The Employee Experience

CHAPTER 6The Transactional Contract

Leadership experts and the public alike extol the virtues of transformational leaders—those who set out bold objectives and take risks to change the world. We tend to downplay transactional leaders, whose goals are more modest, as mere managers.

—JOSEPH NYE, POLITICAL SCIENTIST AND HARVARD PROFESSOR

This quote could have easily been written about grocery store chain ALDI, and we are confident that ALDI’s managers would agree. ALDI executives and managers are some of the best transactional leaders we have observed, and that has been a key factor in the company’s success.

That’s because ALDI is a limited-assortment grocer with thin margins. For that reason, there is simply no room for misunderstanding in the ALDI culture. In the United States, ALDI operates a chain of 1,400 outlets, but across the world, the German parent entity owns and operates thousands more. When you combine all of its various holdings, ALDI is one of the largest grocery store chains in the world.

Most ALDI stores follow the same spare, efficient business model. The majority of the products carried are private label, stores are efficiently laid out, prices are lower than those of competitors, and simplicity and quality reign supreme. When you shop at ALDI, the customer’s Brand Contract is absolutely clear. ALDI will generally stock what you are looking for, but the selections to choose from will be limited. The store’s footprint will be easy to navigate and learn. The ...