Right About Now with Ryan Alford - The Secret Sauce: Chick Fil A's Magical Business Formula with CMO Steve Robinson

Starting point is 00:00:00 Great brands only grow in great culture and great culture only happens when leaders define it and cultivate the soil. This is Right About Now with Ryan Alford, a Radcast Network production. We are the number one business show on the planet with over 1 million downloads a month. Taking the BS out of business for over six years and over 400 episodes. You ready to start snapping next and cashing checks? Well, it starts right about now. What's up, guys? Welcome to Right About Now. I'm Ryan Alford, your host.

Starting point is 00:00:36 And, you know, we like to say we always try to be right, and we're definitely right now. And, you know, I grew up, had this conversation with our current guest just a moment ago, loving a certain brand. and was reminiscing on playing on the playground within this mall and having a certain food item that you in the U.S. probably might be a little aware of. I'm really excited to have Steve Robinson. He's the former chief marketing officer and the author of Covert Cows and Chick-fil-A. Steve, what a pleasure to have you. Good to be here, Ryan. Thank you. Yes.

Starting point is 00:01:25 I was in that mall that you talked about. I've been in there because I started there in 1981. I know. And I grew up eating the nuggets and the chicken and outside all kind of. And I'm pretty sure it still tastes the same. It's the same. Small tweaks, but a little known. In 1985, when I was going to Greenville Mall, it was a pretty well-kept secret except in the malls. That's right.

Starting point is 00:01:55 But thanks to Steve, it became what is one of the most iconic brands in U.S. history. Yeah, it was great. It was a great trip. Yeah, I know you've done a lot and have enjoyed getting through parts of the book. Steve got booked. I want to be honest. I have read and listened to excerpts of this book, lots of which, and a lot of them found fundamental beliefs that I have in brands and things. But Steve has done a number here with this book.

Starting point is 00:02:21 I'm excited to talk about it. You know, it's so funny. I talk about when people go left, it's so funny. I talk about when people go left, you need to go right in marketing sometimes. And, but sometimes it's just doing the right thing. Yeah. Yeah. And when I think about Chick-fil-A and what you've done, there's like, there's this moral thread through it. Yeah. And then there's just the right way to get things done. And I think if I was simplifying, you know, the take, I was like, if we really simplified this, this is how business should be done.

Starting point is 00:02:48 It is. Well, I went to work for them in 1981. Prior to that, I was director of marketing for Six Flags over Georgia, which back then was a hot brand, well-run business. Had a great time. Getting real nostalgic, Steve. I'm thinking Six Flags and Chick-fil-A growing up. These are good vibes here. Well, I actually met them trying to convince them to build a restaurant inside the park

Starting point is 00:03:10 as a way to build their brand and trial. Because back then they were only in malls and mostly just southeastern states. So the footprint of Six Flags kind of matched theirs. But I joined them in 81 because their founder and their COO, Jimmy Collins, the founder was Truett Cathy. They both came to me and said, look, we don't have a marketing department and your name keeps coming up on our search because we need one. Would you have an interest in talking to us?

Starting point is 00:03:40 And Ryan, when Jimmy called me with that question, in the back of my mind, I started laughing. And I said, well, I know you don't have a marketing department, or you would have done that deal with me two years earlier to put a restaurant in the park. Yes. But I already knew a lot about them because of that experience. And Six Flags had gone through a transition where they'd been bought by Penn Central and out of that bankruptcy that you may remember, they became part of Penn Co. And suddenly this very brand guest-focused company was starting, in my opinion, to kind of drift a little bit to short-term transactional focus. And so when I get that call from Jimmy, I said, you know, I'd love to talk to you.

Starting point is 00:04:25 I figured I interviewed with Six Flags for a full day and had the job offer at the end of the day. What the heck, three or four days maybe. If nothing else, I'll learn more about Six Flags and Jimmy and Troy and Kathy. Well, five and a half months later, I was still interviewing with him because that phone call came in August of 80. And they eventually invited me to join them. And I think an important point, an important story that's part of that, it really demonstrates the culture underneath Chick-fil-A. I was sitting in Truett's, Kathy's office, early December, still interviewing. I'm doing it stealth. I finally looked at him and

Starting point is 00:05:06 said, Truett, what are you looking for in the idea of marketing candidate? Because this is starting to get a little cumbersome. And he paused and he looked at me, says, I have absolutely no idea. All I know is whatever it is, I don't want to do it. Okay. That caught me a little off guard. Yeah, I would not have expected that. But then he paused and he said, but you need to understand the most important decision we make here is who we invite to join the organization. And we're only going to ask you to join us if we think we can have fun together, that we can trust you. And I'm trusting Jimmy and others to figure out if you can do the job. Now, think about that answer.

Starting point is 00:05:46 Most people, most organizations, it's all about competency. But he was telling me in a very quick answer, I'm more concerned about who you are. Now, what I didn't know is their attitude was, if I come there, he's never going to leave. So we better be good with this decision. Now you may say, well, that just because they were interviewing you to be a director of marketing, the reality is they approached every selection that way, staff and Chick-fil-A operator. The attitude being, if we invite this person to join us, the attitude being, if we invite this person to join us, we don't expect them to leave. And so we better make a good choice.

Starting point is 00:06:30 We better do our homework. And so I get a lot of questions about why do people have such great people interactions in Chick-fil-A restaurants. It really goes back to that fundamental experience I had in that last interview with Truett. You pick the right people. They're going to attract more of the kind that you want in the business. And the Chick-fil-A operator deal, which we can talk about a little bit, is very unique. And if they pick the right operator for that restaurant, in turn, those operators pick the right talent for the restaurant. And guests, therefore, pick the right talent for the restaurant and guests therefore have a better experience. So I learned a lot about the culture just in the process of that patient five and a half months of interviewing. And I never thought when I joined

Starting point is 00:07:17 them, it'd be a 35 year career, but it turned out pretty good. Yeah, it did. Talking with Steve Robinson, former chief marketing officer of Chick-fil-A. Steve, I think a lot of people hear the culture word now and today, and they like to, ah, yeah, it matters. Yeah. It matters. But I think you've got to delete the but. You do need to delete the but.

Starting point is 00:07:43 It just matters, right? Yes, that's exactly right. It's like, especially, it matters probably in any business, but certainly the behemoth that Chick-fil-A was going to become or had the potential. I mean, your headroom might be in any business. It's okay, headroom, I think of opportunity, right? Right.

Starting point is 00:08:04 Where Chick-fil-a has gone and where you help take it to just the headroom would have never been there without that culture that's correct i talk about in the book ryan um it wasn't until i was near the end of my career that i really began to put words to what i had experienced around the culture. And here's the sentence I have in there. Great brands only grow in great culture, and great culture only happens when leaders define it and cultivate the soil. And so it's in that well-defined and well-cultivated soil that great brands grow and thrive.

Starting point is 00:08:44 And that's what Truett Cathy and Jimmy Collins focused on. They're still focused on it. And so when people say, well, what's in culture? I think you can be very clear about culture. For us, we defined it in basically four key components. One was a very clear purpose. And why does the business exist? What do you mean by purpose? Why do you exist And why does the business exist? What do you mean by purpose?

Starting point is 00:09:06 Why do you exist? Why does the business exist? And as an individual involved in the business, why do I exist in this business? So for Chick-fil-A in 1982, we had a major financial crisis. Their culture reflected the values of Truett Cathy, but nothing had ever been put in writing. And we went off as a leadership team for three days. And even though we had major financial issues, it was interesting. Well, within a day of the three-day meeting, we shifted finances and marketing into, okay, let's get clear about why we exist because people need to understand how

Starting point is 00:09:42 we're looking at this crisis. What are the filters? I won't bore you with the next two and a half days of what we did, but we worked on nothing but defining why Chick-fil-A exists. And we came out with one sentence. To glorify God by being a faithful steward of all that is entrusted to us and have a positive influence on all that come in contact with Chick-fil-A. entrusted to us, and have a positive influence on all who come in contact with Chick-fil-A. Now, when you dissect that sentence, which took two and a half days to write, which,

Starting point is 00:10:17 quite frankly, in my opinion, was a miracle, there's basically three big ideas. Truett wanted a business that would glorify God, not because it was a platform to preach, but by the very experience of interacting with the brand, have a positive influence on people who came in contact with the business, whether they're within the business or as an outsider interacting with the business. But for him, it all hinged on great stewardship. He saw the business as a gift. Right up there, right behind his salvation experience with Christ, he saw that silly little sandwich and what it was becoming

Starting point is 00:10:51 as the center of a brand as a gift, and he wanted to steward it well. And his philosophy in that meeting was very clear. If we steward it well, we'll likely survive. If we don't steward it well, we'll likely survive. If we don't steward it well, we won't. So number one element of a culture is clarity around why you exist. Number two, what are the fundamental values that you're going to use to make decisions? For us, you can call them values, but I call them non-negotiables. What are the things you're going to fall on a sword over that gives clarity for leaders to make more decisions on their own rather than

Starting point is 00:11:29 running up to their boss? So we came out with six very clear values. Stewardship, we're going to have fun, integrity, honesty, which we distinguished, integrity, honesty, which we distinguished, excellence, and what was the sixth one? Great talent. Great talent. Known for great talent. So first principle in culture is why you exist. Secondly, what are the things you're going to fall on a sword over?

Starting point is 00:12:12 Suddenly, when you look at honoring God, stewardship, and influence, and those six non-negotiables, it starts to become easier to decide how you're going to invest time and money. You see? Third big element was what does the brand stand for for um so we literally designed design that around the question what is our brand promise use a lot of customer research over decades it evolved that one can evolve when i left the brand promise was where good meets gracious the chick-fil-a experience is a lot more than just food.

Starting point is 00:12:45 It's the interaction with every guest, personal, eye contact, unexpected, graciousness, and, oh, yeah, everything is good, food, environment, et cetera. And then the final piece of your culture is, in fact, your strategies. What are you going to do to fulfill those first three? So, I think, going back to your question, I think a lot of times culture, yeah, that's important, but it's because leadership has not made the effort to define what their culture is. There should be no question about what an organization's culture is. But when you have, as you and I were discussing before we went on the air, if you have constant turnover in leadership, CEO, COO, CMO,

Starting point is 00:13:38 very difficult to, number one, define those key components of culture and then live about long-term. Because turnover comes, well, I want to put my fingerprint on the business and I want the culture to reflect me. The beauty of working for Chick-fil-A was it was privately owned. It's still privately owned. That corporate purpose statement has not changed, not one word of it. Those six priority non-negotiables have not changed. And what that in turn drives is the

Starting point is 00:14:14 ability to empower a very large organization to make more and more decisions closer to the guest, closer to the customer, and not having to constantly go vertical with decision making. Because everybody understands, okay, I'm about to make a major decision for the business in some form, doesn't matter what's food, marketing strategy, or technology, whatever. Is it going to complement those values and that purpose, that brand promise, or not. And in fact, my last three years there, the entire business plan, strategic plan, was built around where good meets gracious. Every major initiative in the business was evaluated

Starting point is 00:15:00 on whether it would help fulfill that promise. was evaluated on whether it would help fulfill that promise. So that's how you create, you know, across 3,000, 4,000, 5,000 restaurants, and they're between 3,000 and 4,000 now. That's how you create continuity of the brand experience and the cultural experience, the people experience. A lot to unpack there, Steve. That's why I wrote the book. Well, I want to just say, number one,

Starting point is 00:15:30 the full playbook for how to create a magical brand is in Covert Cows and Chick-fil-A. But what Steve just did might be the most impactful six minutes of like how to build a company the right way from the bottom to the top. And we're going to make that a YouTube alone clip right there, Steve. Literally, because I'm just telling you that is magic. And just hearing you talk and knowing. But you know what? I was doing two things.

Starting point is 00:16:01 I understand it took me 35 years to see that evolve. I know, but that's why you're here, me 35 years to see that evolve i know but that's why you're here steve because you have that knowledge and others don't but what you know i want to make a couple points number one as you were talking i was thinking about the chick-fil-a experience and short of maybe like one out of about a thousand visits i've ever made to Chick-fil-A. So 99.9% of the time, maybe the cash register was having a bad day. And even then, I pretty much got that. I was just thinking every experience ladders back up to what you just described.

Starting point is 00:16:36 Where good meets gracious. Where good meets gracious. Right. Every, I mean, every experience. Yeah. And so that's the proof in the pudding right there. Well, the underlying message in terms of corporate communications and training all the way to every team member is what does that mean? It means everything about the brain should be good.

Starting point is 00:17:00 Ingredients, food, environment, service, cleanliness. ingredients, food, environment, service, cleanliness. Where good meets, I meet you. I connect with you. We actually show dignity and respect by saying, hello, we're glad you're here. You say thank you. We say my pleasure.

Starting point is 00:17:20 Okay. Where good meets gracious, you actually experience grace. You experience hospitality. You experience what the word restaurant actually means. It means a place of rest. And the first word means wherever you interact with the brand, not only in the restaurant but in the drive-thru or at an event or even in your interaction with the Chick-fil-A app and the options you have to choose that best serve you.

Starting point is 00:17:55 You get to choose where you want to interact with Chick-fil-A, but wherever that is, that's the experience we want you to have. Chick-fil-A, but wherever that is, that's the experience we want you to have. You're met, it's good, and it has a flavor of gracious hospitality. Yes, and it does. That's why everybody says, you know, no way does it like Chick-fil-A. So what does that mean? Why did we pursue that?

Starting point is 00:18:27 Because my first 10 or 15 years at Chick-fil-A was all focused on the food experience. Yeah. And we got pretty good at that. I mean, we even applied principles from companies like Lexus, zero defects, that really perfect a consistent food restaurant experience. Part of the transition of the brand was, okay, how do we go beyond being maybe the best of a bad lot, the fast food category, and become something that no one else in the fast food category can be. And a lot of that was driven by Truett Cathy, when he had an experience at Ritz-Carlton around the whole issue of My Pleasure, and he brought it back to us, and he just kept pressuring us and pressuring us and pressuring us. How do we instill a My Pleasure experience into the restaurants? At the time, we had about 50,000

Starting point is 00:19:19 team members. They now have over 200,000. That's a big challenge. And it meant we had to institutionalize hospitality just like we had institutionalized the menu experience. And that challenge was harder than the menu. I'm sure. Yeah. I unpack how we did it in the book. And hospitality, it's an interesting word. Yeah.

Starting point is 00:19:49 Because if you're listening right now, you're like me going, hospitality and fast food. Sounds like an oxymoron. It does. Yeah. But if anyone has gotten there, it's Chick-fil-A. You know, because you do feel like, you know what? I'll be darned steve i

Starting point is 00:20:06 feel like those cash registers mean it when they say with pleasure they do man i know and i it's like because sometimes i'm cynical by nature it's probably what makes me a good marketer and like all that but like it's curiosity and like uh you know but i'll be darned man i mean i'll be the fast i'm like she's probably had a rough day. And she just said, that's my pleasure. And I think she meant it. I'm like, how did she mean that? And I think she meant it.

Starting point is 00:20:32 Part of what we discovered, and we visited a lot of other brand, retail brand experiences that consistently deliver great service and great hospitality, including high-end restaurants like Danny Meyer Restaurants in New York, Ritz-Carlton Hotels, et cetera. But part of what we discovered is if you want to deliver hospitality,

Starting point is 00:20:56 you need to bring people into the business that actually have that gift. I mean, that's actually a gift that's identified in the Bible among the gifts of the Spirit. And when you bring in someone who has a natural bent of hospitality, what happens? They attract more people just like them. And even if the restaurant operator doesn't have that gift, they can still attract leaders and team members that do. And it becomes contagious. leaders and team members do.

Starting point is 00:21:22 Yeah. And it becomes contagious. And that's what Truett initially experienced in the Ritz-Carlton was the contagious effect of saying my pleasure in every interaction with their guests. That's what he wanted in our business. It took us seven years to figure out how to institutionalize it, design it, train it, and then measure it. I mean, we're going to have two pickles in every sandwich.

Starting point is 00:21:49 We measure that. How do you measure my pleasure? How do you measure refreshing every drink? How do you measure carrying out large orders to the car without being asked, et cetera, et cetera? We had to figure all that out. This show is sponsored by BetterHelp. We talk about social media a lot on this show, and the reality is it can be really detrimental to your mindset. We compare ourselves to others

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Starting point is 00:23:39 That's betterhelp.com slash writeaboutnow. Talking with Steve Robinson, former Chief Marketing Officer at Chick-fil-A. Steve, you said something earlier that I want to go down a road, transactional versus building brand. And in today's world, performance marketing has become the term of the century. It's really like the last 10 years, especially with digital and everything else. And you know this. I don't have to tell you this. You are a rare breed being at a company for as long as you are, especially as a CMO.

Starting point is 00:24:17 Yes. Knowing the short leash that all employees and leadership seem to get, and the demand for sales today right now, damn it. What's your perspective? Like how do you build brand today? And why have we gotten so short? I call it short-termism. It's a disease.

Starting point is 00:24:42 No question. Next 90 days. Yeah. When I joined Chick-fil-A,. Yeah. It's a disease. No question. Next 90 days. Yeah. When I joined Chick-fil-A, they were actually operating in that paradigm. They thought fast food. We are fast food, so we must have to market like fast food. And they were doing that. They were doing coupons and discounts and price features.

Starting point is 00:25:03 And ironically, they were only in malls where the mall was a built-in medium, in a sense. Yeah. Didn't really need. Didn't really need to be doing it, but they were doing it. And I kind of tripped right into it, too, when I got there. And as I think I mentioned, I was actually involved in a promotion in 1982 that was focused on deals. It absolutely blew up.

Starting point is 00:25:32 It was too successful. Financially, it hurt us. And that actually became a catalyst for me and my team, and my team then was maybe six of us, to sit down and say, we don't need to market Chick-fil-A like this. This is crazy. We've got to figure out another way. We work for a guy who has no intentions of selling the business. Why are we chasing short-term transactions with deals?

Starting point is 00:25:58 And operators were hooked on it like drugs. They're running coupons and stuff like that. So all that to say that's what I started in. A crisis made us step back and say, we don't want to be like that. So what I unpack in that book is a 30 plus year journey of being a brand focused on the experience, the value, building an emotional relationship

Starting point is 00:26:25 with the customer. That's what drove the development of the Cow Campaign was the emotional connections. How do we focus on emotional connections in every interaction? The food, the service, the drive-through, the advertising, events. And we're well into that journey. My last 10 years, a book comes out called Blue Ocean Strategy. I read that book.

Starting point is 00:26:57 This sounds like this is what we're trying to do. And it actually added some really good third-party credibility to take to not only staff but all the operators to say, look, this not only will work, it is working. We need to put the pedal to the metal. And that added catalyst to developing the second-mile service strategy that really took the brand to another level. It added credibility to why we

Starting point is 00:27:27 use cows instead of showing food and price because we were building emotional engagement that people liked and remembered and people don't remember pictures and price points. So that's a bit of a long answer, but it all was possible because we had private ownership that was focused on the long term. Truett Cathy was not focused on how much money am I going to make. He was focused on having a healthy business, a healthy balance sheet, a long term, healthy brand that he could pass on to the next generation of not only his family, but Chick-fil-A operators. And when I joined Chick-fil-A, I think average store volume was probably around $400,000 to $500,000 in a mall. And last year, the average store volume for Chick-fil-A was $9 million.

Starting point is 00:28:22 store volume for Chick-fil-A was 9 million. And we can talk about it, but one of the major catalysts in the other reason we were able to do that is because of the operator model. You want me to unpack that now? I want you to unpack that because I want you to answer this, Steve. I'm going to touch heat up. Why the heck hasn't anyone... Why the heck hasn't anyone, everyone knows Chick-fil-A is the king, the icon amongst a lot of, I don't even want to call them B players, deep, not fast food. Yeah, other category brands.

Starting point is 00:28:57 And other category brands. And you give away the playbook. We share. You share. For the most part. It's in the book. You don't give away your best people, but you give away the playbook. It's it. You share it for the most part. I'm not saying it's in the book. You know, like, you don't give away your best people, but you give away the playbook. It's in the book.

Starting point is 00:29:09 It's right here. But Burger King hasn't done it. McDonald's hasn't done it. Hardee's. I mean, the list goes on and on. Why? You know. Okay.

Starting point is 00:29:19 Well, one, I've just touched on the first one. You have long-term focused ownership. Well, that's a big hurdle right there. It is. That's a big starting point. And we already touched on a little bit of that. Number two, you have a culture that is focused on more than just profits. And I've already unpacked some of that.

Starting point is 00:29:39 It is, but yet it's the most profitable one. I just have to caught these ironies for you. If you're not paying attention, the punchline in all of this is they're not chasing it, but they're delivering it. But it comes. It comes. And it really reflects, which I talk about in the book, Truett's favorite Bible verse, which is Proverbs 22.1. A great name is to be more valued than silver and gold. Okay, so principle being, you take care of your name,

Starting point is 00:30:08 you take care of your reputation, and in his case, one that glorifies God, and in faith, you're trusting God that he'll provide, okay, well, that's obviously happened. So long-term ownership, an environment where culture is clear, people are empowered, they can make decisions, they know the box top of what decisions are appropriate. But then you've got to have an organizational structure that empowers that. As Colin said, makes that flywheel work. For Chick-fil-A,

Starting point is 00:30:48 it's the operator model. It's the leadership model of every restaurant. Here's the top line. Chick-fil-A owns every restaurant. They find the site. They build the restaurant. Doesn't matter what kind of location it is. They equip it. They even put the first inventory in the restaurant. it is. They equip it. They even put the first inventory in the restaurant. They go out and find, recruit, and train an independent contractor. They call them an operator. They're protected by franchise laws, but they're not equity investors. They put up $10,000 earnest money for the deal. But their commitment is they must actually run that business. They're not a passive investor, like many franchise operators are. Their income from the restaurant is based upon half net pre-tax operating profits.

Starting point is 00:31:44 They pay Chick-fil-A a percentage off the top for the use of the brand and all the brand services. I won't get into all, but they have to pay for all the expenses, including the team members, the talent. The team members work for the operator, not for Chick-fil-A Inc. Part of their rent goes against,

Starting point is 00:32:04 comes back to Chick-fil-A to offset the investment Chick-fil-A has made in that site. And there's usually a cap to how high that rent can go. So they're paying a percentage off the top. They're paying rent. After all their expenses, pre-tax profits are split 50-50. So for a Chick-fil-A operator, every incremental customer, every incremental sales dollar,

Starting point is 00:32:32 every incremental therefore net pre-tax dollar, half of it's mine. So what happens? You have a leader in every restaurant at Chick-fil-A that's highly bested in the success of that individual location. And as a result, they attract better people. They train them. They keep them longer. They empower them.

Starting point is 00:32:57 I mean, the average Chick-fil-A operator now has probably got seven to ten full-time salary leaders in their business. And they're focused on growing a healthy, profitable, managed P&L bottom line. And our job at the home office was to do what the operator could not do for themselves. But what is that? Create and manage the brand. Everything that makes up the brand. Every guest interaction with the brand.

Starting point is 00:33:32 Generating demand. Creating demand. Creating value through the brand. And then obviously building infrastructure. The stores, supply chain, accounting services, IT support. Building infrastructure to support them. Jimmy Collins, who was a former CEO, used to tell staff, home office staff all the time,

Starting point is 00:33:53 if you're not supporting somebody who's selling chicken, supporting the Chick-fil-A brand, then you're not doing your job. We don't sell any, we don't have any cash registers at the home office. And it's very true. We don't have any cash registers at the home office. Very true. And it's very true. But that, again, that's that cultural focus of the most important people in the business starts with the customer, and the second group is the Chick-fil-A operator family. The next group is the staff.

Starting point is 00:34:23 The last group is the owners. Many organizations have that the other way. They're all about ownership, return on investment, return on my real estate investment, building my real estate portfolio. None of that was important to Truett. He knew it was important, but that wasn't Truett Cathy's priority. His priority was the guest experience. How am I going to give a great guest experience? I'm going to recreate myself in every restaurant.

Starting point is 00:34:53 We call them Chick-fil-A operators. I'm going to have them highly incentivized to make decisions, take care of the customer every day, all the time. And then I'm going to build staff to support them. And as a result, my family and I will probably be okay. Well, they're doing quite fine. They're doing quite well. We got probably one of the most valuable brands in the world.

Starting point is 00:35:16 The priority that I describe, and I talk about it in the book, the priority I just described is inverted in many organizations. Yes, it is. They're focused on owners. They're focused on operational priorities, conveniences, systems. Customers might be the third audience, the constituent, that they really pay attention to. But they're making decisions in a completely different priority

Starting point is 00:35:45 of how Chick-fil-A was organized. And it's basically built around those three big buckets. Long-term ownership, clear culture, and leadership's focused on managing it, and an operating model that makes that whole system run. And that operating model is operator, shiftly operator focused. Are these other entities just too intertwined now to go that direction?

Starting point is 00:36:14 Could they do it? Could they do it? I think the right organization could do it if you had a board of trustees, even if they're public, if you had a board of trustees that were willing to empower leadership to take a long-term,

Starting point is 00:36:25 we want a long-term healthy brand. Yeah. We're going to pull back a little bit on this being counter-focused on every 90 days, what's happening. And this performance-oriented marketing is nothing more than code for a financial priority versus a customer priority. It is. Exactly right. And I think it's one of the most unhealthy things that have crept into the business acumen in America.

Starting point is 00:36:54 Yeah. But you've got to have a board that's willing to empower, whether it's a private board or a public board, that's willing to empower leadership, take a long-term focus. We're going to focus on the customer. We're going to focus on a long-term healthy brand that people fall in love with. I don't care if it's fast food or car or shoes. The principles are the same.

Starting point is 00:37:14 So it can be done, but it's got to start. It literally, it sounds like a cliche, but it has to start at the top. Now, specific to Chick-fil-A, I think the reason you haven't seen many people in our category or other retail categories pursue it is two basic reasons. It's incredibly generous. The average Chick-fil-A operator now is pushing $700,000 a year. You think a McDonald's store manager is making that kind of money?

Starting point is 00:37:43 No. You think a McDonald's store manager is making that kind of money? No. Now, you've got some franchise owner who's got multiple stores and a real estate portfolio who's probably doing okay, but he's not focused on the restaurant experience. The Chick-fil-A operator is. Yeah. So, number one is they would have completely restructured their operational priority to the leader in the restaurant.

Starting point is 00:38:15 And one of the hangups there is, well, the Chick-fil-A model is too generous. But the other part is, which I've already described, is the Chick-fil-A model I think is pretty ingenious. The operator model has never changed. It hasn't changed one iota, and the reason it hasn't changed is Truett and Jimmy wanted the operators to be able to trust Chick-fil-A that they're not going to change the deal.

Starting point is 00:38:42 How many sales organizations, salespeople start making too much money and they fangle up, they reconfigure the commission structure. Chick-fil-A operator deals never change. Half net profit, bing, that's it. So when I've heard it costs a million dollars

Starting point is 00:39:01 or two million to own a Chick-fil-A, is that even iCarrot? No, no. million to own a Chick-fil-A. Is that even iCarrot? No. I mean, the Chick-fil-A operator, their cash investment is $10,000. Yeah. How do you get in line for that? Yeah. It's a long line.

Starting point is 00:39:14 They have about 10,000 applicants a year. Wow. And they're selected anywhere from 150 to 200 operators a year. So it's a long line and it's a long wait. And they're more focused on the same things that when they interviewed me, they're more focused on the character of that person, their ability to attract and keep great talent, their ability to really run a large enterprise.

Starting point is 00:39:36 I mean, the average Chick-fil-A restaurant is employing about 120 to 150 team members now. And the ability of someone who can do the hard work of running that kind of business 24-6, 24 hours, six days a week. And it's hard work to run a Chick-fil-A restaurant. You know, speaking of the six, I mean, you know, I mean, I know. I grew up in the South. Southern Baptist raised. I know, you know, day of rest.

Starting point is 00:40:12 Yeah. But as a business, I mean, how much blowback and discussion has there been? I mean, not because it's internally. Chick-fil-A doesn't care. Not internally. They could care less, right? I mean, the proof's in the pudding and it's a moral thing but but people talk about it because it's unique to the brand yeah what's your perspective well there's there's several pieces to it um we could sit here and make jokes about

Starting point is 00:40:35 it but i'll i'll tell you the the factual side of it um truett opened his first restaurant in 1946 it was a little diner in the south side of Atlanta called the Dwarf Grill. And it's because it was small. I mean, he had four booths and I think 10 stools. So he called it the- Happily named. Yeah. He and his brother opened it.

Starting point is 00:40:58 They thought they were going to be open 24-7. Yeah. First week, they get to Saturday night. It's late. They literally said, you know what? We're not going to open tomorrow. And Truett was highly motivated

Starting point is 00:41:14 by Truett. He said, I'm not going to ask people to do what I'm not willing to do. I do not want to work on Sunday. I want to be able to go to church with my family, but I don't want to be out of the restaurant. So he made the decision, they made the decision in that first little diner, we're not going to open on Sunday.

Starting point is 00:41:34 And his attitude was, if I can't be successful in six days, I'm in the wrong business, so I'm not going to open on Sunday, no matter what happens to Chick-fil-A. Any blowback is primarily from the outside, you know, retail developers, strip center developers. That want the traffic. That want the traffic. They want the business on Sunday.

Starting point is 00:41:57 And in the early years of the brand, it was a real challenge because some mall developers simply said, no, you're going to open on Sunday. We're not going to come in. And Chick-fil-A would say, okay, we're not going to come. But then as they built, they got stores open, they built a track record. Their average sales per square foot beat everybody else in the mall. And the word got around pretty quick. They're going to pay you, they're not only going to pay their rent, they're going to pay you rent overage. pay you they're not only going to pay their rent they're going to pay you rent overage um and so six day a week is just fine yeah i mean now we have stores on university campuses

Starting point is 00:42:30 airports stadiums and they're all closed on sunday that's part of the deal that's who chick-fil-a is yeah and i think truett would he would joke he he he would often say um i i don't want it i don't want customers to think that we don't love them. We do love them, but I actually want competitors to be able to have one day when we're not competing with them. Oh, man. You know, the competition is good. They probably appreciate it. The competition is good. It also helps keep us sharp. But we want the competition.

Starting point is 00:43:06 We want them to survive too. That's the greatest job he could do. But, you know, he would also observe, and he's right, that it helps operators select and keep good people because everybody knows they've got a day off. Yeah. They're not going to be asked to come in on Sunday. You think that ever changes?

Starting point is 00:43:26 No. The brand? No. As long as the business stays in the Cathy family, it won't change. No, that changed. I mean, what's the business worth? I don't have any idea. How many?

Starting point is 00:43:35 Billions? I'm sure. Yeah. But is there a lineage where you'd never? They're into the third and fourth generation of family now who are involved in the business some of them running stores some of them are on staff they love the business it's all they know it's their platform for ministry uh it generates incredible cash that that they use to support things that they love ministries they care about yeah they don't want to walk away from that um so no i no, I don't see it ever.

Starting point is 00:44:06 And if it ever did go public, anybody who bought it would want to open on Sunday and they'd want to, you know, ramp that operator deal down. And probably in three or four years, the brand would lose it. Diminish. Yeah. Be over. Because you'd be unwinding some of the things I've already described that really make that thing hum.

Starting point is 00:44:30 Yeah. But I'd boil it down to two issues. It's too generous, and it's ingenious, and a part of the being ingenious is that they've not changed anything that's crucial in the business. Things like Sunday, the operator agreement, the Chick-fil-A recipe, genius is that they've not changed anything that's crucial in the business. And things like Sundee, the operator agreement, the Chick-fil-A recipe, the commitment to every restaurant is a restaurant. They're making food in those restaurants. They got big kitchens that

Starting point is 00:44:57 actually produce food fresh. I mean, there's fundamental principles that have not changed. I think as long as they, you know, stay, stay true to those that the brand can just continue to grow. Talking with Steve Robinson, he's the former chief marketing officer at Chick-fil-A and the author of Covert Cows and Chick-fil-A. Steve, I want to pivot a little bit to, you know, your perspective, marketing, branding at a more global level and

Starting point is 00:45:26 like you know we talked pre-episode you got you know you're having this extended tenure for one company you saw these things the rise and the change of marketing yes traditional tv radio out of home social media comes into play yes digital marketing comes into play. And even up until your final day, I mean, it was a transition. What's your perspective on how the mediums, obviously that we've been talking very tactical strategy, which is, hey, the most important part. But the tactics, you know, the social media aspect, the digital aspect was sort of just your overall perspective

Starting point is 00:46:03 of how it's changed and how many different channels there are and how you can't just run a TV ad anymore. Right. Because not everyone's watching TV. Right. But just general perspective on the landscape of marketing and media. I have two or three, I would say, principles that during that transition, my team and I adopted. Part of the Blue Ocean strategy is fundamentally being willing to step back

Starting point is 00:46:32 and say, okay, every brand interaction, no matter what that touch point is, for us, how do we use it to deliver where good meets gracious? Okay. Well, that automatically means we're not focused on using every interaction to drive transactions. Right. We want to figure out how to make the brand more meaningful where good meets gracious in that interaction.

Starting point is 00:46:59 So how are you going to use not only traditional media? I mean, we started with billboards and TV with the cows to build emotional connections. How do you take the cows into those other platforms? How do you use those platforms to tell stories that reflects where good meets gracious, not what is the latest product and price point at Chick-fil-A this week? How do you use technology to make the guest experience still more convenient while also still being personal. So we were working on the Chick-fil-A app long before I left,

Starting point is 00:47:35 and it has continued to evolve. But some of the guiding principles going in is we want the Chick-fil-A app to make the guest experience convenient, but we do not want it to pull them away from our people, our team members. We want it to make it a better experience with our team members. So, okay, what are we going to do in the drive-thru? We're going to get rid of, we got all this technology, we're going to get rid of those little metal speaker boxes. Thank the Lord.

Starting point is 00:48:07 Okay? Well, what do we got to put into place? Well, we're going to let them use the app to pre-order. When they show up, we're going to have people standing outside. How's that? Not a box. Real people. They're going to have in their hands

Starting point is 00:48:22 an iPad that's interfacing with registers on the Chick-fil-A computer system in the back through high-powered Wi-Fi. Okay, we're using all this stuff. And when that customer comes in, if they pre-ordered, we already know who they are. By the way, the app will give us a GPS alert that they've hit the property. So it'll verify they're on the property, their order's ready, and they have the option they can go to the drive-thru and pick it up or they can go to the curb and we'll bring it to the car.

Starting point is 00:48:56 Those are just illustrations. So when I left Chick-fil-A, DriveThru was roughly a third of their business. It's over 60% now. Wow. Heavily influenced by the app. But every one of those transactions still has a human contact. Yes, it does. So my point is, it doesn't matter what those evolution is with media and technology and digital.

Starting point is 00:49:29 You've got to make a decision about what do you want the brand experience to be and how you use those. And we have a high value on the team members and the restaurants. So part of social media, for example, the evolution, we're going to use social media principally to tell stories about guest experiences in the restaurants. And we're not going to tell the stories from the home office. We're going to let the operators, the team members, and the customers tell the stories. But we're going to create the platform on Facebook and Twitter and other platforms where it's easy for them to do it.

Starting point is 00:50:11 But my preference was that the stories be genuine and from as close to the customer as possible because I didn't want them to come off as narcissistic. And I think when stories start coming out of the home office, that's the risky one. Cows coming out of the home office, that's the risky one. Cows coming out of the home office is okay. We're just making people laugh. But guest experience stories, I think, need to be generated as close to that customer and that store as possible. So that's an example of how we chose to use social media.

Starting point is 00:50:40 But it goes back to what do you want your brand to be? What do you want the guest experience to be with the brand? And then you translate it into those various platforms. I led the witness a little bit here, so I'm going to just admit something to our audience. I didn't know for sure, but I knew Steve was going to go there. The tactics don't matter. The strategy and the brand and carrying it through wherever you're doing it

Starting point is 00:51:05 is what matters. That's right. And that's where you're at. And there might even be certain platforms out there that don't fit your brand. You've got to make a decision. We're not going to use it. Yeah. We don't want to be there.

Starting point is 00:51:16 That's right. And we're not going to carry on dialogue on platforms that put the brand at risk. Yeah. So, for example, we had a clear policy. We're not going to discuss social and political issues on the platform, whether it's the store level or the corporate level. Yeah. That's an interesting one there, Steve.

Starting point is 00:51:39 I want you to go down that road because everyone's gotten into this. Okay, we're a purpose-based brand. And look, you could argue, and a purpose-based brand. And look, you could argue, and a lot of things we talk about is, well, Chick-fil-A kind of is, but it is, but it's not. You know, like it's purpose. It has clear purpose. We have clarity of purpose. But it's an inward,

Starting point is 00:51:56 it's sort of an inward belief in purpose and not this cause or that cause or getting on this soapbox or that soapbox. Chick-fil-A, remember, I told you the purpose, core values, the brand promise, where good meets gracious. That's all about us personally delivering a guest experience that, quite frankly, in the fast food category is unexpected.

Starting point is 00:52:25 Okay? Surprise and delight. It's a blue ocean, clearly a blue ocean strategy. Well, you don't want to say anything that all of a sudden creates some sort of emotional barrier that gets in the way of that promise. Because you pick a social or political topic, doesn't matter which one you pick, half of them agree with you and half of them don't.

Starting point is 00:52:47 Yeah, especially today. Today. So don't put the brand in that position. And for us, don't put over 2,000 Chick-fil-A operators in that position where they have to start dealing with that instead of focus on the guest experience. Yeah. to start dealing with that instead of focus on the guest experience.

Starting point is 00:53:04 Yeah. Did it become a fine line, though, with faith and glory to God? Yeah, sure. And the very clear things that that entails with choices. And Truett was very clear. I don't want to use the business. I'm not going to put scripture on packaging, and I don't want to use the business to, quote, evangelize. I want people to notice something unique and different about Chick-fil-A.

Starting point is 00:53:27 And if they want to ask us why, we'll answer their question. We'll tell them what we see as the purpose of the business. We'll tell them what motivated Truett Cathy to get up every morning, go to work. We don't mind talking about that. I mean, he saw the business as a gift. He wanted to steward it well. The most important book he ever read was the Bible,

Starting point is 00:53:49 and he tried to live what he understood. There's no problem with that. But we try to earn the right to answer somebody's question, not lead with what do we think. Yeah. Good gracious. Now, that might change. Yeah.

Starting point is 00:54:09 That's the operator. That's the environment in which I got to operate. Yeah. It's a slippery slope, though, the whole purpose-driven, you know, like take a stand. Yeah. Well, you know, like, take a stand. Yeah. Well, you know. I don't want to go real deep with you, but when you look at the life of Christ, he never did any of that.

Starting point is 00:54:34 He washed people's feet. Yeah. You know, he healed people. He fed thousands. He always earned the right to be heard and to have a relationship with somebody. It's really a servant attitude that's rooted in biblical principles at Chick-fil-A,

Starting point is 00:55:04 which I happen to agree with, obviously. It's one of the many reasons I stayed 35 years. And, you know, God says in Proverbs, my word will not return void. If you apply my word, it will not return void. Now, you may not know how it's going to return. Right. But if you apply my know how it's going to return. Right. But if you apply my word, I will honor it.

Starting point is 00:55:29 And true, believe that. I believe that. So when that happens, people kind of scratch your head and say, what's different about this business? Yeah. And if they ask, you get a chance to tell them. And I think a lot of the purpose-based take a stand becomes about the person and the company saying it for the attention of it versus the right reasons, the actual belief that they have sometimes.

Starting point is 00:55:59 Well, understand that, and I think you can see it in everything I've described, you're dealing with a company that is customer-first focused. Yes. I mean, I described that for you. Customers first, then the operators, then the home office, and then ownership. Well, if you have a customer-first focused organization, in a biblical context, we want to serve every customer well. Yeah. And in a marketing perspective, a biblical context, we want to serve every customer well. Yeah.

Starting point is 00:56:26 And in a marketing perspective, a brand perspective, and we want to do it so well we earn brand loyalty. Well, you can't be out here advocating political or social agendas and do that. No. It really is that simple. Yeah. But if you have leadership at the top that suddenly think, oh, we're going to, we think we can change the world by something we say. I think we've seen many case studies where that's proven to be wrong.

Starting point is 00:56:59 We could sit here and name some of them. Yes. As we wind down, Steve, what are you up to today? What am I up to today? Well, obviously, I still love to talk about the book and the Chick-fil-A story. I do some consulting, but not much. And I don't work, by the way, I don't work with public companies. I find that way too frustrating and challenging.

Starting point is 00:57:23 I work with mostly privately owned companies. Yeah, that way too frustrating and challenging. I work with mostly privately owned companies. Yeah. Husband of Diane. And I'm husband to Diane. I have two grown children. I have four grandchildren. I still do some speaking, but yeah, right now my life is mostly focused on my sweet wife. She and I have been married 52 years next week. Diane's here in the studio. sweet wife. She and I have been married 52 years next week. Diane's here in the studio. She was in the studio. She stepped out, but, uh, he's here with Steve, uh, man, what a legacy of marriage. And, uh, I love that. Well, and we love spending time with our children and their kids. So yeah, yeah. I'm very thankful. Yeah. Atlanta's home. It was, we just sold our house last, last year. Atlanta's home.

Starting point is 00:58:01 It was. We just sold our house last year. Okay. So now we live about half the year in Highlands, North Carolina, and the other half in Southwest Florida. Kids come see us, or we'll get on a plane and go see them. Nice. Highlands is lovely.

Starting point is 00:58:20 We love it. It's a beautiful place. It's not that far from Atlanta, so we can drop down and visit family. What do you want your legacy to be, Steve? People ask me that question. I know that makes you think the opposite of everything we've discussed, which is like sort of this outward, you know. I actually boil it down to very simple. He loved Christ.

Starting point is 00:58:48 He loved his family. And it showed. That simple. That is simple. Yeah. And those are my priorities. If someone was listening, starting a business, young entrepreneur, If someone was listening, starting a business, young entrepreneur, we've given them, and this book gives them, a lot of principles.

Starting point is 00:59:15 What's the one or two things you'd say to them? Well, I think it would be things I've already touched on. Number one, I would be very clear on why you think your business exists. And when I consult, and I have three or four active clients now, that leads to you as the owner need to be very clear on why you exist. What is your personal purpose? And does your personal purpose line up with what you're trying to do with this business? The second main question is, does that purpose, in fact, motivate team members, leaders you're going to attract to want to get up in the morning and come work with you?

Starting point is 01:00:00 Are you going to be the kind of leader with a purpose that will create followership? The second thing I would tell them is, are you going to be focused on making money or are you going to be focused on making money or are you going to be focused on serving others my experience is if you serve others well money will likely follow you'll be okay I think our culture

Starting point is 01:00:21 right now is entirely too self-focused as opposed to others-focused. Chick-fil-A is an others-focused business. I mean, I'm not bragging on them, but it is. And I think what made America strong was more other-focused than me-focused. So that's what I talk about with young entrepreneurs. You've got to decide, am I going to have an others?

Starting point is 01:00:55 What's my purpose? Am I going to have an others-focused business, or is it all about me? If it's all about me, you probably don't want to work with me as a consultant because that has no appeal to me. You've got to run for office, Steve. Oh, my goodness. In this environment, can you imagine that? Oh, I think it might be refreshing, you know,

Starting point is 01:01:20 and it might be the Chick-fil-A way to the office. Well, you're very kind. We really appreciate Steve Robinson for coming on. And look, go get the book, Covert Cows and Chick-fil-A right here. We've got it. He's going to sign it before he leaves. And you're going to see this on all of our show notes. Everything that we have, we'll have links to the book, links to Steve's profiles.

Starting point is 01:01:45 And Steve, I really appreciate you coming. Well, Ryan, I was honored you asked. It was great. It was great to drive into Greenville and spend time with you. Yes. You know where to find us, ryanisright.com. We have people like Steve on the show that make us number one. We'll see you next time on Right About Now.

Starting point is 01:02:02 This has been Right About Now with Ryan Alford, a Radcast Network production. Visit ryanisright.com for full audio and video versions of the show, or to inquire about sponsorship opportunities. Thanks for listening.

Right About Now with Ryan Alford - The Secret Sauce: Chick Fil A's Magical Business Formula with CMO Steve Robinson

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