Turbulent is a good term to describe the state of the quick-service industry in the last couple of years. The Great Recession threw off balance sheets and strategic plans alike, miring operators in a realm of uncertainty.
But Howard Putnam, former CEO of Southwest Airlines and author of the book The Winds of Turbulence, was on hand Monday as keynote speaker at QSR’s Dine America conference to share with industry players how they could implement successful strategies through turbulent times.
Putnam, who helped Southwest Airlines become one of the dominant airlines in the industry and who helped another airline, Braniff International, get into, through, and out of bankruptcy, told the crowd they have to dream big—and translate that dream to consumers.
“You’ve got to have passion for what you do, and if you don’t, your people will not have it as well, nor will the customer,” he said. “I don’t think Martin Luther King ever said ‘I have a strategic plan.’ We all have to believe in it.”
Putnam said in his speech that the key to a company building a successful business, especially in turbulent times, is to stay one step ahead of the game.
“I think the value of preparation and the anticipation of what your customer needs are going to be are two of your biggest challenges,” he said. “When the time to perform arrives, the time to prepare has passed.”
To stay ahead, Putnam—whose career included a stop in the quick-serve industry when he helped his father-in-law operate a KFC when he was a young businessman—stressed that quick serves must constantly focus on innovation.
In order to innovate, Putnam said companies must first figure out what business they’re in, and then build a culture around it. After that, “you can’t stop [innovation] from happening,” he said.
He added that there are three kinds of innovation: incremental, disruptive, and revolutionary.
“Incremental innovation happens in government—you will never see disruptive [innovation] … just little bits and pieces; sometimes there’s progress, sometimes they don’t even know the direction,” he said.
Putnam said the innovation he sought with Southwest Airlines fit into the disruptive category, while revolutionary innovation is what Apple has done with the world of technology.
Too many companies, he said, wrongfully enter wait-and-see mode when times are tough.
“Many of the companies I see don’t take the time to think; they don’t take the time to look for innovation,” Putnam said. “It’s constantly fixing, fixing, fixing.”
At Southwest Airlines, Putnam said innovation was centered largely on the employee culture and environment.
“We wanted to say to the employees, ‘You’re No. 1,’” he said. “We never said the customer is not No. 1, but we always started with the employees. And they still do.”
For quick-service operators still struggling to figure out how to plow through the tail end of the recession, Putnam suggested they assess their position and chart a course for the future.
“There are stages of turbulence,” he said, “and if you can figure out which stage you’re in, you can make strategic decisions. … Some play the game, others change the way the game is played.”
By Sam Oches