Goals, rewards give C-store empire its edge
Pacific Business News (Honolulu) - by
Jim Kelly Pacific Business News
JANUARY 25th, 2008
In 30 years of running
gas station convenience store, Al Gustavson has developed an almost
bulletproof system for success as a "hands-on absentee operator," as
he calls it.
Twenty years ago, when
he ran two stations in California from his home on Maui, it involved
a $3,000 fax machine, a cell phone rig that needed it's own
suitcase, a glitchy TV camera that fed jerky images across 2,500
miles of telephone lines and monthly visits that took him away for
four or five days at a time.
"I'd call them up from
Hawaii and say, hey, I can see we need more popcorn in the machine,
just so they knew I was watching," he said.
'THE CLEANEST STORE YOU'VE GOT'
Gustavson is putting his
managerial omniscience to the test as he oversees a company that has
grown rapidly from $4 million to $70 million in annual sales, from
one store on Maui to 14 on four islands, from a dozen employees to
170.
Gustavson's company,
Goose's Edge Inc., is now one of Hawaii's largest independent gas
and "C-store" operators, under contract to run stores for
Shell and Tesoro. A year ago, he closed the biggest deal of his
career, the purchase of what was the Queen Kaahumanu Chevron(now
Tesoro) and convenience store on the harbor in Kona, one of the
busiest such stores in the United States and the only one Gustavson
owns outright.
With his hair bleached
white and his skin a deep red from indulging his passion for the
sport of fishing, Gustavson is blunt-talking yet affable. He laughs
easily and talks about how he tries to make working fun, but it is
clear he also is a worrier, especially as his company has expanded
and he has had to delegate more responsibility to others.
"I figure if I trained
them right, I should be able to sleep at night." he said. "But I
still do that 3 o'clock thing, getting up, thinking about stuff."
Gustavson, 54,
ultimately sold the California stores and bought the Dairy Road
Tesoro in Kahului in the mid-1990s. His success there led Shell to
approach him about taking over some of its stores on the Big Island
in 2001, a relationship that led him to expand to Kauai and, in
2006, to Oahu, with both Shell and Tesoro. His stores pump 16
million gallons of gas a year.
While price matters, Gustavson found
that customers would come back and even pay a bit more if the stores
(and especially the restrooms) were spotless and the workers were
helpful. Sixty percent of his profits come from the stores, with the
rest from fuel sales.
"I sell the cleanest
store you've got, great attitude, price, "he said. "It definitely
puts people in an attitude to buy."
MOTIVATING WITH MONEY
As he took on the new
station-stores, Gustavson developed a training plan that was simple
yet comprehensive, covering everything from handling credit cards to
cleaning toilets. And he figured the best way to motivate employees
to follow his instructions was by using the same thing that
motivated him: money.
He established a
generous incentive program that rewarded performance on practically
every level, but also deducted points for mistakes, like failing to
wear a name tag or allowing a product to run out. Employees are
rewarded individually and also compete as a team against the other
stations for monthly awards, as well as an annual award that can pay
a winning store manager almost $5,000.
Employees, whose wages
start between $8 and $12 an hour, can see their pay increase 60
cents per hour more by racking up points during Gustavson's
unannounced inspections.
There also are
on-the-spot bonuses of $100 and more paid for excellent service or
for closely following procedures, like checking IDs on beer and
cigarette purchases. There's even a $500 bonus paid to any worker
who reports employee theft.
"It's good
incentives, real money," said Laura McShane, assistant manager of
the Waipio Tesoro. "It isn't like getting movie tickets."
Scores are posted
so all employees know where they stand in the competition.
"Once you enable
them to see how to make money, it's huge; they just go off," said
Gustavson, who paid close to $50,000 in bonuses last year. "I tell
them that I'm here to help them make money, as much as they can."
Gustavson does a
walk-through of each store at least once a month, running his
fingers across practically every flat surface and quizzing employees
with questions about procedures, what products are being promoted
and, especially, what the company's mission statement is: "The Best
Buying Experience 24/7."
Despite its
fast growth, Goose's Edge remains a small company. (The name comes
from Gustavson's high-school nickname, Goose, and the competitive
"edge" he sees in his business). Payroll and most accounting are
contracted out and each store manager is responsible for being his
or her own human resources director. Tesoro and Shell handle most
marketing chores.
There are
only five top managers, including Gustavson and his wife, Suzanne,
the vice president. Son Matthew, 27, oversees stores on the Big
Island and Kauai.
MANAGING FROM HOME
Gustavson runs the
company from his home in Kona. Multiple cameras installed in each
store feed constant images to his office. Using his home computer,
his iPhone and even a laptop aboard his boat, he can tell how much
business each store is doing at all times.
He makes sure that
all employees know how to reach him and is clear he doesn't want any
troubles sugar-coated.
"He's not like a
boss you're afraid to talk to," said McShane, the Waipio assistant
manager. "If you have a concern, he wants to hear it."
jkelly@bizjournals.com 955-8030
Small-business issue
Maintaining consistent quality in multiple stores
on four islands
Strategies
-Establish clear daily procedures
-Use generous financial incentives to make goals
-Use the latest technology to "see" what's
happening in each store an to stay in touch.
-Stay Involved, visit regularly.
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