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Domino’s Pizza and Building a Team of A-Players

Domino’s Pizza and Building a Team of A-Players

Last January, the New York Times ran a great article about building a business by creating a team of A-players (For a Franchise, Success is in the Hiring; January 6, 2008). The article introduces Dave Melton, who owns 5 Domino’s Pizza stores in NYC with total sales of $5 million, has 100 employees – and experiences essentially zero turnover.

This retention rate would be impressive in any business, but the average turnover rate for “limited service restaurants” is 51%. In other words, a similar franchise owner is losing 50 employees every year while Dave Melton loses 1 or 2. How did he do it? Here are some points that I pulled out of this article that are relevant to any business when it comes to finding, hiring, leading, and keeping A-players.

He knows his A-player profile. In my book How to Hire A-Players, I talk about the importance of understanding the A-player profile for key roles in your business. You can tell Dave Melton understands his A-player profile. He says in this article that he looks for people who “can work quickly and have nice personalities.” My guess is that there are few other things he looks for as well, but don’t dismiss this basic profile. A lot of people have bubbly personalities but can’t get things done. Some people can get things done but are surly. He is looking for the combination.

Focuses on creating a great customer experience. Melton lists the bad behaviors that got some of his early, bad hires fired. They include “arguing with customers, refusing to wear uniforms in the correct way, visiting friends en route to delivering pizza, and failing to show up for work. What do all of these have in common? They all create a bad experience for customers. Let’s face it, the average retail experience in the United States is not impressive. If you can put a staff together that creates a good customer experience (much less an exceptional one), that is going to show up in your customer retention. It’s pretty easy to connect the dots between an exceptional retail staff and customer retention.

Creates an Internal Talent Incubator. You wouldn’t think that a Domino’s Pizza franchise could be a talent incubator, but read this article and you realize that Melton has accomplished it. He starts all his employees as hourly workers who make minimum wage + tips delivering pizzas by bicycle. But they can end up as Store Managers making $70,000 annually.

Shows People a Career Path. Again, you don’t associate the concept of Career Path with working at a place like Domino’s, but Melton realizes that you don’t have to send someone to Wharton to provide them with a career path. Melton and his wife Angie (who helps to run the franchise) encouraged one of their employees to take a New York City food safety certification course to “enhance her credentials.” The employee’s initial reaction? “I was a little skeptical. I don’t like tests. But I took it and I passed. I did well. I got a raise and I got a bonus for passing the test.” (She also got promoted to assistant manager).

Promotes Internally. Melton promotes from within when he has a job opening. When a company can promote good people from its ranks into leadership roles, you know they are doing a great job of hiring the right people, developing them, and keeping them around.

Taps into undervalued pools of talent. The article quotes Zia Shah, 35, a native of Pakistan with a degree in business who came to New York at age 26 looking for more opportunity. He started delivering pizzas for Mr. Melton’s Domino’s franchise and today is a manager of one of his 5 stores. Here is a very sharp, educated guy who was “overeducated” for his initial role but hung on because of the opportunity that was ahead of him. I am sure he was a lot hungrier for opportunity than many of his 26-year-old American peers. Sometimes finding and hiring A-players is like being a value investor in stocks. You have to find people who have been undervalued by the market and give them a chance.

Gets entry-level hires from employee referrals. Today, this Domino’s franchise gets most of its employees from employee referrals. I make the point in How to Hire A-Players that recruiting is just marketing and sales in different garb. We all know that positive word-of-mouth is critical in marketing and sales. The same thing is true in creating a team of A-players. If you hire great people and give them opportunities to succeed and win, they are going to tell their friends! Your job is to get your employees engaged in this A-Player mindset.

Grew his business organically. Melton grew his business from 3 stores to 5 in part because he already had groomed the talent to do so. Show me your business plan for growth over the next 3-5 years, and I will ask you if you are developing the talent today to fuel that growth.

You can find the New York Times article For a Franchise, Success is in the Hiring here:

http://www.nytimes.com/2008/01/06/jobs/06homefront.html?ex=1357275600&en=ce3f2f59f1063b24&ei=5088&partner=rssnyt&emc=rss

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