From its meager beginnings outside of Atlanta, Chick-fil-A has become a powerhouse in the fast food industry worth an estimated $2 billion. With over 1300 restaurants located throughout the United States, Chick Fil-A is one of the largest fast food chains in the United States, which is evident in its constant sales and positive growth since the opening of its first restaurant in 1943. What has been and continues to remain key to the success of the restaurant chain founded by Truett and Ben Cathy is the values that company was founded on: valuesbased leadership, social responsibility, and stewardship.
Company Background After being discharged from the Army at the end of World War || Truett and Ben Cathy began to plan their future in the restaurant business. After spending some time as employees in another restaurant they opened their very first restaurant, named the Dwarf House, on May 23, 1946 in Hapeville, GA. It was strategically located near a Ford Automotive plant and what is now none as the Hartfield International Airport. This location proved to be most beneficial as it provided a steady stream of customers.
It was also a location that would experience exponential growth in the coming years. The Cathy brothers started this first restaurant with $4,000 that they were able to Raise and a $6,600 loan from a local bank. The restaurant was only 50 feet wide and 150 feet deep, including the kitchen, (Knight & Weaver, 2008). On their very first day of business they earned $58. 20. In 1949, Ben Cathy was killed in a plane crash along with their brother, Horace. In 1951, Cathy opened a second restaurant in Forest Park, GA (Knight & Weaver, 2008) and over the next nine years, the Cathy restaurant prospered.
In 1960, the Forest Park Restaurant was destroyed by fire. It was at this time that Truett Cathy was forced to make some of the toughest decisions in his life. In a speech that he made in 1997, Cathy said, “Without adequate insurance to rebuild the restaurant I faced some tough questions. Do I take a giant step back to just one restaurant, which would mean having to lay off employees? Do | incur more debt and rebuild the restaurant as it was? Or is it time for something new? I was convinced it was time for something new? Knight & Weaver, 2008). Based on the concept of a fast food chain of restaurants popular in Chicago, Lil Abner restaurants, Cathy opened a new restaurant in Forest Park, which to proved to be unsuccessful, due to customers preference for the Dwarf House style of restaurant. Inspired by a comment from a professional associate and friend, Cathy began to experiment with chicken. His inspiration for the chicken sandwich came from his childhood. His mother served fried chicken to boarders that took residence in their home.
His prototype of the chicken sandwich served today was a fried breast fillet served on a bun. The bun eliminated the problem of customers getting grease on their fingers. However, grease was not his biggest issue, it was time. Cathy needed to be able to prepare and serve a chicken sandwich in the same amount time that it would take to serve a hamburger. Cathy experimented with numerous different cooking methods and seasonings, but it was not until he found a pressure cooker that used peanut oil that he perfected his now famous chicken sandwich.
These chicken sandwiches began to rapidly outsell the hamburgers on the Dwarf House menu. In 1963, Cathy gave his chicken sandwiches a name in order to market them. A patent attorney advised Cathy that he could use ordinary words for his product name, as long as they misspelled or in some way altered the terms from their dictionary usage. Working with the words “chicken” and “fillet,” Cathy came up with Chick-fil-A, making use of the “A” to convey the concept of being the first or best, (Knight & Weaver, 2008).
During the mid-1960s Chick Fil-A only sold its products to other restaurants. In 1967, Cathy decided to transition selling licensed products to operating Chick-fil-A restaurants and opened the first Chick Fil-A restaurant in the Greenbriar Mall, located south of Atlanta, which was the first indoor mall in the Southeastern United States. As the number of malls grew, so did the number of Chick-fil-A restaurants. In 1982, chicken nuggets were added to the Chick-fil-A menu. During the same year, Chick-fil-A built a new corporate headquarters near the Hartsfield International Airport.
In 1985, Chick-fil-A introduced the Dwarf House line of restaurants, named after the original restaurant, which offered customers a choice of sit-down family dining or carryout, (Knight & Weaver, 2008). In 1986, Chick-fil-A began to build freestanding restaurants. By 2002, freestanding restaurants outnumbered the mall units. Chick Fil-A also opened restaurants in new types of locations: on a college campus (1992); in a medical facility (1993); in a supermarket (1993); in a business/industrial location at Alabama Power in Birmingham (1994); at the University of Alberta in Edmonton, Canada, (1994); and in South Africa, (1995).
In 1993, Chick-fil-A opened its 500th restaurant, and in 1996, to celebrate the 50th anniversary of the original Dwarf House, it introduced Truett’s Grill, a 1950s style diner. In 1997, The “Eat Mor Chickin” advertising campaign, became enormously successful (Knight & Weaver, 2008). Shaping of the Chick-fil-A Culture From his humble beginnings in the restaurant industry there were a few lessons learned that Cathy Truett found invaluable to the shaping of the Chick-Fil-A corporate culture.
A culture that values every employee? s contribution to it? s team, is conscious of it? s fiduciary responsibility to the communities that it operates in, and stewardship in both service and mission. These lessons contributed to Cathy brothers? development as leaders within their business and outside of it. According to Winston and Fields (2014), development of leaders is facilitated by the use of clear parsimonious instruments designed to measure specific constructs.
In the absence of parsimonious instruments, formal education, and staff, the Cathy brothers relied on life? experiences, common sense, and the bible as guidance. From his first restaurant Truett Cathy discovered that the best advertisement was his customers. In his book, It Easier to Fail Than Succeed, Cathy said, “Word of mouth in the food business is more important than any other source of advertising. It’s better to maintain your present customers than to spend a lot of time and expense replacing them with new ones? , (Knight & Weaver, 2008).
For this very simple reason, it was not until 1982 when Chick-Fil-A began to put emphasis on more formal advertising than just word of mouth. Chick-fil-A also made part of it? s corporate culture is its policy of operating six days a week, but “never on Sunday. ” (Knight & Weaver, 2008). This policy has not changed since the opening of the first Dwarf House. Cathy’s belief in the bible not only informed this aspect of his business, which is based on the fourth Commandment from the Bible, but many others as well, (Knight & Weaver, 2008).
Prior to the rapid growth from 1971 to 1974, these fundamentals were also included in the development Chick-Fil- A’s corporate philosophy: (1) the company would grow not by selling franchises, but by forming joint ventures with independent operators; (2) they would operate exclusively out of shopping malls; (3) financing would come not through debt, but primarily from the company’s own profits; and (4) people would be the primary focus of ChickFil-A.
With the exception of (2), which had to be adjusted as shopping malls became saturated with restaurants in the 1980s? a hallmark of Cathy’s foresight? hese tenets have remained in effect ever since, (Knight & Weaver, 2008). Biblical Values as a Foundation When the members of the Chick-fil-A executive committee was asked by Cathy’s son Dan in 1982, “Why are we in business? Why are we here? Why are we alive? “, the committee was inspired to create a corporate statement that reflected the role that Jesus Christ played in their lives, for the purpose of providing an example of values-based leadership, social responsibility, and stewardship.
“To glorify God by being a faithful steward of all that is entrusted to us; To have a positive influence on all who come in contact with Chick-fil-A. Values-Based Leadership When a man’s ways please the Lord, he makes even his enemies to be at peace with him, (Proverbs 16:7). Values-based leadership starts with the individual and more specifically how well that individual leads him/herself and how he well he/she holds true to their own individual beliefs, (Frost, 2014). While part of an organizations purpose is to make profit, value-based leaders serve the higher calling of service to others in order to make not only organization better, but to make the people around them better, which contributes to the success and longevity of the the organization.
To the true values-based leader their personal beliefs are nonnegotiable and they can never be torn from them. According to Ahmad and Ghayyur (2014), in their study of how value-based leadership logistics support service and employee satisfaction, value-based leaders understand the requirements of workers, mechanic strengths, research and developments and operational requirements for accumulated value and returns. Therefore, the impact of value based leadership is significant for the differentiable outcomes. Social Responsibility The Lord God took the man and put him in the garden of Eden to work it and keep it, (Gen 2:15).
This same responsibility is placed on the shoulders of entrepreneurs. For everything that they have been provided to them by graciousness of God. To whom much is given, much is required in regards to the execution of their duties within their organizations, in the communities that they operate. Their efforts are not for the purpose of profit, but for the purpose of serving mankind. Organization? s that are conscious of their social responsibility create wealth for shareholders and customers but does so while paying good wages to employees and treating suppliers fairly, (Rae & Wong, 2012).
Organizational research has provided strong evidence that when and organization is socially responsible employees are more committed, which is essential for the success of the organizational, (Bingham et al. , 2013). Stewardship As each has received a gift, use it to serve one another, as good stewards of God’s varied grace, (1 Peter 4:10). Stewardship is the standard to which God calls leaders, whether it is leading a country, business, church committee, or community organization, each has an obligation to determine the impact of their organization to the environment and mitigate the negative impacts as they are identified.
It is an abomination for kings to commit wicked acts, for a throne is established on righteousness (Prov, 16:12). Chick-Fil-As Display of Biblical Values According to Frederick Winslow Taylor (1911), the first object of any good system must be that of developing first-class men; and under systematic management the best man rises to the top more certainly and more rapidly than ever before. This was written in regards to the nature of business without regards of the impact of the organization on it? s employees or the responsibility of the organization to it? s employees, the community, or to the environment.
With the opening of their very first restaurant, the Cathy brothers were able to identify their organizational responsibilities and build a corporate culture that embraced them. These values are evident in their leadership development and community outreach programs. Values-Based Leadership In response to financial difficulties that Chick Fil-A experiencing in 1982, Truett Cathy chose not receive a salary in order to prevent reduction in employee salaries and/or reduction in the workforce. This is just one example of the value-based leadership culture that is permeated through Chick Fil-A.
In addition, Chick Fil-A offers a “Team Member Scholarship Award” of $1,000 to any high school graduate who has been recommended by their restaurant operator, who has worked with the chain for two years, and has averaged 20 or more hours a week. Chick-Fil-A also places the same emphasis as it plans new restaurant locations. Instead of franchisees, Chick-filA searches for a highly responsible person to become operators. Those personnel make an initial investment of $5,000. After only six weeks of training, the operator is a guaranteed salary of $30,000 a year, plus half of net profits after 15 percent of gross sales goes to Chick-fil-A, Inc.
Operator are able to earn a sixfigure income. Social Responsibility In accordance with its corporate philosophy, ? To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come into contact with Chick-filA? , Chick-fil-A has fully embraced its role as being socially responsible in the community, to it? s employees, and to the youth. Each year, Chick-fil-A gives thousands of dollars in monetary contributions and food in support of organizations that provide disaster relief, children? hospitals, support to disadvantage children, sandwiches to organizations treating sick or special needs children, such as the Children’s Hospital of Atlanta, Camp Hope, Nathaniel’s Hope in Florida and the East Tennessee Children’s hospital.
Chick-Fil-A also has it? s own charity organization, which is known as the Winshape Foundation. Through the foundation millions of dollars have been donated for children? s day camps, marriage retreats. foster homes, and sending more than 700 Chick-fil-A staff and Operators to 59 countries for more than 200 projects, such as teaching leadership principles and drilling clean water wells, (Chick-Fil-A, n. ).
According to Swimberghe and Woolridge (2104), fast food restaurants have become a target of consumers and the governments in regards their contributions to society and the costs they impose, notably, obesity, environmental degradation, and poor treatment of employees. In response to concerns, many restaurant chains have introduced healthier menu options and committed to environmental protection and resource conservation and protection of workers? ealth, safety, and rights. Stewardship In 2014, Chick-fil-A announced that over the next several years it would take steps to remove all antibiotics from its chicken supply, (Chick-fil-A, n. d). Meaning that no chicken would be served that had been feed or injected with antibiotics. What this means is an immediate reduction in a practice that is potentially harmful to its customers, employees, and the environment, but also forcing suppliers to adjust their practices.
Conclusion In summary Chick-fil-A incorporation of value-based leadership, social responsibility, and stewardship into its corporate philosophy and culture have facilitated its success and longevity in a profession that experiences high turnover in both businesses and employees. Truett Cathy? s leadership is evident in his business and community, which is proven in his dedication to utilizing the Chick-fil-A Corporation for the purpose of serving God and mankind.