When Paul Brown joined Arby’s as CEO in May 2013, he was an outsider brought in to tap the 50-year-old fast food brand’s potential.
The Wendy’s/Arby’s group split Arby’s off and sold a majority stake (while retaining 18.5% of its shares) to the private equity firm Roark Capital Group in 2011, after the sandwich chain posted a year with a $US350 million loss.
The Arby’s leadership team closed underperforming stores around the world and began developing new menu items, and got onto a path of recovery — but Roark wanted to see more, and hired Brown from the hotel group Hilton Worldwide.
Brown got the impression that despite the beginnings of a turnaround, there was fatigue throughout the company and its restaurants, from years of decline and a revolving door of executives.
It would have been disastrous to act like he had all the answers, especially as someone coming in from not only outside the company but outside the industry, he told Business Insider. He decided that he would begin his tenure with a listening tour.
“I want to hear from you what you believe has worked and what hasn’t worked in the past, and what we think we could do together,” Brown said he told the company.
Whether he was in a franchise restaurant or one owned by Arby’s, he would ask, “What would you do differently if you ran this?” The question got both franchisees and all levels of store employees to not only weigh in on how they would run their own location differently, but how they would manage the entire Arby’s brand.
He said that it took about six months to get to a new vision for Arby’s, and that for the first three months, more than half of his time was spent outside of the office. “I call it management by flying around,” he said. “You’ve just got to get out in the field.”
Brown said there’s a place for formal meetings with franchisees, “but I learn more from getting in a car and driving around and having them drive me to their restaurants, and talking to me on the way there, but also in the restaurants talking to people and showing me around.”
In this first tour, Brown travelled to more than 50 locations across the United States and estimated that he spoke to more than 1,000 employees. He noticed common themes.
- Arby’s had a unique menu in the fast food space, and it’s been most successful when it embraces this — not trying to be like the burger chains, and not trying to be more upscale than it is.
- The company’s different ad campaigns resulted in a lack of a solid brand identity that employees could get behind.
- The brand had access to an efficient supply chain with high-quality ingredients that weren’t being fully utilised.
Brown said that he took this road trip approach to the corporate headquarters in Sandy Springs, Georgia, as well. He would have long meetings with his leadership team where, despite being the CEO, he barely spoke. He would even start the meeting by declaring, “I’m not going to say a whole lot. I’m just going to take a lot of notes.”
He noted that this was a “luxury” of being the CEO of a private company, but it was one he took full advantage of. After his roughly six-month listening tour, Brown led a reimagining of Arby’s as a fast food company with food quality above its price, that regularly rolled out new products without cutting fan favourites, that embraced options for meat-eaters not looking for healthy food, and that had spacious, clean, and welcoming locations.
The turnaround worked. Last year, Arby’s had its best year ever with $US3.7 billion in sales, with an average of $US1.1 million in sales-per-store in the US, up 20% from 2013.
Brown said that he thinks coming in as an outsider worked to his advantage, because it gave him an excuse to be a CEO who listens.
“If you’ve been in the industry for 20 years and you come in as the CEO, you may not feel as comfortable asking broader questions because people expect you to know the answers,” he said.
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