When Steve Carley became president and CEO of El Pollo Loco Inc. in 2001, he saw a company that wasn’t living up to its tremendous potential. The company had a unique and authentic product and tremendously loyal employees and franchisees, but it seemed content with “good.” Carley, however, wanted “great.” Coincidentally, Jim Collins’ book “Good to Great” had just come out, and the book’s principles, combined with Carley’s leadership experience, became the perfect blueprint for Carley to take El Pollo Loco to the next level. Under his guidance, the company’s number of stores and revenue have continued to rise, with operating revenue growing to $237.2 million last year. Smart Business spoke with Carley about how he made his mark and took El Pollo Loco from good to great.
Don’t be complacent.
At El Pollo Loco, what we had was a good company. But I needed a way to rally franchisees and company employees around a vision of greatness.
Jim Collins’ book “Good to Great” was the perfect medium for me to express how I felt and how I wanted to lead the company to the next level, which is, ‘Good is the enemy of great.’ If you’re complacent with good, you’ll never get great.
Let’s set our course on being a great company. Let’s benchmark what great companies do. Let’s set our standards to be great, and let’s all move forward on that basis.
Create alignment through results and momentum.
You have to demonstrate to the vast majority of the folks working with you that you can create results and positive momentum. And once that happens, people align behind you.
If you try and win their hearts and minds through speeches and presentations and four-color, tri-fold brochures, it is a waste of time. When we roll out a change initiative, we will carefully watch the early adopters in the company.
When those people who embrace the change start getting results and performance, we then broadcast that through the balance of the company to demonstrate to people that, No. 1, it’s not impossible; No. 2, people just like you can do it; No. 3, we’re getting great results from this; and No. 4, after a period of time, we’re holding you accountable to do the same thing.
Hire passionate people instead of trying to create them.
I maintain that CEOs can’t instill passion or motivate employees.
The CEO’s job is to find, hire and nurture employees that already are motivated and have passion. That’s the key job.
If you’re not motivated, then we can change the environment, we can give you different challenges, we can provide you with different opportunities, and if that’s not working, then I need to find somebody who is motivated and passionate.
Know your business.
The key to recognizing good business opportunities starts with a deep understanding of your own business so you know what makes your business tick and what makes your business successful.
The second is having a discipline around an annual strategic planning process where you question the key elements of what’s working and what’s not working for you and your competitors and your industry.
When you have that … you will begin to see opportunities emerge that make sense for your business and that fit with your strategic plan. Balancing risks and opportunities is always an issue. If you have a deep understanding of your business, you’re in a better position to take a risk because you have a better understanding of what the potential upside might be and how you can fix that business or add value to that business or change that business to get a return on your investment.
Create learning experiences out of failures.
Your greatest challenges are when you haven’t been successful — when you have taken a project or situation and you have given it everything you’ve got with passion and motivation, and it has not worked. That is a very tough situation with obviously personal ramifications and, in many cases, financial ramifications, too.
The key in those situations is to take that negative and turn it into a positive by making sure you learn everything you possibly can about why it didn’t work — what you did right, what you did wrong — on a really blunt, brutal basis.
By making that situation a learning experience, you can salvage a tremendous amount of value from it, and it will not become a millstone around your neck going forward, but a way to motivate you and inspire you and give you good learning for the future.
Clearly define your performance criteria.
People can’t do what you ask them to or what the company needs them to do if they don’t know what that is.
So many times, we find in performance management that the employee in question doesn’t know what they are supposed to do. There are unclear, murky or unfocused metrics for success.
We have clearly defined metrics for our restaurant-level leaders. You need that to have a really great performance-oriented environment. We’ve been refining them and building on them for years now. They need to be firm, but fair and achievable.
Continually upgrade your team.
The single most important thing for a CEO to be successful is to have a committed and passionate team supporting him or her.
One of the things I did when I came to El Pollo Loco is I took a very hard look at the folks that were working with me, and over time, as there was natural attrition, I made a point to dramatically and significantly upgrade the quality and experience of the individual that replaced that former individual.
That has paid dividends for me big-time. That same thought process needs to trickle down throughout the organization. Any time you have natural attrition, you want to bring a person in who’s better than the person who left, and you want to raise the average watermark of the water level of the folks in that group.
HOW TO REACH: El Pollo Loco Inc., www.elpolloloco.com