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The other day I visited one of my favorite wine and cheese shops in Newburyport. I noticed it carried the same Firehook Classic Sea Salt crackers I’ve purchased at Market Basket. My wine shop asks $9.99 for the box of crackers you can get at Market Basket for just $5.99. I love my wine shop, but you can’t beat Market Basket’s prices.
It’s not just the prices that make Market Basket a special place for me and for thousands of other customers. They’re great, of course, but this 90-store chain has a distinctive culture that attracts Newburyporters from every ward in the city.
They brim with food. Personnel are not hard to find, and, in the main, they want to be helpful to customers. They’re not somewhere else on their phones. The employees are diverse, just like the customers. From what I’ve seen, they treat each other and their clients with respect. The company’s welcoming attitude toward employees with disabilities and immigrants is particularly impressive. Market Basket looks and feels like New England, like America.
I agree with many others that CEO Arthur T. Demoulas (Artie T.) is at the heart of Market Basket’s success. He is a visionary leader, one who walks the talk of managing a complex “can do” operation that is consciously outward facing. Artie T’s leadership was sorely tested in 2014, when a group of his cousins sought to oust him. That ill-fated action resulted in a six-week employee walk out and a customer boycott. The cousins capitulated.
Now, tragically, the company is once again threatened by a family drama, as the board has placed Mr. Demoulas on administrative leave in an apparent power struggle between the CEO and the board (including Demoulas’ three sisters).
Consultant, John Ward, conceptualizes family businesses as systems having three primary components: Ownership, Family, and Business.
Each component of this system is based on a singular principle, which overlaps at the center of the action.
- Rationality governs the Business subsystem. The key question here is: What is good for the business?
- Dividends are the central dynamic of the Ownership subsystem, especially for owners who are not active in the enterprise but want/need the money it generates for their own purposes.
- Feelings are the core ingredients of the Family subsystem. How do people in the family feel about what has happened, what is happening, what will happen and what should happen vis-a-vis past, present and potentially future members of the family?
Like Market Basket, over 90% of American enterprises are closely held. Only about 3% of them survive for four generations or more. At 108 years old, Market Basket is one of this rare breed. It’s older than Fenway Park.
Will it continue to survive?
“You don’t know what you’ve got, until you lose it.”
It’s not overstating the case to say that each of us has a stake in the stability and durability of establishments like Market Basket. It’s more than a grocery store; it’s a community center, it’s part of the way of life here in Newburyport and throughout New England. Right now, it seems like the family (maybe especially Mr. Demoulas’ sisters) is lawyered up. This probably does not bode well for the company. Will Shakespeare had something to say about lawyers and bad blood.
My suggestion: find some skilled advisors to help the Ownership subsystem sort out their needs, their differences, and their pain. Don’t forget about the hundreds of thousands of us who shop at your stores every week. The four of you are sitting at our dinner tables. We need you to work out your differences. Please don’t let us down.
Michael Sales
Newburyport resident and strategic leadership development consultant
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