The Future of Work
Industry Leaders Roundtable

At our 2007 NACS Show in Atlanta, six industry leaders sat down to discuss “The Future of Work,” which was the focus of a special August 2007 Business Week double issue. BusinessWeek explored how businesses will master technology, manage companies and build careers in today’s global workplace. Some of the topics were especially relevant to the convenience and petroleum retailing industry.

Our panelists:
Mike Walsh, president, CEO and director of Core-Mark Holding Company Inc.
Stan Sheetz, president and CEO  of Sheetz Inc.
John Brock, president and CEO of Coca-Cola Enterprises
Mario Guevara, CEO of BIC
Carl Bolch, CEO of RaceTrac Petroleum Inc.
Murray Kessler, president and  CEO of UST

HANK ARMOUR: Murray, in a public company, do you buy this belief that the generalist CEO is dead?

MURRAY KESSLER: I disagree, although there are parts of the article I agree with. It talks about this notion of a CEO who can’t do everything and I absolutely agree with that. And it also talks about the need to surround yourself with spectacular people and empower them, and I agree with that. But the notion that a CEO can focus on one area in today’s business environment is unimaginable. I think a good CEO has to be able to deal with all of the issues and look at multiple solutions and tools that are relevant to the business situation at that time. And I also think your organization won’t respect you if they don’t think you understand their particular issues. If you don’t have enough knowledge and depth of every part of the organization, big mistakes can happen.

ARMOUR: Stan, you run a private company. Do you have a different perspective on whether the generalist CEO is dead, or whether CEOs need to have more specialist backgrounds?

STAN SHEETZ: The reality is, whatever your job, you’ve got to do what’s required of your job. This categorization I think in some ways reflects a portion of what all of us have to do as leaders at various times. I think probably one of the best things you can do is to learn how to ask the right questions, because I don’t think any CEO has all the answers. If you’ve got good people working for you, and you can ask the right question, hopefully you can get to what’s close to being the right decision.

ARMOUR: The model of leadership that BusinessWeek says is required is to have more leaders throughout the organization with specific job functions, such as HR or marketing to interact with a company’s board directly, or more COOs sharing somewhat equal power with CEOs. Do you see this change in your organization already? If not, do you see this model working?

JOHN BROCK: I think the hierarchical organizations of the past are going to be fewer. Today you have to have organizations and structures and people who can work in very fluid environments. For example, as you functionalize the supply chain, functionalize IT, functionalize legal and do it across a whole range of geographies, you’ve got to make sure that the sales and marketing teams know what they’re doing and that they’re getting even better service. This requires a very different kind of person to make it work as opposed to an autocratic leader who sits on top and controls all the levers and all the functions. It’s a very different and far more challenging situation and requires people who are talented in a different way than in the past. A significant amount of change in people is required to make that all happen. 

MIKE WALSH: I think there’s tension now between management and boards on where you draw that line of power sharing because there are more functional experts now who want to delve deeper into corporations. But I want talk a little on what John just said. You have to look at the size of the company to address autocratic versus power sharing. Recently at Core-Mark, I created a senior management group, which is collectively the COO of the company. It wasn’t a matter of power sharing. I needed to expose these guys to more issues than they would have in their functional areas, cutting across all areas and addressing issues across the entire company. And eventually, our plan is that a successor CEO will come out of that group. A little bit of the article resonated with me. However, I guess I’m a little old school in that I think a CEO needs to be a strong CEO. You have to have a decision maker. I abhor the thought of running a company by committee. I think companies that do that are slower than other companies.

ARMOUR: How do you get an organization that’s full of diverse people from various cultures to collaborate efficiently and effectively?

MARIO GUEVARA: In our company we have a common vision and our values. The BIC values have been immersed in the company since inception more than 50 years ago. So it’s part of the DNA of the company. The values are ethics, teamwork, simplicity and ingenuity and each of our 9,000 employees around the world embrace these values. We’re not an autocratic company. We’re really an open door company. We have great people; we are multicultural; we are diverse; and we embrace the global talent. I also encourage my people to see each other face to face.

ARMOUR: There’s an interesting statistic in the article that says 54 percent of people who work in small companies like their jobs a lot versus 44 percent of people in large companies. Do you agree with these numbers and why do you think that is?

SHEETZ: I just worry about job satisfaction in my own company. We’ve grown a lot over the years and as you grow it gets more and more difficult to have the personal interaction. Everything gets spread a little bit thinner and you just don’t have as much of an opportunity to interact with people the way that you used to. So you can expend more energy on it, and you should expend more energy on it, in our case we’ve got a bunch of people with the last name Sheetz to spread around a little bit.

ARMOUR: That’s a great organizational strategy. Have a big family so you can still touch ‘em.

SHEETZ: Absolutely. That nepotism, we believe in it, but I think job satisfaction is a very personal thing to individuals. I know that in our organization people want to feel connected to the organization. I can’t even imagine the issues that Mario would have trying to operate in so many different countries. It’s a never-ending challenge.

ARMOUR: Murray, you run a very big company. Do you have any thoughts  on this?

KESSLER: I previously worked in a very big company where job satisfaction was very low and now I work at UST where job satisfaction is very high. The most obvious difference in both cases was the senior leadership and their commitment and belief that motivating, respecting and recognizing that everybody wants to feel important in what they do is a critical element to the company’s success.

ARMOUR: How do you see technology helping to bring your workforces closer together to help them be more efficient?

WALSH: We process over a million transactions a day. And the error rate is remarkably low for that. So there’s no question that with all of this technology we’re able to communicate faster. We’re definitely more efficient and we’re moving more stuff in less time. But if you’re talking about a team and working as a team, you want your teammates to succeed. That sense of working closer as a team, I think that comes from leadership and not technology.

ARMOUR: I want to turn now to some more specific questions with respect to our industry. Sam Turner talked about how convenience stores are where America, in fact, where the world shops. Do you agree with that?

SHEETZ: Oh, I don’t know that much about the world, Hank, but I think in America, the diversity of our customer base is absolutely massive. Walking through this trade show you would think that a convenience store is the size of a Wal-Mart, but we’ve been able to take what most of America wants and put it into a 3,000-square-foot box and then deliver it to them. I think that our channel owns convenience. I think there’s a huge demand for it because we sell time back to people. That’s really what convenience is all about.

ARMOUR: Mike, your company is a key part of that supply chain to convenience stores. Do you buy into convenience as not only where America shops today but will in the future?

WALSH: I certainly do. We’ve got more than 145,000 retail locations. Who can compete with that? There’s no other trade channel that can out-compete us. We’ve sustained that enviable growth. And I think that answers the question of if we are where America shops — are we still relevant to the end consumer.

ARMOUR: I think we’re potentially in a fairly fragile economic condition right now. Is this industry recession proof?

CARL BOLCH: I think we’re relatively resistant, but not recession proof. And we certainly have some other factors, such as the cost of crude oil, that affect our industry more radically. The cost of credit cards and various other things like that can have across-the-board effects on us more than just the general state of the economy because most of the items we sell are consumed every day and almost immediately by the consumer.

GUEVARA: The business environment always changes. But one thing I know, life must go on and you adjust your sales, because the key is not to fight against the trend. You have to look for the opportunities; for example, convenience stores. For the consumer, if they are losing a paycheck they would spend less money more often. So then convenience becomes something very attractive instead of going to a large format and buying large quantities. It’s about how you deal with that particular business environment at that particular moment.

BROCK: Thinking about the industry as well as the brands and the categories that are sold in convenience stores, I would agree that it’s broadly recession resistant but not recession proof. I think the big issue we’ve got right now is an unbelievable level of uncertainty and we’re seeing it again in the markets and honestly, until somehow, someway, that uncertainty is reduced to a risk profile, it’s going to continue. And frankly, we can predict all we want to. Nobody really knows what’s going to happen. Most of us are pretty good at managing risk. None of us know how to manage uncertainty and unfortunately, that’s where we find ourselves today.

SHEETZ: As a retailer I think that a retailer’s goal is to always try to improve their same-store sales. That is a year after year type of goal and I happen to believe that much of that sales growth is driven by innovation. One of the great sources of innovation, by the way, in this industry is the NACS Show and what NACS provides. But if you’re driving innovation in your retailing enterprise, you should be able to grow your same-store sales. I agree with Carl. It’s not recession proof. And everybody’s trying to get that disposable income so it’s always a battle for the consumer’s dollar and I think when you head into a recessionary environment that battle gets a little bit tougher.

WALSH: You have to ask yourself the question, if a recession hits do I want to be in the automobile manufacturing business or would I rather be in the package consumable goods business? I’d rather be in the latter. People are going to give up buying cars and refrigerators more readily than they’re going to give up buying sandwiches and beer. That’s not to say it won’t be felt even in a national recession. Typically you’ll have pockets of real depression that can create real havoc on certain segments of the industry. But I think overall one has to say that we’ve weathered recessions pretty well in the past, and I think the industry is strong enough to weather it.

ARMOUR: Succession plans certainly affect the future of work, and our industry is full of second- and third-generation businesses. How do you determine if a family member is interested, and perhaps even more important, capable of succeeding? How do you prepare your company for succession?

BOLCH: Family succession is always very difficult. I’m a second generation CEO of our company. I currently have one of my children in the business and I’m looking forward to the prospects of perhaps having others join. I tell all of my children that it’s a two-sided coin. The first side of the coin is that it’s a great opportunity to come into a family business. The other side is that the world will discount whatever you do because “you got your job because of your daddy.”And there’s truth to that. But what you do is meet the challenge and convince the people around you, through your behavior and your actions, that you can contribute to the organization. If you make a positive impact on the organization, then you have both sides of the coin in your favor. To answer the second part of your question, I’ll play some role in that but I think there’s a longer term issue to consider. What you have to try to do is transfer to your children a certain amount of culture and a certain amount of behavior. I have five children with their own set of talents. What I’m beginning to do at this point is to have family meetings in which all five of my children are engaged in the process of coming up with a family constitution and a family set of rules and so forth. And they’re probably going to have a bigger say in what those are than I do.

ARMOUR: Mario, you’re the first non-family member to lead BIC and John, you’re the first non-Coke executive to lead CCE. What challenges are inherent here, and what advice do you have for family businesses?

GUEVARA: Bruno [the founder of BIC] was the one who pushed me to move through the ranks within the company in my different assignments around the world. I embrace the culture of BIC. I like the way they give responsibility to new people as well as accountability. Bruno walked what he talked. And the rest was a just an evolution. He prepared the succession ten years ago. Now in my role, one of my challenges is to channel that passion. Family businesses have a lot of passion. And we cannot deny we have family moments. But that’s great because there’s nothing good or bad around that. Simply, it is what it is and we have to get the job done. I just love it and we’re working on honoring the past and inventing the future.

BROCK: I think CEO succession planning in the United States today in publicly traded companies is a major topic of conversation and controversy. CCE agreed in my second board meeting that one of my major responsibilities was going to be to work in concert with the board on that project because we needed to have a plan if I get hit by the proverbial bus, as well as a plan on a longer period of time. We have very clearly laid out that we’re going to have discussions twice a year on CEO succession planning. We’ve got plans in place that I would encourage most companies to do.