Not every CEO is willing to admit the product he or she is responsible for just flat out isn’t good.
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But Patrick Doyle, president and chief executive of Domino’s Pizza (NYSE:DPZ) wasn’t just willing to admit it, he was more than happy to tell consumers himself that he agreed with them.
It’s been a turnaround story that, for Doyle, has been years in the making, and has paid huge rewards for the company.
Hourly-Wage Earner Turned Big Cheese
Doyle’s career at Domino’s began about 17 years ago in the marketing department, and he’s been with the pizza chain for more than half of his career. While he wasn’t exactly slinging pizzas at the start, he said his depth of experience with the company has certainly been an advantage.
“I’m a finance guy, and way back when I ran our international business,” he said. “I ran our corporate stores. I got an opportunity to really do and see most everything you can do within Domino's before I became CEO. Hopefully I’ll do as good a job getting (the next) experts ready.”
For Doyle, working with his predecessor was never something he dreaded. Instead, he welcomed criticism and opportunities to grow and learn as he progressed with the brand. Even after taking the helm a little more than four years ago, Doyle said he still has a solid relationship with Dave Brandon, Domino’s former CEO who now serves as the chain’s non-executive chairman.
“He’s been my mentor and continues to be. It works out beautifully,” Doyle said. “It doesn’t always work that way for people. Sometimes having the previous CEO still there isn’t great. But in this situation, it’s perfect. He knows the business, we know each other well. He’s someone I can always go to for counsel and he knows what I’m dealing with.”
It wasn’t long after Doyle took the reins from Brandon that he launched the brand into a major turnaround effort. The focus for Domino’s had always been on time and efficiency, not necessarily on the quality of the product customers received.
Dedicated to his pitch for feedback, Doyle even went straight to your living room, asking for photos of your Domino’s pizzas, and suggestions for how he and the brand he represented could do it better.
“We were the 30-minute guys. We were the delivery guys who were going to get a pizza to you that’s going to be OK, but we’re going to get it to you quickly. And that just stopped working at one point,” he said. “We realized there was no conflict between delivering pizza quickly to people and making it great."
So the chain dumped its pizza recipe, and started from scratch…literally. It completely re-did the recipe, a strategy that more than paid off. In the four years since, the chain’s stock price has catapulted from $12 per share to more than $75 in recent trade.
What’s more, Doyle launched the turnaround at the start of an economic recovery that had consumers pocketing every extra dollar they had, hitting many discretionary spending companies hard.
“Some of our problems were probably self-inflicted because the pizza wasn’t as good as it could be,” Doyle said. “But the fact the economy was bad made it easier to go to our franchisees … (to say) look, we have to do something. We have to take a little bit of a risk here, but we need to do this.”
Doyle said in that kind of environment, it’s good to be bold and really rework the business model, especially if it’s not performing.
Partners for Life
Though the turnaround effort he launched is a pride point for his career, Doyle said one of the things he’s most proud of is the 90% of hourly workers who turn their jobs into full-time franchise opportunities.
You read it right: 90%.
“People come in and the opportunity (for them) is here,” he said. “They get excited about the business. At some point they decide they want to be a manager, they can do that pretty quickly, and if they’re a successful manager, they can always raise their hand and come to us and say, ‘I’d like to be an owner,’ and we’ll find them an opportunity to be an owner and run their own business.”
In fact, Tom Peterson, the franchise owner who let FOX Business film in his brand new store in Jersey City, New Jersey, has a success story of his own with Domino’s. And he’s an example Doyle points to when he talks about the franchising opportunities within the company.
Peterson has been with the company for nearly 24 years, starting as a delivery driver as he worked his way through community college.
“I had never heard of Domino’s,” Peterson said. “I applied for the job and was hired as the store’s first delivery driver. The owner of that store was 21-years old. And once I understood the company, I thought maybe I didn’t need the degree (I was working toward), so I went through the steps to own my own franchise.”
Now, he owns two stores, the newly opened Pizza Theater in Jersey City, which is a new open-concept store design from Domino’s. Peterson’s original store in Hoboken allowed him to open his second location after it became a top 30 store out of 5,000 domestic locations last year.
It’s an accomplishment Peterson is extremely proud of, and one he’s worked his entire career to achieve.
“I wasn’t born with a silver spoon in my mouth,” he said. “But Domino’s was loaning money to potential franchisees so we took the money…I got scared and backed out for a while and went back to working for my franchise in Pennsylvania. But I didn’t want to continue making pizzas for another guy my whole life, so I told myself I have to make this happen. In 1987, I built my first store and have been doing it for 27 years.”
It’s stories like Peterson’s that make Doyle proud of the company he’s leading from the top.
“Ultimately, it’s what’s allowing people to connect with the brand,” he said. “The approach we take with consumers is who we really are as a brand, and that’s the approach we take with investors: We’re never trying to overstate the case for who we are as a company. And that’s the same approach we take to the relationships with our franchisees.”
It’s that philosophy Domino’s is really taking to the bank. One of the final stages of Doyle’s turnaround strategy is to completely open-up the kitchens and let customers see the production process themselves in all locations by 2017. And the proof really is in the pudding, er, pizza.
“High-end restaurants have been totally opening up kitchens for a long time now. We finally caught up and realized, wait, there’s a reason they do that…so we’re breaking down the walls, opening up the kitchens and letting people see where their food comes from.”
Peterson said his Jersey City store has already seen double the sales his Hoboken location has seen, and he believes it’s all thanks to the new concept.
“I’m very proud of my new pizza theater store…People walk in and they’re enamored by the place. The new concept of the store is amazing,” he said.
Though Doyle has his hands full with the brand revitalization efforts, he still manages to sit down every once in a while and enjoy a slice or two.
And, sorry Chicagoans, in case you were wondering, without hesitation, Doyle said the best way to enjoy a slice of Domino’s pizza starts with an old fashioned New York-style fold.