After watching an episode in which William C. Carstanjen, chief operating officer of Churchill Downs, worked with three employees in varying capacities at Churchill Downs locations in Florida and Illinois, Buck spoke with Bloomberg BusinessWeek Management Editor Patricia O’Connell about the message of the show and the responsibilities managers have to create a culture of openness. Here is some of the Q&As:

Patricia O’Connell: Out of curiosity, what did you think of the show, Undercover Boss?

Michelle Buck: I was very interested, not just for our conversation, but as someone who teaches a class in managerial leadership. … It’s a look at how important it is for leaders to know what’s happening at all levels of the organization. As [William Carstanjen] said, “this is really a people business,” and everything is a people business. [Managers need to find out do] people have what they need to do their job? What are their hopes and dreams? Those are the factors that affect their motivation and their ability to get their work done.

If [Undercover Boss] that can trigger conversations and open awareness of these issues to the fundamental business practice, that’s a great thing.

What do you make of the idea that clearly a lot of employees have no clue what top management looks like? I realize they are showing situations where there are many, many layers between the workers and the top management. But still, I was struck that employees have no idea who their top people are.

I was at an event at Kellogg with an executive of a large global firm and we were talking about the show, before it had aired. He said the premise was scandalous. The ability of people to go undercover [and not be recognized] at a large organization shows the problem.

Workers likely would not have been as open had Carstanjen shown up and said, “Hey, I’m the COO, and I don’t know enough about the way the operation works. What’s hard about your job?” Even if you create a culture from the very top where this kind of conversation is important, and you want to give people the tools they need to do their jobs well, and you set it up so that cascades down throughout the organization, how do you make it safe for employees to be open with you?

Leadership is a relationship, and like any relationship, it evolves with trust and credibility. So a leader has to be consistent in showing desire for the input and acknowledging the feedback—but there has to be follow-up as well.

Too often people feel, “I made the suggestion, they said thank you and smiled, but nothing ever happened.” And that can cause a real decrease in morale ….

Business: 7-Eleven is part of an international chain of convenience stores, primarily operating as a franchise. The US subsidiary of this Japanese firm has its headquarters in Downtown Dallas, Texas.

CEO: Before being appointed Chief Executive of 7-Eleven in 2005, DePinto was President of GameStop Corporation. He has also held executive positions at PepsiCo, Inc., and was the Chief Operating Officer of Thornton Oil Corporation. A native of Chicago, Ill., DePinto earned a bachelor’s degree in Engineering Management from the United States Military Academy at West Point, and a Master of Business Administration from the Kellogg School of Management at Northwestern University. He and his wife Ingrid and their four sons reside in Southlake, Texas.

Situations:

Day 1: A day in a 7-Eleven store in New York state. This specific store sells the most coffee of any 7-Eleven in the United States. DePinto attributes the success to Dolores, a 7-Eleven worker, who knows most of the customers by name and gives them a family feeling.

Day 2: A work day at a bakery that manufactures donuts and fritters sold at 7-Eleven stores. DePinto is paired with Phil, who is responsible for training, and who assigns him to place dough on a conveyor belt. DePinto struggles to keep up with the pace of the conveyor belt.

Day 3: A night shift in a 7-Eleven store in New York state. DePinto learns that the company’s policy on donating old food to charity is ignored. He also learns that Waqas, an immigrant from Pakistan, who works the graveyard shift so that he can attend college during the daytime perceives his job to be a dead end job.

Day 4: In a work day at a 7-Eleven store, DePinto makes a maintenance call to the store support center in Dallas. His request is placed as a lowest priority job, although DePinto thinks this should be a high priority, due to safety concerns and customers’ perception.

Day 5: DePinto is assigned to work with a delivery driver, Igor, to deliver product. DePinto is impressed with Igor’s loyalty to his job and his new country.

Lessons Learned:

• 7-Eleven HQ needs to reconnect with the field by better understanding the special needs of the franchisees and the people who work for them and for 7-Eleven.
• 7-Eleven needs to change the mind set of store employees from a “dead-end job” to a career opportunity, such as with Brian Dunn, the CEO of Best Buy, who started as a sales associate and was able to climb himself to the top.

Lessons Missed:

• While DePinto acknowledges Dolores contribution to the success of the local 7-Eleven, he does not look for a way to replicate her loyalty and her ability to create sense of  family within other employees of 7-Eleven, or to find a way to keep hiring people like Dolores. “Hiring the right people” is a constant challenge for businesses, especially  as big as 7-Eleven who usually hire low-pay workers. It is interesting to compare DePinto challenges with Nick Sarillo ones, from Nick’s Pizza & Pub, who is trying to grow his business while maintaining a low turnaround and high satisfaction among his young employees. Can a chain as big as 7-Eleven hire only what Sarillo calls “A+ Players”?
• DePinto wants to upgrade the priority of some of the maintenance calls, however no consideration has been made for the additional costs of such a change. There was also no mentioning of an appeal process to change the priority level of a maintenance call.