A Tale of Two Organizations |
Aug 25, 2009 |
Here are my closing words from last week’s post: “Next Tuesday I’ll share a real life example of two organizations (that you may know well). One dealt with the squiggly things and moved onto greatness; the other set the rock back down and died a slow, painful death.” (To read last week’s post in its entirety, entitled "Dealing With the Squiggly Things", click RIGHT HERE!)
Alright, here we go! (And please make note that Jim Collins and his team conducted the research on these two organizations, highlighted in Good to Great, pages 65-69. Any direct quotes are also taken from these pages.)
Back in the 1950s, A&P was one of the largest and most successful retailing organizations in the United States. At that time, the grocery store chain Kroger was less than half the size of A&P. By 1999, however, Kroger had become the number one grocery store chain in America, while A&P had “dwindled to a sad remnant of a once-great American institution.” What happened?
For the first half of the twentieth century, A&P was nearly perfect. Their stores were set up to give people all over the country exactly what they wanted: they offered basic stores with options, and everything was cheap. In the second half of the century, however, things began to change and Americans wanted more. Collins explains:
“They wanted fresh-baked bread, flowers, health foods, cold medicines, fresh produce, forty-five choices of cereal, and ten types of milk. They wanted offbeat items… Oh, and they wanted to be able to do their banking and get their annual flu shots while shopping. In short, they no longer wanted grocery stores. They wanted Superstores…”
In the 1960s, Kroger experimented with the superstore concept and by 1970, had reached the conclusion that the Kroger style, as it currently existed, would soon die out. Kroger executives immediately began to act on these findings, and ultimately changed every store across the country that did not fit the changing times. For the Kroger executives, this was a no-brainer. When asked to identify the factors that led to these decisions, Lyle Everingham, one Kroger CEO during this particular period of change, responded:
“I find your question a bit perplexing. Basically, we did extensive research, and the data came back loud and clear: The supercombination stores were the way of the future. We also learned that you had to be number one or number two in each market, or you had to exit. Sure, there was some skepticism at first. But once we looked at the facts, there was really no question about what we had to do. So we just did it.”
A&P refused to make similar changes. Although their research revealed virtually the same data and the same trends for the second half of the century as that of Kroger, A&P responded defensively. They clung to the past with the motto: “You can’t argue with a hundred years of success.” At one point, as they continued to lose market share, A&P opened an experimental store to try and discover what customers truly desired. This store was called the Golden Key, and it was different in every way from their other traditional stores. The Golden Key was more in line with the previously detailed supercombination store, offering new and different products, styles, and departments. Executives quickly learned that consumers loved the new store. A&P finally gained answers to how they could revive a dying business. However, in an unprecedented decision, A&P chose to close the Golden Key because executives did not like what they learned! The “squiggly things” scared them and threatened the business traditions that executives held; they put “the rocks” back down. Ultimately, Forbes magazine explained how far A&P had fallen, describing them as “the Hermit Kingdom, run as an absolute monarchy by an aging prince,” referring to Ralph Burger, the CEO.
Kroger was willing to not simply identify, but also confront the hard truths of the company’s failures and make all necessary changes. The result has been amazing continued success, prosperity, and overall effectiveness as an organization.
So last Tuesday and this Tuesday all lead to this major question…
How is your development department these days?
Have you recently asked the question: “Where is our ministry (and specifically our development department) right now?" Are you willing to begin turning over rocks in an effort to answer this question? Are you willing to uncover squiggly things and then do something about them?
Let me close with a definite squiggly thing I’ve discovered based on my work training Christian non-profits through the MISSION INCREASE FOUNDATION...
Many orgs today are still trying to resource their Christ-centered, God-Given vision through traditional (and oftentimes very un-biblical) methods of fundraising. Are you? If so, don’t put the rock back down on that. Deal with it!
