7 Business Lessons from Undercover Boss

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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What might you discover if you viewed your business from the perspective of your employees? Challenges that seem academic in the context of a sales or productivity report look very different when encountered on the front lines. Deciphering the people impact of corporate-mandated processes, policies, and business initiatives is the premise of Undercover Boss, a reality show that follows CEOs as they work side-by-side with employees in the field.

Here’s the setup.

• The CEO goes undercover at his (or her) company by pretending to be a reality-show guest, competing for a job or attempting to re-enter the workforce.
• He travels to various worksites across the country, such as retail storefronts and manufacturing plants. There, the boss meets employees who provide on-the-job training and supervision. He attempts work tasks, often failing because assignments are more complicated than expected, and engages in heart-to-heart discussions with employees during work breaks.
• Those assigned to guide the potential workers are outstanding employees. Many of them are enduring personal challenges and crises.
• During wrap-up sessions, the CEO reveals his identity and makes generous gifts that enable employees to deal with difficult family situations and realize professional ambitions.

Admittedly, the show can be overly dramatic, especially scenes in which employees share private details with reality-show guests. And the prevalence of high-performing workers who have arisen from desperate circumstances, time after time, seems unusual.

Whatever your thoughts on the realism of the show, though, there are lessons to be learned.

Sound judgment is fundamental to business success.

The CEOs typically blunder through their assigned tasks. Customer service, manufacturing, and other front-line duties are maddeningly difficult. The work requires greater shrewdness, faster thinking, and more expert problem-solving skills than the bosses ever imagined.

Bosses see that day-to-day decisions affect the quality of the finished product and customer experience. Sound judgment requires not only knowledge of job content, but also understanding of the company’s mission, its values, and priorities.

The best employees develop their own processes, which complement company procedures.

In each episode that I viewed, there is an employee who introduces a new idea to improve results in sales, productivity, and/or quality. CEOs encourage and reward this behavior.

For example, a Baja Fresh employee initiates delivery and set-up of catered orders to drive sales volume of the chain restaurant without compromising profit margins. She believes that coupons issued by the company devalue the brand, but extra services (such as delivery) reinforce the premium nature of menu items.

At uniform and workwear company UniFirst, a supervisor in the quality inspection/pressing line works with the maintenance department to create a system that yields labor savings of about 30 minutes per day.

Serving customers is hard.

Standing in front of customers is unnerving for the CEOs, especially when they have had only rudimentary training. As a result, they take too much time to handle requests and make mistakes. They quickly learn that outstanding service requires a unique combination of friendliness, comprehensive knowledge of product offerings, deep understanding of company-specific computer systems, strict adherence to quality and safety standards, and ability to apply policies to varied customer scenarios.

Lots of choices mean complexity, which is time-consuming to manage.

At Great Wolf Resorts, guests stand in long lines waiting for lodge registration. According to CEO Kim Schaefer, the large numbers of people who check in on a given afternoon cause an inevitable logjam. The wait is exacerbated because customizing the resort experience means that multiple steps are involved during the check-in process.

Set goals to achieve your purpose, not serve the process.

Schaefer assigns the problem of long check-in lines to one of her direct reports, who commits to streamlining this process. The brief interaction captured on film may not have told the entire story. But it’s worth mentioning that a great process is not the goal; a happy customer is.

So, I wonder if the leadership team should have been charged with improving the customer experience rather than cutting steps out of the process. For example, guest packets could be assembled ahead of time or guest information could be updated electronically during the stay, rather than finalized upon check-in. Another option: guests could be entertained while waiting in line (which, admittedly, would not speed the process but make it more enjoyable).

Employees appreciate support in dealing with personal difficulties.

Many of the employees depicted on the show had difficult, complicated personal situations with limited support systems. For example, one has a chronically-ill family member requiring expensive care, one has a spouse who recently lost his job, and one is a single parent attempting to juggle work and school responsibilities. These employees carry family burdens, rather than receiving help from a network of family and friends. The contrast between the CEO’s support system and those of his workers is stark.

Seeing the nature and depth of employee concerns spurs the bosses to evaluate benefit programs, human-resource policies, etc. to better address real-life needs.

Perceptions (and reality) should be managed.

In a couple of the episodes, bosses visit newly acquired locations to assess the smoothness of transitions associated with new ownership. Ronald Croatti, President and CEO of UniFirst, learns that many of his employees think the previous owner was a better employer than his company.

He realizes that additional communications are needed to overcome misperceptions. First, he affirms that his company’s benefits are superior to the program offered by previous owners. Then, he decides to launch an effort to educate employees. However, one of the crucial steps in changing perceptions is speaking with a key employee about the benefits package so that she can inform her co-workers. Word-of-mouth among employees is often more powerful than formal presentations.

As a boss, you should seek to understand employees’ viewpoints while still considering the needs of customers and owners. By viewing a workday from the perspective of hard-working employees, though, you can identify problems, discover best practices, and make changes that benefit everyone. That’s the real lesson of Undercover Boss.