Corporate culture: MRG adopts bigger firms' synergistic precepts

Nation's Restaurant News, August 9, 1999 by Milford Prewitt

Reflecting a commitment to "winning every guest, every day, worldwide," Metromedia Restaurant Group's corporate culture is not based on buzz words thumb-tacked to bulletin boards.

Instead, as a cornerstone of its corporate resurgence, MRG's intricate business culture taps a keen awareness that its customer service goals are a subtext to the even more ambitious objective of becoming both a "powerhouse in leadership" and a "financial powerhouse."

Stripped to its bare components, the core mechanism behind the corporate vision is a series of measurements of employees and guest satisfaction levels. MRG's underlying belief is that if employees and guests are satisfied, then two inevitable results occur: sales rise and margins fatten.

That's the main reason Michael Kaufman, MRG's president, enthusiastically declares that in five years the company will more than double revenues, to $2.8 billion.

"Already our EBITDA [or earnings before interest, taxes, depreciation and amortization] has tripled," he says. "I think it's proof that it's working."

* MRG doesn't have a "headquarters." It has a "support center."

Corporate culture manifests itself in many ways at MRG, but some of the more visible signs are as follows:

* The company doesn't have employees or associates. It has "team members."

* Kaufman is not at the top of the pyramid. His GMs, the restaurant general managers, are.

* MRG does not have franchisees. It has owners.

Conceived in 1996 when senior members of a so-called change team convened to assess MRG's future at a time when its prospects were anything but rosy, the corporate culture that was crafted is monitored by its own support departments. Those include a department for leadership succession, an office on leadership development, a training department and, more recently, a diversity and human- resources director.

Where many companies' corporate culture is nothing more than a few slogans used during job interviews, MRG says its is more akin to a measuring stick of company performance, employee contentment and customer loyalty, based on candor and a steady stream of dialogue and assessment.

On the operational front lines, "walking the walk and talking the talk" are the company's general managers, the hard-core disciples of MRG's value system.

"At the core of our approach, at the core of our guest satisfaction model, is the general manager," Kaufman stresses. "In order to achieve strong restaurant performance, you need a GM to sculpt and achieve team satisfaction and to create great guest satisfaction, and, presumably, that will have a positive impact on guest counts.

"Observing what it is we need to do to satisfy that model is really the heart of what we do as a company."

At the huge Ponderosa prototype in Johnstown, Pa., service manager Bryan Rabbitt recently explained to a group of visitors how corporate culture trickles down to him.

"If the booths are not comfortable, if the wind is blowing in a customer's back, if something is burnt, it's these guys right here who are hearing about it," Rabbitt says, pointing to the crew of servers under him. "And then to take all of that guff, along with me getting in their butts every day, it really takes a lot.

"It is not a job where you can coast through the shift. Each one of these people is ready to go every day. Thank God, I have these people, who want to be successful, make me successful. These are the people who make a difference."

Daily, everyone from Kaufman on down to the GMs is expected to use in their job a set of principles that are the epicenter of the values making up the culture.

Instead of the diplomalike certificates that executives at most companies receive for completing in-house leadership and training programs, MRG's executives and managers are awarded a sack of rocks. Each rock is stamped with the name of one of nine values Kaufman says is crucial to MRG's rebound.

Of the nine rocks, eight are oval and individually named: ownership, courage, simplicity, winning, openness, differences, involvement and fun. The ninth rock is a triangle labeled integrity.

Kaufman could give a lecture explaining why each idea has to be absorbed by all of the company's top managers. But without the idea on the triangle rock, it means nothing, he says.

"Integrity is our bedrock, our foundation," he says.

Kaufman states that when the company was looking to construct a vision and needed a model to follow, foodservice had no inspiring examples with multiple brands, forcing MRG to consider companies in other fields.

"First, we had these four brands, but we were not getting the benefits because they were silos with their own teams and history," he says. "We were not focusing on the guest in the way we should in order to be successful even though we were very bottom-line oriented.

"We didn't even have a real good way of infrastructure support to help our various brands. So we searched the restaurant industry and, frankly, we really didn't find any multiconcept models for an answer."

General Electric, Disney and Johnson & Johnson provided the inspiration sought by MRG's corporate-culture change team.