Commerce Corner S1|E8: Leadership Lessons with Former 7-Eleven & Blockbuster CEO Jim Keyes

In this episode of Commerce Corner, host Justin Jackson sits down with Jim Keyes, former CEO of 7-Eleven and Blockbuster, to explore the transformative power of change, confidence, and clarity in leadership. Jim shares his "Three C's" framework, insights on navigating industry disruptions, and the enduring relevance of convenience retail. From revitalizing 7-Eleven during challenging times to early partnerships with Amazon and Uber Eats, Jim's stories are packed with actionable wisdom for retail leaders and innovators. Stay tuned for Jim's thoughts on the future of digital commerce, the importance of lifelong learning, and how retailers can embrace change to thrive in a fast-evolving market.

Transcript

Justin: [00:00:00] Welcome everybody back to another episode of the Commerce Corner. I'm Justin Jackson with Lula and I have the great pleasure of welcoming today Jim Keyes, who in the early 2000s was the CEO of 7 Eleven and not too long after that spent time leading Blockbuster as chairman and CEO. Jim, welcome and thanks for joining.

Jim: Great to be with you, Justin. 

Justin: So, so Jim, I, I couldn't help but watch some [00:00:30] of talks you've had recently and I understand what I think is a really powerful framework around, uh, kind of approaching life and approaching leadership, uh, with your three C's. Maybe we could, uh, start there for folks who, who are watching this and aren't familiar.

Jim: Sure. I, I have been spending a lot of time, uh, actually just wrote a book recently, uh, called education is freedom. And, uh, in the book, uh, captured [00:01:00] some, um, some learnings over many years of doing business and a couple of fortune 500 companies and, uh, being an entrepreneur and I, I captured it. And I tried to summarize it in, in, in three words that I call my gift.

Uh, and it's, it's what I think. If I have any gifts, not that I'm smarter than anybody else, but, uh, I have, uh, captured these three things that have worked quite well for me. First is the ability to embrace change [00:01:30] because change is the beginning and end of all commerce. If you think about it, something changes and we respond to it and we're compensated for that, uh, adaptation or response to change in some fashion.

And the second is having the confidence to do something about it. Um, where we, uh, Where we often fall short is our own personal insecurity, whether it's imposter syndrome or self doubt or whatever it is. Uh, [00:02:00] but that that individual sense of or lack of confidence sometimes is contagious within an organization and organizations lose confidence and their ability to adapt to change, which is so fundamental to everything we do.

And then finally, the third is clarity. Because if you don't have clarity of both inbound clarity, listening, and outbound clarity, being able to communicate, then it doesn't matter how much confidence [00:02:30] you have, you'll never be able to respond and execute that effective response to change. So those three things, change, confidence, clarity, I think are the things that help me succeed, and I call them my gift.

To anyone else who wants to be successful, that if you can embrace those three elements, you can accomplish anything. 

Justin: Well, you know, history is as our guide here. It's worked out quite well for you. And so thank you for, [00:03:00] for, for sharing those. Um, I want to, we talked to a lot of retailers. Uh, I mean, that's our business with Lula, uh, mainly.

You know, the top 200 or so retailers in the convenience space. And, uh, you certainly spent quite a bit of time there thinking about change. There's changed today. There's been change over time. Um, maybe you could share some of the more significant change that you experienced, uh, jumping into the role as CEO of seven 11 and, and kind of how you applied this and, and, um, and, and how that worked out.[00:03:30] 

Jim: Well, shortly after joining seven 11, the company actually was struggling and they were, uh, they filed for bankruptcy. People forget. That 7 Eleven was, uh, uh, close to going away in the year 1991. Uh, they had done a leverage buyout, took the company private, put on a lot of debt. Uh, but inside the business, it was a 10 year period of same store sales decline.

And it was [00:04:00] masked, in many ways, by growth. Which growth is good, but adding new stores can some sometimes cover up a bit, a core, a challenge with the core business. And that was what had happened at 7 Eleven, what they had lost sight of the real nature of their business. So around that time, I had an opportunity to speak with my mentor, who was chairman of the company at the time, John Thompson.

He was the son of the founder of 7 Eleven, Joe C. Thompson. And I said, [00:04:30] John, what do you think? They're saying convenience stores are going to be irrelevant. They're going to go away. And he said, Jim, let me just tell you what my dad taught me. He said, we started in 1927 as an ice house. We sold blocks of ice to people for their ice box.

And in 1928 or 1929, someone invented this thing called a Frigidaire, a refrigerator. And he said, what does that do to your [00:05:00] business model? But he said his uncle Johnny got on the dock and started asking customers what they could do, what, what else they needed, because clearly they weren't going to come back for ice.

And it was his customers that said, we don't come here for the ice. We come here for the convenience. Where else are we going to get ice in Dallas, Texas? So, if you want to stay in business, find other things that you can sell us conveniently. And literally, that was the origin of [00:05:30] 7 Eleven. They went from the Southland Ice Company to a name called U Totem.

They had little totem poles in front of the store and then eventually they started staying open as a point of differentiation. Again, change, keeping up with changing needs of the customer. They stayed open from 7 a. m. to 11 p. m. to be more convenient. And hence the name 7 Eleven and the rest is history.

80, 000 stores later, um, [00:06:00] they are wildly successful. But the moral of the story. He said, Jim, it's now 1991. We stopped changing. We've lost sight that our core business is not beer and soft drinks. Our business is convenience, and convenience will never go away. So your job is to embrace that change. And the thing about convenience retail is that those convenience [00:06:30] needs will change every single day.

So if you can keep up with convenience, And always stay ahead of the competition, then you should stay because you'll be wildly successful. And we did literally go from 10 years of same store sales declines to, by the time we sold the company in 2005, we were in our 10th year of same store sales increases, quarter by quarter, every quarter for 10 years.

[00:07:00] That is the power of change, and as a result of it. I've coined an expression in the book that I say, uh, when I talk about change in this book, I talk about the role of the CEO and the acronym CEO, we think it means chief executive officer, what it really means is a recognition that change Equals opportunity.[00:07:30] 

Justin: Hmm. Yeah. Fascinating. And, and definitely, uh, resonates with what we're seeing today. We're seeing a lot of change in digital, uh, in, in the retail convenience space. I mean, Lula taking part in, in kind of enabling deliver delivery for, uh, retailers. Um, you know, we, we hear retailers say, you know, I'm not following that.

I'm not doing delivery. I'm not giving into that, but it's really just. The recognition that your customers want continued convenience and we're redefining convenience [00:08:00] for, for this day and age, what do you make of all the change, uh, going on these days and, and what you see, uh, in the market and consolidation and, and different initiatives?

Jim: Well, the, you know, the mantra of 7 Eleven back then, it was, it was really where the company started. And I brought this idea back out in the 1990s. Uh, the slogan that we will provide customers what they want, where they want, when they want it. [00:08:30] That was what, that same notion is what caused 7 Eleven to stay open from 7am till 11pm because grocery stores were closing down at, they didn't open until 9 or 10 in the morning and they closed at 9 at night.

And so that gave us an advantage, what they want, where they want, when they want it. And the idea of technology today lets us expand on that [00:09:00] opportunity. So I see Amazon as a convenience operator. They're providing. What they want, where they want, now the convenience store has a huge advantage over Amazon because they're still dealing with warehouses, but we have stores scattered all over within two minutes or five minutes of every household in America is a convenience store.

So why can't we use those stores as a depot to be able to provide? What they [00:09:30] want, where they want, when they want it, literally 24 hours a day. If they want it on their doorstep, we have the ability to do that better than anybody else in the industry. 

Justin: It's amazing to me that, that, you know, the proximity and the opportunity that that proximity to customers and their homes afford, uh, I was at Uber Eats for about three years on the restaurant side, and While that business was, was very successful and, and grew, especially during the pandemic, you know, restaurants are still, you know, for their own [00:10:00] purposes, centrally, you know, located and you know, the, the, you don't have a restaurant for every 1600 people in the United States.

I don't think you could, but, but convenience stores. My gosh, they are so close and we're starting to see, you know, quality food service and, and kind of this iteration of delivering more of what the customer wants, uh, wants quickly. That seems pretty powerful in the, in the industry today. 

Jim: Yeah, Justin, since you were at Uber Eats, I'll share a little history with you.

Uh, I'm not sure when you [00:10:30] joined Uber, but I was, uh, had an opportunity to take on a chain in California called fresh and easy. Uh, It was, uh, started by the, the British retailer Tesco. And I was basically trying to save it. It was, uh, it was bleeding cash. It was a great idea, but, um, some of the execution challenges they had caused them to burn a lot of cash and Tesco finally said, we're done.

We're going to leave. Well, [00:11:00] in the course of trying to turn that around, we did a couple of things. One, we reached out to Amazon and partnered with Amazon. We were the first of their Amazon prime. Now partners with two hour delivery, but I also reached out to Uber because I said, well, they've already got this distribution.

Massive distribution network out there with these cars all over the place. And as you know, the Uber concept was five minutes, no more than five minutes [00:11:30] from wherever you are. And I thought, well, if we could combine that with the ability to deliver fresh foods, perhaps there's something here. So I reached out to Uber, they came and met.

With us at fresh and easy, and this will make you laugh. You may remember it, but this was a very foreign notion of Uber. They hadn't yet created Uber Eats. Yeah. So they said, well, we'll partner with you, but instead of coming to the store and picking [00:12:00] fresh food up because fresh and easy had a really good assortment of ready to eat.

Um, and ready to heat foods. And so it was perfect. But Uber at the time said it doesn't meet our standard for five minutes because by the time a driver goes to the store, picks the product up and then delivered, take too long. So their first iteration of Uber eats, they put little refrigerators in cars.

And they had [00:12:30] a couple of sandwiches and a couple of salads. Well, obviously that didn't last very long. That was very clunky, didn't work well. And then they evolved to picking up the product and being able to deliver it. But yeah, it is a perfect example of the ability to satisfy customers need for convenience by collaboration.

Taking a good food service provider, a good district distribution [00:13:00] provider banging together and, and elevating the level of convenience for the customer. And all it does is it goes back to what we just said, what they want, where they want, when they want it. I want my food. I want it 

Justin: now. One at my house.

Yeah. It's, it's, I'm fascinated by the early days of, uh, especially like Uber eats. I joined in 2017, early 2018. So it's just after, you know, within a year after, because they, uh, in, you know, right after I got there, they had, uh, tested out [00:13:30] in Canada, different iteration where they would get sandwiches and kind of provide lunches.

And when they were out, they were out, but they had sandwiches in, in coolers, in, uh, in cars. So, Fascinating. You know, and I, I spent actually six years at Amazon before that, trying to figure out how do we do, you know, ever, ever more local opportunities for faster delivery, which, you know, turned into a bunch of other things at, at Amazon.

So, well, fascinating story and not surprising that you were in the, in the middle of the early days of such a, such an innovative thing. Well, [00:14:00] uh, thinking more about education. So, um, you know, obviously a big passion of yours love the story of the t shirt and education is freedom and, and where that came from.

So, If our listeners haven't heard that, you should look it up. It's a fantastic story, Jim. Um, how should people kind of really action on that these days? Because a lot of people equate education just with, you know, back to school or with a professional degree. Do you think of it as broader than that? And what advice would you give, uh, leaders, especially, uh, as they think [00:14:30] about.

2025 and beyond. 

Jim: Yeah, I think of education is, is going way beyond the formal classroom. Um, when I wrote the book, education is freedom. Uh, I didn't see this coming, but the biggest audience I've had has been young entrepreneurs recognizing that. They need to keep learning and they need to be able to adapt to change.

They need to learn new skills, um, technology, social media, the power of AI. It's a, it's [00:15:00] constantly about learning. So, um, when the, the primary message of the book is that the absolute key to success, um, and being able to. Embrace change, have confidence, and, uh, and have clarity. The key to those three things is the ability to learn.

Constant, lifelong curiosity, if you will, that drives you to keep wanting to learn, uh, because that's the only way you can be [00:15:30] successful in being able to adapt to change and lead change, not wait until change happens. But get out and, I like to say as an old retailer, I'm making change. 

Justin: Yeah. Yeah. Well, that, that really resonates with me.

I, you know, uh, one of my earliest roles was at Dell computers and, uh, you know, we were having one of these all hands and our vice president was talking and, uh, and the question session, one of the top sales guys said, you know, Hey, the company has been doing fantastic. We're [00:16:00] profitability is up. When are we going to, when are we going to get some of that?

juice. When are you going to help us out? And, um, he said something that's always stuck with me. And it is like, this company has grown. Everybody's like 35 percent year on year in the last year. Can you point to things that you've done that have helped you grow 35 percent to keep up with it? Because until you can do that, then we're not going to have this other conversation.

So it's, it's similar, right? Like you've got to keep up with the same investment in yourself. 

Jim: Oh, absolutely. And that's I [00:16:30] call it big company disease because, um, it's inevitable. Companies are like organic. Beings, right? They're just like people. We we grow and then we get to the point that we are pretty successful.

And then what do we do? We get nervous about screwing it up, right? We get really conservative and say, well, I don't want to take that risk anymore. Um, and as people, that's very natural. Organizations do the same thing. They start out, they're wildly entrepreneurial, they're creative, [00:17:00] they're adapting to change, they get big.

And then the people within start to get really conservative and they it. Hunker down, and that's, that's what I affectionately refer to as big company disease, and there's some great examples. History is littered with examples. Think about Sears Roebuck. I grew up with a Sears Roebuck catalog in my house.

Couldn't wait till it came, and it was so fun to look through it and see all the new stuff. And then they decided they needed stores, [00:17:30] so they started to build stores. And they evolved away from the catalog and then Walmart came in and said, well, we can do stores better and they put a lot of pressure on Sears and then who came in next Amazon comes in and they put pressure on Walmart.

How did they do it? The Sears catalog. That's all Amazon is. It's a Sears catalog online, right? Yep, the current version of it. The current version of the Sears catalog. Why [00:18:00] didn't Sears? to change, continue to evolve and become Amazon. They could have, but their corporate inertia, they got big, they got slow and they got unwilling to, or resistant to change.

And so it happens to every one of us. It, it, it, it happened to some extent to Blockbuster. The rumors of Blockbuster not adapting to change are largely [00:18:30] overstated because we did actually have a superior streaming model. We had new releases, something that Netflix didn't have, but we also had a billion dollars of debt and another kind of change hit Blockbuster, the macro change in a collapsed financial market.

Right. And left us unable to refinance a billion dollars of debt. Um, but change comes in all forms. It comes with consumer. It comes with macro economics. It [00:19:00] comes with perhaps war, you know, in, in, in any given part of the globe. So we have to be able to be nimble and constantly see that change coming. And even if we don't see it coming, we still have to recognize that.

It's not the change that matters. Change is inevitable. It's our response to change that separates 

Justin: winners from losers. Fantastic message. And I could certainly go on all day. I love this type of conversation. [00:19:30] Uh, but thank you so much for your time. Uh, today, Jim, is there anything else you want to share with, uh, the audience of retailers and leaders before we wrap up?

Jim: Yeah, I'll leave you with one thing. I, you know, I didn't grow up thinking I want to go be a retailer. You know, I mean, I don't know of anybody that does, unless you grew up maybe in a retail family. But once I discovered retail, I discovered that it is the most fascinating and most exciting business [00:20:00] opportunity of any form of commerce.

And here's why. And especially convenience retail. Here's why. In convenience retail, our customers needs change literally by day part. If it rains, They have a different need than on a sunny day on a hot day versus a cold day. And as convenience retailers, we have the ability to put a very small number of items on the shelf.[00:20:30] 

And literally we'll know by tomorrow whether it worked. So we are the perfect test ground for a new idea, a new concept. That we can try very low risk with immediate feedback. You combine that with the power of technology and there is no stopping a convenience operator from being. At the cutting edge of change.

And that to me is the most exciting form of [00:21:00] commerce that exists. If you're working for Boeing, it'll take you 20 years to see the result of your work in developing a new aircraft or putting a new aircraft on the market in a convenience retail market. You'll find out literally within a matter of days whether something works or not.

So it's fascinating. 

Justin: So true. So true. Well, thank you so much again for joining us and uh, everybody else for taking a watch here on the commerce corner. We'll see you [00:21:30] again soon on the next episode. Thanks so much.