Choosing priorities
When so many things need to be fixed, the first step is deciding which problem to tackle first. Carley says making companywide changes presented a unique challenge.
“It’s a little bit like rewiring your house with the electricity
on,” Carley says. “You can’t just stop and take a year off to get
all this stuff put together, so you balance it.”
Carley started by considering where his upgrade dollars
would be the most effective.
“If your whole remodel budget goes into fixing the kitchen,
you’ve done nothing for the customer and you’ve done nothing
to elevate yourself against your competition,” he says.
“So you make decisions around what’s part of this strategic
remodel program and what’s basic repair and maintenance,
and you put them in separate buckets. Then you look at your
available capital and you start with what’s in the worst shape.”
Carley set up a three-year schedule for the company to solidify its foundation. Some programs, like installing state-of-theart technology and developing and implementing a $15 million
remodeling plan, had to be taken one step at a time.
“We put them on a three-year program so we could take a
chunk of it every year, and by the end of three years, we would
be where we needed to be,” Carley says.
Some problems, like the discontent among franchise owners,
couldn’t wait three years.
The franchisee requests were straightforward: Improve communication throughout the company and achieve total clarity regarding the proposed remodeling plan.
Carley laid out new ground rules of how the management team
was going to work with the franchise owners and their employees.
He told them he wanted their input to help him make the best decisions for the company, but that he reserves the unilateral right to
manage as he sees fit.
All of Carley’s plans for the company would be useless if the franchisees weren’t on the same wavelength as the management team.
Carley says to drive change, you need endless repetition as the first step toward successful communications.
“You just never change your script,” he says. “You never stop
saying it, you never stop repeating it; you weave it into every
message you make. You weave it into every speaking engagement, every voice mail, every meeting and into your standards.”
One additional hurdle Carley had to overcome was the widespread irritation of the franchise base with the company’s
direction. The franchisees weren’t happy with the way things
were going under previous ownership.
“We had a company that had been run as a stepchild by a corporate parent,” Carley says.
He started to fix the problem by leveraging Jim Collins’ ideas
in “Good to Great” into the company’s strategic plan.
“There is probably no company that better epitomized a good
company than El Pollo Loco,” he says. “We had good food and
good employees and good franchisees. We had good growth
and good profitability, but we were far from great. I needed a
vehicle to recognize and not denigrate the efforts of the folks
who had been here before me, but, at the same time, begin to
plant the seed that we’re far from great. Only great companies
thrive in good times and bad, and our mission was to become
great.”