I have to start out with the simple fact that I am obsessed, completely obsessed with Trader Joe's. There's plenty to obsess about too. They have really great tasting food (for the most part) for really great prices (for the most part). I think what I enjoy the most is the simplicity of it all. There's food there, different varieties of food, but without all the nonsense of having to choose between a dozen brands of soups, two dozen brands of potato chips, and aisles upon aisles of greeting cards. Thinking about all that inventory, all that space that is used to store this inventory, inventory of items no one has even bought!
I was walking through my other favorite grocery store last week while visiting my parents in Florida, Publix. Publix is my favorite regular grocery store because of their delicious subs (I always have to get one when I'm there!), and their store branded items (their Publix Premium ice creams are quite delicious). They also focus on Customer Service - it is an employee owned company and when I lived in Florida the staff seemed to get to know everyone very well (they knew me by name!). What hit me as I was walking through Publix was all of the inventory of duplicate items. I remembered back to what I used to purchase, and the grand majority of items were all Publix store branded things. Now that I am away from Publix, I shop the same way, just now from Trader Joe's. Trader Joe's by comparison is quite small, but has everything I need without all the need of searching through countless brands of like items. The inventory turns quite rapidly, and the Customer Service is out of this world! This leads me to something interesting I listened to on my plane ride from Florida.
Integrity
Product Driven Company
Wow Customer Service
No Bureaucracy
Kaizen
The Store is Our Brand
We're a National Chain of Neighborhood Stores
These are the Values that everyone within the company shares. They start with Integrity. The way that this is described is essentially the Golden Rule, treat others as you wish to be treated. In our own cultural transformation, this essentially is rooted in the idea of Respect. This is the base of the company, and how everyone is expected to act. The next two Values, Product Driven Company and Wow Customer Service, are the two things that really appeal to my grocery shopping interests of their high quality products and amazing Customer Service. The one that I did not know Trader Joe's had was that of Kaizen.
Dan says that for them it means "everybody in the company owes it to everybody else, a better job every day, every year in what they do." The next thing Dan talks about is what intrigues me even more. As a former CPA, Dan mentions the general apprehension around this concept. They don't really do budgeting. With the Kaizen Value, they expect every store to do a little bit better every year. They allow their stores to make their own targets and give them what is needed to keep improving for the Customer.
I've been thinking about something similar recently. I had been reading about Lean Accounting and in reality, this notion of not budgeting hits on a point made with Lean Accounting. If the general mode of an organization is to have everybody improve every day, then why do we shackle ourselves to the typical Cost Accounting methods and budgeting of the traditional ways of business. I think of Government agencies especially in this. I currently work for one, but had worked at another in my previous position as well. Where there was a budget, there was a team trying to spend up to that budget so they wouldn't lose that money in the following year. This general mindset is counter to that of Kaizen. More so, as we try to report on our workload variance (actual workload to some "standard" workload) we create more work around the reporting structure and minutia of the minutes each person spends one of many dozens (if not more) operations.
Reading more into Lean Accounting, we simplify costs into the overall value streams. When the organization's mindset is on Kaizen, there is no need to do all these special accounting methods to track where each last work hour is spent - it is within a particular value stream, the flow of value to the Customer, which is as far as we need to go. If it is outside any value stream, then the Kaizen mindset would have us eliminate it where possible, as it is non-value adding. I see many hours spent discussing over and over all the clock ring errors, variance of actual work hours to what in reality is a bit of an arbitrary number of "earned" work hours, and we berate people for "not doing anything" about these variances. The simplicity of the Values Trader Joe's exhibits is the thing that most intrigues me. It's what is so great about Kaizen. It's a way of thinking. How do we simplify? How do we make things easier? How do we improve? This extends into every aspect of the business, including accounting and budgeting.
Trader Joe's is not just a store to me anymore. There's a culture behind it that is just as appealing to me as their high quality products, and superb Customer Service. The fact that Integrity and Kaizen also drive them as a company, is something from which we all can learn. Company Values are meant keep the entire organization in tune and in time with each other, constantly driving the flow of value to the Customer through product and service, while maintaining what makes us human, Respect for others.