Stewardship, Or Self-Interest? The Demoulas Family And Its Legacy

August 13, 2014

Paul G. Pustorino

Paul G. Pustorino: "The Demoulas family has the ability to set an example that transcends their private issues. Their next step may be a defining moment in New England business history." Pictured: Protesters hold signs during a rally at Market Basket in Tewksbury, Mass., Tuesday, Aug. 5, 2014. (Elise Amendola/AP)

Arthur T., Caren, Glorianne, Frances, Arthur S., Diana, Fotene, Rafaela and Vanessa: They have our attention. They even have the governor’s attention. But have they thought about the legacy that they are creating? Will future generations of New Englanders recall the Demoulas family as the one that created living-wage jobs, inspired employees and served the vital needs of the communities in which it operated? Will the family succumb to the voraciousness of its own and Wall Street’s appetite for self-interest? If it is remembered at all by future generations, will it be as just another warring, dysfunctional family that destroyed a remarkable business and jeopardized the livelihoods of its employees?

Will future generations of New Englanders recall the Demoulas family as the one that created living-wage jobs, inspired employees and served the vital needs of the communities in which it operated?

As entertaining for us and as great fun for the media as the family has been these past few weeks, the drama has enlightened us to the extremely important role companies play in the lives of their customers, employees and supply chains. The boycott of Market Basket stores is starting to have a serious impact on the well-being of many people who lack the financial depth and resources of the Demoulas family. The fishmonger who no longer has a viable outlet for his catch. The local farmers with crops just starting to ripen. Never mind the burden that will be thrust upon the states’ unemployment trust funds. This is no longer a mere family squabble. The Demoulases have woven themselves into the fabric of the community, whether they realize it or not, becoming so entwined that the interests of others transcend their own. Even given that Market Basket is a privately held company, the supermarket chain and the Demoulas family have assumed a public responsibility.

Demoulas family members find themselves in a precarious position. Their quasi-private feud, simmering through decades of family machinations and intrigue, has finally boiled over and now lives in the public domain. In many ways, the family business is a prisoner of its own success. It has built an extremely successful supermarket chain that rivals are clamoring to purchase. It reportedly has received extremely enticing offers, because the family has created a business model that engenders the loyalty of their customers and staff to an unprecedented degree. The outpouring of public support for Market Basket employees is truly remarkable. Yet that success is precisely what has ensnared the family in this bitter feud.

Yes, as owners of a privately held company, they are legally accountable only to themselves. But can we stand by and do nothing as a company destroys itself for no logical reason other than ego and self-interest? Every day that this continues, the Demoulas family, in effect, is teaching its customers how to shop elsewhere and allowing them to see the benefits of doing so. The family should take heed of the steel strike of the late 1950s, which opened up steel customers’ eyes to the benefits of foreign competition. U.S. Steel was never the same.

As a private company, Market Basket could take a time out, step back, and restore the trust of its employees, customers and supply chain. It could choose to serve the community, even at the risk of disappointing some family members and advisers who are concerned only with their own personal gain.

The outpouring of public support for Market Basket employees is truly remarkable. Yet that success is precisely what has ensnared the family in this bitter feud.

There always will be opportunities for a strong, well-managed company to find a buyer. But there are relatively few opportunities for organizations to truly stand tall. It may sound like we are asking a lot from the Demoulas family. Perhaps we are. Protecting the interests of others before one’s own is a challenge. The hardest decision of all might be to forsake their collective egos and revert back to what they do best before it is too late. Stewardship, or self-interest? That is what will live far past the lives of the Demoulas shareholders, their children and their grandchildren. The Demoulas family has the ability to set an example that transcends their private issues. Their next step may be a defining moment in New England business history.