Dollar General: Values, People, Pragmatism
Dollar General is an American success story. Founded in 1939 by a dirt-farmer-turned-entrepreneur, the retailer now has more than 14,000 stores and generates $20 billion in annual revenue.
Originally a Depression-era general store closeout business, the company adopted a game-changing dollar price point strategy that’s made it one of the most ubiquitous retailers in the country.
In 1977, Cal Turner, Jr. took over the leadership of the company founded by his father and grandfather. It would not be an easy task. Turner’s reign as Dollar General’s CEO was fraught with challenges both professional and personal. He transformed the company from a chaotic family business to a professionally managed corporation that surprised Wall Street. But the tough calls he had to make jeopardized his relationships with both his father and his brother.
This journey is chronicled in Turner’s book My Father’s Business: The Small-Town Values That Built Dollar General into a Billion-Dollar Company. In this interview, Turner talks about a leadership style based on values, people, and pragmatism.
Rodger Dean Duncan: As a young child, you had two piano teachers. What did you learn from them that influenced your management style later in life?
Cal Turner, Jr.: One piano teacher was my aunt Ruth, who lived next door. She was pretty and petite, with brown hair and blue eyes, and she was an outspoken woman who was great at loving from a distance. She would voice approval of me to others, but that wasn’t something I heard. She would lie in her gown on the couch, smoking cigarettes, and call out the correct note when I played the wrong one. Then she would walk across the room and hover over me. Any time I hit a wrong note, she would hit my finger with a pencil. The fear she inspired was self-fulfilling and the tension caused a lot of errant notes that would bring that pencil down. It wasn’t long before I only pretended to go to lessons, preferring to hide in the shed behind the house.
My next teacher was another neighbor, Frances Read. She was a beautiful woman who dressed to the nines and shared her classical training in a manner that was kind and supportive. I would do anything for her, and I did. I performed so much better with Mrs. Read, whose elegance and dignified approach affirmed me, than with Aunt Ruth, who neither affirmed me nor seemed to enjoy her role as a teacher.
Both of these piano teachers were a big influence on my management style. I had their living example that support and affirmation are much more likely to inspire dedication and commitment than criticism and punishment. The carrot is better than the stick—or, rather, the compliment is better than the pencil.
Duncan: Your father preferred stand-up meetings, expecting people to keep their comments brief and to the point. How did that practice affect your development as a leader?
Turner: My father liked to see people in motion. “Don’t hire anyone who doesn’t walk fast,” he used to say. If someone said, “We need to sit down and talk about this,” he would say, “No we don’t. The trouble with this company is how long are meetings are. We need to have stand-up meetings.” He liked people to keep their comments brief and to the point, although I have to confess he often exempted himself from that prescription. He wanted “plan doers, not plan planners.” I tried to carry the spirit of his love for conciseness forward, and it inspired a sign I kept behind my desk, one that made its point, usually after inspiring a knowing chuckle. It read, “Hasten Thy Story.”
Duncan: Your father was famously resistant to change (computers, modern accounting practices, etc.), yet he managed to build a retail empire. What was his formula for success?
Turner: My father knew small-town people because he was one. He knew that they couldn’t be swayed by thick carpets and fancy lighting. They wanted bargain prices for things they needed. His stores presented merchandise that was priced in dollar units so people could keep up with their purchases in their heads. He made shopping and checkout simple for customers and clerks. When he was the company’s buyer, he was always looking for the best deals he could pass along to his customers. He never lost sight of that simple approach, and his customers always appreciated it.
Duncan: When you became president of Dollar General you introduced strategic planning to the company. Previous to that, how did the organization manage to flourish in an environment you described as organized chaos?
Turner: I think my dad’s approach to business was attractive to customers, and everyone who worked for him knew what we were about. It wasn’t even “organized chaos” so much as it was “entrepreneurial chaos.” Everything was in the gut of my father. If we’d had an organizational chart, it would have been a circle with everyone and everything connected to my dad. For a long time, we had no board, no consolidated statements and no financial analysis. There wasn’t a CPA in the company! We had two big things going for us: again, my dad’s vision; and the fact that for a long period after World War II, the economy grew and we grew right along with it.
Duncan: Much of Dollar General’s growth has come through acquisition. What did this teach you about culture blending?
Turner: It taught us that it could be trouble! We bought up single stores and opened our own for quite a while, and took on groups of stores when the opportunity was too good to pass up. Then we looked for such opportunities and they got bigger. After one such acquisition, we realized we didn’t have the executive staff or the battle plan to oversee the vastly bigger company we had become. We had a small management team with plenty of rough edges. That’s when I knew I needed more training. That led me to the American Management Association, and to strategic planning. Troublesome acquisitions that taxed our team too greatly led us to change our approach, and that ultimately strengthened us and led to some of our biggest, most sustained growth.
Duncan: Over the years, Dollar General had operating principles call “Sacred Cals”—such as “Don’t hire anyone who does not walk fast” and “Don’t describe labor pains, show me the baby.” How were those principles embedded in the company culture and taught to new employees?
Turner: “Sacred Cals” were sayings that summed up the old company culture. As we moved from family business to an independent board and a real national presence, I realized we had to examine each of those Sacred Cals and make it justify itself. My willingness to talk about “slaughtering Sacred Cals” was just the kind of attention-grabbing irreverence that let me set the right tone while making important points. I was making clear our commitment to change and to the fact that I was excited by it. I was asking everyone to join in making change happen built on the right foundation.
Along with the training our executives received thanks to strategic planning, we drew heavily on our in-store employees. They dealt with customers. They knew what worked. So, for instance, we made it a rule that no memo suggesting store changes went out generally until it had been tested in a couple of stores. I wrote a regular column for our company newsletter talking about our company principles and the fact that we were in it together. We were all learning from each other.
Duncan: What are some of the key takeaways you hope readers will get from your book?
Turner: There are many, but here are some of the most important.
- The kind of leadership that makes better organizations is the kind that shapes better persons. It’s all about human development.
- Inspiring leaders separate the person from the behavior. When employees miss the mark, help them see the gap between who they are and what they have done, and remind them there is an ideal to reach for.
- Values trump rules when it comes to building a culture—and moral integrity is paramount. If you have integrity, you don’t need a bunch of rules. They just become baggage.
- Retain a sense of humor in the face of your shortcomings and manage your ego. You’ll be more able to grasp the lessons you need to learn along your leadership journey.
- Leadership exists when an organization overcomes having a boss mentality. A boss only gets results; a leader gets development. And it’s necessary for a leader to get over him- or herself.
- Lead with questions, not answers. They help you get at the truth, ensure that you continue to learn, and leave employees feeling valued.
- Don’t let control interfere with the performance of good people who want to demonstrate what they can do. Instead, set people in motion with values and a mission, and let them do what they do best.
- The fear of failure is generally worse than the failure itself, and it teaches far fewer lessons. What I learned in times of joy and success was not nearly as helpful as what I learned in the bad times.
This column by Dr. Duncan was also published by Forbes where he is a regular contributor. Follow on Twitter @DoctorDuncan
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