The Pomp Podcast - #466: Cliff Hudson on Scaling Sonic Nationally

Episode Date: January 8, 2021

Cliff Hudson is a business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corp. He also served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation. In this conversation, we discuss scaling businesses, building a brand, intellectual curiosity, the value of being a master of none, and why flexibility and adaptation is so important.  ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.io/. This is a no brainer for both newcomers and crypto heavyweights - go sign up today.  ======================= Diginex is the first company with a cryptocurrency exchange to be listed in the US. Their ticker is Nasdaq: EQOS, and they are the first crypto company that you can buy stock in. They also have a crypto exchange called EQUOS, which has been built to institutional standards, but is available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees, by signing up using http://www.equos.com/pomp ======================= Sovryn is a decentralised Bitcoin trading and lending platform and one of the first Bitcoin-native DeFi platforms. Earn interest on your Bitcoin and get paid for lending assets, with up to 5x leverage on long and short trades using USDT, BTC and bitcoin-backed stablecoins. All with no KYC. Click the link below to get your first month’s trading fees for free. Be one of the first 100 and claim a $100 bonus! sovryn.app/pomp.html

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Cliff Hudson is a business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corporation. He also served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation. I really enjoyed this conversation with Cliff, and I think you will as too. In this conversation, we discuss scaling businesses, building a brand, intellectual curiosity, the value of being a master of none, and why flexibility and adaptation is so important. Before we get into the episode, I want to quickly talk about our sponsors.

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and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I have a very special treat for you today. Cliff is here and he's one of the rare people who comes on and he's done the work. He's run a real business, scaled it, been super successful. So thank you so much for taking the time to come on and talk. Great. Good to be with you today. I appreciate the opportunity.

For sure. Let's just start with your background. You grew up where, got into law and eventually ended up at Sonic, but kind of tell us the story of how you get to the business. Grew up in North Texas until finished elementary school. Adolescent years was spent in Oklahoma City, you know, kind of a pivotal point that really formative in my life. Um, we, my family moved from Wichita Falls to Oklahoma City after my dad lost his business, um, due to a variety of circumstances. Um, uh, but he lost the business. He lost everything. Um, uh, I was 11 going on 12 and, uh, to see that in my family, literally, uh, lose our home, you know, and, um, uh, that was, impactful for all my life you know and uh i remember when my youngest kid was 11 years old

and then i told him you know when i was your age we were evicted from our home and he my my kid just couldn't believe it just couldn't fathom the concept you know so anyway he took a sales job in oklahoma city uh that was he was better off being at the intersection of i-40 and uh interstate 35 so we moved to oklahoma city and within two or three years he was back in business for himself he was really a serial entrepreneur and um very impressive the way he recovered but um at any rate so now on the plains north texas oklahoma uh um here through undergraduate school went east for five years was in washington dc took a law degree at georgetown university lived in baltimore maryland for a couple years practiced law while my wife was in graduate school

there. Now we return to the plains. My big idea, just because the economy was so hot and what I didn't realize, it was overheated by an oil boom that was debt-fueled. And so within a year after our moving back, all that came unwound. I spent a couple of years in a business law practice here, but I saw it going down because the economy was going down. So my view was I either had the opportunity to try to maybe get inside a company that wasn't tied to the oil business or, frankly, leave the region. And at this point, I was late 20s. My wife was still in graduate school.

should continue on with her studies she's a epidemiologist eventually became a you know phd in epidemiology but i decided i need to kind of stay here and help um help support her get through that process so i left a lot private law practice went to sonic i was 29 years old so here i was i mean amazing enough 29 years old and general counsel of a public company called Sonic. How I got into business, our company went through two LBOs. They talk about that in the book. Went through two LBOs in the late 80s. Took it public in the early 90s. I was central to all of those in terms of helping orchestrate them. And then after we went public, I decided I was going to leave the company. Told the CEO, and this is a compressed version of the story, but

once I told him I was going to leave, he said, well, why don't you stay here and run the company? and so I became COO and it was a gradual process in terms of learning about the company from the time I joined the company until I became COO it was it was like nine years so it's not like it happened overnight but I'd had an opportunity to really learn the business and and so that's how I got onto the business side and a year and a half I'd say after I became COO. I was running the company day to day. My boss left rather suddenly, but he left the company and the board turned to me and said, you want to be CEO? And I thought, well, I'm already running the company, so why not? And same day they named me CEO and I was CEO for the next 23 years.

So when you come in as the general counsel and you eventually become the CEO, Those are two very different functions, but you're doing it at a time when there's multiple transactions going on, the company's growing. Talk through a little bit just as to, in hindsight, what were the key pieces either of learning or people that helped you transition from that general counsel role into eventually the CEO role and then kind of set you up for success to thrive as the CEO of Sonic? Great. Yep.

But so, one, I got to say, I think one of the biggest factors was I was young. And because of that, when I joined Sonic, I'd been practicing law four years. If I'd been practicing law 20 years, I might not have been malleable enough to move over the business side. But I was 29, and it was this relatively small company. and i was aggressive and curious and always pushing out you know so um uh the team was light from a management you know quantity and quality of management and so it really meant that i was often able to fill a void uh on special projects and so on but it also meant that when he wanted

to buy the company uh you know a cfo might have stepped in but we one we didn't have a cfo technically and um uh this meant that i really just got to learn the business um my boss wanted to buy the company and um uh he wouldn't do that from the outset but it was that was hard to pull off but he i think part of his thought in hiring me with a business background And then maybe expectations beyond an ordinary lawyer from the standpoint of just life expectations. I don't know. Anyway, he saw in me somebody could help him do that. So the process is to a great degree. I joined the company in 84 and 86. We did buy the company and to do that, to structure that and sell it to lenders and so on and so forth.

So it really did take more understanding of how we made money, didn't make money, how we could change that going forward. And because the company was hit a bit of a low point when he joined the company and I joined the company. But we were able to buy it and I got invested, you know, as a stockholder. So that gave me a little bit different view of things. um by within two years we had a lot of motivation contractual motivation to buy out our institutional partner that had joined us in 86 uh and three years into the deal the price was going to go up and by besides that they wanted out they need to show a return to their investors so um two years into having bought the company we restructured the ownership

and um and i was able to pull out a lot of of my investment i had to pull out a severe multiple of what i put in two years before and you know suddenly this gets your attention because in that 88 recap i only i mean just to give you and i talk about this in the book it was all public too but i i am in in cash out of pocket in 86 i put out in 2500 bucks and two years later i pulled out over six hundred thousand dollars and uh so one was the leverage with a leverage buyout and two was the turnaround that started occurring in in the value of the company was exploding so suddenly here i am early 30s now i've got a kid my wife and i had had our first son we're We're both 30. And so now I'm now I'm part of a larger part of a company, larger ownership.

I went from one percent ownership to eight percent ownership and had pulled out this capital, which, you know, here on the plains during an oil bus watching bankruptcies all around me. That was an extraordinary thing in my life. So it gave me a little bit more motivation to come to understand this thing. and a couple years into it our new institutional partners wanted to take it public for their own purposes they wanted to liquefy so they turned to me they said advise the team on how to go how to go public so I took a central role in that for the next you know year and more and we were successful in taking it public so once again two LBOs and IPO dealing with all aspects of this but particularly from a corporate finance standpoint i didn't have a finance background but i'd gotten extraordinary you know on job training you would say um and uh so this was my introduction to the

business and thinking more like business and how to you know strategize about growth of the business what would i do with the team meaning the management team you know if they were my management team who would go who would grow so and so forth so uh this was this kind of seven or eight years after i joined the company it actually was in a short circuit and stuff earlier it was in 92 that my boss came to me and said you've been general counsel for eight years how would you like to be cfo then and it was pretty sarbanes oxley and him i kind of thought fine this would be a this i'd learn more doing this had good team in place and you know the good uh auditors and so on good board so i said yes to that and then it was a year later when i said okay i'm gonna leave

and he said no no become coo just run the company so um this was it was a gradual process but a very real one of personal and professional development for me uh before i was made um before i was made CEO. Yeah, it's a fantastic story. While you were running the business, both as COO and then eventually CEO, the business had pretty explosive growth. It went from, you know, just over a thousand stores, I think to over 4,000 locations, drive-in sales, you know, up double digits, you know, year over year. And just by all measures, a very successful oversight of the business and the growth that it enjoyed. What was the secret to success? Was it improving the product? Was it better marketing? Was it investing in the brand? Was it just simply hiring great people? Like when

you look back and you say, we had this, you know, epic run of success. Here is the playbook. What do you say? Well, in a way, all those things you just listed, um, the answer was yes, yes, yes. Yeah. So a series of things that came together just as I became CEO. And then the question is, what do you do with them? But we drove them like crazy. So what were two of the things that came together? Okay, I should say three, but they all they played in a huge way. The first was while I was COO, I conducted over a 13 month period, I conducted a license renegotiation with our franchisees, with our franchise leadership, because the licenses were coming to closure in the late 90s. and our franchise leadership and us, but really our franchise leadership was very concerned about that because they did not want to get

to the end of the license agreement. And then, you know, all of them have scores of stores that, you know, could lose their licenses. So they wanted years in advance to renegotiate this. And we were willing to because we built the value of the brand.

So this was 93, 94. And I just moved into the COO role, literally, as that began. And so 13-month process, the franchisees felt like it was painful. I felt like it was enormously successful because they got what they wanted and we got what we wanted. They wanted elongated terms and they wanted more protected trade radius around their stores, meaning a little enlarged. It was one mile and they wanted it larger in different circumstances and so on. So those are their two big points in negotiation, longer term, better protection, trade radius around the store.

We wanted more authority as a franchisor, a modern franchisor, which we didn't have, and authority to require a single agency for advertising, authority to require buying off of a single contract for goods across the system, authority to require every few years a trade dress upgrade at the store level. So we got all these things in there, plus we got a modern rate, royalty rate, which had been quite outdated as well. So that was one thing. Simultaneously with that, we were leading them through a process to talk about where does this brand need to go. And the two fit together perfectly because the license agreement gave us the authority. In a way, it's a difference in authority of de jure versus de facto, de jure being the law, de facto being, you know, building credibility street cred with folks, you know, and so the authority we were building, we really in a way had both of those because the new license agreement was the de jure, the new license agreement was the law that we had. But a process that we were taking the whole system through meetings to talk about facilities and uniforms and menu inconsistencies and so on was the street cred piece. So that by the time we reached the finish point on the street cred piece, we had a new menu, we had new uniforms, we had a retrofit coming down the pike that they knew they had to do.

And these two were beautiful because we engaged them in a de facto process, but they knew the whole time that we had this new license agreement, and if we had to, we had the hammer. But we didn't want to use that, of course. So these were the two of the strongest things. But I would also say from a people standpoint, we had a marketing person in Patty Moore, and with the new dollars we got from the license renegotiation, we rebuilt several parts of our company, including our purchase and distribution. and we we bring in it brought in then a guy named drew ritker and and uh drew was fantastic on on negotiating with these new requirements we had under the license agreement that everybody buy from the national contracts patty started driving same store sales with some new promotional activities because we required under that new license agreement to do everybody had to be on

the same menu so and and and by the way this is the so license renegotiation strategic focus with the marketing and and more broadly and then a third element franchisee and i say this in the book 94 a franchisee came to me and said you got to help me out and he was a good operator and i said why what's the problem he said some of your i got a great program that's helping me he said things are healthy in Texas and Oklahoma, but they're not healthy in the Carolinas. And I got a great program that's keeping me alive. And your guys are telling me to shut it down. I said, well, tell me about the program. And so he proceeds to tell me about an ice cream program he's got. And I say to him, well, what does your top store do with this ice cream program? He said,

my top store does 30% of its sales in ice cream. I said, you must be kidding me. I said, well, tell me more. I said, don't change anything. I'm going to send our marketing folks out there, And you show them what we're doing, what you're doing. And so we did. And a year later, we rolled the thing out. We didn't shut them down. We rolled it out across the whole system. Now, so here what we have is new authority under the license agreement to require retrofits and this kind of stuff.

And by 96, we have sales exploding, but more so profit exploding because we've got this new Frozen and Fountain Favorites menu. and and so profits begin exploding 96 into 97 and we can require everybody to do the single promotions across the system and we've now brought on this retrofit and so once you get into i would became ceo in 95 in in um in 96 uh and 96 you start getting some benefit of drew victor's purchasing 97 the drinks and ice cream come into play average store profits from 96 to 97 jumped 40 for the operator i'm not talking about the company i'm talking about the average operator in what was then 12 or 1400 stores jumps 40 in one year these franchisees were suddenly just rolling in the dough so what does this feed it fed rapid rollout of a retrofit across the

entire system and what else did it feed rapid expansion of new stores and and um and and we negotiated under the license agreement an ascending royalty rate we said okay we got the old-time royalty rate but if we grow your sales we want a higher royalty rate and so we as a franchisor started getting disproportionately positive benefit from all this and so and so anthony we talk about this run up. When I left the system, it began to push $5 billion in sales. But when I became CEO, it was about $800 million. In 1997, we hit, for the first time ever, $1 billion in system-wide sales, all stores, franchise included, $1 billion in 1997. It had taken 44 years for the business to get $1 billion. Four years later, we doubled it to $2 billion. This is the consequence

of this kind of compounded same store sales new new stores etc the the business just exploded and we had 97 we had a billion oh one we had two billion and oh five we had three billion so it was on a tear you know and as a result so was the company and we split our stock from from 96 to 06 we split our stock a three or two stock split we split it six times in 10 years and it, it, it was, it was just on a tear. It was a great run. It was fun. Yeah. And obviously the success, the success that you had, uh, not only gave you a bunch of experience and skills, but, uh, this book that you wrote, uh, master of none. Um, I think the part to me that stuck out the most wasn't so much the individual stories or the experience or the

skills. It was the mindset and almost like the philosophical take you have on business. Um, and literally master of none, is kind of a counterintuitive type piece of advice where most people say, hey, you need to be an expert, right? You need to be an expert in the law to be the general counselor. You need to be an expert in finance to be the CFO, or you need to have an MBA and be an expert in business to run the actual business. You seem to have drastically benefited from actually being well-rounded and not having just one expertise, but kind of having a command of multiple disciplines. Talk a little bit about why that's been so important to you in your career and how that made you successful. Well, so the title of the book is Master of None. The subtitle

is How a Jack of All Trades Can Still Reach the Top. So in some ways in this book, the subtitle is equally important to the title, if not even more so. But that'd be an awfully long title to the book, How a Jack of All Trades Can Still Reach the Top. So it kind of turned it upside down. at any rate um so uh has it been important to me uh i'd say it has been all my life because i as growing up i was active in formally in music in many ways church music and and um and uh school programs music programs at school um but i was also active in sports and you know i i excelled in each. I was also a good student. Unfortunately, I was a good student often without trying hard, and I might have, really in all my endeavors, I might have benefited from

somebody pushing me harder, but usually when somebody pushed, I walked away, you know, so I was an avid reader, good student. You know, in my book, I talk about really one of my first leadership positions, which would not be customary, I think, when you think about an executive at a public company. My first leadership position was president of the Boys of Glee Club

when I was in junior high. I was in eighth grade. And that actually was the confidence that my teacher placed in me really kind of helped my self-concept evolve in a positive way fairly quickly. That was a very nice thing

at 13, 14 years old. But, you know, what was my next run of leadership? It really was student government in my high school setting, in no small ways, because the high school was undergoing a tremendous rapid change because of court order desegregation. and so that was a huge growing experience for me um so but I've always had a wide degree of wide uh degree of interest yeah joy not unlike a lot of people I enjoy food enjoy travel um but so I think coming into the business I probably discounted my ability or my capacity to move into a leadership position because I didn't see it as leadership I viewed it as business management. I didn't have business education. My undergraduate degree was in history. My graduate degree was in law. I did go into business law, granted, but it's the difference

between business law and business school. I had no MBA, but what I didn't appreciate was that I had um good education from a standpoint of critical thinking um uh in some ways history and law are good counterparts to each other because the history does let you go back and see you know where um events occurred and can be analyzed in such a ways to you know draw conclusions or see different paths that might have occurred you know historically had leaders on one thing or another um law is an analytical piece of of finding similarities or where people don't other people don't see them or finding distinctions where others think that the situations are identical and and uh the business law is a little bit different from

uh trial work but in many ways the critical thinking that's that forces you through going through legal education really makes that kind of separation and the critical critical thinking peace moved to a very different level. So I think these really aided me when I got into business, because as opposed to not wanting to look back, some people don't, as opposed to not want to look back and do a postmortem on something you screwed up. My reaction is, no, you must go back and look at what you screwed up to not repeat it. So it was a different approach, I think, to understanding the business and how you could manage it. So I think I was always a generalist. I enjoyed you know i played piano but but didn't take lessons i played guitar but i didn't take lessons

you know and um uh so this was this was just kind of me you know and so as i looked back over my career i did in business career i did rely on strong people i had good teams i delegated effectively um brought them resources uh worked hard to keep things aligned in terms of objectives and activities. I say that because what I'm saying is functional behavior in an organization, keep the team aligned, and then make sure the adequate resources are placed in order to drive the specific direction. And so as I look back at my career, late in my career, and then thinking about the stories and, you know, considering a book, I did come to see myself as a business leader. Okay, I had to be a good manager here and there and throughout. But the main thing I saw was

i was running a franchise organization uh small independent operators of our concept who were very independent minded and you had to find ways to sell them continuously on staying aligned you couldn't just order them you could but that's a that's a short-term gain so um i i think uh over time i can look back and uh see that um uh you know kind of with that that arc of history in my own life, enjoying a wide array of activities and not seeing that as an impediment to growing a company like Sonic. Instead, seeing it as a foundation for a good leader and seeing it as an empowering element of my own life rather than a limiting element that, that jack of all trades. Yeah. One of the things you talk about is kind of this like

narrow focus is unsafe and boring. And so I think that that's like a really interesting framework because the boring part is more a personal enjoyment, right? Of just who wants to be bored their whole life doing one thing. Right. But the, the unsafe part I think is counterintuitive to people. So describe a little bit why you think of it as unsafe to have a narrow focus more, rather than a more generalist or broad view of the business role? Well, I think a lot of this depends upon the area you want to go into in life, because if you do decide you want to be a brain surgeon, then I think you better get pretty specific about what you're studying and what you're doing every day. On the other hand, if you decide you want to go into even something

technical that let's just say in the technology world you better approach it with some flexibility because the pace of change there is so fast that if you are narrow with what you approach even in the technology field um you know if you're narrow on what you're approaching you can be irrelevant in two years you know so from my standpoint um you know my view kind of back up and get off the brain surgeon thing or you know uh at 12 years old i mean i thought i was going to be a cleanup batter for the yankees but by the time i was 15 i knew that wasn't going to be true you know so so what's my prep and so from my standpoint it was good get a good education about how the world works and um and and as i said also the critical thinking skills and um uh use these

skills to be open to opportunities that come along and ones that feel right for me, intuitively feel right, that I can embrace. But the, so in the book, yes, the discussion about being too narrow can do two things. One, the world can just bypass you. But the other thing is, to the extent you're too narrow, your head's down, the focus, not your head's not out, you're not keeping options open, opportunities can pass you by. And so my belief is with being that generalist and keeping your head up and being open to new opportunities, you've got to be able to see those opportunities to seize them. and I think it's the narrow person who thinks they can create their opportunities for themselves I think most opportunities we don't create what we do is prepare and then the old adage that

fortune favors the prepared you know and so if you are prepared it looks like you're lucky or whatever but if you're prepared and your head's up and your eyes are open you can seize opportunities they come along that you would never see otherwise And I think the more narrow you are, more narrowly prepared, more narrow in your work, more likely to have your head down, narrowly focused, you're going to miss opportunities. And there's also a better chance the world's just going to blow past you as your skills become irrelevant. So that's the gist of the book, I think, at least that portion of it. Yeah. And the part to me that seems so interesting is like this idea of exploration leads to breakthrough, right? If you just sit and do the same thing every day, it's very unlikely that you are going to have any major breakthrough, create any sort of significant inflection point.

But that exploration, that intellectual curiosity really kind of carries the day. Is that fair to say? I think that's fair to say. A lot of it is intellectual curiosity. You got to be a curious person about how the world works and what may be about to occur, why it's going to occur, and how you're going to handle that. You're going to embrace it. You're going to avoid it. Yeah. And so I think being curious and open, those two elements are two of the most critical elements of having a rich life, I think. And in your profession or personally, if you do the opposite, you know, closed and not curious, you're going to have far less interesting business career, but also less interesting life.

For sure. Is there anything that you've done or anything that you can suggest to people in terms of how to increase intellectual curiosity? For you and I, who I think are generally or naturally intellectually curious people, we can just say, hey, be intellectually curious, but there's some people who just that's not their inclination. Anything that you could think of that could help people become more curious or kind of at least get started down that path? Well, it depends upon who you are, who I am that you're talking about. If you're talking about within an organization, as an example, I often, very often, work to make sure that I was including a broad cross-section of our team in all kinds of activities so is to get a good functional behavior a good integration of effort and work as hard as possible not to have silos so this is if i take your question to be what can a person who's already leading an organization do to help the organization achieve what you're talking about you know i mean one of the things that i did is not so uncommon now but 20 years ago it was um we were designing

a new headquarters building and the building is not what has to be new it's the layout that is different but i'd been uh i've been by the time we were designing this i've been ceo of the company six or seven years we were in a high rise downtown main and main i had top floor corner office private bathroom marble floors you had to go through my secretary space to get to me um and what i found was the longer that went on the more horribly boring it was i mean the job of ceo is isolated you're isolated enough and it's lonely enough as it is if you make it physically isolated physically lonely it's even worse you know so uh we were designing new space i i had um picked up and visiting a couple other ceos and their their

businesses a different way to approach that and i kind of pulled together uh combined elements of I saw in these other places. So when we designed this new space, I designed it first of all so there's not a single corner office in the whole building. Every corner was a conference room. Secondly, went to modular furniture so it wasn't about who got to fight over what size desk or what size chair. Everybody in the whole place had the same chair. I had the same chair because everybody else and my floor was not in the corner wasn't even on the south floor I went to a middle floor and I sat in the middle of the building I had a desk out on an open floor using the same chair everybody else used if I needed privacy behind my open desk was a was a room that had a clear

glass on all four sides and so that if I needed quote privacy I stepped into my glass room and And all the employees that were going by could see, you know, business being conducted, et cetera. So my objective there was to blow up the silos and have the physicality of the office space work against building silos so that all employees could see each other every day. And it was an enormous contributor to just that. and so but you can find processes as an executive leader you can find processes to break down walls to include include people from other disciplines and key projects that you have so and so forth okay well that's the executive leader for the individual you know um uh you know i i think within an organization an individual can you know what you can do individually of course

is just explore things through reading or hobbies or otherwise to get into areas you're not naturally comfortable with. But within an organization, you know, volunteer for task forces, even proposed task forces that are cross-functional within the organization, make sure you get into those task forces, that you meet other people in the company, that you engage in tasks that are beyond your department, beyond your comfort level, to help you grow etc so it is a question of acting on your curiosity it's one thing to have your curiosity it's the other thing not to act on it because you don't act on it then you know okay well it's an academic point so uh but if you're if you are a naturally curious person and you're

in an organization that's run as silos and there's no way around it well you know you probably need to look for a new employer. But, um, uh, otherwise I think you, you work to try and break down the silos, work cross-functional manner. And this I think can be really stimulating for a curious person. Yeah. It's so fascinating to hear about, uh, that glass room that you had where you would kind of step in for privacy. Uh, when I worked at Facebook, uh, Mark Zuckerberg had one and we called it the fishbowl or the aquarium, right? Cause basically kind of, you feel a little bit You're inside of that. And it was fascinating because somebody who's the executive of a large company can go in there for a phone call, can go in and meet somebody that nobody knows.

Or literally at one point, the prime minister of India came and sat there, right? And everyone's walking by and you kind of see the business being conducted, as you mentioned. So it does have a very different effect than, oh, the CEO's office is up on the top floor, right? It's almost like the physical proximity can have an impact. When you think today for a young leader who aspires to kind of have the successful career that you've had, what is the advice? If you were mentoring them, what are the things outside of what we've talked about already that you kind of just, hey, keep this in the back of your head, or these are the things that I wish I knew when I first got started that you would share with those young leaders? Well, depending on the organization,

depending on what you're wanting to pursue but you're describing it as an organizational leader so by definition it it this sounds like feels like um um the circumstance in which the you know the generalist can can benefit um rather than the narrow the narrow specialist so i think the you know at a really younger age the issue is get a good education and and um particularly in areas and on paths that do demand, you know, critical thinking skills and analytical skills. Beyond that, you know, life is not target practice, you know. Life's a journey, you know. So, don't try to aim at something that you think is going to enhance your path uh listen to your instincts know about so in other words your intuition you know what

what sounds right to you what feels right to you and go on a path where things click for you you know instead of trying to pursue something that you think um uh from an external standpoint you know on a resume or whatever something that looks good you know pursue something that that feels right to you from your own intuition and and your your own talent and skill sets and and then beyond that remain open to opportunity that comes along keep your head up eyes open remain open to opportunity um yeah uh one fellow that um uh i've talked to about my book he endorsed the book, and I had him in my own podcast, Bill Fromm out of Kansas City that has formed several companies in Kansas City that are headquartered in Kansas City, including those

international scope. Bill makes the point, you know, just say yes, you know, which is the title of one of my chapters. Just say yes, because his comment is, you know, when you say no, the door is closed you know and whereas if you say yes um uh and you know if you learn a month or two later six months later that you just really can't pursue this path you can always go back to somebody and say listen i gotta shoot straight with you i thought we could do this but i don't think we can do this you know i thought i could cut this but i think we need this additional talent whatever but the point is um learn how to say yes to opportunity and and figure out how to do it Because if you say yes, you're going to get full engagement.

If you say no, you just close the door. So these are thoughts along the way to a person younger in their career. The other things that you would say are a little bit more obvious, and they're almost jingoistic, but they're true. And that is, you know, work hard and do the job right, you know, and make sure the job gets done well. But those are somewhat generic, but they're accurate because if a person thinks that I got my college degree and now somebody owes me something, they're going to be a little surprised and a little disappointed with that mindset. One of my favorite business stories ever is the gentleman who ended up coming up with hot Cheetos. He was a janitor at the at the business before he he came up with that idea. And he tells the story that he was working somewhere else and he gets the job as the janitor. And on his first day as he's going to work, his grandfather says to him, you make sure that everyone in that building knows a Munez, you know, mop the floor.

right? Just to basically do your job, have pride in the work that you do. And that's the advice he's getting literally to go mop the floors. And one day later he ends up building, you know, what ends up being a couple hundred million dollar product line for Frito-Lay. And I think that there's a lot of people who say, oh, that's luck or, you know, that's this or that. And it's no, it's the same things that you took to work with you around hard work and pride in your work and things right uh as a janitor he's now applying to you know something that people think is much more aspirational right but it's the same exact qualities yes and he he was also a guy who was in within an organization where you know he won he would keep his eyes open because the ceo

i talk about that example in my own book because the ceo invited that kind of input he developed it at home you know um based on kind of some street food experiences that it had and then called the CEO who took his call. You know, some organizations that wouldn't occur. Well, it's like your ice cream story, right? Yes, yes, yes, exactly. The people that were trying to shut down our franchisee on his ice cream were two of the most senior people

in our company. And they told him the reason he wasn't going to do it was just to say it. They told him that's too much like Dairy Queen. And we don't want to do it. And yet today, I've been going from Sonic for two years. But my hunch is that at this point, Sonic has to be doing $600 or $700 million worth of ice cream. And at that time as a system, we probably did $25 million, you know.

But it wasn't just the increase in sales. My then CFO liked to say anything. He said, I love any promotion where it's something mixed with air or water, you know. Because, because the product margins were just extraordinary. And that's, that's how, with our frozen fountain favorites that we rolled out in 96, spring of 96, 96 to 97, average store profits jumped 40%. Unbelievable, you know, changed everything. But we did, you know, back to your original question, we built on that, built on that, built on that. Everything that occurred, we used it to leverage something else. And the business just flat took off. Just a fascinating, just different way to look at the business over and over and over again. Yeah, it's amazing. I wrap up each conversation with three questions. The first one is a little bit more serious, which is just what is the most important book that you've ever read outside of obviously the one that you wrote? most one of the most i could say maybe one of the most important books i've read outside of the one i wrote um uh and just a book that sticks out in your mind as having

had an impact on you well i remember as a kid reading a book that kind of showed that even a kid could branch out and do interesting and curious things and didn't need to be limited by age or circumstance um but i played baseball as a kid i enjoyed baseball a lot as a kid i read a book dave palmer's diamond mystery okay um a book about a young ball player part ball player part sleuth and um and uh it was um it was a fascinating book that that uh i mean it was appropriate for my age but it really kind of one it got me into enjoying reading all that much more and two um uh kind of set me on a path that uh you know you you can really be kind of quite aspirational but in my adult life i've mostly read biographies

um and you know in some ways going back into my 20s um a series by stephen ambrose on on uh dwight eisenhower uh was one of the more fascinating and delightful sets of books I'd ever read. I think it was either a two or three book series. But Ambrose was a great author. And I have read quite a few pieces by him. But in some ways, I'd say the Eisenhower biography was one of the most enjoyable. And just watching his life growing up on the plains and eventually becoming president of the United States. It's absolutely incredible. The second question is a little bit more fun, sleep. So in 2020, I made a massive focus on,

hey, I probably should sleep more. I was one of these people who was flying around, took 120 flights, literally, I think, was sleeping kind of four or five hours a night. And I met the founder of Eight Sleep. And Mateo was like, hey, man, you probably should sleep a little bit more. What is kind of your sleep routine as the CEO of Sonic?

And then since you've left, is it something where you slept eight hours every night? It just kind of got what you needed? How did you sleep? I don't think I've ever slept eight hours a night regularly. And I don't get more than eight hours of sleep, but just a few times a year and certainly not continuously. I'd say, you know, so one thing I'd say is when I was just going into my teen years, 11, 12, 13 years old, I started delivering newspapers. And this meant getting up 3 a.m. every morning and delivering newspapers, come back, go back to bed at 5 a.m. The number of nights now still where I wake up at 3 a.m., work for a couple hours and go back to bed at 5 a.m. is more often than I'd care to admit to.

But this is a little bit of a pattern. i'd say in my years as being co that um the most common deal was five to six hours a night uh sleep maybe catching up a little bit on the weekend but five to six hours a night and um i i try to get more than that now and i and i enjoy i enjoy getting i enjoy not having to rush off to work first thing but um uh whereas these days working from home anyway but um uh and unfortunately i still wake up at 3 a.m i work for a couple hours but i also now go back to sleep often for another three hours or so so not uncommon for me to get seven hours sleep now but it's um often often proven it's improving i know the sleep experts would say look you need

continuous sleep but you know i can't do a whole lot about it i wake up 3 a.m and i'm wide awake You know, I don't fight it. I don't fight it anymore. You know, I just get up and read or work on some projects and until I get sleepy and I go back to bed and usually it's 90 minutes or two hours of work. Um, and I get a lot of work done in that two hours. Nobody around to bother you. Yeah. No phones ringing, no nothing. Absolutely. I love it. Uh, the last question is a little quirky one uh aliens are you a believer or a non-believer well uh it uh it's my first thought to try to come up with some quip there but uh as quickly as i do i'll um i'll regret it so um i i do think the um you know the universe is a fascinating thing and um um it's hard for us

imagine you know what all uh really is out there you know because we are limited to our own reality to the greatest degree and so we try to reinvent things you know even to the extent we think about them being there we reinvent them in our own likeness you know so uh on the one hand after saying uh it's a big universe and the likelihood that this this globe is the only one with life on it uh seems um there's no reason to be believe that has to be the case you know um and on the other hand uh the more uh practical usage of aliens that we see in movies and you know other fearful sort of things um i don't i have a hard time going there you know but um uh there are interesting things we all see and read periodically about things that appear in the heavens that

lack could lack any explanation um so so who knows i don't know uh i'm not into uh the alien i'm not into thinking about that or pursuing it but nor do i totally discount yeah i think that is the most rational way to view it is a big world probably life somewhere but, uh, I doubt that they are the little green men that, uh, showed up in, uh, in some movies. So I think, uh, I think you're more on it than, uh, than you realize. I just hope they're, I hope they're, if they come around, they're jacks of all trades, you know? I love it. Cliff, listen, thank you so much for your time. I I've, I've read through the book, uh, master of none, uh, how a jack of all trade can still reach the top. And, uh, it is absolutely

fantastic. And as I started off the conversation, uh, it's just very obvious that you've done the work and, uh, and, you know, frankly, just thank you for taking the time to write it all down and share the knowledge with folks. Cause I think, uh, you know, folks like yourself who, uh, who have literally decades of experience building companies successfully, uh, there's just so much information that you have that you can share with others. So, uh, highly recommend everyone go get it. And, uh, just thank you so much for, uh, for taking the time to write the book and then have this conversation as well. Yeah. Well, and I appreciate being on your program today and, and I'm happy to be with you and happy to talk about one of the things I like to talk about

that is my business my career my book you know so okay all right take care