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Why Wawa’s CEO serves first and leads second

With a new “lead goose” at its helm, Philly’s favorite convenience store is heading off growing pains with a laser focus on its values 

By Samantha Drake
Photography by Mitro Hood and courtesy of Wawa Inc. 

Ken Kropp was a daily customer at Wawa Inc.’s Aston, PA, store for years. When he became ill in 2011 and stopped coming in, concerned store employees took notice. But they wanted to do more than just send get-well wishes home with Kropp’s wife when she came by.

So the Wawa employees, known internally as associates, started sending Kropp care packages of his favorite Wawa menu items and did so for weeks until Kropp recovered. Kropp was delighted by the associates’ caring and support, but so was Wawa’s top management. Then-CEO Howard Stoeckel, current CEO Chris Gheysens and other members of management personally served up one of the company’s Values Champion Lunches at the Aston store to show the associates their appreciation.

The lunches are just one of the many ways Wawa celebrates when its associates take the company’s core values to heart and go above and beyond their job descriptions to serve customers.

“The management team is here to remove obstacles to providing great service and to make associates’ jobs easier,” notes Gheysens, who took over as CEO in January 2013. “It’s about serving first and leading second.”

This management approach, known as “servant leadership,” puts the employees’ needs first so they can perform to the best of their abilities, according to Robert K. Greenleaf who coined the term in 1970 in his essay The Servant as Leader. Since then, the servant leadership philosophy has been adopted by the likes of Walmart chairman Rob Walton, Aflac CEO Dan Amos and Southwest Airlines founder Herb Kelleher.

And it’s not hard to see why: The strategy gets results. For Wawa, those results are annual sales of more than $9 billion, the No. 40 spot on Forbes’ 2012 list of America’s Largest Private Companies and a cult following that’s prompted plans to open 50 new locations, including 25 in Florida, by year’s end.

This year is a notable one, both because of the growth forecast and because of the new CEO at the helm. Stoeckel, Wawa’s CEO of seven years, retired at the end of 2012, passing the torch to Gheysens, making him only the second non-member of the owning family to lead Wawa. As the company plunges into a brand-new marketplace in the Sunshine State, prepares to launch a new mobile app and sets its sights on competing with the likes of Panera Bread and Starbucks, Gheysens has his work cut out for him. He admits it hasn’t been without its challenges, but armed with a laser focus on the mission, the mindset of a servant leader and a strong team behind him, he’s ready to carry on the legacy.

“Our core mission is to simplify our customers’ daily lives,” Gheysens says, “and our associates do that tremendously well.”

Six for service

Wawa’s core values

In an effort to formalize Wawa’s service-oriented culture, former CEO and current vice chairman Howard Stoeckel introduced six core values to serve as its backbone.

Value people. “Wawa’s associates are our best resource and our No. 1 competitive edge.” The company promotes individual development and team building, as well as care and respect for co-workers, vendors and customers. This tenet also prioritizes celebrating success and points out that “fun is good business.”

Delight customers. “Our goal is to ensure a consistent customer experience delivers high-quality, reliable products and services at a competitive price.” The company believes excellence is achieved through associate empowerment. “We listen to our customers and are part of their daily lives.”

Embrace change. “Relentless innovation, reinvention and ‘swimming upstream’ are hallmarks of Wawa’s success.”

Do things right. “Our facilities, brands, systems and processes are positioned for long-term growth.” Best practices and customer-focused quality principles are emphasized by the company as well as consistency. “We try to strive to do things right, each and every time.”

Do the right thing. Wawa believes in helping the community.” This includes protecting the environment, supporting children’s programs and being a good neighbor in its stores’ communities.

Passion for winning. “At Wawa, we thrive on competition.” A winning attitude helps reinforce commitment and inspire confidence, self-esteem and pride, according to the company.

What’s good for the goose

Long before Wawa became synonymous with “convenience,” members of the Wood family ran various enterprises in New Jersey in the early 1800s, including an iron foundry and a cotton and textile mill. In 1902, George Wood opened a dairy in Wawa, PA. Wawa Dairy Farms took its name from the town, which got its name from a Native American word for “Canada goose.” A goose in flight eventually became Wawa’s now-familiar logo.

Grahame Wood opened the first Wawa convenience store, called the Wawa Food Market, in Folsom, PA, in 1964. The move capitalized on the increasing demands on peoples’ time, which led to the rise of the supermarket in the early 1960s. His second cousin, Richard D. “Dick” Wood Jr., served as Wawa’s second top executive and remains the company’s chairman of the board.

Today, Wawa stores are opening at a steady clip, with more than 630 locations and a contingent of more than 400 million devoted customers anually across the Mid-Atlantic and Florida. The convenience stores, part of the “fast casual to-go” niche, offer made-to-order hoagies, coffee, specialty beverages and a variety of soups, sides and snacks. Newer stores also have fuel stations. The company has approximately 20,000 associates working in six states — Pennsylvania, New Jersey, Delaware, Maryland, Virginia and Florida.

“If you have an associate who’s not performing well, you have the responsibility as a leader to give them every chance, every development opportunity. You also owe it to all of their peers to make sure there’s fairness and equity.”
Chris Gheysens, CEO, Wawa

Fans are welcoming Wawa’s expansion into Florida with an enthusiasm usually reserved for hot concert tickets and the release of new electronic devices. The first Florida Wawa store opened in July 2012 in Orlando. People started lining up after midnight for the grand opening, with hundreds waiting by the time the doors opened in the morning, Gheysens recalls, noting, “It was like a tsunami of Wawa disciples descended.”

Driving the high turnout were transplants from the Northeast and snowbirds. People came from all over the state to see the Wawa that they knew and missed, keeping the new store “completely packed” for days, says Gheysens. “It’s remarkable and, frankly, it’s pretty humbling.”

While Wawa has no plans to go national, expansion is one of the company’s goals for the long-term good of the company, Gheysens explains. Florida was a natural choice due to favorable real estate opportunities that will help the company build on its mission. “Wawa is about convenience. So we need to be on the best corners in the best towns,” he says. And a built-in customer following willing to stand in line for a store opening doesn’t hurt, either.

Values added

Gheysens, 42, joined Wawa in 1997 after four years as an auditor at Deloitte, where Wawa was one of his clients. He grew up in Vineland, NJ, where he learned about how to treat employees and customers from watching his father own and operate car washes. He stayed local for college, earning degrees from Saint Joseph’s University and Villanova University, and he now resides in Southern New Jersey with his wife and four young children.

Once at Wawa, Gheysens spent 14 years in finance and administration, and served as CFO, learning from Stoeckel and his brand of servant leadership.

Stoeckel, 67, started out as Wawa’s head of human resources and became CEO in 2005. Stoeckel was responsible for formalizing servant leadership at Wawa; he made it an objective for everyone in a leadership position at Wawa and a focus of the company’s following six core values: value people, delight customers, embrace change, do things right, do the right thing, and passion for winning.

Those values are “about the people who deliver the Wawa experience,” Stoeckel points out. How many times have you opened the door to a dingy gas station convenience store, only to be disgusted by the conditions and walked out without making a purchase, never to return? Chances are, it’s too many times to count. In contrast, the average Wawa is bright and clean and associates make guests feel welcome.

Through initiatives that put associates first, Wawa encourages workers to continue delivering that experience. For example, Wawa recognizes associates’ efforts for their customers and each other in its annual Living Our Values storybook that describes how associates have exemplified the company’s six core values over the past year. Stories range from an associate’s consistently positive attitude to associates jump-starting a customer’s car.

Top management takes “store tours” once or twice a month to talk with associates about their jobs and what can be done better. Associates readily bring issues to management’s attention because they know a process is in place to address those issues, explains Gheysens. Managers never give a vague “I’ll look into it” type of response, he says.

At the same time, Gheysens takes every opportunity to demonstrate his own commitment to each store’s success by pitching in where needed. “If I see trash on the floor because they’re busy, I go pick it up. If the coffee counter is dirty, I go and clean it,” he says. Gheysens emphasizes he’s there to help, not look over associates’ shoulders.

Servant leadership is also part of executive training. Wawa worked with Saint Joseph’s University to design a customized servant leadership program. “We’ve put all of our senior team through it, most of our middle management and we’re rolling it down to all of our management ranks,” says Gheysens.

Few companies of Wawa’s size are successfully using the servant leadership model, notes Dr. Richard J. George, professor of food marketing at the university’s Erivan K. Haub School of Business, who helped Wawa develop its executive training program.

“The best part is stopping in stores and talking with associates. I want them to jump out of bed every day and run to work excited.”
Chris Gheysens, CEO, Wawa

Wawa’s success with servant leadership lies in the fact that it’s not the “technique du jour,” says George, adding, “You really have to believe that everyone counts” to make servant leadership successful. Being a privately held company also helps because Wawa is able to focus on Main Street, not Wall Street, he says.

Servant leaders get permission to lead from employees. Like Stoeckel, Gheysens has the right personality to make servant leadership work, George points out, because a servant leader must have the humbleness to ask, “How do I earn leadership every day?”

Critics say the downside of servant leadership is that the philosophy makes it difficult to hold people accountable. Not so, according to Gheysens; serving his associates doesn’t mean he’s there to cater to their every whim, he says.

“If you have an associate who’s not performing well, you have the responsibility as a leader to give them every chance, every development opportunity,” Gheysens explains. “You also owe it to all of their peers to make sure there’s fairness and equity. We do have standards.”

Walking the talk

When it comes to core values, actions speak louder than words

Many companies have core values, and most employees can recite them. But getting an employee to actually live them is a much more daunting task. Wawa reinforces its culture of service through a number of formal initiatives:

Values Champion Lunches: When Wawa’s executives hear about instances where associates go above and beyond for customers, they travel to the store and personally serve lunch to the workers. Pictured at right, Wawa vice chairman Howard Stoeckel dishes out pizza in August 2012.

Living Our Values storybook: The publication describes how associates have exemplified the company’s six core values over the past year. Stories range from an associate’s consistently positive attitude to associates jump-starting a customer’s car.

Family Night: Prior to a new store opening in Florida, the new store’s management team and members of upper management prepare and serve dinner to the associates and their families so everyone can get to know
each other.

ESOP: Associates own 38 percent of the company through an employee stock ownership plan (ESOP), and Wawa contributes a significant portion of its profits each year to the ESOP. That amount, plus the matching amount Wawa contributes to associates’ 401(k) plans totals approximately 15 percent of the associates’ earnings.

Associates in Need Fund: The fund is a 501(c)3 organization with its own board that evaluates associates’ applications. Funds have been disbursed to associates to pay utility bills and funeral expenses, for example. Approximately 10,000 associates contribute to the fund out of their own pockets.

Executive training: Wawa doesn’t expect its executives to figure out servant leadership on their own. The company worked with Saint Joseph’s University to design a customized servant leadership program.

Store tours: Top management takes “store tours” once or twice a month to talk with associates about their jobs, give them an opportunity to bring issues to their attention and determine what can be done better. With 630 stores in six states, site visits are a way to stay connected for Chris Gheysens.

Service with a smile

Because Wawa’s servant leadership culture is a huge part of the company’s success, preserving that culture is a top priority. Gheysens says Wawa could easily build more stores this year from a financial and real estate perspective, but it won’t.

“We want to make sure we aren’t outpacing our culture,” he explains.

Embedding the servant leadership culture in new stores is a challenge, especially for those in Florida that are geographically removed from the rest of the company, admits Gheysens. To meet that challenge, Wawa first permanently transferred a few dozen of its best general managers to stores in Florida to bring Wawa’s culture and customer service model with them. Wawa also held Camp Florida, a weeklong orientation for the local and transferred associates who opened the first wave of stores in the Orlando area.

Before every Florida store opening, Wawa hosts a Family Night for associates and their family members. The new store’s management team and members of upper management prepare and serve dinner to the associates and their families so everyone can get to know each other.

“If I see trash on the floor because they’re busy, I go pick it up. If the coffee counter is dirty, I go and clean it.”
Chris Gheysens, CEO, Wawa

“I’ve met a lot of mothers, fathers, spouses and children, and looked them in the eye and said, ‘I have a responsibility to the individual in your family that’s working for Wawa,’” Gheysens says. “That’s a responsibility I think a servant leader has: You’re creating a family, and it’s about opening up the lines of communication and telling associates it’s really more than just a job.”

If all this sounds like fun, it’s because Wawa is a company that knows how to party. In fact, Wawa’s “Passion for Winning” core value even directs associates to “mix hard work and fun.” As Wawa’s “lead goose” (yes, that’s the title on his business card), Gheysens joins right in, whether it’s serving associates at a Values Champion Lunch or getting up at 4:30 a.m. to build a 4.5-ton hoagie with 200 associates for Wawa’s 2013 Hoagie Day.

The giant hoagie was served to a crowd of more than 7,000 during Philadelphia’s weeklong July 4 Wawa Welcome America! event. Wawa was the title sponsor for the fourth year, and more than 1,000 associates participated in the festivities.

“We are not shy about having fun,” says Gheysens. “We’re really good at celebrations.”

Underneath all the fun, Wawa associates have a stake in the company’s success through an employee stock ownership plan (ESOP), which helps create a powerful competitive advantage for the company, says Gheysens.

Associates own 38 percent of the company through the ESOP, and Wawa contributes a significant portion of its profits each year to the ESOP. That amount, plus the matching amount Wawa contributes to associates’ 401(k) plans, totals approximately 15 percent of the associates’ earnings, says Gheysens. Wawa’s ESOP is one of the largest in the nation in terms of dollar value, he adds.

Wawa also established the Internal Care department, a seven-member team that recognizes milestones in associates’ lives with cards, gift baskets or flowers. The team helps associates in times of crisis through emotional support and referrals to appropriate resources. Associates can apply for financial assistance through Wawa’s Associates in Need Fund. The fund is a 501(c)3 organization with its own board that evaluates associates’ applications. Funds have been disbursed to associates to pay utility bills and funeral expenses, for example. Approximately 10,000 associates contribute to the Associates in Need Fund out of their own pockets.

Looking ahead

Gheysens firmly maintains he’s merely the steward of Wawa’s servant leadership philosophy and practices. “My job is to carry on and enhance what I think some wonderful leaders have built,” he says, citing Stoeckel, Grahame Wood and Dick Wood.

Yet he’s leading Wawa at a time when the company is embarking on a series of strategic initiatives to keep the business competitive. In addition to conquering new territory in Florida, Wawa plans to introduce a new mobile application in 2014 to let customers order before they come in the door, pay via smartphone and get nutritional information about Wawa’s menu items. According to Gheysens, more than 60 percent of Wawa’s customers have a smartphone. The app is expected to improve the customer experience, making Wawa even more convenient.

Wawa has a history of using technology to innovate. Customers can already place orders via touch-screen Customer Activated Terminals, notes Gheysens. But the mobile app will also allow Wawa to tailor its marketing by gathering data on customers’ habits and preferences. “Ultimately, it’s going to allow us to understand our customers’ behaviors better,” he says.

It’s a move that shows Wawa’s intentions to compete with the likes of Panera Bread and Starbucks in offering freshly prepared food. However, sit-down eating is not in the company’s future; Wawa knows its mission and isn’t going to stray from it.

“Wawa is for people on the go,” Gheysens says.

Gheysens is one of those people. Wawa’s collaborative culture means plenty of meetings, and when he’s not on the road, it’s not unusual for Gheysens to be in meetings all day. He talks regularly with Stoeckel, who remains vice chairman. “Howard’s been a friend, a mentor and a coach to me the whole time and, frankly, still is,” says Gheysens. “I owe a lot of this to Howard.”

Stoeckel says his main advice to Gheysens during the transition to CEO was to “be himself. Don’t be afraid to change things. Have fun.” He describes Gheysens as a down-to-earth individual with outstanding leadership qualities who can relate to associates at all levels.

In fact, Gheysens says connecting with those he serves is his favorite part of the job: “The best part, when my schedule isn’t completely full, is stopping in stores and talking with associates. Or walking the halls here and talking to associates. I want them to jump out of bed every day and run to work excited.” CEO

Samantha Drake is a freelance writer based in Philadelphia. Contact us at editorial@smartceo.com.

This article was originally published in the October 2013 issue of Philadelphia SmartCEO magazine.

 
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