Even the most altruistic employees want to be a part of their employers’ success when the profits begin to roll in, says Mingo Lee.
“It’s easier said than done when you’re the owner to say, ‘Don’t worry, we’re debt-free. We’re putting everything back into the company so we can keep growing healthy,’” says Lee, co-founder and CEO of Wahoo’s Fish Taco. “You need to realize the difference between your sweat equity and the things you are gaining from this as an owner, and the guy who doesn’t have any shares in the company. You’ve got to gain an appreciation for where they are.”
So Lee began to look at debt financing as another option for expansion. At the same time, he enhanced compensation packages, offered more health insurance and began to offer profit-sharing plans.
Now, with more than 600 employees at more than 40 locations, the chain of restaurants which offers a mix of Mexican/Brazilian/Asian cuisine has grown from $34.6 million in 2004 to more than $40 million in 2006.
Smart Business spoke with Lee about the importance of relying on instinct in successfully growing a business.
Q: What skills must a good CEO have?
Be compassionate and an understanding leader, somebody who has grown up in the business who has touched every part of the business and really understands and values each one of the employees.
Be decisive. Once you start waffling at the top, I think that really confuses not only your management team, but it just trickles down.
From week to week or month to month, if the direction of the company is changing or even simple operational things are changing, I think that sends a gray message to your crew. All that our good employees want to do is to know what the expectations are and then execute. If you can’t set those expectations and you’re always changing them, it leaves everybody in a state of confusion.
Our management style is very hands-on. It’s to show, demonstrate, teach and re-teach. From top to bottom, there is no wearing a suit and tie at Wahoo’s. You’re getting in the fire right alongside your teammates and employees.
Q: How can a lack of direction hinder growth?
It is the quickest way to have everybody wandering about aimlessly. If you’re not able to follow up on the projects that you delegate, you might as well not even delegate them to begin with. Nobody will have a measuring stick to see that they have arrived and achieved what the expectations were.
Ultimately, they will get to the end of the project and move on to the next, and conceivably, they’ve not even done that right. But they’ve kept on going because nobody has done the follow-up.
We’re always here and we do care about our company and we want to be available to everyone. It’s probably not the most crucial aspect of our management style, but I do believe that keeps our staff engaged.
Q: How do you deal with mistakes?
It’s like seeing your child gain greater and greater independence and feeling that yes, you’ve given them all the tools to succeed, and now you’ve got to step back and let them make some mistakes.
You can’t be there for every decision, nor do you want to be there for every decision. I try to communicate that to my staff.
Before, you might have asked me for the answer; now, I want you to come to me with a couple of different solutions in mind and let’s work through how you came up with those. If you make a mistake and it’s serious enough, we’ll figure a way out of it.
Ultimately, if we make a couple of mistakes along the way, we’re going to learn from them, and next time, you’ll be making decisions. I’m not saying I always make the right decisions, but you’ll be making decisions in the future in the same style or direction that I would have made them, and we’ll all feel better.
Q: How do you earn loyalty from your employees?
You can create an equity program, but shy of creating some type of ownership program for your people, you need to appreciate that they need to take care of their families and their needs.
There is a cap that you will be able to pay everybody. But you should realize that some of the things you feel good about in being debt-free and plowing everything into the company are not necessarily satisfying the emotional needs of your management team in making them feel that they’ve got some future security here.
You can sit and go for a longer-term view and build equity, hoping maybe for some sort of exit strategy somewhere down the road. That same situation does not exist for your management team unless you go the way of creating some type of ownership.
HOW TO REACH: Wahoo’s Fish Taco, (949) 222-0670 or www.wahoos.com