Our leadership Leader for this month is Charles Butt, CEO of H-E-B groceries, headquartered in San Antonio Texas. Intensely private, alas, we have no photograph we could use.
H-E-B is one of the largest privately held companies in the country, and certainly the largest grocery store in Texas and northern Mexico. With almost 100,000 employees and revenues exceeding $20 billion, their size is nothing to be trifled with. H-E-B was on Amazon’s radar before they made the decision to pursue whole foods. They’re ranked #3 in the nation for grocery stores, and #12 among all retailers.
All of that, however, is not what made them this month’s leader. No, it’s all the other stuff…
First, something close to home. Charles Butt but made a personal donation of $5 million to the JJ Watts Foundation for Houston Flood Relief, and the H-E-B Corporation provided monetary, material and volunteer support to victims of hurricane Harvey since the storm began. Charles Butt and his family donated an additional $1 million, in memory of their late patriarch, Howard E Butt, Jr., to help people recovering from the storm’s damage. H-E-B employees felt it was a badge of honor to be at work during hurricane Harvey.
The H-E-B mobile app frequently trends as one of the most popular on both Apple’s Store as well as Google Play. Think about that—a grocer, focusing almost entirely on just Texas and Mexico, is trending nationwide with their mobile app. Take that, Amazon!
They know how to hire at H-E-B as well. And before you chuckle too hard, realize most organizations do not. Not really, anyway. Their hiring practices were singled out by researchers from Harvard Business School for “looking beyond the degree” in their hiring practices. Take a look at their career page, and you’ll notice some differences from many others, particularly retail. Discussions around development, career paths, and expectations… all integral to their obvious success.
And don’t forget the hoochies! Apparently H-E-B also carries (or somehow causes) hoochies.
So, hoochies notwithstanding, Charles Butt and his H-E-B stores are an easy winner for October’s Leadership Leader.
We like some of what we see CEO Brian Cornell doing for Target to keep it from going the way of other defunct or dying box stores. How’s that for equivocation?
Cornell is leading Target through a $7B investment in remodeling old stores, opening new small-format stores in high-traffic urban areas, (thankfully) fixing a supply chain notorious for leaving shelves bare, and upgrading its e-commerce platform. His style is data-driven and hands-on, his outlook for Target is upbeat, and investors seem to be responding.
But not everything thing Cornell has done as CEO is puppies and rainbows. Target’s investors enjoyed his first year, rode through a bumpy second year, and suffered during his third year mainly because it’s been a “follow the leader” strategy that will never get Target to the front of the pack.
Target has not kept up with the Joneses – or Amazon and Walmart in this case – and is pumping money into neglected areas to catch back up. That strategy will work out well if everyone will just stop moving forward.
Take e-commerce, for example. Target is trying to introduce on a wider scale next-day delivery for a price, and same-day deliver for a premium. That means for those with plenty of money, you don’t have to wait or worry when you run out of diapers and toothpaste. Sorry, we’re not impressed.
Investment in existing stores and the supply system? It’s about time. And the small-format stores are likely to be very popular in the right locations, but Target will pay a premium for the footprint and stocking each store differently to meet local demands. We’re not that fond of trying to be everything to everybody.
Still, we like Cornell’s focus on listening to what the customers say – personal visits to customers’ homes is a nice touch, we like his enthusiasm, and we like keeping the shelves stocked. Cornell knows Target has to evolve to be competitive and is leading in the right direction.
But as we’ve all been taught, evolution is a very slow process. We’re looking for innovation here, not imitation. Until we see something different, Brian Cornell gets lumped in with the other mediocre CEOs as this month’s Leadership Milquetoast.
We’ve written about this before, but indecision kills… and Roger Goodell is killing us.
Warning: if you disagree because of your politics, you’ve missed the point.
In his carefully worded memo to NFL franchise Chief Executives and Club Presidents this month, NFL Commissioner Roger Goodell nimbly danced around the current NFL players’ protest issue(s), but he offered absolutely nothing as a way forward. He did offer his opinions, but you know what they say about opinions being like assholes…
My opinion is that he should make a decision befitting the leader of an $80B organization. Goodell has been making over $34M a year to lead the 32-franchise league, worth an average of $2.5B each, but he’s failed to do anything with his indecisiveness over the last year except make things worse. And it seems like each week, another owner steps in it.
His “I think they should stand during the National Anthem, but it’s okay if they don’t” stand is weak. We don’t care which – they have to stand, or they don’t – but until Goodell leads the franchise executives (who are also making bucket-loads of money) in charting a new course, the NFL will continue floundering like a rowboat in heavy seas.
The players have something to say – hell, we all do – and Goodell doesn’t want them to do it during the National Anthem. What alternative has he given them, besides the “to protest, or not to protest” option? That’s all the commissioner and franchise owners could come up with?
Come on, Roger… LEAD THEM! Get your wishy-washy, politically correct opinion out of the middle of the road and get this league headed in the right direction again. Until then, welcome to the club; you’re this month’s Leadership Laggard.
A Triangle Throwback – way, waaay back.
We’ve decided to showcase Marcus Aurelius, Emperor of Rome and General Plunderer, as this month’s Leader.
Not because he was a “good guy,” though he was considered the last of the Five Good Emperors, a time period thought to be ruled by absolute power, under the guidance of virtue and wisdom. Sorta like telling an employee you can fire them for any reason, but you won’t because you’re just not that kind of jerk…
No, we selected Marcus because of his personal leadership style and philosophy. First, he was good at leading an army. These were not the days when leading an army happened in monitor-laden control room thousands of miles away. Leadership during Marcus’ time was a little more hands-on than that. He defeated multiple armies that threatened his empire, many of them at the same time. Most powerful man in the world, but heralded as a noble leader with moral character. A good all-around Joe.
His death in 180 A.D. commonly marks the beginning of the end—the Fall of the Roman Empire.
And more importantly, at least for our discussion today, were his personal writings where he recorded his private notes and thoughts on many things, including human behavior, influence and leadership. The writings have been combined into a loose publication called Meditations. Bluntly, these works are fairly badass in the “quotable” department. For example, these three are our favorites:
“…how we learn; by looking at each thing, both the parts and whole. Keeping in mind that none of them interpret how we perceive it.”
Today’s translation: Perception is reality for those who perceive. Facts are facts, data are data; what we do with them and what they mean depends on our perceptions. And don’t forget—others are doing the same thing!
“…you’ve made enough mistakes yourself. You’re just like them.”
Today’s translation. You’re not all that. Humility is a good thing. Ego can cripple a senior leader; remember that just because you are called to make big, bad, difficult decisions, you are no better or worse than anyone else. Bigger titles don’t equate to more self-worth.
“When you lose your temper or even feel irritated: [remember] that human life is very short. Before long all of us will be laid out side by side.”
Today’s translation: In the big scheme, this isn’t. Most things aren’t a big deal. Bad decisions can be remade, and calmness is a virtue for leaders. It’s not the end of the world. As Bill from my men’s group is fond of saying, “The death rate among humans is 100%.”
Something we preach at Triangle Performance is evidenced in this article:
People are still people; human behavior is a constant.
Marcus was a leader; a pretty damned good one, especially for the times. If you would like to read some more on his Meditations writings, see Marcus Aurelius’ 10 Rules for an Exceptional Leader.
All in all, a no brainer for our Leadership Leader for the month, though saying “for the month” may be a bit disingenuous…
Our love-hate relationship with United Airlines continues. We probably look like some lame politician during an election cycle, flip-flopping every month or so. Like a politician, then, we’ll just say we aren’t flip-flopping, we’re just “modifying our position.”
To wit: United Airlines CEO Oscar Muñoz appeared on CNBC and said something quite moving about leadership, specifically about rules. He confessed that United had lots of rules. Many of those undoubtedly idiotic. Then, in a bizarre twist that made me think an alien had taken over his body, he actually said, “They don’t have to be rules.”
What?? You mean that self-imposed rules created by a manager to deal with a one-off situation don’t automatically morph into statutory law of the land?? How can this be?
So, let’s be fair. The comment was a stellar one, had it been either spoken by someone not trying all that’s holy to rebuild brand credibility, or had it been accompanied by a believable commitment to change the blindingly asinine way that rules at United are enforced today. Given either of those scenarios, the words may have been like music.
Instead, the comments are met with suspicion, given there was no promise to change, and that Munoz is trying to make up for a year that nightmares are made of. Instead of music, they grate like fingers on a chalkboard. At a minimum, those comments are met with some reasonable skepticism.
He didn’t help himself as he moved forward: Muñoz then said that instead of being called rules, “…they can [just] be policies or procedures that can be adapted for the moment.”
Our Triangle Bullshit Translator deciphered that sentence; it’s code-word for “we’ll do whatever we want, when we want, based on the particular whims of the United employee in that moment.”
Why doesn’t that make me feel better?
So, here we are. To be fair, Oscar Muñoz did say a couple of things that are sound, forward-thinking leadership concepts.
- We shouldn’t have so many rules that stifle the customer experience, and
- The rules that we do have should be measured based on the situation at hand.
These are good things, and would make an ordinary company in competition for our Leadership Leader.
Alas, it’s United, a two-time Leadership Laggard, and we must take a more “wait and see” approach before hastily rewarding one-time stellar behavior. So, we’ll settle for something in between.
For almost doing the right thing, Oscar, you and United are September’s Leadership Milquetoast. You’re welcome.
We are really unhappy with Equifax.
To make a long story short, their response to the potential compromise of personally identifiable information (mostly just names, dates of birth and social security numbers) for up to 143 million people – nearly half the population of the U.S. – has sucked so far. Now ex-Chairman and ex-CEO Rick Smith called it “a disappointing event,” and he’s sorry for the “concern and frustration” it’s causing.
Yeah well, not quite good enough for us, especially considering there was a patch for the vulnerability available two months before the breach, they didn’t notice the data was being compromised for two and a half months, and they didn’t tell anyone about it for six weeks. Not even the three executives who cashed in $2 million worth of stock two days after the breach was discovered… that was pure coincidence.
But it was damned sure irresponsible to keep the news under wraps “while they investigated.” Did they learn nothing from Yahoo? Or eBay? Or the Office of Personnel Management (OPM)? Apparently not.
Every step of their response has been because of a public outcry. “Minor” mistakes like confusing the hell out of customers when they want to know what to do; asking for credit cards to monitor your credit that they endangered themselves; forcing people who want their credit monitored to be bound by arbitration instead of participating in a class action lawsuit, etc. While Smith grovels, Equifax’s response to the outcry is, “Oops; we didn’t think about that.” And then they react.
Way to get ahead of the game, folks. Your head-in-the-sand approach is a textbook example of how to handle a crisis. That’s just what well-led people do… NOT.
Back to the story: Equifax eventually set up a hokey looking website that will tell you if “your information may have been impacted.” Unfortunately, you have to trust them with your data again, and they’re not going to give you a definitive answer anyway. It doesn’t take a rocket surgeon to know we all may have been impacted, since almost half the country was.
Did I mention that they only have your information because the big banks and credit card companies gave it to them? That’s right, you didn’t ask them to protect your information, anyway. They got my whole family’s information from OPM, who compromised the data from my security clearance application (another story for another time).
Good news, though: Assuming you trust them, you can sign up – with Equifax, of course – for free credit monitoring. I might be a little more confident using one of the other big agencies who haven’t compromised all the data it will take to steal your identity… that we know of.
And you can use Equifax to freeze your credit, if you can get their sign-up link to work.
A quick check on their site confirms that 100% of us here at Triangle AND our families “may have been impacted.” For some reason, Smith’s disappointment doesn’t make us feel better about it. I expect more from one of 2017’s most admired CEOs in the Atlanta area… and maybe a recount.
Smith promised changes, but he doesn’t tell us what. Maybe he’ll tell Congress when he testifies next month. We were curious how much toothpaste he could get back in the tube before then, but it turns out we’ll have to look to someone else for answers. On September 26th, Smith finally took his first step towards accountability during the fiasco: he retired.
The genie’s still out of the bottle, though. For their mishandling of the entire preventable incident, we’re naming Richard Smith and the whole Equifax cybersecurity team as this month’s Leadership Laggards. Thanks for nothin’.
Seems like I’ve been reading a lot over the last few years about activist investors shaking up a company’s leadership – sometimes successfully and sometimes not. Some recent examples include Proctor & Gamble, Nestlé, Samsung (this month’s Leadership Laggard), insurance giant American International Group (AIG), railroad CSX Corp., Buffalo Wild Wings (June’s Leadership Milquetoast) and Avon. Sometimes just the threat of a proxy war can influence leadership to accommodate the investor’s desired change a company’s direction.
Not so with Automatic Data Processing (ADP) CEO, Carlos Rodriguez. You can argue that ADP could use some fresh ideas, but you can’t deny Rodriguez has the cajones to stand up to Bill Ackman, the latest activist challenge to his leadership.
There’s definitely some “he-said, he-said” going on, and I have neither the time nor the inclination to sort out the alternative facts, but Rodriguez was definitely not going to kowtow to an investor who’s stake in ADP is still in stock options.
A couple of things we believe here at Triangle: no one gets their own facts, and you can make numbers support any position you want to take. 58% of statistics are made up, anyway.
Billionaire hedge-fund manager Ackman wanted ADP to reduce “corporate bloat” (who doesn’t, except the bloat), accelerate investment in back-end improvements and product migrations, and increase sales force productivity. I’m fine with those suggestions, although they’re hardly fresh ideas.
Rodriguez countered that Ackman’s analysis was based on cherry-picked data from 2009 and pointed out ADP has out-performed the S&P 500’s returns and eclipsed (like the solar one last week) those of Ackman’s hedge fund over the last half decade. After ADP refused Ackman’s request to extend the deadline for his board member nomination earlier this month, ADP’s board rejected all of Ackman’s nominees (including Ackman himself). The board explained that the nominees would bring no “additive skills or experience to ADP’s board.”
Rodriguez has been with ADP for almost 20 years and has a track record of successful performance and effective leadership. Ackman, who’s recent investments include Chipotle (last month’s Laggard), J.C Penny’s, Target, and Valeant Pharmaceuticals, has been an ADP investor for barely a month. But, I don’t have to pick a side.
Recognizing a CEO who bucked the trend and stood up to a bully investor, we congratulate Carlos Rodriguez for being named Triangle Performance’s August Leadership Leader.
Google CEO Sundar Pichai missed an incredible opportunity—our very definition of a Milquetoast—when he summarily fired James Damore for penning Google’s Ideological Echo Chamber.
Lots of aspersions have been cast on Damore, many pretending that he said things he clearly and openly dismissed in the memo itself. Damore didn’t say that women are biologically unfit for tech, or that diversity is bad, or that sexism doesn’t exist.
I’ve read Google’s code of conduct; to say this guy violated it is a stretch in reasonableness, and requires interpretations not in evidence.
Pichai said “It is contrary to our basic values and our Code of Conduct, which expects “each Googler to do their utmost to create a workplace culture that is free of harassment, intimidation, bias and unlawful discrimination.”
With this broad interpretation, they can hide behind most anything as a code of conduct violation. The manifesto did not harass, intimidate, show bias (except to use bias as a clear foundation of error), and was not unlawful discrimination. At most, it hurt someone’s feelings. Get over it.
And don’t forget–Google sucks (that’s the technical term) at diversity already. They needed the catalyst for conversation this could have created. Instead, they got bupkus.
If the guy is completely and absolutely wrong, then there is zero reason why Google shouldn’t have positive diversity representation, meaning their significant lack of representation today (or really any meaningful progress at all) must be willful and intentional.
||“Once you eliminate the impossible, whatever remains,
no matter how improbable, must be the truth.”
–Arthur Conan Doyle
It’s not a free speech issue per se, since companies aren’t required to allow constitutional free speech (that’s between government and citizens), but it certainly smacks of retaliation for disagreeing with a position. At a bare minimum, it has created a seriously chilling effect on open dialog around diversity and inclusion.
Google–and virtually every other tech company–should get their own house in order before bullying others to suppress opinions. We need diversity—real diversity—in organizations today. I see it as a business necessity for future success. But Pichai, that’s a really dumb way to go about it.
Talk about a missed opportunity. These sorts of conversations–in the open–are what real diversity and inclusion efforts are missing. Google will never have another chance to have an open dialog around these topics (with those who may have different thoughts). No one will ever dissent again publicly. They blew that big time.
That was an unforced error, Sundar Pichai, and it makes you this month’s Leadership Milquetoast.
We wanted to honor Samsung’s board of directors with this month’s Laggard award, but we couldn’t figure out who’s really running the 60+ company conglomerate that makes up the Samsung Group. Certainly not the Chairman, Lee Kun-hee, who hasn’t been seen publicly since suffering a heart attack in 2014.
So, we settled for spotlighting his son, Jae-Yong Lee, aka Jay Y. Lee, and one of two Vice Chairmen of Samsung Electronics who was sentenced last week to five years in prison for bribery, embezzlement and hiding assets overseas.
Remember ousted South Korean president Park Geun-hye? Lee and some of his colleagues have been accused of bribing Park and a “friend” to the tune of $17M in donations to organizations affiliated with the friend and an $800,000 horse for the friend’s daughter to ride. Lee needed government support to merge a few companies in the Samsung Group to strengthen his family’s control. Apparently, the move wasn’t particularly popular with non-family investors.
So, why are we picking on Lee, since he wasn’t alone in the scheme? Because he expected to be treated like the heir apparent when he didn’t know squat about leading or running the business. He was a figurehead who clearly wasn’t busy enough to stay out of trouble. He said it best himself at his trial: “There was no line of approval involving me. I had no knowledge to make decisions, nor the competence.”
Hardly something to brag about from a Vice Chairman of the world’s biggest smartphone and memory chip maker. We’re not worried about Samsung, though; there are some talented guys (excluding Lee) at the top of the electronics giant. Under the leadership of the three co-CEOs who didn’t go to jail, Samsung Electronics posted record net income, released the Galaxy S8, the Note 8, and stock prices reached an all-time high in the six months since Lee was imprisoned.
Think what they might be able to achieve with him behind bars for five years!
Leadership isn’t about titles and control; that’s dictatorship. For his refusal to take responsibility and his clear lack of leadership, we’re pleased to name Jay Y. Lee this month’s coveted Leadership Laggard.
Mehran Assadi, CEO of National Life Group
Mehran Assadi is an island in shark-infested waters.
Assadi leads National Life Group, the fastest growing life insurance company in the country over the last decade with, according to Scott Mautz’s article in Inc., employee engagement levels and agent retention four times the industry average.
Read that again… Retention four times the industry average. How much is that worth? Damn.
How does he do it? Simple. He says “people first.”
“Wait,” you say. “That’s nothing new, Kevin.” Yeah, well, what is new is that he means it. He lives it. And he leads from that singular position.
Assadi steadfastly insists that their culture is bigger than individuals, and bigger than him; it is tangible and shows up at the top line, bottom line, and every measure in between. He claims their culture is the secret sauce to their success. It’s not perfection—it’s learning as they go, and they are getting better every day.
Now, keep in mind that this guy is working with a 150+ year-old company here. This isn’t some upstart start-up trying to make it big. It’s an established organization in an industry not exactly known for brilliant innovation or trend-setting in the culture department.
He’s a big believer in servant leadership, insisting that leadership is a privilege, not a right or entitlement. There’s some cutting-edge thinking, Lou, and uncommon insight for a financial services CEO. Further, he insists people care for–and know—themselves.
To quote Assadi, “When you find your ‘why,’ you find your way.”
Six years ago, he started a once-a-year process of collecting feedback for their top 200 leaders, from at least 20 people each, on how they were faring as a servant leader. Not coincidentally, the same year they started doing this, sales began increasing every year–by double digits.
Go figure.If all that’s not enough, he shows the LOVE. In fact, L.O.V.E. at National Life Group has come to mean “Live Our Values Everyday”.
Nice touch, Mehran, and a big reason you are July’s Leadership Leader.
PepsiCo Inc.’s longtime honcho Indra Nooyi is sort of shooting herself in the foot.
Now, before anyone leaps prematurely, I’ve been a fan of hers for some time. She’s been solid, a progressive and people-centric CEO, and kicked serious butt in financial performance. There are precious few women in that Fortune 100 role (7, at last count), and she’s had the chair long enough to damn sure prove her mettle. In corporate performance, at least. In succession planning? Not so much…
You know, the better you perform, the more that is expected. And it’s logical for expectations for Nooyi to be high. And her recent announcement/non-announcement of a promotion was clearly not her best work.
Congratulations go out to Ramon Laguarta, currently grand poobah at PepsiCo’s Europe and sub-Saharan Africa business, as he transitions to the company’s President role. The gig includes global operations, corporate strategy, public policy and government affairs, not a small swath of responsibilities.
Then, she simply dropped the ball, announcing that Mr. Laguarta shouldn’t be presumed her successor. “There is no heir apparent,” she said. “When the time comes for succession, whenever it is, I think the wonderful thing is our board is going to have so many people to choose from.”
Yeah, well, I’m calling bullshit. This is a lousy way to plan for succession, and she should know it; she already lost a couple of key CEO-contenders. During Nooyi’s 11-year ride, two viable successors have been promoted into that No. 2 role, and subsequently left the company.
Look, Nooyi’s only 62, so there’s no dramatic rush for succession. But you can’t promote the best, tell them to sit still, and tell the world “this means nothing, long-term,” and expect them to stick around quietly with their thumbs up their derriere waiting for your eventual career plans to be revealed. Talent management—succession planning—simply doesn’t work that way. You don’t have to promise them the job, but to take special effort to say “he’s not the guy” is a bit much, and counterproductive.
That President job has been vacant since the 2014 departure of Zein Abdalla, someone clearly identified as “shortlisted to become chief executive.” He kept the role for two years before his abrupt, unscheduled retirement, which occurred shortly after Nooyi lost Brian Cornell to Target (another identified successor). Before Abdalla, John Compton stayed as Pepsico President for less than a year, before assuming the CEO of Flying J Oil Corp.
Houston, we have a problem. Nooyi has to develop a process for developing and promoting within a non-guaranteed succession plan, that motivates potential successors to stick around, not bolt for the door.Saying, “he ain’t the guy,” is likely not the way to do that. You’re better than that, Indra Nooyi, and this strange non-succession succession plan makes you this month’s Leadership Milquetoast.
Steve Ells, Chipotle’s CEO is in hot water—again—for contaminated food. This time, 135 or so sick customers, with at least two contracting the norovirus. This marks the 7th – SEVENTH – incidence of norovirus disease contracted at Chipotle since October 2015.
That’s not even counting their other woes, like poor financial performance (apparently caused by guacamole. Seriously), and their massive data breach just a few months ago.
Crap like this, folks, does not occur in a vacuum. Generally, when leadership is poor, it shows in multiple areas, not just operational performance. I believe we can safely say that Chipotle leadership is poor.
This piece is short; we covered much of this when Steve was our Milquetoast in January, but thanks to 135 more sick people, he’s “done graduated” to our Leadership Laggard for July… Congrats, Steve.
Benno Dorer, CEO of The Clorox Company
Benno 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.
Dorer 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.
Sally Smith, CEO of Buffalo Wild Wings
When 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?
Hey, 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.
Cheesecake 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.
By 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.
Incoming 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.