12 regrettable misses worth savoring

If you sat out this year’s Global Best Practices Conference, a two-day immersion in the dynamics of leading a restaurant chain’s workforce, here are 12 reasons you might feel regretful. It literally rocked the industry (by a factor of 2.4 on the Richter Scale, to be precise.)

1. Denny’s CEO John Miller revealed the character-building benefits of working for women. “I had two female bosses along the way,” the industry veteran said in looking back over his long career as he accepted the Legacy Award, an honor bestowed by conference host TDn2K on luminaries of chain leadership (previous recipients include Darden Restaurants chairman Joe Lee and Brinker International CEO Doug Brooks.) “I think that helped shape me. If you’ve not had that experience, seek out a mentor.” Miller’s current boss is former Brinker CFO and current Denny’s chairman Debra Smithart-Ogelsby.

2. Former BJ’s Restaurant CEO Jerry Dietchle revealed his behind-the-scenes involvement with several restaurant growth chains. Dietchle, who still serves BJ’s as board chairman, is working through a private-equity firm to assist in the development of the Snooze breakfast chain, the Cooper’s Hawk polished-casual brand, and two barbecue operations, Dinosaur and Jim ‘N Nick’s.

3. Doug Brooks recounted how he came close to losing the CEO’s job at Brinker. “I almost was fired by the board in 2009,” he said during a panel presentation that also included Dietchle, former Applebee’s CEO Lloyd Hill, and former Applebee’s HR chief Lou Kaucic. Brooks explained that Brinker’s evolution into a big restaurant-chain holding corporation had outstripped its development of leadership and ability to keep read changes in consumer preferences. Eventually he awoke to the lapse, but “we had waited too long. I almost lost my job.” But, he added, “it changed quickly enough that I could retire in good conscience and know that if [late Brinker founder and mentor] Norman [Brinker] was looking down, he’d be satisfied.”

4. Lou Kaucic convulsed the crowd with his account of inadvertently broadcasting Carin Stutz’s compensation package. Stutz, currently the CEO of McAlister’s Deli, had been hired by Applebee’s, where Kaucic led the HR department, right after the franchisor had installed a sophisticated new email system in headquarters. Kaucic had drafted a message for his higher-ups that spelled out the particulars of Stutz pay and benefits. But he pressed the wrong Send button, dispatching it to all of the chain’s New England general managers. “When I’d see them afterward, I’d say to them, ‘If you continue to do well, someday you’ll earn a package like Carin’s’,” Kaucic recounted.

5. Brooks shared a big aha from serving on the boards of companies outside the business. Brooks worked his way to the CEO’s job at Brinker from a position in the first Chili’s some 40-odd years ago; it’s the only business he’s known professionally. After retiring, he was asked to venture outside the field to serve on the boards of an airline company and an auto-parts manufacturer. “Being this dumb guy from the restaurant industry, I wondered if I could bring anything to the game on these other boards,” Brooks said. “You get in there, into a board meeting, and you learn it’s exactly the same as it was for us. Leadership is the same in all companies.” He called the discovery “the coolest thingthat happened to me after retiring.”

6. TDn2K’S Victor Fernandez put the industry’s financial performance in perspective. “We ended [2014] on a very, very high note. The [sales] growth rate for December was the highest we’ve seen in three years,” and comps improved by the highest jump in the six years TDn2K has tracked them, Fernandez said. But he added, “we’re still coming out of the hole we were in” from the Great Recession. “We’ve still lost two points in comp sales, and in traffic we’re still down about 11 percent,” he said.

7. The importance of off-premise sales to a chain’s sales growth was put in sharp perspective. Fernandez noted that the chains in TDn2K research universe have enjoyed a median increase in to-go sales of 3 percent. “But if you look at those who are outperforming their segment, they’re growing at 6 percent or more,” he said.

8. Pundits agreed that the benefit to restaurants of plummeting gasoline prices is difficult to calibrate, and likely deferred. Economist Joel Naroff explained that the savings at the pump will give consumers an additional $100 billion to $200 billion in disposable income. TDn2K hasn’t seen any positive effect yet dining-out occasions, Fernandez said, but he speculated that consumers may be willing to spend more when they do visit a restaurant.

9. Proof was offered that young people aren’t looking for work. Fernandez noted that the number of people aged 16 to 24 who hold a job has dropped by 12 percent since the year 2000. As he noted, that group has been a traditional source of labor for the industry, and the decline suggests the business may have to profoundly rethink its recruitment efforts.

10. Panera Bread Co. shared a controversial plank of its stated policy on new hires. The guidelines expressly read, “No jerks.”

11. Village Tavern CEO Tony Santarelli revealed how his chain has eased the burden of order customization and menu changes. “With our cooks, we teach them the techniques before we teach them the recipes,” he explained. If the people on the line know the fundamentals of sautéing, for instance, they can easily infer how to accommodate a guest’s special cooking request, Santarelli said. Ditto, he added, for a menu reformulation. The specifics change, not the basics.

12. Mother Nature provided a vivid taste of what it’s like to be in an earthquake. One struck in the middle of a general session, eliciting a fire hose blast of jokes about earth-shaking content.


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