When one of Church’s Chicken’s competitors introduces a new discount or coupon, the company’s c-suite is alerted, and an on–the-fly meeting is called. The CFO decides the pricing of a counteroffer, the CMO’s team comes up with the language and the SVP of supply decides how to meet the operational demands of the offer. The company’s new chief information officer updates POS terminals systemwide, and a coupon is pushed out on Church’s mobile app within 72 hours.
“That used to take four to six weeks to push out coupons,” says CFO Dusty Profumo. “[Our c-suite] can’t wait for a once-a-month meeting like we used to. Now we call a meeting and find people wherever they are. We set up a call or webinar or whatever we need to do to get things done.”
That’s the reality of the modern restaurant company c-suite. No longer do untouchable chiefs sit atop their fiefdoms, gauging their success by the size of their latest capital budget or how often they lunch with the CEO. Forget the old titles, forget the old ideas of what constitutes valuable experience and don’t even think about making c-level decisions based on instincts. Decisions are made fast, and they’re based on what the data says—not your gut.
“It is an accelerating and changing landscape,” says Focus Brands CEO Steve DeSutter. “You need nimbleness in your c-suite. You need athletes. They need to be experienced but also able to flex in new directions; good raw intelligence and collaborative in their nature. It’s the team more than the individuals.”
Company by company, restaurant brands are reinventing their org charts to match their needs and goals and to keep pace with a market that’s changing evermore rapidly. But amid this have-it-your-way approach, new trends are rising to the surface.
No more silos
“You can’t just be a specialist in the c-suite anymore,” says Joan Ray, an executive recruiter for the restaurant industry for more than 20 years with The Elliot Group. “A c-suite leader has to be a great general business person to survive. You can’t have somebody leading a function who doesn’t have a bigger strategic understanding of their role, how it affects the customer, how it impacts the P&L.”
Profumo concurs and says it’s one of the biggest changes in Church’s executive suite in the 10 years he’s been there. “Each of the c-suite personnel needs to know more about the others’ functions than we used to,” Profumo says. “I used to worry about finance, marketing used to worry about marketing. Now I worry about finance, marketing, supply. I know more about what goes on in HR, development and construction than I ever did 10 years ago.”
That is important for a chain the size of Church’s (1,200 U.S. units, 500 abroad) but it is even more important for small growth chains such as Blaze Pizza, a player in the urgeoning fast-casual pizza segment.
Blaze Pizza currently has 70 units and is adding an additional unit every five days. Its c-suite comprises President and COO Jim Mizes, a chief development officer and a CFO. Mizes says with such a small c-suite to handle such fast growth, it’s critical that information is quickly and easily shared among decision-makers.
“The traditional, siloed [c-suite] structure isn’t going to work for a fast-growing chain,” he says. “Our c-suite has to be integrative and collaborative.” The entire executive team reviews new site selections, for instance, and everyone has a veto vote.
“You have to start with aligning everyone around the company vision and the objectives for the year,” Mizes says. “You have to make sure everyone understands their part in fulfilling those [goals]. That’s critical.”
Weekly department accomplishments are circulated to the full c-suite, keeping everyone accountable to everyone else.
Rise of the CIO
Technology is the driver behind the quickened pace of change in the industry, and it is pushing just as much change in the c-suite.
The chief marketing officer, for instance, is making way for the chief brand officer, as technology has created more targeted opportunities to interact with guests through social media. Traditional ad buying—the kingdom of the CMO—has petered out.
“In the old days, the CMO function for a large QSR was managing ad budgets and managing in-store [media],” says Geoff Hill, principal at Roark Capital Group. “Now you have to think about developing a brand through social media, through digital, through all the ways a customer can touch the brand.”
Likewise, the head of IT, who kept computers running and had a capital budget to upgrade server capacity, no longer is the top-ranking tech employee in most restaurant companies. One of the best examples of the nonsiloed c-suite member, in fact, is the chief information officer, who is involved in nearly every aspect of a restaurant’s marketing, development and operations.
“At the end of the day, I measure our CIO based on how well he was able to affect and enable the business; he’s a business enabler,” says Focus Brands DeSutter. “He touches the back office to the POS and gives insights to our franchisees and company store operators. It’s a continuum of work all the way to the consumer.”
But the CIO’s growing measure of importance is how well he or she enables c-suite decision-making through big data. Church’s Profumo says the company realized the need to think about technology as a more strategic function—rather than a maintenance function—when it created its CIO position over two years ago. Flooded with data, Church’s CIO Marcus Wasdin’s priority is helping his fellow c-suite members determine what information should be used to make decisions.
“We have data on every individual transaction,” says Wasdin. “That level of detail can be important, but the aggregation of the data is most important.” And Church’s has used this type of big data to identify purchasing trends and upsell opportunities. “That is an evolving element.”
Wasdin is working on integrating data streams from varied sources—for instance, individual unit sales meshed with data from social media meshed with customer-satisfaction data. “If there is something happening with a restaurant, is it because of the facility, the location, the broader economy, the weather? There are a lot of data streams that can help paint a picture.”
“Accountability is huge in the c-suite today,” says The Elliot Group’s Ray. “Leaders aren’t doing things based on intuition. Today it’s all about the data. You make a decision, there better be more than a passing chance it’s going to succeed.”
Restaurant experience not required
“I didn’t set out to create a senior team that wasn’t from the industry,” says DeSutter. But, he says, “there are benefits of looking outside into retail or service for fresh perspectives.”
A big part of that benefit goes back to technology, as Ray explains. “Restaurant and retail are both consumer-facing businesses, with a multiunit distributed workforce. They have shared experience. But by virtue of better-developed e-commerce, retail has done more with technology, especially around predicting consumer behavior.”
DeSutter himself came from c-stores. His CFO comes from the hotel industry. His HR officer is from JCPenney. His general council hails from Advance Auto Parts and his CIO’s retail experience includes work at Louis Vuitton and Williams-Sonoma (see “A broad sphere of influence” on Page 48).
But DeSutter says you have to be careful. “You want a mix of strengths in your team,” he says. “There are principles of success in the industry, and you need some been-there-done-that to understand them.” Industry veteran and former Cinnabon President Kat Cole, for example, recently stepped into the role of group president of Focus Brands, where she’s expanding alternate sales channels through licensing and e-commerce. “You want a blend, but not at the expense of giving up the legacy information that comes with experience,” says DeSutter.
While she has seen much more interest in looking at retail to fill open c-suite positions, Ray says that not all of those being interviewed are moving in. “We are seeing more and more receptivity and interest, but not as many hires as interviews,” she says. A big reason: “We tell restaurant folks all the time, retail pays higher.”