Jeff Harvey’s formula for innovation goes something like this: Enthusiasm plus ownership equals creativity and a willingness to take on challenges. Since he’s been at the helm of Burgerville, the 39-unit chain based in Vancouver, Washington, he’s proven the formula time and again, most notably with a seasonal, gourmet LTO program that hit its stride this year and saw the company improve its new product introduction time from 12 months to 6 weeks—and helped keep sales from declining in the down economy.
“We entered this model when I came in here, and it literally started with a conversation... We said we really need to be creating self-directed, self-managed teams. So that means we give a lot of autonomy and freedom to each management team in each restaurant.
“When you create that kind of environment with the people on the front lines you’re going to get creative ideas back out.”
The results of the innovative environment Harvey has fostered are impressive. Some of the initiatives over the past five years include: 100 percent wind power for all it’s locations; health insurance for all employees, including part-timers; a company-wide composting and recycling program; beer and wine service; Nomad, the Burgerville food truck (pictured on the cover); calorie counts on receipts (see page 18); drive-thru lanes opened to bicyclists; new compostable cups and lids; a partnership with biodiesel producers to reuse spent cooking oil; the Community Champions program to recognize people making a difference and to support local charities; and the LTOs—which have included things like Balsamic Strawberry Goat Cheese Panino and Ale Battered Albacore with Summer Slaw—made with locally sourced, seasonal ingredients.
The majority of those initiatives didn’t originate with Harvey or the executive team, but bubbled up from employees at all levels, including front line crews at the restaurants. Harvey’s role, as he puts it, is to encourage and support, and, well, other things he hasn’t figured out yet. “I’m learning my role every step of the way,” he says.
“I wasn’t trained in this business.”
In fact, when Harvey was offered the COO job at Burgerville five years ago—he was promoted to CEO in 2008—he turned it down. Of Tom Mears, Burgerville’s chairman and Harvey’s friend of 20 years and the man who offered the job, Harvey says, “I thought he was crazy.”
In Harvey’s defense, it wasn’t an obvious fit. He spent his career up to that point as an electrical engineer.
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Harvey and Mears met during a series of management and leadership courses. The training revealed a lot about the participants, Mears says, and his and Harvey’s continued friendship taught him about Harvey’s ideals—mainly his deep caring for people and interest in contributing to the community.
“I knew he was a really creative guy,” Mears adds.
“I had an opening in the company and didn’t have anybody internally who could step in to fill it,” he continues. “I was showering one morning and thought, I wonder about Jeff.”
It’s a decision that has paid off in more than an innovative culture. Annual sales at Burgerville, according to Technomic, rose from $55 million in 2005 to $68.8 million in 2008.
Sales maintained that peak through 2009, the worst of the recession. And this is at a premium-priced concept.
Harvey says he changed his mind as Mears discussed the positive impact the job could allow and the meaning it could bring to his life and other people’s lives. Heady stuff for a fast food chain. “Life, no matter how you cut it, has gotten pretty complex,” Harvey says. “There are a lot of challenges that are bigger than any individual. People are consciously looking for hope: ‘Where do I see potential, a ray of hope, a difference getting made.’”
Harvey says he saw in Burgerville what its customers see, a place that’s making a difference. It’s been Harvey’s ability to inspire his team to innovate and his dedication to simply doing the right thing by its customers and employees that makes him Restaurant Business’s 2010 Entrepreneur of the Year.
And now, a closer look at some of the important steps Harvey took along the way to foster creativity and that all-important “meaning” at Burgerville.
First, decentralize
The first thing Harvey did of note after joining Burgerville was to get rid of its regional manager system.
“When I came into the organization, we had more of a command-and-control model,” says Harvey. “Regional managers were accountable for management of four or five restaurants. They had relationships with the GMs of those restaurants. But they were telling [the GMs] what to do. ‘I’m looking at your numbers, you’re off here, this is what you need to do.’ … [The GMs] felt micromanaged, harried, challenged to meet every expectation. When I started to look at, how are we going to get the best out of those teams, their best ideas, their best engagement with guests, how’s that going to happen in that kind of top-down environment? It just didn’t match up.”
So the regional management system was out. The company then ramped up training for GMs on how to run a business, how to create and manage a team and how to be creative in the face of big challenges. Finally, they were taught about the company’s mission statement, Serve with Love—a statement that could feel saccharine somewhere else, but feels sincere coming from Harvey—that basically encompasses the chain’s priority on doing the right thing.
“That’s when creative ideas came forward,” Harvey says. “Our recycling and composting program was completely generated by people in a restaurant. The only thing I did was say yes.”
Second, stand for the greatness of people
The regional manager system wasn’t the only vestige of top-down control Harvey wanted to clear out of the chain. The semi-regular GM meetings didn’t, shall we say, serve with love. They were lectures where headquarters would give out marching orders. They were one-way conversations. In Harvey’s eyes they didn’t just stifle creativity, they undercut the confidence of GMs. He revamped them.
Now the GM meetings are two days long. The first half of the first day is spent giving the status of Burgerville’s business and there’s discussion of market trends. “Then,” says Harvey, “it’s, ‘Okay, given what you’re hearing, where do you see the opportunities—the opportunities for your restaurant, for you, for the company?’ We spend a day and a half brainstorming. By the end, everybody is leaving with a clear idea of what to work on.”
A new breakfast burrito that launched in November came from a soft-spoken GM at one of these meetings.
“I’d always challenge him to speak up,” says Harvey. “As he gained confidence, he raised his hand at the GM meeting and said, ‘Jeff I think we need a stronger breakfast and I think we need a breakfast burrito.’ I said write up your ideas. I half thought he wasn’t going to do it. A week later he called me up.”
It’s a key part of Harvey’s job, as he describes it. It was one thing to strip away the old command-and-control structure, but then he needed to convince people they could do great things.
“It’s saying, ‘You’ve got it, you’ve always had it, it’s you, it’s always been you.’ Keep putting that in front of them. Everybody gets challenged in their confidence. Everybody runs into that obstacle, that breakdown that almost wants to break you. You know, ‘You’re not the one, it’s not your time, go away now.’ I won’t do that. I won’t tell somebody, ‘It’s not your time now.’
Third, embrace breakdowns
When Harvey suggested that they speed up new product launches from 12 months to six weeks so they could introduce seasonal LTOs every month, he knew it would be challenging.
“Hopefully, out there it looked pretty simple,” he says. “Internally, it threw this company through major change. There’s been change with every initiative, but not this pervasive. It really did affect every operational structure, how we manage labor, supply chain, menus, pricing, training, not a thing it didn’t touch.”
And sure enough, people’s confidence was challenged.
“People would say, ‘We can’t do it.’ And I’d say, ‘Got it. But what if we’re committed to it.’ Or, ‘Who are you dialoguing with. Let’s get people together to talk about it.’”
As Harvey likes to say, breakdowns are the path to breakthroughs. “If you’re not causing breakdowns,” he says, “then you’re never going to innovate.” Here’s what some of the major breakdowns and breakthroughs looked like on the way from 12 months of R&D to six weeks:
“[The LTOs] have created a skill set and capability in the restaurants that was far more powerful than anything we had before,” says Harvey. “Our employees are not just assembling sandwiches now, they’re actually creating food, creating gourmet profiles you can pick up in our drive-thru. There’s a lot of pride in that, a lot of ownership in that.”
For 2010 the LTO team started bringing in local chefs, giving them the featured ingredient and allowing them to come up with a dish. They are featured in promotional materials, connecting the program more with the broader community.
Fourth, listen, always listen
Harvey says when he’s talking to employees he tries to “listen creatively.” He tries to hear what animates them, what gets them excited. He then directs that passion toward the mission of the chain. When employees feel they’re heard, they are more inclined to speak up with ideas. And when they learn to listen too, they come up with more ideas.
Four years ago, a marketing department employee tapped into the idea of story telling.
“She realized that story telling was a more powerful marketing tool at the restaurant level than most anything else we were doing,” Harvey says. She put a training program together, including videos she produced. It focused on telling customers about the local and sustainable ingredients Burgerville was using and the farmers who raised them.
The listening extends, naturally, to the customers too. As part of the decentralized nature of the chain, individual units take it upon themselves to hold local focus groups, which is what led to the introduction of beer and wine at one unit.
“People say we’re uncommon from our peers,” Harvey says. “I think the uncommonness comes from the relationship we strive to build with the guests. That’s not just happenstance. That comes from, one, the mission and, two, from developing our people with things like LTOs and renewable energy … we develop the tools so they have rich ground to pull from. You can never tell when someone comes in on what basis you’re going to build that relationship. Is it going to be based on the order they place, their beliefs, their family, their business? The more tools you’ve given your people to engage with, the more powerful and productive they’re going to be in developing that relationship.”
Next…
Harvey will figure it out as he goes along…
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