November 08, 2006
The Profit in investing in employees
Posted by Lisa Fairfax

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.

Corporate Governance | Bookmark

TrackBacks (1)

TrackBack URL for this entry:

Links to weblogs that reference The Profit in investing in employees:

ยป The Chick Fil-A Way: Invest in Your Employees from Workplace Prof Blog ...
"Lisa Fairfax had an interesting post on Conglomerate yesterday discussing the fast-food chicken rest ..." [more] (Tracked on November 10, 2006 @ 11:02)
Recent Comments
Popular Threads
Search The Glom
The Glom on Twitter
Archives by Topic
Archives by Date
January 2019
Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31    
Miscellaneous Links