Adopting an Ownership Mentality in the Workforce
At CarParts.com, we strive to instill an ownership mentality in every employee. We want our team members to regularly ask themselves one simple question: “If I owned this company, what would I do in this situation?”
When we took leadership roles at CarParts.com in 2019, we began with the premise that the only way we would succeed was by making sure our team knew that they could each make a difference and that their contributions mattered. Over the last two years, we've found three strategies that help instill an ownership mentality within our company culture: walking the floor, recruiting and retaining the right people, and emphasizing long-term decision making.
Walking the Floor
We made it our top priority to meet every team member. We visited every distribution center, corporate office and call center, and conducted numerous small group (five people or fewer) meetings. The meetings were generally informal and focused on giving our team members the opportunity to meet with us and share their thoughts about the business — i.e., what was and wasn’t working.
But within each meeting, we would slip in the ultimate question: “What would you do if you owned the company?” Senior management is consistently involved in the decision-making process and has plenty of opportunities on a weekly basis to provide their input, so while their feedback was helpful, we didn't gain a lot of new insights. The frontline workers, on the other hand, such as warehouse, sales and customer service teams, provided tremendous revelations about improvements that we could make to the day-to-day operations of our business.
The majority of the responses were about making their jobs more streamlined — a lot of system and process improvements. This has been invaluable. Far too often companies spend considerable time, money and effort implementing a new tool (e.g., ERP, CRM, etc.) and hardly any time after the fact optimizing the system. These “down in the trenches” meetings continue to provide us with priceless feedback on how to enhance and optimize the systems and procedures we spent so much money and so many resources implementing.
We often stumble into real golden nuggets from these meetings, such as how to service our customers in a way we hadn’t considered before, or a way to process and ship our packages that can speed up the throughput and/or save costs in our warehouses. You never know what you’ll find until you ask the question.
Our warehouse, sales and customer service employees are truly the heart of our business. If we're not spending an hour a day at least a few times a week meeting with them and getting their feedback, we feel we wouldn't understand the true drivers of our business. This feedback loop between frontline employees and senior management helps our team members know they can have an impact on their day-to-day processes and the direction of the company.
Recruiting and Retaining the Right People
The next thing we did was to start focusing on talent acquisition and retention strategies. Far too often in business, we hire “good people” and then we try to figure out exactly what they’ll be doing and how the company will benefit later. While eventually that may work out, it likely can take a company several years before it starts seeing a return on investment from that person.
From a recruiting standpoint, making sure people are being placed in the right roles can’t be emphasized enough. As leaders, we found that spending a lot more time on defining the role can really laser focus recruiting and onboarding processes. We focused on the job description and the internal need intently. Making sure we knew exactly how the company would benefit from a person was key.
After the person has been onboarded, making sure they stay is even more important. There's going to be some level of attrition. Some members sound great in the hiring process, but for various reasons don’t turn out to be the right fit for the role when they become a part of the team.
If you want people to feel engaged, they have to be in it for the long term. A transient employee base cannot embrace an ownership mentality and ultimately cannot produce a good ROI from the people you hire.
We instinctually knew that the most productive teams at a company have the highest retention rates, but we tasked our in-house data science team with validating this theory. Try it yourself. Ask them to measure the percentage of people on a team over one year of employment, and the percentage of people on a team with less than one year. We suspect you’ll find that the teams that perform best are the ones with higher percentages of people employed more than one year. Therefore, frontline supervisor compensation plans should incorporate employee longevity.
If you’re spending a considerable amount of time and effort onboarding new employees, consider making employee retention the most important key performance indicator (KPI) for frontline supervisors. Most of the poor performance in other KPIs are likely symptoms of a transient workforce.
Emphasizing Long-Term Decision Making
A third pillar when it comes to instilling an ownership mentality is shifting the decision making from short-term results to long-term growth. You achieve that by making employee compensation plans less short-term results-oriented, and more behavior-oriented.
While long-term ROI is the ultimate goal, short-term sales and profits can be affected by a number of external and internal factors that are far beyond the control of the person answering the phone, packing and shipping the product, and even the person buying the product for your company.
We created a process for tracking what we call “triple zeros” and “quadruple zeros.” Triple zeros are items that have historical demand but nothing in stock, on water or on order. We then coined items that have been created as part of our assortment strategies, but haven't been ordered as quadruple zeroes. Both triple zeros and quadruple zeros are critical to growth and inventory management, so naming and tracking them needed to be a priority. Developing and executing initiatives like our triple and quadruple zeroes, as well as incentives for supervisors based on employee retention and for the purchasing team based on the reduction of out-of-stock products without a purchase order are examples of KPIs that will help your team members feel they have actual control over their destiny. They will see that their efforts directly impact the long-term trajectory of the business as opposed to today’s ebb and flow of sales. They’ll come to understand that every day they're helping the company achieve its long-term goals.
Finally, instilling an ownership mentality across an entire organization will only be successful if the entire leadership team is committed as a united front. Articulating such a strategy without team members truly seeing that leadership is working hard every day to give its team members the ability to affect outcomes becomes counterproductive. Therefore, management needs to articulate the vision and goals repeatedly and emphasize that adopting an employee ownership mentality is a process not a project. It doesn't have a start or end date. It evolves as the organization grows over the years. But if it’s truly embraced and executed upon, your teams will be happier and more effective.
Lev Peker is the CEO and director and David Meniane the COO and CFO of CarParts.com, a leading e-commerce provider of automotive parts and accessories.
Lev Peker has been CarParts.com’s Chief Executive Officer and a Director since January 2019. As CEO, Lev’s focus has been on executing a complete turnaround of the company, building the business into a technology-driven ecommerce platform to keep drivers on the road.
Lev previously served as the Chief Marketing Officer of Adorama Camera, Inc., a leading online destination for photography, imaging, and consumer electronics, from August 2015 to December 2018. Prior to that time, he was the Senior Director and General Manager of eCommerce Strategy and Operations of Sears Holding Corporation, a leading integrated retailer providing merchandise and related services, from August 2014 to July 2015. From April 2008 to July 2014, Lev served in various roles at US Auto Parts (former company name of CarParts.com, Inc.), including as Vice President and General Manager of Online Marketplaces from June 2013 to July 2014, as Director and General Manager of Online Marketplaces from March 2009 to June 2013, and as Manager of Financial Planning and Analysis from April 2008 to March 2009. As a Director, Lev has applied his invaluable ecommerce and leadership experience, as well as an intimate knowledge of CarParts.com’s financial and operational status gained through his various roles at the company, to guide the business in a new direction.
Lev holds a BA in Accounting from the University of Southern California and an MBA in Marketing and Strategy from the University of California, Los Angeles, and is a Certified Public Accountant for the State of California.
Lev is married to Inna Trosman, and they have three wonderful children. Lev met Inna when they were in high school, and they’ve been together ever since.
Since March 2019, David Meniane has served as CarParts.com’s Chief Operating Officer and Chief Financial Officer, overseeing the company’s operations both domestically and internationally. David has been a key figure in the company’s turnaround as a tech-forward business, especially in the expansion of its fulfillment operations to connect drivers with the parts they need and get them back on the road quickly.
Prior to this, David served as Executive Vice President of L.A. Libations, the official incubation partner to the Venturing & Emerging Brands group at the Coca-Cola Company. During his three-year tenure, he oversaw the launch of three profitable business units as well as three new companies. Using his experience as an operator and financier, the company’s EBITDA grew by 280% and their investment portfolio’s value grew by 73%. Prior to that, David, alongside his wife, Deborah, launched Victoria’s Kitchen, a specialty beverage company, and grew its national distribution until its sale in 2017. Previously, David served as Chief Financial Officer at Aflalo & Harkham Investments, a $350M commercial real estate investment partnership. David currently serves on the board of directors of Space Shake, an emerging CPG company offering low sugar beverages and snacks, and Relentless Trade Solutions, a retail execution company supporting high-growth CPG companies in the grocery and mass merchandising channels.
David holds a BS in Accounting and a Master of Business Taxation from the University of Southern California. He currently maintains an active CPA license in the state of California.
David lives in Los Angeles with his wife of 13 years and their beautiful two-year-old daughter, Bella. He drives a 2018 GMC Canyon Denali.