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Shakey's Leadership Greatness

International Family Food Services, Inc. (Shakey’s)

Impact of Leadership Greatness

The following article is based on information gathered from Shakey’s OD Manager, Gilbert Tolentino, and Training Manager, Marielle Santos. The ManCom of Shakey’s and the heads of the other companies under International Family Food Services, Inc.attended FranklinCovey’s Leadership Greatness (Leadership: Great Leaders, Great Teams, Great Results) Program on December 4-6, 2007. This business case details Shakey’s challenges before the intervention, what they have done to apply what they have learned, and the results they were able to get.

What made you choose the Leadership Greatness (Leadership: Great Leaders, Great Teams, Great Results) Program?

We initially made changes in our organization in 2003. By the end of 2007, we were able to achieve a four-year double-digit growth. And so we asked ourselves, “What more should we achieve?” The questions foremost in our minds that we wanted answered were: “How do we develop real leaders in the organization so we can be more effective? How do we link the corporate-level purpose and objectives with those of the departments? How do we create and celebrate a “wowing” culture? How do we focus on making the right things happen and on getting the right things fast?” We knew the answer was in focusing on leadership development of the key people first, because they have a huge impact on the company, given the number of people working under their supervision.

In which of the four imperatives did you find your biggest gains? In what ways would you consider them as gains?

  • Clarify Purpose
    • Agreements that had been made with the boss are first clarified with the people of the team. There is better communication in the team now and this has made the sharing of upper management's expectations easier.
    • People have become "managers" in their own right and this has empowered them to make decisions. On their end they felt their importance to the organization and as a result, they have been accountable for their decisions. To prepare them, the bosses have been ensuring that there’s good communication in the team and that they are recognized for making good decisions.
    • People saw the bigger picture of the benefits of serving guests better.
  • Align Systems
    • Since 2008 there have been notable improvements in coordination and cooperation.
    • Managers have been making their people feel that they are working for them.
    • There was a trust issue in the past. Through improved communication, high trust has been established between managers and their direct reports.

What was your most important insight? How did you apply it in the organization and what was the impact?

  • The seminar was very insightful. We were inspired to make some changes in the systems of the company. One of these changes was reversing the triangle, making the frontline people the head, and the management, their support (launched as “Inverted Triangle Philosophy”). In the past, our limitation was that operations always felt that they were second-class citizens. We clarified and provided a structure that resulted in this inverted triangle.
  • We also tried to change everyone’s mindset, e.g., by changing the name of “Head Office” to “Corporate Support Office.” It required the Mancom to walk the talk. Ratings of the Corporate Support Office people depend on the amount of support they have given to the frontliners. Our Performance Appraisal System has been overhauled to reflect this change.
  • Performance-based compensation was introduced and with it, the Employee Differentiation Program, where the Top 20% Performers got more rewards than those who did "GOOD."
  • Climate and Department Service Surveys are done twice a year.
  • The impact was tremendous. Sales went up and increased as the highest in the history of Shakey’s, growing by 29.9%. Same-store growth was 20%. By 2008, we were able to achieve a five-year double-digit growth. We also won the Outstanding Filipino Franchise Award given by the Philippine Franchise Association. We received positive rating from our employees, suppliers, and franchise partners. Our people see that the company is investing in them and their satisfaction is reflected in their work.

What other systems or processes were implemented?

  • The cascade was imperative, making the middle managers understand the concepts, clarifying purpose in a stronger way, and resulting in a clearer line of sight.
  • Measurement is now mandatory. We started by using the NPS (Net Promoter Score) to measure satisfaction of our internal customers and now, even the comment cards in the stores are NPS based.
  • Clarifying Purpose:  All the teams/departments were really enlightened after having identified their purpose. It made them feel really good to be very clear about what each department/team stands for. There is no question whatsoever as to which team is responsible for what.  We have been able to identify for each department a vision that is so inspiring that we’re not just living on a day-to-day basis but working towards a specific vision. We now have something to aim for.
  • Aligning Systems: We have been implementing win-win performance agreements.
  • Inspiring Trust: Our performance appraisal (PA) is now character and competence based and this has helped build everyone's credibility. One important learning was the concept of Wildly Important Goals (WIGs), which we were able to adopt in our performance appraisal system. Our PA now has two parts, the WIGS—for the accomplishment of our goals and lead measures—and the Core Values, composed of character and competency.  As a result, our PA is now very objective since there's no room to be subjective in the ratings; everything is based on something. We can clearly see whether employees are delivering results based on their 80/20 activities and lead measures.
  • Unleashing Talent: We have strengthened this through our Career Management Program. We also underwent simultaneous improvements in facilities, programs, and incentives. We built the Center for Leadership and Learning, a training center, to focus on the training and development of both leaders and their people. On the first year when we started to reward and recognize performance, we gave incentives.

What difficulties or challenges did you encounter? What were the implications?

During the cascade, there was resistance from each of the batches especially in areas where there were required changes. The most difficult part was accepting that something must change. The challenge was selling the idea to the people.Looking at the bigger picture was another challenge and so was sustaining the growth.

How did you handle resistance?

We had to be more patient and understanding; we had to improve our communication and do continuous coaching.

What is your most important ongoing objective?

To be the leading and preferred pizza chain in the country