Push the limit
When you’re rolling out changes, Carley says one of the misconceptions many CEOs have is that alignment has to come
before results. For years, conventional wisdom said you needed
to align your employees with the company’s goals in order to
create momentum, which would then lead to improved results.
Carley saw this practice in effect when he worked at PepsiCo.
If the company wanted to launch a new initiative that was
expected to impact corporate culture, the human resources
department and store operators would be given six months to
win the hearts and minds of the employees before the initiative
would launch.
“They’d have meetings and presentations, they’d create board
games, they’d have off-sites, all designed around creating alignment around a particular change in direction,” Carley says.
“That just doesn’t work.
“What works is finding somebody — anybody — who is
either smart enough or stupid enough to do exactly what you
ask them to do, who gets fantastically better than average
results from that, then holding that individual or group of individuals out as an example and saying, ‘No. 1, this is possible;
No. 2, they’re no smarter or have more resources than you do,
and No. 3, this is what I expect, so get in line.’”
The idea that alignment is actually established because of
results and momentum — not the other way around — was
from Collins’ book, and it resonated with Carley because of his
personal experience.
Using this process, he was able to quickly see who his top
performers were and who was dragging the company down.
Finding the overachievers who can help you reach those best-in-class benchmarks is a difficult task. Carley says the keys are
to create a work environment of transparency and communication and only hire employees who fit with the environment
you’re trying to create.
Like firing a flare into the air, the CEO has to set the initial example for his or her employees. Carley says you have to put your personal values out there as a public statement. That way, employees
know what type of behavior will be rewarded and what type of
behavior will not be tolerated. When you act in accordance with
your published values, your company will attract people with similar values.
Carley has seen his strategies pay off. Once the three-year
restructuring period was complete, “The Crazy Chicken” was
hitting new highs. Operating revenue has increased by $41 million since fiscal 2004, to $260 million for fiscal 2006. The chain
also opened 39 new stores in that period, for a total of more
than 360 stores in seven states.
Through all the changes, Carley says one of the keys to understanding is the importance of creating a feedback loop. If something isn’t working or a message isn’t being understood properly,
your employees can’t be afraid to tell you about it. For that to
happen, you need to show some tolerance for “learning” mistakes. Celebrate the risks that panned out, and celebrate the
knowledge gained from risks that didn’t work.
“You’re always going to have elements of the plan that don’t
work correctly,” Carley says. “But if you’re trying to make a difference or turn something around or dramatically enhance performance, people have to know they have the ability to take
risks and make mistakes.”
HOW TO REACH: El Pollo Loco Inc., (714) 599-5000 or www.elpolloloco.com