'Undercover Boss': 10 Management Lessons from 7-Eleven

Last Updated Dec 17, 2010 2:28 PM EST

Undercover Boss Joe DePinto of 7-ElevenAs the largest convenience store chain in the world, we think of 7-Eleven as those bright little stores with drinks and snacks, not a place to gain management insight. Well, with 36,000 stores in 18 countries and over 30,000 employees to support them, the operational and organizational challenges of this unique company are extraordinary.

Not only that, but the company's owned by a Japanese holding company, it's headquartered in Dallas, and it's run by a West Point graduate originally from Chicago. Talk about culture clash!

That said, the parent company, Seven & I Holdings Co., Ltd., gives chief executive Joe DePinto (pictured) remarkably free reign. Since taking over the top job in 2005, DePinto has introduced and deployed a company-wide cultural shift based on the principals of "Servant Leadership" and "The 7-Eleven Way." Whatever that means, it seems to be working.

As evidence, here are 10 Management Lessons from this week's Undercover Boss:
  1. Think synergy. In 1927, Joe C. Thompson, an employee of Southland Ice Company, came up with the idea to sell milk, bread, and eggs from an ice dock he managed. The ice preserved the food and, well, the rest is history. Synergy is fundamental to the 7-Eleven story.
  2. Continuous improvement is key. DePinto tells his leadership team, "I'll be focusing on spending time in the field, where the rubber meets the road. I'm going to see what we're not doing well, and that's only going to make us better in the long run." I'm sure Joe knows the Japanese word "kaizen," which refers to the management principal of continuous improvement.
  3. A fresh set of eyes can see missed opportunities. In the show, one of the chain's highest grossing stores had lights that had been out for some time, a potential safety hazard. Maintenance support said it could take up to a month to fix. Question: shouldn't higher-producing stores get higher priority support?
  4. Employees can inspire management. Through his hard work, can-do attitude, and passion for the job, Igor, an immigrant from Kazakhstan who drives a distribution truck, actually inspires Joe to be a better executive.
  5. Many great leaders started at the bottom. DePinto comes from a blue-collar family. After West Point, he worked his way up at PepsiCo. My path was similar. You always hear people complaining about lack of opportunities. I think that's a load of bull.
  6. Communications is always a challenge. Far-flung operations and thousands of franchisees compound the challenge of communicating programs and messages across a vast network of stores. During the show, one store routinely trashed day-old bakery items that were supposed to go to charity.
  7. Replicate what works. One store on Long Island sells more coffee - 2500 cups a day - than any other location. Danny, Joe's undercover alter ego, learns that the store manager, Delores, knows virtually all her customers by name. Do you know all your customers that well?
  8. An army runs on infrastructure and logistics. At West Point, DePinto was trained to ensure that equipment is always working and "mission ready." Behind the scenes, 7-Eleven's sprawling distribution and support centers and plants that make enormous amounts of perishable foods are a testament to his operational training.
  9. There are tricks to doing just about anything. On a donut production line, "Danny" couldn't keep up with the pace of a conveyor belt until trainer Phil showed him a trick to doing it more efficiently. That's the case with every task in business, no matter how big and strategic or small and menial.
  10. Engineers make great executives. DePinto, Larry O'Donnell from Waste Management, and a healthy percentage of executives from the technology industry all started as engineers, as did I. Sure, I've known quite a few dysfunctional ones, but by and large, they make competent executives. Any ideas on why that is?
Image courtesy Jeff Neira/CBS
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