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Gourmet Foods is a huge grocery and drug company

Management

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Gourmet Foods is a huge grocery and drug company. It has more than 2400 supermarkets, and its Premier and Polar brands make it the fifth-largest drugstore company in North America. In a typical year, shoppers will make 1.4 billion trips through its stores.

Gourmet Foods competes against tough businesses. Wal-Mart, in particular, has been eating away at its market share. In 2001, with revenues flat and profits falling, the company hired Larry Johnston to turn the business around.

Johnston came to Gourmet Foods from General Living Medical Systems. It was while he was at General Living that Johnston met a training specialist named Roger Nelson. Nelson endeared himself to Johnston when the latter hired Nelson to help him with a serious problem. At the time, Johnston had been sent to Paris to fix General Living’s European division. The division made CT scanners. Over the previous decade, four executives had been brought in to turn the division around and try to make it profitable. All had failed. Johnston responded to the challenge by initiating some important changes—he made a number of acquisitions, he closed down inefficient plants, and he moved factories to Eastern European countries to take advantage of lower labor costs. Then he brought in Nelson to charge up the troops. “After we got Roger in,” says Johnston, “people began to live their lives differently. They came to work with a spring in their step.” In three years, the division was bringing in annual profits of $100 million. Johnston gives a large part of the credit for this turnaround to Nelson.

What is Nelson’s secret? He provides motivation and attitude training. Here is an example of Nelson’s primary program—called the Successful Life Course. It lasts three days and begins each morning at 6 a.m. The first day begins with a chapter from an inspirational handout, followed by 12 minutes of yoga-like stretching. Then participants march up a hill, chanting, “I know I can, I know I can.” This is followed by breakfast and then a variety of lectures on attitude, diet, and exercise. But the primary focus of the pro- gram is on attitude. Says Nelson, “It’s your attitude, not your aptitude that determines your altitude.” Other parts of the program include group hugs, team activities, and mind-control relaxation exercises.

Johnston believes strongly in Nelson’s program. “Positive attitude is the single biggest thing that can change a business,” says Johnston. He sees Nelson’s program as being a critical bridge linking employees with customers: “We’re in the business of maintenance and acquisition of customers.” With so many shoppers going through his stores, Johnston says there are “a lot of opportunities for customer service. We’ve got to energize the associates.” To prove he is willing to put his money where his mouth is, Johnston has committed $10 million to this training. By the end of 2006, 10 000 managers will have taken the course. They, in turn, will train all 190 000 Gourmet Foods “associates,” with the help of tapes and books.

Nelson claims his program works. He cites success at companies such as Allstate, Milliken & Co., and Abbott Labs. “The goal is to improve mental, physical, and emotional well-being,” he says. “We as individuals determine the success of our lives. Positive thoughts create positive actions.”

Questions

1. Explain the logic as to how Nelson’s three-day course could positively influence Gourmet Foods’ profitability.

2. Johnston says, “Positive attitude is the single biggest thing that can change a business.” How valid and generalizable do you think this statement is?

3. If you were Johnston, what could you do to evaluate the effectiveness of your $10 million investment in Nelson’s training program?

4. If you were a Gourmet Foods employee, how would you feel about going through Nelson’s course? Explain your position.