David Novak 0:03 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Dan Cathy, Chairman and CEO of Chick fil A, with Dan at the helm, Chick fil A has become the envy of the restaurant industry, the average unit volumes and their stores honestly just boggle my mind, even though they're closed on Sunday, and they've had sales increases every single year of the 75 years they've been in business. Now you can't get that kind of growth for that long without being really good at innovating and adapting. But somehow they've done it while also staying true to their founding principles in their values. The secret Dan says is to marry the mission and date the methods, I just love that marry the mission and date the methods. That means they're not afraid to try new ideas or get rid of what's not working, whether that's a strategy or a process or a menu item. But the core mission never changes. If you're the kind of person who wants to chart a bold path forward, but you don't want to lose sight of what got you to where you are, then you're going to love this conversation. Although I should warn you, it could cause some pretty severe waffle fry cravings. So here's my conversation with my good friend, and soon to be yours, Dan, Cathy.

Then, thanks so much for taking the time to be with us.

Dan Cathy 1:45 

Oh, thank you, David. Of course, as you well know, that CO reference that you made, of course, all the listeners know that, of course, stands for Chief encouragement officer. And I want to thank you for setting the pace because you're known industry wide and throughout, you know all of businesses being that the leadership, encouragement, recognition guru. So I suppose being a Pace Setter for all of us here.

David Novak 2:11 

Thank you, dad. And let's start out with a little fun, you know, I understand you have a pretty wild sock drawer with all kinds of colors and in cows on and what's the story behind that.

Dan Cathy 2:22 

I don't know that we just started having fun with that two or three years ago. And I got socks fallen out of my drawers there, I got so many socks that people have sent me. I've got some Chick fil A socks on right now that are kind of fashionable with black and white spotted cow socks on. We've got milkshake socks, and just all kinds of things that people have sent me over the years. But it's been a lot of fun. Because people looking to looking in the wrong in the wrong direction.

David Novak 2:54 

And your advertising is also a lot of fun feature and a cow said Eat more chicken. What was the thinking behind that approach? I always like to find out what's the real story? Yeah, happened?

Dan Cathy 3:05 

Well, it's about 1819 years ago, I guess maybe now but we were our agency of record at the time was the Richards group in Dallas, Texas. And Stan Richard Sue, started that incredibly wonderful, independent agency out of Dallas, Texas. And we wanted to do something different. We were not much on TV at the time, mostly radio and a lot of billboards, and directional billboards, even that we were doing so we wanted to do something different. And they came up with several ideas. And one of which was this one cow sitting on the back of another cow with a drippy paintbrush that did their best to spell eat more and chicken the best they could do with chicken was ch k i n. And it had such a people just resonated with the plight of these poor, helpless, defenseless cows didn't know how to spell very well, but they were passionate to get their message out. And, David, you can appreciate this. I got I get letters from time to time from English teachers, reminding us of the disservice to literacy in America. But these cows on billboards all over the country that don't spell very well. Send him a little letter back. I said, Well, you know, if you'll pass out copies of our latest ads to the students, let them circle the misspelled words, then maybe we can help on the literacy issue. But I love it. Great, great campaign for people ask me how I'm gonna keep it up. I like to tell him we're gonna continue to milk it till the cows come home.

David Novak 4:35 

I don't blame me it is it's one of the best in the industry by far. You know, I love what you put on your name badge. You thought you call yourself the chief encouragement officer at what's on your name badge.

Dan Cathy 4:47 

So it says in training David, and this came from this to one of our restaurants that a grand opening. Several years back all the new employees had this little in training attached to their nametag I said, Well, what is this all about? How do you get one of these is a well, these are our new new team members. And they're learning a lot. They're reading books, they're watching videos. And besides that, if they make a mistake, if the customer sees that they're just a trainee, they're in training, then maybe they'll extend a little grace tour. I said, Wow, I said, I liked that idea. I like to have four or five of those myself. So extra to my name badges, which I did. And it obviously provokes a little conversation. But it's very serious with me, because I don't do it as a joke, I do it to really ask myself, you know, am I still learning? How many books did I read? Whose podcast Am I listening to? And actually, how many mistakes Am I making because as a leader, you know, we're gonna lead need to make mistakes, just to let everybody else know that they're free to try new things as well. As you know, a business today is driven by curiosity. And we've got to be curious, we've got to explore things, we've got to make mistakes. And that's got to be very tolerable within the organization. So the leader has to set the pace.

David Novak 6:10 

Yeah, I think you're very serious about that name badge, it really makes a lot of senses you talk about it. And at the same time, Danny, you do have a lot of fun. I mean, there's no question about that. How important do you think it is for a leader to break through the clutter in the organization and have a little fun with themselves and not take themselves too seriously?

Dan Cathy 6:30 

Well, it's the leaders obviously, as you know, had to set the tone for the rest of the organization, and is rapidly as the marketplace is changing today, if we're not having this playful attitude of exploration and adventure, we're doing our organizations a disservice. You know, a rut, as someone has described David as a grave with both Ian's knocked out. And it's so easy for any of us leaders as well, to lapse into the convenience of ready thinking, we get into, you know, a trough and it can lead to our demise. One of my leadership heroes of the 80s and 90s, was Jack Welch. And I love what he said, when he quoted that, that when the rate of external change exceeds the rate of internal change, disaster is imminent. And so being well traveled and seeing a lot of things keeps us from getting into a rut, and keeps our thinking sharp, alive. We're constantly looking like scouts on the top of a mountain looking, you know, over the hill into the next valley, trying to anticipate where the puck is headed.

David Novak 7:41 

Well, you're one of the best innovators in the consumer world these days. And, you know, you talk about innovation being an iteration. Tell us your thinking on that.

Dan Cathy 7:52 

Well, it's not just the Eureka, you know, bright idea that kind of dawns on us. But it's, I think a lot of innovation, frankly, is just the fresh combination. You had a wonderful affiliation in your career, of course, with Harland Sanders and his, you know, secret spices that he put together, you know, those spices have been around since God created Earth. Just like Steven Jobs, and an Apple phone, or iPhone or iPad, you know, those minerals that those fundamental hardware pieces have been around forever. But what he put together was a fresh combination. Great chefs are always working on great new combinations, business leaders, I think, David at the same way, we are always looking for a fresh combination. That's exciting, that's new, it's interesting, it's novel, it solves a customer problem. And maybe a problem they don't even know they have. But as leaders we got anticipate a problem that they might have. I never knew I needed an iPhone, you know, that has all these incredible, exciting features on it five years ago, now, I don't know how to live without it. So it's all about putting fresh combinations in unique combinations around. And it's a lot about incremental improvement, leaning in little nuances every day, you know, just continuing to tweak with a with a real art to the outside world as we make internal changes.

David Novak 9:20 

You know, I don't know if I've met too many people that love ideas for the you and you're an idea, man, you know? So I imagine you have so many ideas, you could drive your people crazy with all the things that you probably want to do. You know, how do you go about processing your own ideas before sharing them with your team?

Dan Cathy 9:37 

Well, one, I take people with me, I don't go solo. Whether it's visiting one of our restaurants or if it's going to South by Southwest, in Austin, Texas or other conferences. We take groups of people with us, South by Southwest in the last 10 years has been a tremendous inspiration for me, and we rent to Arabic embase and populate those at a conference like that with, with accounting people, lawyers, operations, tax accounting, and so forth, so that we bring everybody along with us. If I had the vocabulary of Shakespeare, it would be impossible for me to fully communicate some of the things that I see on my travels. So I think it's essential as leaders, we need to be well traveled. But we better be having other people in tow with us. Because it's something about being on site in the moment in which we're seeing something we say, Hey, that's a great idea, we need to apply this. That way, you've already got some built in momentum. Already, when you come back to share the the new process,

David Novak 10:45 

when you come up with an idea on your own. Do you let it ruminate a little bit before you share?

Dan Cathy 10:50 

Absolutely that David, I think that's a very important point. Because ideas can be very fragile. We can we can drop them too easily, we need to let them incubate, and then at the right time, just very, very modestly, begin to open the curtain to what that idea might be. Because if you've not built enough courage, and enough passion or emotion around the idea, somebody's going to rain on your parade, you know, too quickly. But let it let it ruminate, go running, you know, play around a golf, whatever we need to do let these things kind of resonate with us to see if they really, really are viable is something that really moves us personally. Cannes is something we can really be passionate about, because it's for sure, we're going to hit headwinds. Because the the natural tendency is to the things to stay exactly as they are. It takes a lot of energy, people change for three reasons. They change for pain, as you know, get get your head off the hot stove pain, fear of consequence or vision. And pain is a real easy motivator to motivate everybody to get a vaccine when everybody's you know, suffering, as they have been with COVID My team, but it could be fear of consequence. But to get people to, you know, to move based on vision takes a lot of energy, but it's very sustainable. Once it gets going.

David Novak 12:16 

Dan, what's it would be the biggest idea you thought you had that didn't turn out so well.

Dan Cathy 12:22 

Oh, my goodness. One that comes to mind is shared with you is the idea of expanding Chick fil A to South Africa. Before we had expanded in any of our neighboring countries like Canada or Puerto Rico or Mexico. And we jumped out, you know, into a very volatile world and South Africa, I won't get into all the circumstances of why we were there. But I'm so passionate continue to be that chick blaze a brand that needs to see its day and other countries. But after we opened our first store there and 96 and to others in the next 48 months after that, but we ended up closing all three of them in 2001 after five years. So a lot of lessons to be learned. It helped me move a little bit more cautiously represent how challenging these things need to be and how important is we have really, really good strategy. So we've expanded now into Canada, doing very well there and Toronto will be expanding this year and Puerto Rico and hope to learn a lot of lessons. David from you, and your leadership at yum brands. There's a lot of good research out there that we need to take advantage of.

David Novak 13:37 

Well, I definitely think you will be a global brand. You've got everything it takes. Was there ever a time that you felt that your organization was getting a bit stale? And and if so, what did you do about it?

Dan Cathy 13:49 

Yes. When we started seeing the movement towards salads and produce, and consumers wanting waters, and other kinds of things. We didn't have a good water partner. Coke had not come up with the Santee. At the time we were doing a lot of independent water brands. We were not moving as fast with our salad program as we needed to we were not breaking up our front counter so we had better access to the consumer. We were just feeling very stodgy for me. And ultimately, we partnered up with SCAD Savannah College of Art Design, as many MBA programs have done, where they partnered up with great design schools to kind of kickstart a more innovative thinking process within the culture of our business. This year, we're celebrating 75 years of being a business. And I say that as talk about innovation to say that the seeds of self destruction are right there and that statement that we've been involved in business for 75 years because you start you start paving the cow paths you Museum at the past you is bigger than the museum of the future. And so we radically redesigned our whole innovation process, put everybody through it, we started doing much more prototyping. And we build full scale mock ups and warehouses, you know, practicing rehearsing our drug to play redesigning prototypes of equipment. Now, like never before, I think we're an industry leader in that right now.

David Novak 15:27 

You know, then I can't go any further without asking you what I know. Everyone wants me to ask it. I know, you've answered it a billion times. Well, why do you why in the world do you close your doors on Sunday? You know, analysts say that you're leaving at least $2 billion in annual sales on the table. How did that decision come about?

Dan Cathy 15:47 

Well, it goes all the way back, David to the time my dad worked with his mom in a boarding house in southwest Atlanta. My grandfather was not able to provide for the family. And so that responsibility, by default, fell on the shoulders of my grandmother. And so she opened up their home to boarders that would come and stay. And my dad's job was to work with his mom in the kitchen, shucking corn, and shelling peas in Washington dirty dishes. And on Sunday, after they had a big meal, he was still out there washing pots and pans while his buddies were out there having a good time. And he said, even as a young child, if you ever got in the restaurant business, he would close on Sunday, because he did like to ask other people to do that which he was not willing to do himself. That was not a big issue until the 1946, when he opened up his first restaurant, he decided to be closed on Sunday, then it was not a big trading day, as you can imagine, back in the 1940s. But it really became an issue. As we got into shopping malls, particularly in the 80s. And certainly the 90s, as being seven days, which was more common by then, we'd already established a reputation that we generated more business in six days than any of our competitors did, and seven. And we've maintained that practice. From a practical standpoint, I like to say that our food tastes better on Monday, because we're closed on Sunday. I really, really believe that if we will make sure that we take time, and we're honoring our people behind the counter. internal service quality begets external service quality. And to the degree and I know you, I know you believe this so much, because of all the things you've written, said, David, yourself. But as we love our people, and they know that we love them, then that that idea of of loving and care and concern and genuineness at the personal level, that spills over the counter in ways that we'd never be able to describe, you know, in a three ring binder, or on a website someplace. I also think that, as Solomon said that it will be wise to acknowledge the Lord and all our ways, he'll direct our paths. And for us, it's just a little bit as our nation says, And God we trust. And it Chick fil A, we express that by being closed on Sunday.

David Novak 18:14 

I respect that enormously. And and you mentioned her father, and he was an amazing man. And I believe he did died when he was 93 years old. And I understand that he would have turned 100 years old yesterday, if he if he was still alive. When you when you think of your father, Dan, and I know you could go on and on about him. But what would be the single biggest thing you learned from him

Dan Cathy 18:37 

was obviously he didn't teach me how to grow hair. Because I was bald headed as he was. I think it's part of being in the restaurant business. But I'm surprised you still have such a nice head of hair and stuff.

David Novak 18:52 

I don't have volumes like yours,

Dan Cathy 18:55 

golly, is I would say, learn to take advantage of unexpected opportunities. And I think that's certainly true. You know, in this day and time, things are moving so rapidly. You know, we all have strategic plans, we have budgets, we have to put together, you know, on an annual basis, we've refreshed those update those course throughout the year. But if we would allow a little white space on our calendar, if we would have a little extra, you know, in cash, so that we can move and adapt quickly to ever changing dynamics that are going on to the marketplace that we can incubate new ideas that we can have things on the back burner as we might say in the restaurant business, we may find that those things on the back burner all of a sudden are catapulted forward to the main stage, the main entree at a moment's notice. So it's important to have that that depth so let's learn to take advantage of unexpected opportunities.

David Novak 19:55 

Oh, that's great, you know, and, you know, I I read this and I under stated that he made you sign a covenant that you'd never take the company public and not open up on Sunday. Is that? Is that a true story? Or

Dan Cathy 20:08 

no, it's not it was thinking not true David in this, he didn't make us do it. Actually, it was my brother and my sister now the three of us kids. And it was not his suggestion or even his idea. But we, between the three of us, we said, we need to affirm, you know, our parents, we need them to know that, that now we're in our adult years that we want to affirm the values, and the principles that they taught us to be cooperative and collaborative in the way in which we make decisions, to be honorable and respectful of our restaurant operators and our corporate staff. And that we're not going to open on Sunday, and we're not going to take the public, the company public. And we just simply wrote that in two or three little paragraphs each sound are named to we presented our parents. And we really had no intention of him making a public statement about it, but he shared it with our operators and shared it with our corporate staff. And it seemed to really meant a lot to them. So it was not at all something he made us do. But something that we willingly committed to him. Someone said that children are messengers we send to a town we will not see. And so I hope that between our marriages and all our children that continued to be involved with our business, that we can be an extension of that life's message.

David Novak 21:34 

I love the fact that you guys did that. That's, that's just great. You know. And now you look at Chick fil A and you are the envy of of the industry. By far you have the highest average unit volumes in the industry over $5 million per store. And just for our listeners out there, yeah, you know, a KFC would do a little over a million per store. So that's just a huge business. But listen to this. This is just a few facts here for you. 90 stores that are Chick Fil A's do over $10 million in sales in one store in California does $17 million. And these are like unheard of unheard of volumes, you know. Dan, tell us about your business model. How do you do this now?

Dan Cathy 22:22 

Well, it's built on the idea that dad when he was 25 years old at World War Two opened his first little restaurant called called the dwarf grill. And when he and his brother open that restaurant, the only cash they had was $4,600. And that's after they sold the car that they own between the two of them, they got a loan for $6,000. So for a little over $10,600, they bought the land built the building and equipped it. But he really languished over it having enough capital to to grow the business and do the things that he wanted to do and to advertise. And he was he had a lot of inherent marketing savvy, although he never attended college. And so when we opened our first shopping mall location in 1967, he remembered back what it was like for him to be 25 years old and not have the cash. He had a burning desire to be successful. And so we built our check play operator model today after that experience that he hits. So we check play corporately we, we find all the capital that it takes for the for the restaurant for the real estate, the building equipment, and we sign an operating agreement with an individual to operate that location. And unlike any other franchise systems, we actually share in the profitability of that restaurant, not just a percentage of the sales. And that's very unique. And it puts us on the same side of the table with our restaurant operators, any new equipment, any new menu items, any major renovations that are required, we as the brand, fully fund that. So that keeps our restaurants looking sharp, and not dependent upon, you know, the cash reserves of a local franchisee to put money back into the business and that over time has become a distinct competitive advantage.

David Novak 24:10 

And you've had believer, not everybody 75 years of sales increases. You know, when you look at just the Chick fil A success, what do you think is the key that drives the sustained success that you've had?

Dan Cathy 24:27 

You know, I don't want to be overly spiritual here. But if you ask it that way, I have to be very honest with you to say that we feel like God is divinely blessed our business. And it's nothing that we've earned or deserved. None of us ever earned deserve God's God's favor on our lives, on our marriages on our health. You know, it's just a gift that comes from him. But if we'll just acknowledge him as I mentioned earlier in all our ways, he'll help us make wise decisions. He'll help us make good decisions about how much We take home, he'll make us make wise decisions about people choices and decisions that we make. Peter Drucker wisely said, it's not about the wood. It's all about the who. And boy do we have to ask for a lot of wisdom to make good choices about selection of restaurant operators, it said that it's easier to get a job with the CIA than it is with CFA. Labor, so hard, multiple, multiple interviews that may take the course over, over several years actually, before person, you know, we decide on a person for an individual restaurant, so selection of people, be careful to make good decisions. And if we just, you know, pray and ask God to give us wisdom he will.

David Novak 25:52 

You know, with the kind of success you've achieved, you could either grow or swell, Dan, I am How do you? How do you keep the company and yourself hungry?

Dan Cathy 26:02 

Well, it keeps my feet on the ground to be married to my wife, who helps me keep my feet on. For sure. You know, and we all just leaders have to have these people that are truth tellers in our life. That man, they they won't let our heads swell up, you know, with pride or arrogance or hubris. And as I said, when you walk around with, in your name, Texas, in training, you know, and you you make mistakes, it's, it's, it's easy to be, it's easy to have attitude of gratitude, and thankfulness, that you're surrounded by such a wonderful, incredible group of people that we've accumulated and our Chick fil A family over a long period of time. I do think growth and a growth mindset, David is very important to momentum. We personally have got to be growing in every way, physically, mentally, emotionally, spiritually. And that growth mindset becomes a magnet for other people say, hey, I want to get caught in the wake of that kind of growth. I want to I want to be reading off his reading his reading list, I want to be listening to his podcast, and own unknown unknown. So there's a draft, if you will, that as a leader moves forward in their own personal and professional development. Other people want to draft alongside that, and they flourish. And so some of the leaders that we have omniscient norm Brinker as an example, I think of norm out of Dallas, Texas. He passed away here a number of years ago, but he was kind of like the Jack Welch, would you agree in our industry? And he was amazing in terms of attracting leaders? Yeah, so you

David Novak 27:44 

know, Dan, you know, speaking of leadership, and you started out the top of the show, talking about the CEO, being the chief encouragement officer, what hats do you wear as the CEO? I mean, do you think about wearing different types of hats? Or do you just kind of see your role and, you know, pretty single minded fashion growth are

Dan Cathy 28:05 

the leaders I see are so they're buzzing around, they're in so many different areas of their business. And they're in so many different areas in the marketplace, as I said, being well traveled. Leaders. hotma are people like Sam Walton, who were the baseball hat would sit on a concrete floor with his associates during the Walmart cheer with the squiggly and everything. There are people like Bernie Marcus Arthur Blank, who had walked through Home Depot's with the orange apron on, you know, the these are the kind of earthy, approachable, leaders that authentic. They're there, you can see the transparency, that they open their lives up, they're incredibly accessible. They easily share their cell phone numbers, their email addresses, that make it easy for people to know that they can get in touch with him. And those are the kinds of leaders I admire. Those are the kinds of hats if you will, as you put it, that I think we have to wear,

David Novak 29:04 

you mentioned it earlier, you're a family of entrepreneurs. And as you look into the future, how do you keep the spirit of entrepreneurship alive? In your own company, you know, and in the worry about

Dan Cathy 29:18 

losing it. There's a wonderful book out now, David, that I've really resonated with in our chicken halls, and it's the founders mentality. And it's going back and trying to understand what were some of the key fundamental principles of entrepreneurship that led to the evolution or the development of a business. And somehow we need to continue to tell those stories, and to incubate some of that skill level. Now, Chick fil A is a privately held business. And it's just our own family members that own the business, and it'll be to our death if we don't continue to perpetuate entrepreneurial skills. And so we very intentionally are building new business ventures that our third generation can participate in? I'm a self, I've got a lot of side hustles that have really helped me expand my thinking about new markets, new industries, and how if we could have two or three different industries that we could hold in our head at the same time, and watch how rapidly evolving, we'll we'll find that it's going to be a tremendous benefit to our core business, and expanding our thinking and see the possibilities that are out there.

David Novak 30:34 

Then you mentioned this are you you've referenced a little bit earlier, you know, we did go through an incredible experience as a country when we saw the the, the tragic murder of George Floyd and racial equality is a huge issue in our country. How much of the recent events really influenced your leadership

Dan Cathy 30:54 

was it has to be a heartbreaking situation for us. And it, it was breaking my heart before we saw the summer of 2020. As I saw the issues of crime, and our 30314 zip code in Atlanta, it was the number one zip code in Atlanta right across from a multibillion dollar football stadium. Number one zip code in the state of Georgia on homicides, home foreclosures, HIV AIDS, high school dropouts, incarceration rates, number one in the whole state of Georgia, right across, you know, from this incredible football stadium, which I was very supportive of, but I'm not supportive of having people dig around in a trashcan trying to find something to eat, you know, when we got people eating, you know, cocktails and caviar, you know, at a at a nice stadium. And we've failed to acknowledge and Arthur Blank, who's a dear friend and colleague in Atlanta, he also broke his heart. And so Arthur Blank and myself and other Atlanta's citizens that have a burden for this, see the need. And so these issues like we saw a sort of injustice, they've got to break our heart, it's got to be something that emotionally moves us to take action. we're allocating, for instance, this year, and our Chick fil A foundation and I went shape giving programs where we're focusing in on black lid, African American led ministries and social organizations, because we're gonna have to really heavy up in these grantees to span the bridge of the chasm. There's so many factors, David, that are causing a divergence here. For instance, the Internet creates huge learning inequities, like we've seen with with remote education doesn't work, you know, when you don't have you know, a high speed access cable coming into your home or apartment, or wherever you may live. And so we've got to step in the gap, we're gonna have to go out of our way to make up these inequities that we have, it'll take a long time to close this gap. But I feel like it's a moral imperative for us as a nation.

David Novak 33:04 

I agree, you know, and moving back, shifting gears going back to Chick fil A a little bit, you know, you're, you know, absolutely focused on the customer experience. I mean, I remember talking to you years ago, but you called me up, and he told me about your extra mile service program that you had. And one of the things that I really love seeing in your restaurants is how focused you are on the family experience. You know, everybody talks about creating that, you know, unique retail experience, but you're really focused on the family. How do you think about that?

Dan Cathy 33:37 

Well, we're, we're have a family bias in that we're one we're owned by family. We got family leadership, that's with the brand, our operators, our restaurant operators, you know, our family members themselves, who have a spouse that may be working for them, they may have a son or daughter that is working in that restaurant as well. And many of them that are working as sons and daughters, they aspire to want to be there be a restaurant operator themselves. And we have dozens and dozens of our restaurants now that are operated by second even third generation, you know, families that have been in the business, but we were serving families in our local communities, both the urban stores as well as suburban stores with children's playgrounds and so forth. We'd love to do advance David, we can't wait to get back to doing events we can repopulate our dining rooms again after COVID but we have what we call daddy daughter date night for instance, which is a fun deal where we look operator will get up a limousine or maybe even a horse drawn carriage. And the dad will be there with his date which is a young his young daughter and she'll be all dressed up like a Valentine's night perhaps, and they'll take a ride around the store and a horse drawn carriage if you can imagine this will turn out the lights in the dining room and light up candles. on our tables will have a printed menu will seek them. And not only can they order off the little menu there will bring it to their table, table side like a four star five star restaurant. But do we have discussion guides David, which is really cool. And it's questions that a daughter can ask their daddy, and questions that the daddy can all ask the daughter. You know, one of the fun questions, Danny went, when did you and Mommy kiss for the first time, and the girls have made it's never never heard that story, that those are fun little stories to prompt. And, you know, at Chick fil A we can be the most caring company is because we care about helping parents be better parents, and to love their children. And to be the examples that there is so needed today.

David Novak 35:46 

You guys are definitely do it. And that's why you have the kind of volumes you have, you want to come back to Chick fil A you know, it's amazing. When you go through the drive thru at Chick fil A, and you got all these cars just stacked up. But I have to tell you, I go in that drive thru with 100% confidence that I'm not going to be there that long and the time flies and you know, how do you build a culture of speed like that in your restaurant?

Dan Cathy 36:15 

Well, it's enabled David with a lot of technology. I would say that before COVID. We've been leaning forward until as I mentioned earlier, as we think about innovation and creativity, you know, you're oftentimes working on projects that may not have an immediate apparent application, but a more, you know, kind of where the puck is headed as Wayne Gretzky, that great hockey player would say. And so we have to have, you know, built in this reservoir of new thinking new ideas when we had a crash and burn on our electronic payment transaction system with credit cards that went all the way across the country. It was a it was an awful day. It was back in the month of March. And boy had we not had some backup, new currency things that we were working on backup systems, we would have been in big, big trouble. So it's not just for the anticipation of growth for the future. But it also helps build, you know, a defense mechanism that you can handle emergencies when they when they they come your way which there should I have, we can never anticipate everything's going to happen. So we'd better build a big bench strength.

David Novak 37:29 

It was major news would I think was Mount Pleasant, South Carolina there they had a drive through Coronavirus vaccine clinic. And the cars were just backed up there and people couldn't get their vaccinations. And I understand the mayor, the town mayor called the Chick fil A manager and asked him to help them out. And what happened?

Dan Cathy 37:54 

So yeah, I think the headline is they're calling it The mayor says, let's call in the professionals. They call the local Chick fil A operator who within minutes kind of solve, solve the problem that was there and began to apply some of the expediting, you know, ways in which we you know, move cars move, people organize things just a little bit better. But you know, we just make little small tweaks, David, it'd be amazing how much better the throughput is of whatever the system may be. So someone said that we need CIC play needs to be administering all the COVID testing and all the vaccine distribution, but we're gonna stick to what we know to do, but it's honoring when that happens. And to know that you can be trusted, and to build a trustworthy, worthy brand. So all of this is laters. You know, let's, let's, let's keep the main thing, the main thing. And that's really important. First, let's get better and better at making these incremental improvements every day.

David Novak 38:55 

Speaking of COVID, how did COVID impact your business? And what did you do to really, you know, make your business thrive in this tough time? Because you had increases in sales this past year?

Dan Cathy 39:08 

Well, I'll save the punch line to give you that answer in just a moment, but to say that it had a huge impact on any retail business, obviously, many of which are immediately shut down for the most part, you know, they're in the month of March and April, we began to kind of figure out how we could could safely repopulate Bihar restaurants with team members and you know, we have 1000s of teenagers that are working with us and huge responsibility to parents of young teenagers to have a safe working environment for them. So we put hand washing stations and all of our drive throughs we we deployed, you know iPads and tripled the population of people outside taking borders. Our local building authorities and zoning permitted us to have canopies and covers. That would be And to put out in our parking lots. But the net of it is we shut down our rush at the inside of our restaurants, we moved all that business outside. And we ended up with a little over a 10% overall sales increase for our system in in 2020, which we're very, very grateful for.

David Novak 40:19 

You know, what's the capital A stand for and Chick fil A,

Dan Cathy 40:23 

it stands for great a dad, the original chicken sandwich, dad named and put it on his little dwarf grill menu called a chicken steak sandwich. And it was such a hit on a menu the other restaurant tours wanted to know can we serve, you know, this chicken sandwich too, but then went to an attorney to find out you could not register the name chicken steak sandwich. It was too generic. So he came up with this funny little spelling check. And then fill in the A so the bill a is a is a playoff the idea of a filet mignon. But then the little twist with the dash a standing for great a number one, us great, great day. So that was the idea chick, and then Phil and then the day che. And by the way, David, you'll appreciate this. We paid an artist $75 in Atlanta to come up with that little chicken comb and the beak a lot. It's there $70. And I've got a copy of that invoice. The best we've ever spent.

David Novak 41:30 

You're right about that. And you know, you've added new products over time, including I know, yeah, this mac and cheese product. How does the new product earn its way on the menu?

Dan Cathy 41:40 

Well, it has to go to quite a quite a gauntlet. You know, one is does it meet a need that we don't already have covered or a menu. And again, those needs continue to evolve and change the items that we had like cause flow and carrot raisin salad and potato salad at one time. Those were those are great products back in the 60s and 70s. But we had to move along an expression that I really resonate with. It says we've got to marry the mission, a date the methods. And some oftentimes in the restaurant business, we can have some tired worn out menu items that are tired and worn out. But they've been such a tradition that we keep them anyway. But they take up space. They take take up spaces, you know and equipment in the kitchen, you know small kitchens, you can't keep adding things to the menu. And certainly with the drive thru business, you add complexity and takes longer for people to make choices, looking at menu boards, so you got to be committed to pruning your menu and the restaurant business. And every business has to prove their their ideas, you know, don't pave the cow paths don't don't marry methods, we need to stay married to the mission and only date the methods. And I believe about 90% of it is methods only 10% Are the is the mission. So in other words, everything needs to be subject virtually to change except for our core mission and a core of what we're doing. So we're constantly evolving our menu, we've got all kinds of test panels we've got. We got that Titian's where we're anticipating new flavors, new ingredients, continuing to improve our existing menu items been incubating. And we probably have at any given time, at least a dozen or more items that are to prototype, and six or eight different markets and shoot about a two year process. I know that sounds long. And it's longer than it should be. But we really, we really work these new items to make sure they're going to work in our kitchen. Also make sure we can train our people to do it properly, and make sure that doesn't starve off you know other other menu items that may be in a competing space.

David Novak 43:57 

Well, that mindset drives operational excellence for sure. And then when you think about your your life and your career, you you've had so much success, but but everybody struggles, you know, what would be the biggest personal adversity you ever faced? And how do you handle it? Oh,

Dan Cathy 44:14 

there was a time early early in my career in the 1980s I guess it was where we did a survey David, in which our customers in a particular market set and we were just beginning to do customer surveys that was that became very popular in the in the 80s and 90s. And we have mystery shoppers in different processes and so forth that have evolved over time. But initially, we were doing just a little interview survey and there was a time I was in charge of directly in charge of operations and the result was 25% of the customer said based on that visit, they would not return back to Chick fil A. And I was aghast for that to think 25% You're losing 25% of your customers. Think of how much effort it takes to replace those customers. And so I thought that everybody else was the problem. I thought those operators weren't Chipotle restaurant operators, they weren't paying attention to cleanliness in the restroom and the wall for fries, you know, we're getting cold. And that service was surly. And you know, it's those operators, they need to be doing a better job, then I'm just pointing the finger to our operations people, our corporate staff that they're playing too much golf, there's, you know, they're not actually confronting problems, and oh, no, no. And after about a year and a half of beating up on everybody else, there was a book a mysteriously appeared on my desk, called volunteers free by Philip Crosby. And in this book, quality is free. One of the salient points that really hit me between the eyes, is when he said that what's an a business is a reflection of leadership. And boy, was that incriminating. If I really accepted that that means that that surly, you know, service or CO waffle fries, or dirty restrooms, that was a reflection of me and my attitudes and my behavior. But if I could change me, I could change the rest of the organization. So all of a sudden, I had a much different attitude. And I became a student. And we began to study what was going on, in quality in the automobile industry, and in other industries, and this quality revolution that was going on in the 80s, and the 90s. That kind of put us back into a globally competitive place, and a lot of manufacturing areas. And we applied those principles to Chick fil A. And it changed our bid, but it changed because I had a different attitude. As a leader, I said, I've got to learn this. I've got to know this. I've got to have a teachable spirit. And I've tried to maintain that still today. Since I'm just a trainee.

David Novak 46:52 

You're very good. tradie you know, this been so much fun. I got to ask you some questions. I love to do this lightning round of q&a here. So I'm gonna do you know real quick lightning round a q&a. What three words best describe you?

Dan Cathy 47:09 

Visionary, passionate and caring?

David Novak 47:14 

If you could be one person for a day that isn't you? Who would it be? And why?

Dan Cathy 47:19 

If I can roll back the clock, it would maybe be a Sam Walton, because he was such a courageous leader. And he turned retailing upon his ear, I have a great effort and a privilege of meeting one time and being one of his Saturday morning meetings, and it was one of the great memories of my life.

David Novak 47:36 

I've seen those. They're awesome. You know, what's your biggest pet peeve?

Dan Cathy 47:41 

litter on the floors. I love to pick up paper. I hate to see it. But and so I'm a paper picker, upper management, let me walk in our little restaurant as a child and let's say had a cigarette butter, something in my hand. So always picking things up. Only problem is when I pick up paper, my wife hold my hand until I wash my hands. That's only probably

David Novak 48:04 

what's that about you that few people would know.

Dan Cathy 48:08 

Not many people know that I'm a trumpet player. I'm an avid and lifelong musician, loved music. And I try to practice every day and I'm still in pretty good shape. I've got a wedding coming up soon for our nephew, so I'll be ready to go.

David Novak 48:24 

You're an avid learner a visit all different kinds of companies for Mattel and Google all over the place. What's your favorite best practice visit?

Dan Cathy 48:35 

Recently at Amazon, I could cite a bunch of but recently been in Amazon in Seattle and seeing the way they've organized their campus to see how forward thinking they are in collaborative learning space than other site visits caused us to dramatically change. You know the whole style in which we operate. We have no I have no desk I have no credenza. I have no door. I have no defined space. I have a little locker like everyone else has where I could put a put a hat or a raincoat or an umbrella, whatever. But I just migrate all over the office. You know when we when we reconvene our office which we've not had for the last year, but I think he's been able to move around but visiting places like Amazon and others, these new learning environments that new operating environments are are critical to business performance.

David Novak 49:30 

You know, we talked about your your Dad, what's the biggest lesson you learned for your mom?

Dan Cathy 49:37 

She was the technology person. She was the early adapter. She we were the first ones to have World Book Encyclopedia David Turner road. So she was the first one to have a Kodak Instamatic camera with the little rotating flash cube on it. She was the first one to have a big, like a big case that was a video photographer to, you know, do capture videos. So I appreciate that about her. And I still try to be absorbing technologies as often as I can

David Novak 50:11 

about to wrap this up just two more questions. One would be what would be you've given a lot of great advice already, but what would you be the three bits of advice that you would most want to give aspiring leaders?

Dan Cathy 50:25 

Well, if I was sitting in a dining room, as I often do, and I've put together, six rated the leaders that are there. And there's, if I was sitting in the chick by dining room with aspiring leaders who are young in their career, perhaps their older teenagers are in their 20s, I would remind them of a simple little Sunday school lesson that my dad often taught to 13 year old boys, and I think still resonates with us today. He said, The three most important decisions we make, start with the letter M, who our master in life is going to be through our mate in life is going to be and what our mission in life is going to be. And if we get really squared up and make some really, really thoughtful a wise decisions about our master mate admission, I think we'll be set on a trajectory of success. And I believe God wants us all to be successful to be the total person he wants us to be, and accomplishing the goals that he helps us to set for our life.

David Novak 51:24 

Dan, do you have any thoughts on your legacy and how you want to shape the company in the future?

Dan Cathy 51:29 

Well, I did think, you know, companies are, are at their best when they meet the needs of the marketplace, but they're great citizens in the community. Our corporate purpose, probably best expresses how I'd like to be thought of and it was defined about 35 years ago, and it simply says this, that our our purpose, the big wise statement, Simon Sinek, as we know, as question, start with one, so this is the why, and for me, it's very personal. It says that we're here, to glorify God, by being a faithful steward have all this entrusted to us. And to have a positive influence on all who come in contact with Chick fil A

David Novak 52:13 

is great. And this just makes me have to ask you one more question. You are just an unabashed Christian, you you you believe with God, follow your heart, you know, how much does prayer come into to your your life in terms of the decisions that you make?

Dan Cathy 52:30 

Well, you know, today's marketplace, as it always has, has called for courageous leadership. And I think there's a sense of inadequacy that every leader has to deal with. You know, if we don't have inadequacy, that we set the bar too low, we're not aspiring to Big Hairy Audacious be head goes be hag stands for big, hairy, audacious goals. And so as leaders, nobody's going to aspire to get excited about little dreams. Little dreams are no man's heart. And I firmly believe as a leader, the bigger the bolder, the more courageous the goals that we set for ourselves, the easier it is to lead. But we better be prayerful, ask God to give us a lot of wisdom to give us the strength and the courage we need, just like he gave to Joshua, in the Old Testament. That's one of the reasons I think the Bible is so authentic, is so real. And it helps us to understand our own weaknesses, our own fallibility, how, how weak we really are, if we really are honest with ourselves, how much in need we are of those around us, they give us the encouragement that we need.

David Novak 53:39 

Well, Dan, I want to thank you so much for for the great advice that you're offering our aspiring leaders, and thank you for being so open with how you're building your business in your in your faith, you're You're an incredible person, and I admire you very much.

Dan Cathy 53:55 

Oh, thank you, David, and thank you for the work that you're doing the leadership, as you saw from said, leaders aren't born, you know, they're built, they're people that are pouring in to the next generation. And for those that aspire to want to be a leader, it's a noble thing, to want to lead for the sake of the influence that we can have on the next generation. If we failed to lead it note, if leaders that have values, good values and good principles, if they failed to lead, then by default, that leadership of influence is going to go to something less. And we can't let that happen in society. We cannot have to have that happen in the marketplace. Leaders with boldness and courage and good bass have got to lead and they got to be intentionally pouring it others so it's a real honor David to see the influence that you're having the 1000s of people that that you're reaching, I love listening to your podcasts when I'm out jogging, and that's when I get pumped up on it. If I listen to David Novak's put cast, I'm actually gonna run a little faster. So

David Novak 55:04 

the vest, the vest, and thank you for that Chick fil A coupon. I can't wait to go get that original ticket sandwich. Yeah, just

Dan Cathy 55:12 

be sure to bring somebody else with you to pay your price. Okay, I'll do it

David Novak 55:25 

I obviously came up in the restaurant industry. And I have to tell you that was a conversation I just loved is a Dan Cathy, a great storyteller. And gosh, he has a lot of great stories to tell about the success that Chick fil A has had, since he's been in charge. They really do have the best run restaurant operations in the world. And I have to tell you, I'm envious. And Dan's probably got the most fun soccer the world too. I just love that this guy has everything the best restaurant company in the world and a soccer that everybody wants. And this week, as part of your weekly personal development plan, I want you to do something silly. I want you to buy yourself a pair of fun socks. No, I'm serious. Not just any fun socks, I want you to find a pair that's going to remind you have your mission for Dan, his socks have milkshakes and cow spots on him for you. I imagine it'll be something different. I know what I'm looking for right now I'm looking for some socks with some golf balls on it because I want to improve my game. But when you wear them, you're going to look down and smile and be reminded of a huge lesson for every leader. We've got to find new methods to stay fresh and grow and be innovative. And by the way, have some fun while we're doing it. never losing sight of our mission, our big why that guides us and inspires us marry the mission and date the methods and hey, go out and buy yourself a pair of socks. So do you want to know how leaders lead? What we learned today is that great leaders understand that the methods change, but the missions don't. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in. While I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader that you can be