Conglomerate Blog: Business, Law, Economics & Society

Doing some light reading on the airplane, I came across a story about Chick-fil-A, the second largest quick service chicken restaurant and the 25th largest restaurant chain in the country. The story profiled its founder, S. Truett Cathy and his keys to creating a successful business.

The first key was to cultivate the desire to succeed. As Cathy put it, "A 19 year old can outperform a Harvard graduate" simply because he or she is willing to do the work.

The second focused on employees and the investments a company must make in its employees. As an initial matter, in case you have never been to a Chick-fil-A, it is not open on Sunday. Cathy explains that this policy has roots in his religious beliefs. As a result one may think it has no connection to employees. However, Cathy explains that Sunday closures also have importance for creating a better work enviornment. He claims that closing on Sundays--and ensuring that all franchises close on Sunday--attracts the caliber of people who appreciate such a gesture. Second, Cathy focuses on investing in people early. Hence, the company provides college scholarships to employees--something many other companies do. However, the company also seeks to give all of its employees the ability to have some ownership-type interest in the company. Not through stock options, but through operating franchises. To that end, the company invites any employee interested in operating a franchise to its corporate headquarters to learn about the company. Chick-fil-A also seeks to make franchises affordable in a variety of ways. And according to the article, franchises are typically only $5,000. Apparently as a result of these efforts, 65% of Chick-fil-A franchisees worked for Chick-fil-A in high school or college. Also, employee turnover at Chick-fil-A is only 3.5%. In Cathy's view these extra efforts with employees translates into more satisfied employees, customers and ultimately a higher profit.

I found the strategies Cathy employed interesting and refreshing because they moved beyond rhetoric to real policies.

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"Lisa Fairfax had an interesting post on Conglomerate yesterday discussing the fast-food chicken rest ..." [more] (Tracked on November 10, 2006 @ 11:02)

Doing some light reading on the airplane, I came across a story about Chick-fil-A, the second largest quick service chicken restaurant and the 25th largest restaurant chain in the country. The story profiled its founder, S. Truett Cathy and his keys to creating a successful business.

The first key was to cultivate the desire to succeed. As Cathy put it, "A 19 year old can outperform a Harvard graduate" simply because he or she is willing to do the work.

The second focused on employees and the investments a company must make in its employees. As an initial matter, in case you have never been to a Chick-fil-A, it is not open on Sunday. Cathy explains that this policy has roots in his religious beliefs. As a result one may think it has no connection to employees. However, Cathy explains that Sunday closures also have importance for creating a better work enviornment. He claims that closing on Sundays--and ensuring that all franchises close on Sunday--attracts the caliber of people who appreciate such a gesture. Second, Cathy focuses on investing in people early. Hence, the company provides college scholarships to employees--something many other companies do. However, the company also seeks to give all of its employees the ability to have some ownership-type interest in the company. Not through stock options, but through operating franchises. To that end, the company invites any employee interested in operating a franchise to its corporate headquarters to learn about the company. Chick-fil-A also seeks to make franchises affordable in a variety of ways. And according to the article, franchises are typically only $5,000. Apparently as a result of these efforts, 65% of Chick-fil-A franchisees worked for Chick-fil-A in high school or college. Also, employee turnover at Chick-fil-A is only 3.5%. In Cathy's view these extra efforts with employees translates into more satisfied employees, customers and ultimately a higher profit.

I found the strategies Cathy employed interesting and refreshing because they moved beyond rhetoric to real policies.

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