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Sep 2, 2014

A few weeks ago, I wrote about the unfolding saga of the Market Basket grocery store walkout.

For those not in the know, non-unionized employees walked off the job or protested outside of stores in support of their beloved CEO, Arthur T. Demoulas (called ATD). Market Basket is a family-owned business of several dozen grocery stores across New England. But the family that owns it was fairly evenly divided between those in ATD’s camp and those on cousin’s Arthur S. Demoulas side.

Arthur S. owned 51 percent of the chain and, I think it’s fair to say, had an acrimonious relationship with his cousin, ATD, who owned the remainder. ATD served as CEO until mid-June, when he was fired by the board, led by cousin, Arthur S. That prompted the employee walk-out, demanding the return of ATD.

Last week, the employees won. After effectively shutting down operations for more than a month, ATD convinced the rest of family to sell him Market Basket outright, restoring him as CEO (eventually … there are still a few wrinkles to work out).

At its heart, this is a three-fold story:

1. Employees matter most

While there is no clear public story on this, most of the employees say they walked out because they were afraid the new leadership cared only about increasing value to the shareholders (the family members) and potentially restructuring the company for sale.

Under ATD, employees never worried about this. ATD is famous for plowing profits back into the company, opening more stores, creating more jobs and opportunities. When employees walked out, so did the customers. Very few were willing to cross the picket line, and nearly all believed in the company as built by ATD

The lesson: Take care of your employees first and they’ll respond with remarkable loyalty and customer service, creating a stable workforce and loyal customer base.

2. Compensation matters

One reason why employees fought so hard to get ATD back as CEO is because Market Basket is famous for the high rate of compensation and exceptional benefits offered to employees from stock clerk to cashier to store manager to warehouse manager.

Employees weren’t only fighting for their leader, they were fighting for their way of life. If you pay people fairly, they will respond.

The lesson: Pay people fairly and consistently, and they will seek ways to make the company even more successful.

3. Recognition matters

During the walk-out, media coverage included interviews with employees on the picket lines, interviewing them about why they would risk everything, including their daily paycheck, without union backing.

I heard several very similar stories along the lines of: “I broke my back and was out for many months. Arthur T. came to my house to check on me and my family, see how we were doing, see what he could do to help. He made sure my bills were covered and my job was waiting for me when I was healthy again.” That’s recognition of the deepest kind – showing care and concern for those who work for you and with you every day.

The lesson: Recognize the people around you by paying attention to their needs and goals and they will do the same for you.

Compensation and recognition are usually cited as the top two reasons why employees say they look for new jobs. Market Basket is a strong case study of how to get these elements right.

How would employees in your organization respond if your CEO was removed from the position?

You can find more from Derek Irvine on the Recognize This! blog.