3 More Questions (Paul Brown) with David Novak and Koula Callahan

0:04David Novak:Welcome to How Leaders Lead. I'm Koula Callahan and I'm here with David Novak to bring you another edition of Three More Questions. David, today we're debriefing your conversation with Paul Brown. Paul is the co-founder and CEO of Inspire Brands, which is the parent company of six iconic brands that everyone listening to this podcast, number one, has heard about, number two, has eaten at. Yeah. And what are those brands, Kula? Those brands are Arby's, Buffalo Wild Wings, Sonic, Jimmy John's, Baskin Robbins, and Dunkin. And America runs on Dunkin.

0:42Well, America gets a lot of fuel in all those places, for sure.

0:47David Novak:This conversation is an excellent one because all of the conversations that we have are excellent. But what I really loved about Paul is that he just gets down to exactly what it is he does and exactly what his restaurants do. And they just double down on the obvious. And what I love about that is that they've seen success doing it. And there reminds me, David, of one of your favorite sayings that they use a lot of common sense, but common sense, sadly, is not all that common. Yeah, there's no need to complicate the uncomplicated. That's what I think Paul has really figured out in the world of marketing and the world of branding.

1:23He knows how to simplify, get to the essence of what a brand offers, and then find some way to communicate it in a way where you just can pound it home every single time with every kind of communication and every kind of media vehicle you would think about, whether it's social media or network television.

1:42David Novak:David, we'll get into the questions in one second, but you asked Paul to do this in the episode, and I have to ask you to do this in our episode, can you please give me the Arby's tagline in the voice of the Arby's tagline man? We have the meats.

2:04David Novak:Question number one. Paul talks about a seminal moment in his early career where he basically bombed a marketing pitch. And in that moment, he got some powerful coaching from the iconic Barry Diller, who told him to sell what you sell. I love this advice, David. How should leaders apply this concept not only to their marketing, but to their vision and strategy as well? Well, first of all, I want to say that Paul had a great luxury there and a great benefit. And that benefit is to actually be able to spend some time with Barry Diller, who he worked with, because Barry Diller is one of the great marketing leaders of all time.

2:43This is a man who's a great business person, great entrepreneur, but he really understands, you know, how important it is to communicate. And, you know, Barry is a simplifier. He gets down to the real essence of what you need to say. And I think Paul had his marketing campaign that was very confusing. And Barry just said, hey, you know, remember, just sell what you have to sell. Don't try to, you know, complicate things. Just keep it simple and, you know, people will understand what you're really talking about. You know, look for powerful ways to sell what you sell, but know what it is and make sure that everybody knows exactly what you're selling when it's over with.

3:27You know, so many times in marketing, you know, people get too cute. You know, they try to be so creative that they try to convey what they have in a way that will really be distinctive, which is a great and noble goal. But if you do that at the expense of what you really are and what you really stand for, you know, it takes you down a rat hole. You just don't want to go down.

3:48David Novak:In the episode, Paul says that it was this very concept of sell what you sell that many years later had him land on the We Have the Meats campaign, which is part of his turnaround strategy at Arby's when he took over as CEO. Yeah. And, you know, he went in, he looked in the freezer and he said, God, we have, look at all these meats we have here, you know, and that refrigerator told the story. Do we tell everybody we have basically every meat underneath the sun? The answer is no, we don't. And they had a bunch of, I remember they had a lot of uneventful marketing campaigns, you know, until Paul came in and really boiled it down to, hey, we have the meats and the rest is history.

4:25And now he's got a conglomerate of restaurant brands. So I would say, well done, Paul.

4:31David Novak:Question number two. With portfolio companies, you can't always copy and paste what works well in one market to another. For example, Paul points out that what works well at Dunkin' and the Northeast doesn't play well in the Southern markets. David, when you were at Yum, how did you think about maintaining the consistency of the brand while being flexible on the product offerings based on different markets? Well, I have to tell you, you know, in the United States, things were pretty similar. So we really didn't have a lot of regional flexibility. You know, it basically came straight from the headquarters.

5:06You know, they did the marketing and it was national in scope. and what worked in the Northeast usually worked in the Southwest. So, you know, we didn't offer up a lot of decentralized thinking for our brands in the United States. What our brands are enormously successful outside the United States. And that's where we really said we had to understand the cultures of the country. China, for example, the Chinese love lots of variety. So we had a lot more variety beyond chicken in China. And we built KFC into the number one retail brand in China. We offered a lot of local flexibility to do whatever you needed to do to be culturally relevant in every country.

5:44So that's where we really said, okay, we've got core brands that you've got to market. Like Original Recipe is one of those. You know, Pan Pizza is one of those for Pizza Hut. We've got to, you know, these are the brands that we have to have everywhere. But if you need to tailor the menu to make it more relevant, we expect you to do that in that market so that we can be successful. So the one thing about international markets is everybody wants a piece of America. A lot of people will never get to come to our country. And so when you take a U.S. brand international, you know, people can walk into your store, eat some pan pizza, eat some original recipe, and they're getting a piece of Americana.

6:25So we always wanted to make sure that that piece of Americana was evident through our restaurant decor, our exterior packages, the core products that we offered. You know, that was really, really key. We want to give people that piece of America, but we also want to give people a piece of their country, too. You know, what makes you unique? You know, it might be rice. It could be, you know, more pork-based products or, you know, you pick it. But if that was really something that was needed in your country to be relevant on a restaurant basis, you know, that's what we did. So it made a lot of sense, and it certainly worked.

6:58But in the United States, it was pretty much what works in the Northeast is going to work in California. And when you move outside the United States, though, that's where we really had a lot more tailorization.

7:08David Novak:That original recipe spans far and wide in this country. I'll tell you that much. You bring up a good point, David, though. The core product, the core offering is what you wanted every brand to market, regardless of where they were. So focusing on and knowing your core and perfecting it so that you are known for that thing, regardless of where you are, is a key piece of this whole equation. Yeah, absolutely. Question number three. Paul said one of his biggest lessons has been figuring out what to manage at the portfolio level versus what to leave with the brand teams. For leaders running multiple teams or business units, how do you find that right balance between alignment at kind of that core portfolio level versus autonomy at the brand level?

7:53Well, I think when you have a portfolio company, you have to look at the work. what work needs to be done and what work can be done best on a centralized basis and what work can be done best on a decentralized basis. What Paul talked about is they've made great strides at that company on technology, but they don't have every one of the brands working on technology. They have somebody at the corporate level working on technology that can provide that technology to the rest of the organization. and therefore they get better technology and they get it done more efficiently. And that's what you're always looking for.

8:31What can you do something better centrally and how can you do it more efficiently centrally? And that's what you want to take and put into the hub. The other thing you want to do though is you want to make sure that people share know-how. One of the things that he talked about was the meeting he had every Friday with all the marketing people. You know, and they talked about what was working, what wasn't working because what that allowed people to do was to share best practices and learn from each other. And so that was a way to really leverage what the corporation can do. Because those brands would never come together if they were by themselves, but they shared the know-how to really get at it.

9:08Now, what should be decentralized? I think what the brands should have is anything that really touches the customer in a significant way from a marketing and product standpoint. That's really where you've got to have the brand expertise, the people who know the brands the best, know what they stand for, know what they represent. And these are also the people that work with the franchisees at each one of the companies. And Inspire is pretty much a 100 % franchise company. And so they control the franchise relationship at the brand level as well. So a lot of times people take over too much and bring too much into the headquarters.

9:47And a lot of times people leave too much out at the brands. By the way, this is the million dollar question at every portfolio company. It's like, what should be centralized? What should be decentralized? And this is where all the friction is created. This is where people are irritated that they've got to rely on somebody else when they want to have control. Because basically, most of us are control freaks. We want to be able to control everything. But if you let everybody have their way in a situation like that, the shareholder's not going to get their way. They're not going to get the best possible result from the company.

10:21And I think Paul's done an excellent job of figuring out how to run a portfolio company and could articulate this stuff and does in his podcast with me better than what I'm rambling about.

10:33David Novak:David, I imagine you experienced that tension at Yum, trying to figure out what to keep at the Yum level versus what to leave in the hands of the folks who are actually out there running the brands, talking to customers, and seeing what was landing. Exactly. We did real estate development that we centralized, and that worked pretty well. But we centralized multi-branding, where we put two brands in one restaurant because we thought we needed to build the expertise. And we had no ownership of that at the brand level. And it was a complete disaster. You know, it just didn't, not a disaster, but we were never ever able to really, you know, get that multi-branding off the ground because there wasn't ownership.

11:11And if we'd have figured out how to get the ownership there, I'm sure we would have done better because the consumer loved the idea, but we really couldn't execute it. So, you know, we had a lot of tension over this, but basically the key thing was anything thing that touches the consumer and represents your brand, you know, to the consumer you're in charge of, and you have all the resources to make that happen. And where we have the opportunity to leverage our scale, you know, we'll look for those opportunities and we expect everybody to work together as a team to leverage that. But, you know, I think Larry Bossidy said it well.

11:49He says, you take the joy of the job when you take the decision away. So we always erred more on letting the decisions be at the brands than at the corporate level.

11:59David Novak:I love it. Well, if you're listening to this podcast and like me, you are an avid fan of many of the brands that Paul runs, I hope that this episode, I mean, I know it will give you kind of a behind the scenes look at why you love those brands so much, but I mean, Duncan, Buffalo, Wild Wings, these are brands that are unbelievably culturally relevant. They're brands that I see all the time online and in the media. And it's just so fun to hear the way that Paul thinks at the top and how that thinking has trickled down into the people that manage those brands. And they're out there executing campaigns that get me to fall even more in love with the brands that they're running.

12:36David Novak:So it's just a fascinating conversation. And I think you're really going to love it, especially if you love Buffalo Wild Wings, Arby's, Sonic, Jimmy John's, Dunkin' and Baskin Robbins. Pretty iconic lineup.

12:51David Novak:Well, that's a wrap, David. On our edition of three more questions for today, thank you so much for listening to How Leaders Lead. We're on a mission to make the world a better place by developing better leaders. And if you carve out a little time with us each and every week, we'll help you build the confidence you need to lead well. Coming up next on How Leaders Lead is Sarah Gibson Tuttle, founder and CEO of the popular nail brand, Olive and June. And you're going to love how she came up with that name, Olive and June.