This past year, Staples announced a strategic plan to better serve the needs of our customers and to accelerate our growth. Successful execution of our strategy will help us achieve our vision: every product your business needs to succeed. Another key aspect of our success is our commitment to being a responsible corporate citizen, or what we refer to as Staples Soul. This holistic approach to business recognizes the close connection between our financial success and our desire to make a positive impact on our associates, communities and the planet.
Staples is the world’s largest office products company and second largest Internet retailer. For 26 years, Staples has served the needs of business customers, and its vision is to provide every product businesses need to succeed. Through its world-class retail, online and delivery capabilities, Staples offers office supplies, technology products and services, facilities and breakroom supplies, furniture, copy & print services and a wide range of other product categories. With thousands of associates worldwide dedicated to making it easy for businesses of all sizes, Staples operates throughout North and South America, Europe, Asia, Australia and New Zealand. The company is headquartered outside Boston.
During the majority of 2012, Staples served our customers through three operating divisions: North American Delivery, North American Retail and International. In September 2012, Staples announced a strategic plan to better serve the needs of our customers and accelerate growth. As part of this strategic plan, we realigned our organization by combining our North American retail stores and public Web sites in the U.S. and Canada to create our North American Stores & Online segment. Our North American Commercial segment now includes our Staples Advantage® and Quill.com.
More information about Staples (Nasdaq: SPLS) is available at www.staples.com/media.
Staples invented the office superstore concept in 1986 and ranks second worldwide in eCommerce sales. The company is headquartered outside Boston.
Staples Corporate Overview
Staples 2012 Annual Report
1 - In 2012, Staples realigned our organization to align with our new corporate strategy and the revenue mix shown here reflects the new organization.
Nothing is more important to Staples than the relationships we build as a company. Our key stakeholders include customers, associates, communities, non-governmental organizations (NGOs), investors and suppliers, as each of these groups has the potential to significantly influence our ability to run a successful business. We choose which specific stakeholders within each category to meet with based on a variety of factors, including the priority issues identified through the materiality analysis and previous stakeholder engagement, as well as individuals’ and organizations’ availability and desire to meet with Staples. Group-specific criteria are further discussed below.
We reach out to our stakeholders often, both with key information and messages about our values. We seek their comment and input on our activities and incorporate their feedback as we structure programs and initiatives and set corporate objectives. When and how we engage with stakeholders varies based on the group and topic, as detailed below.
In 2012, Staples embarked on a strategic plan to better serve the needs of our customers, accelerate growth and achieve our vision: “Every product your business needs to succeed.” Third-party mystery shoppers, as well as tens of thousands of customer satisfaction surveys each month, tell us whether we're getting it right. We also receive feedback from ratings services, such as BizRate, quality assurance monitoring programs and customer interviews.
Read more about our efforts to learn about our customers' needs and concerns and to increase customers' overall satisfaction levels in the “Customer Satisfaction” section of this report.
We engage with and support associates on an ongoing basis in many ways beyond their daily interactions with coworkers and managers:
Read more in the “Understanding Associates” section of this report.
We seek to be a valued and trusted member of the communities in which our associates and customers live and work. Staples works closely with all the non-profit organizations we support, whether they are long-term national partners such as Boys & Girls Clubs of America, or small grassroots groups receiving a Staples Foundationsm grant to fund a local program.
Our community and giving team has surveyed our stakeholders to gauge awareness and perception of Staples’ community involvement, allowing us to continue defining the optimal community outreach programs. In fact, it was feedback from our associates that helped Staples Foundation decide on a new global giving strategy in 2012, one that is associate driven. The 2 Million & Change program allows associates to nominate organizations to receive a portion of Staples funding.
Read more about our efforts in the “Community” section of this report.
Staples engages with NGOs that are considered leaders in their respective areas of expertise to help us enhance our performance across our four Soul pillars (Ethics, Community, Environment and Diversity). For example, we are engaged with:
As environmental, social and governance (ESG) issues make their way into mainstream investing, Staples is continuing its efforts to engage with both traditional investors and the socially responsible investment community. We respond to surveys that seek information about our corporate responsibility programs and performance, such as the CDP and the Dow Jones Sustainability Indexes questionnaire. We also meet with firms that include corporate responsibility information in their investment portfolio screening process.
As part of these efforts, in 2012, as in prior years, we conducted in-person and phone meetings with larger institutional investors, labor unions, pension funds, corporate social responsibility investors and proxy advisory groups. We engaged in a constructive dialogue to hear their perspectives on various corporate governance matters, as well as our executive compensation program. The results were shared with our Nominating and Corporate Governance Committee and Compensation Committee, as well as our Board of Directors.
Our discussions over the past years have helped us to understand which issues are important to Staples' shareholders and how we can be responsive. This outreach also made it clear that our shareholders have divergent and varied opinions and perspectives regarding governance, executive compensation, and some of our other practices.
We engage with suppliers to promote ethics in the supply chain, environmental excellence and innovation, and a diverse supplier base. Our outreach efforts, among others, include the following:
We rely on the talents, strengths and commitment of our associates at every level — from the associates at the stores, picking product, making sales calls, answering customer questions to those in our senior management positions — to focus on executing our company vision of providing “every product your business needs to succeed.” Associates who believe in our vision, live our values and are engaged with their job and work environment are essential to provide our customers and our teams the best experience possible.
The company uses many strategies to understand how our associates are feeling about working at Staples. Starting in 2010, we utilized an outside vendor to conduct our first ever Global Engagement Survey, in which every associate was asked the same set of questions in their local language. We needed to understand not only our current engagement levels, but more importantly what drives our associate engagement and where the company should focus on improving. The results were shared with the entire organization. But change is critical at all levels in the organization and we asked leaders to share their results with their teams and together build action plans against their most significant opportunities.
We also conducted a Global Engagement Pulse survey in 2011, which was a more targeted subset of questions focusing on engagement and the most important drivers. Again, this provided associates with a confidential way to share their feelings and experiences about working at Staples. In 2012, given the amount of change in our organization, only select groups participated in the pulse survey. In 2013, the entire organization will participate in our global survey.
During 2012, we implemented a set of revised corporate values that guide our interactions with customers and each other. We have not only identified our five new values, but we have also articulated the behaviors that support or exhibit these values, with the goal of integrating these values into our culture and day-to-day operations. These values, critical to bringing our vision to life, represent what matters most at Staples and are: Own it; Say it like it is; Be caring; Keep it simple; and Work together.
In 2011, Staples also rolled out a new intranet for our associates called “The Hub,” which won a Nielsen Norman Group 2012 Intranet Design Award for the Year’s 10 Best Intranets. The objective of The Hub is to connect our associates globally, so we can streamline communications, provide an easier method for accessing critical tools and resources, and allow associates to connect with and share ideas with each other. Through this global communication tool, our associates can now help and support one another, regardless of location. To date, The Hub has been rolled out to all U.S. associates and select associates in our international operations, and we will continue to improve our capabilities to reach more associates.
Since late 2012, Staples International has been piloting a new associate Recognition & Reward program, based around our new values. The program allows associates to recognize each other for the great work they do and provide visibility to notable performance throughout the company. Select associates are then rewarded with the donation of a small fund to a charity of their choice through Staples Foundation.
Furthermore, we have introduced new national Corporate Social Responsibility (CSR) taskforces to improve the effectiveness, communication and governance of our Soul programs — by being more inclusive and improving the engagement of our associates, we can make our programs more representative of our associates, improve our performance, focus on issues important to our stakeholders, and create a mechanism for providing suggestions on how we can improve
At Staples, we strive to provide superior value to our customers through a broad selection of products, easy-to-use Web sites, an integrated retail and online shopping experience and a wide range of copy & print and technology services. We are committed to providing superior value to our customers through a broad selection of products, easy-to-use Web sites, an integrated retail and online shopping experience and a wide range of copy & print and technology services.
Our vision is to provide our customers every product your business needs to succeed. In 2012, we announced a new strategy to achieve this vision and accelerate our growth. We are accomplishing this in multiple ways, for example we combined our North American retail stores and our public Web sites in the United States and Canada, staples.com®, to provide a more integrated and consistent shopping experience for our small business and home office customers. Our strategy for this new segment focuses on offering easy-to-shop stores and Web sites with quality products that are in stock and easy to find, and courteous, helpful and knowledgeable sales associates to support customers across all channels. In our North American Commercial segment, our focus includes expanding in categories beyond core office supplies and providing customers with a broad assortment of core office products, as well as serving our customers by continuing to improve our perfect order metric, which measures the number of orders that we fulfill on time and without error, and has led to establishing industry-leading customer service standards.
To make sure that we're doing a good job, we survey customers in our retail,online, and contract businesses, monitor quality assurance efforts, drop in on stores unannounced through "mystery shops" and interview customers directly. Each month, we conduct tens of thousands of customer satisfaction surveys across each of our North American business units and receive feedback from thousands of customers.
In our retail operations we ask customers to rank a variety of customer service factors, including customer engagement, cashier courtesy, speed of checkout, ease of finding merchandise, whether products are in stock, and associate knowledge. We monitor these factors against diverse dimensions of the shopping experience, such as time of day and week that customers shop, whether they are shopping for personal or business purposes, and what type of products they are purchasing. Due to our ongoing investment in training and focus on improving the customer experience, our overall retail customer satisfaction scores continued to increase, with the percentage of customers indicating they are extremely satisfied increasing from 74.5 percent at the end of 2011 to 76.5 percent at the end of 2012, a 2.0 percent increase.
We use customer feedback and suggestions to identify and correct issues, refine our product and service offerings and set aggressive year-over-year customer service improvement targets.
Much as we do for our retail business, we also track and evaluate the performance of our North American Contract business, and our Staples Online business, including Staples.com and Stapels.ca. In addition to assessing our customers’ overall satisfaction, we request feedback on specifics such as the ease of the shopping experience — online search capabilities, accuracy of product images and ease of checkout — as well as the packaging and delivery service, and satisfaction with any problem resolution. These indicators give us valuable insights into how our customers perceive their relationship with Staples. NAC CSAT performance has remained stable from FY’11 to FY’12, with 73.5% of customers indicating that they are extremely satisfied with their purchasing experience. Staples.com and Staples.ca consolidated performance has declined from 2011 to 2012 by 80 bps; however, satisfaction remains high with an overall score of 83.4%.
Thanks to the collaborative effort of our leadership team and our associates globally to drive progress across all of our Soul pillars, several organizations recognized Staples in 2012 for excellence in corporate responsibility.
We know that Staples' success depends on the best efforts of our associates. We also realize that to be at their best, associates need opportunities to develop their talents, sharpen their skills and receive feedback on their performance.
We are committed to talent development for our global workforce. Staples’ VP of Organizational and Executive Development oversees success planning and organizational design efforts in addition to recruiting, coaching and developing senior leaders. The Director of Learning and Development leads management development efforts for all associates at Director level and below, including live and virtual programs for managers around the world.
Each associate in North America receives an annual performance review that is based on objectives and development plans established at the start of the year. We have also established an annual performance review cycle as Staples policy in our international locations.
Individual training and development teams are embedded within business units and are responsible for organization-specific and function-specific training. Training teams exist within U.S. Retail, Canada Retail, International and North American Commercial (contract sales, logistics and supply chain, customer service and telesales).
Associates can learn about development opportunities either directly through their managers or by contacting their respective Human Resources team. In North America and some international locations, associates can also access the company's intranet to see required courses and register for open enrollment classes. In some cases, associates are nominated for management and leadership training.
We encourage associates at all levels of the business to reach their full potential through internal training and development, as well as external educational opportunities.
We offer hundreds of classes to expand associates' business skills and introduce them to new ideas. We are increasing our efforts to reach remote associates through virtual classroom training and are creating tools and processes to help associates focus on taking advantage of the most accessible opportunity for growth — on-the-job development.
Staples' management development programs provide training across the entire career arc of our associates: from New Manager Programs like Leading at Staples for associates who recently entered management ranks, to Manager Certificate Programs for experienced managers, to the Advanced Manager Program for Senior Managers and Directors. Each course provides broad-based development support, including training on delegation, coaching, project management and communication skills, among others.
In North America, the Leadership Development team has continued the rollout of the Leading at Staples program, offering development on leadership competencies for all audiences based on the job level. The Foundations of Leadership program, focused on first-level supervisors and managers of individual contributors, is the initial offering under the Leading at Staples brand, with programs for Senior Managers/Directors and individual contributors to follow in 2014.
By August 2012, 20 sessions for supervisors and managers across every function within the United States were offered. The content of the program follows a very simple philosophy — that regardless of the function or location, there are vital leadership skills that can bolster managerial effectiveness and associate engagement. Topics include Emotional Intelligence, Selection & Hiring, Situational Leadership, Developing Associate Capabilities, and Project Planning. The training is delivered using a blended learning solution that includes virtual sessions, self-paced modules, classroom learning and on-the-job application through action plans.
Of particular importance is that in addition to professional trainers, the classroom sessions are facilitated by leaders from across Staples. This “Leaders Teaching Leaders” model offers developmental benefits for the participants as well as the leader-facilitators.
In 2012, Staples Europe graduated several associates from its manager training programs. Two new groups of senior managers graduated from the Advanced Manager Program (AMP), while three groups of first-time managers graduated from the New Manager Program (NMP). The AMP was created to better support seasoned managers in transitioning from leading others to leading managers, while the NMP provides the foundation for what it means to be a leader at Staples, and successfully prepares graduates for the responsibility of managing others. Both courses span an eight-month period, with combined classroom and online training, and give participants the opportunity to present their learnings and recommendations to address specific business questions to the European Leadership Team.
In partnership with the University of Toronto, 22 Staples Canada associates identified as high potential talent graduated and obtained their certificate from a two-year Advanced Strategic Leadership program in 2012. Using current Staples business challenges, participants developed key competencies and acquired specific business knowledge to enable them to be more effective in their current roles and prepared them for assuming more senior leadership roles in the future. Program topics included Strategic Thinking, Emotional Intelligence, Building Business Cases and Leadership Techniques.
U.S. Retail Talent and Development held a leadership development conference in 2012 to provide the team an opportunity to collaborate, learn and share best practices. The conference focused on how to analyze and evaluate current tools and metrics to identify the root cause of business problems and develop effective solutions quickly. In addition, a detailed action planning session was conducted to prepare our leaders with a definitive roadmap to drive their business forward.
In 2012, Staples continued the process of launching our global talent management system, Talent Track. This system consists of three modules: a learning management system, used by associates to access and complete learning content; a performance management system, used to complete performance appraisals and other performance management components; and a succession planning system.
U.S. retail stores successfully launched the learning management and performance management systems in early 2012. In 2013, we will be launching our online performance management system for the large majority of our associates in the U.S. and large numbers of leaders in Canada and our International locations. This will allow managers to provide more consistent and more objective feedback. We will also continue to use our global online succession planning system, which will ensure that we build a strong bench for leaders of the future.
In 2012, the Learning and Development Team launched a new pilot training program for managers leading remote teams, with the goal of helping them face the challenge of managing people and performance at a distance. The program uses online training modules with a focus on an applied learning approach (experience sharing, individual case study work, coaching and mentoring). Participants gain an understanding of the principles of effective people management and the specific challenges of remote people management. They also develop key competencies of an effective remote manager, define effective solutions and apply best practices for their individual management situations.
For those associates who would like to take advantage of external educational opportunities, we offer an annual scholarship program. Unlike many retailers, Staples offers this opportunity to part-time as well as full-time associates, requiring only that classes be taken at accredited universities, colleges or technical schools. We also have relationships with the University of Phoenix and Capella University, allowing Staples associates to receive a discount on classes. To learn more about working at Staples, please visit our careers page.
Health and Wellness
Staples’ approach to healthcare considers its associates’ emotional, physical and financial well-being. While some benefits are available only to full-time associates, many are offered to all associates in support of our culture of health.
Staples offers Personal Health Assessment (PHA) rewards to full-time associates and their covered spouses or domestic partners. Through its health plans, Staples encourages all associates to take advantage of the low- or no-cost annual physicals, which may include vision and oral health exams.
In addition, Staples provides many other benefits that support associate well-being – now and in the future. These programs include:
Read more about Staples’ approach to healthcare.
Ensuring the health and safety of our associates is a core focus for the company. The management team at Staples is committed to conducting our business in a manner that is safe for our associates, our customers and the communities in which we operate. Core components of Staples' safety program include:
In order to deliver on our goals of a safe working environment, we have Occupational Health and Safety (OHS) plans that are reviewed and updated annually based on changes in the business and in local, state and federal regulatory requirements.
In 2013 Staples business units will continue to implement business-specific behavioral-based safety programs such as "Safety In Action" (in U.S. stores), and “Focus 4 Safety” in U.S. Retail Distribution Centers and North American Commercial. Each is designed to improve site safety by promoting behavioral observation of how associates are working in their job functions and by coaching and promoting correct work techniques. Program compliance and feedback are tracked through internal safety audits conducted by field personnel and local safety committee members. Results are communicated and reviewed by management.
Staples uses a data-driven approach to manage our occupational health and safety programs. The Risk Management department sends out weekly, monthly and quarterly reports to help inform and educate all associates on program results, injury trends and injury prevention techniques. Based on injury experience and regulatory requirements, we develop new action plans that include enhanced training, new tools and equipment and vendor-provided safety services. For example, we've instituted injury management training for supervisors, safety gloves for cutting, third-party injury triage services and active relief therapy (ART), and are currently testing pallet jack guards to help prevent foot injuries.
Primary focus areas of our safety program include, but are not limited to:
Each associate completes an annual safety certification. Interim training is provided by location management through individual safety training modules (job aids) that combine both classroom and practical training.
Hazardous materials need to be safely managed across our operations, from handling in our warehouses to transportation on our fleet. Our compliance and safety teams stay abreast of all pertinent environmental, safety and transportation-related requirements to ensure we are compliant and our associates are safe.
In 2011, prompted by increasing growth in our facilities and breakroom categories, our North American Commercial department worked diligently toward completing a two-year project to streamline the management of all the products we sell — both existing and new — that are regulated by the U.S. Department of Transportation, U.S. Occupational Safety and Health Administration, U.S. Food and Drug Administration, and, in some cases, states or state consortia. By collecting and maintaining product data at the initial point of entry into our information management systems, we can easily share that information upstream and downstream to give our associates access to the information they need to properly package, mark and label all regulated products. The upgraded system also allows our customers to access important product information (Material Safety Data Sheets) directly from our ordering platforms.