Chapter 70 - How Did You Do It, Truett?: A Recipe for Success
Today’s Chapter is based on the book “How Did You Do It, Truett?: A Recipe for Success” by S. Truett Cathy, the founder and ex-CEO of Chick-fil-A.
Here’s what I have learned:
Hard Work
“A lot of hard work is hidden behind nice things.”
— Ralph Lauren
As we have learned previously from Chung Ju-Yung, the founder of Hyundai, time is a form of capital provided equally to everyone. As such, to become successful, Chung believes that it is important for one to make good use of one’s time. In fact, he mentions that “Even if life doesn't stop for a moment, everybody wants to enjoy life comfortably at a leisurely pace. However, I think there is nothing more foolish than living a life according to the mantra of "doing enough just to get by," not knowing how precious one's time is.” Chung explains that he believes that anyone can excel in any field if they make full use of their time:
“In one lifetime, we can become a revered, immortalized politician, a scholar, a revolutionary, a writer, a musician, a painter, or a businessman like those that we admire. These remarkable people did not take two or three lifetimes to accomplish what they did. They did it in one. To be sure, individual aptitude, ability, environment, or excellence differs from case to case. Not everyone can pull off such deeds in a single lifetime. However, if you make full use of your time by living diligently, you can excel in any field. Such a life would be considered a successful one.”
— Chung Ju-Yung
Chung mentions that it is extremely dangerous to stay complacent. In fact, he says that “Every day needs to be a journey towards growth. If we pause today, it is a step backward. We must move forward even if it means only one or two steps at a time. If we don't, we will be overtaken and soon find ourselves falling behind.”
More importantly, he explains that life without hard work is a life wasted. In fact, he reiterates that a life without daily self-improvement has no meaning.
“We live in order to make ourselves better. No one can control where they're born or what kind of family they're born into these conditions are naturally unique. But there is one thing we have in common. Our future will be determined by our effort. Thus, our future is our own responsibility. No matter how hard things seem today, with a positive attitude, we can all find joy in the midst of our troubles.”
— Chung Ju-Yung
Similarly, in his autobiography, S. Truett Cathy mentions that his formula for success comes from hard work. This concept came to him due to the way he was raised by his parents. Considering his parents were poor, Cathy learned quickly that if he wanted things, he would need to work hard and to save money. As he once said, “When I was young, I learned that the harder you work, the more successful you will be. That still holds true today.”
As such, Cathy believes that luck and opportunities arise to people who have done the hard work. He reiterates that “If you examine “luck," you will usually find that the people who have been lucky have also worked hard, understood the value of a dollar, and taken advantage of unexpected opportunities.”
In Cathy’s case, he was able to find success with Chick-fil-A by taking advantage of opportunities by keeping it simple. In sixty-one years of business, Chick-fil-A kept it simple by focusing on “serving great tasting food in a clean, wholesome environment with great customer service.” Chick-fil-A’s story is a great example of how one can find success without needing a big dream as long as one stays fully committed to a simple idea. As Charlie Munger, once said, “take a simple idea, and take it seriously.”
”There's nothing wrong with big dreams. But my experience tells me that we're more likely to reach our dreams if we climb with care and caution, putting one foot in front of the other.”
— S. Truett Cathy
This idea of taking things one step at the time also reminds me of the concept of “Dream Small, Win Big” that we have learned from Kazuo Inamori. Inamori states that he was able to create a company as large and successful as Kyocera through working untiringly and by making steady progress by putting in more constant effort than anyone else.
In Inamori’s view, one who improves steadily will be rewarded for his or her efforts. It may take a long time, but you’ll eventually find a person who will appreciate and who will reward you if you persist long enough. All people who are recognized as masters in their field surely attained this status through diligence and steady efforts.
“But there's one thing I want them to understand: great achievements are born from steady effort on a road traveled one step at a time. Without that, big dreams, no matter how vividly imagined, remain nothing more than dreams.”
— Kazuo Inamori
Sampling
“Reciprocation tendency subtly causes many extreme and dangerous consequences, not just on rare occasions but pretty much all the time.”
— Charlie Munger
As we have learned previously from Estee Lauder, reciprocation is a powerful tool especially in terms of sales. Cialdini, a social psychologist who is widely known for his studies on the principles of persuasion, identified several key principles, and one of them is the power of reciprocity. According to Robert Cialdini, the author of the book “Influence: The Psychology of Persuasion”, humans are hardwired to give back to others the form of behavior they have received. In other words, when someone does something nice for us, we feel an obligation to do something nice in return.
This principle has been applied in various fields, including sales & marketing. Estee Lauder was one of the pioneers in implementing the power of reciprocity in marketing in the beauty industry. She gave free samples of her products to customers, which not only allowed them to try Estee Lauder's products but also created a sense of obligation to buy the products in return for the free samples. This approach proved to be very successful and has since become a common practice in the beauty industry.
Similarly, offering free food became a model for Chick-fil-A for building a customer base. Cathy believed in the importance of the Golden Rule as a business philosophy: “Do unto others as you would have them do unto you.” This is especially true considering the fact that Chick-fil-A is in the restaurant business where customer services’ is primordial to success. As Cathy once said, “If you really aren't interested in serving others, you don't need to be in the restaurant business in the first place.”
As a matter of fact, Chick-fil-A implemented a concept called “Second-Mile Service”. Here’s how Cathy explains this concept:
“When customers come into a Chick-fil-A restaurant, they expect to be greeted with a smile. They expect delicious food delivered quickly and accurately in a clean environment. That's the first mile-the expectation.
Second-Mile Service is about the heart, and it goes above and beyond the requirements, making sure customers get not only what they expect, but something more that makes them say, "Wow!" It might be something the Operator plans: fresh flowers on tables, fresh ground pepper, or something as small as the toilet paper in the bathroom folded the way a nice hotel might.”
— S. Truett Cathy
Furthermore, Cathy believes that giving free samples is a great way in order to test new products and to gather customers’ opinions. The famous Chick-fil-A chicken sandwich went through various years of experimentation and asking customers how they liked it and what they thought should be changed to make it better. As such, sampling is not only a tool to bring in more customers, it is also a great way to find out what your customers want and to provide it to them. As Cathy once said, “Be kind to your customers. It's the key to success.”
This concept of going beyond a customer’s need in order to satisfy them reminds me of what we have learned from Jack Taylor at Enterprise. As we have learned previously, taking care of customers is part of Enterprise’s corporate culture and a big reason for their success. In fact, for Jack Taylor, having “satisfied” customers isn’t enough, you need to exceed their expectations. This is because customers who are completely satisfied are 70 percent more likely to become repeat customers.
Why are repeat business so valuable? The reason is simple; studies shows that it costs 5x or 6x more to gain a new customer compared to keeping a current one. According to a survey done by Enterprise, 70 percent of those in the “completely satisfied” category were willing to use Enterprise again the next time they need to rent a car. However, only 22 percent of “satisfied” customers mentioned they would come back.
“Repeat customers are the quickest way to build a solid business.”
— Jack Taylor
People Matters
“Four Seasons is the sum of its people—many, many good people.”
— Isadore Sharp
As we have learned from Isadore Sharp, the success of Four Seasons hotels relied on the successes of their employees, notably those on the frontline. While other hotels treated employees as costly expenses, Sharp treated them as assets for the company. As Peter Kiewit once said talents are Kiewit’s most important asset.
As such, Isadore Sharp believed that he had to treat his employees well, especially considering the fact that they were the ones representing the company and the ones providing exceptional customer services to the customers. Employees are the reflection of the company in the eyes of the customers.
As Isadore Sharp once said, “Our greatest asset, and the key to our success, is our people. We believe that each of us needs a sense of dignity, pride, and satisfaction in what we do. Because satisfying our guests depends on the united efforts of many, we are most effective when we work together cooperatively, respecting each other’s contributions and importance.”
“The books may show that employees represent the largest share of expense. They don’t show that they also earn the largest share of revenue. Or that long-term service employees are storehouses of customer knowledge, role models for new hires, and advisers for systems improvement—all in all, our best source of added value. If employees are really doing their job, they’re not a cost, they’re an asset, our primary asset.””
— Isadore Sharp
Similarly, Cathy at Chick-fil-A also believed that the business is merely a reflection of the character of its leadership. He believed that the key to his success at Chick-fil-A was to partner with great franchise operators. As he once said, “Businesses don't succeed or fail. People do.”
Therefore, Cathy believed that the leadership team first had to be great people in order to attract great franchise operators. As Charlie Munger once said, "How to find a good spouse? The best single way is to deserve a good spouse...To get what you want, you have to deserve what you want.”
On this line of thought, Cathy once said, “We gradually become a part of those people we associate with, whether good or bad. If you want to be a great preacher, you associate with other great preachers, and something rubs off on you. If you want to be a great businessman, you associate with other great businessmen, and something rubs off on you.”
”Our franchise Operators determine the success of the chain. They're the ones meeting customers and selling chicken sandwiches.”
— S. Truett Cathy
This is a great reminder of how important it is to work with A players. As Steve Jobs once said, “I’ve built a lot of my success on finding these truly gifted people, and not settling for “B” and “C” players, but really going for the “A” players. And I found something… I found that when you get enough “A” players together, when you go through the incredible work to find these “A” players, they really like working with each other. Because most have never had the chance to do that before. And they don’t work with “B” and “C” players, so it’s self-policing. They only want to hire “A” players. So you build these pockets of “A” players and it just propagates.”
Beyond the Book
Watch "Charlie Munger - Keep It Simple (Investment & Life Advice)" on YouTube
Read "“Take a simple idea and take it seriously.” —Charlie Munger" by James Clear
Read "Reciprocation Bias" by Farnam Street
Watch "Steve Jobs - Building a team of A players" on YouTube
Read "The Importance of Working With “A” Players" by Farnam Street