know, we’ve learned a lot we want to give back.
Once you start to think differently about
leadership, you’ll start to act differently in your leadership.
This is going to be very, very powerful and and we want to change the world. We want to make the world better by creating better leader.
Welcome to the oboe lead leadership podcast with David Novak. Today’s guest is Mike call president and CEO of KB p foods. Mike bought into his first franchise restaurant at the age of 21. Today at age 37, Mike operates more than 600 restaurants across 23 states.
What really makes a great restaurant General Manager in your opinion,
I think their number one goal is their ability to select and motivate the team that’s around them. I think at that level, what they do themselves is far secondary to their ability to get people to want to work with them. The motivational and influential capabilities that those individuals have are the single most important things in our opinion.
Michaels entrepreneurial spirit and vision has helped him become a leader in the world of franchising. Mike founded KB cares which raised and donated $1.5 million and 30,000 volunteer hours to charities in 2017.
Now, here’s our host, David Novak, and today’s special guest, Michael
Well, I’m really pleased to have Mike Colt the chairman and CEO k dp investments with me today. He’s a great business partner for my past he’s fantastic franchisee actually owns if you can believe it or not 600 restaurants 500, KFC and 100 Taco Bell’s very successful at what he does. And I think it’s going to be a lot of fun learning from Mike and I have to tell you up front, Mike’s very young guy, 37 years old, he’s achieved so much so fast. So I think we’ll learn some of us I’m well, I don’t think I know we’re going to learn some of his secrets today. But Mike always start out at the beginning. Just tell us about your your upbringing. Where’d you grow up? And tell us a little bit about your background?
Sure. Well, thanks for having me. It should be fun. So I grew up. I grew up in a small town, south eastern Colorado, about 8000 people called Lamar, Colorado, near Kansas, close enough to Kansas that my parents used to tell me that if I do that, again, they were sending me to Kansas. But but in Colorado still so we can claim Colorado and my parents were both teachers. My dad taught biology. My mother was a special education teacher. So she’s taught emotionally disturbed and physically disabled children and and then those would just learning disabilities for over 40 years if you can imagine doing that. I had five brothers and sisters. And I spent we spent our whole lives there. My parents met and Lamar, Colorado. My dad taught there for a couple years, my mom moved there to take a teaching job and I didn’t leave there too. I left for college. So spent my whole life there.
Did you have any early job that sort of begin to shape your life?
Well, my my first job was in the restaurant business and as many people in this industry would tell you, you know, you can take the person out of the restaurant but you can’t take the restaurant out of the person so I joined a small fast food business and Lamar when I was 14, I think day after my 14th birthday. And I never left the industry after that it was a small burger local burger shop and, and and worked in a couple different restaurants in town before leaving for school, but immediately went to work in the restaurant industry primarily because it was either that or hard work out in the farms in the local farming community. And I chose the easier path in the air conditioned restaurant. So
yeah, it was a restaurant and college as well.
Yeah, I did. I worked I never I really never left the business. David I I worked in I think two different restaurants in high school. And then when I went to college, I took a job immediately in the restaurant business in college as well. I worked in a sports bar as well as a couple years later took a job with a large Applebee’s franchisee in Grand Junction, Colorado, and and then from there got into the yum brands business immediately following college. So
what was it about the restaurant business that you found so intoxicating? You know,
I think initially it was just the opportunity right beyond that, I think you know, the interaction with the people you got to know those you worked with, and also the consumer base, which tends to be a pretty regular group of people that come in and you build relationships there quickly, as it became more of a an opportunity to really earn money that I needed to live and not just some pocket change. The opportunity for advancement in the restaurant business is always one that comes quick. So I think you know, after I was moved on to college and wanted to make some actual money, instead of just fill my wallet with a couple of dollars, I think the opportunity that sat in front of me was what continued to kind of motivate and attract me to the business.
Did you have anybody that you work for the Applebee’s that took you underneath their wings? And
so there was a couple of people, you know, we had a first general manager that I worked underneath there was a was a unique guy, he had worked in the business his whole life too. And, you know, one of these, you know, grace in his veins, kind of guys that that taught me a lot of kind of unique things that still stick with me today. And there was a likewise, you know, just, he was one of these people that when something wasn’t perfect at the end of a shift. When something wasn’t perfect during a shift. For example, I can remember at the time, Applebee’s had a standard where there was a skinny piece of bread on a plate that was it was called bobbly bread, and it was supposed to lay on the plate at five o’clock. And I can remember if I picked up a plate leave in the kitchen, and it was at four o’clock he whistle and tell you to turn around and set it back down. And he looked at you and say that’s at five o’clock, right. And the point wasn’t that the bread was in the wrong spot. It was that he took such pride in doing things the way they were supposed to be done. If silverware was roll backwards if meat wasn’t laid perfectly in a drawer, all the little details that I think you fast forward much lot later in my career. And you start to think through some of the things that make us good at what we do today. And how it’s really just accomplished of doing those little details. So well. He never saw a ton of career advancement. But I sure wish I could find 20 Kevin’s today or 50. Kevin’s, he was he was he was a great guy that influenced a lot of little details early on.
So what made you leave Applebee’s,
really, it was just opportunity. The guys that I ended up partnering with early on had worked in the restaurant business. In fact, in the yum brands business for a number of years, the initial guy that I partnered with his father had worked in Harmon management for 34 years, I think in total. And they had recently acquired a business in Grand Junction, Colorado from a lady whose whose husband had passed. And today we’re looking for, you know, additional help both in that business as well as with some marketing and some other things that they were doing in a sports bar concept that they had built. And from my perspective, they were young, energetic, enthusiastic guys that were you know, somebody that I could see myself working with for a long time and the Applebee’s franchise I was working for I didn’t see a ton of upside and, and there wasn’t a bunch of little at that point in my career, right. So they offered me an opportunity to do two things, I went to work in the sports bar concept side of their business with them, and also started doing some marketing work both in the Kentucky Fried Chicken and sports bar concepts with them early on. And that quickly, just blossomed into doing a ton of stuff over the course of about the first six months in partnership together. So it was a little bit of what I’ll tell you in hindsight was fate and friendship that it started as that grew into a good decade of partnership with
you think you can mix friendship and business and be successful.
I think it depends on what the basis of it is. I think if the basis of its business, and there’s a there’s a an understanding that we’re here for for that reason. And you grow into loving each other and respecting each other. I think yes, I grew to love that family. And those guys follow my heart. I think to this day, while we’re certainly not as close as we were, I think we do anything for one another, I think what’s difficult sometimes if you take great friends and try to turn them into a business partner that and and I seen that fail a lot of times. So I think it kind of depends on what the basis of the relationship is, in my opinion.
Now, when did you become an owner,
so I became an owner with the bank and Ellie organization, they provided me and an opportunity really early on to buy into their business, which was really unique in franchising at the time, a lot of people provided options, or, you know, some Phantom ownership, but they provided me the opportunity to, to borrow money. And and by 10% of that operating company at the time, which I did, and and without the way that they provided I could never afford to do so
now. How old? Are you when you did that? 21 Wow, yeah.
And so they did that. And then over the years, I had opportunities for increased ownership and, and 10 years later partnered with a unique debt structure and some outside capital to buy those guys completely out of the business. So you know, without that initial partnership opportunity, whenever would have never been able to pull that off, obviously. But right away, almost, I think I was only there a couple of years, David before they offered that opportunity to me. And I think, you know, they were smart and doing so it probably kept me focused on the future and long term, but I think they were also it was just a genuine, you know, offering of what they believed in, in, in the business that they had come from and grown up and as well
now so you you buy them by them out you you now you own the whole shooting match with with some with some investors, and what kind of pressure did you feel when all of a sudden, man, I’m really out there? Yeah,
so I was talking to somebody I remember just after we did that, and in our industry, I tell people all the time that it reminded me of a story that I always talk about where an assistant manager in our industry always thinks that they’re better at the general managers job than the general manager right up until that day, they take it. And the same holds true for kind of every spot in the organization. And, and I felt I remember like yesterday, you know, I thought I was doing most everything in the organization until both my partner as well as when he exited. Our CFO also moved back to Colorado with his family. And so we had kind of new financial leadership, and I was on my own as, as kind of the only guy running the business and it was a lonely feeling for a couple of months, I think what I quickly realized was that the fundamentals we had in our operating business or where I where I went and really dug my teeth back in and gained comfort in knowing that if we were really taking care of the guest inside of our four walls that we were going to be okay and made a couple of good hires, which, you know, I’m thankful for to this day that we didn’t make a few mistakes out of the gate. But you know, there were a few days early on where I can tell you I did plenty of Ray and before I laid my head on that pillow that we were going to make it to the next morning and and yet at the same time, you know, had confidence in our ability inside those four walls. So So knew we’d be okay fundamentally abilities
Do you have to have to really make a restaurant go?
Well, I think, you know, in our quick service world, you know, I think those who are really good at executing the basics, so you know, the replicability of systems and tools and processes, routines that sit above those to follow up on them are those who succeed, I think we had built a good core group of simple, replicable processes that to this day, we still use
now. Right now you’re growing the business because you’re going out and buying more KFC buy more Taco Bell’s I’m, you know, how do you make the economics work? And what do you do that that really makes these investments in these, these other stores come alive for you?
Well, we so our model is simple. We we look for opportunities that we see substantial upside economically and as we purchase. So we’ve got a very disciplined purchase model that suggests we’re not looking for perfect businesses. When we buy we’re looking for businesses that we see meaningful economic upside in. And usually that means both revenue and in the middle of the financial statement. And so, you know, in the first hundred and 20, 280 days, we’re typically seeing substantial both profitability and revenue change in those businesses. And it all comes through very fundamental focus in inside of those systems I’m talking about. So we’ve got 190 day plan, that we roll out in every acquisition that we do that in small 30 day chunks of very simple focused things that the restaurants that we acquired go through, we do them through a series of workshops inside of those acquisitions situations, and just really get the managers focused on doing things that we know are going to help them be successful. And we’ve built enough of a history with this now that we can walk in and say, here’s the results that we’ve achieved historically, trust us and and we’re going to put these things in place. And here’s what you’ll see,
you have to change the people out or what you know,
typically, we jokingly say all the time that very rarely do you go to and 14 this year and win the Super Bowl next year with the same players on the field. But I’ll tell you that that’s not always the case, we find often that, you know, there’s a lack of leadership present in a lot of these situations where people aren’t performing. And so what we what we find a lot of times is that will come in and provide, you know, a new motivation and a new influence new incentive programs and some new cultural flair. And we’ll see a good portion of that population, you know, gaining excitement about that. There’s some people who don’t like it, because there’s also a different level of accountability and what we do so
you know, it’s a 50 shot, depending on where we are
what really makes a great restaurant General Manager, in your opinion?
Well, I think their number one goal is their ability to select and motivate the team that’s around them. I think at that level, what they do themselves is far secondary to their ability to get people to want to work with them. And so those soft skills that the motivational and influential capabilities that those individuals have are the single most important things in our opinion.
Yeah. And what what soft skills do you think those are,
I mean, communication, follow up the ability to sit down and have genuine conversations with people and connect with people on a pretty emotional level. You know, most of the people that work in those businesses, especially the part time individual, they’re looking for more than a boss, a lot of time they’re looking for a mentor, sometimes a parent, that may be lacking in their life. And I think playing some of those roles, in addition to boss is really important. Those who can create what looks and feels a bit like a family inside of a restaurant are very successful in our industry.
You do you have like any tricks of the trade that you use to get that emotional connection with people?
Well, I think you start with you gotta genuinely care. I mean, I think you’ve got to surround yourself with people you want to make successful. You know, I’ve said for years, the most important thing that I think anyone does in interviewing, is make sure you’re selecting someone that you can’t wait to help make successful. And if you’re sitting in front of somebody that you could kind of give or take whether they become successful with you, they’ll fail, because you’re not going to help them to success.
What do you look for in the interview to to make that call? Do you have any questions that you use that really gets bad? Or is it just your gut instinct? I know,
it’s not a gut instinct, I think, you know, at this point, you know, the people that I’m interviewing, we spend a lot of time with, right? So it’s really the the reasons why they’re taking the job that I’m looking for, you know, we break up the the motivations for they’re taking their role into three pieces. It’s personally Why are you taking this professionally? Why are you doing this? And financially? Why are you doing this? And I’m really keen on their transparency and honesty, and then their behaviors historically And currently, and whether those match with what they’re saying. So I’m kind of looking for their actions, and as opposed to their words, on those three things. And do those align with I think, what our organization can provide or not,
what’s what do you think the role of measurement is, in terms of effective leadership?
Probably one of the things that jumps out at me when you asked that question, first is, is it a selfless and and servant leader is probably one of the first things I think of so when I just looked to measure a leader, I think, first of all, are they leading by example? And what kind of results are they achieving? Are the first two things I think of, are there people succeeding? So if I back up and say that a little bit differently, David, there’s a lot of leaders that I think achieve results themselves, but their team is in achieving at the same level? And and then how they’re achieving those things, I think are also a way that I would measure their effectiveness. So, you know, are they getting the short term results? Are they really developing and growing those people around them in sort of an upside down organizational chart that’s leading them to, you know, sustain results through the individuals that they’ve that they’ve invested in, and in our business, with the challenges of hiring and developing people, leaders who are out there truly investing in those around them and getting results through other people are the ones that are winning, and it’s pretty easy to measure that, you know, you can really just do it with your eyes, you don’t even necessarily need too much of a scoreboard. You know,
looking back, Mike, you know, in looking at your own leadership style. Did you have any habits? Or what were some of the habits you had that that really have helped you get to where you’re at today?
Yeah, well, I think the first one is I never pretended that I was something that I wasn’t. And I still don’t.
So you’re authentic?
Yeah, I, I think in this industry, and in our business, in particular, and I’m I’m I’m not certain it doesn’t apply to every business, people want to know that a leader they’re dealing with is a real, and that they care about them. And I think you know, whether it was in five restaurants, or seven or 20, or now 600, I think your ability to go in and connect with the people that you’re talking to dealing with leading is the single most influential characteristic that a leaders got. And then from there, you know, I think being a good listener, and really understanding what’s motivating those that you’re trying to get results from is probably the second most important thing. It’s easy to make decisions. And I think it’s easy to direct and coach and teach and do all the things that I think most leaders do pretty instinctively. But to do it through the lens of people that you’re trying to influence and do it in a very authentic way is something that I think we see less and less in in our world at least today.
We’ll be right back with the second half of the podcast. And just a moment ago, lead has launched the heart wiring and hard wiring your leadership digital training program to help individuals and organizations develop the skills they need to drive more consistent results. The fully integrated online program consists of five interactive learning modules, each designed to teach practical leadership skills that can be applied immediately in the workplace. Go to overlay calm to request a free course demo.
Now, back to our host, David Novak, and today’s special guest, Michael,
let’s say you walk into a KFC take us through what a store visit would be like, yeah, you.
So you know, I like to tell you that I do it by the book and visit like a customer and eat the product and do all that every time. Unfortunately, most of my visits, they know I’ve come in for 30 minutes now, right? So typically, what I do is I walk in and spend 95% of my time making sure that I touch every single person in the restaurant, I asked him a couple of questions about you know, themselves. And really the biggest thing I want to try to take away from store visits today is what type of organization do I feel like those people are working in? And is there a flavor both for the local leadership and the leadership being provided by our organization inside that that restaurant? And then what kind of team in general Am I looking at here? Usually, from the lobby, I can take a look at the smiles of the people, just the you know, are they upbeat? Are they not so just kind of a little bit of the Mojo of the restaurant, you can’t fake that no matter how much you’ve cleaned the floors and prepared good product for a visit today, until you were in a good restaurant, or we’re not and there’s good strong morale, either in this restaurant or this market or this city or there’s not. And so I’ve had to change my tactic over the years, from being able to surprise restaurants with a visit versus today, it’s more difficult to do so. But 95% of it’s based on that I try to always leave the store feeling more motivated and upbeat than when I got there. But it’s it’s all about assessing the quality of the people because I know if we’ve got those things, right, you know, we’ll get to the rest.
So you walk in let’s say you don’t feel the energy, you don’t see the smiles, you know, so how would you follow up with the management team to get the right kind of changes to happen probably
depends on how how poor it is. You know, my natural instinct is to address it. With with I’m rarely there without above store leadership. So I would probably start asking that above store leader, what they’re seeing, and go into assessment mode of their ability to see what I’m seeing the Ask them if they’re seeing what I’m seeing, ask them how they feel about the morale and the team that they’re, you know, they’re watching with me. So then I go into whether, you know, I immediately would shift to a testing that individual, and and are they going Jesus isn’t looking very good? Are they like, this is okay. But you know, I think from for me, it would probably lead me to another restaurant. And do I start to see a pattern? Or am I in a bad restaurant? You know, when we’re in 23 states and was 600 stores? If I’m going to be effective? You know, I feel like I’ve got to focus on groups of restaurants and patterns and trends as opposed to what I see in one restaurant. And so, you know, I probably would shift pretty quickly to you know, is this a trend? And why is this being caused? And what’s the source of it? You know,
you’ve had such a meteoric rise in you have so much responsibility, and but is there been a failure or a parent failure that, that when you look back on, it sets you up for success?
I think we, I mean, I could probably give you 100 of them. I think we’ve one of the things that I that I’m really proud of our organization of about David is, I think we’ve become really good at failing. And what I mean by that is we are fearless is impossible, but we try a lot of new things. And we’ve become really good at trying things that don’t work. And knowing that when they don’t will find the answer to how something will, I think part of how we’ve built such a strong relationship with our franchise, or is through our willingness to be delete with our chin, and to try everything from, you know, assets that people thought we were crazy to build, because they were 10 times the cost of anything, anyone that ever built to marketing campaigns that no one else would try to, you know, you name it in an effort to try to crack through some consumer barrier that no one else was willing to get through. And I could give you a 50 of those failures I’ve got
what would be your favorite failure?
Well, I’ve got two of them in motion right now. We just put five and a half million dollars into two remodels that at this point about 30 year paybacks. I hired a guy I could tell you about which I’ll tell you was probably one of my biggest people learnings. When I replaced the CFO that left us originally in the business, I found a guy who had worked for a fortune 500 business that was president and CFO who thought he wanted out of a big environment into an entrepreneurial one who didn’t have a balance sheet based business experience background, who had a team around him the size of our organization, and brought them into the company without the intent study of what culturally was going to be the right fit for our business, and also tactically what we really needed at the time, probably the biggest hire I ever made. And probably the reason why we spend the amount of time and energy and intensity we do on hiring today, who was with us for about five months. And both from a cultural standpoint, but also from a reputational perspective in a town like Kansas City is which is not difficult to develop a hiring someone of that of that caliber, and then it not working out reputation. It was it was a setback for us. I think in all of those examples that I’ve given you, we become pretty okay with failure and know that it’s a part of how we’re, you know, we’ve gotten to the pace of growth and some of the success that we have. So we failed a lot though.
You mentioned your relationship with the franchise or you know, those that are listening, those are the people basically owned the brands and you you basically run and operate the stores and pay them a royalty for on sales and what’s it take to develop a great franchise or relationship? Now, you mentioned you had a good one?
Yeah, I think I think it the first piece you have to have is you have to remember what your role is and what their role is. And I think franchisees that cloud the relationship between franchise or franchisee relationship and think that they were the brand, or what their role is in in running the restaurants and forgetting that their role is to really operate great restaurants. And that that’s their role as great franchisee that’s the first mistake that’s made. And so I think fundamentally, what’s really built it is that we’ve run good restaurants. And I think that’s the basis for the for the relationship, I think from there that’s bought us a seat at the table to be able to become a good partner and other ways. So it’s bought us the ability to have a voice on things like influencing marketing or influencing testing or, you know, getting them to come sit at our table one witness the talent that we’ve hired and witnessed the investments that we’re making things like over investing in in remodels during periods when no one else was doing that building restaurants when nobody else was doing that. There’s certain things that like that, that have certainly helped. But I think fundamentally, we’ve taken care of our business inside of our restaurants, which I think is what every franchise owner would tell you they’re looking for, in good franchisees, you know,
one of the most popular advertising campaigns going now is the colonel campaign. Yeah, Colonel shifts every six months or so. And even Reba McEntire has been a colonel, what kind of impact is that campaign had on your sales?
Well, it’s a it’s a it’s it’s had an impact on our sales. And I’ll talk about that in a second, I’ll tell you what, I think the biggest impact that it’s had on us is when you’re in our restaurants, and all of a sudden, the young kids that work in our restaurants on on the weekends and at night, all of a sudden, because of the amount of, of social media buzz and energy that’s being brought to the social layer and the digital airwaves as a result of a campaign like this are talking about this being a cool place to be again, and somewhere that all of a sudden, my kids who haven’t talked about this brand, or fired up about and asking if I can bring them home, you know, KFC shirt from my next meeting, it’s brought on youthfulness back to the brand that I think is really neat. And it’s brought back to life, the story of the legacy of the fast founder of the brand that I think a lot of people didn’t understand and know. And I think that’s really, really neat. And something that I think is a is is just another layer to the ad campaign aside that it’s brought, you know, four years of same store sales and transaction growth in a row back to the brand, which has been fantastic. And and really accelerated things that we’re on a path now to do which are, you know, substantially enhance the asset base across the system and, and and really step into the limelight and compete with some of the brands that have taken product offerings to a different level and and started to attract younger user basis that the brand struggle to attract over the years. So I think it’s been really a catalyst for sort of the beginning of moving thought leadership into should this get me thinking about trial of this of this product again, and this brand, again, for a lot of people who hadn’t thought about this brand in a long time.
Fantastic. But what’s the difference between or the biggest difference between operating a KFC and a taco bell? Because you have 100 Taco Bell? Yeah,
very, very different. So you know, the biggest difference would be that you know, everything in a KFC is made fresh, you know, this product is brought in fresh off farms. And it’s a never frozen product that takes 33 minutes to prepare by cooks. And and that’s a very difficult process to to uphold and do really well. It’s also a product that when you get into the complexities of being able to project the business and prepare for cycles of lunch and dinner is it is a challenging business top rate. It’s primarily a night and weekend business. So we’ll do 60 plus percent of our of our business between 4pm and 9pm, and Thursday through Sunday. And if you look at the Taco Bell business, it’s basically the dead opposite will do a larger lunch business, then we will have dinner business. Most of our Taco Bells are busier during the weekdays, and they are on the weekend. It’s a much lower check average business and a much higher traffic count business. So it’s all about speed and efficiency. So if you if you basically took these businesses and stack them next to each other, they’re almost polar opposites. And in a lot of ways, so the consumer basis, it’s a taco bell is talking to a much younger consumer base. It’s a it’s a very strong value driven consumer in a lot of ways. And they’re great compliments to one another to have in our portfolio, very strong brands that we feel very strongly both about but very different from one another. And a lot of ways, you know,
the fast food business gets maligned a lot. What do you think is the biggest misperception for the industry?
Well, I’ll tell you, I think you know, I spoke about this a second ago with with KFC, the quality of the product coming out of that business is phenomenal. And you know, I talked to people about this all the time and comparing it to a lot of fast casuals, because I think one of them is the quality of product, and how good certain fast fast food products are. And there’s a lot of the guys in in the burger space that prepare a fresh product really well, also. So I think that’s one of them. I think one of the other ones is sometimes health perception, where, you know, the the perception of the consumer, sometimes on the health side of the equation versus reality is very interesting also, and how some brands have done an interesting job of, of how they’ve pushed health perception. And when you look at the facts, it’s not always the case. So you know, I think beyond that, one of the things we work hard to try to do inside of our organization is more from an employment perspective, and how we try to break some of what I think are often negative perceptions in the persona, of working in the fast food business, and how that can really be an amazing career, and open up unbelievable opportunities for people financially and professionally. And and I think at times that business has built, especially at entry level positions, a bit of a negative perception around it, in the context of you know, it’s the last place you want to go work you hear, you know, a lot of people use the phrase of I don’t want to end up at McDonald’s, or I don’t want my kids to end up working at McDonald’s. And you know, when you really get into the opportunities that exist for people on the pace with which you can grow and do amazing careers and fast food, it’s, it’s pretty mind boggling to those who aren’t educated
Oh, you’re pretty good example that you started out at 14 years old work in the restaurant business. And now you’re you’re running a very significant company, which is, you know, that doesn’t happen in in every industry as as fast. What’s your view, Mike, on the minimum wage,
here’s what I can tell you. I’m a personally a believer that there needs to be some minimum wage growth. I’m not a personal believer that, you know, appear stagnant and minimum wage is a positive thing. I will tell you, however, that this concept of radical growth overnight is detrimental to our industry, if you just take a pure mathematical approach to it, that change to you know, take, for example, $15 minimum wage for us, that change in an hourly rate as a percentage of sales is as great as our full margin. And I think one of the biggest misperceptions of our business and financial worlds, is that we’re printing a lot more money than we are, and that the gross margin in our businesses a lot different than it is. And so I think what’s got to happen is we’ve got to figure out how to help create some wage growth in our business and help provide those that are the hourly workers in our business, seeing wage growth, without it becoming something that’s purely mathematically prohibitive to the industry. And how we do that, I think is where things get challenging. You know, in the,
in the last five years, what new belief or behavior habit as most improved your life,
I’ll tell you, in our business, we, about seven years ago, started to bring on additional Equity Partners into our business. And we really had a bunch of success quickly, with helping create wealth for individuals in our organization who had primarily come from long careers in the restaurant industry. So these were individuals who, you know, looked like an 18 year old kid who worked there till they were 38, or 40, or 45 years old, had a decent job, a pretty good income, but really no nest egg and no light at the end of what this was going to look like for them financially. That came into an equity opportunity with us. And Fast Forward 3457 years later, we’re we’re seeing substantial equity growth inside of this program we had built. And when we did that, somewhat knowingly, and somewhat through a program that actually was much more successful than we ever dreamed it would be. It completely changed one of the biggest motivators for me in this job and in our company. And I’ll tell you that we now have almost 40 individuals we’ve helped into that program. And I think the way I look at what some of my primary responsibilities are and what gets me you know, most excited how I look at people at want to bring onto the team and why who were promoting and how it’s changed. I would tell you so many things about the way I do my daily job as a result of the, of the joy that I watched that bring to people and how it was to change their lives. It was dramatic, and I and I can’t explain to you how impactful it was both as a leader and as an individual. For me, watching people’s families go through that experience as a result of the success we saw from our businesses perspective. so fantastic. It I can’t think truly of anything that’s probably been more impactful than that.
That’s great. Now, you know, you You’re a very intense guy, and very competitive guy, and you like to win and you care about people. How do you keep polishing your apple? And what do you how do you how do you get sharper and sharper and better and better?
So I think it’s, it’s interesting I, as you know, I think it’s something I’m challenging myself to try to do daily, is figuring the answer that question out, I’ve always been somebody that’s not afraid to reach out to people and ask them for help. And in answering that question, you know, somebody wants said to me years ago, you’ll be amazed to will say yesterday, if you’ll reach out and ask them if they’d be willing to spend a little bit of time to you and get together for lunch, or, or a quick meeting and help challenge you to grow yourself. But I think it starts with the desire to want to do that I have three or four or five people in my life that I that I meet with regularly that did help challenge me to think a little differently. Some of them in different ways than others, some of them are a little bit more financial minded, similar a little bit more, you know, leadership and, and, and people driven. And some of them have done things very, very similar to me. And some have done things a little bit different than I have professionally. But those are things that I do, I also, you know, recently have started doing some things more formally, to try to better myself, I’ve done some things, I’m getting a bi annual executive, physical and doing some things with some monitoring through Garmin, that are helping me challenge myself to keep in a regular routine of keeping myself up and running. And you know, a lot of stuff that I that I that I’m trying to do along the non professional lines to keep that to keep that afloat. But I think it’s pretty easy to your point to sit back. And, you know, once you’ve had some success kind of fall into a low part of I think what I was mentioning earlier about what this program is done, and helping change that it’s really kept me from being able to do that, because I feel responsible, not just to myself, right, but to, to so many other families and really driving this business forward at a different level. So some of its about the equity, David, but I think as much as anything it’s about, we’ve gotten families from places that would have never joined this business or our company or this industry even to come to a place and commit to being with us for a long period of time on this dream and belief that we were going to create something special. So there’s an equity component, which is, you know, that’s kind of the pot at the end of the rainbow. But But more than that, it’s about we I’ll give you an example. We have a guy who joined us that if you looked at his resume and his professional success, you just said, why in the hell would this guy ever come join but fast food franchise from where he was? And the answer to that question was things like, well, where I was before, you know, my firm had 800 Associates, and I was the top guy at that firm, my wife could name three other wives of anyone that I work with, we didn’t feel like we were a part of a team, we didn’t get to watch a team succeed. And part of what he was desiring was to be a part of a group that one together. And that, you know, there was some camaraderie associated with it. And there was a little bit more of a family feel there was the equity component also, right. But creating that for him, is now something that I aspire to do. So opportunities to bring team together, include his spouse, include his children, is something that I sit back and look for opportunities to create, how do you bring your family into the business lie way. So you know, we have events in our business that are that are full family events, we include spouses in nearly everything. So awards, banquets, Christmas parties, Friday afternoons in our office, we have a thing at three o’clock that families are invited to we do a lot with family and are big believers that if your spouse is a fan of what we’re doing, it sure is easier to keep you a fan of what we’re doing.
Mike, I see why you bring so much talent into the organization and people come to you from from different fields, you know, because people follow leaders. And just in this past, you know, 40 minutes we spent together is so clear that you know your business, you’re passionate about people and you’re just out and out later and and I want to thank you so much for for being on this podcast and sharing your sharing your thoughts.
Yeah, you bet, David, thanks for having me. It’s an honor to be a part of it.
I’m Ashley Butler, your colleague on the journey to becoming the best leader you can be. My cult talked a lot about how leaders need soft skills to be successful. Things like communication follow up and the ability to sit down and connect with people on a personal level. According to Mike, one key to leadership success is genuinely caring about the people you work with. Mike also shared that leadership is a driving factor in determining whether his restaurants will be successful or not. I really like how Mike said leaders that are truly investing in those around them and getting really through others are the ones that are winning. These leadership insights don’t just apply to the restaurant industry. I believe they apply to all leaders. My question for you today is do you genuinely care about the people you work with? are you investing in the people you lead? Are you helping them to achieve the type of results they need in order to be successful? If not, what do you need to do differently? How can you improve If you or your team needs to improve their leadership soft skills, check out the heart wiring and hardwiring your leadership program at Oh the lead calm. The program is designed to help you be the best leader you can be so you can get the best results out of others. Thank you for joining the David Novak Leadership podcast.
David Novak 0:23
Well, Ashley, I’m really excited today to have with us, Jeff Simmons, he’s the President and CEO of Elanco Animal Health. And let me tell you something, Elanco is a great company, it provides products and knowledge services to improve animal health and production in more than 70 countries around the world. And Jeff, I have to tell you that I want to thank you and your team, so much for one of the drugs that you’ve created. Atopica, which is helping to keep my dogs Sarge alive, you know, I feed that pill to him with peanut butter every morning. He loves the peanut butter, not the pill so much, but it’s doing a lot for him. But anyway, Ashley and I first heard Jeff speak at the edge mentoring conference and in addition to being a great CEO, Jeff has founded Edge, which is all about mentoring others, and we’ll talk a little bit more about that later. But the thing that really struck us the most about Jeff, was that he is the perfect example of a purpose-driven leader. And Jeff, I want to thank you so much for being on our show with us today.
Jeff Simmons 1:20
Great to be here, David, enjoying the opportunity to spend some time with you.
David Novak 1:24
You know, Jeff, we’ll get to your incredible company later, but I always like to start out at the beginning. Tell us about your upbringing.
Jeff Simmons 1:32
Yeah, I’m from upstate New York, I always emphasize the “upstate” part. Three generations of dairy farming, my dad decides to get away from milking cows, becomes a Welch grape grower. And I will just tell you, I grew up a poor farm boy but learned the significance of purpose early by just agriculture – are humble people that believe in what they do. And so I always say to people. You know, growing up day to day, year to year, at the grape business is a fun business, but a challenging one as well.
David Novak 2:08
Yep. Jeff, do you have a favorite story from your childhood days that you like to tell that would, you know, give us a real indication of what kind of person you are?
Jeff Simmons 2:15
Yeah. So I actually just came back from Colorado and a bunch of our leaders and I share this story. I believe, truly, as a leader, you know, you have your full of about, you know, seven or eight crucible events you’ll always remember it always pull on. And so yeah, I was August of 1974. I am standing, I can still remember, on the porch of our farmhouse. And David, when you’re in the grape business, and you’re not doing well financially, when you’re trying to start like my dad was I was seven years old. And the last thing you want when you pour 11 months of effort and costs into a vineyard, is you need that crop to pay all the bills. And you don’t want a hailstorm in upstate New York during this time. And I remember as a kid, even as seven, eight years old, when the black cloud started to roll over the Finger Lakes and upstate New York, my family got nervous. And I remember this was a crucible moment. My mom, my dad, my brother, and I stood on this old farmhouse in August. And sure enough, up over the hills comes this storm and your hope was always you didn’t hear the pounding of the hail on the ground. And in the course of about 20 minutes, 70 acres of grapes went on the ground. The hail hit this vineyard and it went hard. And my mom was crying and very emotional. And I saw the tear roll off my dad’s cheek for the very first time. And we just- it was dead silence, that kind of the smell of all that rain. And we knew was young kids, we were in trouble. My brother, my older brother looked at my dad and said, Dad, this is not good for us. What my dad said, I’ll remember forever, turned to both of us and said, This is not about us. This is all of those individuals that depend on this operation. That was kind of servant leadership for me right there in that moment that it never can be about you, the significance of a farm and entity or an organization of any kind as a leader, you got to be thinking about those people. So that was servant leadership. At seven years old. With a hailstorm in upstate New York, we survived we’re thriving we- family just celebrated 53 years in the grape business in upstate New York.
David Novak 4:27
Wow. That’s such a powerful story. I suppose you worked on a- worked in the business. Do you remember your first job and on what did it teach you?
Jeff Simmons 4:37
Boy, I’ll tell you something, jobs in the grape business, everyone thinks it’s a romantic industry. Well, I didn’t see too much romance to the grape business. Suckering grapes in July was a regrettable job, but they like little kids to do it. You had to cut suckers off the bottom of every grapevine in the winter, minus 20 degrees, with all the wind chill in upstate New York. My brother was always smiling. And I was always looking over to him saying, there has to be a better way to make a living than this. So a lot of tough jobs. But man, four siblings, Mom and Dad, I learned family through business as well. I mean the, the unity that we have now as siblings and memories back to that farm are powerful. And it actually is led to me and what I do and Elanco. I just love the noble humility, but also the determination and perseverance of a farmer. That’s something that’s carried with me all the way to today.
David Novak 5:30
Jeff, where to go to college? And were you one of those guys who always knew what you wanted to do in your life?
Jeff Simmons 5:36
No, it was really the fire inside to achieve, the fire inside to please and every door opened up kind of a higher ceiling for me to understand, wow, I can do something else. It was just an intention to- my dad demanded we get a college education and then leave the farm for a couple years, got accepted into Cornell agricultural school. That’s the land grant in upstate New York, I actually couldn’t afford it. So I went to a junior college before, you go there two years and then transfer, so to Morrisville college, met my wife there and went on to Cornell studied Agricultural Economics, and then got out and joined the Elanco because I had to go do my two year stint before I could return to the farm.
David Novak 6:17
So you joined Elanco of right out of college. What was your entry strategy?
Jeff Simmons 6:22
Yeah, there was no strategy, David. Okay. The strategy was this: if you go back and pull my application 29 years ago in Elanco, it was, I’m extremely mobile, and upstate New York, I’ll go as far down as the Pennsylvania border, I won’t go as far out west as Buffalo. And I’m not going to go to New England. Otherwise, I’m pretty flexible. I chose the Elanco only because it was an hour from the farm. And I had vineyards, I had a little real estate business. And my dad made us all leave for two years as a way to get a new experience. What I didn’t realize was about six months into this sales job I had, and now live from the farm- I got transferred to Indiananapolis, and 29 years later, I think my brother and my dad have given up on me coming back.
David Novak 7:07
That’s interesting. What do you think a person should look for in a company before they join it today?
Jeff Simmons 7:12
Yeah, early on, you know, and that’s simple, we’ll get to- I’m a big believer, that kind of- the 20s that decade, learning and knowing yourself, and that only can come from authentic experiences, breakdowns and vulnerabilities. And so if you over plan, you know and not think through the lens of you know, most people are thinking through the lens of what people are going to think about me and my salary and the status of the brand of the company I need to go work for. They even do that with universities, I think it’s much more of a Hey, put yourself in a situation to where you can learn yourself. And it’s as much about closing doors as opening doors, my first three internships, my- everything I did, even before Elanco, taught me the things I didn’t want to do. And that helped me get more clarity on what I want to do. And I think that’s, that’s something that’s really important. So I think you got to look at a company to say, Hey, are you going to give me experiences to learn myself? Are you going to allow me to develop and grow and do things like oGo and it’s, does a company have a development program? Are they going to challenge you. And the biggest thing, I still remember today, in 1989, when I walked out of Elanco went back to the airport, because we didn’t have cell phones and called my dad, I said, I’m going to join this company, because man, the halls feel good. the halls of a company and what happens, the cafeteria of a company, is there laughter, is there just informal conversations and energy in that office. If not, then you can’t be yourself. Today, companies have to be a harbor, to allow people to come in and feel safe to be all of them. Not to be politically correct and not be themselves and there’s a sea or an ocean out there of divisiveness and political correctness. I think a company that allows you to be all of you, you’re going to learn about yourself in the 20s. And then watch out.
David Novak 9:04
Yeah, that’s great. You know, you never did make it back to the farm, right? But you did stay in Elanco for you know, yeah, this is 30 years now. Tell us how you went from, basically, the start of your career at the bottom and worked your way up to CEO, what’s the short story on that?
Jeff Simmons 9:22
And you know, I would say, David, the short story is simply, I feel very blessed. The greatest secret I guess is I just was around great people. And I turned down a lot of jobs along the way. And I didn’t get too far ahead of, Hey, what the next job was. Staying a lot in the moment and focus on your development and enjoying the people you’re around, every position has an opportunity. And today that organization, even when I started much different, but I think even more opportunity today than then, is organizational charts don’t exist in most companies. It’s a fluid opportunity. If you look at Hey, this is what I’ve been given now, what am I going to make of it, you’re going to grow yourself, and you’re probably going to shape even how the organization is going to be organized and what the next jobs are. So I think that I was living that not realizing it by job to job. I was actually not looking too far ahead. But understanding Hey, what am I good at? So I started out in sales, I enjoyed sales, but I enjoyed people even more. Then I went into marketing, which allowed me to see the world which led my family and I had go to Brazil, I went to Brazil, I found my Why I found my purpose. And I saw brokenness. I saw agriculture’s role in the bigger size of health. That was never part of my plan. But one door led to another and it was all about purpose, delivery, seeing the bigger context of every job you’re in. That took me to Europe, I went from one of the most progressive agricultural areas to one of the most restrictive areas in Europe. I went there when Mad Cow, the Euro, many things in the early 2000 that allowed me to see the complexity of the world. The bureaucracy that things aren’t easy. I played the Hoosiers movie clip in my first leadership Town Hall in Europe and nobody had tears coming from their eyes, but me. And I realized, wow, Hoosiers doesn’t work in Europe like it doesn’t the United States, so. And then other roles, you know, leading research etc. It allowed me also to say, Hey, I know what I’m good at. I know what I’m not good at the people around me, it allowed that development. So I think in summary, it’s lot about people and culture and seeing the job more as experience in a bigger context.
David Novak 11:36
Jeff, you’re known for being a purpose driven leader. What’s your personal purpose? And then I want to talk about your company’s purpose. But what’s your personal purpose?
Jeff Simmons 11:46
Yeah, so, I would tell you that, it comes down to one word, which is hungry, and it has two sides. And it’s really connected. My upbringing, and agriculture, and the food side of our business and the leadership side. My purpose, and it really comes from making two wrongs, a right. First is, I believe everybody deserves food. And I believe that meat, milk and eggs and our industry plays a big part in that. And I’ve seen brokenness of kids that haven’t eaten. And I’ve seen people that have eaten, but are eating the wrong thing. So I believe by 2050, it’s my Twitter handle, we’re going to be in a world that’s not even more food secure, but it’s going to be great food, and a healthier world that plays a bigger role in the health of the world and healthy environment. The second is hungry leaders. And maybe David This is the one that gets me fired up more is, there’s nothing that’s more sad than someone that’s not living in the center of their why, that is a leader that is not fully optimizing all their potential. If leadership potential is left on the table, that’s a sad thing. And I believe that’s happening all over today. And I think our country and the world’s potential, its greatest opportunity is fully optimizing the potential of a leader, so hungry leaders and hungry people. I have to nonprofits in both those areas. And I live in a world and a company I’m in that can go after that as well.
David Novak 13:12
You talk about the importance of having a why, when did that first hit you, that you really needed to have a while to maximize your potential?
Jeff Simmons 13:19
Yeah, I saw- I was in Brazil, April 4 of 2000. And I’ve been I’ve been with the company now for you know, 12-13 years. And I have to tell you until you actually get shaken, I think sometimes you don’t, and I ended up having a guard that was at our- we lived inside a compound and I became good friends with him. for about three months he was the guy that kind of taught me Portuguese, I’d go down, get my ride every day get there 15 minutes early, Joaquin was his name. And he always talked about his daughters. Three months in, David, got a knock on my door, my wife and I go to the door. And this was a turning point for me is, there stands Joaquin, with his head down and broken Portuguese and says, your landlord, my employer hasn’t paid me in a long time. And there, standing next to him, is a six and a four year-old – daughters of his and all I remember, David, was the dirty white sneakers, their heads were down and his head was down. I didn’t see hunger, I saw shame. And he said these are my daughters, I didn’t know where to go, Mr. Jeff, and they haven’t eaten in two days. And I will tell you, every ounce of political correctness and worry about myself, went out of my body. They not only came in our home that night, but it wasn’t feeding them. It was seeing the shame from them that was so wrong for me and to say I’m going to be a leader in agriculture and food and one of the most leading countries in the world, Brazil. And I’m worried more about the doing things right internally? I totally changed. And my why became, I knew what it was, I knew I had to lead totally differently. I had to speak, I had to get involved in social media, I had to take advantage of every platform I had. Because this wrong could be a made right. So it was Joaquin and his daughters, April 4 of 2000. And I’ve never really led the same since.
David Novak 15:23
Gosh. What’s the higher purpose and noble cause for your company? You know, great companies always have a noble cause. What’s yours?
Jeff Simmons 15:31
Yeah, well, first of all, if a company doesn’t have a noble purpose, and a cause and connect to it to any of your emerging aspiring leaders out there, you either find it and help them get to it. Or I would really challenge you to think about it because every company, profit or nonprofit, an entity has to have a greater cause, it really does. So ours is five words – our vision. And it sounds so simple. But I will tell you, not only everyone knows it, but they know their piece in it. So food and companionship and routine life. What’s that? Well we’re in the animal business. Well, we do two things, we make meat, milk, eggs and fish more affordable, healthy, more accessible all over the world. We need 70% more of that animal protein between now and the end of the 2050. The second side is pet’s. Longer, healthier lives of pets. And if anybody has one, as you just mentioned, a dog or a cat’s companionship matters. And so I can tell you, then I asked every employee what’s your why? For my platform and speaking and supporting protein farmers at another level. I can tell you, Karen Newhall, a researcher that develops products for us brought in the first therapy dog to Elanco. And this dog Nelly changed our company by- she was going to children’s hospitals with employees with therapy dogs, watching dogs get up into the beds of sick kids, and see the entire emotional change. Karen comes back and does research totally different. Her vision is, Hey, hi, we get dogs to have healthy active lives. From the time a child is born to the time they graduate from college, and everything changes. And so I ask every employee, I go to every new employee group and say when you start here, you got about a year, find your why. And don’t be embarrassed about it, be personal about it. Because purpose driven people have high engagement. They’re not politically correct, they speak up, they think about their work in a shower. And it’s constant. And it feels so much more fun when you’re in a building in a manufacturing plant and a car with a sales rep with a purpose driven individual.
David Novak 17:39
You know, you really believe in communication, I can tell that. Tell us a story of how you make the company’s higher purpose relevant to team members. I mean, you communicate, you do social media, you know, how do you let people know what’s going on?
Jeff Simmons 17:53
You know, I think everyone needs to have their own style, right, David? And so I always say to people don’t do your own thing. See, here’s one little thing in my leadership box to answer your question is, you know, I always open up a two year leadership program that we’ve done now for 14 years. It’s scattered over about two years, we bring 25 in at a time, I’m heavily selective around that. And we’ve got about three classes going at once. And I’ve opened every class for 14 years. And I close every class and I open with one question. I think this is a simple leadership answer. Who will follow you? and write it down. And I put it in their journal, write the names down. Two years later, I say replace the who and ask why. Hopefully in a two year period, you’ve developed the recipe. If you come to my office, it’s just an open cubicle. But above the phone, there’s four words, it’s my recipe, those four words, you know, is it passion? Is it painting a picture in the future? What’s your leadership recipe that allows people to follow you? And part of- I say that, to answer your question is, everyone has their own unique way, I like town halls. I like doing two-minute Tuesday videos out to employees. I like getting on any big stage of our industry to talk about our industry, to our employees to see, hey, Elanco is playing a bigger role, go to the White House and speak about antibiotics and animals. But that’s not everybody. And I would say find the area you’re comfortable. But you have a purpose driven person, the leader has to communicate, they can’t be boxed in. And so you have to find a way. And then a last thing I just say being raw and real is what this generation wants. So you know, I worried one thing that concerns me, as a lot of my fellow CEOs and presidents, as they get to that final platform where they have the most influence, they probably don’t have that much influence because they’re worried about society today. Understand how to communicate, there are some dangers in that, but you have to communicate.
David Novak 19:52
You know you’ve mentioned political correctness a few times, you know, what does that mean to you? And why do you disdain it so much?
Jeff Simmons 19:58
I do disdain it because I see so many people and boardrooms and offices and positions all over the world today, that 20 years ago, they would speak up and they would say things, but the society we live in today, there’s more downside by speaking up than maybe upside. I think that we just have to be smarter, we need to know the do’s and the don’ts. But in your area of expertise or in your area of your why or cause, if you’re not speaking up, that might be one of the biggest leadership wrongs ever. And all I will say is I’ve been doing it now since that April day in 2000 and as long as you’re studying, you got some people around you that can help you say, Hey, stay away from the things that don’t matter. Focus on what does matter. Stay away from some of the politics, etc. But get to your cause and speak out loudly about it. I think it becomes a testament of who you are so when someone does come after you I say, look at my 10 years of social media, LinkedIn, Twitter, videos. Actions are louder than one line that maybe is wrong.
David Novak 20:03
You know, you’ve obviously achieved a lot of success. And you know, what I see happening a lot of times, Jeff, is people start out strong, but they don’t finish strong. What in your mind is the key to finishing strong?
Jeff Simmons 21:15
Well, I think you hit something that, to me, you’ve got to constantly reinvent yourself every two to three years, you’ve got to stay fresh. I think that when you get surrounded by a whole bunch of people that will tell you only what they think you want to hear. And that comes from a culture that maybe isn’t as purpose driven, because purpose driven people always speak up typically, if the cultures, right. You need one, a culture that speaks up, and you got to have people around you that are making you restless, and bad news and direct feedback travels faster than the good stuff. Have the mentors, have the people that are, not even mentors, maybe sponsors, people that are invested in your success, that are stirring you every month or so. I’ve got about five and I change them every three to four years, where there’s people that are not telling me what I want to hear, I think I think those are a couple ingredients. And then I think the reinvention piece, if you’re not keeping yourself fresh, if you’re the oldest in the room, and I’m not talking about age, but if you’re not reading 10 minutes a day, and 12 books a year, if you’re not, you know, listening to podcasts like this, you will get old quickly, you only need to go to a social event, walk around and talk to 10 leaders at a conference like I did last week. And you pick out the two oldest and the two youngest in the room. And I’m talking about the edginess of a leader or slackness. If you become slack, or don’t have mentors around you and a culture that speaks up, today’s society will trip you up.
David Novak 22:49
The great thing about this podcast is you get to learn from the real life experiences of a great leader. That’s why I think you and your company could get a lot out of our Essential Leadership Traits digital training program. I teach it myself, along with colleagues who have been there and done that, I promise you, the training is proven, and it’s pragmatic. Go to David Novak Leadership and check it out for yourself. It could definitely help anyone become an even better leader. Now back to the podcast.
David Novak 23:16
You know, Jeff, you’ve tripled the size of your businesses as CEO in the last 10 years, you know, how have you transform the business? And the decade that you’ve been a CEO?
Jeff Simmons 23:26
Yeah, well, first of all, get rid of all those eyes. And I really mean this. The leaders and the people across this entire company, it’s their company. And I saw this even in the recent, you know, launching of the IPO, it’s, you know, it’s their company. So I want to just emphasize David, it really when I say how do we do it, we did it, a lot of people that play the role and expertise. But I think two things. One is, we knew what we were and we knew we weren’t – this enriching life with food and companionship allowed us to be very selective. A vision links to strategy and a great strategy, has more nos than yeses. What are we not going to do? We’re not a diagnostic company. We’re not an animal ID, a pet food company. We’re about regulated highly scientific products that enable livestock and pets to have better lives that help people. And we’re in the people business. That just put everything together clearly and allowed us to see yeses and nos. Yeah, we made 10 acquisitions, we started five new businesses and we made some really good scientific choices in our pipeline. All of those are stemmed back to, we knew what we were and we knew what we weren’t. And then two is, just amazing people. I think, you know, this, as well as anybody in the company you build with Yum’s is, pick the best people and be ruthless on having the best people. You put the best people in the best culture. I measure engagement on a regular basis is one of my top metrics, highly engaged people with the best leaders with clear vision – watch out. And I would tell you just like my career, at 10 years of tripling in size, it happened chapter by chapter. It was not that one strategic plan we did in the beginning,
David Novak 25:13
Jeff, you you mentioned engagement. You know, I saw some Gallup research where 70% of employees go to work and they’re not engaged. That means only 30%, on average, are driving productivity and companies. Why do you think that is?
Jeff Simmons 25:24
Yeah, I think- just think about the potential that’s missed here, right? And that’s where I come back to this whole purpose driven leadership is, I believe a lot of companies aren’t seeing that bigger purpose. And I don’t want to be repetitive here, but to me, it is that. I think the second is, look, I’ve got a daughter, I’ve got six kids, I got a daughter is getting ready to go into the workforce. And I think to your earlier question, I believe truly, that a lot of people go to get a job initially. Get out of college, the pressure of, I gotta land a job, okay? And then that turns into, hey, this may not be where I want to be, but I’m going to stay. And so that cycle begins, and there’s just a lot of people today that are working, you know, because they have to. There’s peer pressure early on, coming out of colleges and master degree programs, etc, that I’ve got to land this role, and they get in the wrong place. And I think it’s a combination of those two things. We don’t have as many purpose driven organizations that have that bigger cause and great culture. That’s what retains people, that’s what moves that engagement up. And two is, I think people, early on, are not knowing themselves well enough. And they’re rushing to get a job versus chasing, Hey, this is what I’m about.
David Novak 26:35
You know, I know you’re, you and your team are deeply engaged in innovation. Do you do anything unique that others could learn from in terms of how to build an innovative company or an environment?
Jeff Simmons 26:47
Well, you know, we do a lot of different things, but what I would say is, I’ll start with one and this may seem a little silly, but we just celebrated our 10th anniversary, 10 years with Heifer International. Heifer International, well, as you know, you can gift animals and you can go out and what we’ll do is we’ll send some researchers or some of our more innovative people, maybe even with customers, and we just sent a bunch to Asia, and they went for 7-10 days. And they they got to see, you know, animal production in a totally different level. But what it does is it stirs you, we’ve all been on those trips emotionally. But when you’re around others, it begins to stir up the, Hey, we’re we’re in salmonella reduction business, we want to get rid of salmonella and poultry and you know, the importance of that. You give me five researchers in an entirely different environment, maybe a little bit of brokenness, in a sweat standing with shorts on and Cambodia, standing around talking after a long day, it takes them back to the lab, and then they come back and they bring stories and energy. And I, you know, went into a lab not long ago, and there was a statement from somebody that was actually on one of those trips saying, you know, something like salmonella, another pathogen, this is unacceptable, and this lab will solve it. So I think getting out of your environments important. I think the other thing is piloting projects- allowing small teams, our board always said to us pilot more, pilot more, and our structure sometime doesn’t allow that is to pilot more. Allow five or six great leaders to be able to get together on a cross functional team and solve problems. We’ve turned our leadership development programs, and they end their two years now without solve a problem. And that’s the best way, is turn leadership into a laboratory.
David Novak 28:35
Wow. You know, what was the, you know, as you look back and even as you’re going through the business challenges today, what would you see as the biggest challenge you’ve had to overcome so far? And how did you do it?
Jeff Simmons 28:46
Yeah, so you know, quite simply, we just completed an IPO and there’s quite a story here for myself. We had 10 years where we were leaders in the industry and growth acquisitions, new products, as Jim Collins says, sometimes it’s return on luck. We had a lot of tailwinds that we, I think, were taking credit for as a company, I probably was as a leader. And then we had the world change on us quickly, you know, with whether it was clean food or whether it was innovation that came from competitors, you can’t win in a business for a decade without money, capital and competitors are going to shift on you. So there was some complacency of seeing realities, but saying, Oh, that’s four to five years from now. It happened in six and 12 months. What I will tell you is during that time, the ability to watch people, you know, give them reality, they wanted the reality, they wanted to speak reality and we held it back from them a little bit. We were careful not to give them too much detail too early. Every place where we did give reality quickly or when we decided we had to, we saw remarkable change. The loyalty, it’s their company, how can you have a purpose driven company and not have people say this is my baby? As soon as we gave them the reality of what was going on. And and when in doubt, stand and town halls with no PowerPoint slides, but a couple stools and a couple mics and type it in globally and do one a night for the Asians. And just speak raw and real. This is what’s happening. We need everyone to put their their heads together. I will tell you we went through 18 months of total restructuring a resetting of a business which is common right and you see it in the Wall Street Journal all the time. Let the people reset it. What shocked me the most was that – give them reality. Give them facts early. The second is the power of vision. Everyone stayed that believes strongly in this company. And they saw a world when we were kind of in that, are we going to IPO or Are we going to get sold. I saw people do miraculous things because of vision. They say without vision people perish with vision and accompany pockets of people do miraculous things because they saw world without Elanco in it for about six months. And they saw a world with Elanco still in it, enriching people’s lives and I saw researchers do things, I saw new products move along quicker, supply chain problems get solved, new solutions for customers for people doing what eight people used to do. So don’t underestimate the- just the power of passionate purpose driven people that have a vision.
David Novak 31:25
You know, Jeff as part of your why, you’ve become an expert on global food security. You know, what do you see the status today of that? And what do you see as the way going forward?
Jeff Simmons 31:37
Yeah, it’s, first of all, say, I’m an optimist, it’s solvable. And not only do we see a more food secure world, there’s always going to be poverty because of maybe broken systems. But my vision is that people having food that are least in systems that enable that and allow that. And then is to talk about hunger and then food security. Now I’m talking about one, health is healthier people in our area. And you know, this because you’re in the protein business to is chicken and meat, you know, beef and milk and salmon or fish, you know, the first thousand days of a child, the cognitive skills, getting it to them early will help brain development and the obesity epidemic and the aging population with bone and muscle development. We see it in a bigger context. So I believe that one, we do need, you know, in my area 70% more of this by 2050. We have some environmental pressures, but we have the innovation, we have the solutions, they’re in front of us. And we can be living in a whole different world that’s healthier and have all the food that they want by 2050. It’s going to take leadership, it’s going to take people to knock down policy, it’s going to take people to balance trade, need milk and eggs, and other foods are going to need to move around the world and we know there’s politics there. But it’s going to take, again, this is why political correctness bothers me is people that know the ways to do this, that can enable this, need to be able to lean in and speak out and that’s my bigger calling. I’m never going to retire from this. Purpose driven leaders shouldn’t retire they should refire a few times. But I see this destiny happening by 2050.
David Novak 33:13
Switching gears, I understand your kids took over your dad’s social media to keep him young and hip. Explain it and how are your kids impacting you as it comes to social media?
Jeff Simmons 33:24
Yeah, I think this is key, part of this staying young. So, they took over my social media, David, Instagram and Twitter and we made fun, you know, we had some fun over it during Thanksgiving. They knew all my rules by the way, what I could and couldn’t do, but you know, I think one, is it It allows me to see what matters and you know, hey dad, the way you’re doing this is not going to connect with my age and hearing and seeing that. Hey, we need more video and more fun pictures and you know dad, your Twitter, but Instagram, Snapchat, Snapchat videos is the way to go. So it’s fun, actually, for a couple days that they decided that they were going to, they were going to do that. But I think it’s part of the deal too is the big joke. I didn’t get my dad too much feedback and his generation. And the big joke now with my six kids in the kitchen, and my wife is Hey, I’m getting more feedback on an evening having dinner than I do at work. But I think that that allows us all to to enjoy experiences. But to you know, this reinvention piece David is so important of how you stay young you are who you hang around with. You are what you read or listen to today. And you are you know, I think the third ingredient I’ve added is your level of vulnerability. Being vulnerable, yesterday and my leadership team, the last 30 minutes of 2018 was really feedback for me and and it was just a real, free flowing, little fun stuff. Adjusting and a couple big themes in there. So I think staying young takes those three ingredients.
David Novak 35:00
Jeff, you know, I also understand you’re a big fan of Nick Saban from your Twitter. And you know, he’s the legendary football coach from Alabama. And you actually spent a weekend studying his processes. What did you learn from him? And how have you applied it?
Jeff Simmons 35:15
So I you know, I do this a lot. There’s always books to read and stuff. But you know, I think your podcast is a good example. You can become a student of and come out of a weekend. I do this a lot where I’ll say, hey, this weekend I’m just driving home on a Friday night, well, what can I read? What can I study? Oh, you know, and whether it’s podcasts videos, or just get on the internet for a while, right? And so that was one weekend. I’ve done it from you know, artificial intelligence to new things to try to understand. So Nick Saban, look, I actually had my daughter be upset. She goes to Texas A&M. And I’ve set in three Alabama games for Texas A&M and got beat badly. So I don’t know if I’m an Alabama fan as much as a student of Nick Saban’s to watch someone when consistently, and it was all this- it was it was fundamentals, and it was discipline. He’s kind of the John Wooden of have today. And you know, I’m not going to get into ways in the personal size or anything like that is- he has a process, he has a model, and the mundane is exciting to him. And he just demands the mundane, he demands a process that he knows works. And I think in companies, I include myself, to do something for you know, three years in a row over and over again, is hard, because everybody wants to try something new. And I think the power of that repetition is a little bit of the ingredient mixtape.
David Novak 36:38
What do you think makes a really great business coach?
Jeff Simmons 36:41
Yeah, that’s a great question. One is, I think, you need coaches, right? You need coaches in companies. You can be a coach as a leade. I always say to people, I need two Cs out of all my leaders in 2019 more than ever. Connecting and coaching. You need to be able to connect with people in a vulnerable way. Just came from a large sales meeting and you need to be able to to coach them. In there comes things that you do real well, David like recognition. But what makes a business coach or just an executive coach or anyone is to be able to really, really listen, really, really meet people where they are, and really, really get them to be as vulnerable as possible. And I’m sorry, it’s got to be whole life. When I sit with people, I got to fully understand where they are. And I know HR says, Oh, you can’t do some of that. Let people go as far as they want relative to where their head is, where they are, you know, in all aspects of their life and where they want to go. Once you meet them where they are, then you start to really push them on where their Why is – their purpose, the rest of the coaching is easy.
David Novak 37:50
You know, you founded Edge Mentoring, tell us why you started this.
Jeff Simmons 37:55
So I had over the course of about two months, I had 3 individuals that were unrelated, come into my world, the guy that was the president National FFA, a neighbor boy deciding to finish up his college degree and I knew his parents coming out of college and then one of the guys I worked with here in Elanco, his son, same age. And I just over time, three months, I ran into these individuals and what I ended up doing said, hey, let’s have a conference call on a Thursday night. This is how- kind of how Edge Mentoring got started. And these three individuals and I got on a call. And all I’ll say is at the end of that 60 minutes, I’d never felt more full as a leader, by hearing the hunger on that phone line of just their desire to talk about stories and talk about what they need. They were hungry, aspiring leaders who you’re serving, even with this podcast. And so what ended up happening with edge was, well, we doubled the size of the group and that group became nine. Well, we’re now in our I think ninth year, these nine individuals. And we’re extremely close, those groups have now expanded to dozens and dozens we’re over 1000 people in 45 states, I think, across the United States. And what the learning here is, is just it’s emerging leaders that really want to grow in their 20s and the 30s and early 40s. While there’s people like myself that are in that mid-later stage of their leadership, that really want to stay edgy, learn and create a legacy and give back. So mentoring doesn’t happen by default, it happens by design. And what edge does is it connects groups of four or five similar demographic type people, groups of men and women separately, connected with different season leaders that match their demographic and watch out when it’s done by design that way, magic happens relationships happen, trajectories of leader totally change. And that’s what I always learned. My four or five biggest leadership years, I journal at the end of every year, for the year, when I read those past journals, my greatest years, I had a mentor somebody side by side of me pushing. And that’s why I believe hungry leaders without mentors is a sad thing.
David Novak 40:01
You know, I understand you’re a fan of reverse mentoring. Give us an example of where that personally paid off for you.
Jeff Simmons 40:08
Yeah, so I actually just asked somebody to be a reverse mentor, yesterday, or earlier this week, I kind of do that this time of the year, I’m trying to pick my three this year. So yeah, one year I took three individuals. And I’ll be very vulnerable here and say, one was a young lady with social media that works in our company, where I was, quite, candidly quite concerned, one was an organic meat CEO, that actually he and I sat on a panel together where they were trying to force us to have a debate as kind of two different people and I really, really enjoyed him, but I’m in a company that creates animal health products. And he was one that was trying to take him out. So he mentored me, and the other was from a minority group, gay lesbian pride group from Lily, and all I did was three very contrasting people from the standpoint of worlds I was not used to. And about every 60 days, I gave them full rights to, you know, send me stuff, shake me up and make sure that I’m accountable to every, probably four to six weeks, an interaction as a way to say, look, open my mind. I’m not going to necessarily always say I’m not going to judge. I’m not going to be an advocate sometimes of everything you say, but I need you to push me around you’re in charge of helping shape my thought process, my mind and better understanding. And I try to do that consistently every year to have two or three people that are reverse mentoring me.
David Novak 41:35
Jeff, you’re really passionate about leadership, I have to ask you, what leader in history would you say you admire most?
Jeff Simmons 41:40
Oh, the reason I don’t say most is I would say, people that are probably unknown, that have shaped me and I know the story. No question – my dad, I think he taught me the persistence of keep going. Dave Cole, a professor at Cornell visiting one year, he showed me the size of agriculture, passion, and cause without question. And spiritually. I mean, you know, the book I read the most and I’ve learned the most about is, without question, is Christ.
David Novak 42:12
You know, Jeff, you recently took your company public as you mentioned, and I think it was September 24, 2018. Tell us the story of what it was like for you and your team to ring the bell and have that accomplishment?
Jeff Simmons 42:26
Yeah, I you know, I would just say probably knowing the loyalty and purpose driven company, I got to see it through a different lens. I saw were, in my tough moments, short as 12 months ago, wondering what our destination was. Because David, we announced some- very unique, which I look back and say, Boy, it was not good. But it was maybe the greatest gift is, almost a year before we went for an IPO we announced we’re looking at all options. And we let all the employees in the whole world know we could be sold, we could stay or we could go public and go independent. And you can imagine the purpose driven people wanted their own thing. But for nine or- nine to 12 months, people got to choose, people got to decide I’m going back to the parent company, I’m leaving, but that the center of the company, the majority of the company, became even stronger and more loyal. And they fought through, as I said, and chase the vision. But that just created a kind of an inferno of purpose and belief that when it happened, I remember walking down along the side street coming up to Wall Street. And we had a big banner that the communication team had put over the New York Stock Exchange, how a dog an employees daughter, and our vision, food companionship and enriching life, I was one of the last ones to walk down over that hill, David, and the ring in the bell won’t be something remember maybe 20 years from now, but I’ll remember this site. Seeing over we had over 125 employees come and celebrate that day. And from all over the world, different facets of leadership. And to watch them emotionally turn the corner, take pictures, hug each other, to see that banner to say hey, it’s there, we did it. And more or not that that we arrived. But watch out what we’re going to do that, to me is probably the story behind a purpose driven company doing this. And I would say it’s probably appropriate, I was the last one down the hill. Because there was times in those weak valleys that I did have a lot of doubts. And it was people all over the company and manufacturing floors and research labs, sales reps, texting and calling me there was more belief by the front line than the executive office and some of the deeper valley and that- my message to the listeners out there. Purpose-driven people are dangerous, you lose control of your company in a real good way.
David Novak 44:47
It’s about time to wrap this up. But I want to ask you this question. What three bits of advice would you give aspiring leaders if you had to boil it down to three things?
Jeff Simmons 44:57
So I’ll start with one is this Vision and Why – get it. You’re not living a life without it. My my favorite, one of my life verses is Proverbs 13:12. And it says hope deferred makes the heart sick. But a longing fulfilled is the Tree of Life. And everyone has a tree of life out there. And that’s when everything’s flowing, life feels good at home, with your husband or wife, with your kids or your parents, with your community. With your company. It’s just life is flowing – that’s what tree of life is. Well, that’s when a longing is fulfilled. We all have a longing. And if you’re not fulfilling it, you’re leaving something on the table. And I think that’s really, really important. Two is, this whole recipe piece. Be you don’t be somebody else. Don’t try to over-plan and get too far ahead. Leadership is measured by followers. People only follow you if you’re real, what are the two or three words in the back of a business card, that’s your recipe, that are the simple ingredients that make you different and it’s why everybody loves you and adores and will follow you. And then I think the last thing is keep growing and stay young – be the youngest in the room. And I’m not talking about age, but leaders need to stay young. So 10 minutes a day of reading, get someone that will mentor and push you around a little bit. Work on an outside project, start a nonprofit. And I think with those three things, watch out. You’ll live the life that you were meant to live. So, and a real credit to you, David, you’re one I could point to and aspire to as well. You know, you’re writing the next chapter here on recognition and aspiring leaders. And I think I’m talking to somebody that’s doing what I just said.
David Novak 46:35
Thank you so much, Jeff, and I have to ask you this before I let you go. Do you have any pets?
Jeff Simmons 46:41
I do. Yes. I’m a Labrador family. We’ve been through a few generations of Labradors. I like water. And and I like pets and I have to say I have a little allegiance to poultry – I grew chickens growing up and dairy so they’re my livestock groups. I don’t have any directly now, but down the road, I’ll probably have some more investment and I know you can relate to that being a Kentucky Fried Chicken guy. But no, black Labradors is the family dog so.
David Novak 47:07
And the name?
Jeff Simmons 47:08
David Novak 47:09
Maggie. Alright. That’s fantastic. Well, you know, Jeff, I knew I was going to love this podcast with you. Because your passion is contagious. You know, you’ve really driven home the importance of being a purpose driven leader. And there’s no way you could have listened to your insights without taking three or four things back that could really improve your life and your leadership. So you’ve really inspire me today. So thank you, Jeff, for being on the show. I really, really appreciate it.
Jeff Simmons 47:35
Thank you, David. Thanks for the opportunity. And I wish you all the best in these initiatives. It’s exactly what the world needs right now. Well done.
David Novak 47:43
Ashley Butler 47:44
I found Jeff Simmons very inspiring. Throughout the conversation, Jeff talked about how important it is for every organization to have a noble cause. And it’s not enough to have one that’s just lip service. It’s so important for your employees to know how they contribute to it. Why? Because the noble cause helps employees connect and engage with your organization. It becomes part of why they work for you. At David Novak Leadership our noble cause is to help people be the best leaders they can be so they can make a positive difference in the world. If you enjoyed this podcast, you can subscribe at DavidNovakLeadership.com or any of your favorite podcast platforms like, iTunes, Stitcher, or Spotify. Follow us on Twitter, Facebook, or Instagram for more great leadership insights. Thanks for listening to the David Novak Leadership Leadership Podcast.
Steve Trager has been with Republic Bank since 1987 and now serves as Chairman and Chief Executive Officer where he remains actively involved in the operation and retail management of Republic’s forty-five banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee with total assets of $5.1 billion.
After completion of undergraduate studies at the University of Texas at Austin where he received his B.A. degree in finance, Steve went on to receive his J.D. degree from the University of Louisville School of Law. For a period of two years, he was associated with the law firm of Wyatt, Tarrant & Combs.
Steve is past chairman for the Kentucky Bankers Association, the University of Louisville Board of Overseers, the 2016 Fund for the Arts Campaign and Leadership Kentucky; and a former board member of the Federal Reserve Bank of St. Louis’ Louisville Branch and the Louisville Regional Airport Authority. He currently serves on the Bellarmine University Board of Trustees. He is involved in local community nonprofit organizations and was recognized as the Louisvillian of the year in 2017 and was awarded the Lincoln Foundation’s 2018 Spirit of Excellence Award.
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David’s passion is to make the world a better place by developing leaders at all ages through David Novak Leadership, his family’s Lift-a-Life Foundation, Lead4Change, Global Game Changers and The Novak Leadership Institute at the University of Missouri.
Novak has been recognized as “2012 CEO of the Year” by Chief Executive magazine, one of the world’s “30 Best CEOs” by Barron’s, one of the “Top People in Business” by FORTUNE and one of the “100 Best-Performing CEOs in the World” by Harvard Business Review…