Cameron Mitchell fine-tunes his recipe for growth

 

Cameron Mitchell feels like he hasn’t gone to work in 20 years. The founder and CEO of Cameron Mitchell Restaurants plans to keep his “founder” title until he — as he puts it — goes to the big restaurant in the sky. He doesn’t want to retire, ever. However, after 37 years in the restaurant industry, he is moving toward a stewardship role.

Most recently, the company has been building out its Ocean Prime brand, which serves seafood and steak, while continuing to build specialty restaurants with the goal of vetting a secondary growth brand that can be developed coast to coast.

In October, Cameron Mitchell Restaurants will celebrate 25 years in business. The company is stronger than ever, with approximately 4,200 employees, 30 restaurants in its portfolio and five new locales opening in the next 14-18 months. In addition, the Rusty Bucket, its sister company, has more than 20 restaurants, and Cameron Mitchell Premier Events, its private dining and catering division, has expanded in recent years.

“In the earlier days, we were drinking out of a fire hose to a certain extent, but now we’re much more strategic,” Mitchell says.

Mitchell promoted David Miller to COO and president two years ago, and plans to gradually take things off his plate over the next three to four years. But he admits letting go hasn’t been easy.

“I’m trying to find what is that right place? What are the right things to let go of? What are the right things to keep hold of? That will naturally take some time,” he says.

The growth of his business offers evidence that he has at least some idea of how to proceed. Mitchell admits that if he had never been able to let go, the company wouldn’t have all the restaurants it has today.

Stay strategic

Beyond the ongoing challenge of managing capital in a capital-intensive industry, Mitchell says he’s gotten in trouble twice by trying to grow too fast. The first was in 2000 and 2001 when the company doubled in size and caused unnecessary hardship.

Then in 2008, he sold two of his most popular themes, Mitchell’s/Columbus Fish Market and Mitchell’s/Cameron’s Steakhouse — a total of 22 restaurants — to Ruth’s Hospitality Group for $92 million. Mitchell wanted to rebuild that EBIDTA.

“We went out and signed a bunch of leases and just got all crazy — and that took years to recover from,” he says.

Because the company was overanxious, it picked some locations it shouldn’t have, Mitchell says.

“When you’re growing that fast, one of the lessons I’ve learned over the years is that human capital, mental capital is the same as physical capital. You can overspend both,” he says.

Mitchell says that kind of environment can lead you to start cutting corners.

“When we’ve grown too fast in the past, we’ve ultimately always run into those three issues, and we don’t want to run into those three issues ever again,” he says, joking that while he tries not to take too many laps around the track twice, every once in a while, he finds himself asking, “Hey, didn’t we make this mistake once before?”

Today, the executive team thinks about a restaurant location almost too much.

“We grind about it. We work it. We think about it. We research it. Before we sign on the dotted line, we’ve done a lot of homework on it. That’s the difference (between) the company today than it was years ago. We’re much more mature and much more methodical,” Mitchell says.

Selection criteria

Cameron Mitchell Restaurants has opened 13 Ocean Prime locations in cities like Beverly Hills, Boston, Denver, New York City, Washington, D.C. and Naples, Florida, with plans in the works for Chicago and a second Denver location. The company was a superregional brand a decade ago, but this time around it has cast a wider net.

Mitchell says he doesn’t know which cities will be next because finding a trophy location is critical — a generational site that can be a great restaurant location for decades. The company’s extensive real estate broker network is actively looking in targeted markets.

“You only have so many bullets in a gun. We can only build two, three, four restaurants a year, depending on how expensive they are,” he says. “When America is your landscape, that provides a lot of opportunities. You want to be very selective.”

He doesn’t know if Cameron Mitchell Restaurants will open a Houston location in 2019 or 2023. He just knows the company wants to be in Houston at some point.

“There is no box that we have to operate in, that a development has to fit these exact criteria or we’re not doing it. We try to also be very flexible in our development criteria — ultimately looking for the best restaurant space with the best return on investment that will provide us success in that particular location for many, many years,” Mitchell says.

Cameron Mitchell Restaurants isn’t a chain that needs to build a certain number of restaurants a year; it doesn’t have to be anywhere at any time. Mitchell says that keeps it from making exceptions, picking substandard sites, which drives down average unit sales.

Mitchell’s approach to expansion has been informed by the writings of Jim Collins, particularly his three concentric circles concept from the book “Good to Great.” In it, Collins says to answer three questions: Where are you one or two in the marketplace? What’s got a great financial model? What do you have a passion for?

Back in the Fish Market days, the company had opened both a Fish Market and Cap City out of town. After Mitchell read Collins’ book, he realized that Fish Market was where the company should focus its energy, which ultimately led to a very favorable sale.

Today, Cameron Mitchell Restaurants replicates that same recipe with Ocean Prime, which he says was its first target for expansion in the current business model. The company is passionate about the high-end steak and seafood business and the brand competes well.

“The Ocean Prime brand itself has got one of the highest average unit volumes of any restaurant company in the country — definitely in the top 10 — and it has got a great return on investment,” Mitchell says. “It’s very capital intensive. It costs a lot of money to build those big, grand restaurants, if you will, but if we get the right location and can do the business volume, it’s got a nice economic model to it.”

Exporting the culture

Another way Cameron Mitchell Restaurants has honed its craft, compared to its earlier days, is exporting its culture out of town.
Twice a year, the company does an in-depth survey that evaluates its associates and their opinions on management, the company, the culture, etc.

“Back in the days of the Fish Market, if we took our top 10 restaurants in terms of culture impact, nine out of 10 or 10 out of 10 would be here in Columbus. And inevitably, the ones out of town would be further down the line,” Mitchell says.

Today, out of 30 restaurants, seven or eight of the top 10 scores might be out town.

“There is no difference now between the operating culture in our restaurants in Columbus and operating culture in our restaurants in Beverly Hills or New York City. That is probably the biggest thing we learned and have applied toward our national growth,” he says.

The difference comes from how the company staffs its new restaurants.

Mitchell says even if you train new managers in your company culture and values, they won’t know how to operate within that at first. Now, when Cameron Mitchell Restaurants opens restaurants, of the eight people on the opening management team, six or seven are transfers who know the culture well.

“That way we establish that culture, that operating culture in that restaurant from day one, out of town. No matter where it is, no matter what locale it’s in,” Mitchell says. “So that’s our calling card — the single biggest point of differentiation for Cameron Mitchell Restaurants is our operating culture, our associate-comes-first, service culture. If we don’t have that going for us in an out-of-town store, we’re in big trouble.”

In order to grow and create a business built to last, like Mitchell has, he believes you have to be prepared for the long haul.

“We never had any delusions that, ‘Hey we’re just going to pop a few restaurants up around the country and it’s going to go great and it’s going to be easy, etc.’” Mitchell says.

If Cameron Mitchell Restaurants is going to be around for 100 years, it will continue to be based on its people — built on its people by its people for its people.

“We have so many people who are building their careers with our company and so forth. So, growth becomes an integral part of who we are,” he says.

Growth isn’t a five-,10-, 15-year deal; it’s a long-term commitment.

 

Takeaways:

  • Growing too fast can overspend both your physical and human capital.
  • Don’t make exceptions; be selective with your development.
  • When expanding, remember, your people establish the culture.

 

The File:

Name: Cameron Mitchell
Title: Founder and CEO
Company: Cameron Mitchell Restaurants

Born: Columbus
Education: Culinary Institute of America, Hyde Park, New York

What management skill was the hardest for you to learn?

I’ve always been a student of the industry. I read the trade journals and I’ve had lots of mentors in the business — I’ve read their books, even if I hadn’t met them — learning about leadership and business. But one of my hardest lessons came when I was a young general manager.

I was 24 years old and the GM for a white tablecloth restaurant in downtown Columbus. I was working my tail off and thought I was doing a great job. My boss calls me into the office one day and says, ‘Hey, about eight servers just left and we’re having a mutiny on the Bounty down there at the restaurant. They said either you need to go or they’re going.’

I was shocked. It totally threw me — no one wants to hear that about themselves, especially when I thought I was doing a good job. I thought the restaurant’s success was dependent on how hard I worked and how good of a job I did. But I realized then the restaurant’s success is dependent upon how successful all the people are that work in it. So, instead of spending all my time on top of them, managing them and the restaurant, I turned it on its head. I spent my entire day supporting everybody and helping everybody. That caused the restaurant to rise and therefore I rose.

That’s where I became the people person that I am today. I understood right then and there that our associate is the most important thing in our company and restaurants. I never looked back and it was the biggest turning point in my career. I had no idea what leadership was prior to that.

Do you have a favorite food, or something you don’t like to eat?

I don’t think I could follow Andrew Zimmern around and eat some of the stuff he chomps on. Generally speaking, in America, is there any foodstuff I don’t like? Not really, no.