Deming’s Ideas in Action: Trader Joe’s Cultureby John Hunter
An understanding of Deming’s System of Profound Knowledge provides new lenses* to view the world. Those lenses allow you to see clearly what before you may not have noticed. And that clear vision can help managers lead their organizations more effectively.
We plan to use this blog to explore examples of management action today (using the lens of Deming’s ideas to view those actions) in order to help illustrate how Deming’s ideas can be put into practice. We can learn both from organizations intentionally applying Deming’s ideas and those that are not necessarily doing so.
Trader Joe’s has a strong culture of respect for employees and customer focus. Those principles are fundamental to Dr. Deming’s management system. Let’s examine some of the text from the careers page on their website.
I would like to emphasize that words on a website don’t mean much. What matters is how the culture of the organization puts those words into practice. In my experience Trader Joe’s does a very good job of operating based on the words they claim to be guided by.
We are looking for hard-working, fun people—people with a passion for food, learning, and creating delight for others.
Sure that sounds similar to what most organizations would say (though maybe not “fun people”). But as a long time customer of Trader Joe’s they have created a culture where their interest in creating delight is noticeably different from any other company I deal with. Their staff demonstrate an interest in delighting their customer and their co-workers.
Dr. Deming understood the importance of truly respecting employees. Without a culture that demonstrates that respect to employees every day, it is very difficult to have the organization treat customers with respect. When you create a culture that demonstrates to employees their value, their right to joy in work and makes clear the purpose of their work every day, that creates the conditions necessary for delighting customers.
We provide Crew Members with a great retirement plan. Trader Joe’s currently contributes 10% of annual salary to eligible Crew Members, and the plan allows Crew to save pre-tax dollars towards their own retirement. You are making an investment in us—we are making an investment in and for you.
Trader Joe’s backs up their words about valuing and investing in employees with cash. They pay 10% into retirement accounts for employees. This shows true respect for people and long term thinking. Trader Joe’s pays well (similar to Costco and unlike most large retailers) and promotes from within. Their turnover is very low compared to similar jobs, illustrating that paying people well, treating them well, and letting them have joy in work does matter.
We offer medical, dental and vision plans to eligible Crew Members at a low cost (currently $85/month).
Those outside the USA may not see this as anything great but in the USA this is a sign of respect for employees. Trader Joe’s doesn’t just say that they value employees they show it in many ways. This offer is not limited to full time employees.
We shun bureaucracy and advocate for decision-making to happen at our stores.
Again this is something most organizations say. However most organizations don’t act that way. One of the very frustrating things for me is any time I have to deal with a large USA company you are going to have your time wasted and have nearly no success getting a person that will listen and make a decision. They just follow some script that often has nothing to do with my situation and I am forced to put up with whatever inflexible policy that the organization has created.
We value open and honest communication and are committed to listening to our Crew. Their ideas make us better.
We structure our entire business around supporting the Crew Members at our stores, so they can earn the delight of our Customers.
Again, something many organizations say and few actually practice. Deming encouraged honest communication, not because it was easy, but because it was effective. Most organizations say they want it but discourage such communication in overt and covert ways. It isn’t easy to listen to criticism, but it is important to learn in order to improve.
Honest communication is also something that cannot happen without creating a culture of trust and respect for people. If people are retaliated against for pointing out problems, those problems don’t go away, but you can reduce the instances of people pointing them out. This makes life easier for managers in the short term but damages the company and those that have to keep addressing the poor results.
Related: Do You See What I See by Bill Bellows – W. Edwards Deming Discussing the Leadership We Need in Our Organizations – All That People Need to Know is Why Their Work is Important – Product and Service Innovation is Driven by Customer Focused Organizations
* The W. Edwards Deming Institute Blog Aim, Vision and Values: “Our vision is for the System of Profound Knowledge to be the standard lens people use to understand and improve the world.”