He keeps Dollar General running at peak efficiency
When Jeff Owen was named executive vice president of store operations at Dollar General in June 2015, he hit the ground running. He quickly developed a vision focused on elevating talent, building an execution machine and upgrading the customer experience. Now, three years later, Owen’s vision remains the same, although he is constantly developing new goals for his teams to support and drive Dollar General’s growth plans.
In recognition of his role in the retailer’s ongoing success, Mass Market Retailers has named Owen as Retail Operations Executive of the Year for 2018.
With more than two decades of experience at Dollar General, Owen was honored when the company’s chief executive officer, Todd Vasos, asked him to step into the store operations leadership role.
“I’ve always worked closely with and had a lot of respect for Todd, and so I was happy that he was selected to lead Dollar General,” Owen said.
Owen, who had worked his way up to senior vice president of store operations, decided to step away from the company to pursue an entrepreneurial interest in 2014. After a short hiatus from Dollar General, he stepped into his new role with a fresh perspective that included new thoughts on processes and initiatives that he originally helped put in place.
“Being away from Dollar General, even for a short period of time, allowed me to appreciate what truly distinguishes us from other retailers and other companies overall: We have a relentless focus on our customer and a passion for attracting and developing amazing talent,” said Owen.
Owen’s first order of business was to create a three-year vision that could help Dollar General overcome the toughest operating challenges facing the company at the time. This original vision remains a cornerstone of Dollar General’s store operations strategy today.
The vision for elevating talent was simple in concept, but not an easy mountain to climb. Owen laid out a plan that would emphasize fostering an inspirational culture.
“People work for people. This means that we needed to have the right leadership team in place who would allow us to attract and retain high-caliber talent. I felt strongly that having this dynamic team in place would be the foundation for our success,” Owen said.
Under Owen and his leadership team’s direction, Dollar General implemented an improved recognition and feedback loop that included both recognition and development programs designed to inspire current employees and attract new talent.
“We needed to get employees to ‘believe’ and want to be on the Dollar General team,” Owen said. “With 120,000 people, you need to make sure they constantly feel connected. In order to achieve this, we needed to create systematic processes that could scale.”
Next, Owen turned his attention to building an execution machine.
“When I returned to Dollar General, I saw things in a different light than I did before I left,” Owen said in an interview when discussing his time away from the company. “As it turns out, it allowed me to be a better leader and to serve the team better.”
From an execution perspective, Owen determined that the team needed to build further simplification into the store environment, create a tool set that allowed employees to focus on what matters most and expect accountability throughout all levels of the organization.
Owen points to a revamp of each store’s business center as an example of his new thinking. The business center provides an access point for communications with store employees and a real-time view of the store’s current progress against its financial and operating goals. It’s a tool that makes it easier for store managers and their teams to understand their store’s performance and build a two-way conversation with the Store Support Center (SSC), which is how Dollar General refers to its corporate headquarters. Ultimately, he wanted to build a better tool to help store managers evaluate what was working in their stores and what was not. And, for a while, the business center seemed to serve its purpose, and new features were added over time. However, the system became less effective.
“When I came back, I first visited 50 stores, and I asked the store managers of all 50 stores to talk to me about the business center that I had helped to develop years earlier. I asked for candid feedback on its effectiveness, and I received basically 50 different answers. So, what became apparent is that we had over-engineered this tool, and it had become too complex.”
Owen and his team got back to work and came up with a streamlined version of the business center.
“We realized it was time to stop producing the reports we think are so valuable, because the people that we actually designed them for weren’t using them. It was time to simplify. Thanks to input from our store managers, we now use the same types of data and tools to evaluate a store’s progress through a green light system.
“Today, we have complete alignment from the store manager all the way to senior leadership. We’ve built reward programs, performance recognition and a performance matrix. Now, the performance systems are aligned and provide a ranking for every store, every district manager, every regional director, every store manager and every person within the operations team at the SSC. Without a doubt, it is probably one of the single greatest performance drivers that we have. People know exactly what they need to do to perform, how they are performing against those goals and how they will be recognized for that performance.”
Today, Dollar General’s emphasis remains on attracting the best talent, who want to work for the company because they have unparalleled opportunities for people to grow. In fact, approximately 10,000 of the retailer’s current store managers have been promoted from within. In fiscal 2017, Dollar General invested approximately $70 million in wages and training for its store managers, and the company has seen great returns, including historically low turnover rates at the store manager level.
“We wanted to build a performance culture that would allow us to elevate our talent, which we’ve done,” said Owen.
Owen also understood that both technology and people were needed to power the Dollar General execution machine.
“We’re a lean operator that uses technology to drive consistently strong execution. We’re proud of our innovative technology platform that is allowing us to reach even the most aspirational of goals,” Owen said.
The company also uses technology to help determine the best uses for its resources.
“We are very, very intentional in everything we do,” said Owen. “We’re as intentional about the things we want to get done as the things that we will not focus on.”
Since Owen’s return, the team has vastly improved how it leverages technology to drive growth. For example, district managers now have access to their offices on their phones, allowing them to manage their districts on the go.
Dollar General was in solid shape in 2015 when Vasos succeeded Rick Dreiling as CEO. Customer traffic and average ticket size had increased in each of the preceding 29 quarters. Executives were projecting top-line sales growth of 8% or better for fiscal 2015, with comparable-store sales increasing approximately 3% and operating profit rising by as much as 9%.
As one of his first priorities, Vasos vowed to continue efforts he had begun as chief operating officer to enhance the in-store experience by improving Dollar General’s performance in “getting merchandise on the shelf at the time the customer needs it so she can get out of the store quickly.”
Owen began to build on this priority by integrating a focus on upgrading the customer experience into his vision, and he has been instrumental in helping Dollar General become more systematic in how it uses customer insights and analytics to run the business.
“One of our most important priorities is to serve the customer. I know a lot of retailers say that, but at the end of the day, it is our team’s top focus,” Owen said. “It’s all driven by the customer telling us what she wants, and then us doing the analysis to understand what gets us the greatest result.”
“We rely heavily on analytics,” Owen said. “We put a tremendous amount of energy around the statistical view of operations. We have an amazing team who has created tools to figure out what customer behaviors best correlate to the results we want to achieve, which are based on what our customers have told us they want us to deliver.”
The analytics underscored the paramount importance of improving on-shelf availability while reducing shrink at the same time. In addition, analytics also revealed that Dollar General could successfully accelerate its real estate activity. As a result, it began to open and remodel stores at a faster pace than it had ever done before, doubling down on its commitment to convenience.
“We needed to deliver on what mattered most to our customer,” said Owen. “Reducing shrink was critically important, and we needed to upgrade the customer experience. These are two of the key buckets we remain centered around, and we have aligned the behaviors of the teams around these and others for the last three years.”
Since 2015, Dollar General has delivered on this vision. Shrink rates have decreased. The customer experience and satisfaction have improved. The company has completed approximately 6,000 real estate projects, divided relatively evenly between new stores and remodels. Today, all of these results have culminated in more than 28 years of same-store sales growth.
Owen began his career at Dollar General with an internship in 1992, when he was still an undergraduate at Vanderbilt University in Nashville, Tenn., studying economics and human and organizational development.
After graduation, he was recruited by former Dollar General president and chairman Hurley Calister “Cal” Turner Jr., son of the company’s founder, to be the first person to go through a new management training program that Turner established.
“I started learning the business from the ground up,” Owen said.
In 1997, Dollar General sent Owen back to Vanderbilt to get an MBA. “I did several stints in more areas of the organization, with increasing responsibility, and eventually led a division, then multiple divisions. Over the last 10 to 15 years, I was exposed to nearly every aspect of the business,” he said.
In 2011, Owen was named senior vice president of store operations, leading nearly 5,000 stores and 40,000 employees.
When asked about the secret to the team’s success, Owen quickly pointed to a core philosophy that focuses on continually thinking beyond today’s goals and needs and anticipating the opportunities of tomorrow. And Owen just as quickly gave the credit for this forward thinking to his team.
”I am so lucky to be part of an amazing team. They have shown me that thinking incrementally isn’t good enough … we must think bigger. We call that step-change thinking here at Dollar General.”