The only constant in business is change. In Episode 34 of the B2B podcast, Pit Stops to Podium, hear from Mike Lage on keeping up with the pace of change in your organization. Mike is the Senior Director of Restaurant Development at Chick-fil-A, the well-known and well-loved quick service restaurant business based in Atlanta, but spanning the country. After working with Google and Facebook during their seasons of changing to mobile as the main revenue channel, Mike then joined Chick-fil-A to bring this digital transformation into their restaurant experiences. He was instrumental in launching and developing the Chick-fil-A Customer Digital Experience and CFA One App. Currently, Mike looks toward the future and how CFA will position its restaurant for further development and expansion. Learn from his experience to explore how you can innovate in the context of your organization and push the bounds. If you wait, you’re losing. Listen in and then back to the races!
Take 20 minutes to listen and digest and then head back to the races! 🏁🏆
Pitstop Highlights
The Digital Transformation
Prior to 2012, Chick-fil-A launching an app was unheard of. Many questioned how the launch of an app would affect the company’s quality in terms of its hospitality and customer service management. But despite the concerns, Chick-fil-a believed that the advanced technology would be able to transform the way they understood their customers. Now, they would be able to know their customer's favorite menu items, what time of the day they typically visit the store, and the types of menu items they would want to see in the future.
The results of the launch were incredible. Within hours, Chick-fil-A saw their new app #1 on the App Store. With a simple download, customers were promised a free chick-fil-a sandwich–and it worked. Today, Mike expects 50% of Chick-fil-a sales to come from their app.
The Physical Transformation
As Chick-fil-a began implementing well into its digital transformation, the company began to focus more on its physical transformation.
“Now we're starting to think about, OK, digital transformation is here, and obviously we're continuing to tool up and continue to innovate and move fast with regard to technology advancement we need to make. But now we need to think about it was the physical transformation to support the digital transformation”
The company began asking itself, “How do we transform our physical format in light of what our customers want?”
COVID-19 Impact on Chick-fil-A
As COVID-19 hit, customer demand among the company went up. The customer demand didn’t shift away from the traditional way of operations–it ventured to a new horizon. It’s a factor Chick-fil-A has been constantly innovating on while still being able to maintain its reputation for strong hospitality.
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Full Transcript:
Brendan: Hey everybody, welcome to Pit Stops to Podium. The RevPartners podcast, where we talk to execs who have competed and won, taking their companies from high growth to high scale. Well, my name is Brendan Tolleson. I am the co-founder and CEO of RevPartners, and I'm delighted to have with me today, Michael Page for our latest episode of Pit Stops to Podium. Welcome, Mike.
Mike: Hey Brendan, great to be with you, man.
Brendan: Well, it's great to be with you. Mike is a friend of mine, so that's always a fun part of a podcast for me. Mike has been currently serves as a senior director of Restaurant Development at Chick fil A. Mike, most of our audience probably knows who chick-fil-a is, but this would be your opportunity. Typically, what I do with my guests is give the guests the opportunity to introduce their company, but go ahead. Who's who's chick-fil-a?
Mike: Well, we're a quick service restaurant business based in Atlanta, but we, of course, exist all across the United States and hopefully many of your listeners have tried, have tried chick-fil-a before. So there's a great chicken sandwich. We say we didn't invent the chicken, just the chicken sandwich. So that's some fun, but hopefully most folks know Chick-fil-A.
Brendan: Mike, how would you say you guys stack up with the chicken challenge? I haven't heard chick fil a too much.
Mike: You know, I tell you what, like, we have some amazing operators who make great chicken sandwiches and deliver even better hospitality and customer experience. So when you package all those things together, I say this humbly, but we don't think we can be beat.
Brendan: I love that. Well, Mike, you have kind of an wouldn't say nontraditional, but you have an interesting pass. So you've been at Chick fil A 12 years. But I think one of the reasons why this is such a relevant topic, we'll get into the big idea in just a second. But walk our audience through your background a little bit because I think that will shed light around where we're going this conversation.
Mike: Yeah, thanks, Brendan. Well, I started at Chick fil A as a summer marketing intern 17 years ago and then when on board full time after graduating and I spent about four years at fil A really learning the restaurant, working closely with operators in restaurants, doing a lot of grassroots marketing promotion to understanding how to grow this gross sales and grow the brand at the restaurant level. And then I actually left chick-fil-a and I pursued graduate school and then spent a couple of years out in the Bay Area. I just got married and my wife and I got to live out there and I worked for a summer with Google, and then I worked full time at Facebook. And so this is about I split my time kind of pre IPO and post IPO at Facebook. Just I share that just to showcase what a tremendous season of change and growth was going on at Facebook. And my role there was to help big brands, primarily beverage, CPG and restaurant brands, figuring out how to leverage the Facebook platform to connect more closely with their customers. And so I got a chance to work with brands like Starbucks and what they were doing from a mobile standpoint. Facebook made a strong pivot to go after mobile as a major revenue channel, which seems obvious in hindsight, but back then was a pretty revolutionary move. So I was there for a couple of years, and then I actually boomerang back to chick-fil-a about eight years ago because I got an opportunity to be a part of the team working at chick-fil-a as customer digital experience. And so I worked on helped develop in the chick-fil-a app and mobile ordering chick-fil-a one rewards. And that program, which was a great run. It's a season and build operations, and now I work in Restaurant Development thinking about where we're going to be future Chick-fil-A formats and restaurants. So it's been a fun journey. Thanks for asking.
Brendan: Yeah, you've had quite a ride and that's a good teaser for where we'll get to from a big idea perspective. But before we do that, I don't want to skip steps. We do have a tradition here at pit stops the podium, and that's to get to know our guest. And so, Mike, what are three fun facts that our audience should know about you outside of what you do for chick-fil-a?
Mike: OK fun facts, so the first one is a bit random, and I think it's fun. I'm a huge I'm a huge Georgia Bulldog football fan, but that's how my fun tax specifically.
Brendan: Yes, go dogs. Do you guys know the movie, rudy? It's one of my favorite movies of all time. It still makes me cry to this day, I was actually in the stadium at Notre Dame when that movie was being filmed at halftime, so that's kind of a fun fact. That is a great fact. That sounds kind of cool. I'm still trying to convince my wife to watch Rudy with me, but she is not obliged yet, but it's also one of my personal favorites. Yeah, I mean, if she wants to see her husband get emotional at a powerful moment, I mean, that's entertainment, and that is it.
Brendan: That's a good way. That's a good hook. I might have to use that.
Mike: Good way to frame it. So that's one fun fact. The second fun fact is personal, of course, Brendan. My favorite thing to do in the world is to coach young kids and basketball. And this season I got a coat. I got to coach for the very first time. My daughter and Brendan, your daughter. They were on a 7 and eight-year-Olds girls basketball team, and their team name was the thunder Crushers. And so we had a tremendous season. We beat a couple of the boys teams with just our ferocious, tenacious defense. And so that was really that's a fun fact too.
Brendan: It was a good run. They were probably the best rebounding team in the conference, so you did a great job with the girls.
Mike: Yeah, I mean, people think Trae Young and the Hawks are hot right now, but nothing on the Thunder crusher. Watch out for the Thunder Crushers. That's great. All right. So we've got Rudy, we've got the thunder Crushers. And what's your third? You know, third one is just one thing I really love to do is go deep sea fishing. I go out of California, most years, spend four days out of the boat, and it's a great time to get away, to not see any land, to have zero cell signal for like four days and just enjoy time with my dad, with my brother, cousins and and grandfather. So that's a fun tradition that we have in the family and maybe a little fun fact.
Brendan: That's great. You guys typically go for a certain type of fish or is it whatever you can find?
Mike: It's always tuna, but we'll catch whatever we can get out there, so it's really fun, but even if you go on a trip, you don't catch much. It's still a great trip because you're disconnected from reality for a few days.
Brendan: Well, I expect some tuna from your next trip. I'll hold you to that. Well, hey, let's transition to the big idea you talked a little bit about in terms of how your Facebook experience informed some of this. But what we really want to talk about is this idea of what called the change maker. And what I really mean by that is the only constant business is change, and innovation is a very big buzz word. But I think what you've been able to embrace and what you've helped steward not only from your Facebook experience but now to Chick fil A is this idea of how do we innovate before we need to? Because if you wait, you're losing. And so chick-fil-a had a really phenomenal job at that. And so let's start a little bit with what you were describing in the introduction, which was your experience from a digital perspective. Most people that know chick-fil-a the digital app, but that wasn't always the case. You are a food services business. You mentioned the quick service concept, and so that may not always been embraced within the four walls of Chick fil A. So let's talk through. You know what got you to that point where you said, hey, this is where we need to go and why?
Mike: Yeah, Thanks for asking. I mean, it was a tricky challenge because as a business, we were doing really well back in. When I came back in 2012 and 2013, our business was continuing to grow. We were known for hospitality and for customer experience, and so that had become kind of staples along with really great quality food. So the question was obviously like, hey, why would you mess with that? Why would you mess with the hospitality at chick-fil-a? Why are you trying to get fancier creative with digital with mobile? Again, that's hindsight hindsight's 2020 20 today. It's obvious, but back then it was like, why would we ever mess with something like that? And so what we really tried to do is couch, whatever we wanted to do in digital to augment and almost be a force multiplier for our customer experience and for our hospitality. And so we really keyed in on this idea that when you know, customer stories, you can care for them personally when you have a better sense for what customers care about for the way they like their menu, their favorite menu item, prepare for when they come and what time of day when you have an understanding of their story with your brand and you can care for them in very personal way. And that comes down to the actual customer experience of when they order ahead, you can get it to them faster and you can get it to them exactly the way they want it, right? The number of chick-fil-a sources they want just exactly the way that they want that chick-fil-a sandwich prepared. And so that's kind of what we anchored in on. And then we kind of took off from there. And don't get me wrong, it's really challenging to continue to pursue that level of technology transformation in a business that has historically just been so successful in a brick and mortar standpoint. But I think anchoring it to that big idea around how do we take what we've always done well and take it to the next level, leveraging technology versus just doing an app for app sake?
Brendan: Yeah so I think you did a great job articulating the why. But let's talk about how so you've created this business case, a justification of, hey, we need to embrace this. Here's why then how do you take it from the idea and the justification to actually implementation?
Mike: Yeah, well, it's probably worth a whole other year and couple things first. One of my innovation heroes is our CEO, Dan Cathy. I mean, he is often fond of quoting Jack Welch and saying, hey, like if the pace of change the external rate of change is greater than your internal rate of change, then the end is imminent. Like, we have got to constantly be thinking about changing and retooling and getting better. And so Dan came to a colleague of mine one day and said, hey, we're going to have a meeting every single week on Tuesday mornings, and we're going to invite all the cross-functional partners needed in order to transform our business, leveraging the power of mobile. And so he said, hey, give me a list of who needs to be there and then I'll see you on Tuesday. And so every Tuesday, we got a group in our Innovation Center over what we call hatch to make consistently and do and clarify what's our roadmap, what are we going after? What are we going after? What are the interdependencies? What things do we need to tackle? Where is there tension? Where are people not aligned? Let's bring people around whether meetings do we need to have? And so it just became a really significant kind of cultural moment weekly to help us continue to move things forward. I mean, we're reviewing backlogs or reviewing what do we need to build and why? How do we roll this out? Let's get operator feedback. And so it became kind of our forum to continue to work together and collaborate moving forward.
Brendan: Yeah so, what I hear there is you had an executive sponsor at the very top with your CEO and then you have some way of driving accountability in terms of we're going to meet on this date. Here are the things we say are getting it done and ultimately driving those. Now that idea from what it is an idea to actually activating it. So that's a really good, practical way to think through that. And so, mike, let's talk about the results. So I love the app, but like, give me an idea of adoption, usage, et cetera. What percentage of revenue ever you feel comfortable sharing? I'd love to hear the success behind that digital transformation initiative.
Mike: Well, I'll share one thing that was really encouraging out of the gates is that within days of launching chick-fil-a one, we had hit number one in the App Store. Which was like mind-numbing. We didn't think that wasn't even on our radar. And I say that humbly because at the end of the day, we did it because we told customers, hey, download the app and register and you get a free chick-fil-a sandwich. And it turns out people love free chick-fil-a sandwiches. And so that's what launched us in the beginning. But it was a great way to sort of splash into that experience. And since then, it's continued to grow. As you can imagine, having that experience with the chick-fil-a app and the course of COVID became a total multiplier and accelerated growth moving forward. And we think that in a matter of years, it could be half of our business. And so it's already taken on significant, significant ramifications across our business. And I would say what's proven out, which has been really cool, is how chick-fil-a operators have leveraged the power of mobile to continue to create moments of hospitality and moments of care throughout things. So it wasn't again just the app or app saying, but really about how do we use it as a force multiplier for our hospitality experience?
Brendan: Yeah, I love how you just described at the end of it supports the overall mission. It's not to replace it. And so that's like the force multiplier that you just alluded to. Well, let's transition Mike into the next big initiative that you're tasked with. So we talked a little bit about the mobile app and how that serve the digital transformation perspective. That was really interesting. You're starting to think through the it's kind of working backwards a little bit. It's this physical transformation. And so what is that when you say physical transformation, what does that mean in your context?
Mike: Well, you know, it's interesting, it's a fun, it's a fun thing to work on now. I think early on we were working on digital transformation. How do we give customers the ability to have a remote control on their hand for their experience? And we were doing that within the construct of our current restaurant format and our current real estate strategy. Well, now Brendan, it's mobile ordering and digital experience takes off and delivery hits the scene in a very significant way, and it's a really growing part of our business. Now we're starting to think about, OK, digital transformation is here, and obviously we're continuing to tool up and continue to innovate and move fast with regard to technology advancement we need to make. But now we need to think about it was the physical transformation to support the digital transformation. It's almost like the first time it was about digital transformation, almost like within the bounds of our physical format. And now we got to think about how do we transform our physical format and the light of the fact that customers want. Things delivered to them, and they want to order ahead. They want it delivered to deliver to them whether they're sitting in a parking spot on one of our restaurants or they're on their couch and they want to deliver to their doorstep. What does that mean for real estate strategy perspective from the kind of formats we're pursuing? And so as you can imagine, it's a whole new challenge to try and tackle in the business.
Brendan: Yeah, it's to me. I mean, I'm trying to think through this question of what is a bigger disruption or what is it presents a bigger challenge for you internally. Is it the mobile app or what you're describing here of how we rethink physical space in light of where you've been?
Mike: Well, when you can appreciate to is, I mean, you if you get a great digital experience strategy humming and a great kind of agile process humming, you can make changes to the digital experience and a matter of days or weeks, depending on how fast you're shipping with the physical format. I mean, you're aiming for the future because you talk about a real estate deal from start to finish it. It takes a number of months or even years. You talk about reinvesting in existing restaurant and busting out walls or cutting curbs. That just takes time, and it takes heavy capital investment when its brick and mortar. And so you're really kind of aiming and betting on the future and then trying to make changes now based on where the feature is headed. But it's really tricky because, like I said, it's capital intensive that takes a lot of time and you're kind of betting on a future that you're not quite sure is out there yet.
Brendan: Yeah, you mentioned COVID. Was that a catalyst for it or how did COVID impact this strategy or thought process?
Mike: Yeah, catalyst is probably the right word we were already thinking about that we are already, as Dan Cathy says, those over our toes and kind of lean in and what that might look like. But when COVID hit and customers just demanded it, now we've got it. Now we're kind of on our heels a little bit trying to react to figure out how do we respond to this overwhelming customer demand. And the other thing is, it's not like customer demand has shifted away from our traditional way of operating. I mean, our drive-thru business is as healthy and strong as ever before. And so we're having to continue to support our current business while also having to look on the horizon. And so it's a very tricky challenge. But again, it's one that chick-fil-a operators have been getting after it and innovating and thinking about serving customers in a thoughtful way. They've done that since the beginning of the business. And so I hope that's been people's experiences that I'm going to chick-fil-a restaurants. What we're trying to do is just support them in that through everything we're developing for the future.
Brendan: And Mike, does mentioned the digital transformation issue with a mobile app that you had executive sponsor where you have these weekly meetings and you were working in that agile fashion. What are the parallels as you think through the physical transformation? Is it the same? Is it different or are there more stakeholders? Just curious to hear your that process on the chick-fil-a side?
Mike: Yeah, I think the biggest change so much of it is about the timing, right, you're dealing in them as a matter of months and years. There's certainly still a lot of different stakeholders. I think the stakes in some cases are higher because of the timing, because of the capital investment required. And so I would say what the real parallels are is how do you get stakeholders from various parts of the business to have shared consciousness around a specific thing that you're trying to figure out or a goal that you're trying to go after? And I'm a full believer that you can have kind of shared understanding and begin to speak the same language, even though you're coming from very different vantage points. I mean, that's half the battle, the clear definition of the problem, the shared consciousness across functional areas, if you've tackled that and the solution becomes so much easier. But I think a lot of times, especially within the context of big organizations we fail, is because people aren't speaking the same languages or the clear outcome or goal is it defined. And so that's, I think, how we're spending a lot of our time is trying to get that clarity as we continue to drive forward. But again, I mean, going back to the beginning of what we started with change is inevitable and customer demand and customer motivation and customer behavior, they're going to take us into the future. And a lot of times we're going to be chasing what customers want is something that, I mean, that's something that he's been doing since he started. The business is chasing what customers want because he cares so much about them feeling cared for personally. So we're still on that journey. Years later, it's just taken on a different form.
Brendan: Yeah, I love the way that you package that up, and it's to your point about understanding what the mission is. And if people have that common understanding, then it allows us to kind of break through some of those silos and those different opinions to ultimately understand, hey, what are we really striving for? And that will inform how we built the strategy and ultimately serve the stakeholders in this case. It's not just the customers, but ultimately making sure the operators and others within your context are served properly. Well, this has been a great conversation. It's been fascinating to hear how a multibillion organization has embraced innovation. As we said, not necessarily when you need to do it, but before you need to make sure you can keep up with the pace of change. If people want to learn more about you, typically they say also the business, particularly is a little bit different. But what would be some practical next steps people take to learn more from you?
Mike: Well, I'd say I'm less interesting than chick fil a, so I'd say, hey, make sure down with the Chick fil A app, go to chick-fil-a.com. I mean, I think most of your audience are leading at high levels in their business, but we want to connect with you. And so it makes sense to connect with me on LinkedIn. I'd love to hear from you. I'd love to hear what you're learning about the subject. And if you're ever interested in opportunities at chick-fil-a, we're always looking for the best and brightest to help us grow and forward. So that may be something as well. So that's what I'd say, Brendan.
Brendan: All right. Well, I heard was eat a chicken sandwich or apply for a job, which are two good practical steps. So mike, it's been a pleasure connecting with you. I know I've learned a lot. It's fun to hear about your experience. It's exciting to see what chick-fil-a is headed. So thanks for the time.
Mike: All right, Brendan. My pleasure, man. Have a great day.
Brendan: You too. See you.