Daniel Korschun: An interview by Bob Morris

Posted on: September 17th, 2015 by bobmorris

KorschunDaniel Korschun is an Associate Professor of Marketing at Drexel University’s LeBow College of Business. He works with companies to develop innovative CSR practices that generate value for both the company and society. Korschun’s academic research appears in the Journal of Marketing, MIT Sloan Management Review, Academy of Management Review, Journal of the Academy of Marketing Science, Journal of Public Policy & Marketing, Journal of Business Research, the Journal of Business Ethics, and other leading journals.

Dan is co-author of two books:

With Grant Welker: We Are Market Basket: The Story of the Unlikely Grassroots Movement That Saved a Beloved Business (AMACOM).

With C. B. Bhattacharya, and Sankar Sen: Leveraging Corporate Responsibility: The Stakeholder Route to Maximizing Business and Social Value (Cambridge University Press).

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Morris: Before discussing We Are Market Basket, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Korschun: It has always started with my family for me, so I’d point to my parents and my wife right away. They are the ones who have always provided the most encouragement and who always keep me focused on doing the right thing.

Morris: The greatest impact on your professional development? How so?

Korschun: There are many people to choose from here. One example is Bill Shipman, my fencing coach while I was in college at Brandeis. He introduced me to the discipline of excellence. What I mean is that he showed me that in order to excel, one has to stay focused on technical expertise first, then get creative. It was at through him that I began to see excellence as more of a habit than a destination.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Korschun: I majored in psychology in college but never knew what I would end up doing with a lot of that training. My first corporate job was in advertising, and that’s when it clicked for me that to be an effective marketer you have to understand how people think. It may seem obvious, but as a fresh graduate, it gave me direction I didn’t have before.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Korschun: My doctoral program was where I finally saw a lot gel for me. Before that, I had a lot of different interests, in social responsibility, in psychology, in leadership, in marketing. But they never fully came together until my doctoral program. That’s when I began to work under CB Bhattacharya – he’s now at ESMT in Berlin – and learned how to turn those interests into some tangible research projects that could break new ground. It’s also when I began to believe that I might contribute to other scholars and practitioners.

Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?

Korschun: Today I have a better sense of what to take seriously and what not to take so seriously. When I first started my career, I got very hung-up when things went wrong; but now I’ve gotten better at expecting that some things will go wrong and I just concentrate on fixing those inevitable problems the best I can.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Korschun: The movie Billy Elliot is a personal favorite of mine. I tend to love movies where the character has a sort of passion that breaks with the norm, but they stick with it and find a way to make it work. One of the lessons I like to leave with my students is that they need to follow their personal passions because that passion will be contagious. I always tell them that how hard it is to get someone else to get excited if the student isn’t excited themselves. And getting others excited about something is really what leadership comes down to anyway.

Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.

Korschun:
Victor Frankl’s Man’s Search for Meaning is a classic text. It recounts his years in a concentration camp. He examines how people were able to cope under those sorts of conditions. We can trace a lot of positive psychology back to that book. More recently business scholars are looking at positive psychology as a means to make the workplace better for employees. It’s a difficult challenge, but scholars and practitioners are making some progress.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Korschun: So many economists and business people think that business is all about money, that money is the only real motivator. But when you dig deeper, you almost always find that it only partly explains what drives people. What I read first in this quote is the importance of people, that is “who are we working for?” Business, when it’s done well, is a way of gathering resources and expertise to make someone else’s life better. The second thing that jumps to my eyes is the feeling of accomplishment that comes across strongly in that quotation. More and more studies are showing that intrinsic motivation can be as powerful as any monetary incentive. The key for leaders is to tap into this, helping people direct their energies so that they can serve others better.

Morris: From Michael Porter: “The essence of strategy is choosing what not to do.”

Korschun: You’re forcing me to quibble with a giant of strategy. I would argue that the essence of strategy is not so much what you do or don’t do, but rather to know who you are and what you are trying to achieve. Without that, how can you ever know what to choose?

Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”

Korschun: This one is dangerous because I may be today’s cliché! But I do believe that we can make our companies better at serving others. Wouldn’t it be nice if that idea became so commonplace as to be cliché?

Morris: From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”

Korschun: I agree with this wholeheartedly. As a social scientist, I don’t think I’ve ever had a full-on eureka moment. Instead, I’ve experienced a long series of tiny breakthroughs which bring me closer to an insight.

Morris: From Thomas Edison: “Vision without execution is hallucination” and from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Korschun: I think I’ll take these two together because they show two sides of the same coin. The best functioning companies that I’ve come across are able to execute nearly flawlessly but always have one eye on the end goal. For example, in the book, we describe how Market Basket employees are detail oriented and spend a lot of time training each other on grocery techniques (for example, how to stock, where and how to display products); however, most employees have a very strong sense that the end goal is to help people put food on the table. It’s this balance that is so challenging to maintain, but which also is a key to their success.

Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Korschun: I agree. We tend to exaggerate the impact that many leaders have. For example, we credit or blame the President for economic conditions. The truth is, leaders can influence the discussion and set the tone, but most are limited in just how much control they have over large organizations. So beyond the decisions they make, a big part of the job in my view is reminding people in the organization, or the country, about what is important. In the book we describe a culture of excellence where there is a strong chain of command, yet everyone is expected to contribute by spotting improvements. The CEO serves as a model for how this to be done, and sets the tone. But if the frontline employees don’t follow through and do their job well, it doesn’t matter what the CEO decides.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Korschun: So many executives begin by looking for monetary incentives that will get a few key influencers to change behavior. The problem is, no amount of money can mitigate cultural resistance, because culture is not driven by self-interest. In addition, even if successful in the short term, the incentive approach may wear off, and those people will fall right back into their prior routines and ways of thinking.

So the key is not to work against the culture but rather, work within it. Take a hard look at what in that initiative contradicts the culture, and what reflects the culture. Then the executive needs to demonstrate that the initiative will help the organization achieve something that is valued by that culture.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Korschun: One of the big challenges is certainly evolving cultures from inward looking to outward looking. Companies have spent decades convincing employees that their job is to pull profits inward. But the most admired companies today are trying to push value outward. They are inventing ways to become profitable by making someone’s life a little better.

Morris: Now please shift your attention to We Are Market Basket. When and why did you decide to write it?

Korschun: There were two objectives for the book. First, we wanted to create a document of this unprecedented protest. The second objective was to see if there was anything that other companies could learn from this.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Korschun: A huge surprise for me was just how passionate employees, they call themselves associates, feel about this company. But even more surprising was how much suppliers are committed to this company. I have frankly never seen suppliers so eager to make a buyer successful. The result is a system that unites suppliers, associates, and customers in a very unique way.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Korschun: To be honest, it didn’t change that much from what we first envisioned. What evolved most over the year of writing was that we put more and more focus on the people behind the movement to reinstate the CEO. We at first had spent more time on the CEO himself, but found over time that he wasn’t the real hero. It was the two million people who believed in him so much that they would make personal sacrifices to bring him back.

Morris: In your opinion, what is the single most valuable lesson to be learned from each of the main figures in the Market Basket saga? First, Telemachus Demoulas

Korschun: It’s not enough to be successful, you need to prepare the next generation to succeed as well.

Morris: Bill Marsden

Korschun: Integrity is important but it isn’t easy. It takes courage to face the truth sometimes.

Morris: Arthur T.

Korschun: A CEO shouldn’t be afraid to tell employees he loves them. I’ve never heard another CEO say this and appear to really mean it.

Morris: Mark Lemieux

Korschun: Great leaders should get as much energy from their direct reports as they give.

Morris: Arthur S.

Korschun: The things we do always have consequences for others. We need to ask, “How does what I do affect my neighbor?”

Morris: What role did social media play during the “We Are Market Basket” campaign?

Korschun: Social media were absolutely critical. This protest united so many people from so different many walks of life and roles at the company. Social media became a gathering place and a place where everyone had a voice in the fight.

Morris: Is the chain’s original mission, “people first, groceries second,” still alive and well? Please explain.

Korschun: If anything, the success of the protest has reaffirmed that adage. Of course, expectations are higher as well. But so far, signs indicate that the company is living up to this mission.

Morris: In the final chapter, you suggest that “a corporation like Market Basket is a different sort of animal.” How so? So what?

Korschun: This is a company that always goes its own way. They try to learn from competitors, but they don’t imitate. So when a store down the street implements an automated checkout lane, they don’t automatically adopt that technology. They look first at whether or not it makes sense for them, whether or not it would impede their ability to serve in a very personal way. So far they have not adopted automated checkouts. They haven’t started a website. They still have two people working every checkout, one at the till and the other bagging. I like to say that rather than imitate others, companies need to become better at being themselves.

Morris: You also observe, “The Market Basket case is reason for pause.” Please explain.

Korschun: I suppose that when two million people shut down a $4 billion supermarket chain for six weeks, it is always reason to pay attention! But in this case, it challenges a lot of business principles that I have until now taught in university. One of the biggest is that directors on the board have a responsibility to shareholders alone. That idea is deeply flawed. Their responsibility is to the corporation as a whole, which includes but is [begin italics] not [end italics] limited to shareholders. In this case, some board members sided with some of the shareholders over the wishes of other shareholders and two million other stakeholders. They planned to sell the company. In this case, it’s difficult to argue that they were acting in the interest of the whole corporation. So we need to expect more from our boards.

Morris: In the Epilogue, you observe, in the fall of 2014, that “something in the air is different.” Please explain.

Korschun: This protest knocked the company upside down last year. The company got up and running remarkably fast afterward and now appears to be running smoothly and growing quickly again. But people are different now. Many look back and feel great pride that they took part in something historic. Some others have a tinge of lingering sadness because they lost some friends during the conflict, friends who perhaps crossed the picket lines. So this is a company that was deeply affected by these events. It is a company that will always be somewhat defined by the protest, both in the media and at a personal level.

Morris: You suggest that “the story forces us to rethink who owns a company and who gets to decide how it is run.” To what extent (if any) did the Market Basket case change your thoughts about these issues? Please explain.

Korschun: One of the reasons I was drawn to this case is that I had been arguing for years that we need to change our notion of who a company is. If we return to the origins of corporations we see that they are a device in order to get a bunch of people to pitch in resources and effort to achieve some common goal. Over the couple of centuries we have strayed from that core idea to the point where we view corporations as money generating machines for shareholders. Although corporations are more complex than in those early days, I believe that we can benefit greatly by returning to some of those principles. That means we need to recognize the important role that [begin italics] all [end italics] stakeholders play in the corporation. That also means that in some cases, we need to give more say to employees, customers, and the community in our corporate governance.

Morris: There are several dozen passages throughout your narrative that caught my eye. For those who have not as yet read the book, please suggest what you view as the most important point [end italics] or [key take-away in each of these passages.

First, Market Basket (MB): The Early Years (Pages 8-17)

Korschun: For me, the early years tells of a company that was always tied to the fortunes of the working poor in Lowell. Although the company has expanded its customer base, that commitment to low income and other vulnerable populations remains.

Morris: Arthur S. and Arthur T.: The rivalry (27-28, 97-99, and 169-170)

Korschun: Here we show how stark the differences are between the two cousins at the center of the protest. Arthur S. would perhaps try to reason that his right is to sell the company and do what he wishes with his shares. Arthur T. is portrayed in the book as completely enamored with the business and those who are a part of it. It is hard to find an example where two cousins are so starkly divided on what they hope to achieve.

Morris: MB culture as family (55-58, 63-67, and 196-199)

Korschun: I don’t think I’ve spoken to an associate at this company who hasn’t at some point mentioned the word family. Most have a story of a time when they went through a difficult period and a colleague helped them out by covering for a shift, giving them a ride, or attending a funeral service. It can sometimes be hard to believe because the experiences are so different from what I have experienced in the workforce. But they are very real.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in We Are Market Basket, which do you think will be of greatest value to leaders in small companies? Please explain.

Korschun: Small and medium sized businesses need to strike a balance. They need to be open to experimentation because that’s the root of innovation and growth. But they also need to stay close to who they are and why they are in business in the first place. So I suppose my advice would be stay close to your values and who you are trying to serve, but always look for new ways to express those values better.

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Dan cordially invites you to check out the resources at these websites:

We Are Market Basket link

Daniel Korschun faculty profile page link

LinkedIn link

Twitter link

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