June 2017 Leaders & Laggards

Leader

Benno Dorer, CEO of The Clorox Company                              

CloroxBenno Dorer is a Rockstar. He was recently recognized as the highest-rated CEO by Glassdoor in its 2017 Employees’ Choice Awards, surpassing Elon Musk and Mark Zuckerberg in the top 10 list.

Now, let’s get something straight here. I’m neither for nor against glassdoor.com, but at least theirs is based on relevant, first-hand input, not like some of the myriad “great places to work,” and Fortune’s “here are our favorite companies” listings. Glassdoor is a website where current and past employees get to rate their employer, including specific ratings and comments for the CEO. For the record, I always take at least a cursory look at glassdoor.com ratings when speaking with a new or potential client.

A fairly valid grading system, and Dorer clocked in at 99%. NINETY NINE percent!! I’m impressed at anything above 80, so this is rarefied air indeed. And he blew right past all the Fortune favorites and greatest places reviewers hoping to snag a client—he scored well above Zuckerberg, Musk, Bezos, et al.

And before now, who had even heard of this guy, specifically by name??

By the way, lest you fall for the myth that popular (read “nice”) leaders must be milquetoast business managers, know that Clorox stock has increased in value by almost 40% since Benno took over in late 2014. That’s just two and a half years, for the mathematically challenged among us.

DorerDorer is the real deal. When notified of the award, he said the title was humbling and “gratifying in a sense that I take it as a vote of confidence from our employees in the direction we’re taking the company.” While we’re quoting the guy, he also said:

  • “A good leader is someone who ‘has a point of view, has a vision of what can be accomplished and enrolls others in that vision and helps get barriers out of the way.’”
  • “Diversity and inclusion is something that is good for employees and also good for business.”
  • “As leaders, employees expect us to make the tough calls, and empower them make tough calls themselves. Employees want us to be decisive.”
  • “We measure employee engagement and… my own pay is determined by that engagement level…”
    (Re-read that last one—his pay is determined (in part) by employee engagement levels!)
  • “What I care about is results, versus how many hours you put in.”

Now, read this last quote, because it sums up everything Dorer does to exude successful leadership in a nutshell, “I leave it up to my people on how they accomplish what it is we want to accomplish. So, try to empower people to do what they can do best–I try to stay out of their way–and create a real supportive environment.”

To do that, senior leaders must be confident; not just in themselves, but in their vision, direction, veracity of strategy, and ability to discern results and outcomes quickly. In other words, they must be confident to lead.

And Benno Dorer clearly does that solidifying his position as this month’s Leadership leader.

Milquetoast

Sally Smith, CEO of Buffalo Wild Wings

BWWWhen investors get antsy, senior executives get defensive. That’s not necessarily a negative leadership response, if that leads to action that makes the company better.

It is a poor leadership response if they start blamestorming for their failure to respond to changes in the market.

Enter Buffalo Wild Wings. Along with many other restaurants of their genre, BWW has been suffering from declining profits over the last few years. Why? According to the CEO, Sally Smith, it’s the Millennials’ fault.

No, really. Apparently “millennial consumers are more attracted than their elders to cooking at home…”

Note: I unscientifically polled 100% of the millennials in my household and found no evidence to support Sally’s claim.

Granted, she also whined that shopping mall traffic was down – a blinding flash of the obvious – and added declining viewership of sporting events as a contributing factor to BWW’s woes, but why did she think excusing her management team’s failure to adapt to a changing market was going to appease the shareholders?

SallyHey, Sally, here’s a reality check: the BWW customer experience has been in decline for the last half decade in some pretty important categories (food quality, service, cleanliness, and menu variety to name a few). You can cherry-pick statistics all you want, but that doesn’t mean BWW didn’t rank in the bottom quartile in every surveyed metric in the 2016 Nation’s Restaurant News Consumer Survey for casual dining restaurants.

Being dead last in the Overall Guest Experience category – including the bottom 10% of food quality and service – doesn’t exactly build confidence that senior leadership is paying attention to what it takes to get people to eat in your restaurant.

I’ll concede that BWW’s latest foray into food delivery service and a fast-food version of their restaurant (B-Dubs Express) shows they’re paying some attention to changing preferences, but that’s reactionary, not visionary. And that kind of leadership is definitely not going to convince people to come out to eat bad food, drink and watch sports on the big screens… not even us Boomers.

Sally Smith’s classic failure to accept responsibility for her leadership team’s lack of vision nearly made her this month’s Laggard, but she lost out to the competition (see below). So congrats, Sally, you’re the Triangle Performance Leadership Milquetoast for June 2017.

Laggard

CheescakeCheesecake Factory CEO, David Overton

Look, Davie here is also the founder, so he’s not going anywhere, but he could damned sure use a lesson in accountability. When revising downward his quarterly analyst’s forecast, he blamed the weather—yes, the WEATHER—for the decline in sales.

May not be as bad as Buffalo Wild Wings’ millennial crap, but it’s awfully close.

Yes, this is the same Cheesecake Factory you’re thinking of, with the two-ton sandwiches, 250-item menu, and restaurants so dimly lit you could catch lunchtime zzz’s after the carb overload. A meal there makes anyone feel like Mr. Creosote — the “better get a bucket…” guy from Monte Python’s Meaning of Life. I’d include a youtube link for that part, but I’d catch too much flack, so you can look it up yourselves.

THAT Cheesecake Factory.

And Overton is seriously claiming that weather in the East and Northeast reduced patio useage to the point it effected year over year sales. Yeah… right. I was born at night, but not LAST night.

Sure, Dave, maybe weather was bad. Maybe somewhat fewer gluttons dined on your outdoor patios. Or maybe, just maybe, your leadership needs a tuneup. Consider:

  • Over the past six months, the industry has gained 8.7%, while Cheesecake has lost 14.8%. Surely yours wasn’t the only patio effected.
  • The failure of your March value menu insert, ~10 items below $15, highlights the inability to drive incremental traffic.
  • The weak summer box office is problematic, given Cheesecakes’ proximity to movie theaters.
  • Increasing Costs: Cheesecake Factory was planning to open eight new restaurants in 2017 and is anticipating a 5+% increase in labor costs. Wage inflation has continued this year.

burgerBy the way, something else to consider… Though the Macaroni and Cheese Burger, Topped with Creamy Fried Macaroni, Cheese Balls and Cheddar Cheese Sauce SOUNDS simply decadent (almost 1,500 calories), that fare may be headed the way of the dodo bird.

Stock fell 10% overnight upon the “weather” announcement, so it seems investors were calling “bullshit” as well. The stock is near 52-week lows, and still 15% below that fateful announcement date.

cheesecake2Incoming Chief Financial Officer Matthew Clark (he’s not the “regular” CFO until July 7) said despite the climate impact, the company still expects same-store sales growth of 2%. Good luck with that, Matt, and best wishes on the new job. Hopefully, you’ll do better than Winnie the Pooh’s “The rain, rain, rain came down, down, down…”

As it is, your boss, David Overton, used the weather as a reason to avoid personal accountability for strategies and decisions that should be reconsidered. As such, he wins our Leadership Laggard for June.

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