Bouchard

"At Perrette, Bouchard’s supervisors would rent a space and then give him the mandate of putting in a store within a few weeks, without asking his opinion on the location chosen. He had definitely faced challenges. Often he even saw them coming beforehand, but no one would listen to his warnings. The years of trial and error had nonetheless paid off. They allowed him to develop the skill that he would later put to use: the ability to identify the best location for a convenience store, which became part of his new role at Provi-Soir. It was a responsibility that he took very seriously. To successfully carry out his task, he developed a mathematical model that he applied systematically to each new project. His basic criteria started with the number of vehicles driving to the site each day. Then he examined the number of residents who lived around the location, in expanding concentric circles to which he assigned a decreasing value according to distance. He also assessed the demographic makeup of the population, the average age, the number of children and the ethnic makup, knowing from experience that some groups are less likely to shop at convenience stores. After having been at the heart of Provi-Soir’s rapid growth, this formula, honed over time, would be one of the key elements to the success of Couche-Tard."

"Many companies discourage this type of behaviour and promote strict rule-following and a hierarchical structure. Bouchard, however, advocates an entrepreneurial attitude at every level. He encourages risk-taking. This requires a high tolerance for error, but he prefers taking an overall position of trust—even when it sometimes backfires—to an overall position of mistrust that will sometimes prove justified."

"Where did the neologism “*dépanneur*” originate? It comes from the verb *dépanner,* meaning “to repair.” This word also has a metaphorical sense: “to *dépanner* someone” means “to render a service”—hence *dépanneur.* According to Bouchard, the neologism originated with Paul-Émile Maheu,[[2]](private://read/01j5mtjqkzkqnzrmf5b4rr6pr2/#notes2) owner of a small grocery store in a popular Montreal neighbourhood in the 1970s. With his customer base dwindling due to the booming popularity of supermarkets—a trend that was spreading across the continent—Maheu decided to cut his staff, expand his range of products and extend his business hours, which were severely regulated for grocery stores at the time. This formula, later adopted by Bouchard and others, was such a success that today Quebec has the world’s highest number of convenience stores per capita: one store per 1,200 inhabitants—three times more than the average in California, for example."

"Inflation, bankruptcy, the closing of factories, unemployment and poverty were painful realities across Canada, and the banks were becoming increasingly cautious. How could the economy be revived when entrepreneurs couldn’t borrow money to carry out their projects? To solve the problem, the Canadian government adopted a program to guarantee loans for small businesses, up to a maximum of $250,000. In effect, the government would act as guarantor in case of default. The project provided concrete support for small businesses as well as a colossal gift for the big Canadian banks. Fortin discovered that the program offered a solution to the financing dilemma faced by the four shareholders. No problem, he told Bouchard: We’ll split the company into separate units and apply for small business loans. The loans would be guaranteed by the government, so the banks would have no cause to refuse them. Following the advice of the Banque Canadienne Nationale, the group chose a different institution to finance its growth: the Bank of Montreal."

"In addition to designing new stores and organizing launches, he was entrusted with renovating older stores. He was named territory supervisor, which involved regular visits to each store and mentoring the managers. The demands on him were clearly too great; there wasn’t a moment of downtime. He realized he wasn’t the only one who was becoming burnt out. His work with dealerships had allowed him to see behind the scenes, and he discovered the extent to which the company’s operating system was interfering with their functioning. “I saw the numbers,” he says. They didn’t show Perrette in a rosy light. For one thing, the dealerships had to pay the head office for any products lost due to shoplifting—and it wasn’t the wholesale price they wanted for the stolen items, but the retail price. Each shoplifting experience was thus triply costly: the dealers lost the value of the product; they lost the profit that was anticipated from the sale; and they had to pay this unrealized profit to the company’s management. It cut into revenues that most dealers already thought were too low. “I lost dealers constantly, and I lost good ones,” says Bouchard, who would inevitably find himself with the burden of finding and training replacements."

"One day he had the opportunity to speak directly with Robert Bazos, who was passing through to inspect renovation work for the Perrette in his own neighbourhood, the Town of Mount Royal. Bouchard told him that the turnover rate for dealers was much too high and that replacing them was costing the company a lot. “Try to find a formula for them to make more money, and that will make them stay with us longer,” he suggested. Bouchard can still hear Bazos’ response, as clearly as he did that day: “Mind your own business.”"

"“They kicked me out. That was hard,” says Bouchard, who nonetheless understands Provigo’s reaction. Franchises must be loyal members of their clan. Obviously, Bouchard had had other projects in mind. “I knew I was going to go out on my own, but they forced me to do it a little sooner than I expected.” And it certainly didn’t happen in the way he thought he deserved. A bailiff appeared at one of his stores and presented him with an eviction notice—he who had built the Provi-Soir enterprise from its beginning. His wife, red with rage, gave the Provi-Soir delegate a furious warning: “One day, we will buy you out!”"

"Facing the several dozen people present, he began to speak. He thanked the employees for their continued efforts. Then he went on to deliver a prediction that left his audience stunned. Their company, he told them, would become the largest convenience store chain in Quebec. “The other partners and I just stared at each other,” says D’Amours. “We definitely had a long way to go to catch up with Provi-Soir, which had 200 stores, or Perrette, which had 125. We only had 12!” Fortin was also in shock. “Bouchard hadn’t told us about his announcement beforehand. Réal Plourde and I agreed that it was a very nice goal—but could we actually achieve it?”"

"A temporary absence of his immediate superior due to health problems gave him the opportunity he wanted. While his boss was in the hospital, Bouchard found independent retailers that Provi-Soir could acquire and quickly transform. Bouchard, in a hurry to capitalize on the growing reputation of the Provi-Soir banner, believed it was necessary to step up the pace in order to win the battle against Perrette. Almost overnight, the brand could strike a major blow and acquire 25 new stores, all in the Montreal area. Even better, these stores were operational, and therefore had a known and quantifiable customer base, which would reduce the risks."

"“No one shows up to work every day aiming to rip off the boss,” he says. “In real life, people want to earn their wages, to feel good about themselves, to be able to say they did a good job, to contribute in their own way.” To get there, Bouchard says, each individual has to find the zone in which they can make decisions, room to manoeuvre that fits their abilities and gives them a chance to show what they can do. “That’s a basic need for all humans. We all want that: to reach the level of importance corresponding to our potential. That’s the biggest lesson I learned in my three years doing evening classes at HEC Montréal.”"

"There was no longer any margin left for Bouchard to become a more important player at Provi-Soir, so he decided to leave. He did so on good terms, however, offering to buy a second Provi-Soir franchise,[[13]](private://read/01j5mtjqkzkqnzrmf5b4rr6pr2/#notes13) whose construction was almost finished, in Blainville, north of Montreal. At management’s request, he agreed to stay on in his position until they could find a replacement. He expected it would take them a few months. It ended up taking more than a year, and not one but three successors were hired: a development supervisor, a construction supervisor and a maintenance supervisor. He still can’t believe the implication. “Like an idiot, I was doing all that work by myself,” he says—an amount of work that resulted in personal sacrifice and sometimes resulted in a less than perfect work quality."

"Next Bouchard had to find trustworthy employees to run the store while he took care of developing the enterprise. He immediately thought of Jacques D’Amours, a brilliant young man he had met seven years before when they both worked at Perrette. Bouchard was a replacement manager at the time, and D’Amours—then barely 14 years old—was a jack of all trades. He had no option but to mature early; his father had left the family and his mother was raising 11 children on her own. All of the D’Amours children had to start working at a very young age."

"On the evening of Saturday, August 24, the four Couche-Tard founders found themselves at Bouchard’s home, sharing a nice meal to celebrate the start of the pan-Canadian adventure that was opening up before them. Now they had to plan their implementation schedule. In the middle of dinner, Fortin’s telephone rang. It was his contact at the Caisse de Dépôt. There was good news and bad news. The institution’s credit committee had agreed to finance the operation, but on the condition that it would raise Couche-Tard’s interest rates. Fortin swiftly took a hard stance, even though it risked scuttling the deal. There would be no question of renegotiating the agreement in principle that had been reached. If the Caisse didn’t stand by it, their word meant nothing. When the call ended, the mood at the gathering had lost its sparkle. If the financiers didn’t back down, they would have to abandon the project. Bouchard and Fortin would be flying to Toronto the following day. They had hoped they would be presenting their surprise offer to Silcorp’s president—who still knew nothing of their plan—on Monday. It was good that he was unaware, given the new circumstances. Would the meeting even come to pass? Fortin spent Sunday morning pacing at home, waiting for the telephone to ring. Had his refusal to allow the Caisse to change the deal at the last minute pushed the powerful financial institution into backing down, or made them dig in their heels? The answer came before noon: The initial agreement would be respected. They had the green light to start the acquisition process. It had been a close call, but their plan was still on track."

"“The company was too small to have so much talent,” Bouchard thought. He set about acquiring other small manufacturing companies, and gave Plourde the responsibility for running them. One company manufactured security modules that were installed at entrances to stores to detect theft. Another produced eyeglasses lenses. “We were making money, but it was a major distraction"

"“Those are management theories that are totally void of sensitivity,” his human resources manager responded. So what should be done with the least productive workers? “We’ll put them in the right place, where they’ll learn to be productive,” Plourde told Bouchard. It was the price to pay to obtain loyalty from employees, rather than obedience; long-term commitment, rather than mere submission."

"A number of managers were unsatisfied with how the system worked in its early stages, and told Bouchard that they often received calls from the “head office” to resolve different problems. At the end of his tour of the stores, Bouchard rented a reception hall so he could address all the employees from the service centre in Laval, who had become so numerous that none of Couche-Tard’s buildings could hold them. “I’m not here to tell you some good news,” he told the assembly. “We all need to understand that in this organization, today and always, you and I are at the service of the stores. Not the other way around.” And that, he said, should be reflected in their vocabulary. “There is no *head office* in this company, and there never will be,” he insisted. “So, I don’t want to hear the words *head office* or *headquarters* anymore. We are a service centre and a training centre—that’s it.”"

"The example came from the very top. Bouchard had personally reproached employees “caught in the act” of working too many hours. One night when he passed by his office to pick up a file, Bouchard found an attorney, recently hired by Couche-Tard’s legal department, busy preparing a contract. He lectured him at length. “You have a family, a wife and kids. What are you still doing here at this hour? Go home!” he ordered. The young employee explained that it was normal for lawyers to work long hours, and that he’d been taught to stay late in the private firms he’d worked in before coming to Couche-Tard. “To me, it isn’t normal,” Bouchard responded. “You have to have a balanced life to be able to reach your potential. I’m paying you to have clear ideas. Go home to your family, and don’t let me see you in the office this late at night again.”"

"Typically, says Bouchard, the stronger a company becomes, the more it tends to impose its procedures on all of its components. Couche-Tard’s strength lies in taking almost the opposite tack. “Our DNA is the local business model,” Bouchard says. “It’s the most important element. It’s what allowed us to build everything we’ve built.”"

"Bouchard placed a phone call to Silcorp’s president, Derek Ridout in December. Bouchard had made progress in English, but he was still far from capable of holding a conversation fluently. In preparation, he wrote out what he wanted to say beforehand. To Bouchard’s great surprise, Ridout showed his cards during the call. He admitted straight out that he had never liked the convenience store industry. Bouchard wasn’t sure he understood. “You don’t like what you’re doing, and you continue to do it day after day?” he asked, incredulously."

"As soon as the deal was announced, Bouchard declared that Couche-Tard’s objective was to increase the number of establishments in its new American Midwest division from 225 to 600. It would take place through small acquisitions, and by building new convenience stores inspired by the “Strategy 2000” concept. To succeed, they had to rely on the management team already in place in Columbus, whose jobs Couche-Tard had promised to protect."

"“I would have been interested in buying 7-Eleven,” Bouchard acknowledges. He even flew to Tokyo to meet with the CEO of the group, in the hopes that he would agree to sell the American portion of his empire, which had more than 20,000 stores around the world. “But the Japanese aren’t sellers,” he discovered. He would have to take them on in a different way, and using patience."

"The stores, he said, operate in an environment that they don’t completely control. Their region could be affected by an economic slowdown or, inversely, by inflationary factors or by intense competition. “They deliver the profits that they’re capable of delivering,” he explained; and that’s why the people who are in the best position to define their profitability objectives are managers and their supervisors. That’s where the projections for each division should start. Such an operation obviously requires more work than a decree handed down from the top. In fact, the consultation process would have to be launched in January to be ready for April. “It was a complete education for people in operations and the stores, to empower them and teach them open-book management,” says Bouchard."