I have attended four funerals in three weeks. Each service, a “celebration of life,” was amazing. I am a better person for having known and loved these people — and for seeing their lives and accomplishments honored so beautifully by their families and friends.
A phrase I heard often from the adult children of each deceased was: “I just lost my biggest cheerleader.” They lost the person who never stopped reminding them of how good they were and the difference their actions were making in the lives of others. They lost the person who made certain they fully appreciated their special gifts and talents, the person who cheered when they succeeded and encouraged them when they failed. They lost the person in whose likeness they strove to be.
As I reflected on that phrase, I thought about the world of work — and the opportunity we have to be the biggest cheerleaders in our companies: leaders who genuinely encourage the best from our people. There are many employees who have lost their “biggest cheerleader” — or worse, may never have known one. We are surrounded by individuals who might be startled to have an authentic conversation with their boss about the difference their effort is making, the impact of their work on the company and others, and their potential to contribute even more.
The idea of “evaluating performance,” or comparing one person’s actions with another’s, precedes time itself. However, the introduction of formal performance review processes traces back to the era of Frederick Winslow Taylor when time and motion studies and quotas were the subject of the renowned first efficiency expert. And the use of performance reviews to motivate people or map out career/development plans is a far more recent concept — and arguably one most companies still don’t have quite right. (And if we think “cheerleading” happens well within our company’s “performance review system”, then we are all in trouble!)
I am not suggesting that we adopt a “cheerleading system of management.” But I continue to be struck by the power of positive reinforcement, in the form of praise, when it is received from someone who is trusted and respected. I continue to believe this is the single greatest, most underleveraged asset in most companies today. If “praise for good performance” were management’s product, I’d say we have a ton of inventory sitting around, warehoused without a plan to distribute it any time soon — and it is costing most companies, dearly.
We can choose to change that, so simply, by recognizing three things:
Praising great performance and offering caring, constructive feedback for less-than-great performance are premium products in every leader’s inventory. Don’t let them sit in the warehouse. Distribute them with a sincere heart.
Feedback is one of the world’s great natural resources, and it does not deplete. The more you give, the more you get back — and the more impact you will have. Catch people doing things right. Coach for improved performance, and recognize the impact of your sincere and caring words.
Be a genuine cheerleader for your organization. People want and treasure a sincere cheerleader — a leader who makes sure you know how good you are — and who lets you know when you need to try harder. Honesty and praise from a respected/trusted leader is worth its weight in gold.
Employees spend more time at work than they do at home. So as leaders, we can help them live richer lives through their work experience.
Down the road, when your life is celebrated, how affirming it would be if your employees remarked, “I just lost my biggest cheerleader.”
Leslie W. Braksick is co-founder of CLG Inc. (www.clg.com), co-author of Preparing CEOs for Success: What I Wish I Knew (2010), and author of Unlock Behavior, Unleash Profits (2000, 2007). Braksick and her CLG colleagues develop the capability of leaders to cheer the performance of their people, often and well. You can reach her at 412-269-7240 or firstname.lastname@example.org.
As a CEO, I am often asked to describe the top challenges of leading a business. There is no doubt that setting a vision, creating strategy, and building the right team are at the top of the list. At the same time, one of the most important challenges is to understand and mitigate the risks associated with all aspects of the business.
Years ago, our firm didn’t have a risk management tool or strategy to mitigate risk. We’ve since learned that it is the one management strategy that we can’t live without. Business risks today are comprised of strong internal and external forces, so mitigating both forces is critical for long-term survival. If business leaders don’t have an in-depth knowledge of their industry and how they play in their market space, then they will undoubtedly forge ahead with incorrect and misdirected strategies, costly mistakes for a firm.
Understanding and mitigating risk is not as difficult as some would want you to believe, but it does require three components: a firm application of discipline, unrelenting tenacity and an acceptance of reality. Today, our firm manages risk by applying each of these pieces.
First, a firm application of discipline is applied to every area of the business. We list all of the possible internal and external forces that could present an opportunity or threat to our firm. Internal risks include whether the firm has adequate or inadequate infrastructure, capital, expert resources, technology and facilities for business today and in the future. External risks cover market segments, industry trends, competition, and customer supply and demand, as well as global economic trends. Publically held firms must do this type of analysis on a routine basis. If you have not conducted this type of risk assessment, you might try looking at the annual reports of publically held firms similar to yours. This information is free online and can often jumpstart a brainstorming session with your management team to determine what risks might be similar to your business.
Secondly, an unrelenting tenacity must be applied to ensure that each area of the business is examined. Paranoia is essential. If something can happen, then add it to the list of potential risks. We take the entire list of risks and place it in a spreadsheet. Next, we determine a numerical threshold of acceptable risk for each area, placing a score in the column next to each risk. In a column next to the risk threshold, we then list the strategies that we will implement to mitigate the risk. On a quarterly basis (or more if conditions change), our leadership team reviews our current internal and external risks and revises the risk and associated threshold as needed.
The last component that we adhere to is the acceptance of reality. When examining risk, it is important to be realistic. This is not an area to defend product or service territories or allow “gut feelings” to dictate strategy. The market does not understand emotions, complacency, or turf wars, so your leadership team needs to be frank and candid about their real business risks. Try asking outside advisers, researching industry publications, and talking with partners and competitors to share views on current and future business risks. The local economic development corporation, chamber of commerce and small business administration are also good places to gather information.
Finally, there isn’t a business on the planet that has eliminated all of its risk. Understanding, embracing, and mitigating risk is part of doing business. In the end, companies that are realistic about their risks and manage them carefully will pull ahead of those that choose to ignore the risks around them.
Victoria Tifft is founder and CEO of Clinical Research Management, a full-service contract research organization that offers early to late-stage clinical research services to the biotechnology and pharmaceutical industries. She can be reached at email@example.com.
Pat Whitaker was ready to step away from the day-to-day responsibilities of running Arcturis. But she wasn’t prepared just yet to give it all up and call it a career.
With that thought in mind, Whitaker did some research and found that with a lot of workspace design firms, there was no succession plan in place to ensure a smooth transition from one leader to the next.
“One thing I didn’t want to do was sell my company to an outside source,” says Whitaker, founder and CEO at the 50-employee company. “I wanted the people here to own it.”
In order to make that happen, Whitaker needed to find someone who she would feel comfortable with as the new leader. She wasn’t looking for a clone of herself, but she did want to find someone who shared her values.
“They can have a little bit of a different strategy about how to get there,” Whitaker says. “But if their basic values and basic vision is drastically different, it’s probably not going to work.”
Whitaker began the process by asking employees to step forward who had an interest in taking over as company president. She then asked them to write an essay.
“I asked them to write a description of why they thought they should have the job, and they all did that,” Whitaker says. “One person thought he was entitled to the job because he had been here a long time. Another person thought he should have it because of his marketing skills. And the third person, she wanted to make a really good contribution to the firm and the future. She was much more visionary.”
It was what Whitaker was looking for. You need people who care more about the big picture than their own needs or their own skill set to serve as leaders in your organization.
“It’s got to be somebody who is a strategic thinker as well as a tactical thinker,” Whitaker says. “Lots of people think they are strategic thinkers and they are not. So that perception kind of came out.”
Whitaker composed a job description for company president and began to dig deeper into what each person brought to the table to see where there were matches.
“You have to develop a job description so that even though they see what you do, they kind of know what’s involved in the job,” Whitaker says. “Then you have to ask them. I spent time with them. I don’t know that I exactly interviewed them, but I did ask them why they wanted the job and I sort of vetted them that way. It’s not like I didn’t know them. I knew all these people pretty well.”
But her own intuition couldn’t be the sole basis of her decision. In any personnel choice as important as that, Whitaker says you’ve got to do psychological testing.
“If I look back three years ago, a person who I thought was going to be really good in that role was absolutely the wrong person,” Whitaker says. “After the testing was done, I could see those traits in the person. They were really good at one thing, but they weren’t the right kind of person to lead the firm.”
If you haven’t used psychological testing before to help with personnel decisions, Whitaker says it’s a good tool to test leadership skills.
“Part of it is an intelligence test,” Whitaker says. “Will people follow you or not? What kind of marketing experience do you have? How dedicated are you?”
Whitaker did not want an important matter such as this to be decided in a rush. It helped that she wasn’t in a hurry to leave the company and wasn’t even going to leave completely once a successor had been chosen.
In the end, the methodical approach brought Whitaker to the right successor. Traci O’Bryan was named president in July 2010. And while it hasn’t been easy, Whitaker has learned to let O’Bryan find her own way was as a leader.
“You just have to keep your mouth shut,” Whitaker says. “Just because it’s different than the way I would handle it, that doesn’t mean it’s wrong.”
How to reach: Arcturis, (314) 206-7100 or www.arcturis.com
Know your place
Pat Whitaker lets Traci O’Bryan come to her if she has a question about something that needs to be addressed at Arcturis.
“If she needs advice from me, I give it to her,” says Whitaker, founder and CEO at the 50-employee design firm. “But she makes the decisions. At first, she didn’t really make them too often. But after a couple months, she started doing it.”
Whitaker says O’Bryan still reports to her, but it’s O’Bryan’s company to lead and manage.
“She’s running all that stuff and I’m coaching her and working with her and doing marketing to try to get the firm work,” Whitaker says.
There are still times, however, when Whitaker misses being on top.
“If there’s a meeting that I usually go to, I tell them, ‘Oh, I don’t really need to go to that meeting,’” Whitaker says. “And then I say, ‘Oh, you didn’t invite me to that meeting.’ You want both things that are in conflict with each other. But I’m getting used to it now. It’s been over a year, and it’s getting better.”
Jon Kirchner could feel the tension looming on the horizon just as sure as if he were watching a movie where the storyline was about to reach a climactic turning point. DTS Inc. was trying to do too much and it was threatening to tear his company apart.
The company had launched in 1993 to support the development of better sound equipment for movie theaters. But as home theater systems began to take off in the 2000s, the company discovered there was a huge market for people who wanted to create a great movie-watching experience at home in their living room.
“We proceeded down the path of building both of these businesses,” says Kirchner, the 228-employee company’s chairman and CEO. “Then in the mid-2000s, we realized strategically that the theatrical business was on a completely different trajectory and in a very different environment than the consumer business in terms of the investment required and in terms of the risk that lay before that business.”
The rapid evolution of digital cinema was bringing significant change to the theaters where moviegoers would flock for new releases. As he looked at the future, Kirchner realized two very different approaches would be required in order to achieve growth in both the theatrical and home consumer markets. It put him in a tough spot.
“How do you manage a portfolio with two very different businesses with different investment requirements and different horizons?” Kirchner says.
Kirchner had an idea in mind about how to solve this dilemma. He felt the best thing for the company was to divest itself of the theatrical business and focus exclusively on the home consumer market.
It wasn’t an idea that drew rave reviews from everyone.
“The internal reaction was definitely quite challenged by the idea, because it was so much a part of our identity,” Kirchner says.
“Change is not easy because change is about people. But if you handle these things in a very respectful, open and communicative way where your reasoning is not hidden, but is very transparent, ultimately people will navigate through the various stages of change in terms of shock and anger and transition into the new normal.”
Consider your options
Before Kirchner went public with his idea to split DTS and focus on the home consumer market, he took about a year to consider the pros and cons of the idea on his own. He had to decide if the company was up to the challenge of successfully spinning off its theatrical business.
“I thought about it on the people angle, who is likely to be pro-change and who is likely to be anti-change and why,” Kirchner says. “I thought about it along the financial dimension, along the strategic and competitive dimension and then I thought about it from a customer dimension as well, since in our case, we do business with all the major studios. Part of each studio was a customer for one part of our business and another part of the studio was a customer for the other part of our business. How do decisions like this ultimately impact them?
“It ultimately leads you down a path of trying to lay out from a sequencing and tactical standpoint, as well as a communication and messaging standpoint, internally and externally, who you need to get comfortable and how. Ultimately, that’s what I did for about a year before I brought it up with my own team.”
The actual idea to divest the theatrical business came from Kirchner, but the topic of what to do with the two sides of the business was front and center on the minds of all the company’s executives.
“The executive team had a lot of dialogue around managing the tension between two different divisions and two different groups of people, both of whom were driving incredibly hard to be successful in their respective markets,” Kirchner says. “But as the ultimate referees, our executive team of myself, our CFO and our general counsel, really sat down and thought critically and discussed what are the alternatives.”
Kirchner felt confident that DTS was strong enough to address any concerns that would arise once the move was made. He believed that the company’s leaders would be able to work through those concerns and do what needed to be done.
“You need to do everything you can to increase the odds of successful outcomes,” Kirchner says. “What that really means is you need to take stock with the people you have in the organization. Who is likely to be able to quickly adapt to a new vision and support you? Who is likely to struggle? Pick the right extent of change in part around your team and your organization’s capabilities.
“I had made the decision in this case that we had enough strength in certain areas to weather the storm that this was going to induce. But at a different point in our life cycle, I may not have been willing to make that decision, because even if you knew what you wanted in the end, the organization may not have been able to get there without exposing itself to undue risk.”
It’s all about knowing your organization and its strengths and weaknesses and being honest with yourself about its ability to handle change.
“If you don’t believe you’ve gotten all the pieces of the puzzle in place, then my experience has been you’re better off making smaller incremental changes to position the organization,” Kirchner says. “Then go with the big change when you think you’ve not only thought it through, but you’ve got all your contingency plans and you think you have enough to get you to the finish line.”
You run into trouble when you can’t be honest with yourself about what your company and its people can or can’t do. You try to make the move anyway under a false premise and odds are, it doesn’t work out like you had hoped.
“It’s the lack of objectivity that causes people to stumble into places where you end up with the ‘Oh my God’ scenario and you need to do drastic things to change out of it,” Kirchner says. “A lot of change can be predicted and actually can be driven if you are really objective about where you are.”
Walk before you run
As Kirchner began to go into more detail with his leadership team about what would need to be done to split off the theatrical business, he still took a deliberate approach.
“We talked about it on and off for four to six weeks, socializing it with all the key people and being very transparent about the reason why and also being very transparent about the objectives in the divestiture process, which in our case were to support the team that was running that division right up and through a successful sales process,” Kirchner says. “That, of course, did not alleviate all the anxiety.”
The fact is you’ll never have a perfect transition when major change is being considered.
“It’s never clean, smooth and simple,” Kirchner says. “You’re constantly dealing with people and personalities and mental models around things and emotional trust. It invariably goes through its own emotional cycle. The best approach is one where you’ve thought it all the way through to a reasonable degree of granularity as it relates to the what, the when, the where, the why and the who. Invariably, there will be a couple things you don’t anticipate. But I would submit there’s a lot you can anticipate.”
Common sense, at least when it comes to being a CEO, can fill in many of the blanks in your plan.
“If you’re on the top deck of the boat and you’ve got your binoculars or your telescope out, you should see a lot of these things coming well before hand,” Kirchner says. “If you’re mindful of this, there is often the ability to begin to make these changes, the changes you need to prepare you for bigger changes when the time comes.”
This is, of course, contingent on your ability to be honest with yourself. One safeguard against that is the use of executive coaches or consultants to help guide you through important decisions.
“Really effective organizational development consultants or coaches can help shine an external light on things executives might not be seeing or may not want to see,” Kirchner says. “Once the light is shining some place, it’s really up to the team to do something about it.”
It’s a continual process of trying to locate potential problems ahead of time so you can prepare for them and be ready, rather than end up in a situation where the unexpected threatens to derail your project.
“It’s not just about having a plan,” Kirchner says. “It’s spending the time necessary to understand where your plan, if it doesn’t go as you thought it would, what your contingency would be or how you’ll deal with things. As a result, the time you spend on the backside with unexpected things tends to be a lot less and you can really focus on the business.”
Don’t forget the people
Kirchner tried to address every aspect of the DTS split as it related to the organization as a whole. But it was just as important, if not even more important, that he address the impact the move would have on personnel.
“There are two buckets of concerns you may want to focus on in the planning,” Kirchner says. “One bucket is what I’ll call general concerns, concerns that everybody is going to have, regardless of position. It’s thinking through and being prepared with clear and concise answers. Or in the cases where you simply don’t know the answers, being clear and transparent about the fact that you don’t know and as soon as you do, you’ll inform people. There is more credibility in that than there is in painting a picture that turns out to be not credible later on.”
The second bucket is concerns at the executive level in terms of people whose individual presence will play a key role in the success or failure of the move you’re looking to make.
“You really need to take it down, based on what you know about that individual and their impact on the business, to how you’re going to address their specific concerns,” Kirchner says. “Maybe somebody wants to leave that business and join the other business. You need to think about whether that makes sense and how it will impact you.”
In the end, it was a pretty clean split of the theatrical business from DTS.
“There were people in what I’ll call more corporate support functions that we needed,” Kirchner says. “One of the planning items was thinking through what kind of administrative infrastructure or support infrastructure did each entity need. In some cases, we went to people in those departments and literally offered them an opportunity to pursue either course. In other cases, we pre-identified that we really wanted certain people to go in certain places and made those decisions and communicated that.”
Communication is key, both from you and from the people who have direct reports who may be changing positions.
“The flow-down method is important because people need to hear certain messages from the managers and leaders they most directly work with,” Kirchner says. “But there are also times and places where there is no substitute for people hearing it directly from the top in the CEO’s words. Oftentimes, if the CEO is the one driving the vision, they are going to use different language and sometimes different emotion. At times, they are better able to articulate things that managers in the ranks may not be able to. You need to do both.”
As Kirchner looks at DTS today, he sees evidence that the split was the right move to make. Revenue has risen from $60.2 million in 2008 to $87.1 million in 2010.
“We basically spawned a much more focused and much better business, certainly from a financial performance,” Kirchner says. “I’m not saying we did everything correctly but by and large, it went pretty much exactly as planned.”
How to reach: DTS Inc., (818) 436-1000 or www.dts.com
Takeaways: Take the time to make sure that you’re sure about what you’re doing. Anticipate that there will be unexpected problems that will arise.
Don’t forget that there are people involved in every decision you make
The Kirchner File
Jon Kirchner, chairman and CEO, DTS Inc.
Born: Ada, Okla.
Education: Bachelor of arts degree, economics, Claremont McKenna College, Claremont, Calif.
What was your very first job, and what did it teach you?
When I was young, I looked older than my age. I was already eager to begin working, and with the help of my parents, I made business cards that I handed out to neighbors, offering help for general chores like shoveling snow and mowing lawns. By the time I was 13, I had quite a clientele, and my family moved. When I told my clients I was leaving, they thought I was going away to college. So from an early age, I learned the value of selling and believing in yourself, and that there’s no substitute for hard work and persistence.
Who has had the biggest influence on your life and why?
My parents. My mother and father were both professors and experts in their field. They were driven professionally, but were also very family oriented and created a very supportive environment. They encouraged an independence, a curiosity and a passion for learning that has been influential throughout my entire life; my optimistic, positive supportive and driven outlook is a reflection of what I saw every day at home.
As a company leader, you are often confronted with nagging work-force-related questions.
First, are you prepared for your future work force? To prepare for the future, you must start with your current employees. To develop a solid work force and company, you must consistently re-evaluate your employees’ skills and make sure those skills are used properly.
Perhaps you’ve invested in talent management initiatives and training. But are the right people benefitting from those initiatives? If you want your company to continue to grow and be successful, you must retain and promote your best performers.
Size up new talent
When you hire employees, ask them how they heard about the company, where they received their degree and how long they were at previous jobs. This data will help you benchmark your best employees and predict how long your staff will stay with the organization.
If you start seeing turnover early within your new recruits, you can use this data to channel recruiting efforts toward employee profiles with longer staying power. Tracking and interpreting this data is crucial to effective recruitment.
Assess exiting workers
When people leave the organization, assess their demographic profile to enable you to better track trends. For example, employees who keep the same job title for more than three years have the highest rate of voluntary turnover. However, if the trends are skewing in a more unfavorable way, you’ll need to evaluate the situation and find the root of the problem.
You may find that your highest performers are leaving the company at a faster rate than your average or poor performers. If so, you should locate the red flags and take steps to improve unfavorable trends. You may discover that the feedback you provide isn’t enough to let them know they are appreciated.
Match skills to tasks
Make sure you always pay attention to the job attributes of those employees you consider key, high performers or high potentials. When you consider moving an employee into a different role or department, make sure your executives are aware of the job attributes of that employee to avoid shuffling poor performers on to a different department while hogging pet employees.
To show your top employees that there are opportunities for them to grow outside of their core function, break down the silos and allow them to grow elsewhere. Even when faced with uncertainty, the return typically outweighs the risk, and it’s a best practice that will benefit the entire organization and help you retain your skilled employees.
According to recent research (see DeVry University’s Career Advisory Board Job Preparedness Research at www.careeradvisoryboard.com), hiring managers at top U.S. companies perceive a large skills gap in job applicants who make it to the interview stage. Often all it takes is re-evaluation.
Challenge managers on why they have not developed those skills among current employees to fill the positions they have open. You may find that managers have not given employees the training time, or your managers may not even be aware of the possibilities the current work force brings to the table.
Promote your people
Movement across departments or job functions doesn’t have to be lateral. Managers can challenge the perspective that their staff should only be promoted within their chain of command.
Remember that an employee is an asset to the entire organization. A high-performing employee who seeks upward mobility may not have an available opportunity for promotion. Rather than risk losing the employee altogether, find a way to make upward movement available even if it’s outside their department.
You can only manage all of these areas through proper measurement of your talent pipeline. Monitor investments toward employee and manager development, employee retention, employee engagement, and better hiring.
With every development in your work force, it’s a best practice to see it through until the objective is met. After all, you’re dealing with your company’s most valuable asset.
Lois Melbourne is co-founder and CEO of Aquire, a work force planning and analytics solutions company based in Irving, Texas. Visit www.aquire.com for more information.
Mike Shumsky’s timing wasn’t the greatest when he joined CiCi’s Pizza as CEO in September 2009. It was right about that time the recession began to pummel the Coppell, Texas-based restaurant chain’s sales.
“We had started to see the effects of the softening economy in different segments of the restaurant industry six to 12 months before that,” says Shumsky, who before joining CiCi’s parent company, CiCi Enterprises LP, held similar executive positions with La Madeleine restaurant group, Sonic restaurants and Johnny Rockets.
“In late 2008 and early 2009, we started to see sales slow down at some of the higher-ticket restaurant companies,” he says. “We thought we’d be a little bit more immune to it at CiCi’s, though, because we’re at a lower price point. But toward the end of ’09, we started to feel the softening of the economy in our own business. That’s when it really started to reach us.”
The recession insinuated itself on CiCi’s and its segment of the restaurant market with a sort of slow-motion, delayed-reaction effect.
“In late 2008, when things started slowing down throughout the economy, all of us in the restaurant industry could sense that, yes, things were starting to change, but we went through an initial period of disbelief,” Shumsky says. “Then there was a period of unfamiliarity; that’s what I’d call the next cycle we went through. Then all of a sudden you started to really see it firsthand and believe it. So you go through these levels of consciousness of where the economy is headed and how it will affect you. That’s what I think a lot of people were trying to figure out.”
Sales began to slow appreciably in late 2009, and that’s when it became clear that CiCi’s and its competitors in the lower-price segment of the restaurant market would not remain immune to the recession’s effects.
“We started to see it in the softening of our top line — our sales numbers, our year-over-year growth numbers,” Shumsky says. “And because we basically have a daily sales cycle in the restaurant business, it started to become evident to us pretty quickly that things were starting to slow on the sales side.”
Drill down, do triage
Once the reality of the economic downturn started to settle in, the CiCi’s leadership team took steps to ensure that the data it was receiving from its nearly 600 restaurants in 36 states was timely and accurate. Then it made moves to rein in the company’s growth plans and spending in several areas.
“First, we made sure we had good information and that the results we were getting were reflective of the actual things that were happening in the marketplace,” Shumsky says. “We shored up our communication systems, our internal reporting systems, our financial reporting systems. We converted to more of a daily focus on our business. We started tracking sales daily instead of weekly. We started to drill down deeper into our business.
“The other thing we did was put in conservative stops around the growth plans we had, to make sure we had a good handle on it and that we were growing at a pace that would reflect the new marketplace. We slowed down our people hiring and slowed down some of our growth initiatives.”
Overall, the battening down of the hatches amounted to roughly halving the company’s projected growth rate, and CiCi’s leadership team analyzed its markets to concentrate the slowdown in parts of the country that it deemed riskier in terms of expansion.
“The company had been growing at a rate of roughly 50 stores a year, and we slowed that down to 25 — and that was over time, it wasn’t overnight,” Shumsky says. “In our business, we have a pipeline of real estate and a pipeline of franchisees that would have started a couple years earlier. It takes a number of years to get a franchise approved and to get a piece of real estate approved. So we went back and re-evaluated all of those transactions, and looked at the ones that were high-risk pieces of real estate with the economy changing.
“Those markets that were getting worse — which for us were the Southeast, the Arizona market, the Vegas market, and some markets on the East Coast and in Florida — we looked at those, and where we had development and growth planned in what we considered to be markets that were going to be hit the worst, we went back and re-evaluated them, not only in terms of the franchisees in those market, but also the growth expectations.”
In the company’s core markets where it already had significant penetration and larger, stronger bases of franchisees, it didn’t pull back as much.
“It was kind of a triaging effect,” Shumsky says. “We wanted to make sure we were isolating the more difficult, higher-risk areas of our growth, and then reinvest in those areas that were fundamentally stronger.”
The company used a site analysis tool to determine which geographic areas to invest in and which ones to pull back from.
“We ran the demographic and statistical information through that model to define our top 70 markets in the country, and then broke that down into smaller groups of restaurants,” Shumsky says. “We made sure we were honed in on the quantitative side of our business, both in terms of the financials and in terms of our growth modeling plans. We ran it forwards and backwards, and out of that we identified what markets were at risk and what markets were less risky, and then we worked our way forward from there.”
Listen and support
Next, the CiCi’s leadership team “circled the wagons,” as Shumsky labels the process they went through. They went out into the field and talked to as many of the company’s roughly 570 franchisees as they could — Shumsky estimates they were able to talk to about 85 percent of the franchisees in all — to find out what they needed help with in order to improve their restaurants, in terms of both diner experience and profitability. They did this in the form of a “listening tour” — a series of regional meetings in which the company’s franchisees were invited to talk about what they needed from their franchisor company to run their restaurants more effectively.
At these meetings Shumsky and his team learned there were several aspects of the business that the company needed to improve in order to help its franchisees improve their customer service and their bottom lines. These fell roughly into three areas: marketing support, training and service call response time.
“There were a number of things franchisees told us were important to them in terms of how we can support them better from a franchise support and service perspective,” Shumsky says. “From answering a phone quicker to responding quicker to dealing with their business issues quicker, whether it be R&D or manufacturing issues or product issues.”
A recurring theme the company’s leaders heard was that CiCi’s franchisee training program needed to be streamlined.
“We came back with a message that we needed to revitalize and simplify our training program,” Shumsky says. “This is a restaurant business, and if you have an operations manual that is two inches thick, that’s too complicated for franchisees. We received an awful lot of feedback that we needed to revise our training program, which we have now done. We’ve made it much simpler, much more concise, and we’ve gotten rid of some of the fluff that was in it.”
CiCi’s also reorganized its operations group to make it more responsive and supportive toward franchisees.
“For our district managers, which typically are responsible for supporting franchisees — each one is responsible for 25 to 30 stores — we changed their title to brand excellence managers, and we revised their job description to be more business consultants than managers,” Shumsky says. “We wanted them to be more than auditors auditing franchisees’ operations. We started directing them to provide more advice, more counsel, to transfer more business knowledge to franchisees and their operators. So it wasn’t just their job title that we changed. It represents a significant change in the type of people and the skill sets we now require in those positions.”
Another result of the listening tour is that CiCi’s is providing more detailed and tailored marketing support to franchisees.
“We changed the marketing function, because that was one of the key findings of the listening tour,” Shumsky says. “We’ve added a whole field marketing structure that didn’t exist before. So we now have regional marketing managers that work toward helping franchisees on the local issues they have. These regional marketing managers are not involved in national media at all. We still do national media, of course, but all of the local activities that can allow the local restaurant manager to get out in his or her community to help drive the business on a more localized level, we’ve added a lot of marketing resources in that area.”
CiCi’s Pizza had its annual company convention earlier this year. Attendees at the convention included restaurant franchisees, vendors and corporate staff. The event’s themes were “brand renewal” and “the start of something big.”
“We’re starting to feel like we’re turning the corner,” Shumsky says. “First of all, the economy seems to have bottomed out and we’re starting to see some life there. It’s not exactly vibrant, but you get a sense that there are things starting to happen. And secondly, all the things that we’ve done to invest in our business — technology, training, marketing, changing our organization around — they’re starting to have an impact. So we’re optimistic.”
The company has instituted a handful of improvement initiatives for 2012. The keys initiatives revolve around improving restaurant profitability and growing the company in a cautious fashion geared toward the realities of economic projections for the restaurant business over the next few years.
“We’ve put in a target of saving $70,000 a restaurant for our franchisees this year,” Shumsky says. “In other words, we plan to improve profitability by $70,000 per restaurant. And $70,000 a store is a lot of money. We have a number of test projects in place, and from those tests, it’s looking like we can save at least half of that amount very quickly.”
Key components of the company’s restaurant profitability system include a new labor scheduling system, a new food-cost model, a new point-of-sale register system, reformulation of some food products, centralizing the placement of condiments in stores, changing pizza box designs to use less cardboard, and changing the design and layout of the restaurant buffet to reduce the amount of food wasted by diners.
Lastly, CiCi’s has modified its growth plan to fit economic expectations moving forward.
“We’ve come out of this planning process with a new look at our business, and we’ve labeled it sustainable growth,” Shumsky says. “It used to be ‘Grow at all costs’ in the restaurant industry. You know: ‘Let’s just grow; let’s grow 100 stores, 200 stores.’ You heard all of these industry experts out there talking about the growth they were going to achieve, and none of them delivered.
“So our deal now is sustainable growth. Let’s build a fundamentally conservative, realistic growth model that can grow at a rate of 25 or 30 stores a year over the next eight to 10 years, and do an awesome job with it, making sure we have good site selection, good franchisee selection. We call it our QQ strategy — quality franchisees and quality sites. So that’s what we’re going to do.” •
The Shumsky File
Name: Mike Shumsky
Company: CiCi Enterprises LP
Born: Traverse City, Mich.
Education: Bachelor’s degree in accounting, California State University-Fullerton; MBA, Pepperdine University
What’s the most important thing you learned in college that you use today in your work? Financial discipline — I learned that in college. And analyticals — the analytical skills have helped me a lot in my business life.
What was your first job? I worked at Knott’s Berry Farm in Southern California as a candy maker’s apprentice. I worked at Knott’s for 10 years, through high school and my college undergraduate years, and when I got out of school, they hired me in their accounting department.
What important business lesson did you learn from that job? Persistence. That’s a huge one for me. I’ve gone through lots of turnaround situations, and sometimes you just have to hang in there and stick with it.
Do you have any overriding business philosophy that you use to guide you? Yeah, I do: ‘Good, better best, never let it rest, until the good are better and the better are best.’ That’ll be on my tombstone. Everyone who knows me knows that about me. There’s always an opportunity to get better at what you do.
What traits do you think are most important for a CEO to have in order to be a successful leader? Honesty and integrity. Character. People see what kind of person you are through the things you do.
What’s the best advice anyone ever gave you? ‘It’s just tacos.’ I’m one of those driven kind of guys, never happy, never satisfied. One day, a manager I was working with at Taco Bell said to me, ‘Mike, it’s just tacos.’ In other words, don’t take everything so seriously. There’s always a way to figure out the problems you’re dealing with. Be patient, think things through, don’t overworry, respect your own judgment, respect the people around you and lighten up a little bit.
Learn more about CiCi Enterprises LP at:
How to reach: CiCi Enterprises LP, (972) 745-4200, www.cicispizza.com
Bill Giesler has had to endure more change at Pedco E&A Services Inc. in the past five years than the company has had in its 30-year history. The climate of the current economy, the moves necessary to adapt to it, clients’ changing needs, and the start of retiring baby boomers has given the company a wake up call.
Giesler, Pedco’s owner and president, knew that with all this happening around the 84-employee design and consulting firm, business operations and the way leadership looked at the company had to change.
“We said, ‘Wait a minute. We’ve got to really change how we look at this business, how we manage the business, and how we lead the business,’” Giesler says. “In the last five years, this company has made a right turn from wherever we were headed; we deviated significantly from that path and really took control of our destiny as opposed to just floating down the river and going wherever it was taking us.”
That revelation and the ongoing changes inside and outside the business led the company to explore strategic planning.
“Our clients are changing in the downturn and they’re getting leaner and meaner and looking for quicker, better, cheaper ways of doing business, and we’ve really got to stay in alignment with where they are and what they’re doing,” Giesler says. “It really boils down to managing change. A lot of changes have been occurring over the last couple of years and just trying to stay in alignment with our clients on one side and then on the internal piece, we’ve got a lot of transitions occurring internally.”
The company had run itself tactically over the years and needed help making the transition to more strategic business and processes
“Over the last five years we’ve really opened ourselves up to bringing in outside experts and we brought them in for marketing, business development, HR, strategic planning, project management training and not just local experts but national experts as well,” he says. “What we’ve done is really tried to learn what the best practices are nationally and those that apply to us that we can use we grasp those and implemented those into our processes and how we look at the business.”
Trying to problem solve challenges internally was no longer garnering the best results. Giesler needed to strategize about how the company could improve for the future.
“You have to start off with strategic planning. … Think strategically and be open to using outside advisers and experts to understand best practices industrywide and utilize that,” he says. “The process that we went through recently is we discovered to a deeper level who we are. We developed six critical success factors to our business and we had really never thought of our business in those terms. Once you kind of focus on that you understand what drives what.”
Strategic planning is a great way to make your company nimble and adaptable to change. To get the most out of it you have to involve a team.
“You need to involve a cross-functional team in that process,” he says. “When we started out revisiting our process we were just going to use three or four of the very senior people to develop the plan. To have success at that strategic planning process and really get buy-in and then be able to implement it you need to involve a whole lot more people and it needs to be cross-functional. You need to reach out into every part of the organization that has an important role and involve somebody at some level in the process.”
HOW TO REACH: Pedco E&A Services Inc., (513) 782-4920 or www.pedcoea.com
Roll with the changes
As a result of a new strategic plan, Bill Gielser, president of Pedco E&A Services, kept pace with change by finding out more from the company’s clients.
“It’s really developing your critical success factors, action plans and priorities as a result of the strategic planning process,” he says. “You have to continue to have those high-level meetings on a periodic basis to make sure that you’re staying in alignment.”
Surveying and measuring customer satisfaction in some way shape or form is an important process.
“It really takes a lot of doubt out of how well you are doing,” Giesler says. “We also do an annual survey to understand what’s going right and what’s not and we look for themes. We’ve really implemented that strategy so that we stay close to them and that we’re looking at that and analyzing that and really setting goals based on that on an annual basis.”
Along with staying aligned with customers, it is critical that you continue to invest in your resources as much as possible.
“A lot of times the first thing to get cut in a recession is investing in training and development and I would really challenge people to do your utmost best to continue to invest in those things even though it’s a down economy,” he says. “That will pay dividends over and over and over as you move forward and as you come out of the down economy.”
Every employer considers foundational rewards — base pay, benefits, retirement packages and paid time off — when working to attract and retain employees. But there’s more to it than that, if you want your employees to remain engaged in their work, says Josh Strok, Director of Rewards, Talent and Communication at Towers Watson.
“You should consider performance-based rewards, such as merit-based pay, bonus plans and recognition programs, which help differentiate performance and reward top performers,” says Strok. “These rewards focus employees on the company’s priorities, as workers see where the organization is putting additional dollars. There are also career and environmental rewards, which include career development opportunities, training, mentoring, corporate social responsibility and wellness programs.”
Smart Business spoke with Strok about how employers can use total rewards optimization to allocate their reward investments for maximum return.
Why should an employer create a total rewards program?
We know organizations have placed additional burdens on employees since the beginning of the recent recession. In our 2011/2012 Talent Management and Rewards Study, nearly two-thirds of organizations have employees working more hours over the past three years, and over half of the companies expect this to continue over the next three years. Coupled with the increasing difficulty to attract and retain top performers and people with critical skills, crafting appropriate total rewards programs is more important than ever.
Employers are worried they might not be able to meet employees’ expectations as the labor market heats up and workers gain more negotiating leverage. By evaluating your total rewards offering now, you can determine how to strengthen your organization’s employee value proposition — and minimize the risk associated with losing critical-skill talent.
Most employers know that a highly engaged work force is a leading indicator of strong financial performance. So they’re working to deliver an employee deal that engenders workers’ rational, emotional and cognitive commitment to the business. When committed fully, employees are more willing to make a discretionary effort to go above and beyond the minimum that’s required.
Has total rewards optimization been overlooked?
Yes, until recently. In the past, employers typically started from a compensation and benefit standpoint, which addressed foundational and some performance rewards. However, they developed and managed the various components as very separate programs. Today, more companies recognize the power of blending these reward programs and looking for ways to reinforce the overall total rewards deal.
CHROs and CFOs know they have one pool of money to spend on all aspects of total rewards — health care and retirement benefits, job training and base pay increases. With limited dollars, they’re trying to figure out how to get the biggest bang for their buck. The challenge is to offer the right deal to the right employees — a deal that will keep top-priority workers highly engaged — within the confines of the company’s fiscal constraints.
In putting together a total rewards optimization (TRO) program, how should employers begin?
Start by looking at what you have in place and how you spend your dollars, and determining whether that’s competitive against companies with which you compete for talent.
Next, understand your employees’ preferences and use employee surveys with conjoint analysis to determine which rewards have the biggest impact on employee attitudes and behavior. Segment your work force and ask employees in each segment what they want and what they’re willing to trade off. For example, if you can spend $100, would employees rather have a lower health care deductible or a better training and development program? Or more base pay or a better retirement program?
Based on that feedback, you can look to shift your investments among programs (i.e., portfolio optimization) to create total reward portfolios that deliver the highest return. The goal is to invest finite reward dollars across the work force in a way that balances organizational and employee interests creating the highest possible perceived value at the most economical level.
For instance, if employees say lower health care costs are more important to them than the retirement program, explore the opportunity to invest more in health care programs if you reduce your 401(k) match. If so, employees will be more engaged with that deal, because you tried to construct a total rewards program in light of their wants and needs.
Rebalance your allocation, and make trade-offs you can live with. You’re not going to eliminate your 401(k) plan, but maybe you can spend less there to better invest in areas your employees value more.
How do employers determine whether the total rewards optimization program is succeeding?
After a year or two with the new program in place, you should assess its effectiveness. This is an ongoing part of an effective total rewards strategy. Be sure to check with employees. Do people feel better about their jobs and about what’s going on in the company? If you were trying to address unwanted turnover, look at the hard metrics. If you formerly had 8 percent turnover and now have 4 percent, clearly what you’ve done is working. If you were looking to save money, did you do so at the expense of reduced engagement?
The issue isn’t only about deciding whether to spend more or less in total. The real questions are whether you know what your employees value, and whether you can adjust your total rewards investments accordingly. You don’t have to do it all at once in a full-scale redesign. Many employers do it in steps and focus on big-ticket programs or areas that earn the least employee value.
Josh Strok is Director, Rewards, Talent and Communication at Towers Watson. Reach him at Joshua.Strok@towerswatson.com or (818) 623-4577.
Insights Human Capital Solutions is brought to you by Towers Watson
Your own approach to the work that your company does transcends all aspects of your business. It sets the tone for pace, execution, employee engagement and results. By its example, top management must establish the culture of work on which excellence, and thus company success, depend.
But as I consult with companies — small, medium or large — I’m continually amazed at how work is getting done. What’s lacking in these businesses is a culture that clearly defines excellence and that values diligence, timeliness, efficiency and, as you’ll read in the case study presented here, honesty.
Absent these shared values, the answers to problems become those that a select group wants and not fact-driven solutions. Projects take on a life of their own, dragging on for inordinate periods and overrunning budget because goals, scope and deliverables aren’t defined. Time and resources are wasted on misguided efforts and activities that don’t support the company direction or mission. Employees then become frustrated by a process that makes it impossible for them to contribute their skills, talents and energies to a successful outcome.
How can a CEO turn this destructive culture around? An important first step is to understand the difference between challenging and communicating - a critical distinction that impacts how work gets done.
When you challenge a team, you risk directing the outcome to a narrow set of predefined options or to an impossible goal. For example, hitting a sales target that isn’t supported by market conditions. Communicating, by contrast, calls for setting the overall tone and parameters and creating an environment in which broad, even unforeseen options, can be critically explored and high achievements can blossom. This was one invaluable lesson that a CEO who called on me for advice learned.
When the CEO engaged me, his company’s sales targets and new product launches were consistently falling short of expectations. He wanted to know, “Why isn’t the sales team working effectively to launch new products, maintain current accounts and expand our customer base?”
In each of the three previous years, the company’s management had assembled members of the sales and marketing teams to explore how to achieve sales growth and position new products. In these meetings, the sales team had described the competitive challenges it faced in the marketplace, including effectively demonstrating the value of the company’s products to customers. Sales also had consistently reported that the margins distributors were capturing were not competitive.
But marketing, just as consistently, had responded that its research indicated high end-user satisfaction and high repurchase marks even at higher prices, and so, marketing had continued to raise prices. Management and marketing together had concluded that the sales team’s inability to position the products was the reason for declining sales.
As it turned out, the CEO’s challenge to grow sales had spawned a dynamic that had produced just the opposite. Determined to rise to the CEO’s challenge, the management and marketing teams had ignored the views of the sales team as they focused determinedly on raising prices and setting high expectations for sales. Unable to gain support at the distribution level, the sales team continued to fall short of goals as sales experienced even sharper declines.
Although he’d heard the arguments of both sales and marketing, the CEO believed he should continue to challenge his teams, assuming that they would present the best solution. As it turned out, however, marketing had not just discounted the views of the sales team but had also skewed its research rather than confront the CEO by questioning his challenge. So the CEO learned the importance of communicating rather than challenging. But he did so at a dear price for his company’s sales figures, his trust in the marketing team and his sales and marketing teams’ ability to work collaboratively and effectively.
Does your company lack a culture of work? If it does, what price are you paying?
Tony Arnold is founder and principal of Upfront Management, a St. Louis-based management and executive consulting firm. He can be reached at (314) 825-9525 or firstname.lastname@example.org.
Kevin Brown looked at Grand Café and he didn’t like what he saw. The French bistro in Chicago’s Lincoln Park neighborhood was still a nice place to eat, but it had lost that special something that once made it a destination place.
“We had let some chefs play with the menu a little bit and it had lost its soul about what it was,” says Brown, president and CEO at Lettuce Entertain You Enterprises Inc.
Lettuce Entertain You operates more than 80 restaurants across the country and with the responsibilities that come along with each of those locations; it would have been easy for Brown to look for someone else to tackle the problem of Grand Café.
He certainly didn’t have enough time to take on the task himself, right?
Whether he did or not, Brown made the time to do a thorough review of every aspect of the restaurant’s operation. Company founder and Chairman Rich Melman and several talented chefs in the company joined him in the effort.
“We went back and I think we were closed for about three weeks,” Brown says. “We redid the floor plan, redid the look of the menu and we changed the name to Mon Ami Gabi, which was ‘my friend Gabino.’ We just went back to basics and made it a great French bistro again. We worked on the onion soup and the salad frisée and the steak frites. We just went back and said, ‘This is what this business is meant to be.’ We reignited its soul.”
More than a dozen years later, Mon Ami Gabi remains one of the company’s most popular eateries with five locations, including a particularly successful restaurant in Las Vegas.
Brown credits the attention to detail that has been embedded in the culture at Lettuce Entertain You for allowing the transformation from Grand Café to Mon Ami Gabi to take place.
“Leaders, a big part of their job is to solve problems,” Brown says. “That’s what we do. We inspire people. We take chances and try to solve problems. We take risks. Risk creates opportunity. Whether you’re fixing something that is not working or creating something new, you have to attend to the details. The details are what build the engine to make it fly.”
It’s not always easy to stay in touch with those details as your company grows. Lettuce Entertain You has come a long way since June 10, 1971, when Melman and Jerry Orzoff opened their first restaurant in the same Lincoln Park Neighborhood.
But Brown says finding a way to maintain the spirit that the company had when it had only one restaurant is crucial to the effort to stay on top.
“Culture is the glue of an organization,” Brown says. “It fills the gaps where nothing else can fill. It’s the passion and the culture and the drive to do what we think is right and the drive to do things because that’s the way we believe they should be done. That’s our primary motive.”
Here are some of the ways Brown works with his team to help Lettuce Entertain You and its collection of restaurants remain a favorite for customers.
Stay true to your culture
Brown quickly one-ups anyone who shares with him that their job is just never the same from one day to the next.
“My job isn’t the same every hour,” Brown says with a chuckle. “It’s a wonderfully stimulating business. You get to taste a lot of really great food. You get to work with design and you get to work with music. But at the same time, you have to think about how do we run a $400 million company with 91 restaurants?”
The first step for Brown is to not look at this task as if he were being asked to build a new company from scratch. Lettuce Entertain You has been around for 40 years and history shows it has done a lot of things right.
“We have a very entrepreneurial organization with a dynamic founder,” Brown says. “The challenge of my leadership is to help bring the second generation along so we can keep it going. How do I maintain it and keep it going as we continue to drive new ideas? At the same time, how do I structure and help organize and create accountability in the organization to ensure that along the road, we’re healthy?”
One of the keys to his company’s success is the belief that culture is more than just a sign that is posted on the wall or a card that employees are asked to carry in their pockets.
Culture is made through every action you take and every word you speak.
“Your philosophies from the way you want to treat people, the way you want to manage people and the way you view your business, culture is built every single day,” Brown says. “It’s the way you react on the spot to your employees and to your guests and to your vendors and the decisions we make on how we want our restaurants to be run. It’s a day-in and day-out process.
“So when you’re pushed on something and you’ve having to make a decision or something, that decision, if you look at the decision you’re making and it’s a long-term decision or it’s a tough decision, that says something about your culture. I believe it’s those decisions that reinforce the culture. It’s those conversations and those choices. I would hope we continue to make choices in our organization that reinforce our culture.”
Brown prefers not to think of his job as leading 5,500 people a philosophy, which makes it easier to maintain the company’s open culture and easier to tackle fixes like the transformation of Grand Café.
“We don’t focus on the entire company at once,” Brown says. “We focus on one store at a time, one problem at a time and we try to fix things. Now there are multiples of us trying to fix and improve one area at one time, obviously, at our size. That’s how we operate. We don’t think big. We think small. We believe when you think small you can get things done. When you think big, it can be overwhelming. We don’t view ourselves as big.”
Brown and Melman didn’t approach the situation at Grand Café with panic or a sense that the fate of the company was hanging on what they did next. The calm approach gave them the freedom to do what needed to be done.
But even if you are facing a significant problem, you still can’t afford to panic.
“You have certain things that come across your desk that you have to deal with,” Brown says. “Most of the things, if you’re trying to fix something, it’s unlikely they got where they are quickly. And it’s very unlikely they are going to be fixed quickly. So the recovery is going to be somewhat similar to the reaction to what actually happened.
“You have to be intense, you have to be persistent and you have to keep working at it. But at the same time, just know that some issues you go to tackle are going to require smaller steps to solve. You want to try to solve things so that they are solved, not just a Band-Aid.”
Respect your employees
No matter how great you think your company and its culture are, you need to make sure employees have a clear outlet to express concerns.
“This is not an easy business,” Brown says. “There are guests who are rude, and management’s job is to support employees. Back them up if there is a rude guest. Let them know that is not acceptable. Any service business unfortunately can be the brunt of other’s emotions that really sometimes have nothing to do with where they are at the time. Sometimes we’re the brunt of something that happened to them three hours earlier or something that is going on their life. That’s just the nature of being in the service business. You want to be supportive of your staff.”
Hopefully, there aren’t a lot of situations where you have conflict between your employees and your customers. In more typical interactions, the way you treat your employees is often most evident through your actions rather than your words.
“They know when it’s real,” Brown says. “You can’t say it, you have to reinforce it. It’s decisions that you make every day. It’s how you treat people. You can’t say you care, but then don’t back it up. You’ve got to put substance behind it and make people believe that we want this to be a great place for people to work.”
If you’re a company that touts itself as providing world-class customer service, you may want to look in the mirror and ask yourself how well you treat your employees. Is there a difference between the two?
“If you expect your guests to be well taken care of, you had better take great care of your people, because they take care of your guests,” Brown says. “We like to work with a high level of recognition for our employees and high respect. What we ask of them and everybody that works for us is we want them to care. We want them to care about their guests, their food and care about each other. We want them to care about the job they are doing.”
Develop your emotional side
If you’re a leader who has read every piece of advice offered on how to succeed in your industry, Brown gives you kudos. Just don’t think that you’ve reached the finish line and now know all there is to know about effective leadership.
“Sometimes leaders try to read a lot about getting more technical savvy in their business, which don’t get me wrong, is important,” Brown says. “But as leaders, you always have to be developing your emotional side. You have to be developing your ability to lead, your ability to motivate and your ability to read a situation. That’s our job. Our job is to continue to develop ourselves. If you continue to develop yourself in all aspects of leadership, it can be quite fulfilling.”
It’s easy to get hung up on perfecting this process or working on your sales pitch or making the next version of your widget better than the last. But it can’t be all about the nuts and bolts of your business.
“We have a lot of employees,” Brown says. “We as an organization have to fill their financial needs and their job security needs, but there is a certain amount of emotional needs we have to fill with them also. We have to give them a good workplace. The hierarchy of needs, that’s all real. But it’s not a formula; it’s a practice.
“You have to constantly be committed to developing yourself in all aspects of leadership. A developing leader and a growing leader generally speaking will have a developing and growing organization. If I stop growing and I stop developing, it’s kind of hard for people around me. Why should I keep going? Why should I keep pushing?”
Brown says the blueprint for effective leadership is really not that tough to understand. The execution isn’t always easy, but the steps are pretty straightforward.
“You give them as many tools at the management level as needed when they go on the floor to know how we feel service should be and how the guests should be treated,” Brown says. “Once they continue to progress, then it’s just reinforced on the day-to-day decision-making and leadership they see from the rest of the organization. As long as we say it, the proverbial ‘walk the talk,’ as long as we tell people what we’re doing and then we back it up, then it’s believable. If we say what we’re doing, but we don’t back it up, it’s not particularly believable. I won’t say we’re perfect, but we really strive to do the right thing.”
How to reach: Lettuce Entertain You Enterprises Inc., (773) 878-7340 or www.leye.com
The Brown File
Kevin Brown, President and CEO, Lettuce Entertain You Enterprises Inc.
Education: Bachelor’s degree, hospitality management, Michigan State University
What was your very first job?
My father had a very small boat dock on the Ohio River. It docked about 30 boats and it had a snack bar. My brother would be out pumping gas and would be on the boats and loved to water ski. That didn’t interest me. I was real interested in what was going on in the snack bar. My father was also the manager of a lot of townhouses that had a pool and a snack bar. I ran that also. There was something in the back of my brain that I like serving food and I like taking care of people.
Who has been the biggest influence on you?
Founder and Chairman Rich Melman and second would be Steve Phillips. The Phillips family owns Phillips Crab House in Ocean City, Md. It’s a large family, and they have a big crab-packing company and 15 or 20 restaurants. I had an opportunity to work there in Ocean City. I wanted to work at the beach, and it sounded like a fun job.
Well, I went into a 1,400-seat restaurant and said, ‘This is the coolest thing I’ve ever done,’ and six weeks later, I transferred to Michigan State University for the fall. Steve Phillips was driven and intense and cared about quality and took care of his people. Fortunately, I went from Steve Phillips to Rich Melman and he exemplified the exact same thing and both of them have helped mold me into who I am.
What would your last meal be?
Traditional spaghetti and meatballs