Employees, Customers, Leadership & Social Media: Lessons from the #MarketBasket Debacle

Mark Sagor


mbcustomerswequitThe current Market Basket saga features product and customer shortages but there certainly is no lack of compelling story lines and business lessons here.

The intricate melodrama of the Demoulas’ family feud, the emergence of a rank and file army supporting a fired CEO and the suspense concerning how and when all the complicated elements will be resolved have captured, and held, the attention of the public and the media for several weeks.

Market Basket opened its first store in Lowell Massachusetts back in 1917 and has become the 127th largest private company in the United States as it approaches its 100th anniversary.

Consumer reports rates them as the sixth best grocery chain in the U.S.

Despite this long history of success and accumulated corporate might, they are now close to running out of cash and struggling to restore a wounded reputation.

How did this happen so quickly?

One of the more fascinating dynamics at work here, one that will be studied for years to come in business schools and boardrooms is the unprecedented confluence of employees, customers and social media that is propelling the action.

The Save Market Basket Facebook page, with almost 90,000 likes at the time of this writing, has become the central rallying point for employees, customers and vendors protesting the firing of Arthur T. Demoulas.

Social media is providing an essential platform for protesting stakeholders to organize, communicate with each other and the public, and pressure the Market Basket Board of Directors.

Of course, it is the passion of employees for their cause and for their CEO which drives this protest and gives it meaning.

But it is Facebook and Twitter which are making it possible for thousands of protesters to coordinate their efforts effectively, maintain morale, and tell their story to the public.

Market Basket is a huge old media advertiser, sending their shopping circulars into shoppers’ homes via regional and local newspapers. Before social media leveled the playing field, the company point of view would have had a disproportionate share of media, and public, attention.

Instead, it is the protesters, armed only with the free resources offered by social media, who hold the clear advantage in the public dialogue. Market Basket, despite its $4.6 billion in annual revenue and access to the best media firms is losing the debate.

The lessons for organizations are unmistakable:

In a communications landscape, where every employee and every customer has access to the megaphone supplied by social media, organizational issues can easily be exposed and amplified.

Companies need to recognize how quickly employee relations and customer service problems can escalate into public relations nightmares with the assistance of social media.

The price of company mistakes will continue to rise as more individuals become adept with the ubiquitous, and free, instruments of social media.

When customers and employees get fired up about something (positive or negative), in this age of social media, they have the means to enlist thousands of ambassadors for their cause. Their recruits, in turn, can bring access to additional supporters in a rapid geometric progression.

There is also an old lesson at work here. Perhaps the oldest lesson in business. When a leader, like Arthur T. Demoulas, takes the time to know employees and recognizes their individual contributions to the success of the business, and treats them with genuine respect, those employees will work hard and offer their undying loyalty in return.

The empty shelves and deserted aisles of the once thriving Market Baskets stores are testimony to these new, and old, facts of business life.