Delivering on the 300-Hour Rule

This is a story for some of the hi-tech hot shots sitting around trying to come up with the next Google idea surrounded by empty pizza boxes. Or, for the students dreaming of a seat at that ping pong table. Or, for the parents whose kid is not a prodigy counting down the 10,000 hours it takes for mastery of a “gift” and still believes in a dead-end summer job instead.

Let’s call it our 300-hour rule. See how much easier this is going to be? That’s the minimum for about how long it should take to get comfortable with an uncomfortable summer job for a teenager.

Yes, things have changed. Which is precisely when vintage ideas become more valuable. Summer jobs are harder to get. We shared some data on how much harder and why I tell my own kids the best way to predict the future is invent it, including interviewing for jobs that do not even exist.

Yes, summer jobs can be scary. I will never forget working the night shift, alone at a small creepy hotel in the Rocky Mountains. Security patrol of the grounds, maintenance, and front desk all rolled into one. I thought of “The Shining” more than a few times that summer.

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A guy named Patrick Doyle actually did work at that hotel for his teenage summer job. He was a busboy at Oregon’s Timberline Lodge which is the hotel used in the 1980 classic horror movie “The Shining.”

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I grew up a lot that summer,” Doyle said about earning his first paycheck. “Show up on time, dress properly, treat customers well.”

Busboy is a pretty good start if you believe in the advantages of discomfort. Humbly watching and learning the inner workings of a restaurant, he was later able to apply those lessons in running a little pizza shop called Domino’s. He climbed the ladder for many years and is now CEO. He delivers more than one million pies every day around the world, and one heck of a story behind them. Here is a look at how Domino’s shares have performed since Doyle took over.

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Maybe that first summer job paid off. A humble and disruptive desire could only explain his first order of business as CEO. He did what no other restaurant owner would consider doing and publicly discussed exactly how bad his product was.

For almost half a century Domino’s specialized not in good pizza but in getting it out fast. Ingredients were canned, frozen and pre-made. Doyle was around food his whole life since bussing those tables at the Timberline and believed in quality. He explained, “You can’t lead a company like this unless you love food. I love food.” What happened next was the most authentic turnaround I have seen in corporate America.

When he held focus groups of customers he heard “the crust is like cardboard,” “the sauce tastes like ketchup,” “this is the worst excuse for pizza I’ve ever had, totally devoid of flavor.” Then he SHOWED the rest of the world the videos that never paused or edited out any disgusted look. He shared that Domino’s pizza came in dead last in a national taste-test.

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Doyle explained, “You can either use negative comments to get you down, or to excite you and energize your process to make it better. We did the latter.”

A 49-year old process was torn up and thrown away.

We started over with a completely new recipe and worked day and night and weekends to get it done,” Doyle said of the year and half invested in testing hundreds of combinations. All during that time, he went very public with honest confessions and promises to change.

I have never seen a better example of K&C Belief System #6: “In the digital age, authenticity is the new currency.”

Two of the lead chefs tracked down the woman from the focus group who hated Domino’s the very most. They surprised her with the new product to see what she thought.

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Doyle decided to document all of it on pizzaturnaround.com. He asked the most negative food bloggers to take live videos of themselves tasting the new pizzas and providing honest feedback that would be unedited and shown directly on the website. Using social media to go right into the belly of the beast, perhaps he found those brave keyboards’ kryptonite by making it personal instead.

They disrupted every rule of marketing along the way. "It's a very dangerous game," said Claudia Caplan, a veteran advertising executive. "Two bad things can happen: You drive away the people who liked the old pizza, and if you don't really make the new pizza better that makes your new customers say, 'You lied to me.'”

Bill Benoit a communications professor at Ohio University explained why it should not have worked, “Some people are going to hear only part of the message – Domino’s stinks – and not hear the part about how they are going to get better. Thus, apology ads can reinforce negative perceptions and raise awareness of them among people who’ve never tried, or even heard of, the product.”

Here is the difference between the former busboy and the professor. I have never heard the pizza guy use the word ‘thus.’ He was too busy delivering with no time to pontificate.

When he was brand new to the CEO job, Doyle said at that time, “We think that going out there and being this honest really breaks through to people in a way that most advertising does not.”

I watched an interview on public television in his home state of Michigan for a university audience learning about business. “Leaders usually like a plan B. what was yours?” the moderator asked.

Doyle answered before the question could be completed, “There was no plan B. Absolutely not. Plan B would have been the Board finds a new CEO. We burned the bridge. If you want to make sure people are focused and moving forward, burn the bridge behind you.”

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From its new Pizza Tracker app was a link to blast real-time feedback good or bad. Unfiltered, they were then shared on a scrolling feed on a 4630-square foot digital billboard in Times Square.

So, how did that kid with the humble summer job do after burning the bridge as CEO? The advantages from discomfort and disruption produced more than a 14% jump in same-store sales in the very first quarter of 2010, the largest ever recorded by a fast-food chain. That is staggering growth for any company in any quarter when it was already doing more than a billion dollars a year in sales.

Doyle did not inherit a disaster. The company had slowly gained market share right through the recession just before this growth. To me, this is the best part of the story. Getting comfortable being uncomfortable made him the perfect candidate to completely disrupt his own company.

You gave every marketing professor a coronary!” he was told in an interview. Doyle responded, “Marketing has changed dramatically. Go back 30 years and a company like Domino’s could control the message. We could spend hundreds of millions on television and pound it at consumers and they had no way to respond. They just had to sit and listen. Now, consumers control the brand. The way you manage that is you listen to them. Understand what is going right and wrong. Make changes with that feedback and earn trust. Our mass media follows behind this social media strategy, most companies do it the opposite way.”

As I like to say at K&C world headquarters, there is no difference between the guy who says, “We’re screwed” or the guy who says, “We’re good” because neither is going to try to improve that day.

Heading the opposite way from the crowds is a wonderful place to start. I think back over the past two decades and wonder, of the couple billion pizzas delivered since Google and Domino’s both IPO’ed in 2004, how many were ordered by investors too busy to cook while in search of the next great technology stock?

Better might be to look for businesses so beautifully boring they do not attract a crowd, but with a little disruption can serve millions more customers. Tom Monaghan was the first delivery man for Domino’s after buying Dominick’s pizza store in Ypsilanti, Michigan and then changing the name. How un-crowded a business idea? Well, from his autobiography Tom explained what happened when customers refused to pay.

I didn't call the police. I just went and demanded the money…and I didn't hesitate to swing a punch to persuade them to pay up. From time to time, we'd have pizza thefts from parked vehicles while drivers were busy with customers. I'd hide in the back of the car the next time it went to that neighborhood and wait for them to try it again. I'd carry a meat-tenderizing mallet or a pop bottle as a persuader, and that approach always solved the problem.

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After Doyle’s great turnaround, he recently spent the next four years building a new vehicle to deliver more. Sticking to his playbook, he crowdsourced ideas in a competition from customers, franchisees and employees to gather as many new design elements as possible. DXP stands for Delivery eXPert and with only one seat it has room for a warming oven and 80 pizzas.

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Over 90% of franchisee owners started as an hourly worker in the store. Most of them started as delivery drivers earning the minimum wage. I cannot help but think Doyle’s very first paycheck as a busboy makes him most proud of that last fact. It is amazing how disruptive you can become after about 300 hours in an uncomfortable summer job.

Disclosure:

As a reminder, over the past two decades nothing I write about is recommending a stock trade or investment of any kind. I am only sharing what I’ve learned and want to at least write down for myself to review. I am on a never-ending search to get better as a money manager, a small business owner, and as a Dad. I love to learn. When I find super interesting topics to explore and research, then I enjoy sharing with the K&C Family and friends in case you also might find it of interest.

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