Lessons from Undercover Boss: A good employee is golden

The new CBS show, Undercover Boss, continues to provide great insight into American corporations and lots of blog fodder. In the show, the chief executive of a major corporation goes undercover and tries out five frontline positions within his company. (There hasn't yet been a female executive.) The latest episode features Joe DePinto, CEO and President of 7-Eleven. Joe comes off as the least clueless executive so far, but there are still some gems in this show that are great lessons for any business person.

Watch the show here.

Gem #1: Retail sales associates should sell!

One of the stores DePinto visited sold an extraordinary amount of coffee each day. DePinto wanted to see what made them tick and he got his answer soon enough: Delores. Delores is a highly engaged employee who works the coffee bar during the morning rush, rather than being stuck behind the register like most 7-Eleven employees. She greeted customer after customer by name and many hugged her before grabbing their coffee. DePinto was amazed.

"That's why we're selling 2,500 cups of coffee [per day]. Not because we have great coffee, but because we have Delores there."

Lazy operations managers and mathematically challenged CFOs look at hourly retail sales associates as labor expense. Competent operations managers and CFOs who aren't afraid of a little analysis realize a good sales associate should pay for herself. If you take your gross margin (price - the cost of the product) and compare it to your fully loaded labor cost (hourly wage plus benefits and taxes) for one employee, you can easily see whether its worth having an extra person on-board. The trick is the sales associate actually has to greet customers and be helpful in order to impact sales, an art form that sometimes seems lost in many of today's retail stores.

Gem #2: An edict does not equal action

There's at least one moment on every show when the executive is tempted to break cover and put the brakes on something shameful. Instead, they sneak away and call someone at corporate to make sure it gets fixed immediately.  In this episode, DePinto called corporate after seeing a 7-Eleven manager try to get a maintenance visit scheduled to replace some lights, only to be told by the 7-Eleven support center that it would take a month.  DePinto was also shocked to see the amount of food thrown away at another store, rather than donated to local charity programs 7-Eleven had established for that purpose.

The lesson here is an executive edict does necessarily translate into obedient minions. You need real leadership to bridge the gap between policy and your frontline employees. A written policy alone doesn't cut it.

The memo, email, or other written form of communication is hailed by executives as "efficient". Participants in my Performance Management workshops often tell me they don't have the time to check in with their employees or ensure their policies are understood, so they rely on the mass-distribution capabilities of the email. The counterpoint is when employees don't understand the policy or simply ignore it. Then that "efficient" communication becomes inefficient and worthless.

Gem #3: Frontline work is hard!

Each executive has struggled to keep up with the pace of the frontline jobs they try on the show. DePinto flailed and fumbled his way through a shift at the coffee bar with Delores, an older woman who worked circles around him. At another store, one of the employees remarks that the undercover DePinto doesn't work very hard and seems a bit lazy. Ouch!

At the end of the show, one of DePinto's executives asked him if he had learned anything by going undercover that he couldn't have learned as Joe DePinto. His on camera answer seemed edited out because it was so vanilla. The real lesson could be that these jobs are difficult!