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Stan Sheetz may straddle the fence between convenience stores and foodservice, but when it comes to innovation, he is strictly out in front.
The CEO and president of the privately held Sheetz Inc. makes it his business to stay one step ahead of his one million customers each day.
“I think innovation should be driven by the customer and what they need,” Sheetz says. “Secondly, it should be driven by what we as a company need to efficiently serve the customer. That’s where the genesis of our technology has come from.”
Based in Altoona, Pennsylvania, Sheetz operates 368 stores in six states and maintains annual revenues north of $4.4 billion.
In 1994, Sheetz wondered if his technology vendor could develop touchscreen software that would allow the customer to select made-to-order menu items that were illustrated with pictures.
“Within a month we had a working prototype, and after we installed the first touchscreen our volume went up 12 percent immediately,” he says. Some of this bump in sales Sheetz attributes to customers who couldn’t read or write.
Sheetz also was one of the first retailers to offer pay-at-the-pump gas, an innovation that has been widely imitated. More recently, Sheetz launched a state-of-the-art, $46 million, 140,000-square-foot Sheetz Bros. Kitchen that delivers fresh, ready-to-eat products to all of the company’s stores.
“This really lets us control waste, and every store gets a delivery every single day of the year, including Christmas,” Sheetz says.
“From the standpoint of efficiency, this system allows us to automatically reorder those food products.” Consequently, Sheetz says, the company’s instock percentage is 99.97.
Another recent change is the introduction of frequent-buyer cards, which supply the company with the buying habits of their customers.
“These cards allow us to monitor what our customers are buying, and how frequently they purchase it. This then lets us send them coupons for the things we think they will be interested in,” Sheetz says.
“It allows for individual customer direct marketing.”
Also on the drawing boards for Sheetz is an app for the iPhone, which would tell a customer where the nearest Sheetz location is, as well as continuing tests on drive thrus.
It appears the search for new technologies to improve the customer experience at Sheetz is here to stay, and in all likelihood, so is innovation.
It takes a lot more than hard work and intelligence to wrestle innovation from a company that is more than 50 years old and the size of McDonald’s, but Jim Skinner has done that and more during his six-year tenure as CEO.
Skinner’s winning strategy, christened Plan to Win, focused all team members’ attention on improving service, food, and ambience and not necessarily on opening new stores.
“Every function that we have is best in class,” Skinner says. “That’s what it means to be an industry leader. I’ve only had two jobs, a lieutenant in the United States Navy and McDonald’s, both extraordinary organizations, both best in class.”
Since taking over the burger giant, which now has 32,000 restaurants worldwide, Skinner has restructured the company, redesigned the restaurants, and revolutionized the menu. Aside from the addition of premium coffee offerings, McDonald’s menu also features healthier choices such as Fruit & Walnut Salads and Chicken Wraps. Skinner also earns high marks for offering better value and improved marketing.
Aside from reducing energy output and working with suppliers to establish healthier environmental operations, Skinner puts a lot of muscle behind talent management and leadership development. High-potential employees are put through a leadership institute, and diversity is an important value at the company.
“There always was a true indication that McDonald’s takes care of its people,” Skinner says. “I knew that Fred [Turner], Mike [Quinlan], and the other guys who were running the company, when they got up in the morning, they were concerned about me. We don’t take that lightly, so all of our people practice it.”
Last year, Skinner received the CEO of the Year award from Chief Executive magazine. “He has been respectful of McDonald’s legacy while engineering an inspirational strategic leadership that reinvented the industry,” says J.P. Donlon, editor in chief of the magazine.
The chain, which operates in more than 100 countries, is about 80 percent owned and operated by franchisees and recently was anointed the “best run major international company in the world” by Mad Money’s Jim Cramer.
Since Skinner took over the helm of the company in 2004, the company’s stock price has more than doubled.
“I take it personally when someone says, ‘Well, they’re the industry leaders now, but will it last?’ We don’t hear that too much anymore,” Skinner says.