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Leadership Style at H-E-B

Leadership Style at H-E-B

Discuss Leadership Style at H-E-B within the Foundation of Human Skills (F.H.S) forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; HEB Grocery Company, LP (H-E-B) is a privately held San Antonio, Texas-based supermarket chain with more than 315 stores throughout ...



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Leadership Style at H-E-B
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Netra Shetty
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Leadership Style at H-E-B - May 10th, 2011

HEB Grocery Company, LP (H-E-B) is a privately held San Antonio, Texas-based supermarket chain with more than 315 stores throughout Texas and northern Mexico.[2][3] The company also operates Central Market, an upscale organic and fine foods retailer.[4]
H-E-B ranked No. 11 on Forbes' 2006 list of "America's Largest Private Companies."[5] H-E-B was named Retailer of the Year in 2010 by Progressive Grocer.[6] Supermarket News ranked H-E-B No. 13 in the 2008 "Top 75 North American Food Retailers."[7] Based on 2010 revenues, H-E-B is the twenty-fifth largest retailer in the United States.[8] It donates 5 percent of pre-tax profits to charity.[9]

Since taking the helm of the company in 1971, Butt has led the chain from $250 million in annual sales to about $13.5 billion and has carved out a dominant market position in southeastern Texas. He has driven the retailer to develop several new formats, including the highly regarded Central Market banner and the massive new H-E-B Plus superstores.

Charles C. Butt has been running one of the most successful supermarket chains in the country, but he has never stopped being a student of what he describes as “the art and science” of retailing.

The chairman and chief executive officer of San Antonio-based H.E. Butt Grocery Co., Butt has had many teachers through the years — his father, his fellow executives, the other successful chains that he has visited in Europe and North America, and his own customers, who have helped shape the company through their response to H-E-B's innovations.

“I've probably been what I would call an ‘incrementalist,’ improving the business bit by bit over the years,” he told SN. “I believe in sticking to the basics while exploring new avenues and new ideas.”

In recognition of Butt's success as the leader of one of the most admired supermarket chains in the country, known for its experimentation with new formats and its close connection with its customers, SN is recognizing him by naming him as one of three inaugural inductees into its new Hall of Fame.

“They have been real leaders in developing new store formats that are not only efficient, but that more effectively meet the needs of the shopper,” said Jon Hauptman, partner, Willard Bishop, Barrington, Ill.

Butt became president and CEO of the company in 1971, when H-E-B was a local operator ringing up $250 million in annual sales, and has grown it to become a 304-store regional powerhouse generating $13.5 billion in volume from multiple formats.

Its Central Market concept, which combines elements of specialty retailing with farmers' market-style merchandising, is one of the most admired concepts in American food retailing. In addition, the chain has recently begun opening supercenter-sized stores with expanded general merchandise called H-E-B Plus and a Hispanic-oriented format called Mi Tienda.

Butt said the company has learned from all of its retail experiments, even the ones that are no longer operating, such as the H-E-B Pantry concept, a price-impact format that helped H-E-B refine its cost-management skills at a time when Wal-Mart Stores was making inroads in Texas with an aggressive price stance.

The eight-unit Central Market format has perhaps solidified H-E-B's reputation as a successful innovator, however. The first Central Market opened in Austin in 1994, and continues to slowly expand under the leadership of Charles Butt's nephew, Stephen Butt.

“They are a format that serves a more affluent and generally a well-traveled, well-educated customer,” explained Charles Butt. “Those locations have influenced the rest of our company toward higher standards, particularly in perishables, which represent most of our sales, so they have been a great role model.”

H-E-B is also one of the few U.S. retailers to venture outside the nation's borders for expansion, and its 28-unit division in Mexico is continuing to expand there. The idea to extend into Mexico, where H-E-B's operations are headed by Howard Butt III, was originally conceived by Charles Butt as a research project for a business-school class.

“It's been a very gratifying experience, and it has afforded us some opportunities in cross-border procurement in fruits and vegetables,” he said.

Charles Butt, Chairman and CEO of H-E-B, today announced changes in the company’s senior leadership team.

“Craig, with his collaborative leadership style and keen insight into our customers’ needs, is well-suited to lead H-E-B in the new decade”
Effective January 24, Craig Boyan has assumed the position of H-E-B’s President and Chief Operating Officer.

Boyan, 46, has been with the company since 2005, and served previously as its Chief Strategic Officer and COO. He assumes the duties of President from Bob Loeffler, who in announcing his retirement, has volunteered to take the Chief Administrative Officer role for two years before doing so.

“Craig, with his collaborative leadership style and keen insight into our customers’ needs, is well-suited to lead H-E-B in the new decade,” said Charles Butt. “I’m confident that under his direction, our senior leadership team will ensure H-E-B’s continued growth.”

Boyan joined H-E-B in 2005. Prior to joining H-E-B, he served as a consultant to the company as Partner of the Monitor Group, where he headed their New York office. Monitor assists companies with corporate strategies, marketing strategies and company competitiveness. He is a graduate of Harvard College, and received an MBA from Columbia Business School. He chairs Junior Achievement for South Texas and is co-chair of the upcoming Hispanic Chamber Installation Banquet.

Another key leadership change was the appointment of Martin Otto to the role of Chief Merchant. Otto adds the title of Chief Merchant to his current one of Chief Financial Officer, upon assuming duties from Steve Harper, who will continue as a consultant. Otto joined H-E-B in 1991. His past professional experience includes real estate investment banking and public accounting. He is a graduate of the University of Virginia and Harvard Business School.

The company also highlighted the strong leadership of Suzanne Wade, President of its San Antonio Food/Drug division (207 stores). Ms. Wade joined H-E-B in 1997 and assumed her current position in July 2003. Wade is a graduate of Oklahoma State University. Ms. Wade is a Board Member of the Coordinating Council for United Way Initiatives, a member of the Advisory Council of San Antonio Independent School District’s Young Women’s Leadership Academy, and a member of the Women’s Leadership Council.

Also recognized for his strong leadership is Scott McClelland, President of H-E-B Houston joined H-E-B in 1990. He was appointed to his current position in 2003. McClelland is a graduate of the University of Southern California. Mr. McClelland chairs the Houston Food Bank and serves on the boards of the Greater Houston Partnership and Memorial Herman Hospital Systems. He is also a member of the Children’s Defense Fund.

Bob Loeffler, during his long and distinguished tenure with H-E-B, has held the positions of President, COO, and Senior Vice President overseeing Houston store operations as well as having led Information Services. Loeffler is a graduate of the United States Naval Academy at Annapolis and received an MBA from Texas A&M University. Loeffler served as Chair of the United Way Campaign for Bexar County in 2009. He serves on the boards of Meijer, a supermarket company based in Michigan, and the National Association of Chain Drug Stores, of which he is Treasurer.

In his CAO role he will be responsible for distribution, information solutions, Mexico and Central Market at the corporate level, food safety, and quality assurance. Howard Butt, III, who heads up H-E-B Mexico, 33 stores, with others under construction, headquartered in Monterrey, will continue to report to Loeffler as will Stephen Butt who leads Central Market, headquartered in Dallas.
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