White Castle balances seasoned success with fresh ideas

 

Beef consumption is declining, and other proteins are becoming more popular with Americans. So, what does that mean for White Castle System Inc., the king of the slider?

“For a company that is built on a 2-inch-by-2-inch square hamburger, we needed to recognize that trend, first of all, and then decide: Are we going to just ride that trend out or are we going to be proactive and try to get ahead of the game?” says Lisa Ingram.

As a result, White Castle introduced more products in the past six or seven years than it did the 90 years prior.

“That’s been a big focus for me personally in my leadership,” says, Ingram, who became president and CEO last year.

Ingram’s self-awareness of issues like declining beef consumption and her own leadership are adding value to the family business. At the same time, she is making an effort to let her team be part of the company’s future.

“In 2016, in my 360, there was some feedback that I wasn’t letting my team do their stuff, that I was getting too involved in the details and making decisions that they didn’t feel like I should be making,” she says. “And so I worked really hard in 2016 to not give my opinion or let my team give their opinion first and then support them.”

That’s just one example of how Ingram has grown as leader since she succeeded her father, E.W. “Bill” Ingram III. She also uses that self-awareness to surround herself with people who have strengths she doesn’t.

While her father respected different points of view, but emphasized decentralization, Ingram seeks to not only empower the team, but also bring them together to explore new ideas. She doesn’t want to pigeonhole the company into the White Castle way.

“We’re bringing in different perspectives to enlighten us and to help us grow and think and push us up out of our comfort zone,” Ingram says.

A few years ago, she hired an outsider to run restaurant operations. This was unusual for a company where the majority of staff started with White Castle as teenagers and worked their way up.

“I felt like to complement my skill sets, I needed a strong operations person that hadn’t been at White Castle for 20 or 30 years, and that could help mentor those individuals within White Castle that had been there awhile — a different leadership style, a different leadership philosophy, a different focus on different things,” she says.

Shaped from others

Change is inevitable under a new leader.

“Certainly there are people that really liked my dad’s leadership style and don’t like mine as much. Conversely, there are people that like my leadership style better,” Ingram says. “That’s just part of having a new leader, whether it’s your father or not.”

Throughout your career, you interact with different leaders, she says. If you’re observant and you want to grow, you pick what you like and that helps shape you.

Ingram initially didn’t want to be involved with White Castle. She worked for a Dallas wholesale distributor for five years.

“I was really proud of the fact when I graduated from college, that I got a job on my own without any help from my family or anybody knowing my family name,” Ingram says.

It gave her confidence. But when an opportunity came up at White Castle with the same title as her current position, she thought it was time to see if the family business made sense.

After another stop, this time for her MBA, Ingram came back to White Castle for good as director of operations in 2000.

Experiencing a variety of jobs allows you to figure out what you like, what you’re good at and what to avoid, she says.

“There’s definite value in having different opportunities that stretch you and grow you, and that can be within the same organization, or it can be at other organizations,” Ingram says.

Prudent investments

Stretching and growing isn’t limited to employees; a company needs to invest in itself before it can stretch and grow into new markets.

Recently, White Castle started rebuilding existing restaurants.

“We have a lot of castles built in the 1980s. They just need to be replaced. They look old. They look tired,” Ingram says. “We’ve had lots of success with our new look — a reimaged dinning room, a more open kitchen — because we want to display to our customers a level of transparency so they can see how the food is being cooked.”

Investing in the existing infrastructure was critical for the brand image. It also benefits the employees and customers.

“It’s definitely an investment that we have seen a return in, but that costs money,” she says. “We are all company owned, so there are some economics to that that we have to work through.”

White Castle has two bakeries and three plants that make the meat patties for its restaurants and frozen products. In fact, the company’s retail sliders, developed more than 25 years ago, account for 20 percent of sales. With lots of places that need capital, growth is slower.

Investment decisions are presented to White Castle’s fiduciary board of three family members and five independent directors. The board gets quarterly updates on capital expenditures, with a deep dive once or twice a year to keep strategic planning on track.

White Castle has always been financially conservative and for many years it had no debt. Ingram says they have some debt now, but it’s appropriate to their size.

“We’ve always been very conservative. You won’t see us going after something and risking the whole company to be able to do it, which has made us successful for 96 years,” she says. “Being prudent doesn’t mean you don’t take advantage of opportunities; it just means that you’re very thoughtful about the opportunities that you go after.”

It’s only after your ship is in order that you can look out to grow, Ingram says.

“We’re now at that point, and excited to be able to not only continue to invest in where we already are, but look at places where we are not and find other spots that might want to have a White Castle,” she says.

For example, in 2015, White Castle signed a licensing agreement for a restaurant in a Las Vegas casino, going west of the Mississippi River for the first time.

Diversify around the core

The effort to update restaurants partly came from new products that added requirements on the kitchens. There’s a rigorous process before a new product shows up on White Castle’s permanent menu, though.

First, the company tests the idea with an online panel. Then it develops a spec and takes the item out to a few castles. With some customer feedback, a team of marketers, trainers, operations personnel and chefs ensures the product works for customers and with operations.

From there, the product is put into a market with media and marketing behind it. If it works, White Castle may roll it out across the whole system as a limited time offer. If it’s really great, it stays on the menu.

Ingram wants to continue this trend.

“We are now looking at doing more product development for the retail side — taking existing products on the restaurant side and seeing if those would be applicable products in retail or specifically developing products for retail,” she says.

While some new products have been successful, not all new ideas have worked. In 2010, the company developed three new brands: a sandwich concept, a barbecue concept and a noddle concept. After about 18 months, Ingram says White Castle closed them down.

But how does she balance innovation against customers who get married at White Castle or are inducted into the Craver Hall of Fame?

“As long as we don’t touch or change in any way, shape or form the 2-inch-by-2-inch sider, our core customers will be happy — and they’ve very adamantly told us that,” Ingram says. “‘You can have all these new products. I don’t understand the new products. I don’t want to taste the new products. I just want my slider; don’t mess with the slider.’”

The idea is to honor the company’s core while expanding to new audiences. That core is so established that White Castle doesn’t have to spend much time marketing the slider.

King of the castle

Tapping into your customers’ voice is critical for business longevity. That’s how White Castle put restaurant products in the grocery freezers before others. Ingram’s father saw customers ordering extra sliders to take home and freeze.

Ingram says you have to understand what customers want out of your experience and your brand. To do that, White Castle takes customer service seriously. It has been surveying customers at the store level for years.

“Since we’re open 24 hours, we can track how well each shift is doing and provide feedback to team members on how they can improve,” she says.

Team members also have scorecards that help with accountability.

“We’re a small regional brand and we’re not on every corner,” Ingram says. “Our customers have to drive by five or six other places to get to us. We want to make sure that when they arrive, they have a really, really good experience.”

Another integral piece to the overall customer experience is loyal, long-term employees. Of White Castle’s 10,000 team members, more than 25 percent have been with the company for a decade or more.

“A lot of people know customers by name, and know about their family and know what they order,” she says. “When our customers come in, many of them feel like this is their place — it is their place that they are welcome, that they have friends, that they are cared about.

“Sometimes if our regulars don’t show up for a couple of days, our team members get worried and they may call the family of that particular customer to see if they are OK.”

 

Takeaways:

  • Invest internally before looking for external growth.
  • Honor your core business when adding innovation.
  • Listen to your customers’ voice at all times.

 

The Ingram File:

Name: Lisa Ingram
Title: President and CEO
Company: White Castle system Inc.

Born: Columbus, Ohio
Education: Bachelor’s in business administration with an emphasis on marketing and finance from Southern Methodist University in Dallas; MBA in operations and consulting from The Ohio State University.

What was your first job and what did you learn from it? My first summer job when I was 16 — because my father said you have to go get a job, you can go work at White Castle, you can go work someplace else — was being a ride operator in the hot blazing sun at Wyandot Lake, the old amusement park at the Columbus Zoo.

I learned that you can perceive a job to be easy and fun, and you can figure out once you get into it, it’s a lot of hard work. But there are fun aspects about each and every job if you’re willing to open yourself up. Even though I can’t say I loved being a ride operator, I enjoyed the people and the friendships that I made. That’s what made the job fun.

What’s your best advice about working in a family business? I feel really fortunate because all of my family members are hard working, loyal and add value to the brand. I know that’s not always the case in every family business.

My advice would be to focus on the needs of the business — try to make sure that every family member understands the needs of the business and how their unique skills fit in. It may not be what they think. Where do their skills make them the most valuable to the business? Those aren’t always easy conversations, but if you can get to that point, it really benefits the individual because they’ll be productive, happy and contributing, and it also benefits the business.

What do you like to do when you’re not working? I’m a runner, so I run. I like outdoor activities — running, hiking. I have four kids, so honestly that pretty much takes up any free time that I have. My family is a big part of my life. They are my hobby right now.