Today was the semi-annual Villanova School of Business Bartley BriefCase Challenge. The event is held each semester for our junior business majors and involves their analysis of a Harvard Business School case. If you would like to learn more about it, here is a post I wrote a couple of years ago that describes how the competition works.
The case chosen this year was about Daily Table, a Boston-area nonprofit community grocer dedicated to providing fresh, tasty, convenient and nutritious food to communities most in need at prices everyone can afford.
Here is some info about the company, from its web site:
We believe that delicious and wholesome food should be available to all. We help communities make great food choices by making it convenient and affordable to choose tasty and fresh meals and groceries. By partnering with a network of growers, manufacturers, and other suppliers, we source high-quality food at low costs and make it available to everyone in our communities at prices designed for even a SNAP budget.
Our stores provide a selection of fresh produce, grocery staples and made-from-scratch prepared foods at prices low enough to fit within every budget. We believe in providing a shopping experience that fosters a sense of agency around your health (you can afford to eat well!), and the dignity of providing a helping hand, not a handout. We believe in creating livable wage jobs, with a strong preference for hiring directly from our neighborhoods.
Our unique retail model means that every dollar donated is matched at the cash register with more than two dollars of earned revenue. As we grow, we become more financially sustainable and less dependent upon philanthropy. Literally every shopper is a funder!
Our goal is to generate funding through the delivery of our mission, not simply for the delivery of our mission, allowing us to focus all of our attention on our mission instead of fundraising.
In the case study the students were asked to analyze, management of Daily Table had to think about what to do about its employee wages. The grocer had raised starting wages to $15/hour a couple of years ago, and then last year they added a $2 per hour rate hike because of COVID-19.
Now that COVID was starting to get under control, they were trying to decide whether to lower the wage back to where it used to be, and if so, how to do so. In addition, the students had to think of any other strategic initiatives that Daily Table could implement in order to further its mission.
It was another wonderful case that challenged our students to apply their business knowledge to help an organization that was committed to making a difference in its local community.
I wish Daily Table all the best, and if I ever get up to Boston, it will be on my list of places to visit.
Here is a video that offers some insight into Daily Table:
I think they can safely leave the wage at $17/hr. I expect inflation to quickly catch up very quickly to it.
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Some teams presented data to support such a decision, citing benefits like reduced turnover, that would actually lead to cost savings, despite the higher wages…
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Good points also. Now I can see how business school can help people make good business decisions.
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Let’s not get carried away…
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i would also say to leave the wage at $17. respect for all people – those who serve, as well as those they serve.
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I think you are right; it’s hard to cut somebody’s wages, especially after they just put in all that time during covid… I would imagine cutting wages could turn into a PR nightmare…
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there really is no plus other than in earnings /profit for the business/company. not worth it for what is lost. in my opinion.
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I agree. Hopefully in the long run the employees will be happier that the company supported them and will lead to lower turnover and higher productivity.
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If anyone was ever concerned about our future, these young adults have it covered!!
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I agree!
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Sounds like a great thing to me and I wish them the best and agree that they should leave the wage at $17.
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That seems like a viable solution.
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Interesting challenge and it will be interesting to see what else they come up with. Love the non-profit and what they stand for. As to the wages, I think those workers earned it and it should be left as is. Also, it’s not over yet…
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I also like the mission of this nonprofit. I agree that the workers should be rewarded for having worked through the pandemic. There may also be other forms of compensation in terms of benefits that the employees might appreciate.
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I think it’s hard anytime wages are lowered for workers. It’s hard to process working just as hard for less money, especially if he/she has been doing a good job.
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I agree, Pete. I don’t think the employees would react well.
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What a great community initiative. We need a daily table here!
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We could use one everywhere!
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Leave the wages as they are; this great project can’t work without staff and the company should set a good example caring about their staff.
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I agree. And you want employees who are committed to working there. Cutting wages wouldn’t help trying to get such commitment.
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What a great organization and business model. Too often these types of places are heavily reliant on outside donations and grants. Turning this into a self-sustaining venture makes this a workable model in any underserved areas. I agree with most that the reduction of personal wages is a hard sell. But I look forward to you sharing some of the ideas the bright Villanova students come up with. Great post, Jim!
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I agree that Daily Table sounds like a wonderful organization. I wish there was one near us. The students had some interesting suggestions!
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Such a great example to introduce your students to. Kudos to you for this decision. It will give them much food for thought.
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Daily Table looks like a terrific organization with a goal of making money while improving lives in the community. If it figures that out, it should use the model in all communities. Regarding the case, Daily Table should not lower wages unless doing so was an explicit part of the deal or lowering wages is necessary to remain in business.
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I think the model could be used in cities all over the country. And I agree; the wages should be kept where they are…
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We have these sorts of community initiatives here too, Jim. They often fail because they are not competitive. The bottom line with a business is that it has to make enough money to cover its costs and so you can’t pay out more than you earn. This seems to be a foreign concept to a lot of people involved in these sorts of initiatives locally. They seem to think you can operate indefinitely at a lost. Our government seems to have the same idea, which is why all our parastatals are in huge financial trouble. Can this company afford to maintain the $17 per hour wage and still break even. Also, if there are shareholders who have contributed money they expect a return on their investment, that is how business works. Just my two pennies.
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well said, Robbie. And this business is trying to get to the point where they are completely self-sustaining; I think right now customers help pay for 70% if operations, the rest is raised through donations.
Part of the problem with the analysis is trying to quantify the benefits of keeping the wage at $17 per hour. It’s easy to measure the cost difference between paying $17 and $15, but measuring the dollar benefit of rescued turnover and more productive, engaged employees is challenging. Fortunately, the guy running this organization was CEO of a successful grocery store chain and seems to understand the importance of trying to cover your costs.
Had to look up what a parastatal is – interesting concept. I’m guessing that’s how many of China’s companies are organized…
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Sorry, Jim, I didn’t realise it wasn’t a well known term. It is so common here. Parastatals are not a good idea. They often result in protected jobs filled by unproductive people with no innovation. They become the dinosaurs of business and hold back progress with red tape.
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that does not sound like a good way to run a business…
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