• Trader Joe’s is roughly the same size as Whole Foods. It is owned by Germany’s Albrecht family but still managed by its founder.

• The company is very selective about where it puts new stores. It’s only adding five locations this year. It looks at demographics to choose sites in places that fit its distribution infrastructure.

• Trader Joe’s offers a limited selection of products. Typical grocery stores carry 50,000 SKUs; Trader Joe’s sells about 4,000, about 80% of which bear the store brand. “With greater turnover on a smaller number of items,” Fortune writes, “Trader Joe’s can buy large quantities and secure deep discounts. And it makes the whole business—from stocking shelves to checking out customers—much simpler.”

• Trader Joe’s pays its suppliers on time without the extra charges for advertising, coupons, or slotting fees that other supermarkets charge.

• The company buys directly from manufacturers that ship straight to Trader Joe’s distribution centers, which ship daily to stores. The stores don’t carry much inventory so ordering must be precise.

• Store managers can make low six-figure incomes while full-time employees can start at half that, and Trader Joe’s annually contributes 15.4% of employee’s gross income to tax-deferred retirement accounts.

• Trader Joe’s is becoming more corporate. As a former employee observed, “You have to grow up at some point. You have to start following rules. You have to start putting in checks and balances.”

It’s becoming more systematic in its approaches within a culture that has been very successful. As the article notes, “A Trader Joe’s brings with it good jobs, and its presence in your community is like an affirmation that you and your neighbors are worldly and smart.”

So that’s why they put a Trader Joe’s in my hometown.

To read more about successful cultures, click on these articles:

• A Baldrige Leader
• What Great Organizations Achieve
• Zappos and a Sustainable Culture
• Guided by Your Culture
• Sustaining the Culture
• 2009 Baldrige Award Winners

Chip Conley’s Joie de Vivre hotel chain in the San Francisco Bay area struggled after 9/11. In an interview on FastCompany’s Web site (click here), Conley talks about turning to Maslow’s hierarchy of needs pyramid to understand how to connect to the higher needs of employees, customers, and investors. He developed an employee pyramid with three basic themes: “survival at the base, succeed at the middle, and transformation at the top. Applying that to employees, it’s money, recognition, and meaning.”

Conley and his leaders worked on building a culture of recognition and meaning:

• Senior leaders ended their meetings on a positive note.
• They created an environment of recognition throughout the organization.
• They made a rule that the person giving recognition needs to be from a different department than the person being recognized.
• They added questions to the twice-annual work climate surveys measuring performance on the top-of-the-pyramid attributes.
• They held offsite retreats with line level employees to promote recognition and instill meaning.
• They measured relationships to help evaluate manager effectiveness.

Joie de Vivre’s focus on the employee pyramid seems to have produced results: It was named one of the top ten “Best Places to Work in the Bay Area for the fifth year in 2010.

One note of caution: Recognition and meaning cannot replace fair pay. Wages in this country have been stagnant for so long, and jobs are so hard to come by these days, that senior leaders seem to give little thought to increasing wages in any meaningful way. If the productivity gains of the last two decades that have spawned record executive pay had also led to commensurate increases in worker pay, one could argue that the American economy would be significantly stronger because millions of hardworking Americans would have more disposable income on hand.

Recognition and meaning are essential to employee satisfaction and engagement, but they are an airy substitute for fair pay.

To read more about employee engagement, click on these articles:

• Engaging Employees to Improve Performance
• What Drives You?
• Workforce Well-Being
• Paying Disengaged Employees\
• Bottom-Line Value of Employee Engagement
• Increasing Employee Satisfaction in a Time of Decline

They also share these final two characteristics:

6. They treat people well. That means everyone the company touches: employees, customers, suppliers, community members—everyone. The striking difference between companies that treat people as commodities and companies that treat them well was captured in the transformation of Wainwright Industries. In the early 1990s, the leaders of this small Missouri-based manufacturer of machined parts listened to a speaker describe how his company thrived because of a sincere trust and belief in people. One of Wainwright’s leaders wondered what that meant. The CEO didn’t have a good answer, and that bothered him. What would Wainwright look like if it sincerely trusted and believed in its people?

The answer changed the company. A sincere trust and belief in people became one of its core values, and that value guided its actions. Quality improved. Safety improved. Customer satisfaction improved. Gross profit jumped 62 percent in just three years. And employees rewarded the company’s trust by generating more than one implemented improvement suggestion per employee per week. Most American companies struggle to get one suggestion per employee per year.

7. They continually improve. They must. It’s who they are. They build improvement into their processes, a step to take in an ongoing cycle that compels them to find ways to do things better.

Such cultures are not created overnight. The contrast between good companies and great ones can be seen in the ways people work. In great companies, employees care about the quality of their work. They feel integral to their company’s success. They seek opportunities to learn and improve and feel responsible for making things better.

Employees in average companies also care about the quality of their work—they’re just not sure anyone else does. They see little connection between what they do and their company’s success. They have been conditioned to interpret opportunities to improve as problems with their performance and react defensively. Yet as Wainwright and others have proved, the employees in both cultures are the same. What is different is the system.

To read more about integrating Baldrige, click on these articles:

• What Differentiates Baldrige Award Winners (Part 1)
• What Differentiates Baldrige Award Winners (Part 2)
• How to Integrate Baldrige
• Leading the Integration of Baldrige
• The Organization You Want
• 5 Added Values of the Baldrige Process

The researchers measured job engagement through 18 questions organized by physical engagement, emotional engagement, and cognitive engagement. According to the article abstract, they found that “engagement, conceptualized as the investment of an individual’s complete self to a role, provides a more comprehensive explanation of relationships with performance relative to well-known concepts that reflect narrower aspects of the individual’s self.” The researchers were able to evaluate the impact of other factors including job involvement, job satisfaction, and intrinsic motivation on performance and behavior; they concluded these factors did not predict performance and behavior while engagement did.

According to Simmons, the researchers identified three antecedents of engagement: value congruence, perceived organizational support, and core self-evaluations. In other words, hire people who share and support your organization’s mission and values and who are self-sufficient and confident, and then provide development opportunities that align with your organizational values and your employees’ developmental needs.

In “Bottom-Line Value of Employee Engagement,” I wrote about a Gallup report that came to similar conclusions. Gallup defined a fully-engaged employee as emotionally attached to the unit and rationally loyal and found that “organizations that employ performance optimization management principles have outperformed their competitors by 26% in gross margin and 85% in sales growth.”

In “Employee Engagement and the Bottom Line,” I pointed to two specific cases where employee engagement had a direct correlation with financial results:

• Best Buy sees a $100,000 annual increase in sales at any location where employee engagement rises 2%.

• JC Penny had 67% of its employee engaged in 2005 and 80% engaged in 2009. Its earnings per share growth over the last five years is five times the industry average.

The key to getting similar results at your organization is to: (1) figure out how to measure employee engagement as the researchers quoted above have done; (2) use your measurement tool to assess engagement; (3) identify opportunities to improve performance; and, (4) close the gap.

To read more about employee engagement, click on these articles:

• What Drives You?
• Paying Disengaged Employees
• Why HR Needs Baldrige
• Recruiting, Retaining, and Engaging
• Valuing Employees – and HR

Click here to view the embedded video.

It turns out that study after study has shown that money works if you want people to perform simple, rudimentary tasks, but if you want them to do something more complex, you need the three elements of true motivation: autonomy, mastery, and purpose.

To learn more, watch the video — and then join me in reading the book.

According to Gallup’s research, there are universal elements of well-being that differentiate thriving from struggling. They have grouped them in five categories:

• Career Well-Being: How you occupy your time or how much you like what you do every day.
• Social Well-Being: Having strong relationships and love in your life.
• Financial Well-Being: Effectively managing your economic life.
• Physical Well-Being: Having good health and enough energy to get things done.
• Community Well-Being: A sense of engagement with your community.

According to the book’s authors, when these factors are fully realized, people thrive.

An article on the Gallup Management Journal (click here) explains why this matters. Most of us believe that happy and healthy people get sick less often than miserable people. According to Gallup’s data, workers with the lowest well-being scores cost their companies $28,800 a year in lost productivity from sick days. In contrast, workers with the highest well-being scores cost their companies just $840 dollars.

That’s an astounding discrepancy! The data suggest that it is worth an organization’s time and money to improve their workforce well-being. That means paying attention to all five elements.

• Career Well-Being: Engage your employees. Gallup found a strong correlation between employee engagement and well-being.
• Social Well-Being: Gallup’s research shows that people need six hours of social time every day. That doesn’t mean six hours hanging around the water cooler, but it does suggest that teams, mentoring, training, and other social interactions improve well-being.
• Financial Well-Being: Financial security is integral to well-being.
• Physical Well-Being: The number of organizations that are implementing programs to improve the wellness of their employees indicates that this element has become mainstream.
• Community Well-Being: More and more people, most notably younger workers, want to feel like the work they do makes a difference not just to their organization’s bottom line, but to society as a whole.

The article concludes that “businesses would be wise to measure and manage” employee well-being. That’s a Baldrige perspective.

To read more about workforce well-being, click on these articles:

• Increasing Employee Satisfaction in a Time of Decline
• Why HR Needs Baldrige
• Bottom-Line Value of Employee Engagement
• 10 Steps to a Successful Workplace
• The 3 Factors That Motivate Employees

Here are a few things that made Taylor a believer:

• The hospital sits on a wooded 160-acre campus
• All 300 rooms are private and designed so that family members can stay overnight if they wish
• All patients go right to pre-assigned rooms when they arrive
• A concierge helps patients and families with errands
• A “tea sommelier” recommends different teas for different situations
• There’s a day spa and an indoor farmer’s market every Wednesday
• There’s a 90-seat demonstration kitchen to teach patients’ families and the community how to prepare better food
• A celebrity chef spent two years creating 3,000 healthy recipes for patients to choose from
• The atrium features more than 2,000 trees lining paths to shops that sell products that can improve health

There’s a Baldrige connection to this story: West Bloomfield’s new CEO is Gerard van Grinsven, who joined Henry Ford after a long career with two-time Baldrige Award winner Ritz-Carlton. Skeptics questioned the wisdom of hiring someone with no healthcare experience to run the new hospital. Van Grinsven thinks it was a smart move. “I had a fresh pair of eyes and no baggage when I arrived,” he said. “The real opportunity for reinvention is to rethink the role of a hospital. How do we position ourselves as a community center for well-being—as a destination that helps everyone to lead a healthier life?”

His leadership and vision seem to be paying off: West Bloomfield is filled to capacity, patient satisfaction scores are very high, infection rates and other quality problems are at a minimum, employee morale is high, and turnover is low.

The innovation at West Bloomfield reflects the attitude of Henry Ford’s leaders. As Robert Riney, the system’s COO, said, “How can you look at the situation in our industry and say the answer is to make incremental change?”

To read more about quality in healthcare, click on these articles:

• 10 Healthcare Innovations
• A Healthcare Role Model
• Baldrige Saves Lives
• Why Baldrige? Saint Luke’s Makes the Case
• Disruptive Innovation and Healthcare