Bulgaria: Lidl's 10 success steps
Discount Retail Chain Lidl's (owned by German Schwarz Gruppe) 10-step success recipe, on the eve of the 10th anniversary of Lidl Bulgaria, explained by Milena Dragiyska, the MD who has been leading Lidl Bulgaria since its entry into the market.
1. The beginning
For any company, person or endeavor, the beginning is extremely important and determines a large part of success. For us, the literal start was on November 25, 2010, when we opened 14 stores in 11 cities at the same time, which is an unprecedented practice for the Bulgarian market. But preparations for this moment began three years earlier. Before the opening, we believed that we went through all possible scenarios, there were no unforeseen situations. We woke up with huge queues and if before the opening my fears were that there would not be enough shoppers, then when we saw them waiting in front of the shops, we realized that the real challenge is whether we will be able to meet expectations the shoppers so that they return to us. After this moment of unique adrenaline, everything was functioning as if it had always existed. I believe that our beginning was successful, because in these three years we had achieved something important - we had become a real team, in which everyone was ready to join where they needed help, regardless of their position, so that the work could be done. finish in the best possible way.
People are undoubtedly the key to success up to this day, but every leader and every company has their own reading of how to work successfully with people. My approach is direct communication with employees at absolutely any level and I dare say that this more direct, personal and immediate approach gives me the most accurate daily feedback on the company's pulse. I am glad that I can draw it from direct contact with people all over the country.
At Lidl Bulgaria, the foundation of the relations with the employees, the clients and the partners is honesty. Being honest means doing what you say and saying what you believe, no matter who you talk to. It seems simple, but for honesty to be a constructive force, many qualities are required - courage, good upbringing, competence, ability to listen and understand, desire to do the right thing and change the environment for the better. Only in this way does honesty build trust - both in leaders and in brands.
Trust is above all a huge responsibility. To be a successful leader, you must first educate and build resilience to live with this responsibility, and not just from 9 am to the end of the working day. Honesty, competence and perseverance are the "three pillars" on which trust rests. Lidl Bulgaria was the last of the large grocery chains to enter the market and we had to earn the trust of our customers in a highly competitive environment. We had something to offer - a new and different model of shopping. But how do we provoke people to take the first step towards us and trust us without knowing us? In addition to being honest, we had to be innovative to provoke their interest and make them notice us.
In order to lead to success, innovation should not be an end in itself. For us, it is an organic part of the DNA of both the company and the team. You may be wondering if it is possible? And the answer is a resounding yes. The specific business model of Lidl, the core of own Private Label brands and distinctive advantage - the best value for money, centralized deliveries to stores in the country from Lidl's own logistics center, the prominent nature of the discounter - this whole set was completely new for Bulgarian consumers and markets. Lidl has developed modern retail for its shoppers in its most complete form and sequence. The innovative business model is successfully complemented by many and innovations in products, processes, in production technologies - developed together with our suppliers, in advertising communication and our overall responsible and consistent approach to everything. Here I will illustrate with a few examples, giving only a few of the dozens of examples in various fields - for example, we were the first retail chain to launch a TV commercial, we were also a pioneer in offering themed weeks. Together with our partners - Bulgarian producers - we have developed and introduced a number of product innovations such as sausages without mechanically separated meat and the Clean Label series - an innovative series of sausages without artificial preservatives, colors and flavors, which gave a positive impetus to market development. There are many employer practices - we were the first employer in this industry to introduce electronic reporting of working hours and the first employer, who announced in an advertisement the exact starting salary for cashier-sellers in Sofia and in less than 2 weeks we received over 3,000 CVs. And this was not only because of the high salary level, but because the way we addressed them corresponded to our clearly stated values - transparency and honesty. Being innovative and moving the market forward is part of Lidl's global identity, making us the number one grocery chain in Europe.
5. The model
From the very beginning, Lidl's driving force has been a new, democratic shopping model based on the belief that high quality can and should be widely available. The way to do this at Lidl starts with developing and establishing our own Private Label brands, which are not inferior in quality to the leading and already established brands and at the same time are at very good prices. Therefore, we can rightly say that in Lidl you do not choose between price and quality, but you get both.
If the model is the backbone of the business, then the processes are the main arteries. With us at Lidl Bulgaria, they are a guarantee that we will keep our main promise to customers and offer high quality at good prices, investing the funds saved from process optimization in lowering the final price of the products. For this purpose we work side by side with the Bulgarian producers, we help them to modernize their production, to make it as efficient as possible and at the same time we exercise strict control over the full cycle - from the choice of raw materials to reaching the products on the shelves. The right processes are also key to developing a sustainable business without wasting natural resources and paying attention to environmental protection - something extremely important not only for today, but also for our tomorrow.
Crises are a real stress test that shows crystal clear the health of the business, both breakthroughs and strengths, the ability to react quickly and the coefficient of adaptability of people and processes. During social isolation, we were at the forefront. Fortunately, we did not have to stop, but we had to change our plans and the way we worked at great speed, but also to provide maximum protection for the people. I think that we have dealt both with the shoppers, not allowing essential goods to be missing and ensuring good organization in compliance with all hygiene measures, and with the employees who received from us the most important thing during the crisis - security in uncertain times. For me, a good leader is the one who takes the next step and turns the crisis into a positive impetus for the company's development by removing the redundant, optimizing to the necessary and maximally unlocking the team's creative potential for non-standard solutions, extremely important for success in today's world.
8. The numbers
For business people, numbers are an universal language, I am no exception and I rely on them a lot, but on one condition - when they are the result of stable processes, clear vision and sustainable values. For 10 years there are thousands of figures indicative of the growth and stability of Lidl Bulgaria. Even if I want to, I can't list them, but I will mention only a few of the most key ones as an illustration of the vision behind them. For 10 years the total amount of our investments in Bulgaria exceeds BGN 1 billion (US$ 0.6Bn). Our stores from 14 in 2010 are now 102 in 48 cities. Our team has increased tenfold and from 300 people with whom we started the business, today we are 3,000 and continue to grow. It is no secret that our pay is among the highest in the industry. 75% of the people in management positions in Lidl Bulgaria have risen from the inside, and every year we invest a six-figure sum in training and qualification. In 2019, we put into circulation goods from Bulgarian producers worth BGN 350 million (US$ 209Mn), which is equal to 67% of all our costs for products, and the export of Bulgarian goods in the European network of Lidl for the same year exceeds BGN 40 million (US$ 24Mn), which is a 33% increase compared to 2018. Two of my favorite numbers - 86% of Bulgarians approve of all products from Lidl's own Private Label brands, 96% approved Lidl's ice cream (produced by Bon Gelati and owned by Schwarz Produktion GmbH) - this is shown by the results of a nationally representative taste test conducted among 4,000 respondents across the country.
9. The goods
The substance leader is the one who strives to change lives for the better, and this applies equally to people and companies. Lidl's vision is very clear in this regard - with everything we do - from the products we offer, through the initiatives we support to our relationships with people and our position in society - we strive to change our lives for the better. Every year we conduct a large-scale study of the criteria for a full life of the Bulgarian, so that we can, based on the results, refine our activities. Our priority as an employer is to ensure an optimal work-life balance through a variety of policies and initiatives. For us, this is a value that enables people to feel satisfied and happy. Our biggest socially responsible initiative "You and Lidl for a better life" clearly states with its name what we strive for - step by step, I believe that the causes behind the numbers are the ones that remain after us and they are worth working for. And these are not empty words, but content that gives density to success.
For me personally, the ability to sincerely and deeply feel gratitude, and not as a superficial gesture of upbringing, is a supreme value, and I firmly believe that without it, long-term success is impossible. People and companies who fail to feel grateful are the ones who most easily reach complacency and stop developing.
Click here for more: https://corporate.lidl.bg/medien-cent-r/pressreleases/2020/lider-na-fokus-10-st-pki-po-p-tya-k-m-usp