Bringing Out the Best in People at Cosi, Au Bon Pain, and Applebee’s

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In this interview with RJ Dourney, we learn about bringing out the best in the restaurant industry and entrepreneurship more broadly as part of Leadx3 m's Creactive Leadership Series

RJ Dourney, Founding Partner of The Fortis Advisors, investor, and independent director of several boards, emphasizes the importance of staying creative, at the forefront, and having comprehensive leadership by mentoring and developing the organization's employees to achieve an integral culture. RJ is strategically involved in creating great enterprises, building leaders, and guiding organizations to achieve greatness. He is the former CEO of Integrity Community Partners, The Upper Crust Pizzeria, and Cosi. Previously he served as COO of Au Bon Pain, VP of Applebee's, and the Board of Massachusetts Restaurant Association and Frisch's Restaurants

 RJ, best known for his successful career in developing multiple restaurant concepts internationally in the US, Europe, Central America, and Asia, is increasingly dedicating his time to the Catholic Church and studying to become a permanent deacon. He serves the Church at the diocesan and parish levels in Springfield and Chester, Vermont, and is on the Hope Expansion Council for the Brotherhood of Hope. He also works with several nonprofit organizations, including EforAll, a business mentoring organization that helps inner-city entrepreneurs, and the Catholic Universities Mentoring Outreach Program.

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Henrik Totterman (Henrik): Warmly welcome, RJ. It's great to have you in this interview. I have a set of questions around a concept I've been developing for several years. I call it playfully Creactive Leadership, And the word creactive is a play between the word action and creativity. I argue that leadership needs creativity, but it's nothing if it doesn't have real action and outcomes associated with it, and that's the term's origin. Over the past months, I've been interviewing senior executives like yourself, asking a set of standard questions. The idea is that substance and differentiation come from your life experience and the content and insights you want to discuss. My first question is: How would you define your leadership style? 

RJ Dourney (RJ): I am a combination of a coach and a strategist beyond anything else. I believe that if I do my job well, I bring out the best in people by leading them to a point where they become better than they thought they could be. At the same time, as any captain of a ship should be, you're looking at the horizon. You're thinking about where we could go, what we can be, how big it will be, and what challenges we are facing—withdrawing those answers from the people around me and helping them realize the honest answer.

Henrik: Thanks and my next question is: Why do you think we see an increasing need for a creactive leadership style? 

RJ: The accelerated rate of improvement in companies is incredible. I've been in business for over 40 years now, and what we thought was moving at lightning speed 40 years ago, 30 years ago, is a snail's pace today. If you want to stay ahead, you have to be creative if we look at just a few of the situations on our doorstep today: between employment challenges, staffing challenges, and organizations attracting talent and developing that talent. How do you pivot during an event like Covid when it's unprecedented? There's an opportunity to leverage this and, quite frankly, make much money and be successful so that creativity can be the linchpin. 

Henrik: Well, thank you. I have four sections that I would like to cover. The first one relates to innovation and strategy. My first question is: How do you maintain a positive outlook direction and keep a winning concept current in a primarily disrupted world?

RJ: It's so important that we remain focused on the simple fact that people are attracted to us, drawn to a concept because they like it; there's something about it. There's something in the DNA of a restaurant company or any brand that attracts people, and they see that the consumer sets an expectation of your brand. When your team sees this fantastic contribution that they can give to keep you first and foremost in customers' minds, that excites them, they're a part of something unique. I've long said that organizations should have a deep-seated commitment to being the best in the industry. Whatever they do - and my primary focus typically is on the restaurant business - so be the best restaurant company out there. The service you provide, the food quality, the innovation around culinary that you do, how the consumer engages with you, technology, or just within four-wall dining. When you create energy in that dynamic environment, both the consumer and your people will enjoy it. That really kind of sums it up, and in turn, will keep you pretty excited despite everything. 

Henrik: And what about you as an individual, as a leader, how do you keep a positive outlook? What are your secret methods? 

RJ: I'm deeply spiritual, I'm a devout Christian, and I believe that God has excellent intense force with all my heart. There's a passage in Jeremiah where the word God is quoted as saying, "I know the plans I have for you," to paraphrase plans of success. God wants great things for us, he doesn't want us to be unhappy, and I believe it. That would be the first thing that I would share with you. The second is that I'm blessed with a wonderful wife, a great family, and incredible friends. Whenever I find myself being challenged beyond my capacity, I revert to that; I am reminded of how blessed I am to have these beautiful people who keep me centered. Other things, one that you and I talked about offline a little bit earlier: you have to recharge the batteries. I love to exercise, I'm in Vermont, and I snowshoe a lot, downhill skiing cross-country skiing. I have to get the heart rate going, and I think that clears out our heads. Spending time with creative people like yourself is critical to getting out there. I will be speaking at a retreat in Minnesota next month and listening to other speakers, but constantly opening myself up to ask questions. And it will remind me what great ideas are out there and how many positive things are happening. 

Henrik: Excellent. My next question relates to business intelligence. And of course, it's been hyped a lot in the past years, and it seems like we will need more and more data and intelligence to understand business situations moving forward. My question is: Any advice, especially on data collection and analysis, when we think about small companies just starting to wake up to collecting some of this data and generating intelligence for them? 

RJ: The gathering of data, particularly the data that we have out there, has multiplied exponentially, just even over the last ten years. You can ask any litany of questions about your business, your consumer, their trends, what the competitive set is doing, what's hot, and what's not. However, don't get paralyzed by overanalyzing this information because it literally can. Identify specific targets that are important to you, zero in on those, and leverage that information. I'll give you an example when you see trends in your business, particularly positive trends, you can drive yourself crazy trying to understand what's at the root cause of those. But look for a few of the primary drivers. Look for the big things, and once you start getting some momentum, you start realizing the root causes. 

For years, I have believed in learning from what works. If you have a portfolio of 20 or 100 locations, there are outliers on the high side and the low side of those top 20 locations across those one hundred locations. Why are they doing so well? You start pushing your analytics team to identify those critical variables, which often bear incredible fruit alone. Still, you'll just come to a screeching halt if you overanalyze. The amount of information we can glean about our consumers and their trends and preferences is impressive. I love that. I love knowing all those things. What do you like? What would an example be if you were not in one of my restaurants? Where are you? What do you do? My consumer has behaviors, and we know that. So, learning as much as I can about that, I think that's a great use of analysis. But again, be careful. Don't drive yourself crazy. 

Henrik: Thanks for an in-depth answer. My next question it's a little bit of a follow-up and relates to key performance indicators (KPIs): With creactive leadership and overall performance in mind, what kind of key performance indicators would you favor? What are the things that you like to measure?

RJ: First of all, KPIs should be both quantitative and qualitative. I almost don't care what position you are in within an organization. Whether you're in the C-suite or part of a department like human resources, marketing, whatever it is, there are aspects of the role which should be quantified. Did I contribute there? I believe that great KPIs should always zero in on the company's mission and culture. Culturally connected KPIs are critical in any company that wants to differentiate itself as really being a place where you and I want to go to work every day. When I know that my boss, part of his success factor is my success rate, my growth in the role, advancement, achieving my own goals turns me on. I like that, and that works up in an organization. 

I think someone understands that there is an opportunity for them to advance and make contributions, so KPIs push the bounds and encourage especially young people. For instance, to make a contribution that could be grabbed by the entire organization and make an impact. Also, KPIs not in the center of your wheelhouse is important. Let's say you are part of the finance team, and you're going to have KPIs that link directly to your department's expectations, but you also should be tied to the tremendous success of the entire organization. You should be creative and think outside those boxes and look for ways that, if I'm the head of marketing, just because you're a finance person doesn't mean that you shouldn't be making that type of contribution. 

Henrik: I've heard from people who work with you that you are someone who coaches them in their careers and, of course, as human beings. With this KPI question in mind, I wonder what tangible things you like to measure? What items do you think will help them on that path to grow as human beings and as business professionals? 

RJ: Two things make the case very much; the first is bosses, executives, particularly CEOs, are either not spending any time focusing on developing people, or they're spending all their time appeasing people and telling those people what they want to hear. One of the things that I try to do is help young executives learn how to take a punch, take feedback, develop grit, grit when it comes to their development. Do you want to get ahead, because if you do, I will help you?

I've told this story for years that I've long been a Bill Belichick fan. He's taken his hits recently. This year, I don't think, by any stretch of the imagination as the season has ended for the Patriots the way he wanted it to. Still, he's had much success through the years, and I remember years ago I got to know Teddy Bruschi, who had played for Bill, and I asked him; What was that like? And he said it was incredible. He said he pushed us so hard, and when you would sign up and play for Bill, the players would often say, are we going to the Super Bowl? And Bill would say not only we're going to go, but we're going to go and we're going to win! When you work for a great CEO, you're essentially doing the same thing about yourself and the company. I guess this is a long way to one of the KPIs I zero in on: Are you willing to do what it's going to take to be as great as you can be? And teaching that sentiment, it's OK to bring bad news; it's OK to get hit. Not physically, but to take harsh feedback because that will build character. 

It is not a trophy for everybody, but it will help you be the best that you can be. When young people accept that, they light it up. It's incredible what they can do. Those KPIs are where we identify their strengths and determine their weaknesses, such as profiling to grow as a leader. I'm careful about using these things, but I like to use 360s to hear what your peers say about you, which is a crucial indicator of your strengths and weaknesses. When we talk to your boss, we speak to your people, talk to your peers, and help you build stability, address weaknesses, and leverage restraints over the next two years. 

Henrik: Fantastic. Thank you. Let's move to the next section: compliance and intrapreneurship; my first question is: Can you provide examples of employee engagement in corporate innovation activities? The follow-up question is: How does this impact overall well-being and retention?

RJ: This one has been one of my favorites for years, and I started this in a public company forum, but it doesn't have to be applied just to public companies. Often, the board of directors in an organization is not from your industry. They may have minimal contact with your team, and they're getting 99 percent of their information from your CEO or your CFO. They fly in, they attend four or five meetings a year, and that's pretty much it. You've got this incredibly talented team within your organization, many of whom, by the way, will be great board members further down the road, great CEOs. Well, what a perfect opportunity to leverage. For years, I've done things like asking my board members to come in a day before. We have an all-day board meeting on Thursday, and if you would fly in on Tuesday night, I'd like you to spend the day with a couple of our executives. Let them show you their business and introduce you to their teams. They're going to be with you and brainstorm on areas they're focused on and get your feedback on their development. 

We talked about KPIs centering around someone's development; what a perfect opportunity. Here's a great example, you've got a strong woman member on your board of directors, and you have a young female executive that doesn't have a female mentor within the organization. I mean, talk about Nirvana. I've never met a board member who wasn't willing to participate in this, and young executives eat it up. They get right there exposed to some of the best brains in our industry, doing senior offsites with them. Taking that same group, those board of directors and key individuals in the organization beyond the C-suite, and suddenly they're doing an offsite everybody's side by side: We're all equal. They get some private time, maybe a mix of some social time, rent some snowmobiles, you do whatever. But they start to see a different perspective; young executives typically thrive in those opportunities. 

Henrik: I love the answer in so many different ways and on many different levels. I think it's fantastic for board members and excellent for the young professionals involved. You also mentioned women leaders and a tremendous opportunity to find a mentor connected to the board. 

RJ: Yeah, I will go back to the woman leadership. Not only is it the right thing to do to get up on a soapbox: yes, women should be their advocates, and other women should be advocates of women in leadership, But those of us blessed with the opportunity to get ahead and we're often men, we also need to reach our arms down over the wall and lift them, and this is one of the ways I think we do it, we make this a priority. 

Henrik: Fantastic. My next question is: In your industry, which of course, we know is very competitive, how are companies safekeeping their intellectual properties (IP) and keeping the knowledge base current, and of course, also protecting their talent? 

RJ: It's a very different game when it comes to protecting your IP today than it was just a few years ago. It's tough, I think, practically speaking. It's almost impossible to say if something is genuinely your competitive advantage unless it's a proprietary recipe. Then you can keep certain things under wraps; it's pretty tough as soon as you start to practice some of the things that we're talking about, like the inclusivity of employees in C-suite meetings. I don't consider myself an active CEO at this point, I'm chairman of the board of other companies, but that's not my full-time role. I would have a weekly C-level meeting with my management team, inviting any management member within the office when I was. You could be two or three levels down, and you were welcome to that meeting. The excellent news is that you're developing tomorrow's leaders. The bad news is that they're hearing everything they're talking about on a strategic level. But it's never come back and bit me, so I don't worry about it terribly. I think what's important is the latter part of what you said; what are you doing for retention. Because when people feel like they're part of greatness and not just pounding rocks, but instead they're part of building a genuinely excellent organization, they don't want to hurt you. 

For years, I had somebody high up in my organization thinking about leaving and interviewing with another company. If that company were run by someone I know who used to work for me, they would call me and say, "look between you and me. You may want to talk to this person. I think I think they're looking to leave." That's the type of loyalty you breed when you take care of people. 

Now I'm going to head in another direction because this will sound counterintuitive, but it works. I care about you. If you are one of my executives, I genuinely care about you if you're anybody in the organization. I want to know what your priorities are in life. What do you aspire to do? Do you want to be a chief executive? Do you want to own your own company? What do you want to do? That is my priority when I deal with you. If you came to me and said, RJ, I've got this fantastic opportunity, I've always wanted to do X, and it's a part of the country where I want to live, and I can do it, I'm going to help you do that, and I want you to do that. At the same time, if you came to me and I didn't think it was the right opportunity, I'm going to tell you that too. When people know that you have their best interests at heart, that goes a long way. So even if they do leave, you're not going to suck whatever they learned out of their brains, and I don't want to. But they won't be malicious about how they go off and do something else. The restaurant industry is incredibly competitive, but it also is a tiny industry, most of us know each other, and most of us have a culture where we don't want to hurt each other.  I'm going to beat you because my team is better than you are. I'm not going to win you because I will do something deceitful. 

Henrik: Thank you. Now I would like to move to the next section. This third section is about cooperation and impact. My first question is: How are you and your employer engaging with the surrounding society and specific industry? So basically, we can broaden this question a little bit, thinking about your role and how you engage with the industry more broadly, which is a follow-up to the previous discussion we just had.

RJ: Norman Brinker, the famed American restaurateur, once commented to me, which is when we start thinking we have all the answers. That is the moment we stop having all the answers. I've always taken that very seriously; I'm perpetually going into other restaurants talking. As you can tell, I'm not bashful. If I see something that impresses me, I'll find out who the owner is, or the CEO is. I'll reach out to them, have a conversation, and ask them questions. 

As far as giving back, I will give you two examples that I'm very proud of that I'm honored to be a part of; the first is a program in Boston, "E for All." It is an entrepreneurial development program, a nonprofit that helps the young inner-city, predominantly minority young men and women aspiring entrepreneurs. We are about 20 entrepreneurs and executives who help: we sign up with them, mentor them for six months, and remain a resource. For instance, there's a young man that I continue to help. Two years ago, I started to help him, and we stayed in touch. Fortunately for him, his company is actually off the ground, and it's becoming something.

I think E for All is a perfect example of what we should be doing right, that we shouldn't be just up on a stage. I do guest lectures and speak at events. Those are fun, and maybe people find them interesting. Still, the more direct contact we get, the more we can help in practice. Another example is two young men, brothers from Ethiopia, who started a restaurant concept in Worcester reached out to me on LinkedIn. I responded When people do that, I'll answer. I'll try to help them if I think I can serve them and agree socially morally with what they're doing. 

If I slide out of the restaurant business for a second, I think you're aware that I will become a deacon in the Catholic Church. By the grace of God, I'll be ordained in October of this year. If you don't know what a deacon is, deacons were created by the Apostles not long after the resurrection of Christ. Without going too far down a spiritual road, the reason the Deacons were made was to serve widows and orphans who needed someone to care for them. The apostles were approached. People were saying: nobody's helping us, and that's when they said, bring us seven of your best men, men of good character, and those men, St. Stephen being the first of them, went out into the community and started to be that service mechanism. So that's how I lead my life. I probably spend now 25 percent of my work time, my regular hours trying to do that, trying to give back to people in a litany of ways. Yeah, from volunteering and warming shelters to some entrepreneurial assistance, I try to assist. 

Henrik: Thanks, RJ, for being such a great role model and showing how to succeed and give back to others in need. Thank you. The second question I would like to ask in this category takes us back to business, we are looking at assessing risk, and the question goes like this: How do you assess risks and opportunities for key partners and suppliers? Of course, it could also be an investment target. 

RJ: Let's start with the investment targets. One of the blessings of entrepreneurs is that we believe in ourselves, we're hard-charging, we know we can do amazing things, we believe in our people. We just get fired up, and we see the promise in things. For years, I've used this example to collect classic antique cars. For a period, I focused on old muscle cars, old Chevrolet Corvette's, Ford mustang's, and Pontiac GTOs. The type of car that I would target was in good shape, not in excellent condition, referred to in the collector arena as a driver. It was intact. Still, it needed some love like a sixty-nine GTO with a factory engine. Maybe the paint is rough, and the interior is also a little rough, and it just needs some leather. That is a wise investment.

A few years ago, I had a friend who called me up, and he said I had just bought a 1970 Ford Pinto. Why did you buy the year 1970 Pinto? He said it was the lowest mileage Pinto in the best condition of any Pinto in the United States, And I said it's a Pinto. What's the point? It's the same thing with investments. At times, we can look at it. We can talk ourselves into it. I took a hard run at a company just six months ago that was down in North Carolina, and as soon as I got under the hood, they had more cultural issues and supply chain issues than you could shake a stick at.

The seller kept trying to tell me,  look, it's remarkable all these different things. Yes, but it's just that the risk factor goes through the roof, and that's the discipline that an intelligent entrepreneur has to make. I'll tell you firsthand; my experience comes after making a couple of bad investments; I've lost millions because I believed in my team, and I believed in myself. Now, I make sure that nothing can derail the opportunity. If I do run into something that, even if it's a great concept, it's going to put the project at risk, I'll walk away because, quite frankly, it's just not worth my time, And I think if I were going to give a young entrepreneur a lesson, just because you think you can, doesn't mean you should. 

Henrik: I can tell that we have a lot in common. My final section of questions for you, RJ, is delivery and transformation, and I have one question for you in particular. It's about assessing and then moving forward and driving improvement, and the question goes like this: How are you evaluating the implementation and driving improvements? In other words, after making your investment and working with a company, how do you continuously ensure they are improving and moving ahead with the mission? 

RJ: I think it's critical in my arena, where I do business, to provide the management team with a platform. We're very proud of it. They tell you what they're going to do, how they're going to do it, what they need to do. Then they report back to you monthly or, in some cases, every quarter, and you give them a platform like you make that a big deal. I shouldn't be chasing them down for answers. I've long believed in creating a large company structure in small organizations. 

I've sold companies for pretty incredible multiples, 19 times cash flow. One of the reasons we could do it was because we had established significant company disciplines. We have a strategic plan in place, and each department has a business plan. They all tie back their KPIs into that business plan. They do a monthly team meeting where you do financial reviews by the department. Other departments weigh in and give feedback to you when you're presenting as a team. Those are great company disciplines, so what that does for me is that it helps me grow the leadership team, but it also keeps me very close to what's going on. I learned a lot about the chief executive, and I learned a lot about the organization.

One of the things that I talk about is what you are willing to do and not do. How do you make a wise investment? Sometimes the best investment you make is the one you don't make. You get into a project, as I did in New York three years ago and made a sizable investment, and it did not work out. I was willing to step out because I didn't see these traits that we're talking about right now, the leadership team, the chief executive, being ready to bring everybody together and establish this significant company behavior. He wasn't willing to do it. Well, I wasn't prepared to continue to invest in the company, so we sold the company. Sometimes, that's the way that you protect your interests. You start to get a reputation that you're willing to walk away from that type of transaction. 

Henrik: Yeah, and I love your comment about putting the large organizational structure into smaller companies. I think entrepreneurs often need someone like you with that experience to help them understand its benefits and realize that it's not bureaucracy; it's helping you scale. 

RJ: Yes, you're right. It's not bureaucracy, and that's not what I'm talking about here. A great example is that whatever your strategy is, at some point, it's measurable. Let's take something near to conversations you and I have had with a brand that we're growing. When we plan to open up a new location, we create the prototype design, estimate what it would cost, when it would open, what the revenues would be, or what the cash flow and the location would be? Then we check if we hit all of our targets. Establishing the discipline that everybody understands that they're accountable. It is not bad. There's nothing wrong with that. People start to realize that's the way big companies become so successful. Recently, I had the opportunity to spend some time with a C-level executive at Chipotle. It's the same thing that she's doing in this multi-billion dollar company. Companies I'm involved with are doing the same behaviors; It helps the management team grow and supports the financial returns. 

Henrik: Love it. I have a bonus section for you, and I wonder if I can bother you with questions around four words. I'm planning to spell out the word, and then you can briefly answer how you define that word in your experience. The first word is Influence. 

RJ: Obligation. When I think of influence, we're fortunate to influence people's behaviors and influence the way they lead their lives. That comes with an obligation, and I don't think companies take that seriously enough. I'll leave it at that. 

Henrik: My next one is: Agility. 

RJ: I think, thinking on our feet, the ability not to be the battleship and bathtub. I love watching big companies that you believe should not be agile, be agile, because why not. Here's another one, Jersey Mike's in the restaurant business; whether you like them or not doesn't matter. They are a pretty agile company. When COVID happened, they were not on a delivery platform, and within 90 days, they were. That's agility, focusing on results, not on systems and controls. I like that. 

Henrik: My third one is: Resilience. 

RJ: Yes. Doesn't that go back to take a punch, right? It's grit; it builds character. What do you want to be known for? Look, you're going to get knocked down. Get back up again. It's OK. You're going to make mistakes, which truly builds character when you're resilient. No chief executive, no entrepreneur worth their salt, is going to tell you they've never made mistakes or that they don't admire resilience. They do. I used to tell a story about a restaurant in Cambridge, Massachusetts, we had a pretty, pretty big fire, and we were only closed for three days. The way that we did that was through resilience. My team and Cambridge rallied around us, the Board of Health did, the Fire Marshall, the building inspector because they saw how resilient we were. We were going to fight back. Once you accept that, that's a beautiful thing to be resilient. It's a blast. 

Henrik: Wow, The final one is: Efficiency. 

RJ: My definition of efficiency has changed the older I'm getting because limited time makes me need to be more efficient, but when I think of the value of business efficiency, the use of my money is efficient. Any time we engage with the consumer, efficiency is enormous. In today's environment, efficiency is mission-critical as time-starved as people are. 

Henrik: Thank you, RJ. Thanks for being a very inspirational business person, human being, and of course, a creactive leader. Thank you very much for this interview. 

RJ: My pleasure, and thanks for doing this. I mean, you were talking earlier about what I'll refer to as an idea; how do you stay fresh in anything? This is it. I think Fortune 100 CEOs should be listening to your podcast because you're gleaning great information from people, and I can't wait to listen to some of the other interviews you've done. Thank you! Thanks for the opportunity. 

Henrik: Thank you. 

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