Service sensation Featured

8:00pm EDT October 19, 2006
 It’s just another day at Boise Airport in Idaho as customers come and go from one of The Paradies Shops’ airport stores. But one customer is having trouble fitting her new purchase into her carry-on.

An employee takes off his coat and, like he’s solving a jigsaw puzzle, intricately packs the pieces in her carry-on so she can board her flight.

You might think this helpful hero was an average shop worker, but in this case, it was Gregg Paradies, president and CEO of The Paradies Shops, which operates the Georgia Aquarium store and more than 500 specialty, local and national brand stores in 63 airports and three hotels in Canada and the United States.

While many corporate executives give lip service to the fact that they get down in the trenches with their employees, Paradies actually does. He strives to live the core values of this family-owned business in every interaction with employees and customers, and this leadership focus helps maintain the values that define the 46-year-old company his father and uncle founded.

“If you talk to most companies today, they’ll tell you about their core values,” Paradies says. “The question is, when you spend time in that organization, do you feel those core values? In many cases, the answer is no. It’s just talk. Talk is cheap. ...We know that if our people love the company and feel part of something bigger than a company, they’ll be happier.”

Paradies wants his employees to embrace the family environment the founders created — a feeling of a tight-knit community, where employees feel like citizens instead of just workers. Within that community, people are enthused, energetic and passionate about their responsibilities, their co-workers, the customers and the company.

Mix those things together, and you get a positive environment that people actually enjoy spending their time in and people who are excited about going to work.

Happier employees tend to give better service to customers, something that’s absolutely critical to a retailer. But happy employees don’t necessarily get that way on their own — they are a product of a culture designed to bring out their best traits.

Creating a foundation
Taking care of your employees and making sure they are living the culture is key to a company’s long-term success. This approach has led to 46 consecutive years of profitability for Paradies.

“If you’re only looking short-term, you’re going to cheat yourself long-term and cheat the employees, as well,” Paradies says. “Part of the long-term perspective is make sure you treat your people right. People are too smart. They can see through the fluff. If the core culture’s not in place, the company’s going to have a hard time attracting and retaining great people.

“In today’s world, people are very mobile. To keep great people and recruit great people, you need to have something special to offer them. That’s frequently what is cut first in these companies that have these challenges. In reality, that should be the last thing that’s cut. Once you lose your great people, you really lose everything that made the company successful at one time.”

Cultural initiation starts with managers and corporate employees attending Paradies Shops University for training and to experience the culture first-hand. There, Paradies explains how the family culture evolved and the role it has played in the company’s growth.

“If they don’t feel the culture, they will not be able to spread the culture,” Paradies says. “We must ensure from Day One they have a feel for the culture, and that builds and builds so they can spread it to their teams.”

Through the university, employees delve deep into TRIFIC, the acronym used to identify the company’s core values of Trust, Respect, Integrity, First-class service, Innovation and family-Culture. They put these values to work when they are transported to one of the company’s shops to work the registers for a day. Everyone continues to work in the field at least once a quarter to maintain that understanding.

“The customer is what pays our paycheck and pays all the bills,” Paradies says. “You see it in other companies where they lose sight of what their business is. Our business is all about providing first-class service which exceeds the expectations of the customers we service.

“It doesn’t matter if you’re in accounting, human resources or IT, we want to make sure that everyone recognizes that we’re a support center here. We don’t have cash registers here, so we need to do whatever it takes to support the people in the field. In order to support the people in the field, we need to know what their challenges are, day in and day out. By working on the front line on the sales floor, you recognize these challenges.”

Empowering employees
Instead of giving managers rigid guidelines on how to run their stores, Paradies empowers them to embrace their entrepreneurial flare to personalize their stores. The only stipulation is that they adhere to TRIFIC.

“That’s the fun part of the business, because entrepreneurs love change and love to get better,” he says. “If we continue to do the same thing year in and year out, our business won’t grow. We need to continue to innovate and come up with new ideas. ... Nothing is more rewarding than being successful with an idea you created. Each of our managers has that opportunity.”

While every store is different, Paradies sees the importance in keeping them all on the same page in terms of goals. Twice a year, managers fly to Atlanta for a company meeting. And because Paradies expects them to roll out the red carpet for customers, he does the same for them by giving them a classy experience.

“The first priority of that meeting is for everybody to feel the culture, so they can take that culture back to their location,” he says. “When I say ‘feel the culture,’ it’s a very motivating week. We celebrate, give out a lot of awards, and then we articulate our game plan for the coming year.”

Managers take that enthusiasm back to their stores and let it permeate the environment using their own forms of recognition and morale-building. Paradies sees this spirit first-hand when he and management travel to the stores.

“You can’t look at a report,” he says. “You need to be in the location, see what’s going on. Every store’s different. Every airport’s different. The only commonality among all our operations is they’re all different. It’s not The Gap.”

Although costly, Paradies says the travel benefits the company.

“Obviously there’s a tremendous expense for that, but that’s an expense that we do not challenge,” Paradies says. “We want our support center traveling. We know that if we can get closer to our associate, make sure they know who we are, make sure they’re getting a clear message as to what their role is, we know we’ll be more successful.”

Beyond personal communication with employees, traveling allows him to develop stronger relationships with those who are on the front line with customers, giving him a better gauge of his business.

“We know when we visit a location immediately if that general manager is doing a good job of motivating his employees and creating that family culture,” Paradies says. “You feel it. It’s a tough thing to explain, but you just feel it — the employees are happy. They appreciate their job.

“These are front-line people who know where the opportunities are better than anybody. You’d be amazed at the good ideas these people have.”

In fact, the TRIFIC values acronym wasn’t concocted in the support center by upper management but by two employees at a West Palm Beach airport store. Management quickly embraced it, and those employees received an innovation award. Paradies says rewarding employees for their contributions gives ownership in its success, which creates buy-in. When employees have buy-in, they’re more productive and less likely to tolerate behaviors in their colleagues that hurt the company.

“You get all these benefits by creating a great place to work and live,” he says. “Is there an investment to doing that? Absolutely. I cannot tell you that we get a dollar-for-dollar return on every item, but when you put it together, that makes our company unique and special.”

Driving service
When employees feel the culture and buy in to the company’s mission, it heightens their dedication to serving the customer, which is crucial for the company’s reputation and growth.

Unlike most retailers, The Paradies Shops doesn’t have the luxury of controlling the number of stores it opens in a given year. Its niche is primarily airport retail, and the people running the airports ultimately decide whether Paradies can open a store.

“We compete for every contract,” Paradies says. “In order to grow, we have to be successful winning new contracts or expanding existing contracts. The way you win new contracts or expand existing contracts is your quality of operation. A big part of your quality of operation is the customer service you offer in your stores.”

To help him gauge the quality of his employees’ performance, customers are encouraged to fill out comment cards. Each month, between 2,000 and 3,000 do so.

To those who submit positive feedback, Paradies sends the customer a letter of thanks for the feedback. He also sends the comment card with a personal note to the employee involved to thank that person for his or her commitment.

When he receives negative customer feedback, he meets with the store manager involved, who addresses the problem with employees and provides feedback about how they can do it better next time. Paradies then sends the customer a note thanking him or her for helping the company improve and encloses a $25 gift card with a request to give the store another opportunity to make it right.

“It’s a lot of work involved, but that’s what makes the difference,” Paradies says.

Additionally, employees are recognized each month with service awards for going above and beyond. Of these monthly winners, six are selected as annual winners, and their stories are featured on the company’s Web site. With each win, employees receive points, which they can redeem for items such as DVD players, plasma TVs, and washers and dryers.

“It’s easy for the little things to fly through the cracks if you’re not committed to this culture,” Paradies says. “It’s easier for me not to do it. When you put them all together, it works. It’s not one thing individually. It’s a package of trying to ensure each associate in some way feels and appreciates the culture.”

This cultural experience and appreciation has propelled The Paradies Shops’ growth. It hit the $100 million revenue mark in 1994, broke $200 million in 2000 and will surpass $400 million for the 2006 calendar year. But Paradies doesn’t let that success distract him.

“You can get spoiled by success, but I’m frequently reminded when I read the papers and talk to others outside the industry of how lucky we are,” he says. “Well, luck doesn’t just happen. We have created our luck here because we hire great people and we have created a great culture and we are in a dynamic and growing industry.”

How to reach: The Paradies Shops, www.theparadiesshops.com