Article
Business lessons from the late founder of Chick-fil-A
Cathy believed the key to success was 'taking care of the customer' and treating each of them like the most important person in the world.
September 8, 2014 by Alicia Kelso — Editor, QSRWeb.com
S. Truett Cathy, who founded the Chick-fil-A restaurant chain in 1967, died early this morning at his home. He was 93.
Cathy was born in 1921 in Eatonton, Ga., and grew up in Atlanta. He opened a diner in 1946, which eventually evolved into Chick-fil-A. He served as the chain's chairman emeritus until his death.
In late 2013, Cathy created a new Hawaiian-themed concept, Truett's Luau.
Setting the standard for customer service
His imprint on the restaurant industry – particularly the quick-service segment – is indelible: Chick-fil-A claims to have introduced the original chicken sandwich 50 years ago.
The chain is now an 1,800-unit, $5 billion-plus business. It ranked as the No. 9 top U.S. chain by sales in 2013, according to Technomic data, despite only being open six days a week. It has the highest same-store sales and is the country’s largest chicken QSR based on annual systemwide sales, according to the company. The chain is currently riding a record 47th consecutive year of annual sales increases.
The Atlanta-based company has set the bar high not only for its sales performance, but also for its customer service model. The company is repeatedly named at the top of a number of customer service benchmark lists and has been cited by industry insiders as the standard-bearer.
For example, Jim Knight, former training and development director at Hard Rock International, said Chick-fil-A creates an ideal culture through its employee orientation and training, which includes the “Every life has a story” video series.
According to Chick-fil-A, the video was created to "remind us that everyone we interact with is a chance to create a remarkable experience."
"That's a tough video to watch if you're a 17- or 18-year-old kid. It resonates. Instead of selling a product, they are asking them to think about what's going on," Knight said. "They're doing a lot of things from a cultural and service standpoint and they're hiring the right people to fit the brand."
Even chicken rival KFC looks to Chick-fil-A for customer service pointers. During a recent earnings call from parent company Yum! Brands, CEO David Novak said KFC is developing a stronger focus on the consumer experience that includes a systemwide training program applied to each team member in China. Novak said the program mirrors Chick-fil-A's training system.
"We want to help people and thank people for coming in, just like they do at Chick-fil-A. The 'it's been a pleasure serving you' — we picked that up from Chick-fil-A and built that into our brand of service experience," he said. "We have to make our customers happy and bring them back again and again. We want to make our customers feel valued."
Cathy extended his philosophy from customer service to philanthropy and community involvement. Chick-fil-A franchisees frequently host family-friendly events at their restaurants – such as Daddy/Daughter date nights – and support local schools and organizations.
Cathy also created the WinShape Foundation in 1984, which mostly supposed youth through scholarship assistance. Additionally, Chick-fil-A’s Leadership Scholarship Program has given more than $32 million in financial assistance to employees since 1973, according to a news release.
Other business lessons
Cathy was a prolific author who penned books such as It's Easier to Succeed Than to Fail; Eat Mor Chikin: Inspire More People; It's Better to Build Boys Than Mend Men; How Did You Do It, Truett?; and Wealth, Is It Worth It?
He shared a number of business lessons from his years of experience in the restaurant industry, and once said “It is when we stop doing our best work that our enthusiasm for the job wanes. We must motivate ourselves to do our very best, and by our example lead others to do their best as well.”
On the subject of leadership, Cathy said: “I believe no amount of business school training or work experience can teach what is ultimately a matter of personal character. Businesses are not dishonest or greedy, people are. Thus, a business, successful or not, is merely a reflection of the character of its leadership.”
He often cited a five-step “recipe for business success,” which includes:
1. Climb with care and confidence.Cathy’s daughter, Trudy, gave him a poster of a mountain climber with these words framed on the photo. “I wholeheartedly believe in this philosophy, which is why in all my years in the restaurant business, I have never tried to overextend. I’m satisfied stepping from one plateau to the next, making sure we’re doing everything right before moving on …” he said.
2. Create a ‘loyalty effect.’ Underscoring the attention to customer service was Cathy’s belief that “attracting great people helps create an unforgettable experience for our customers.” He said it requires time and effort, but it is time well spent. This philosophy, he believed, led to a low turnover rate within the company – fewer than 5 percent of franchise operators leave the chain every year.
“The more we can foster the feeling that we are a group of people working together, depending on each other, the more likely we are to be loyal to each other … Customer satisfaction is the payoff for spending the time to search for the best employees. Our restaurant team members have proven time and time again that going out of your way to make sure our customer has a pleasurable dining experience will build customer loyalty,” he said.
3. Never lose a customer. Once that customer loyalty is built, Cathy believed it was important to not lose a single customer. He once said that when he delivered newspapers as a teenager, he treated each recipient like the most important person in the world. “The key to succeeding is to take care of the customer … I have found that the most effective way of promoting my business didn’t cost me anything but a little kindness to my customers.”
4. Put principles and people ahead of profits. Cathy once said, “We should be about more than just selling chicken; we should be part of our customers’ lives and the communities we serve.”
5. Closed on Sunday.Cathy, a Southern Baptist, said one of the “most visible examples” of putting principles and people ahead of profits is Chick-fil-A’s decision to remain closed on Sundays. This decision, he said, was a way to honor God and “direct attention to things that mattered more than our business.”
Cathy also provided tips to those who want to embrace entrepreneurial success, including:
- Not be burdened with personal debt;
- Start early – as a teenager;
- Sacrifice material things and reward yourself later;
- Observe what is working in the lives of others;
- Don’t try to please everyone;
- Set your priorities straight;
- Grow your business cautiously;
- Use franchising cautiously;
- Be prepared for disappointments and failures;
- Be kind; and
- Invite God to be involved in every decision.
Chick-fil-A will remain privately held
Cathy is survived by his wife of 65 years, Jeannette McNeil Cathy; sons Dan T. and Don "Bubba" Cathy; daughter Trudy Cathy White; 19 grandchildren and 18 great-grandchildren.
This afternoon in Atlanta, EVP of Operations Tim Tassopoulos will make a statement concerning the death of Truett Cathy. He will make brief remarks but will not take questions.
On Tuesday, a private family viewing and public viewing will be held. On Wednesday, additional public viewing and a public funeral service will be held. The private family burial is set for Thursday.
Chick-fil-A will remain privately owned and under the leadership of Cathy’s oldest son, Dan, who became president in 2001 and CEO in 2013. It will also remain closed on Sundays.
