by Herman Cain
Those discussions were very informative in helping me to understand why Godfather’s business was declining. Now I had a sense of the direction we needed to follow in order to get the company moving in the right direction again.
Then I asked each one of the executives: “What would you do if you were president of Godfather’s Pizza, Inc.?”
While they differed somewhat in their specific answers, they all expressed things like the need for focus, consistency, and leadership. We were on the same page! As a result of listening to the people closest to the situation, I now had a rapidly evolving picture in my head of what needed to be done.
One of the most encouraging conversations I had during that first week was with two franchisees, John Chisholm and Jim Morrisey, who at the time controlled thirty-three units, and they would soon add another thirty-five. Despite Godfather’s problems, their operations were among the few successful ones.
We met at their restaurant at Seventy-sixth and Pacific streets. The most important words I heard them say were: “For the good of the system, you might have to require us to do some things we don’t want to do.” Those words were inspiring! They understood that times had changed; that we had to become a system; and that to do so, Godfather’s, as the franchisor, had to take the lead.
I realized pretty quickly that if we were to compete with our three major competitors—Pizza Hut, Domino’s, and Little Caesar’s, companies with 4,500, 2,800, and 900 units respectively—we would have to determine our strategic focus and then begin the process of getting the whole organization focused.
So during a meeting with sixty district managers and a number of vice presidents, I asked them what came to mind when I mentioned our three competitors. When I said “Pizza Hut,” their responses included the words “red roofs,” “our biggest competitor,” “all things to all people,” and “deep pockets.” As for Domino’s, their nearly unison response was one word: “delivery.” And regarding Little Caesar’s, they said, “two for one” and “low price.”
I then asked them, “When I say ‘Godfather’s Pizza,’ what comes to mind?” There was silence, so I asked, “Well, what did Godfather’s used to stand for?” Silence again. Finally, one of the district managers spoke up: “Quality,” he said.
It was obvious to me: If my district managers were uncertain about our identity, our customers must also be confused. Now I was sure that what somebody had said during my first one-on-one meetings was accurate: Godfather’s had a blurred image.
To turn things around, I suggested that we refocus on quality. After all, that’s what helped make Godfather’s successful in the first place, when a consumer survey had shown that Godfather’s overall ratings for good taste and product quality perceptions were high relative to those of our largest competitors.
I said that rather than trying to be the biggest, “We should just be the best.” Instead of trying to deliver faster than Domino’s, I said, “Lets give our customers the best pizza—when it gets there.” Instead of trying to be the cheapest, I said, “Let’s give our customers the best value for their money.”
Now there were nods of approval, even some smiles. I thought: My district managers realize that I know what I’m talking about!
My next move was to challenge all departments to develop plans for reestablishing “quality” as Godfather’s special niche.
Then, having established a clear focus on quality, priorities for marketing, product research, new unit development, training, operations, and all respective departmental functions, I knew that consistent quality could be maintained more effectively and productively.
And it wasn’t long before the entire Godfather’s organization began to resonate with the idea of focus. In fact, by the end of April, my first month on the job, we had pulled together our first tactical action plan to reinvigorate our reputation for quality products. And there were new initiatives, like our pizza-by-the-slice project.
Godfather’s now had a new sense of decisiveness and direction. People like to succeed, and they know they can’t do that if they don’t have direction. As the famous humorist Will Rogers once said, “Even if you are on the right track, you’ll get run over if you just sit there.”
Ron Gartlan, who I’ve said is a fellow CEO of Self, had urged me to be visible, since people are inspired when they hear directly from their leader. By both spreading the focus message and challenging people for even more ideas about how we could win again, I learned more about the pizza business in general, and about Godfather’s strengths and weaknesses, in particular. And the more I learned, the better my own morale grew.
In order to survive against our much larger competitors, to distinguish our innovative attitude from the old paradigm, and to get our new program off the ground, we developed a focus logo. It was a symbol of our new thinking, and we featured it on T-shirts, caps, paperweights, marketing plans, and everywhere else imaginable.
We also developed a “guerilla warfare” atmosphere in order to communicate a sense of urgency to the staff about the necessity of competing, in the words of two marketing gurus, Al Reis and Jack Trout, “to achieve the greatest impact with a small arsenal of competitive weapons.”
Winning is the biggest boost there is to morale. And we could win again!
Within sixty days of my coming on board at Godfather’s, I suggested that we hold an all-systems meeting to share information about our new focus, projects, and priorities. That meeting was held on May 29, 1986, and the turnout was tremendous.
We discussed many specifics during that daylong gathering. I then closed with an inspirational message, calling upon everybody present to dream again of possibilities beyond their grasp, and challenging them to dream once again of success, prosperity, and personal fulfillment:
When you allow yourself to dream, you look at a mound of clay and see a masterpiece. You look at a glass of water half-empty as a glass half-filled. When you dream again, you are able to recognize that problems are merely opportunities that could unlock the doors to your success. When you dream again, you view today as the first day of the rest of your life. I challenge you to dream of Godfather’s as the number-one pizza chain in the world. And if you truly do dream of being a part of that achievement, your creative energies will be unleashed and unstoppable. I challenge you to dream again about what Godfather’s can become.
There was more—a concluding challenge to every Godfather’s corporate employee, operator, owner, restaurant manager, and crew member, to everyone connected to the Godfather’s system: “Let’s go. Let’s get on with rewriting the currently anticipated future of Godfather’s in the annals of the restaurant industry.”
But I was not done yet. I said: “There are generally three kinds of people in the world. People who make things happen, people who watch things happen, and people who say, ‘What in the heck happened.’ People who make things happen—they dream, they commit themselves, they say, ‘Let’s go!’ ”
Finally, I cautioned: “In the unforgettable words of my grandfather, a Georgia farmer all his life, who would hitch a team of mules to the wagon on Saturdays for the weekly trip into the local town, ‘Them that’s going, get on the wagon. Them that ain’t, get out of the way.’”
Then, my voice rising to a crescendo, I repeated my grand-father’s injunction: “Them that’s going, get on the wagon. Them that ain’t, get out of the way!”
Most of the people who attended that all-systems meeting “got on the wagon,” and our new initiatives began to pay off. But it was several months before our sales increased.
Then I had an idea for a product that could give us a short-term sales boost, so I called my vice president of Research and Development in and asked her: “Can we come up with a product variation that would have great price appeal without sacrificing quality?”
“How much appeal do you want it to have,” she asked.
“Two large pizzas for twelve dollars—and we still make money,” I replied.
A few days late
r, I was visiting our product development kitchen when I was asked to sample the new product: two large pizzas, with the same quality ingredients, but proportioned differently; my people had come up with both a pepperoni and a four-topping pizza that we could sell at a great price and still achieve a quality product.
We decided to go ahead and roll out the new product—we called it “Big Value”—in as many of our restaurants as possible, and it took off like a rocket! To say it exceeded our expectations is an understatement: Our customers now had a compelling reason to stop in at Godfather’s stores, and within a matter of months, many units were hitting new sales records.
While “Big Value” generated great excitement and boosted company morale, we didn’t take our focus off our other initiatives. Their success would ensure that we could keep those customers who had rediscovered Godfather’s. My first year’s results as president of Godfather’s exceeded all expectations: We achieved a true turnaround.
Nevertheless, as Ron and I worked to pull together a new strategic plan, we realized that our parent company had reservations about our remaining a subsidiary. Our suspicions about that were confirmed when, following our presentation to top management in which we detailed our great results for the year, no one offered to take us to dinner. Nor was there any in-house celebration in our honor.
So Ron and I went to dinner by ourselves and as we discussed the reactions, comments, questions, and even the body language, we reconfirmed our view that Godfather’s days as a Pillsbury subsidiary were numbered.
The story doesn’t end there. We hatched a crazy idea: If Pillsbury decided to sell Godfather’s Pizza, Inc., we would be its buyers! And while neither of us had ever dreamed of doing so before, I asked Ron rhetorically, “How hard could that be? After all, I’ve bought a house before.”
Four months later, in January 1988, we learned how hard buying a whole company can really be. Jerry Levin, the company’s executive vice president of acquisitions and divestitures, called and asked us to meet him the next day in Minneapolis. We did, and, as expected, Jerry informed us officially that Pillsbury had, indeed, decided to sell Godfather’s. Although the news was expected, I was still stunned; I felt as if I were being fired.
But sometimes seemingly negative things turn out to be for the best. As I had learned from my parents and grandparents, if one door closes, another door opens, so the best course is to believe in yourself and to look for the next open door. In other words, I once again had to exercise my power as CEO of Self. Pillsbury’s decision to jettison Godfather’s gave me and Ron Gartlan the opportunity to own the company. For me, that meant going up yet another corporate rung, to CEO.
Two weeks after our meeting in Minneapolis, with Jerry Levin’s help, we negotiated Godfather’s purchase price. Then we had to find financing. Given Godfather’s turbulent financial history of late, that wasn’t easy.
Working with a consultant on leveraged buyouts, we made presentations to nineteen banks and other potential lending institutions. The individual sessions lasted from half a day to three-quarters of a day, with many of our presentations made in our Omaha offices so that potential lenders could visit our local units and sample our products. Then after three months, CitiBank said yes.
Finally, on the morning of September 21, 1988, after nearly nine months trying to obtain our financing, and after signing what seemed to us to be thousands of documents, we closed on our transaction at the Citicorp offices in New York City.
Ron and I, and our very able attorney, Gary Batenhorst, flew to Tampa, where we had scheduled another all-systems meeting. On entering the meeting room, we shook hands. Then I moved to the microphone. After formally greeting everybody, I announced: “At approximately twelve-thirty this afternoon, we closed on a leveraged buyout and we are now the heavily in debt owners of Godfather’s Pizza, Inc. Let the real celebration party begin!”
Although Ron and I were very excited at becoming owners, we were now facing challenges beyond simply running a business. We could no longer turn to Pillsbury for cash or capital investment, nor would we have access to our former parent company’s reservoir of corporate expertise.
The full impact of being CEO didn’t really sink in until we arrived back at Godfather’s: I was forty-two years old and I had just made the biggest business decision of my life. I knew that my actions would now affect not only all of Godfather’s employees and their families, but the franchisees and their families, as well. As the new owners of Godfather’s Pizza, Inc., Ron and I were now responsible for maintaining its vitality and generating the paychecks of more than ten thousand employees, as well as our own. Those realities were sobering.
I was fortunate to have Ron there as my associate. He’s one of the most effective and tenacious negotiators I’ve ever worked with—and his integrity is beyond reproach.
We’re very much alike in many ways, having the same values about life and family. But we’re also just about as different as two people can be: I’m an extrovert—I’ll seize any podium in sight—while Ron is more of an introvert and won’t make a speech unless he absolutely has to. But when he does get up on that podium, he does a great job.
Part of my functioning as a pizza company CEO involved knowing about our product. I learned early on about quality ingredients, for instance, what makes a good “all meat” pizza: If the ingredients are not exactly the best quality, all that meat tastes salty. So the way I test a good pizza is to order the “all meat” one. If it tastes too salty, I know that the meat is not top quality. But if you get top-quality ingredients and put them all together, you’ll find, like on a Godfather’s pizza, it doesn’t taste salty. That’s one of the little keys to understanding “Pizzaology.”
As I went about fulfilling my CEO’s responsibilities, I realized more than ever before the meaning of the expression “the buck stops here.” Some people didn’t grasp that fact, like a former colleague who called me and asked, “So whom do you report to now?”
To be successful, a CEO must answer that question with only one word: “Myself!” That is, if one is a true CEO of Self.
Working together, Ron Gartlan and I were able to put Godfather’s Pizza, Inc., back on the success track, with stores throughout the country. It was a great ride, one I’ll always remember—and one I absolutely thank God for.
Now, as I travel the country, campaigning for America’s highest office, I see parallels between the situation that existed at Godfather’s when I came on board and the state of our union today.
The good news is: Being a true CEO of Self to whom God has entrusted yet another opportunity to turn a seemingly impossible situation around, I believe passionately that I will succeed in doing my part to make our great nation whole again.
6
New Challenges and Achievements
Have I not commanded thee? Be strong and of good courage; for the LORD thy God is with thee withersoever thou goest.
—Joshua 1:9
My success at Burger King and Godfather’s led to the recognition of my business savvy and financial acumen. This was demonstrated, starting in 1991, by my appointments to the corporate boards of major corporations: Nabisco, Super Valu, Inc., UtiliCorp United, Inc., and Whirlpool; by my selection in 1994 as chairman of the board and president of the National Restaurant Association; by my appointment in 1995 as chairman of the Federal Reserve Bank of Kansas City; by my service during the 1996 presidential campaign as an adviser to the Dole-Kemp ticket; and by my recruitment in 1998 as CEO of RetailDNA, a start-up technology company focusing on smart marketing applications for retail businesses.
I also established my own leadership consulting company, T.H.E., Inc. in 1996, which used my skills as a communicator to connect with individuals outside the corporate world. I did this through my radio call-in talk show and by giving speeches. During my tenure as vice president of the National Restaurant Association, I had an attention-getting encounter with Bill Clinton, challenging and stumping the then-president on the issue of health
care.
That encounter came about as the result of a telephone inquiry on April 6, 1994, from Loretta Carroll, a news anchor with KMTV in Omaha. She was asking for my reaction to a comment that President Clinton had made the night before during a town meeting in South Carolina. He had said, in essence, that he could not understand the restaurant industry’s intense opposition to his health care plan.
The president had insisted that under his scheme, the cost to restaurants would be only about two-and-one-half percent of their cost of doing business. I told Loretta that his observation was ludicrous. I knew that because I had consulted with the staff of the NRA, and they had found Mr. Clinton’s calculation to be mathematically incorrect.
Then Loretta told me that in order to maximize diverse participation at the president’s town meeting, scheduled to take place the next evening in Kansas City, it had been decided that while the program would originate in Kansas City, there would also be live pickups from Omaha, Topeka, and Tulsa, and she asked whether I would like to participate from Omaha.
When I told Loretta that I would be happy to do so, she asked whether, if given the chance, I would be prepared to ask the president a question. When I responded that I would, Loretta, who knew how passionate I can be when I believe in an issue, advised me to “be respectful.”
“Of course I will,” I promised.
The next night, I joined approximately one hundred people gathered at KMTV’s West Omaha studio. When the telecast began, the president took an initial round of questions from each city. While I did not participate in that round, it gave me a feel for the program’s format, as well as a sense of Mr. Clinton’s style in such a setting.
The early questions seemed platitudinous, emotional, and not very factual. I was determined that if given the opportunity to pose a question, I would address something concrete concerning the president’s plan: I was not going to waste his time, or, for that matter, mine, by tossing him a softball.
When Omaha’s turn came around once again, Loretta said, “Mr. President, the CEO of Godfather’s Pizza is here and he has some concern about the cost of health care reform for service industries, specifically restaurants.”