Wise Words with Jeff Philipps

During the worst economy since the Great Depression, during the worst Spokane winter in decades, the roof fell in Dec. 29 at the Rosauers at Five Mile. The practical thing to do, from a financial standpoint, would have been to lay off that store’s 120 employees during the four-month roof repair project. After all, companies throughout the Inland Northwest were shedding employees every day. But Jeff Philipps, president and CEO of Rosauers Supermarkets, along with his management team, decided not to do the practical thing, but to do the right thing for the well-being of their employees. They relocated some of the employees to other stores and paid 90 percent of salaries, plus health benefits, for all 120 employees. Philipps, 54, is serving as this year’s “Pacesetter” chair for the Spokane County United Way fund campaign, asking businesses to ask their employees to give early to the campaign – and increase their donations over last year. One recent Friday, Philipps took a break from his busy schedule to reflect on how his childhood helped him make the job-saving decision. And how Rosauers employees are now “paying it forward” through extreme generosity to United Way. Philipps was the fifth interview in the “Wise Words for Troubled Times” series. Here’s the complete transcript of the interview.

I grew up in Montana, one of five children. I was No. 2. When I was a sophomore in high school, my parents divorced. My mom raised five kids by herself. I look at those things as times of turmoil, but also times where a lot of lessons were learned and, really, set the foundation for who I am today. Sometimes you get forced into situations that you may not want to be in, but when you look back you think, wow, what a great opportunity that was for a learning experience, a family building experience.

I grew up going to Catholic schools, so there has always been a real commitment to faith, belief in God — that’s been a real anchor for me. Sometimes when the world starts to go sideways on you, you need that anchor to hold onto. It’s an important baseline.

I grew up with a real sense of responsibility. We had to help provide financial help to our family. I got a job early on as a 16-year-old working at a grocery store. I loved that business. It was a public place. Lots of personal contact with a lot of people. A very busy place. There was always something new going on. That had a lot of appeal.

I’d been going to the grocery store talking to the manager because I was still 15 at the time and you couldn’t work until you were 16. I pestered the guy every single day, for at least six weeks before my birthday, because I knew I couldn’t work until I was 16. I went in person. It was about a mile from the high school to the store. I walked a mile to the store, did my thing with him and then I walked two miles back home the other direction. What went through my mind was “When I do turn 16, that job opening is going to be mine. I want him to know I want it. It’s not that my mom wants me to have it or someone else wants me to have it. I want it.”

I recall I told him, “I would really like this job. My mom has shopped at this store for a long time. I’ve come with her and I really like what happens at the store and I really want to be part of your team.” I told him that over and over. After awhile, he’d see me coming and say “I know. I know.” It was a bag boy job. On the day I turned 16, I had that job.

That was a lesson for me too and one that I try to share with my kids — persistence does pay off. If you are really passionate about something, if you really want something, you have to do the necessary things to get it. You have to take the necessary steps and the necessary risks and sometimes that’s not easy, but you have to.

I remember the store manager was a very people-oriented guy. He was very friendly. And he was also very fair. Sometimes in the grocery business, really in life, things aren’t always fair, but it’s a matter of how you address those things. You need to handle them in the way that provides a base of fairness. And that’s what I remember about him. You just tuck it away and pull it out when that situation arises.

I went to Carroll College in Helena, Montana, thinking I was going to be a banker. I did the whole accounting, business, economics degree. As it turned out, I was working for a company called Buttrey Food and Drug, a regional company. There was an opening for an assistant manager’s position. Even though I was only 23, they offered me that position, I accepted and the rest is history. I’ve been so fortunate in my career to have lots of opportunities to experience lots of different styles and management techniques and you get to choose a little bit of each of those to choose who you are.

When I worked at Buttrey, we had a couple of stores in Missoula, and Rosauers had a store in Missoula. So they were a competitor of ours. I remember going into the store in 1978, because Rosauers had built the store in Spokane that had the chandeliers and the carpet and all those things in it. They had done a similar thing in Missoula. I was in Great Falls at the time and I remember getting in the car with a couple of co-workers and driving to Missoula to see this great store. I was very impressed.

The thing I liked about Rosauers was that it, like Buttrey, was a very family focused grocery store. They were similar in how the companies grew, how they split – Rosauers went through a time where they divested stores, as did Buttrey. Beyond that was that sense of family that held the companies together and still does to this day at Rosauers.

The day of the roof collapse, December 29, I was at home. I had had a shoulder surgery two weeks prior. I got a call from our chief operating officer. He said, “Boss” in this very flat tone. I said, “Mike, what’s wrong?” He said, “I’m on my way up to the Five Mile Store. The roof has collapsed. I’m not sure everyone got out.”

You talk about a sinking feeling. If you recall on December 29, we had tons of snow. I was snowed in at my house. I went across the street, in my sling, to my neighbor who had a four-wheel drive. I borrowed his vehicle. My oldest son and I went up to the store. I drove, and he made sure I could drive with one arm. We got up to the store and very fortunately for everyone, there was one minor injury. It was an employee, and I spent a little time with her just trying to make sure she was OK.

From the outside of the building, it looked like nothing was wrong. All of the disaster portion happened inside the building. It was cold. The fire department was there. I ran into Bobby Williams (Spokane Fire Chief). Bethanie Powell, our assistant manager, was on duty that night. She took decisive action to get people out of the store. And according to Bobby, she saved lives. We could have had some real serious problems. The area where the roof collapsed inside the store was phenomenal. It was something in your worst nightmare you could not imagine.

Shortly after that, once we made sure everyone was OK and accounted for, our executive team who was there that night all came back to our office facility on Garland. I remember thinking, “OK, what’s the plan of action.” What I recall of my comments were “Guys, the building is just a shell. The building will be rebuilt – no issue. Now, what are we going to do about the employees.”

You never know what’s going on in the personal lives of your employees. Everyone’s got issues. Everyone’s got their own stories unfolding that are sometimes hidden and they don’t come out until a situation like this. That night, we decided right away we were going to take care of our employees. We weren’t sure of the insurance piece. We weren’t sure about anything, but we made the decision that that’s what we were going to do.

Where do those kinds of decisions come from? I really believe our management team – and I’m so proud of them – has a similar view of the importance of people to our operation. We look at our business, not as a grocery business, but as a service business that just happens to sell groceries. Without the people component of our business, we don’t have a business.

I think everybody felt very strongly that the people at that store – just like any other employee at our stores – are the reason for our success. People go to the stores to be cared for by those people. And they’ve established relationships with our customers. For us to leave them sitting on the edge of the curb wasn’t even an option.

We all went through that big gulp thing of saying, “Who knows how long it will take to rebuild the store. Who knows how long it will be before we can actually we can take money through the front end to pay for the labor we’re going to try to shift around.” But those were secondary thoughts. It really was a decision that we are going to do this, now it’s just a matter of how we’re going to get it done.

Did Rosauers take a financial hit because of it? Oh yeah. Obviously the building was covered and we had other insurances that helped, but you still have all sorts of other expenses that are just borne by the company.

In that December time, the stock market was really starting to unravel. There had already been a series of layoffs within our community. Spokane is fortunate in that it goes into things a little bit slower and comes out a little slower, but the dips are not as deep. We had employees who worked for us at that store whose spouses had been through layoffs. There was already this fear of what is going to happen.

We had two meetings. One was to explore what options were available to assist people. We went to the unemployment office to figure out how that would work. After we had the meeting, we said, “Oh my gosh, they are going to maybe cover 30 percent of the wages. That will leave people unable to make house payments, care for their kids, all those things that are life and death situations when you are living check-to-check.” So we said, “Even though this may cause us a setback from a financial standpoint, we’re going to do the right thing.”

The roof collapsed on a Monday, and we gathered them for the first time on Friday to explore the unemployment benefits or whatever. Then that following week, after we made the decision of what we were going to do, we all gathered at the Roundtable Pizza at the end of the plaza.

And by the way, the fellow that runs that – (Skip Webster) - when I called him to see if we could reserve the space, he said, “Just take it. Your do whatever you need to do.” You feel really supported when those kinds of things happen. We got literally hundreds and hundreds of telephone calls, e-mail messages from customers, our other employees, just everybody for weeks afterwards. People were concerned about their checker. “Is she OK? Is he OK?” It was a hugely rewarding experience. In the midst of this turmoil come all these silver linings that held us all up.

There were 120 employees on the payroll. They all showed up, except for two. We had 118 employees that morning. We jammed in the room. We recapped what we’d discovered. When we made the announcement that we were going to cover people at 90 percent of their wage, that’s when you find out all the other stories. There were tears and cheers and a real sense of family.

We said we’re going to try to place people where we could. And if you couldn’t be placed, we’d pick up that wage out of our pocket – and medical benefits. We’ve got lots of young mothers, young fathers working at our store who are the breadwinners in some cases. For them to be without insurance coverage for small children, particularly. We didn’t want to put our people in that situation. They had nothing to do with what happened and they had everything to do with our success. That was our approach.

After the meeting broke up, a number of people came by to tell me, “My husband was just laid off three days ago.” Or “I’ve got some health issues and I can’t tell you what the insurance coverage is going to mean to me and my family.” It was an incredible meeting, emotionally charged. We came back here (to headquarters) literally exhausted. It drains you of everything. It was also a great feeling.

What can other companies learn from how this was handled? Not every company is in a position to do what we did. They might not have the resources. But every company has the ability to be compassionate and treat people with dignity and respect and be empathetic to whatever else faces them behind the scenes. An employee said, “The money part was secondary. The fact that you cared enough to do it meant everything.”

We had customers through the whole four-month period we were down calling and asking, “When is the store going to open? That’s MY store.” At the early onset, we didn’t know how long it was going to take. It took about three weeks until we understood the gravity of the situation. We had the caution tape surrounding the store, but we still had people coming up to the door saying, “Aren’t you open today? I though the roof had just collapsed.” They had no real perception of what that truly meant. Until we got into the building to start extracting the roof could you really see the devastation of what happened in there. What had once been a barrel roof was concave. If you think of all that pressure coming down, it was a mess.

The vast majority – I would venture to say 110 of those 120 – came back to work for us. A few took the opportunity to say this is a great opportunity to do that thing I really want to do. A few of them moved out of state. We had a little get together the night before our reopening day. They had been flung to the far reaches of the Rosauers organizations within Spokane. So it was wonderful to have them all back at their store. We had some good sharing of stories. I really believe our company, as well as that team of employees, are so much tighter and closer and more committed than ever to our mission.

Why did I say yes to be a Pacesetter chair? Personally and corporately, we have been a supporter of the United Way for many years. I believe in what they do. I believe in the organizations supported by them. There is so much need in our community. We have a fair amount of poverty in this community. We have a fair amount of unemployment. We have a large number of students who never complete their high school education. All of those things are things that need to be attended to. If nobody does it, it just doesn’t get done.

It’s been a very busy year for me, but for the things you believe in, you owe it to yourself, really, to be the example for others to show them that if you believe, then you must act. I said yes to this United Way Pacesetter position. Another person (from United Way) called and asked me to take a position. I thought it was the same position, but it ended up being two different things. The other one was making calls on other businesses in our area to get them to run campaigns.

Once I discovered I’d signed up for two things, I was thinking “Can I do that?” And then I thought, “Of course. It will take time. It’s pressure. It’s always pressure, because there are always so many things vying for your time.” But when you believe in it, you just do it. The need this year is greater than ever.

Is it counterintuitive to ask for more money in a recession? Oh yeah. When I was asked to be a Pacesetter company, in addition to being chairman of the Pacesetter group, I love a challenge. The Pacesetters were asked to run their campaigns early and be completed by Sept. 18 and also shoot for a 15 percent increase over last year’s contribution.

The businesses I contacted were ones who had run campaigns before, except one. The ask to every business, not just by me, but by everyone in the campaign who is reaching out and saying “Times are tough. We know that. We understand that. But we are asking you to put the decision in front of your employees. Let them make the decision about the sacrifice they are willing to make to make our community better, one person at a time.” The people that I talked to were going to run campaigns anyway, but sometimes people at higher levels of an organization tend to think for the organization. We don’t let our employees make decisions.

I think all of us, regardless of job security or pay levels, are being affected by those around us who have been impacted. All of us, seeing the interaction in our realms of influence, are saying “You know what? I know someone personally who is being affected today. If I can help, let me help.” And while some people who are unable to help this year, because of their financial status or because their spouse has lost a job, that has been more than picked up by those who said, “I have a job. I can help. I will help.”

Spokane is really noted for this. In tough times, we come together as a community and we make it happen.

When we had our United Way meeting here with our store team and our corporate team, I said, “Here’s the goal. We’re going to try to get a 15 percent increase. You know how you can read faces. It was like “Are you kidding me? In this economy?” But we also said, “Ladies and gentlemen, let your employees make the decision. Your job is to present the case. Their job is to make the decision.” And we ended up with a 41 percent increase and we were only shooting for 15.

How did the retention of the 120 employees is related to the 41 percent increase? The dots connect. We have a meeting with all our management team every year to kick off our internal campaign. We’ve said it before and this year when we said it, it was even more real in that there are probably those among us, within our organization, who are recipients of aid from United Way agencies. For our own Rosauers family, it is important to take care of each other. Working through the United Way is one of those means. Not the only means, but one of those important means. I think when people thought back to “Hey, I was taken care of. Can I afford a couple of bucks a week to pay it forward for someone else?” I think that really did make an impression on people.

It’s an amazing feeling to see those pieces that have a ripple effect all come together to make that one wave in the center that say yes, that was the right thing to do. It’s working better than it ever has.

What will I take from this that will last you the rest of your career? I saw it today when the United Way campaign cabinet went to the Salvation Army to work the mobile food distribution line. And then we got a tour of what happens at Salvation Army. It happens at the Salvation Army, it happens at Vanessa Behan Crisis Nursery, it happens at Children’s Hospital – all of which I’m associated with. Wonderful, wonderful organizations doing great work. But what I realized today is sometimes we are so proud to ask for help that we push ourselves to the further edges of that margin of society, because we’re too proud to ask. Yet within this community, there are so many people willing to help those who need it.

Where did I see these characteristics role-modeled? I don’t even have to think about that one. My mom. In my mind, she was the one who showed her kids that even in the toughest of times, integrity is important, honesty is important, faith is important and family is important. There were times when I would come home and there was no electricity or no water. First of all, no kid should have to experience that. But sometimes life is like that. So you have to then figure out how to deal with it. In our case, our mom held that family unit together in such a way that everyone knew they had a role to play. Everyone knew what the benefit was to the family. Even though it was hard for kids to be adults in that situation, we did it because we loved each other and we knew we had to make it.

My mom’s name is Mary Philipps. She lives in Great Falls. She is 79 years old and still goes great guns. My mom knows the meaning of being a true friend. Friendships are so valuable, especially in times of trouble. You always have your family. But sometimes, we minimize the value of our families, but we also minimize the value of our friendships. She is a true friend. She is usually the one to do the organizing, the calling and making sure everyone is OK and have been taken care of. And if she hasn’t heard from you for a couple of days, she’s calling to make sure things are OK. She does that with her friends and her family. She’s been a great role model in terms of parenting – even under difficult situations. But she also role models what the true spirit of a person is.

When she found out what happened with the store and the approach we’d taken with our employees, I called her to tell her what was going on. A few little tears on the other end which got me going. It was a real sense of pride on her part and she said, “I know things were rough when the family was growing up, but obviously the love we shared as a family made a difference. And the leadership qualities that we worked so hard as a family to instill in each other paid off. You did the right thing.”

My mom was a bank teller. She worked as a credit union. Didn’t make a tremendous amount of money. It was a second income at one time. After my dad left, there was still a house payment to be made, as well as all the other expenses that go with running a house. She got a call to come down to the bank, and the bank was going to repossess the house. She went into the bank and the bank basically said, “Mary, you are not able to make the payments, we’re going to have foreclose on the house.” My mom basically said, “You are not taking this house from me. I’ve got five kids that live in this house, and we are a family in that house, and we’ll make the payments as much as we can make the payments, and that’s going to have to be good enough for you until I can pay it off.” And she kept the house.

I was 16 years old. I’m helping make those payments. I had my job at the grocery store. I also had a paper route at the same time. My sisters babysat. My older brother did his share. And you know, we made it. Our family is really very strong because of that experience. It’s not something you necessarily share with people. It has its bittersweet moments. There are times you can look back now and laugh at it. But there are times you were going through it wondering how is this going to work?

What do I hope to pass onto my children? In today’s world, it becomes more and more difficult to make sure your kids are exposed to the right kinds of examples for those qualities of leadership, integrity and honesty. They read in the newspapers or see on TV every day, somebody is going to jail for this or that or the other thing. Or you’ve got people so self-absorbed in drug habits or alcoholism or those sorts of things. It’s your job to say as a parent to say, “This happens in the world. But in this family, it doesn’t happen. And it’s not going to happen, because we are strong enough to figure it out that it’s not.”

And so you try and get your kids exposed to friends who have the same values, to church and faith, to make sure that foundation is there, so that little conscience that tempts you to be off doing something you shouldn’t, that that foundation is pretty darn firm so you’ll make the right decision when tempted. And then you have to be there for them.

I’m very fortunate, my wife Kathie has been home with my kids since they were born. She has done a great job of getting our kids involved in outdoor activities, music, extra math programs – for the purpose of exposing them to other things in the world. And to help them understand the value of a good education. It will be a huge value to you in the long run. My oldest son is a senior at LC, a straight A student, taking honors and AP courses. I’ve never had to say anything to him about school. He comes home, he does it. All of them understand education is important. And that the person you are comes from knowing how to interact with people and putting that knowledge into action.

Have I forgiven my father? The last few years have been easier. There will always be the hurt of the lack of an involvement when you want your dad to be part of your life. There’s always going to be the hurt that that wasn’t there. I do communicate with my dad now. He lives outside Phoenix. We do talk. It’s going to take more time – for both of us. Relationships are difficult enough when they are going well. My faith teaches me I need to put it behind me. I’m working on it.

Some final thoughts? Lend a hand. We all have time, if we make it. There’s a saying, “If you want to get something done, find a busy person to do it.” Those are the people organized enough to say, “I can carve out this piece to spend on this and then I’ve got to move to this.” Sometimes, we as a society, and we as individuals, become really lax in terms of our commitment in terms of who we are as a community. It’s easy to say, “You know, I’m not comfortable doing that. I’m not comfortable asking.” It only takes one time to get past that. And then you’re on your way. As fearful as it is for some people to do that, if they would do it once, they could contribute so much more. And the ripple effect happens after that.