When Doug Cavanaugh approached a group of friends with the idea of turning an old bait shop on Balboa Pier into a restaurant, all but
one thought he was crazy. More than 20 years later, that one believer, Ralph Kosmides, is now executive vice president and co-founder
of The Ruby Restaurant Group, the company that controls or has franchised 41 Ruby’s Diner locations nationwide, employs
approximately 2,500 people and boasts annual revenue of $100 million. As chairman and CEO, Cavanaugh, who named the chain of
1940s-style diners after his mother, has big plans for Ruby’s continued expansion. His top priority, however, is maintaining the culture
and atmosphere that he believes makes the brand so special. Cavanaugh spoke to Smart Business about staying true to your roots and
why a little discipline is necessary for a growing company.
Protect your culture and your brand. Unless
you’re just a box mover and you’re just
selling something for the lowest price,
where culture doesn’t make much difference and people are just looking to get in
and out and get the box for the cheapest
amount, you have no option. Your culture
is what is going to make or break you.
We franchise throughout the country,
and one of the things that makes Ruby’s
successful is the essence of our culture.
Without that culture, you’ve got just
another restaurant. You might as well be
a coffee shop. That’s essential for us.
One of the things you have to be careful of is that the brand becomes the
guests’. They take possession of it and
they hold it very near and dear to them.
If you lose the core of what it is that they
have an affinity for, you can really turn
things upside down. Especially with an
older brand, you have to protect the core
value of what the guest perceives you as.
Our culture video is something that
every new hire, no matter where they are
in the company, is asked to watch. It’s
about a 15-minute piece on where the
company’s roots are and how it developed and where it’s going. We have something called Ruby News that goes to
every employee via the Internet, and we
try to make sure we’re consistently sending our message on. We’re trying to make
sure we’re disseminating that data so the
guest gets the impact of our culture.
Communicate from the top. Everybody, all
the way to the busboy, has to understand
what they’re in charge of and what
they’re responsible for. The message has
to be very clear and concise. Unless you
have that alignment, everything you talk
about at the home office is for naught.
We don’t sell any hamburgers here on
the eighth floor.
We have to make sure our missions and
our goals are very well delineated and
very well communicated. If you don’t do
that, you’ve lost it all. Without alignment, you really don’t have anything. They’re
out there on their own, and they really
don’t know what they’re trying to execute.
There’s a certain amount of comfort
that team members have when they
know what their job is in very definite
terms. When they feel comfortable and
confident, they’re going to do a far better
job. In a vacuum, it’s a wildcard; you really don’t know what you’re going to get.
Balance entrepreneurial spirit with discipline. If somebody’s going to create a new
division or a new product line, the entrepreneurial spirit goes a long, long way. On
the flipside, my skills as an entrepreneur
are better set for the foundation of a
brand and for the genesis of things.
As a company gets big, you need to
become more professionally managed.
You always have that entrepreneurial
element embedded in there, but you
have to get more and more disciplined.
You can’t be the cowboy you once were.
The magnitude of everything shifts as
the sales get higher. The importance of
decisions is magnified as well, so shooting from the hip doesn’t work quite as
well as it did in the early days. You don’t
want to ever lose your entrepreneurial
edge but being disciplined is important, and it creates a more stable environment
for the management throughout the
organization.
Build buy-in by listening. There’s nothing
as valuable as buy-in, and it’s a little
tricky these days. You have several different generations you’re working with
and their motivations are far different
than the baby boomers, and the X-ers are
different from the Y-ers, so it is a bit of a
dance to keep them all in lockstep.
You just have to listen. We go to great
lengths to have roundtables at our
restaurants where we will invite the
team members to come and talk about
what’s affecting them and their job and
what we can do to better support them
to support the guests. It’s critical for me
to know the real story.
I don’t get a chance to interact with our
guests that often but these folks are there
day in and day out, and they’re far more
in touch with what the guests are thinking. If we make a change in a menu or a
procedure, that’s when I really have to
dive down to make sure we didn’t affect
the core of the brand, because that’s the
golden goose you can’t mess with.
Create positive tension. The people I’ve
found to be most successful are the people who are absolutely, doggedly tenacious and just don’t give up. That makes
up for a lot of things.
You don’t have to be the smartest guy
in the pile, but the minute you stop innovating, the minute you stop being aggressive, that’s when things get dull. The
team can sense that. There’s a certain
level of tension that’s healthy for an
organization. I don’t mean negative tension, but there’s a level of creative tension that keeps people excited and
keeps people interested.
It’s all about new ideas and it’s all about
‘What’s next?’ That keeps people inspired.
HOW TO REACH: The Ruby Restaurant Group, (949) 644-7829
or www.rubys.com
