‘Serve, lead, do what’s right’

6/1/2010 - 7-Eleven President and CEO Joseph M. DePinto '99 believes that to be a good leader, one must learn how to serve.

“It’s called servant leadership — serve, lead, do what’s right,” he said, addressing a crowd of Kellogg faculty, students and friends at the Owen L. Coon Forum on May 13. “Invert the pyramid — put the customer first, followed by strategy. Then take all your infrastructure and put it to use to meet customers’ needs.”

DePinto demonstrated the concept of servant leadership during his appearance on “Undercover Boss,” a CBS reality series that follows high-level chief executives as they work anonymously within their companies. He played clips from the show during his speech to illustrate 7-Eleven’s customer-focused business philosophy.

“We’re here to make people’s lives a little easier,” he said in the clips, which showed him being trained to sell coffee, one of the company’s most popular items. “We’re here to serve people. That’s what 7-Eleven is about as a company — serving people.”

But the way the company serves people is changing, DePinto said. The entrance of the millennial generation into the market, the increase in unemployment, and the growing emphasis on health and wellness all have changed buying patterns. To find out how to meet consumers’ changing needs, 7-Eleven asked customers what they wanted. Quality, service, value, cleanliness and assortment were the five things consumers rated highest. The company then evaluated how it was performing in those five areas.

“Some areas really needed to improve, so we worked on strategy,” DePinto said. “To me, this is the essence of retail. What are the customer’s needs? What is the current inventory you’re carrying in the store? How do those line up? If they don’t line up … those customers go to your competition.”

With customers crossing channels, competition in the convenience market is fierce, DePinto said. To ensure stores carry the products people want, 7-Eleven has introduced a number of new measures. These include a hot-food on-the-go section, private-label brands and an inventory analysis and consolidated distribution program.

“It’s a constant process, and this process doesn’t work unless we have innovative new items,” he said.

In addition to inventory innovations, 7-Eleven has sought to concentrate its presence in targeted areas, DePinto said. Part of this strategy involves a new business conversion program that offers small, independent stores the opportunity to increase their sales by taking on the 7-Eleven name and gaining access to the brand’s system, scale and infrastructure.

“We’ve been very successful,” he said. “We fill in these areas by partnering with mom-and-pop shops to convert them to 7-Eleven stores.”

These partnerships allow the stores to offer popular products and services at a good value, while still maintaining the customer service of a small store, DePinto said. This emphasis on providing a personal experience for the customer is the key to 7-Eleven’s overall strategy.

“We want to grow globally and operate locally,” DePinto said. “It’s very, very local in nature. We have great people [working in our stores]. It’s a habitual business and the customers come back to that.”