The Good Jobs Strategy

MIT Sloan Alumni Reunion

Zeynep Ton

©Zeynep Ton 2014

Phantom stockouts: 25-30% in CPG, 60% at a specialty retailer

Promotion compliance: 50%

Data Accuracy

©Zeynep Ton 2014

Vicious cycle

Low sales

& profits

Low labor

budgets

Low

quantity &

quality of

labor

Poor operational

execution

Who suffers?

Customers

Employees

Investors

Conventional wisdom

bad jobs & bad service

necessary for low prices

Satisfy

Customers, Employees, Investors

Satisfy

Customers, Employees, Investors

Costco versus Walmart

©Zeynep Ton 2012

©Zeynep Ton 2014

What’s their secret?

Operational excellence

The Good Jobs Strategy

Operate with slack

Cross-train

Offer less

Standardize

& empower

Invest in

people

Operate with

slack

EMPLOYEES Ability to succeed Time off

INVESTORS Higher sales Fewer errors Improvement Better hiring

CUSTOMERS Low prices Good service

Components work together

Operate with slack

Cross-train

Offer less

Standardize

& empower

Invest in

people

Two strategic benefits

1- Differentiate 2- Ability to adapt

Mercadona in 2009

• Reduced product variety

• Lots of other changes

– Produce presentation €175million/yr

– Water and milk cartons €2 million/yr

– Cereal and nut packaging: €900,000/yr

– ……

• Cut prices by 10% (€720 less per

household)

©Zeynep Ton 2014

©Zeynep Ton 2014

Sustainable strategy in which

everyone wins

Jobs with meaning and dignity

©Zeynep Ton 2012

Erika Karp

Cornerstone Capital Group

Is your money being invested in

ways that align with your values?

The Good Jobs Score

Thank you!