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Being True to Values Leads to True Value: Community Natural Foods Takes a Different Approach

10/04/2012


In a world where the bottom line rests on the financials, consistently putting people over profit isn’t a common approach. At Community Natural Foods, one of the largest natural food retailers in Canada, relationships with employees and customers take centre stage and it’s creating great results.

The Calgary - based company, founded in 1977, offers unrefined and organic foods, natural nutritional supplements and sustainable lifestyle products to encourage “living a healthier, more natural life, conscious of our planet’s well being.” Three-hundred strong, it operates out of three locations in Calgary. “We are not really driven by sales and profit. We are driven to engage the public to improve their life and health through natural means,” explains General Manager Bruce Martin.

As such, the company ensures that everything it does is consistent with its focus on health and community. Whether budgeting or deciding on a power source - 100 per cent wind - profit takes a back seat to people and the planet. This alternative approach to doing business isn’t always easy to reconcile with the business world. So, when Martin started talking about a performance measurement system for Community Natural Foods with Jeff Orchard an MNP Business Advisor and Lori Schmaltz, CGA, MNP’s Food & Ag Processing Team Leader for Alberta, he was intrigued.

But the senior management team had concerns about the focus that performance measurement systems tend to place on operations and financials. They wanted to honour and keep true to their core philosophy.

A Balanced Approach

Orchard suggested a balanced scorecard approach that measures performance in four key areas— customers, operations, people and finance —and encouraged the management team to follow its vision and focus on employees and customers. Terminology like ‘profits’ and ‘finance’ — words that didn’t fit their philosophy—were removed.

Community Natural Foods chose to focus about 80 per cent of their efforts on relationships with employees and customers, and 20 per cent on operations and financials. In comparison, Martin says previous performance measurement systems he’d used put 80 per cent of the focus on operations and financials and 20 per cent on people. “What happened was interesting,” says Orchard. “Customer experience improved. We saw that in the metrics, the number of people coming through and their average purchase. They used the balance scorecard as a discussion platform so people could have meaningful conversations about the business for the benefit of all. Because of that, operations people realized they had to be more reliable so that the customers would get the service they were looking for. As that went along, they became more profitable.”

The balanced scorecard program also set the company up for increased growth and success. In the enviable position of watching the marketplace gravitate toward health and wellness, Community Natural Foods is focusing on expanding its offerings as well adding new locations. The balanced scorecard, with a quadrant that focuses on staff and training, has helped them manage the biggest issue with expansion: having the internal management resources to execute.

Putting the Pieces Together

“The other piece of the puzzle for growth is having strong business processes in place and the balanced scorecard helps us make sure that’s happening as well.” Martin stresses that Orchard and Schmaltz’s willingness to listen and adapt the balanced scorecard approach to fit with the business philosophy was critical to the success of the program. “MNP just makes it easy. It is not a big deal; it is a conversation.” The conversation has continued and resulted in other changes. Orchard, Schmaltz along with Ryan Mackiewich, CA, SR&ED Practice Leader; and Lee Thiessen, Advisory Services, has helped Community Natural Foods with Scientific Research and Experimental Development (SR&ED) tax credits and challenging real estate assessments to ensure they aren’t overpaying taxes. The company’s corporate structure is also under review to make sure its assets are protected and the structure is cost effective. “We feel like we are part of Community Natural Foods community where there is the kind of trust MNP is committed to building with its clients” says Schmaltz.