Episode Transcript
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Speaker 1 (00:00):
Okay, I'm going to
give you four restaurants.
You tell me which one, whichone of these restaurant change
you think has managed, navigated, change the best, because this
is part two of our little serieshere on managing or leading
through change.
Here are the four restaurantsPizza Hut, chick-fil-a, subway
(00:22):
and Chipotle.
Oh my gosh, these numbers aregoing to shock you.
This is the Lead in 30 podcastwith Russ Hill.
You cannot be serious.
Strengthen your ability to leadin less than 30 minutes.
If you have not listened to thelast episode, stop, hit pause on
(00:46):
this one.
Go back and listen to theprevious one, because I talk
about, I frame up in thatepisode why I'm talking about
change Now.
You shouldn't need a lot ofevidence or convincing that this
is a timely topic in the worldin which we live in, unless
you're like stepping out of acave right now or you've been in
a cabin in the woods for thelast I don't know six years.
(01:09):
But if you've been out in theworld for six minutes, you know
that this is a timely topic.
So go back to the last episode.
I'm framing up change.
I talk about how the brainworks.
I talk about status quo, biasversus our need for novelty and
the psychological terms that Iwas using.
Go back to that.
Okay, this is part two.
(01:29):
By the way, welcome into lead.
In 30, in less than 30 minutes,we give you a framework, a
model, a best practice.
In this case, I'm going to giveyou a ton of financial reports,
the data which is just going tostun you, this.
You're going to be pulling upthis, this in a meeting.
The stats I'm going to give youin this.
You're going to be pulling upthis, this in a meeting.
The stats I'm going to give youin this, in this episode,
you're going to use in aconversation, in a meeting, a
(01:51):
conference, or a dinner, acocktail hour in the next few
the next few days, I promise you, because they're so interesting
anyway.
So that's what we're doing.
In this episode you can find outmore about our firm.
At loan rock io, we've got anexecutive consulting coaching
company.
We work with large companies,the executive teams, helping
(02:13):
them with clarity, alignment,movement, being effective,
keeping them ahead of the curve.
And then we've got another sideof our business, which is
leadership development.
Think of that as what we learnon the consulting side in the
room with senior executives.
We then step back as a firm andthink how do we package that in
a way that we can put it on ashelf at your grocery store?
(02:35):
You could just walk in and buythat those core models,
frameworks, learning, insightand hand that to a manager, a
mid-level manager, and give themthe learning.
And so that's the leadershipdevelopment side of our business
.
We've got four courses.
You can see all of them rightnow.
Just go over to lonerockio.
(02:57):
Okay, and, by the way, mybackground is in coaching and
consulting senior executiveteams at some amazing companies.
And I'm Russ Hill if you're newto the podcast, so nice to meet
you and I'm one of the foundersof our firm and just an
absolute junkie for leadershipdevelopment.
(03:18):
I don't care about quantity, Icare about quality.
Make me a better leader,because if you do that, I'm a
better dad, I'm a better husband, I'm a better citizen, I'm a
better neighbor, I'm a betterexecutive, I'm a better manager,
I'm a better thinker, I makemore money, I expand my impact,
I have a better influence, Ihave more legacy, I learn, I
(03:39):
grow, I become the best me.
Okay.
So here we go.
Okay.
So for companies, think aboutthe restaurant space.
You all, has there been?
So we're going to talk, we'regoing to zoom out from
restaurants.
Has there been any change inthe world in the last five, six
years?
We all agree, yes, you can juststart throwing out letters like
COVID-19, or phrases, or AI, ortariffs, or hybrid work, or
(04:05):
market swings, or customerexpectations, or innovate.
You can throw out all theseterms, and there are some that
are specific to your industry,and so there's massive change.
And you, if you're going to be aleader whose market share, your
market value, your market valueis going up, then you got to
(04:27):
have a game plan, a strategy forleading through change.
And so let's let's just diveinto some case studies.
Let's talk about executives andlet's talk about leadership
teams.
Let's talk about organizationsand if they were well-suited or
not well-suited for change.
Because if you are, if you havea mindset, a strategy, a game
(04:48):
plan for how to lead throughchange, we're going to see it in
your financial, your employeeretention, engagement, safety,
product launch, innovation, allof these metrics.
It's going to be visible.
And if you and your team theteam that you're on or the team
(05:09):
that you lead in an organization, if you're well-suited to lead
through change, that's going tobe shown in our key business
indicators we call them keyresults and if you're not,
that's going to be evident aswell.
And what's really important isnot so much just you but the
team around you.
So I'm teaching you, I'msharing with you free of charge
(05:31):
in these episodes right, this isepisode 369.
So we're closing in on 400times I've sat here and hit
record and put out an episodeinto the world free of charge,
just trying to bring value,insight into what we're learning
.
Okay, and if you implement this.
That's awesome.
And then I want you to take itto your team and if you don't
(05:54):
lead other leaders yet, wellcrap, let's get you going.
Let's move you up the org chart, let's get you promoted.
Let's get you, let's get thisorganization moving.
It's not you promoted, let'sget you, let's get this
organization moving.
It's not rocket science, it'sjust you've got, you've got to
learn, you've got to dig in,because they're not going to
teach these things to you inbusiness school.
They're not going to teach youto it in uh, on Instagram.
(06:16):
They're not going to teach itto you out in the world.
If you're consuming mostly newswhere they're yelling at each
other and complaining like youcan get absorbed in all of that.
You'll have nothing to show forit except frustration and
exhaustion.
So instead, you're investingyour time and bettering yourself
so that you can.
Then you're leading individualcontributors right now.
Next, you're going to leadleaders.
(06:37):
Then you're, instead of leading10 people, you're going to
oversee 50.
Then you're going to oversee500.
Then you're going to oversee5,000.
We're going to move you throughthat.
All of that is dependent onyour ability to lead.
Okay, pizza hut.
Have you eaten there any timein like?
Raise your hand right now.
Let's see, raise your hand ifyou've eaten at pizza in the
(06:57):
last year.
Okay, there's one of you andyou're kind of weird.
I'm just kidding, I don't haveany of you all.
I'm sure pizza hut hasincredible executives.
Maybe one of you and you'rekind of weird.
I'm just kidding, I don't haveany of my.
You all.
I'm sure Pizza Hut hasincredible executives.
Maybe one of you is listening,maybe someone's forwarding this
to someone who's a VP, adirector, a senior executive, an
EVP at Pizza Hut, a Yum brand,maybe, and that's awesome.
(07:21):
I'm sure you're an incrediblehuman being.
Most likely, if you're anexecutive at Pizza Hut today,
you weren't five years ago andthen another, another company.
Well, let's just, let's juststay with Pizza Hut for a minute
.
So let's talk about so.
I know there are incrediblehuman beings and I'm not talking
about, I'm just talking aboutthe organization.
Overall.
It has sucked canal water.
(07:42):
It has.
You do not want to have been aninvestor in Pizza Hut these
last five years in a pandemicand post pandemic world.
And so let me pull up the chart.
It's here on my computer and Iuh, you can't see me doing.
2019, $5.7 billion 5.7.
(08:09):
Pandemic hits 2020.
What's the revenue?
5.6.
They slide back $100 million.
So 5.7 to 5.6.
Then 2021, 5.7.
They get back to a pre-pandemiclevel, barely barely growing.
When I show you some of theseother numbers from 2021, their
(08:32):
numbers should have beendramatically higher.
2022, they're at 6.6.
2023, so they grow a little bitNow.
The market overall, therestaurant market over the last
five years has exploded.
It's grown dramatically.
We've been eating out way more,we've been ordering food way
more, right as families, asindividuals.
(08:52):
So the industry overall it has.
You should be growing prettyhealthily if you're a decent
company.
Pizza Hut has not.
And so they went to 6.6 and 20,and then it's here.
The last three years, 6.6, 6.8,6.8.
So no growth, 0% the last from2023 to 2024.
(09:14):
And then operating profit theywent backwards this last 12
months.
Their growth was 0% from aprofit standpoint in 2023.
And then in 2024, they wentbackwards 5%.
Pizza Hut was not positioned forchange.
They were an in diningrestaurant.
Maybe you remember, if you'remy age or somewhere around there
(09:37):
.
If you're under 30, I wouldthink you've never been to a
Pizza Hut.
If you're over 30, I think oncein your life, maybe at a, at a
T-ball team celebration dinner.
You went into pizza and they hada buffet and and you could get
different pizza slices and youcould get whatever.
And they had a couple of arcadegames or pinball machines and
you went in there and it was anice environment and that was
(09:59):
literally 20 years ago.
There are a few exceptions.
Are like three of you who arelistening that it's an exception
?
The rest of us?
This is all true.
You don't order from them.
They don't.
You haven't used an app.
They didn't really have an app.
They weren't really in thedelivery business.
Yes, they delivered some, butit was secondary.
Where these other chains, likePapa John's, like Domino's, have
(10:25):
grown dramatically Insanegrowth.
Why?
Because they were wellpositioned for the trends that
were coming.
Pizza Hut was behind.
If you listen to the lastepisode, they were stuck in the
past.
Their model was great for 1980.
It wasn't great for 2025.
When people want Uber Eats orDoorDash or whatever, want you
(10:46):
to deliver or curbside pickup orwhatever else, pizza Hut's not
there Now.
They're spending a ton of moneyon marketing right now, as I
understand it, and hopefullythey'll turn it around.
I don't love anything more.
There's nothing I love morethan a turnaround.
Insanely good.
The final chapter has neverbeen written, and so that's
awesome.
Hopefully they'll be able toget that going.
(11:07):
But they were not wellpositioned and it shows in
revenue.
I'm going to give you anotherexample Subway.
Subway has been terrible theselast few years.
Let me give you some stats here.
Where the crap is it?
3,000 stores closed, right,3,000 stores closed between 2020
(11:30):
and 2023.
Talk about a kick to thestomach during the pandemic that
, like they weren't positioned.
Did you ever order like takeout,like hey, let's get on the app
and order some Subway sandwichesdelivered to our home?
No, not a chance.
(11:50):
Jersey Mike's.
What are the other ones?
Um, firehouse subs?
There's a, there's a gosh,there's a bunch of them, right?
These change.
You think of Subway?
Not, they're not viewed asinnovative.
That's not their brand.
So they uh, their peak was 27seven thousand locations in 2015
.
And and now last year it was,it was twenty thousand.
(12:16):
So over the last kind of 10years, they've lost seven
thousand.
They're shrinking.
Why?
They weren't well positionedfor change.
That's the point of these lasttwo episodes.
They they did not have anexecutive team that was leading
through change.
So let's look at let's look atrevenue for subway.
(12:36):
Now I'm going to two amazingexamples.
After that, subway in 2019 did$10.8 billion in revenue.
Okay, let me say it slow, causesome of you are on the
treadmill and you're barelybreathing and we're cheering you
on.
Okay, so 2019, $10.8 billion,2024, last year, five years
(13:00):
later 10.2.
They aren't even back topre-pandemic levels, to
pre-pandemic levels.
So every year of the last fouryears 2023, 2022, 2021, 2020,
(13:21):
the year of the pandemic theywent backwards $9 billion.
They are struggling to.
There's no growth.
If you're an investor, you'regoing to put your money in
subway stock Not a chance.
Not a chance why?
Companies are led by people,right.
There are executives who areaffecting this Power of one
(13:43):
Massively right, and so allkinds of examples of that.
So what these numbers tell me?
I don't even have to know theplayers, I don't need to read
any stories, I don't need to digthrough AI.
Tell me the story of theleadership teams or whatever.
I can already tell you.
I can predict it right now thatexecutive team, great people,
I'm sure, wonderful, probablyincredible human beings, not
(14:07):
well positioned to lead throughchange, not innovative, no game
plan for how they're going tolead through all the disruption
happening in the market.
The numbers show it.
Now let's go to an example thatmany of you know.
How many of you raise your handif you've eaten at Chipotle in
the last three months, wow, lookat that, everybody's hand is up
, except for like two of you andyour vegetarians.
Well, actually, they have aveggie bowl.
(14:29):
So, yeah, you probably eatthere too.
So, chipotle, unbelievable.
You want to?
Let's just go right to theirperformance 2019, $5.5 billion.
(14:50):
In Last year, 11.3, 5.5, 11.3net income.
Listen to this net incomenumber, you people Listen.
2019 Chipotle net income $350million.
(15:11):
This blows my mind.
Chipotle, little restaurantchain.
They sell like, like burritos,and you've been there.
All right, we all just raisedour hands.
We've been there in the lastthree months.
Some of you have been there inthe last three hours.
2019 billion, 350 million to1.5 billion.
(15:36):
Now do you know why theChipotle CEO in the last six
months was recruited over tolead Starbucks through their
turnaround that they need rightnow Unbelievable growth?
Why it's burritos people.
Everybody sells burritos.
It's burritos people.
Everybody sells burritos.
Everybody's got a rice bowl,everybody's got the veggies.
(15:57):
Chipotle was their culture,their mindset, their leadership
team was all about innovation,was all about leaning into the
future.
On that continuum that I drewfor you last week, in the last
episode.
Go back and listen to it if youhaven't Past present future,
leaning into the future.
They developed an app.
The percentage of their revenueand sales coming off of their
(16:19):
app was very high, was higherthan the industry norm
pre-pandemic.
Then, in the pandemic, theyleaned into it.
They already had all thesethings in motion, by the way,
they'd had a big health scare.
You remember your history ofChipotle?
That really damaged their brand, threatened to kill it a few
years before the pandemic.
So what did they do?
They put all these sanitizingstations, all this employee.
(16:41):
They changed the venting systemin the restaurants.
So guess who was incrediblywell positioned for a health
scare?
A pandemic.
Incredibly well positioned fora health scare?
A pandemic Chipotle.
The very crisis that threatenedtheir existence ended up
positioning them.
The pain that they went through, the adapting they went through
, the innovation, the changesthey went through led them to be
(17:03):
the best, one of the bestpositioned restaurant chains for
the pandemic.
The lesson in life?
About that too, about oursetbacks, isn't it?
It looks like an insane setback.
It's so painful right now andyet it could be positioning us
for explosive growth.
So I'm going to drink thismedicine, I'm going to endure
this.
I'm going to push through thissetback, our first lead in 30
(17:26):
webinar.
A thousand leaders showed up,thousand leaders showed.
No one bought.
Not one single manager anywherein this freaking world bought
from us in lead in 30.
Setback Hello, embarrassing,totally humiliating, yeah,
pretty much paralyzing.
Not a chance, not a chance.
(17:49):
And paralyzing, not a chance,not a chance Ended up teaching
us, making us go back to thedrawing board reworking some
things, figuring out how to doit differently to where now we
were able to launch a leadership, a leadership to training
company.
The setback was the ticket, wasthe door opener to the market,
the market opportunity.
Without it, we couldn't havedone it.
(18:10):
Same thing I'd argue withChipotle anyway.
So, chipotle, then they openthese Chipotle lanes right, they
opened hundreds of them duringthe pandemic.
It's not a dry, it's like adrive-through lane, but they
don't have a, a speaker to orderat.
It's just for app, app pickupsI use it all the time and a
super convenient.
You just go there, you order onthe app, they tell you what
time you pull up in the lane,boom, they hand it out the
(18:32):
window and you're on your way.
Beautiful, Love it.
So, chipotle, their leadershipteam.
Go dig through chat, gpt,search through grok, go to
perplexity, whatever your AItool, ask them, tell me the
story about Chipotle, tell meabout their CEO.
You'll get all the details.
They were so well positionedbecause they were leaning into
change.
Okay, one more example.
(18:53):
And then I got to go to aframework that I want to teach
him some takeaways.
Then the last example isChick-fil-A.
This is the no brainer, and Iknow there are a few of you out
there, like three of you who arelistening, that think Chipotle
is the devil incarnate andthat's fine.
And that dates back to some ofthe, the, the founders,
political views.
I would argue get over it.
(19:13):
Um, companies, whatever, everycompany has got stains.
Disney, um, papa John, I meanall these companies that they're
led by, yeah, whatever.
And and so we're just talkingbusiness case.
So for the rest of us, we can'tget enough of the chicken
sandwich or the nuggets orwhatever the crap is that you
want to eat there.
(19:33):
And so Chick-fil-A's growth isdramatic.
I'm just going to give youthere just real quick.
I did an episode about this,maybe a year ago, six months ago
, I don't know when it was.
Let me just find it on myscreen here.
Here it is the amount of salesper restaurant.
If you owned a Chick-fil-Afranchise in 2019, your store on
(19:57):
average generated $3.5 millionin revenue.
In 2019, say it slow for thepeople on the treadmill.
In 2019, $3.5 million perlocation revenue.
Last year, that same storedelivered $9.3 million nearly
(20:22):
not quite well, more than morethan doubled, nearly tripled 25,
25.7% growth last year alone.
Chick-fil-a is a company on themove.
They're growing dramaticallyand, um, you can search their
newest prototype store inAtlanta with four drive-through
(20:43):
lanes the restaurants on thesecond floor.
There's no in dining experience.
They're trying out differentmodels.
I did a whole episode on it.
Why has Chick-fil-A grown somuch?
Because their executive teambelieved in innovation.
Because their executive teamwas not mourning the past,
because they were bucking thetrim of status quo.
They were leaning into thefuture.
(21:03):
So, while you've got all thosepeople in the restaurant making
a chicken sandwich and thewaffle fries, you've got an
executive team that's thinkingabout next year and six months
from now, and we show a videowith the executive teams that we
consult that takes you insidethe innovation lab at
Chick-fil-A.
Every executive team we show itto loves watching this video.
(21:24):
It just shows about how?
I mean, it's unbelievable.
They build this inside of awarehouse and they they're fine
tuning and fine tuning andthinking ahead and thinking
ahead and innovating.
So here's, here's what I wantyou to think about my last 10
minutes with you.
Let's go into.
Okay.
Well, thanks for us.
Those are great examples.
(21:44):
Now, what do I do?
This is what you do, and I'mgoing to build off of the last
episode what you understand.
This is what you do and I'mgoing to build off of the last
episode what you understand.
This is part of your strategy.
What I would suggest to you.
You adjust it.
However you want Part of yourunderstanding or strategy or
(22:05):
mindset as a leader who is wellpositioned to lead through
change.
That has to be your identity.
You all.
That has to be something thatyou're good at.
Your identity you all.
That has to be something thatyou're good at.
Okay, if your value in themarketplace is going to increase
in the current conditions andwith what's coming ahead,
especially in this age of AI,okay.
So this is what you know.
You know that the brain defaultson wanting status quo.
(22:26):
Last episode, we dug deep onthat.
So people don't want change andwhen change happens, or
disruption to them personally intheir department, to their
career in the industry.
They go into threat detectionmode.
They're worried about survival.
They never will say those wordsout loud, but that's what
they're subconsciously thinking.
(22:47):
I'm less safe today than I wasyesterday.
If the world didn't change, Iwas okay.
But it did change.
Tariffs came on, ai came on,this came on market all these
changes Okay.
So we know that status quo isconstantly disrupted and when
status quo is disrupted, thenatural inclination is to mourn.
(23:09):
You mourn what used to be.
I've talked about this a littlebit in previous episodes.
Some of you who are listeningin I've walked through this, or
our team, someone from our firm,has led you through a
discussion around this.
This is the basis of what wesell in our course at LoneRockio
about.
We call it Adapt in 30, adaptin 30.
You can find it on our websitearound courses.
(23:31):
It's exactly what I'm teachingright now in a more concise way,
that we certify internal folksin, or our faculty teaches it.
So you mourn.
You mourn the change.
You want yesterday to be here.
You want grandma to not havepassed away.
You want that divorce to nothave happened.
(23:52):
You want that leader to nothave quit.
You want that restructuring tonot have taken place.
You want the customer to nothave canceled or not change
their order.
You want the market to not haveshifted.
You don't want a pandemic, youdon't want tariffs, you don't
want a threats from AI.
You don't want you.
You don't want this disruption.
(24:13):
We don't want it on one hand.
And so when it happens, wemourn, and that is a spiral.
We, some people, get stuck inmourning perpetually.
They never get out of it.
They're constantly now their,their brain, their emotion just
goes to the past and they find aseat in the past theater and
(24:37):
they just get comfortable thereand they can't wait to tell you
constantly about the way it usedto be, the way that it was.
And we, as leaders who managewell through change, we allow
that.
We give space for mourning, wevalidate the pain, we validate
the way that it used to be andthat, yep, we thrived in that
(24:59):
and yep.
And so we validate it and thenwe push through it.
We push through it and we getto the next stage.
We call this model change, os.
And so it's status quo.
It's disrupted.
Think about this just visuallystatus quo.
We put this in kind of a circle, so status quo is up at the top
.
It's disrupted.
So look at kind of a ripthrough the circle.
(25:21):
And then the next stage ismorning.
Most organizations Pizza Hut gotstuck in mourning.
I promise you they did.
I promise you there weredebates inside their boardrooms
about, well, we were the numberone or we've got this brand.
Or just look at this marketresearch.
I swear there was somebodymarketing saying there's nothing
(25:41):
wrong here.
Look at our brand identityPeople think about.
Everybody knows Pizza Hut.
We're a household name.
People think about they.
Everybody knows pizza hut.
We're a household name.
Those other brands wish theyhad our name recognition morning
.
That's what it sounds like.
This is the way we do it.
This is how it happens.
I've spent 15 years doing it.
I know what works.
I've got the relationships.
This is like that's morning.
(26:05):
Yes, that gave you your ticketto the current market, but that
doesn't get you onto the stageto take the trophy.
That just allows you admittanceinto the venue.
All right, cool, you're here.
You're in the market.
That got you here.
Now do you want to win here oryou just want to be here?
So we've got to push ourselvesand our team from mourning into
(26:27):
adapting.
I don't care whether you liketariffs.
Maybe they'll go away, maybethey'll stay, maybe they'll be
higher, maybe they'll be lower,doesn't matter.
We're going to win.
Period.
An AI doesn't matter whetheryou like it or not.
The robots or this or thewhatever, I would embrace it.
(26:48):
You know who's going to win inthe age of AI?
We are, we're going to figureit out.
We lead to change.
We embrace the future.
It's going to make us morecompetitive.
So you lead to adapt.
So, instead of mourning, you'readapting.
Adapting is acknowledging,accepting that reality has
(27:10):
changed.
Yesterday was yesterday.
It's not tomorrow, okay.
So if you've got anorganization, a team or even
yourself that's just stuck inmourning, it's okay for a day,
for a week, for a little bit.
That's totally normal.
(27:30):
We validate it because we'rehuman.
But now let's move on.
No more discussion about that.
Let's move on.
This is the world.
It's exciting.
Do you embody excitement or doyou embody mourning?
I'm thrilled with the future.
Politicians do whatever thecrap you want to do while the
rest of the world debateswhether it's good, bad or
whatever.
I'm adapting, we're adapting.
(27:52):
We're going to lead through itwhile you have a hissy fit over
it, and if it changes back orchange it.
We're going to keep leadingthrough it.
You go get on Twitter, you gowatch the news, you engage in
the six hour time waste overthere.
We're adapting and thenadapting.
Adapting is when you start togain market share in a changing
(28:14):
environment and then theultimate step you want to get
your organization to is not justadapting, because adapting by
itself is reactionary.
You're reacting to thedisruption or the changes in the
market, which is fantastic.
Well, the rest are mourning.
Your organization, your team,you, you're adapting, which it
(28:35):
means you're reacting.
The final stage that weintroduce in ChangeOS, in this
model, is innovate.
Innovate is proactive.
Innovate takes thisorganization and this team from
reacting and adapting, which ishuge.
That means we're going to growthis year because we've got the
organization, we've got ourleaders, we've got our
(28:55):
executives, we've got ourmid-level managers leaning into
the change.
They're adapting to it, they'reacknowledging reality.
Now, if I can get them over toinnovate, which means that as a
senior team, we're looking evenfurther into the future.
So where do we think this isgoing to go?
We become less tactical at thetop of the org chart, more
strategic at the top of the orgchart.
(29:15):
What does that do?
It creates an organization thatinnovates.
We lean into change.
We anticipate it, we're readyfor it.
We are agile, we are resilient,we are ready for disruption.
We're built for it.
That's what Chick-fil-A is,that's what Chipotle is.
At the time of this recording,that's not what Subway was, and
(29:39):
it sure wasn't what Pizza Hut is.
So my question is what do youlook like?
What does your company looklike?
Have I given you something tothink about?
I hope so, man.
I love talking about this, Ilove having you think about it,
(30:02):
and I hope that you positionyourself, your team and your
organization to innovate andlead through change.
Speaker 2 (30:04):
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