How Bob Fish reinvented his leadership style to bring Biggby Coffee out of the recession Featured

8:01pm EDT July 31, 2012
Bob Fish Bob Fish

When the recession hit, the only direction Bob Fish could turn was inward.

Up until then, it had been the best of times for Fish, the co-founder and CEO of Biggby Coffee. The chain of franchised coffee shops – which is based in East Lansing, but maintains a substantial presence in metro Detroit – had been growing by about 50 percent per year. But when the bottom fell out of the economy in late 2008 and early 2009, all Fish could hear was the sound of screeching brakes.

“Prior to that, it was pretty easy to get financing for new franchisees,” Fish says. “When we had the collapse, it became much more difficult for even our current operators to get financing. So it slowed our growth down, and that slowing had a morale impact. We fell back to about 20 percent growth per year.”

The good news was, Biggby Coffee — which is the brand name of Global Orange Development LLC — didn’t face an immediate existential threat. But growth slowed to a crawl, and Fish realized that if he didn’t reposition his company, the situation could quickly worsen. In an industry segment dominated by corporate titans such as Starbucks and McDonald’s, Fish’s burgeoning company couldn’t afford to slide any further. He needed to rally everyone at the corporate office and throughout the franchise chain, and to do that, he needed to draw the company closer together.

That meant Fish needed to revisit and refine what it meant to communicate with and engage his people.

“With our operations, we began to essentially change the style of our leadership,” Fish says. “We moved to a style that would be one that involved a higher degree of communication and a higher degree of inclusion between our office and our operators. We felt the need to get in touch with people on more of an in-person basis.”

Get tuned in

Fish believes one of the most powerful actions a business leader can perform is to get up in front of his or her company, and relate to them on a face-to-face basis. E-mails, videoconferences and newsletters all have their place, but nothing carries the weight of your words coming directly from your mouth.

“Communication is one of the most paramount things a CEO has to do,” Fish says.” You can have great ideas and a great vision, but if you are unable to articulate that to the balance of the community you are serving, it just doesn’t matter. The component that makes the real difference is to be able to create environments where there can be a dialogue on what you are communicating, and by extension, inclusion in the process of decision-making.”

As the economy slumped, Fish soon came to the conclusion that if his company was to maintain a healthy outlook, he’d need to create opportunities for educating employees and franchisees about the Biggby’s present state, and for facilitating an open dialogue about the company’s future.

“That manifested itself in the form of increasing frequency of in-person meetings,” Fish says. “At that point in time, we instituted what we called ‘in-market meetings,’ where I would go to each (designated market area) and hold about a three-hour meeting. We would discuss the current economics of the organization, and also cover what was going on in the immediate promotional period. We run promotional period cycles, and we’d talk about the performance of the previous cycle and what we were expecting in the coming cycles. Overall, that process created about six market meetings every 60 days.”

Fish also recognized the need for better lateral communication among the franchisees. As the company grew and fought the effects of the recession, Fish wanted to have a system in place by which franchisees operators could speak with each other, share best practices and find common ground on issues that affected the entire chain.

“What we did was to help establish something called an independent franchise association,” he says. “We have encouraged our franchisees to band together as one voice, creating an association that they could use to roll up their thoughts and opinions from throughout the franchise community, and then bring to us in corporate in a cohesive manner.”

One of the biggest keys to effective communication is high engagement. You have to have the attention of your audience if your words are going to mean anything to them. To engage, you have to give them compelling reasons to get involved. And to give them compelling reasons, you have to know who they are and what motivates them.

Fish identified the two constituencies he serves as CEO — consumers and franchisees. Consumers get involved in the business by purchasing the products and referral advertising through word of mouth. In order for consumers to engage — and stay engaged throughout the recession, when disposable income was drying up in households across America — Fish realized he’d need to know what his franchisees wanted and needed, and address those areas.

Through his avenues for communication and dialogue, Fish learned his franchisees wanted a voice and a tangible way to impact the direction of Biggby moving forward. Communication was only part of the equation. The ideas submitted by franchise operators had to turn into something that had a real impact on the business.

“Typically, change comes out of strategic planning,” Fish says. “Today, we do strategic planning with all department heads at the corporate office, but we also include two board members from the (International Franchise Association), so that we can represent that community in our strategic planning. Those board members have full votes, full participation and so forth. Very early in our operation, we have folded our operators into that dialogue.”

Form your process

Fish knew that in order to keep employees engaged and active in shaping the future of Biggby, he needed to form a process that turned employee and franchisee ideas into reality. The process was critical, because employees needed to see the system in action. A handshake and a promise doesn’t get you very far if your people don’t see the organization working toward results.

With that in mind, Fish divided the process of considering and implementing employee ideas into three parts: strategic, tactical and execution.

“All ideas are brought to the table at any given time for strategic planning,” he says. “Once decisions have been made at the strategic level, we have to deconstruct the idea and prepare it for the next level of feeding, which is tactical. That’s where we hash out the particulars regarding how we are going to execute it. Then we move into the execution phase, which is more or less a checkbox that tells us whether the task was performed or not.”

The process happens every day at Biggby on a small scale, but during the company’s recent revision of its catering business, Fish saw that his team could scale the process to tackle bigger issues.

“Our catering area in the past was relatively stagnant,” Fish says. “We weren’t getting any growth out of the area, so out of our strategic planning, we decided that we needed a way to stimulate bulk beverage orders. Through our market meetings, we came to the conclusion that our presentation on catering and education of consumers was poor, and it was delivered in the exact same manner as every other concept out there.”

The leadership team’s solution was to re-launch the catering business under the name “Grabbit2Go,” make it more responsive and throw marketing muscle behind it.

“We made sure the consumer knew that catering was not something you’d have to worry about days in advance,” Fish says. “It was something that you could make a relatively spontaneous decision on and still be accommodated.”

Out of the strategic planning phase, Fish and his team moved the idea into the tactical phase and hammered out the process for how the new catering setup would be implemented at the store level. Then, the concept was rolled out to the franchisees, who offered feedback on the concept, suggesting changes and refinements that would make the new service easier to implement.

“We then took that information back to headquarters, tinkered with the program until we had a formalized version and launched it on Nov. 1 of last year,” Fish says. “The process worked, because in that month alone, the new catering program contributed an additional 16 percent to our catering and sales area. And because we had to use beverage vessels that were purchased and reused, it also contributed 14 percent to merchandise sales.”

Normally, Fish says, getting franchisees to make the investment in reusable mugs and cups would have been a hard sell. But because the franchisees were actively involved in shaping the plan, they were actually anxious to see the program rolled out.

Throughout the recession and recovery of the past two years, Fish has geared Biggby to continue growing. He believes growth is his primary responsibility as CEO, and any change that any CEO makes to the leadership philosophy of the company should be made with growth in mind. Fish’s decisions have helped Biggby stay on a growth-focused path. At the end of 2011, Biggby had 139 units owned by 82 franchisees, employing about 2,500.

“The purpose of facilitating change as a CEO is to ensure growth for the company,” he says. “At our company, there are two pathways we can follow: same-store sales or adding new stores to the system, and I have to understand how to grow the business along those lines, and engage our people in stimulating growth. As the CEO, it’s your obligation to make sure that you understand all the components of your business, that you can measure every component and decide whether it is working or not, whether it is adding value.”

Change is going to happen, whether you want it to or not. So it is always in your best interest to ready your processes and engage your people in management of the change. If you haven’t geared your people to deal with change, your whole company will stagnate, and it won’t take a historic recession to cause serious problems.

“At this point, I bring ideas to the table just like everyone else here does,” Fish says. “I use my ideas to address the concept of change for the purpose of growth. This company started off in 1995, and the company we have now is remarkably different from the company we had back then. For me, it is really about managing the idea of change for growth, and understanding that change for growth is essential to remain a growing system.”

How to reach: Biggby Coffee, (517) 482-8145 or www.biggby.com

The Fish file

History: Bob Fish co-founded the first location of what would become Biggby Coffee in East Lansing in March 1995. The second Biggby location opened in Lansing in October 1997. The company began franchising locations in 1999, and the chain had grown to 139 units operated by 82 franchisees as of the end of 2011. About 2,500 people are employed throughout the Biggby organization.

Fish on prioritizing ideas: If you have engaged people at the table, each one of those people understands what is important. This might sound a little ludicrous, but we vote on the items. There may be 25 or 30 items that are on the table to discuss, and we give everybody five votes. We approach the items from most amount of votes to least amount of votes. It is sort of magical out happens, the highest priority items do end up on the top.

Fish on travel time: Keeping everyone engaged on an in-person basis is time-consuming, but necessary. If we look at 2012 today, 85 percent of my business time is booked. All of those meetings are already booked for 2012, and I only have about 15 percent flexibility in my schedule.

More from Fish on the change management process: I think the most important part of managing change is — and it becomes almost an academic process — is you have to make the case for the change and you have to be able to articulate the vision. When we move forward with the process, there is a mini-white paper done, which makes the case for change and creates the vision. But when we get to the actual launch is where we have to make sure the skills, incentives and resources are there, and there is actually a plan in place to make it happen.