Taco Bell's New CEO On How Brands Become Culturally Hot

0:00When someone comes to my door, I know, because I'm using SimpliSafe. I get an alert straight to my phone and I can see, is this someone I should unlock the door for because I know them? Or is it someone I need to tell to get lost? But here's the thing I love most about SimpliSafe. It works when I am not looking at my phone too, because when I'm not keeping an eye out, SimpliSafe is. SimpliSafe is proactive with a double layer of defense that stops crimes before they start. First, AI-powered cameras spot potential threats outside, and then live agents step in, talking to the person through the camera and letting them know they're on video and police will be dispatched if they don't leave.

0:44They can even trigger a loud siren or spotlight. That's how you help stop a crime before it starts. And SimpliSafe makes it easy to use. There are no long-term contracts, no hidden fees. You can cancel at any time. It was named Best Home Security Systems by U.S. News and World Report for five years running. It offers a 60-day money-back guarantee, so you can try it and see the difference for yourself. This month only, take 50 % off any new system. This is one of the best prices you will ever see for SimpliSafe, so don't miss it. Just go to simplisafe.com slash problem solvers. Again, that is SimpliSafe, S-I-M-P-L-I, S-A-F-E, simplisafe.com slash Problem Solvers and lock in your discount.

1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

1:59Everyone knows Taco Bell, of course, but not everyone knows this guy. My name is Sean Trezvant. And as of January 1st, 2024, Sean is the CEO of Taco Bell. And if you haven't heard of him, that's fine. Sean kind of likes it that way. I always tell people, it's not about me. It's about the team. I don't need to get my bars up. Instead, Sean has spent his career raising the bar for great brands. He spent time at Sports Illustrated and PepsiCo. He rose to CMO for Nike's Jordan brand and then joined Taco Bell in 2022 as its global chief brand officer. Now he is succeeding former Taco Bell CEO Mark King, who retired at the end of 2023, which means that Sean is stepping into the hottest seat in the hottest brand in franchising, where attention is going to be hard to escape.

2:53But he knows his number one mission. My job and our job as the Taco Bell team is to keep this brand hot. How hot is Taco Bell? Well, to start, so hot that it reached number one on the entrepreneur franchise 500 ranking for the fourth year in a row, which is only the second brand to accomplish that in the rankings 45 year history. The other was Subway. And by the way, I am reading from that issue right now. Just listen to this thing. The thing is that is 300 pages of magazine. It's the franchise 500 issue. You can find it on stands now, but let's keep going with Taco Bell. Taco Bell so hot that unit growth was 12.4 % over the past three years.

3:35Worldwide system sales grew to 11 % in 2023. Its profit margins are 24%, a number that David Gibbs, CEO of Taco Bell's parent company Yum Brands, called industry leading during a recent analyst call. And Sean has already turned up the heat since joining the brand by steering some of its recent attention getting moves. You may have seen some of them, like rallying Doja Cat and Dolly Parton to bring back Mexican pizza, which was a beloved menu item that was discontinued during COVID, and partnering with LeBron James to quote unquote, liberate the trademark on Taco Tuesday. Because as it turns out, Taco Tuesday, as a phrase, was owned by rival Taco John's and Gregory's Restaurant and Bar, which prohibited anyone else from using the phrase.

4:20Until now, because it worked. Now, Sean must keep this momentum going, while also coordinating with franchisees and acclimating to the new challenges of leadership. Sean and I, to mark the occasion, sat down to talk, to talk about Taco Bell, but also to talk about what he has learned by driving and growing incredibly culturally resonant brands. How do you make a brand culturally resonant? How do you keep it that way? And how can great leaders empower their teams to be even greater? That's the conversation that's coming up today on Problem Solvers. An edited version of this conversation is printed in the January issue that I just mentioned, along with so much more.

5:03If you are at all interested in franchising and getting into franchising, franchisee or a franchisor, this is the issue for you. We of course have the ranking of the top 500 brands. We dig into growth secrets from so many of them, understand what's driving success. We also learn about what it takes to be a great franchisee, and so much more. But today, after a break, it's my conversation with the new CEO of Taco Bell. There's an article that I bring up pretty regularly when I talk with entrepreneurs about the dangers of not adapting to change. It's called Why Big Companies Can't Innovate. And it argues that as companies shift all their focus and incentives towards being efficient, they stopped focusing on new ways to create value.

5:52I love that piece, and it was published in Harvard Business Review, the leading destination for smart management thinking, and articles like that. Through its flagship magazine and digital content and tools published on hbr.org, Harvard Business Review provides professionals around the world with rigorous insight and best practices to help lead themselves and their organizations more effectively and to make a positive impact. While much of Harvard Business Review's content is available for free after signing up at their site, subscriptions to unlimited content start at only$10 a month. Go to hbr.org slash subscriptions and enter promo code SOLVERS right now to take advantage of this great offer.

6:39Again, go to hbr.org slash subscriptions and enter the promo code SOLVERS to learn more about this great opportunity to help manage your career and business. All right, we're back. I'm talking with Sean Trezvant, new CEO of Taco Bell and just an absolute genius in brand marketing. And well, let's just get into it. Sean, I wanted to start our conversation with a kind of philosophical question for a new CEO, which is you are stepping in to lead a brand that is hot. It is undeniably hot. It is successful by pretty much every measure you measure a brand. Is it easier, do you think, to walk into a brand where the expectations are so high as the new leader or to walk into a brand where maybe there was some more low-hanging fruit around and a turnaround story that could be told?

7:34Obviously, you have the role that you have, but I'm curious how you think of it as you step into this new role as CEO. Yeah, I don't think it's easier to walk into a hot brand because my job and our job as the Taco Bell team is to keep this brand hot. You can go back not only for the four years, and that's an incredible accomplishment, you know, being a back to back to back to back winner of the award, but take it back 62 years. This has been an incredible brand for four years with Entrepreneur Magazine, but for 62 years, it's been a hot brand. It zigged when others were zagging. It was courageous.

8:10It was different. It led from the front. And my mantle coming in as CEO will be to continue that. When we talked to Mark King, your predecessor, for the story that ran for the first of these four years, these first consecutive number one wins, he told us this story, which was that when he first joined Taco Bell in 2019, he, as he told us, did not yet have a full grasp on just how culturally powerful Taco Bell had become. And then a week into his job, he drove out for a four-day takeover that Taco Bell had done at this fancy Palm Springs hotel. And he was floored by what he saw and the people who showed up because they loved Taco Bell.

8:54And he ended up at the end of that day with a Taco Bell logo shaved into his head. I assume that's a story you probably know. Yeah. You are known as a guy who really understands culture. I'm sure you were very aware of the cultural power that Taco Bell had. But I'm curious what you maybe didn't know or fully understand about Taco Bell until you walked in to start working for this company. Yeah, my story is different from Mark, but very similar and maybe underestimating the power of the brand. So when I started, obviously, I came from a brand that is pretty well known. And two things happened. Whenever I would go, once I was officially named the global chief brand officer at Taco Bell, and people knew I had that role, The amount of emails, the amount of conversations.

9:41If I was at an event or a gathering or a conference, everybody wanted to talk about their favorite Taco Bell meal of today or of the past. When are you going to bring back the quesadouille? What about the Interrito? Hey, bring the caramel empanada back. Hey, I just ordered from Taco Bell at my store. And you guys need to make sure that you keep so-and-so on the menu. It was pretty incredible. the love and the passion people have for this brand and what we have on the menu for this brand. That was probably the first one that was really interesting. And then, of course, I like to represent the brand.

10:14So I'd wear Taco Bell merch places I went on a plane. People would stop. Taco Bell, where did you get that jacket? One guy tried to buy my Taco Bell jacket off me and it just had the belt. And it was one of those interesting things like, hey, it's not for sale. No, no, no. Like, I'll give you X amount of money. No, no, it's not for sale. No, no, no. I'll give you more. And that's pretty powerful. I don't know many brands in the world who have that kind of cult, passionate following about the brand. You know what's funny? I was thinking about Taco Bell and the cultural resonance that it has. And I was thinking, there's nothing inherently culturally strong about Taco Bell, right?

10:54If you strip everything away, it's a quick service restaurant brand. It serves food. There's no reason that one brand like it It should be culturally resonant in the way that another one isn't. And then I started to think about where you would come from, Nike, which also at the very beginning, I mean, you know, the famous story with Nike is Phil Knight hustling to make this a relevant brand. It was not for a long time in the same way that Taco Bell wasn't for a long time. And Taco Bell didn't come out of the gate incredibly strong. It came out as, you know, just another player. And it took a long time.

11:25What is it do you think that turns a brand into just any old brand into the kind of meaningful full player that it can become. And do you think that there's anything inherent about a brand that allows it to do that? Or can the right leadership accomplish that with any brand? Great, great question, Jason. I do believe from the start that Taco Bell wasn't any other brand. Let me tell you why. UnBell 1962 started Taco Bell. It has an incredible origin story, like some of the best brands do. And in 1962, when Glenn Bell brought Taco Bell to the U.S., think about it. It was Mexican food in 1962 in the U.S.

12:06It wasn't burgers. It wasn't fries. It wasn't pizza. So inherently, it was different. Inherently, it was for people who were curious. Inherently, it was for people who were bold and courageous to try something new. Fast forward to 2023, soon to be 24. And I believe that DNA still exists in the brand. We are people who are zig when others are zagging. We are courageous. We are bold. We are not afraid to do something different. And so that's what I think a little bit of the magic sauce in Taco Bell is, is the origin of Glenn Bell in 1962, the DNA of being different and being courageous and trying something new still is what we do today that has contributed to the success of the brand.

12:49Built into that answer there is something every great brand storyteller does. And so I want to call it out to you to hear you unpack it a little bit more, which is to build upon the origin story of a brand. There's a lot of really interesting research out there about how the differentiation point for a brand, for a consumer, is often the story of the founder, which is a really useful insight for founders because it tells them, hey, look, you are an asset. When you tell your story, that matters to and connects to consumers. But of course, even if the founder is not there anymore, is not the leader, that story can still be told.

13:33As someone who tells brand stories, and as I'm saying this, I'm thinking about Jordan. I mean, the name, the identity of Michael Jordan was right there in everything that you did with Jordan Brand. I think that there are probably a lot of people, more people than not, that didn't know that the word bell in Taco Bell actually references a human being. They probably just think it's a bell. But tell me about that instinct that you have developed to go to the brand origin story and make that a meaningful part of how people understand a brand. Yeah, it's another great question. As early as probably 10 months ago, So as we're thinking about the brand and the vision and how we take it forward, all great brands, as you mentioned, have a really interesting origin story that is not origin story, but it defines who they are.

14:23You mentioned Till Knight selling sneakers out of the back of the VW bus. You look at Jordan, who was a logo that was in flight. That brand is about flight. Glenn Bell in 1962 embraced the idea of difference. It's not the not difference for difference sake, but different to try something new and and be a little left of center. And we wear that with a pride. If you look at kind of the decades of Taco Bell, we haven't been afraid to lean into being different. We haven't been afraid to be courageous. And today we still do that. And it's really kind of we'll call it the filter of what we put our brand through, not only marketing through, but our total brand through is let's be courageous.

15:01Let's not be afraid to be different. but it does stem from 1962 Glenn Bell having this vision to be different in a world that was maybe Mexican food in 1962 versus who we are today, very much interrelated and linked. But if I were to ask you to give that same answer, but take your Taco Bell CEO hat off and just put on your marketing professor hat, right? And if we're talking to a room full of entrepreneurs who are trying to understand how to meaningfully tell the story of their brand, there's something that you have learned over the years about how to tell that origin story and how to connect that origin story to now.

15:41I think it's not an accident that the way you tell the origin story of Taco Bell, even the way that you weave it into conversation here, is about this independence, this standing out from a crowd, which is exactly the customer that you target at Taco Bell. You came up with that psychographic of the cultural rebel. So there's a very intentional connection that you're drawing here. And I would just love to hear you, not necessarily as the leader of Taco Bell, but just as someone who really understands brand marketing, talk about how to smartly use that origin story. So there's four marketing philosophies that are kind of our go-to.

16:20Two of them apply if I'm sitting in a room with marketing people or people like, how do you dimensionalize the story? The two I'll use to help dimensionalize the story of why the origin story is so powerful is one, this idea of math and magic is one marketing philosophy. So how do you take all the math that is available today and turn it into magic? And that's one thing I think we're doing very well today. We are a data heavy business as you know, but how do you take that data and turn it into something special for the brand? The other one is we have the saying here, which I think Taco Bell does better than any other brand, is hit people in the head and hit them in the heart.

17:00Hit people in the head is like what's your pricing, what's your operations, when you think about how you go to market, all very important things. But none of that matters if you can't hit people in your heart. Make people feel the brand, make people love the brand. And what is different than most brands out there that what Taco Bell has is people have an incredible love for the brand is because when we talk about the brand, you have to be smart and operational and all the right pricing, the right menu. What we also have to do is make people feel the brand, make people love the brand. And those are probably the two things I'd say that we, if you had to break it down, that we think about every day to what make what difference is this brand and other brands out there.

17:40Math to magic is an important framing because I think the importance of data is not lost on anybody today, but it's how you use that data that matters. And you certainly can see brands out there who just start tilting towards whatever they started to see in their data. And it might not quite connect with the emotional driver that their customer actually has. Can you give me a real world example of what it means to take a piece of data and turn it into magic? Yeah, you're right. It's a pendulum. It's scales and you got to have both in your business. And you mentioned it more than ever today. The data that's available, the analytics that are available is massive.

18:27If you can't turn that insight, that analytical insight into action or magic, that's where I think brands lose the plot. One example that I'll give is we have a lot of data from our restaurants and from our social channels is that people talk a lot about whenever we post something about the brand, people talk a lot about menu items of the past. And Chorito or Cesa Lupa comes up and people, you know, the threads just go crazy. I remember when my mom took me. I remember how it tasted. I used to get it with tomatoes. There'd be a lot of data. So we took all that data that how people love the Taco Bell items of the past, and we turned that into voting.

19:09So last year, we started vote on two items and the consumer decides. And that's, I think, a really good example of turning some data that we didn't maybe quite know what to do with it. We knew that people love to talk about their favorite Taco Bell item of today, but also of the past. How do we turn that into something, an experience for the consumers where they can vote on two things from the past will actually bring something back on the menu. You know, what's interesting about that, it is the same insight that you personally got when you started talking to people when you first showed up at Taco Bell, right?

19:41Like that was your answer to me. One of the first things that you noticed was that as soon as you tell people that you're at Taco Bell, they just start telling you whatever random menu item from, could be decades ago that they remember. They have some emotional attachment to, some sentimental attachment to. And I'd love to hear your insights on what a leader should do with that. I mean, that's anecdote, right? That's not data at that point. That's an individual just noticing something. But what's cool about that is that you noticed it. And then I don't know if there was a direct connection between then turning it into something that you could draw data from and then draw action out of.

20:19But they are one in the same, which means that the observation that you had anecdotally, just as a individual out in the world, interacting with people when they hear about Taco Bell turned out to be the starting point for a really powerful action in the company. What should leaders do with or think about these little personal experiences that they might have out in the world? Yeah, I think leaders, great leaders and great leadership need to listen more. Listen to the data per se and listen to the team. Because I would tell you when I would come back and from the weekend or tell stories about, I was in an airport and somebody wanted to buy my jacket off me or, hey, I was at this event and all people could talk about was crunch wrap or something that was in the past.

21:03To your point, it's very powerful. And it wasn't my experience exclusively. Now it was mine because I was new to Taco Bell. But when I would talk, oh, yeah, I have the same experience whenever I go to back home. People always ask me about the brand or they want merch or they think as leaders, being great listeners to the team on a on a common experience is really, really important. And the other part is we could have explained it away. It could have been like, to your point, an anecdotal phenomenon. But then when you marry the anecdotal phenomenon with, well, hey, we just posted something in the chat about a menu item of the current and the threads blew up.

21:40Now you have the right people in the organization who really understand the function and say, how do we take this? how do we take these two things, an anecdotal and a real data phenomenon, and turn it into some magic about something that consumers can actually do and experience a brand. As you're talking, I'm trying to puzzle together. I'm just going to think out loud and hope something connects with you. What I'm hearing is this process of taking something that is just in the air. It hasn't been put down anywhere. It's not some test that had already been run. It's not data based on just whether X product sells or Y product sells.

22:16It was just a thing that a lot of people were hearing. And if it was just you, then whatever, it was one anecdote. What you found, first of all, was that it wasn't just you, it was a trend that everyone at Taco Bell was hearing this kind of stuff. And then you could expand it out further and you could say, oh, you know, actually, when we prompt these kinds of conversations on the internet, people really engage with it, which means that there's something there. There's something to engage with. And then of course, the question is, well, how do you start to figure out what that thing is? How do you systematize it?

22:49How do you productize it? How do you create something that delivers for people the thing that they're clearly carrying around and maybe not articulating that they want, but obviously they do? Yeah, I think if you take those pieces, I think one thing that helps the organization get to the magic quickly is in Mark's time here, he had a platform or a filter of this idea of restlessly creative. So it doesn't matter what function you're in, it's not only reserved for the marketeers, but whether you're in ops, finance, HR, sales, this idea of being restlessly creative was a filter that permeates the organization.

23:32And so when you have some anecdotes and to your point, you have the data, the quantitative data that says when we do this on social networks, it pops. The mindset or the culture of being Russ's creative is what if we put those two things together and let the consumer decide what we bring back? Now, think about that. That sounds easy from me saying it or from the marketer saying it. But now you got to go supply chain. How available is our ingredients? You got to go to operations. How do we make it on the line? What else is happening during that experience where does it make it really hard on a team member?

24:07How do you price it? All those things have to come together. So it's not as easy as let's bring these two things back. But now you've got to bring the organization along too, is like, this is why this is a good thing for the consumer, for the business, for the franchisee. But what strings it all together is this idea of we wouldn't be able to do it if it was just a marketing idea. But since people have the DNA or the filter of being restlessly creative, it all comes together. That's such an important point that you make because I have certainly, at places that I've worked, run into exactly what you described and then hit a dead end, which is to say that there was, in some creative meeting, someone always, right, like the best ideas always start with like, what if we, you know, like what if we did this?

24:51You get a little buy-in enough so that there's some momentum and then it hits the next department that would have to be involved in this. They're like, no way. They're like, absolutely not. Right. Like that would just be that would be so much time to do that. And it would draw our energy away from something else. And then it dies. And I've often wondered what what was it about that death that I could learn from? And sometimes I think, well, maybe the idea just wasn't good. And maybe the idea wasn't good. And that's why when dev saw it or when somebody else saw it, they were like, no. But maybe maybe what it is really is organizational leadership.

25:30and making sure that every department feels like their job is to, in some way, at least engage with or have a high tolerance for the crazy what if we dot dot dot ideas. How do you how do you instill that? It's one thing to say restlessly creative. It's a great line. It's another thing to get people to actually live it. I think for us, we have called leadership philosophies, which which I can walk you through. But walking in, to your point, I'm two years in, but I'm still, we'll call it new. And sometimes there's an outside looking in. I believe this organization has a very high trust bar. So when, use the example, when you go to operations, you go to legal, say, we're going to put two things together.

26:18The trust from not only internal to, talk about corporate or what we call the RSC, think about the franchisees. Case in point to four years in a row, the idea of the trust to the total brand, Big B brand, whether it's internal, whether it's functional, whether it's franchisees, to do the right thing. And again, tie it back to the origin story. We're not going to be the brand or we wouldn't be the brand we are if we didn't take some big strings, if we didn't have it all figured out, if we didn't say, just go with us on this one. And sometimes we get it right more times than not, but sometimes we take a swing and instead of a home run, it might be a double, but we learn a lot from it.

26:59And I want to talk more about franchisees in a bit, but just because you bring them up in this context, I'll tell you, I have this really interesting insight. it's not a unique insight just for me, but it's been interesting for me into the world of franchising because I get hired to speak at a lot of franchisee conventions. So franchises will reach out to me and they'll have me come and talk to their franchisee convention. And the problem is always the same. And the problem is that the franchise wants to introduce a bunch of new changes and the franchisees are uncomfortable with it. Not all of them, but a lot of them.