Executive Q&A: Growing Organically

As the new CEO of the nations largest grocery cooperative founded in 1953 as Puget Consumers Co-op Cate Hardy oversees an enterprise encompassing 10 stores, nearly 1,300 employees and more than $250 million in revenues this year. For the foreseeable future, she plans to add a new PCC Natural Markets store every year to promote its social and environmental mission.

Early days: I was born and raised in Cincinnati, Ohio. My dad was an engineer at Procter & Gamble. My parents always had a huge vegetable and fruit garden where we grew rhubarb, strawberries, corn, zucchini, tomatoes. They enjoyed gardening, but it was also a money-saving thing. They even rented an eighth of an acre across town for an even larger garden. My grandmother was a child of the Depression and my mother was raised that way. She made all of my brothers and my clothes. It was a lifestyle.

Career: As a management consultant for Deloitte and McKinsey & Company, I worked on strategic issues, including competitive threats, turnarounds, and mergers and acquisitions. That five-year experience gave me a foundation for critical thinking, problem solving and the ability to quickly recognize a business situation. Its a kind of pattern recognition. I also learned how to ask questions rather than state answers, and how to be effective when there is a lot of tension. When you are a hired gun, there isnt a lot of warmth from management.

Management: I spent two years at Washington Mutual helping to drive their retail expansion before joining Starbucks in 2005. My bosses [at Starbucks] told me that, to get ahead, I should take a field position where I could roll up my sleeves and get something done, so I moved to Indianapolis to be director of store development. I learned about facilities and project management. It was the first time I had people working for me who did jobs I hadnt done before, like maintenance and repair. I went from management to leadership because I had to depend on their expertise.

Starbucks: Back in Seattle, I worked as a vice president in customer service. Howard [Schultz] had just returned as CEO and Starbucks had decided to close 8 percent of its stores. Starbucks handled things with such compassion, making every effort to place [employees] in other stores. I spent a lot of time with customers. We were focused on that two-minute interaction between the barista and the customer that sets the company apart. I also spent time in product development and supply chain. If we make a muffin, how do you roll it out to 20,000 stores? My last role was as the general manager of the new Starbucks Reserve Roastery on Capitol Hill. Howard wanted customers to see the magic when a very simple agricultural product gets transformed. My job was to bring it to life.

PCC: Joining PCC [in January 2015] was a great opportunity to work with another iconic brand with excellent product, fantastic customer services, true values-driven organization, and connection to the communities where I could step in and bring it even further along to be all it can be.

Leadership style: I learned and developed the most when I worked for leaders who provided a clear and compelling vision of the future and then provided all the coaching and mentoring I needed. Thats the kind of leader I am trying to become. We are a retailer, so its in the store where things come to life. At PCC, Ive worked as a receiver, in produce and as a courtesy clerk. One surprise to me was that things are inconsistent from store to store. Practices dont need to be identical from store to store, but they need to be similar enough that the best practices learned at one store can be implemented at other stores.

Values: A lifetime membership to PCC is $60. Its been that way for 30 years. We have 50,000 members who receive discounts several times a month. They are our owners and they keep us on the straight and narrow. They hold us accountable. We have a triple bottom line of social, environmental and financial commitments. Ninety-five percent of our groceries are organic. Our carrots are grown by Nash Huber, a farmer in the Dungeness River Valley who has been supplying us for 30 years. Mark LaPierre grew our blueberries and nectarines this year. Where they have a choice, people want to go local. But we absolutely make our decision with a strong financial purpose. If we go out of business, we arent helping farmers, ranchers or the community.

Standards: We have incredible loyalty based on our high standards around ingredients and sustainability. There are entire categories we dont carry because they include ingredients we dont approve of. You wont find Robitussin at PCC because it contains artificial colors and flavors. I love Oreo cookies, but you wont find Oreos here. All our salmon is wild caught, our seafood sustainable and our meat mostly organic grass-fed. We have two researchers who monitor new research to determine how our standards should be adjusted. We see part of our mission as educating and informing our consumers. Consumers today want freshly prepared food, so we hire chefs who make everything fresh every day from organic ingredients. At the Columbia City store, there is a taco bar with tortillas handmade every day. Most stores have pizza ovens and make pizzas from scratch. We have chef-inspired combinations like red curry pork with pineapple coleslaw.

Growth: At a recent retreat to envision the future 10 to 20 years out, something PCC hasnt done before, we talked about growing our business to further our social and environmental mission. We created the market for natural and organic grocery food and we should be the dominant force. Opening one store a year is the direction we are headed. We need to bolster our resources around store development, with things like design, architecture, construction and project management.

COMMUNITY: This summer, we opened a store in Columbia City. It was an underserved community with a diverse, growing and thriving neighborhood. We built a neighborhood gathering place that has become a source of pride for local residents. Next year, we will open a store in Bothell. Each store employs 120 people in well-paying union jobs with outstanding benefits. Thats part of our social bottom line. By opening new stores, we offer healthy produce to more communities and create more good jobs.

ONLINE SHOPPING: One thing Im trying to introduce at PCC is the notion that its OK to test things. For example, we are launching online delivery. A number of customers said our stores were the hubs of their communities and we shouldnt do anything to undermine that. But we also heard from someone with a disability who can now get our produce and deli products.

Executive Q+A interviews have been edited and condensed.