CHERYL BACHELDER
I met Cheryl Bachelder at a conference sponsored by the Servant Leadership Institute at Datron World Communications. I’m always looking for good news stories of top managers who put common sense into practice and make a major difference in their company. Cheryl certainly did that during her tenure as CEO of Popeyes Louisiana Kitchen. What a wonderful example of how servant leadership can turn an organization around. —KB
IN 2007, POPEYES was a struggling brand and company. The restaurants were declining in sales and profitability. The franchisees—the owners who had invested in the facilities and the people—were not happy. They had committed their money and life to Popeyes, and they wanted to know what the franchisor—the corporation—was going to do about it.
When I accepted the role of Popeyes CEO in November 2007, I knew it was a difficult time. Even so, this comment from a veteran franchisee caught me by surprise: “Don’t expect us to trust you any time soon. We’ve been abused children. And it will take a long time to get the past behind us.”
In short, the franchise owners had not been served well. That would have to change.
I have worked in franchising, observing the relationship dynamics between franchisors and franchisees, since 1995. The business model is set up as a symbiotic partnership. The franchisor provides the brand, the menu, the marketing message, the operating systems, and often the food and packaging supplies. The franchisee builds the restaurants, hires and trains the people, and operates the restaurant by the policy guidebook. Both parties must do their job, and do it well, or the results falter.
Given the nature of the business, I am always surprised by the animosity and outright battle mindsets that so often characterize the franchisor-franchisee relationship. As one of my leaders liked to say: “There has never been a brand with positive sales and profit growth that is at war with its franchise owners.”
It was this very predicament that my Popeyes leadership team decided to address as our strategy for turning around business performance. Simply put, we decided to serve the franchisees well. We began calling them our number-one customer. More important, we began treating them that way—as servant leaders.
Our principle was simple. If we served the franchise owners well, and they experienced sales and profit growth, they would be excited about the future—and would build more Popeyes restaurants. When they built more restaurants, our shareholders and other stakeholders would also be well served. Serve the people well. And the rest will take care of itself.
So where did we begin the turnaround—and what drove the positive outcome?
Our first decision was to spend a lot of time with our owners, looking at the business and working collaboratively to make the results better. We chose to focus on the core strategies of a successful chain restaurant: build a distinctive and relevant brand, run great restaurants, and make money for the owners. Those strategies were important to the turnaround. But I would tell you that our principles for how we did business with our franchise owners were the more important factor. We landed on six servant leadership principles that would guide our actions.
To state the obvious, small business owners like Popeyes franchisees are passionate by design. They are risk takers. They put big money down on the brand idea—and with that comes their passion for getting it right. At Popeyes, the greatest passion is for the superior food. Popeyes people want only the best quality and innovation in the restaurants.
Our first principle was to respect the passion of our owners. They had made the investment of their money and their lives in Popeyes. We would treat that as a sacred trust. We would respect and admire their passion for the business. Passion would be the fuel of our business plan.
If you’ve ever had an argument with someone you care about, you have experienced what happens when you don’t listen well to another person. You miss their point. You overlook their real concern. You lack vital information. And the argument escalates. The same is true in the franchising business.
Our first road trip in the fall of 2007 was called a listening tour. We went to seven cities and listened carefully to our franchise owners, our restaurant managers, and our Popeyes guests. We asked them what was wrong and what their ideas were for fixing the problems. We asked clarifying questions and we didn’t try to sell them anything. In doing so, we heard all the issues we needed to address going forward. We demonstrated respect for our people. And when we got back home, we had the beginnings of an action plan.
Listening carefully to our franchise owners, and learning from them, became an essential principle of our success.
The retail food business is dynamic and fast paced. There are many competitors chasing share of market. As a result, your business can be performing brilliantly and one day later an aggressive competitor can change the trend with one new menu innovation, one new service approach, or one new value offering.
In the fall of 2008, we were ready to launch our big marketing plan to turn around sales at Popeyes. We had alignment with our owners, we had set aside a big budget for advertising, and we were going to take the market by storm. Little did we know that America’s banks were on the verge of collapse and the economy was at the beginning of the biggest recession of our lifetime. We were about to learn some lessons.
We did not experience a sales turnaround in those next few months, but we learned continuously. We stayed in close dialog with our franchise leaders. We analyzed the results quickly. And we made agile decisions to change to plans that would be effective in this new world order. Our willingness to learn and act on that learning resulted in the beginning of a remarkable turnaround in early 2009 and we continued to hold this principle dear.
Popeyes was a thirty-five-year-old company in 2007. That would lead you to believe that we had long established planning processes and performance metrics to help us manage the business. Wrong.
Our business plan looked forward about ninety days. We had one dataset: how much money our franchisees were sending us in fees and royalties. We did not have a detailed annual plan or a five-year strategic plan. We did not have a pipeline of new products, promotions, and restaurant locations. We did not collect any data on important things like guest satisfaction, speed of service, or restaurant operating profits.
Remember our first principle—passion? Well, passion that goes un-governed by any facts and plans is just raw, unbridled emotion. And that was the nature of our conversations with franchisees in the early days. Until we had facts and plans, we would be at the mercy of whomever yelled the loudest.
One of our operators said, “You move what you measure.” And we began to measure just about everything that moved. First on the list were guest transactions, guest satisfaction, speed of service, and restaurant operating profit. Second on the list were the returns to our owners on new restaurant investments.
Two things happened. Our franchise owners started improving key measures of the business. And when we met to plan the future, we had facts in front of us to guide our decisions. We could argue passionately—but our emotions were bound by the reality of information. Facts and plans made our success sustainable.
Sometimes the most important decision you can make is to acknowledge your weakness. At Popeyes, we had virtually no people capability—coaching and development of our talent was not a principle of our culture. We openly stated this weakness to ourselves, our team, and our owners. Then we began a journey of making coaching and development important in our culture.
We established the business competencies and the cultural principles needed for success, and then focused on coaching and developing our people toward those capabilities. Even though we were not the best coaches, our people saw our efforts as a sign that they were valued—and they began to grow.
The benefit to our franchises? They were being served now by people growing in their capability because their leaders were investing time and attention in coaching. Our talent grew by leaps and bounds—and our franchisees noticed the difference.
A relationship without accountability is destined for dissatisfaction and dysfunction. As I mentioned earlier, in our business model, each of us had roles and responsibilities we had to do for the business to prosper. The franchisor had to provide a compelling brand and an effective operating system. The franchise owner had to provide top quality people, food, and guest experiences. When we all did our piece of the puzzle, we could expect positive outcomes. When one of us dropped the ball, we had to accept personal responsibility to correct our actions quickly.
Our culture became one of “no excuses, no blame.” We accepted our role and responsibility to make things right. And worked to avoid victim behavior. Productivity soared when accountability was high.
The last principle we chose may have been the most important to the turnaround of Popeyes. It was the principle that underscored the Popeyes purpose statement: Inspire servant leaders to achieve superior results. It was both our belief and our work experience that when we served our franchise owners well, the business prospered—and over time, our own career goals and needs were met as well.
Being humble on a daily basis is difficult. It’s also difficult to teach humility to leaders who have viewed it as a leadership weakness in the past. But getting ourselves out of the way was essential to serving our franchise owners well.
Our definition of humility was one I’ve heard attributed to Rick Warren, Ken Blanchard, and others: “Humility is not thinking less of yourself, it is thinking of yourself less.”
At Popeyes, we were ordinary people who struggled to not be self-centered in our daily actions. We believed—and we had experienced—that when we acted out of self-interest, the relationship with our owners was damaged and our business outcomes suffered. Alternatively, when we put their interests above our own, the relationship and business outcomes flourished.
During the period from 2007 to 2016, Popeyes became a prosperous enterprise with restaurant sales, profits, and unit growth rates that were the envy of its competitors. Franchise owners were served well, with 95 percent rating their satisfaction with the Popeyes system at good or very good. And 90 percent said they would recommend Popeyes to another franchisee. The decision to serve the franchisees also benefited other stakeholders, including the shareholders. The stock price moved from $11 per share in 2007 to $64 per share at the end of 2016, which I believe to be a direct result of our leadership approach. When the company was sold by the board of directors in March 2017, the buyer paid a $15 premium—a share price of $79.
They always say hindsight is 20/20. And that is certainly true in the Popeyes story.
When this story began, we didn’t know it would be servant leadership that drove success. We didn’t have a plaque in the office that stated our purpose and principles. What we did have was a team of leaders who were willing to focus their passion and ambition on the success of the people and the enterprise before their own interests. And as Jim Collins predicted in his book Good to Great, the results were phenomenal. Collins states great leaders “are a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves.”1
Cheryl A. Bachelder (www.cherylbachelder.com) served as CEO of Popeyes Louisiana Kitchen, Inc., from 2007 to 2017. She has more than thirty-five years of leadership experience at companies like Yum! Brands, Domino’s Pizza, RJR Nabisco, Gillette, and Procter & Gamble. In 2012 she was recognized as Leader of the Year by the Women’s Foodservice Forum and also received the Silver Plate from the International Food Manufacturer’s Association. She is author of the best-selling book Dare to Serve: How to Drive Superior Results by Serving Others.
1. Jim Collins, Good to Great: Why Some Companies Make the Leap and Others Don’t (New York: HarperBusiness, 2001).