Undercover Boss Chris McCann shares insights, lessons learned

Somewhere between Valentine’s Day and the height of the Spring floral season wouldn’t be best the time to dabble in flower arranging if it wasn’t something that came naturally. But that’s where 1-800Flowers.com President Chris McCann found himself when he agreed to participate in “Undercover Boss,” which aired last night on CBS.

Chris McCann, President, 1-800Flowers.com

Chris, who jokingly told me he arm-wrestled his CEO brother Jim to determine who would be the one to go undercover, was as lively and engaging on the phone as he came across in Sunday’s episode. (While the arm wrestling may have happened, Chris told me later that the decision was made a bit easier by the fact that Jim is featured on so many of the company’s advertisements they were worried people would recognize him. And, supposedly, Jim didn’t want to shave off his trademark beard.)

After seeing McCann speak about business analytics at NRF’s Annual Convention earlier this year, I was immensely looking forward to watching his experience going incognito at his own company for a week. And last week, prior to the episode airing, I had a chance to talk with him about his experience, the rebounding economy, and the joys and challenges of working in a family-run business.

In a few months, Chris will hit the speaking circuit again as he keynotes Shop.org’s Online Merchandising Workshop. I imagine he’ll bring the same fresh insights and perspective – though perhaps not the beard – to California in July.

What were your initial thoughts the first time you were approached about the opportunity to go undercover?

I was intrigued right away. I thought the concept and the opportunity would be very exciting. Once CBS showed us a copy of the first show that would air [Waste Management] I said, “Okay, they’re not looking to do a slam story on a company. Let’s do it.” And I was excited about it right off the bat.

Tell me a few of the most surprising moments from your week incognito.

Chris McCann (aka: Patrick O'Reilly) during his week incognito

There were a couple eye-openers for me. One certainly is a stark reminder that retail is detail. Growing up in the retail business you’re always aware of that, but in these roles I was reminded about just how many details there are.

I was really impressed and took a lot of pride in the commitment and passion that everybody in all different areas of the company have – whether it’s the commitment to quality in food production facilities, commitment to quality in the floral division, the design capabilities, or the creative artistry.

We’ve tried to build the culture of our company on a concept that my brother Jim brought from his experience as a social worker: build a relationship first and do business second. We’ve always preached that in how we interact with our customers. But what I’ve learned from this experience is that it’s even more important to do that with the people that work in our company. This has changed the focus for me to make sure that managers at all levels of our company are building relationships with their employees. At the end of the day, if I want our employees to connect with our customers, they have to feel connected to our company. You only feel connected to the people you work with, not to a company brand or a name.

Ultimately, how do you think the Undercover Boss experience changed you as a leader?

I found I need to focus more on the cultural aspects of the company and that gets back into connecting with the people. It’s so important that everyone understand what we’re trying to achieve. In each of our businesses and each of their channels—retail stores, wholesale, online—at the end of the day what we’re doing is creating smiles for our customers.

Several years ago, when I was having a career discussion with my daughter, she said, “I want to be in a job that impacts people, like you do. You get up in the morning and go to work where you make thousands of people smile every day.” I was reminded of that during this experience. If I keep that my center and make sure everyone in my company understands that they make people smile everyday, that can go a long way to making people feel good about their jobs.

Has your company made any changes to business processes or operations as a result of your week in the trenches?

One of the things I will be doing – I have not implemented this yet – is changing the top-down performance appraisal process. I want to get people rating their managers. That will show, “do they know me?” That’s what I want to get from the employee’s perspective: “Does my manager know me, what motivates me, do they know anything about my personal life…”. That will tell me whether the manager is doing their job.

I can see whether managers are doing their job from the production and metrics point of view, but not whether they’re connecting with people, so that’s a change we’re looking to make in our HR processes.  Other changes we’re looking to make are compensation programs, production quotas, and making sure people are getting rewarded for exceeding their production quotas.

You joined 1-800Flowers in 1984 to work with your brother, Jim, joining many in retail who are part of family businesses. What are some of the challenges and benefits to working alongside family?

Jim opened the first shop in 1976. I was 15 years old and had no choice but to work at the shop through high school and college. I’m still trying to collect back pay for those years, but I decided to join full time in 1984.

We grew up in a family contracting business that ended in conflict and splintered the family. Jim and I decided to try it for six months and to see if it worked. Now I’m re-upping for my 52nd six-month contract. One of the benefits was an age difference: He had already started the business, he had 12 shops when I joined. There was no power struggle. Then we were able to develop our roles to complement each other: Jim’s a big picture guy, I developed the operational side.

Our roles over time have changed. And now it’s at the point where we can operate as two at the top. While we have different sets of responsibilities, he can step into my job, I can step into his.

1-800Flowers went online in 1991 and created its website in 1995, long before most retailers were even thinking about the Internet. What was behind the decision, and how has it paid off?

There was this thing called the World Wide Web and we said, “We’ve got to try it.” We buckled down and rode the internet wave for a while. That led us to the decision to go public and execute the strategy that we have now: expanding product offerings through the web and brick-and-mortar that gives our customer the choices they’re looking for when they want to make someone smile.

In each of those cases, we saw a technology emerge that had the capability to change consumer behavior. We embraced it and if the consumer changed, we were ready. We’re doing that now with social media and mobile commerce and have been actively involved there for the last two years.

Over the past 18 months, how have you seen the economy impact the floral industry?

We used to say that the floral industry was somewhat recession-proof – we wouldn’t get hit real hard during a downturn but we didn’t operate at the high end of any upturn. This recession was different. We experienced our first negative year last year as the consumer pulled back significantly, especially in discretionary spending. Our food gift business like Fannie May, Cheryl & Co and the Popcorn Factory fared a little better during the downturn. If you want to call gifting discretionary, the consumer will place more value in something more tangible like a food gift than they will uncut flowers, for example.

We do see that the economy has now stabilized. We haven’t seen a big uptick right now, but in a stable economy we’ve continued to grow. As we went into the recession, we made some decisions that positioned us for growth. We made the decision to focus on the customer, increase service to our customers, maintain the right cost structure, and invest in technology for the future, such as social media and m-commerce. We also launched a new brand last fall, 1800Baskets.com.

Thinking about all of your brands, tell me a few of your favorite items.

I love an assortment of products. One of my favorites and a great seller is our chocolate covered strawberries. They did phenomenal this Valentine’s Day and are still selling great for us.

On the floral side, I like some of our more fun and whimsical products like our strawberry margarita from our happy hour collection, which is made in a big margarita or martini glass. It can be for many different occasions. A perennial favorite along the same lines is our birthday flower cake. Again, it’s a product that customers love to send because its made of flowers but in the shape of a cake. It’s a twist on things and a play on words and puts a smile on people’s faces.

Then of course I’d be remiss if I didn’t mention our Fannie May chocolates, especially our pixies.

What do you love most about retail?

It’s very simple: customer interaction. I’m very fortunate to be in the business of creating and sending smiles. When I deal with a customer it is usually for a celebratory occasion, even if it’s the celebration of life. Birthdays, anniversaries, Mother’s Day—these are things that people love to celebrate. I love that customer interaction and that’s why I loved the experience of Undercover Boss where I got to go work in the stores and see how that customer interaction was happening.