Lead In 30 Podcast

The Power of Adapting to Change: Chick-fil-A Revenue Stunning!

• Russ Hill

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The numbers are in on Chick-fil-A's performance through the pandemic. You're all aware of some of the changes they made after the world shut down several years ago. But, there's new data about what adjustments they made inside and outside the restaurants and what impact it had on revenue.

The results are stunning!

Most organizations get stuck in the mourning phase when changes hit. Chick-fil-A is not that type of company. In this episode we dig into the latest case study of what it looks like to adapt.

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Speaker 1:

It wasn't just their company. The whole industry was absolutely transformed overnight by a massive change that rocked everybody. How this company adapted was remarkable. The new research on Chick-fil-A in this episode.

Speaker 2:

This is the Lead in 30 podcast with Russ Hill. You cannot be serious. Strengthen your ability to lead in less than 30 minutes.

Speaker 1:

If you're not using chat, gpt or a quad or one of these AI tools on your phone, you're insane, like you are so far behind the times. I know Apple, like I got Apple intelligence on my phone now it's cool, like it's definitely cool, but it's nowhere near the functionality of a paid version of like chat, gpt. Anyway, if you're not deep into that you got you got to spend a little time maybe on a Saturday, a Sunday, a weekend, I don't know when over the holidays, like research it. So let me give you an example I'm obviously in a rental car right now. I'm not in my home office and we're knee deep, right, let me set this up for you. So we're way deep in the research for our upcoming book, the next one, the fourth one that's going to be our best ever coming out in the first half of the hopefully first quarter of 2025. And so the last two episodes I've been sharing some of the research that the team's been doing. So, talking about the difference between Harry Ford and Thomas Edison I hope that was interesting to you what was going on in Menlo Park, new Jersey, versus what was happening in Detroit, these two very different approaches.

Speaker 1:

Then, in the last episode, I talked to you about Dayton, ohio and John Patterson's remarkable accomplishments and the company that he created. There's so much I left out of the episode and in fact I don't even know if I shared this. I've shared a couple other meetings with our clients recently as we geek out on this stuff. But in Dayton Ohio, this is at the advent of the modern corporation, right the late 1800s, the early 1900s, and as teams are growing and corporations are growing like mad, and these people are trying to figure out how the crud do you manage 3,000 people? People are trying to figure out how the crud do you manage 3,000 people? How do you manage 5,000 people? How do you manage 30,000 people? Just, it's crazy. And so John Patterson, more than anybody else in that time period of like let's call it 1890 to 1920, figured it out. So the start of the HR department, the start of the suggestion box, the start of employee training and sales training and sales conferences and the executives that work there I don't know if I shared this in the last episode or not. So these executives, a team he built was remarkable and one of them went on to create IBM. So we're in the middle of IBM computers. And then John Patterson, in little Dayton Ohio, is laying the foundation of modern day Silicon Valley companies, the biggest growth companies in the history of the world, pretty much Corporations, right, and so you can trace parts of Amazon and Dell computers and Google and Apple, and all of these back to what John Patterson was doing, and we don't have time in these episodes to go that deep in it, but we're going to do it in the book and there's so many lessons for us, right, so, anyway, so I'm thinking about John Patterson and Dayton Ohio, I'm looking at the research for that, I'm thinking about the executives that left and went on to create companies like IBM and General Motors and these different organizations, and they all learned how to lead large teams and do it in the most effective way possible from John Patterson, who just made it up on his own.

Speaker 1:

So in the midst of that, I'm headed to a client meeting and I fly into Minneapolis and I get on the road and I'm going through a place that 99% of you have never been Rochester, minnesota, which is on the way to Wisconsin, because I got to get to Western Wisconsin for this client meeting with. Anyway, it's a long story, and so I go through Rochester, well, right off the freeway, I happen to look to the side of the freeway and there's this massive ibm facility, right. So I see ibm, like oh, wow, that's interesting. Like you don't hear a lot about ibm these days. Like the 80s were their heyday, right, and as office computing took off and anyway, and one of john patterson's and national cash registers executives went over and started the company and anyway, so go back to chat GPT. So I'm in the car, right, I'm driving this rental car, and so I fire up the chat GPT, the app on my phone you probably don't even know it does this and I start having a conversation. I'm like, tell me about the IBM facility in Rochester, minnesota, and the app. I don't know if I pay for the paid version, which is literally like $20 a month and it's basically making me five times smarter than I am. So is that worth the investment? Hello, so anyway, and the voice feature I'd never used it on chat.

Speaker 1:

I'm like, holy crap, I'm having like a full-on conversation. It's like what you imagine Siri could do, it's what you imagine the Alexa of the future could do. And I'm having this Like it's responding in half a second after I ask a question. So here's how the conversation. I should actually record it and put it in the episode. That would be fascinating. I actually should do that. Maybe I'll do a clip of it here for you to hear. We'll see if our team does that. So I'm I don't know actually. Yeah, I think it records it anyway. So I'm like, hey, chat GPT says back to me nearly 500 acres. Holy crap, 500 acres, 491, to be precise.

Speaker 1:

I'm like, well, chat GPT, how many people worked at that Rochester plant? Rochester, you all, you've never even heard of it. It's like an hour outside of Minneapolis and nobody goes there. I mean, it's way out there and there's like there's no civilization for an hour. It's way out there outside of Minneapolis, right? So I'm asking ChatGPT, how many people work there? 8,000.

Speaker 1:

Then I'm asking, well, what did they do there? When did the factory get built? It's the 1950s, do there? And when did it? When did the factory get built? It's the 1950s. And then it tells me well, the um, what they built? There were the first mainframes for corporations.

Speaker 1:

I'm like, well, how big were these machines? Over six feet tall. Six feet tall, am I okay? And like two feet wide. Like well, how much did they cost? This is me and the freaking computer. Like, think about that. Ibm's building these six foot tall, two foot wide computers for businesses in the 1950s. I'm holding in my hand a computer that could go like is so much more powerful, it fits in my pocket and we're what? 70 years later, that's like nothing, that's like two minutes.

Speaker 1:

And and so it's talking to me and so I'm like, okay, well, how much do those computers cost? Like, well, one chap gpt still make. Well, one of those machines was hundreds of thousands of dollars, holy crap. Maybe you shouldn't complain about how much the iphone 16 cost you was hundreds of thousands of dollars, holy crap. Maybe you shouldn't complain about how much the iPhone 16 cost you. Right, that thing's remarkable. These companies are paying like and they're like, yeah, typically companies bought multiple mainframes, housed them in special parts of the company, had to build rooms for them, keep them cool to run their data collection, and they're paying like literally $150,000, $250,000, $400,000.

Speaker 1:

This is what I'm learning in this conversation on the road trip out to this client, this organization that we're meeting with the executive team. So remarkable. And that has absolutely nothing to do with what I want to talk about in this episode. But you all, is this not the most amazing time to be alive? Is it not remarkable to be able to like, wow, I'm literally in a car, a rental car, in the middle of nowhere Minnesota, and I'm I need, oh, wow, anyway. And then I'm thinking, wow, the impact of John Patterson, like 8,000 people in this city, this small city in Minnesota, employed because of what one of the executives on Patterson, what his team learned in a national cash register company. And you fast forward just a couple of decades and out here in the middle of nowhere Minnesota, they're building this massive facility.

Speaker 1:

Now didn't last, right, the cycle of business. Here's a whole nother book Now. So I asked Chet TPT, have they sold any of the land? Is it still 400 acres? Like? No, they've sold most of it. They downsized. How many people work there now? A few hundred, yeah, that's what I thought.

Speaker 1:

Ibm's a shell of what it used to be. But in the heyday, how they knew how to run, those leaders knew how to run organizations. And then just fascinating to learn that, okay, welcome in to the lead. In 30 podcast, in less than 30 minutes, we give you all kinds of data from chat, gpt. No, we give you in less than 30 minutes per episode, a model, a framework, an example, something to think about instituting, implementing, changing, adjusting, strengthening the way you lead, because nothing impacts. Nothing impacts your ability to earn income, impact the world around you, affect customers, grow your career than your ability to lead. And so welcome into the podcast. For more on our 30-day leadership course, go to leadin30.com. All right, you all.

Speaker 1:

Here's what I want to talk about in this episode Chick-fil-A, chick-fil-a. And you all know like I have to be careful anytime I talk about Chick-fil-A, because there's two audiences in the room. Well, there's three in every room. In every audience where I talk about Chick-fil-A, you have one audience that's like holy crap, I'm getting hungry. I love Chick-fil-A. They are the most amazing company ever. You have another group that's like what is Chick-fil-A? They aren't near me. I've never eaten there. I don't like fast food. I only eat lettuce and wheat bread. Then you have a third group, a third group that's like oh really, you want to talk about Satan in the flesh. I hate Chick-fil-A. They're an evil corporation and I hope that they fail.

Speaker 1:

And there are very few in the I hate Chick-fil-A camp. There used to be more, but just because of some of their political leanings way back in the day, the Truett-Cathy family and whatever. Anyway, we're past, hopefully, most of that. No corporation is perfect. Some of you hate Amazon, Others of you. You order a package every four minutes from Amazon and so you just just whatever. Some of you hate Walmart. Some of you hate Chick-fil-A.

Speaker 1:

So no, I just need to throw that disclaimer out before we get deeper. Every company has good things and challenges and corporations. So just if you hate Chick-fil-A, I'm just going to validate whatever feelings you have. If you love them, I'm going to validate that I don't really care. I just want to examine them from a business standpoint. Love them, hate them, don't care about them. Just let's talk about them from a business result standpoint.

Speaker 1:

So I don't know if you've heard about it, but this little thing called a pandemic rolled out a few years ago and it rocked the world, right? How many of you were alive back then? Raise your hand. Yeah, all of us, right? Someday this episode, somebody will listen to be like what was the pandemic? Um, but um, it rocked our worlds just a few years ago and it certainly rocked the restaurant world, and so, while many organizations, I've taught this model before the change sequence, that's what we spent our time with this executive team on today was the change sequence.

Speaker 1:

Change is inevitable. We all know that. How you react to it? Basically three phases. Most people go through the first one, some people go through the first two phases, and the truly successful, the most successful among us go through all three phases when change happens to them, personally or professionally. The first phase is mourn. Everybody mourns the way it used to be. So think about a restaurant mourning. Holy crap, we can't now have customers to come in, we can't have people working close together. We have to change everything. Yada, yada, yada. Second phase is adapt. Not everybody gets to the second phase after a change. Some people are stuck in mourn for the rest of their career, for the rest of their personal life. Something seismic happened. They can't recover, they mourn, and those businesses, those restaurants, failed after COVID or struggled mightily. Then the last phase we're not going to talk about it here, but is learn. Change is inevitable.

Speaker 1:

Wisdom is optional. A lot of people have been through a lot of change in their lives and their careers. They have not gotten any wiser from it. They haven't captured the wisdom. Hence the need for journaling, writing in your notebook, capturing thoughts, pondering, quiet time off the grid, meditation, all that.

Speaker 1:

You're capturing the wisdom from the change in experiences you've had in your personal life in the last week, month, year, got it Personal or professional life? Okay, and the most successful executives I ever get a chance to interact with capture learning and share it in a simple way Two thoughts, three learnings, one insight, and they know how to monetize that wisdom that they fought super hard to capture. They monetize it in the marketplace in the form of organizations that pay for their value. It describes what I do for a living. I am not a very smart person, but I freaking capture the wisdom of everyone around me as much as I possibly can and I simplify it along with smart people who do likewise, and we have a firm that does that. And we sell the wisdom, we sell the models, we sell the framework, we sell the coaching and we provide an outside perspective based on what we've captured from our own experiences and those of other people. And the best organizations and most successful do that at scale in specific industries.

Speaker 1:

You tracking with me, okay, so Chick-fil-A. What they did is they did not get stuck morning and I'm going to give you some numbers, some research, because you know all this. You're like, yeah, whatever. Okay, yeah, that's like duh. I know Chick-fil-A thrived in the pandemic, but wait till you hear the numbers, you all. Let me show you what our research has uncovered. Okay, here we go.

Speaker 1:

So Chick-fil-A, when the pandemic started, leaned on the insight they had gained from a place they call the Innovation Center. That's located in Atlanta, and I showed a video today of the innovation center with these executives. Remarkable, remarkable. It's inside a massive warehouse in Atlanta where they built what looks like a couple of restaurants. Anyway, long story short, chick-fil-a is just innovating. Anyway, long story short, chick-fil-a is just innovating. So when the pandemic hit, they were way ahead of everyone else, because, guess what? Their competitors aren't, they aren't thinking that far ahead. Their research and development teams are nowhere near what Chick-fil-A's got Right. Okay, so they were able to adapt. They spent like no time in the morning phase. They went right to adapt and they implemented three major changes in these three categories training, technology, facilities.

Speaker 1:

I'm going to give you the cliff notes version, the very high level overview. It's fascinating. And then I'm going to give you some revenue numbers that will blow your freaking mind. Okay, so training, what does that mean? Three new positions, outside expediters, the team that's out there.

Speaker 1:

If you ever go to Chick-fil-A that you see in the parking lot with the tablet taking your order, working the lines. They're called expediters. Working the lines, they're called expediters, the outside expediters how brilliant is that term? Not order takers, not drive-through workers, expediters, messaging matters, it matters. My job is the expediter. You know what that verb, what the verb expedite, means, and they trained them on what they call upstream ordering. So when the line starts forming, you'll see it, if you ever get in a drive-thru during a busy crunch time, they move upstream, which means get as far away from the restaurant as possible to take orders as early as possible so that we can make sure that food is ready and moving, we can get people through faster upstream ordering. And then now, so you think. And so that's one position outside expediter.

Speaker 1:

Outside director, another position the person who's overseeing the outside operation. Another position outside runner. That's the person who brings the food out to the people who are ordering off the app, to the Uber Eats or DoorDash people, or to you in your car. That's training. Second category technology. Guess what happened as the expeditors got further upstream? They lost their headset signal. It wasn't strong enough, so they had to change the technology in the restaurants to boost the signal for the headsets. Second, tablet. Well, how do you make sure the orders are accurate? You don't just take somebody's name. You put into the system the color and size of the car blue truck, red sedan, white SUV. You might have looked at your receipt from a Chick-fil-A if you ever go there and notice that You'll have your name and it will have the color and size of your car for order accuracy.

Speaker 1:

We could spend a lot more time here. I'm not going to the third. So that's technology and lots of other changes. That's what I'm going to stick with right now. Facilities, reworking the parking lot, reworking the inside of the restaurant to accommodate two lanes Lots of different stuff. We could say there they made changes to the facilities.

Speaker 1:

Adapt like at scale, fast, unbelievable, okay. So how did that impact? How did that impact their results? Here you go. These are the mind-blowing stats 2019, the year before the pandemic the average revenue per location for Chick-fil-A. 2019, the average revenue per restaurant per location was $4.7 million. $4.7 million dollars. 4.7 million dollars. 20, now let's go. 2020 is crazy. 2021 they actually went up in 2020, by the way. 20, so now let's go now the the tail end of the pandemic. Um, in 2021, things, things are a lot more open, that sort of thing. 2021, $8.1 million 8.1. 2019, 4.7 million. 2021, $8.1 million Insane.

Speaker 1:

Did adapting pay off for Chick-fil-A? Duh, what about 2022? Pandemic's over. We're back at work, we're back in schools, we're back everything. Most, I mean everyone's pretty much back. Everything's back to whatever 8.7 million dollars, another half million dollar increase per location on average. Some did a lot more, some did a lot more, some did a little less. So we go from 4.7 to 8.1 to $8.7 million.

Speaker 1:

Who's the nearest competitor to Chick-fil-A when it comes to average revenue per location? It's McDonald's. Well, let's look at their numbers 2019, 2019, $3.7 million Excuse me, that's not true. $2.9 million, $2.9. So Chick-fil-A is doing 4.7 and McDonald's is doing $2.9 million per location. Massive difference, right? Unbelievable.

Speaker 1:

Then the pandemic hits and let's fast forward. Then let's go to 2022. Whereas McDonald's, they're at $3.7 million per location. So they grow pre-pandemic 2.9 to post-pandemic 3.7. Growth Interesting, okay, and compare that to what Chick-fil-A did Unbelievable. So you've got 8.7 million per location for Chick-fil-A in 2022. And you've got McDonald's with 3.7. Just phenomenal. They opened up a freaking valley, a massive gulf ocean between the two. They took their lead and just stinking, poured gasoline on the fire. And I want you to keep in mind that McDonald's generates that number so much less per location, being open more hours per day and one additional day per week, because Chick-fil-A is closed on Sundays, everywhere it's required, and Chick-fil-A typically is open till 10 or midnight, depending on the location or whatever it is where McDonald's, you find a bunch of them that are open 24 hours. Just remarkable, you all adapting.

Speaker 1:

So here's the takeaway, the punchline why do any, what does any of that matter? It matters because it's the. It's yet one, it's yet another case study in the power of adapting. I mean, there's lots of other lessons too that we can dig into and we will and we have, but the message for you in this one is the world is in motion, right? I mean I made that case with the whole chat, gpt point, the apps, like the development, what's going, what's happening in AI. You realize that your kids' lives are going to look so remarkably different than yours, like it used to be, like oh yeah, there'd be this robot in houses. You realize, like that that's not like Jetson or science fiction crap anymore. I mean, like what Elon Musk and what the folks that are on AI are doing it just there's never been innovation at the scale we're seeing right now. It's unreal. So that's just one example of how the market's changing, the world is changing, so it's out there spinning. The globe is spinning faster than ever, so to speak.

Speaker 1:

And are you adapting? Is your team adapting? And some of you work at large organizations and you're adapting, but it's slow. You're so mired down in status quo. You've got such established systems and you're pumping out another 2% or 3% a year, and that's a huge number in the grand scheme of things. But could you do more? Could you do more? And others of you work at smaller organizations that are disruptors, and the opportunity is enormous because you can adapt faster, your organizations can adapt faster.

Speaker 1:

There's nothing, there's no word that I'm more interested in right now, in today's environment, than adapting Adapting to the environment we find ourselves in adapting, adapting to the environment we find ourselves in and not spending time mourning the change and leading a team. So how do you do that with a team? Just a quick thought before I wrap. You have to model that and I'll tell you the way, what works for me and the people that we work with, that.

Speaker 1:

I see who are good at this, the way what, what causes them to be good about it is expanding their bubble, consuming reading, being out with customers, just not being caught up in only the environment in which they work or they live, like getting out and and and seeing the ideas that are out there, networking, reading, thinking, learning, making yourself aware of where things are going, and then leading the charge and thinking about what's possible, what really is possible, how can I push this organization or this department or this team in ways we haven't tried before? And that, how exciting is that? It's like remarkably exciting, and it fuels me. Hopefully it fuels you too.

Speaker 1:

Some facts and figures, some of the latest from our data, our research, the latest data on the power of adapting. It's what I want you thinking about and how good you're doing in that and how you could lean into it more. So those are my thoughts. From the middle of nowhere in Minnesota, I'm on my way back to civilization after a great meeting, just a remarkable meeting, with an executive team of an organization that I'm a huge fan of, that is in better shape than it's ever been because of the strength of its leadership team. It's awesome to watch. That's what I got for you in this episode of the Lead in 30 podcast.