Steps To Success – Part Two

Profile on: S Truett Cathy:  The Chick-fil-A  success Story. Chick-fil-A is a fast food restaurant chain in the USA.  It has over 1000 restaurants.

Read Steps to Success – Part One

S Truett Cathy’s four tenets

Chick-fil-A’s expansion was governed by a small number of basic principles. In 1971 Truett articulated those principles in the form of what he referred to as the “four tenets by which our company would be run.” (Cathy, 1989, p 125) The tenets and Truett’s explanation for each were:

1. Instead of selling franchises, Chick-fil-A will form joint ventures with independent Operators. (This “guarantees quality, supervision and the motivation of partnership.”)
2. Stores will only be opened in major shopping malls. (This was a timely niche to enter because malls were becoming popular. This was also a way to minimize capital costs per store.)
3. Growth will be financed primarily internally. (This allowed Cathy to keep ownership control and thereby run the business according to his Christian principles. It also reduced the likelihood of losing operating and quality controls because of too fast a pace of growth.)
4. The chief emphasis will be on people. (This “is the essence of the philosophy of life that God has entrusted to us.”)

Cathy’s opinion regarding ownership control is worth further comment. Here is what he had to say about this issue (Cathy, 2002, p. 88):

“In the early days we did not offer stock for sale because I could not predict how fast the company might grow or what dividends we might pay to anyone who might invest. Additionally, I’m afraid the directors, if we had a bad year, might tell me I’m old fashioned and fire me….

“If I had a widow invest her savings in Chick-fil-A and the company didn’t pay the return she expected, I would feel obligated to make up the difference for her. Even if we paid less than she could earn in a savings certificate, I would feel compelled to bail her out. Feeling that way, I might as well sign the bank note and be personally responsible rather than take other people’s money.”

The decision to remain independent did face a moment of truth shortly after the first mall store was opened. At that time Truett was approached by the cafeteria chain Morrison’s with an offer that seemed irresistible. They would pay Truett what seemed like a high price for ownership of the Chick-fil-A rights and would then hire him to direct the growth of Chick-fil-A outlets. Truett would become an officer of Morrison’s and would stay for at least five years or until 50 Chick-fil-A stores had been opened. It was a tempting offer. Morrison’s had the resources to make faster growth possible, Truett admired them. And the offer would provide financial security for the Cathy family. But after much praying and discussion within the family, Truett turned down the offer. (Cathy, 2002, pp. 90-92)

Relationships with store operators

Cathy’s approach to relationships with store Operators is also worth additional comment. He devotes a lengthy chapter of his 2002 autobiography to this topic. Among the highlights of that chapter are the following comments:

1. “In my first meeting with a potential Operator, I explain that our commitment is going to be like a marriage, with no consideration given to divorce. We’re much more careful about selecting Operators when we know we can’t easily get rid of them.” (2002, p. 97)
2. “We expect our Operators to abide by several tenets that we adhere to:
   • People want to work with a person, not for a company.
   • Each new Operator is committed to a single restaurant.
   • Operators will hold no outside employment or business interest.
   • We choose Operators for their ability and their influence, so we want them in their restaurants.
   • We expect quality interaction between Operators and team members.
   • We expect quality interaction between Operators and customers, both in the restaurant and in the community.” (2002, pp. 97-98)
3. “Our Operators work closely with us, but they are owners of their own business. In 2002 more than half of our Operators earned more than $100,000, many earned $200,000 and a few topped $300,000.” (2002, p.99)“After we make the necessary investment – buying the real estate and building the restaurant – we turn over the responsibility of running a $2 million-plus business (for a free-standing location) to these independent franchisees – many of whom have not yet turned thirty years old. We support them with training, technology and anything else they need. But the bottom line depends on the Operator’s honesty, integrity commitment and loyalty to customers and to us. We trust our Operators to make good decisions – and they do. I don’t know of another restaurant company that places so much responsibility in the hands of its franchisees.” (2002, pp. 98-99)
4. “Another key to Operator loyalty lies in our decision to allow each Operator to have only one restaurant. At first this policy might seem counterintuitive. Many companies reward success by enlarging territories or brining them into the company to oversee operations of other franchisees. I want our best people right there full time in the restaurant they’ve built, serving the customers and team members who have become loyal to them.” (2002, p. 100)
5. “A restaurant company needs two things to succeed: capital and talent. Franchise restaurant corporations raise capital by selling the rights – usually for hundreds of thousands of dollars – to open a restaurant to people who have already succeeded in the business and are looking for a good investment. Sometimes the franchise owner will work directly in the restaurant, but most of the ones I have met are looking to own several units from which they can draw income. They aren’t actually wearing a uniform and serving customers. We supply the initial capital for the restaurants, so we don’t have to limit our search for Operators to people with high personal net worth. The only money required from and Operator is a $5,000 refundable capital commitment.” (2002, p. 106)Cathy says the company was receiving 1,000 requests per month from persons desiring to become Operators; the majority of those chosen had been Chick-fil-A employees; an their average age was 30. (2002, p. 107)
6. “Most (Operators)…feel that this is more than just a job. They feel either a divine call or the satisfaction of a desire to make a difference in the world. They contribute greatly to the development of teenagers who work in our restaurants, creating a wholesome atmostphere in which to work and modeling positive leadership traits that teenagers will take into their adult lives. Our Operators consider themselves to be mentors to the next generation.” (2002, pp. 111-112)

S Truett Cathy explains his Christian business principles

Christianity is a signature characteristic of Truett Cathy’s business and private life. In business his Christian commitment shows up both in his daily dealings with people and in the “corporate purpose” which was adopted in 1982. That statement is reminiscent of ServiceMaster’s mission statement. Adopted by the executive committee under Truett’s chairmanship, the Chick-fil-A business purpose statement is:

“To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.”

That statement was placed on a large plaque at the entrance to company headquarters where Truett hoped it would serve as a reminder to all of how to conduct themselves day in and day out. Copies were also prominently placed at each operator’s location as a means of keeping the company’s ideals uppermost in the operator’s minds.

The Christian emphasis raises the question of whether or not employees must be Christians. Truett Cathy’s answer is (Dailey, 2002, p. 13):

“Not at all, but we ask that you make your business decisions based on biblical principles. There seem to be no conflicts when we tell people of various faiths how important it is to stick to the scriptures in business decisions. In the scriptures we learn how to handle our business, how to give customers good service and how to treat employees.”

Running a company on Christian principles has paid off for Cathy, but the policy has had its critics. There has even been a discrimination suit. In 2002 an ex-employee in Houston filed a lawsuit claiming that Chick-fil-A had fired him for refusing to pray to Jesus Christ during a training session. (“Suit Accuses Atlanta-Based Fast Food Chain Chick-fil-A of Religious Bias,” 2002)

Two of Cathy’s Christian business principles deserve a closer look:

Closing on Sundays

One of the most striking features of Truett’s Christian management approach is his refusal to do business on Sundays. In 1982 a major mall developer attempted to get Truett to change the policy by offering to donate $5,000 to a church of Cathy’s choice for each Chick-fil-A mall restaurant that was open for business on Sundays. Truett’s response, presented in his 1989 autobiography, reveals the reasons why the stores are closed on Sundays. In rejecting the developer’s offer, Truett said, in part (Cathy, 1989, pp. 74-76):

“Thank you for permitting us to close on Sundays. We’re doing business on your premises and you did not have to make an exception. Because of this, we’ll pledge to you exceptional performance during the six days we are open.

“Why do we close on Sunday? Well, it started back in 1946 when I opened my first restaurant, a 24-hour coffee shop called The Dwarf House. After the first week, I determined that if it took seven days a week to make a living, I should be in some other business. Too, it was my conscience that I had to live with; I just never could come to the idea of dealing with money on the Lord’s Day. I became a Christian at age 12; that’s not to say that everything I’ve done since that time is becoming to a Christian, but I believe the Lord had blessed us because we recognize Him on this special day we call Sunday….”

“I do not condemn a person for opening on Sunday; it is just a principle I stand very firmly on for my business….”

“We find closing on Sunday attracts those people who give attention to spiritual growth and are family oriented. The fact that we have Sunday closing helps attract quality housewives and young people as employees.…”

“You are just the kind of person we would like to honor with any reasonable request, but please understand, we cannot compromise on certain principles.”

Opportunity for service of others – mentoring young people

Like JC Penney before him, Truett Cathy was a member of Rotary, an international service organization. And like JC Penney, Cathy’s approach to business made him a role model for fellow Rotarians. In Cathy’s case what is striking is the manner in which he exemplifies the Rotary ideal of, “dignifying (one’s) occupation as an opportunity to serve society.”

Of particular note is Truett Cathy’s recognition that the business put him and his Operators in a position to mentor thousands of young people. As was the case with virtually all fast food restaurants, Chick-fil-A hired teenagers for the vast majority of the entry-level positions. Many, if not most, of those teenagers were in need of career advice and character development mentoring. The Chick-fil-A workplace could be the place where some of that could occur. Truett saw the need, felt the call to serve and made Chick-fil-A a place where young people would find adult mentors. As he once put it (Cathy, 2002, p. 48):

“The restaurant business gives us a wonderful opportunity to mentor young people and help guide them toward adulthood. Hundreds of thousands of teenagers have worked at a Chick-fil-A restaurant and I like to think we have been a positive influence for each of them.… Many of our young employees have been encouraged to work for Chick-fil-A because of the positive influence of our Operators.”

In 1997 Rotary International discovered Truett’s good work and profiled him in the July issue of its magazine. (West, p.50) In that article Truett was quoted as saying:

“The restaurant business provides my livelihood and its success enables me to fulfill the obligations of Vocational Service as well as community service. By contributing to the continuing education of my employees and helping youngsters without families, I also make a contribution to a better society. As a Rotarian, I can do no less.”

Community service has been a core source of meaning for Truett Cathy. Arguably the three most notable examples are:

• his service as a Sunday school teacher,
• his sponsorship of college scholarships and
• his outreach to young persons in need of adult friends and role models.

Sunday school teacher

Theo Abbey, Truett’s Sunday school teacher, inspired Truett to make a commitment to Sunday school teaching, a task Truett took on with relish. He started teaching Sunday school for teenage boys in the 1950s and was still teaching in 2004. He saw his job not only as introducing the young persons to the Bible but also providing a wholesome role model. And so he would get to know the youngsters better by doing such things as treating them to a meal at his restaurant during the week and bringing them home for a meal and some fun on the weekends.
But there was more. In every class he looked for youth who was obviously in need of personal attention. When he found someone in need he would go the extra mile. As he once put it (Cathy, 2002,p. 30):

“When I encounter children whose fathers do not participate in their lives, I try to establish a relationship with them. I have taught thirteen-year-old boys in Sunday school for nearly half a century and through that contact have tried to identify those boys who didn’t have fathers or who lived in divided homes. I often give those children more attention than I do those with a stable home life. Over the years I have become a substitute father or grandfather to dozens of children, as Mr. Abbey did for me sixty-five years ago.”

Scholarships

To date, more than $18 million in $1,000 scholarships has been awarded to eligible students, with $1 million awarded in 2002 alone.

Homes for boys

Sprinkled throughout Truett Cathy’s life story are incidents of reaching out to individual boys in need of adult kindness, caring and guidance. Some, as noted earlier, were connected with his Sunday school teaching. Others were not. Both of his biographies are filled with examples. An insight into the nature of his one-on-one work with youth is suggested by the following excerpt from an interview with evangelist Billy Graham’s magazine Decision (Dailey, p.15):

“Once a caseworker called me about three boys who needed a mom and a dad, but at the time we didn’t have a place in our foster homes for three boys. They spent the weekend with us. Their ages were 12, 14 and 15. The first thing we did was to eat. Then we went shopping. Then we ate some more. Back at our home we read the third chapter of John and I explained briefly what it meant to be born again.

“The next day I asked if they had thought about becoming a Christian. The two older boys said that they were Christians, but 12-year-old Nicholas said, ‘Well, I’m not.’ I asked him when would be a good time to accept Christ, and he said, ‘Right now!’ So there in the car we bowed our heads and prayed.”

This personal mission was raised to a new level when Truett established WinShape Homes, a program of long-term care for foster children. The name represents the program’s goal of homes that shaped winners. By 2003 WinShape Homes operated eleven long-term homes in Georgia, Alabama, Tennessee and Brazil. Each home provided a family atmosphere for up to 12 children with two full-time foster parents. The Brazilian program came into being after Truett visited his daughter and son-in-law while they were serving as missionaries in Brazil.

Successor management

Truett’s plans for successor management focused on his family. All three of his children worked in the business while they were growing up. Dan, the oldest son, graduated from Georgia Southern University and then went to work full time in operations on the headquarters staff.

Bubba, the younger son, graduated form Sanford University in Birmingham, Alabama and went to work as a carpenter’s helper in the design and construction department. He then became a Chick-fil-A Operator for a time before returning to headquarters to work in development.

Trudy, their daughter, became a Chick-fil-A Operator after her first year of college. She later married John White, a star Chick-fil-A associate and, like her, a devout Christian. The newlyweds soon felt a calling to become missionaries and ended up serving in that capacity in Brazil. While there, they enlisted Truett’s help in setting up a foster home for Brazilian children.

All three children demonstrated strong management skills. The two who remained with the company became the obvious choices for successor management. They both established their strong credentials by being active participants in the company planning as well as in operations. In fact, by the late 1980s they were pushing their father to raise his sights. In 1989, for example, Dan Cathy talked his father into setting an eleven-year goal of an annual 12 to 15 percent sales increase. (Cathy, 2002, p. 164)

In 2001 Jimmy Collins retired as President and Chief Operating Officer and Dan Cathy was appointed to replace him. Bubba Cathy was already serving as Senior Vice President. Truett Cathy continued to serve as Chairman and Chief Executive Officer.

Conclusion and appraisal

By 1988, Truett Cathy and Chick-fil-A had become business celebrities. Favorable articles on the business appeared in Success, Entrepreneur, Venture, Forbes, Fortune, Nation’s Restaurant News, and Restaurants and Institutions among other publications. In 1986 Business Atlanta called Chick-fil-A, “One of Atlanta’s most famous home-grown companies” and named Truett “Entrepreneur of the Year” in 1987. Restaurants and Institutions reported that Chick-fil-A was the nation’s top-rated chicken restaurant in the magazine’s eighth annual survey of customer satisfaction. (Cathy, 1988, pp. 148-149)

The following years brought even more recognition as the company grew larger and become even more visible and as Truett’s charitable work expanded in scope. In 1989 Truett received the prestigious Horatio Alger Award. In 1994 he became the first recipient of the National Foster Parent Association’s new Commitment to Foster Care Award. (Diana West, 1997) He was publicly presented as a Christian role model on national television by Robert Schuller and in print by evangelist Billy Graham and Focus on the Family.

Those close to him were probably less impressed by his public recognition than by the way he conducted his daily life. They saw him taking the time necessary to maintain a close knit and loving family; they saw him finding time for a few valuable leisure pursuits including his love of motorcycles and hikes on his farm. They saw him establishing healthy long-lasting relationships with people who shared his values and with people for whom he served as a role model. (Cathy, 2002, pp. 60-69 as well as various other portions of both autobiographies) In short, they saw him as a business executive who did an exceptionally good job of leading a balanced life.

Those close to him for many years also had to marvel at how he was able to continuously renew his management abilities as the requirements of the job changed. As he put it (Cathy, 2002, p. 89):

“When we opened the first Chick-fil-A restaurant in 1967 I never expected a chain of 1,000 restaurants and at that time I was not capable of running such an operation. But I grew into it one day at a time with the help of talented people around me.”

Given that perspective, how does S Truett Cathy wish to be remembered? He answers that question in his 2002 autobiography with these words (p. 35):

“I think I’d like to be remembered as one who kept my priorities in the right order. We live in a changing world, but we need to be reminded that the important things will not change if we keep our priorities in proper order.”

Truett’s two autobiographies lend strong support to the argument that this statement truly reflects his worldview. For example, he tells of a defining moment early in his adult life when he appears to have thought through the issue of priorities. That moment occurred when, at the age of 38, he was found to have colon polyps and he became convinced that he was about to die. That caused him to think through what really mattered to him and he then and there made a commitment to change his priorities. (Cathy, 1988, pp. 64-65) The selection of material presented in both autobiographies seems to indicate that he followed through on his new commitment to Christian living.

Are you at the place in your life where you want your life to count for significance? Would you like to help other people reach their potential? Why not let Jesus show you how to do this? If you don’t know Jesus, we encourage you to pray the following prayer:

Lord Jesus, I want to know You personally. Thank You for dying on the cross for my sins. I open the door of my life and receive You as my Savior and Lord. Thank You for forgiving my sins and giving me eternal life. Take control of my life. Make me be the person You want me to be. Amen.

2 Responses to “Steps To Success – Part Two”

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• Donna Davis says:

  August 7, 2010 at 6:57 am

  This article was a blessing. He has been used mightily by God.
  Walk with the King and be a Blessing!!!

• Susan says:

  September 26, 2014 at 12:57 am

  This is really an excellent article. I like the way, he is reaching out the youngsters and kept God his first priority. I am really blessed with this article and I have learned so much from this. Thanks you so much.