The Inside Scoop on Chick-fil-A's Competitive Advantage
Last week, I had the chance to sit down with David Salyers and learn more about what sets Chick-fil-A apart and how we might apply some of their principles to our own organizations. Don’t miss out on these incredible insights he had to share.
GH: David, you recently retired as the VP of Growth & Hospitality at Chick-Fil-A after an illustrious 37 years; what is it about the culture at Chick-Fil-A that leads to such long employee tenures?
DS: What’s interesting about the culture at Chick-Fil-A is that we have a 97% retention rate which is staggering for any business but, particularly, in the fast food industry, because it is an industry known for turnover. What makes it even more interesting is that the fast food industry is generally known as the job of last resort. There’s an old adage that “if I can’t do anything else I can always flip burgers for a living”. And yet in that atmosphere we’ve been able to create very stable employment environments both in the support center (our corporate headquarters) and with our Restaurant Operators (keep in that mind that doesn’t include restaurant team members like teenagers going off to college).
When you think about that, I think it all begins at the start of your relationship. At the restaurant Operator level, most of our competitors would simply go after franchisees with lots of money; the first question they ask is “do you have access to 3 million in capital”. But fascinatingly, the first question we ask of potential Operators is “would I want my kids to work for this person?” And that one question… answers a thousand others. We prioritize talent over money and that starts with the kind of people we look for to operate our next Chick-Fil-A.
We are also more mission-motivated than money-motivated. For instance, I always go around asking operators what they do for a living… and they almost never say selling chicken; my favorite answer was from an Operator in Virginia who said something along the lines of, “I feel like I’m running a leadership development academy masquerading as a fast food restaurant.” Imagine the implications of how he runs his business based on this view of what he does. It is so true that “How we view things drives how we do things”. That Operator is using the platform of running a Chick-Fil-A to develop the next generation of leaders. Think about how you might do your job differently if that’s how you viewed it; what a difference that would make! And what kind of retention and sales would that create? So, I think a lot of the secret behind Chick-Fil-A’s success is viewing what we do so differently than a lot of our competitors, by viewing it in a mission-minded way.
GH: Chick-Fil-A has been, and is on an incredible growth trajectory. What has been the key to maintaining and strengthening the organizational culture throughout the journey?
DS: Well, there are so many things that go into strengthening a culture, but one of them we love at Chick-Fil-A is the statement that leaders are learners. And we try to hire according to that by seeking people who are continually learning and growing. Because the nature of a growing business is that people have to grow with it, because one day the business will be far greater than the one they originally joined. When I joined Chick-Fil-A, I was one of 2 employees in the marketing department which now has over 220 employees. I’ve had to grow into a person who can lead in a 10 billion dollar business instead of the roughly 50 million dollar business I originally signed up for, and those leaders are two very different people.
I remember reading an article one time by Guy Kawasaki that he wrote right after Steve Jobs died about what he learned under Jobs’ leadership and one idea really got my attention; a 10 wants to be surrounded by other 10s. Truett Cathy (the founder of Chick-Fil-A) used to say “we become like those we surround ourselves with, for better or for worse”, which explains why a 10 would want to be around other 10s. Kawasaki goes on to explain that 7s and 8s want to be surrounded by 5s and 6s because they feel superior and 5s and 6s by 3s and 4s and so on and so forth. So Jobs would say that once you lower your standard the “Bozo Explosion” has begun! So I think part of how we’ve strengthened the culture at Chick-Fil-A is by setting the bar high and only bringing 9s and 10s into the organization so we all get better together.
The other thing that has been true for many years is that we’re very much a learning culture, so we’re constantly trying to learn from the very best. In order to become excellent, you must study excellence, and we’ve done a good job of letting our people do that. There’s not a lot of that level of excellence in our own industry so a lot of times we’ve studied the other greatest businesses of our time, meeting with them, touring their facilities, and asking ourselves, what have we learned that we can apply back at Chick-fil-A? Dan Cathy (now CEO of Chick-fil-A, Inc) has an interesting name for this exercise…he likes to call it “corporate tourism”; constantly studying the most excellent businesses and applying principles to our own culture.
GH: Your 2016 book, Remarkable!, imparts leadership lessons that can transform one’s workplace culture. What’s a lesson from the book that feels particularly timely for leaders today?
DS: Maybe the most important lesson is to realize that culture is the ultimate competitive advantage. We get focused on so many things like improving products and processes, but products can be reverse engineered; a strong culture, on the other hand, is very difficult to create, and nearly impossible to reverse engineer. So to me…cultures are truly the ultimate competitive advantage. A lot of the book is about how you create a remarkable culture, a place where:
“people believe the best IN each other,
so, they want the best FOR each other,
and expect the best FROM each other.”
And I think if you can create a culture that is remarkable for that reason, you will have created a huge competitive advantage and you might just find yourself with a 97% retention rate!!!
GH: You will be a coach at the Unstoppable Cultures Fellowship this November. Can you share about what gets you excited about working with this group of leaders?
DS: By definition, the people who are going to come to this event have a huge interest in culture. And we just talked about the fact that culture is the ultimate competitive advantage and that at Chick-Fil-A we love to study excellence as part of our growth strategy. Rather than going one company at a time, in the case of the Fellowship, we have companies that appreciate and exude excellence coming together and I think the learning will be incredible and contagious. We are going to have so much synergy and excitement that I think the learning will be “turbocharged”. And because of the nature of what we’re doing, it won’t just be an event at a point in time. Rather, I believe it will be an occasion that creates friends and colleagues you will have for the rest of your life and fellow learners to go on the journey with you. It’s the start of a relationship that will have a lasting impact on the rest of your business career and in the life of your organization. I’m so excited about this event, in fact, that I’m willingly giving up my birthday this year to be part of it (with my wife’s support – she’s coming too!); I’m thinking of the Fellowship as a birthday gift to myself!
I love the story David told about strengthening our leadership by surrounding ourselves with strong leaders. That’s exactly what The Unstoppable Cultures Fellowship is all about. I want to encourage all of you to join us there this November 12-15 at the Four Seasons Rancho Encantado in Santa Fe, New Mexico. Now through September 30, you can use the code DAVID to receive 10% off your registration. I hope you’ll join me as we experience the power of a group of leaders who want to get better, and do better, to impact organizations and to impact the world.