Chick-fil-A’s rise to the No. 3 largest restaurant chain in the country is news that many retailers may have heard, but not given much thought to. With sales up 17% in last year following 51 consecutive years of growth to reach $10.5 billion in revenue and 2,400 restaurants, Chick-fil-A trails only McDonald’s ($38.5 billion and some 14,000 stores) and Starbucks ($20.5 billion and about 14,000 locations also) among U.S. restaurant chains.
Another bit of news that may have passed retailers by is that Chick-fil-A is rated the No. 1 fast-food restaurant in the country in the American Customer Satisfaction Index. With a rating of 86 points, it leaves McDonald’s (69) and Starbucks (79) in the dust. But then, that is the quick-service restaurant (QSR) business, not regular retail.
However, the latest 2019 ranking of the top 100 most reputable companies compiled by the Reputation Institute should put everyone on notice.
Chick-fil-A has been inducted into the ranks of the country’s most respected and revered companies. It entered the list at No. 51, ahead of Amazon (No. 54) and where it keeps company with other highly-rated retailers like Barnes & Noble, Costco, Bass Pro Shops, Menards, Ace Hardware and Lowe’s.
“Among the people who know it and love it, Chick-fil-A delivers on the reputation drivers that matter – in linking high-quality products and services, to a high-minded sense of purpose, and a commitment to well-intended acts of good citizenship,” says Stephen Hahn-Griffiths, chief reputation officer at Reputation Institute.
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No matter what Chick-fil-A is selling, it is selling it really well. So, regardless what retail sector it operates in, it runs a first-class retail operation. Chick-fil-A has lessons to teach every other retailer in how to be successful in retail, too.
To learn Chick-fil-A’s retail “secret sauce,” I sat down with Khalilah Cooper, who is director of Chick-fil-A’s service and hospitality group. She joined the company after a stint as a management consultant at McKinsey & Company and getting an M.B.A. from Harvard.
While Cooper credits the company’s success to its freshly-prepared food made with the best-quality ingredients (e.g. only breast meat is used with no fillers or hormones and, by the end of 2019, no antibiotics either), she is also the first to admit the food is but a small part of the story.
“Great tasting food gets people in the door, but that is ‘table stakes’ in this business,” she shares.
“It’s really about delivering high-quality personalized service, best-in-class hospitality along with food that tastes great. We care so much about our guests that we believe something as simple as coming in to buy a chicken sandwich can be a bright spot in their day.”
Excellent product matters, but people matter more
Today retail is a people rather than a product business. But to get people to shop, it takes products that people really want. That’s why every retailer should strive to sell the best products in their category and within their customers’ expected price range.
Likewise, consistent quality that meets customers’ expectations is important. But to do that, retailers need to know what they are good at and shine the spotlight on that. Since nobody can be good at everything, it is critical for retailers to be truly excellent in whatever they are trying to sell and not try to be all things to all people.
Chick-fil-A demonstrates how retailers need to go deep and long into what they can do exceptionally well and to forget about going broad and wide.
For Chick-fil-A it is chicken done any number of ways for breakfast, lunch, dinner and snacks, with waffle-cut fries, salads, drinks and desserts. But even in these ancillary categories the same exceptional quality standards are maintained, with fresh salad vegetables delivered daily and chopped in-house, fresh lemonade made from real lemons not concentrate, in-house brewed iced tea, and freshly-spun milkshakes.
“When people walk into Chick-fil-A, they get a chicken sandwich, fries and a Coke, but we are very intentional about every step in the process,” Cooper says. “When they come in, they are greeted by a well-dressed person who gives them a smile, makes eye contact, doesn’t rush them and is able to bring the meal to the table. This is the great customer experience and the ‘secret sauce’ honestly is our operators and their local ownership of those restaurants.”
For years I’ve been saying success in retail is less about what you sell and more about how you sell it. Chick-fil-A is proof positive. Products still matter, but the people matter more.
Bottom-up, rather than top-down management
One of the root causes of the retail apocalypse and why over 7,000 major retailers have closed stores so far this year is because management has taken a cookie-cutter approach to their stores with a top-down management structure. Walk through any enclosed mall in the country and each one looks very much like the rest: the “usual suspects” decked out in the usual way.
Chick-fil-A understands that physical retail is first and foremost a local business designed for local customers. Thus with most franchisees operating only one store, these owners are deeply committed to their local community and serving its special needs.
“Our operators are invested in their local environment,” says Cooper. “They are spending their time there, stewarding their business. Our operators are embedded in that restaurant in their community and pouring an extraordinary amount of care into their team and to their customers each and every day.”
Owner/operators/managers literally take orders from their customers, not from corporate executives, who in other retail operations may dictate every aspect of operations.
The Chick-fil-A corporate support center partners with operators to truly enhance the local experience. In that way, innovative ideas can bubble up from the local store to corporate and then filter out to the rest of the company.
Commitment to innovation regardless where it originates
Reputation Institute’s Hahn-Gritffiths attributes much of Chick-fil-A’s rise to the top 100 most reputable companies to its focus on innovation. For that, the company can thank Cooper and her support team.
“Our bests ideas come from our operators because they are in it each day. Then we come alongside them to help them with it and scale innovation across our system,” Cooper says.
Innovation is part of the company DNA and formalized through an operator-innovation team that meets quarterly, if not more frequently, to look at innovative opportunities across the entire organization, from hospitality and service to back office systems. “They help us get close to them and they give us direction, so that we can help create solutions that best serve them,” she continues.
One such innovation relates to the drive-thru service, which rapidly gets backed up during meal times. Putting service first, some local operators started to send staff out with notepads and cell phones to take orders from customers before they reached the speaker box.
“We came alongside operators to help them make this innovation scalable and to make sure such service is safe for customers and team members. Now we’re able to take orders with iPads in safe-walk zones and where team members can deliver meals to the cars safely,” Cooper shares.
Hire right, train right and develop staff to their highest potential
In Chick-fil-A’s world, people come first. That means the customers but it also includes the people who serve those customers. Local operators look to hire people with a service-first, people-friendly attitude—the rest can be taught on the job.
The support center provides training systems about how to properly execute tasks in the local stores, like chopping lettuce and breading chicken, but more importantly, staff members learn why everything they do is important down to the most mundane task.
“We provide training for tactical execution, but what is really important is to cast the vision around why we are doing all of this,” Cooper says.
By providing each team member, no matter what their job, with an understanding why that job is important, the company also commits to the importance of each individual team member. Unlike so many other QSR establishments where a job may be a dead end, Chick-fil-A communicates the value and importance of every member on its team and gives each one opportunities to advance and grow.
“When they know how they fit into the broader puzzle of taking care of guests and being a positive influence in their community, people feel empowered to go above and beyond,” Cooper shares, as she tells of a drive-thru staff member who actually jumped out of the service window to save a child who was choking in a car.
“It’s all about valuing people,” Cooper continues, so Chick-fil-A grants college scholarships to help its team members grow. In 2019, it awarded $15.3 million team member scholarships, like this one to 21-year old Abram Waller who works in the White Oak Village store in Richmond, Virginia. I dare you to read his story and keep a dry eye.
Other retailers can take a lesson in this. The company truly cares for its own people, who have the ultimate responsibility of caring for its customers. They employ extraordinary people to do ordinary things in an extraordinary way. The result is an extraordinary experience for customers and team members alike.
Values above all
And finally on the seven attributes that Reputation Institute measures – products/services, innovation, workplace, governance, citizenship, leadership and performance – it finds “the power of purpose and expressing your corporate brand strength in a unique, genuine and consistent way can have the biggest impact on reputation.”
Chick-fil-A does it in a very prominent way: by being closed on Sundays. While some may look askance at this as hearkening back to “blue laws” and playing to the religious right, the policy originated for a more practical reason.
Founder Truett Cathy carried over the practice from his original restaurant. Because it was open 24 hours a day, he believed it important to give his team one day off a week. He continued the practice at Chick-fil-A to guarantee all employees had one weekend day off to spend with their families and in their communities.
Its closed-on-Sunday policy sacrifices money – as much as $100 million by one estimate – in favor of the well-being of its team members.
Yes, Cathy, who passed in 2014, was a Christian and didn’t want to “deal with money on the ‘Lords Day,’” but the religious overtones take second place today to Chick-fil-A’s fundamental belief in putting people first. It communicates loud and clear, as a 2009 corporate statement said, “There must be something special about how Chick-fil-A feels about its people.”
In these divisive times, corporations that take a strong values stance on one side or the other of issues may alienate those who stand on the other side. At the same time, businesses that don’t stand strong for something risk being seen as irrelevant, out of touch and not engaged.
Grounding a business in authentically held and consistently practiced values can bond people more tightly to the business and make them feel a part of something bigger than just being a customer conducting a transaction.
Chick-fil-A proves it with its “Do unto others as you would have them do unto you” principles. To thrive in today’s retail environment, retail businesses must put people before product to thrive and that must include both its customers and its employees. Other retailers would do well to copy Chick-fil-A in this principle, too.