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April 07, 2006
Burger King's drive-thru executive suite
With the resignation today of Burger King CEO Greg Brenneman (pictured in the AP photo), the fast food company has now chewed up and spit out 11 CEOs in 16 years.
With that much instability in the company's top job, Burger King's culture must have multiple personality syndrome. Employees probably find themselves constantly struggling to develop the necessary patterns and rhythms of culture growth that a CEO reflects and drives.
Indeed, stability is the driver to success, even genius. Researcher Anders Ericsson of the University of Florida (as recounted in Sutton and Pfeffer's book "Hard Facts") has found that at the individual level, "exceptional performance doesn't happen without approximately 10 years of nearly daily, deliberate practice."
Think Tiger Woods here: he had a professional coach at age 4 and was playing golf every day by age 6.
Carried over to the organizational level, Pfeffer and Sutton find that "no matter how gifted (or ordinary) team members are to start out, the more experience they have working together, the better their teams do."
How else better to explain the exceptional and sustained performance and evangelism of companies like Southwest, Whole Foods, Nike and others that focus on culture and (mostly succeed at) long-term executive stability.
Technorati Tags: Burger King, Culture, Southwest, Whole Foods, Nike
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Ben ... I don’t fully agree that long-term executive stability is the main reason why Southwest, WFM, and Nike have had sustained success.
Yes, Southwest, WFM, and Nike have had stable leadership but each of those companies brings something different to the table in their respective fields. I reason sustained success at those companies is more the result of doing things uncommonly better than their competitors do than because they don’t have an executive revolving door.
No matter its executive leadership, Burger King brings nothing different to the fast food table. The only thing BK does differently than their competitors do is make wackier ads. They certainly don’t make a better burger.
Then again ... maybe because Southwest and WFM go about business dramatically different that their executive leadership has remained stable. (I would throw in Nike here but didn’t Nike just force out a CEO after spending only a year on the job?)
I'm not necessarily arguing it's the main ingredient (heh) but a high-level factor. Here are a few more examples of the 10-Year Effect:
For instance, Apple was rather unstable after Steve Jobs was forced out in 1985. He returned in 1996. Hitting that 10-year stride today, Apple has never been stronger.
As James B. Stewart documents in "Disney War," Disney grew dramatically for the first 10 years of Michael Eisner's reign... then began to falter as he turned the executive door faster and faster.
Build A Bear Workshop has been led by its founder for nearly 10 years and grown to a $200 million company in that time.
I'm going to have to agree with John. The problem with attributing success with executive stability is that you run into a logical fallacy, correlation implying causation. The 10-year executive may not be generating all that success but merely enjoying the stability of it. While a stable vision can drive growth, I don't think executive stability itself is a key driver, it's more of a KPI. Rats on sinking ships and all that. =)
That's the point of Anders Ericcson's research: he finds there is a correlation between continuous practice -- stability -- and performance.
Strong performance as a by-product of continuous practice and stability is also a central theme in GOOD TO GREAT.
However for executive leadership to gain stability, the company must be healthy. Jobs did a FANTASTIC job in nursing Apple back to health. Brenneman was hired by BK to turnaround a very unhealthy company--and failed to rehab BK into being healthy.
Coke has been an unhealthy business for years now and its executive ranks have been in a constant churn. Wal-Mart has been financially healthy for years and it has had stable executive leadership. Which brings me to this question … is stable executive leadership a driver of business health or is it a by-product of a healthy business?
Let's look at IBM. Lou Gerstner was named CEO in 1993 at a faltering company that was about to be broken up into pieces. Gerstner, of course, squashed that idea. By the time he retired in 2002, IBM was a transformed company.
As for Brenneman, perhpas he wasn't given enough time to make the business healthy. I imagine the company's 10 previous CEOs might say the same.
