LAS VEGAS REVIEW. CORPORATE CULTURE? PAY ATTENTION TO MOD PIZZA – available to non-subscribers

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I returned last night from the Restaurant Finance and Development Conference in Las Vegas, with 2600 restaurant related professionals, the must-attend Conference of the year, IMHO.

Every operator should know that long term success depends on the corporate culture that begins at the top. The best panel I attended included presentations on “Culture” by James White, CEO of Jamba Juice, Phil Greifeld, CEO of Captain D’s, and Scott Svenson, CEO of MOD Pizza. Each described their approach somewhat differently, starting with the customer or the employees, but the end objective is the same.

The last question, posed by Beth Ewen, the moderator, was: “What event can you describe that illustrates your “culture”. White and Greifeld gave fine examples, but Scott Svenson, who had been compelling throughout (to me, anyway) spoke last and told the following story.  I don’t expect to do it justice here, but I will try. As they say “you had to be there”.

Scott said “A few years ago, we hired a new associate, Corey, who was wearing an ankle bracelet, after being arrested three times. The personnel person who hired him at the entry level obviously thought he had potential. When asked a week after hiring, about her selection, she just said: ‘I just think he has something’. So Corey did very well, and after a year or so became a store manager. Turns out that in his store a $2200 cash shortage was discovered, and naturally it had to be considered, from his background, that he could be involved. After talking to him, we decided that he could, and should, be trusted, and we all moved on from the incident. Corey moved on up and became one of our top training leaders, moving around with new store openings, an outstanding person within our organization. So a while back we had an organizational meeting, within which we were focusing on our “culture”, so to speak, and we asked each person to describe what MOD Pizza means to them. Corey was the last to speak, and you should understand that he is big, and bald, and tatooed. He stood up, turned his back to management, faced the group, pointed his finger at them, saying: ‘MOD Pizza means EVERYTHING to me, and not one of you guys is going to f…k it up”.

Obviously, I was very impressed with Scott and his description of the organization he has built. After the meeting I told him I thought he was a cross between Howard Schultz, Danny Meyer, and Nick Sabin (U.of Alabama, Roll, Tide!).

Mod Pizza has grown from 35 units a year ago to 85 units today and will be approaching 200 locations by the end of 2016. Since 80-90% of the stores are company owned, this is an unusually challenging objective, and the Company has been staffed accordingly. There are about 125 people at the head office today, soon to be a support staff of 175. It’s expensive, but necessary to get where they want to go. Scott and his wife have built two successful businesses before so they are not naive in terms of the pitfalls vs. the opportunity.

In my four decades following the restaurant industry, I can’t think of any company that has grown this fast with company operated stores, from a small base, including Starbucks, to my recollection. The Svensons are well equipped to succeed and I hope that they do. Harvard Business School should do a case study on this one.