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Aramark: Feeding Development to Grow Success

If you’ve ever purchased a snack from a vending machine, chances are you’ve come in contact with Aramark Corp., a leading provider of managed services.
January 1, 2007
Related Topics: Strategy and Management

If you’ve ever purchased a snack from a vending machine, chances are you’ve come in contact with Aramark Corp., a leading provider of managed services to business, educational, health care and recreational facilities. The company’s Refreshment Services Division has roughly 3,000 employees in North America and provides customers with beverages and snacks typically found in an employee break room. With more than 242,000 employees in 20 countries and several million customers worldwide, Aramark’s primary objective is to exceed customer expectations and grow the business by creating an environment where top talent wants to work.

Aramark’s Refreshment Services Division has noted thousands of dollars in profit gains, and even more dollars saved through cost reduction, by paying special attention to individualized development plans and a focused, strategically motivated workforce performance management methodology in tandem with well-crafted training modules and recruiting techniques. Perhaps more important, Aramark measures success by customers who recommend its services to others, as well as the growth of the company and employee satisfaction, said Tony Petrucci, vice president of human resources, Refreshment Services Division, Aramark. “We really focus in four key areas, what we call ‘one best team,’ which is how we develop the team to serve our customers. It’s a focus on new business, customer retention and base business, and we roll those four up into what we call Mission One.”

For example, Aramark’s Service Stars program has created a cultural change from a sales and operations focus to one of sales and service in order to meet the demands brought on by significant company growth. “It’s a cultural shift that was led by senior management but was developed by our front-line managers in combination with the HR training team,” Petrucci explained. “It also involves training, rewards, recognition, metrics, all the way down to the front-line service provider level, and over the last several years we’ve seen it improve our customer retention by over seven points. That equates to roughly $14 million a year in revenue. It’s something we’re real proud of that bubbled up from the field based on a business need, and it has been encapsulated in how we do business every day.”

Petrucci said the Service Stars program places a great deal of attention on customer care with supporting training in 15 short modules that focus on areas of customer service as well as new sales to help front-line service providers meet, better interact with, respond to and anticipate the needs of Aramark customers. The company’s Sales Stars program has had similar results. “We’ve got about a 200-person sales force, and we’ve reduced our turnover over the last several years by about 30 percent. Each of those years we’ve had record levels of productivity. Our days to fill went from over 80 days to 31 days as far as filling open sales positions, and we’ve reduced our open territory days about 2,000 days a year,” Petrucci said.

Sales Stars impact begins with the onboarding process and a keen emphasis on training for Aramark products, services and equipment. The salesperson must understand everything that Aramark does. They attend training to learn the “need satisfaction” selling technique, or how to identify prospects’ needs and offer the appropriate benefits of company products, services or equipment. “When they come back from the training, we put them on a ‘Navigating the Stars’ development plan, which is very focused on the front-line managers, working with them one-on-one relative to the sales techniques,” Petrucci said. “That’s an ongoing process. The plans are written out, kept at the location. Everybody on the senior team as they travel through the locations looks at the plans, asks questions about them, constantly reinforces it, and we’ve found that our sales professionals are much better at what they do. Therefore, they make more money, they tend to stay longer, they’re happier, and it has resulted in making about an additional $400,000 a year in gross profit and reducing costs by about $540,000.”

The link between performance management and Aramark’s strategic objectives is strong because the senior leadership team works to successfully simplify, focus and prioritize complex business issues. Workforce performance solutions and development plans are designed on an individual basis and are constantly revisited outside the formal, twice-yearly managerial review process. Work is recognized, promotions are granted and questions are answered throughout the company around the simplify, focus and prioritize theme.

“We look at the profile of managers that we want either to hire externally or to promote internally so that the profile should be aligned with the behaviors that we’re looking for,” Petrucci said. “Then our management dimensions that we focus on align with the desired behaviors that we look for. There’s a lot of formalized training. We have the Leadership Development Institute where there are programs that everyone from front-line manager level all the way through executive can go to and participate in to have these behaviors reinforced in an applied academic setting. Then you have the career management process, and part of that process is where we sit down with everybody twice a year and formally go through the objectives that are set for them, their results to those objectives, their strengths, their opportunities and the development to help them reach their short-term goals, as well as their long-term goals.”

If a manager’s objectives don’t match up with his results, he receives no bonus. “We try to get a very early start in our annual process so that our leaders and the leaders that report them and so forth down the line have plenty of time to really think about the feedback they want to deliver, continue to analyze it and put together good quality plans versus having to rush through it,” Petrucci said. “There’s a very strong linkage back to what we need to accomplish. From there, it’s a relentless focus on all levels of the organization executing the feedback in the development plans, and making sure that it’s very quantifiable. You’ll see a high level of involvement with our front-line service providers to make sure that whether it’s executing marketing promotions or utilizing proper sales techniques, we’re very involved as a senior team, and it’s part of how we go to market. People love feedback. They would rather be engaged in very good candidate conversations that talk about strengths as well as development opportunities than be left alone by themselves.”

With an eye on what it takes to retain top-performing employees, Aramark turned its attention to the best processes and programs to attract talent. The A Plus Player Program, targeted to passive job-seekers, is one of the results. In addition to engaging in normal recruiting activities to tap into top talent, Aramark posts for positions that aren’t currently open to build networking opportunities. A database of these potential candidates is matched with either peers or potential supervisors in the field, introductions are made and relationships formed. “A lot of the research shows that your best candidates aren’t going to hop when an opportunity opens, they’re going to build a relationship and feel comfortable they’re making the right choice,” Petrucci said. “We try to attract and set up networking opportunities that are managed centrally as far as administration, but are executed locally with key leaders.”

Aramark doesn’t just recruit top talent—it also uses training to set the stage. For instance, when Aramark recruits sales professionals, every four months the director of sales training and development conducts an hour-long sales training session for pipeline candidates. “We want top talent to know that we’re committed to investing in their future,” Petrucci said. “If somebody’s willing to train them even before they work for the company, that’s pretty special, and what would we do for them once they come on board?”

Aramark recruiters are encouraged to assess and attract talent simultaneously during interviews. Typically, recruiters assess for the proper fit, but Petrucci said it’s also important to reinforce the benefits of the company at the same time by not waiting until the end of the interview to answer questions. Once candidates are on board, Aramark works during “the silent period” between job offer acceptance and the actual start date to dim the allure of counteroffers and ingratiate family members into the Aramark team with frequent contact and an onboarding plan to alleviate first-day nervousness.

Aramark measures workforce performance in traditional ways, such as attainment of sales targets, earnings before interest and taxes (EBIT), customer retention and sales force productivity, but also looks at behavior or actions, as well as tangible results. “If somebody has delivered good financial performance, but they don’t have a track record of developing their team, they’re much less likely to get promoted than the person who can balance both,” Petrucci said. “As we’re looking at our Sales Star training and we’re visiting locations and assessing their development plans for their sales force, if they’re not really focusing on the right techniques to make sure that we’re meeting our prospects needs, but yet they have a good profit margin, they don’t have the complete picture. So they’re less likely to get promoted than the person who can balance both of those things.”

Further, workforce performance data drives future initiatives. Aramark implemented a handheld technology initiative that changed the way the company does business using SKU information from vending machines versus category information. “Based on the potential of this system, we’re changing our structure, training, hiring profiles and performance management. As we looked at the opportunities to better serve our customers we (changed) the merchandising of our machines, making sure we have the right amount of product and the right products there for our customers. We implemented the technology and therefore changed the way we’re doing business based on that technology,” Petrucci said.

“We think our strategy is sound,” he added. “Sometimes people are looking for change and something new, and we have some of that, but really it’s discipline to execute the details every day. At the same time, given the shift in the employment marketplace, some of the studies I’ve read project that there will be 8 million open jobs in the U.S. by 2008. We need to continue to be a world-class destination for the top talent. That’s going to mean building on everything that we’ve talked about, as well as looking at new and creative ways to have the best and the brightest want to come and work as part of our team. It goes back to the ‘simplify and focus’ theme. There’s so many things you can get distracted on today. If you can break things down into four to six top priorities that everybody in the organization is talking about—they’re in our development plans, it’s what we talk about when we promote people, it’s what we recognize people for—it becomes part of your culture, and it’s not just something that’s on an overhead slide.”

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