The Transformational Leadership Talks series is hosted by David Alexander, Managing Director at The Human Capital Group, and features advice and insights from leaders who are transforming their industries.
Welcome to the Transformational Leadership Talks, a series featuring leaders who are transforming their industries on a global basis. Today, I’m sitting down with Dave Pace, former CEO of Jamba Juice with more than 30 years of executive experience.
Q1: Dave, you’ve experienced quite a few business cycles throughout your career and have a great perspective. What is the greatest change you’ve seen in global business from 15-20 years ago?
As I think about the last 30 years, the biggest change I have seen is the speed with which the business cycle moves. Everything in business (innovation, economic development) is moving at an accelerated pace and so the speed in which you need to move and the data that you have available to make decisions is increasing in multiples every year.
The change you had from 20 years to 10 years ago had one speed. From 10 years ago to 5 years ago, there’s a different speed. And in the last 5 years the pace has accelerated further and there’s nothing to indicate that it’s going to slow down. All this acceleration is driven by technology. Technology is forcing you to move faster. It’s allowing you to analyze your business in greater levels of detail. It’s allowing you to understand your customers in greater levels of detail. Consequently, you are required to fine-tune your business strategy and tactics at a rate of speed that is far faster than anything in the past.
Q2: As a former CEO, what do you think are the greatest challenges businesses will face over the next 5 years and what are your thoughts on how businesses can address them?
The biggest challenge is going to be your ability to constantly put yourself in the minds of your competitors and startups. You need to continuously ask yourself, “If I wanted to beat myself in my own game, how would I do it?” Anticipating how your competitors and startups are going to differentiate themselves is more important than ever.
I also think choosing technologies to support your business will be another challenge, regardless if you are a large or small enterprise. Because business cycles are so much shorter and technology implementations can be lengthy and expensive, you really need to evaluate if a technology will elevate your performance or negatively disrupt your business. As you evaluate technologies, you need to ask yourself: what do I really need to differentiate? How do I do it fast? How do I do it in a way that doesn’t create a legacy anchor in my business or legacy drag on my business?
We have to constantly keep trying to find that balance of staying ahead of technology and anticipating where it’s going. That way, you don’t invest in technology that’s out of date after a short period of time.
To give an example of this, Starbucks got into the music business for a while because people wanted to have a certain kind of relaxing music and they trusted Starbucks to curate it. So, we started to introduce new CD burning machines in stores so you could go in and pick out your own songs, make a playlist of your favorites and burn them into a CD. Well within a year or two after we started to do that, iTunes was introduced. The iPod, the iPhone, iTunes made all that instantly obsolete. So, we went whoa wait a minute, we can’t put that across the system because it’s an expensive technology and it’s already obsolete. People don’t need that anymore. Moral of the story: stay ahead. Technology changes so quickly. If we had pushed ahead with that CD idea it would have been an enormously costly mistake.
Q3: We continue to see and hear quite a bit about the proliferation of AI (Artificial Intelligence). What are your thoughts about how AI will impact how we work in the future?
I think it relates to the same point about technology, but I think particularly with AI, and particularly in the restaurant business, the risk factors are largely around labor costs. We’re facing this huge issue in the restaurant service industry, which is by far the largest employer. As you increase labor costs in this industry, leadership is increasingly put in the position of having to make the tradeoffs between the introduction of technology versus using more labor.
It used to be simple. Technology was so expensive that labor was far less expensive and far more efficient to use within the restaurant. However, as labor costs go up and available labor goes down, leaders are considering that technology may be more accurate, faster and more efficient in terms of what and how things are produced, or how things are handled. So, whether it’s AI or any technology, the more we increase labor costs and the more technology costs continue to fall, we have made it more likely that industries move toward technology.
Q4: Talk to me a bit about corporate culture and why it is so critical to a company’s success?
First of all, I think there is a crisis of trust across this country. People have lost faith in big institutions and don’t trust that large organizations will be fair, equitable and socially responsible. Creating a culture within your organization is an opportunity to provide people with an environment that is bigger than they are, and one that they can trust in.
Consequently, you have to create an environment where people feel connected. Where they feel part of something bigger. Where they feel empowered to do something that they want to do. Where they’re making a difference and are recognized and rewarded for it. Where they feel that they have the tools they need to do the job.
As a leader, you have to create an environment where more people feel those things. Businesses and institutions have to create that kind of culture in order to be successful today. However, it’s increasingly difficult to do that because there’s also increasing skepticism that large institutions are inherently not good and cannot be trusted.
Q5: What are the key elements of a great corporate culture?
There are a number of things that you can do to create what I call a culture of trust. Define what you stand for, whether it’s a mission statement, principles, value systems or something else. Ninety-nine percent of organizations out there have a mission hanging on the wall but in most cases, it’s just a piece of paper. Beyond having it defined, you must bring it to life.
So how do you bring it to life? First, you must communicate it broadly and make it be visible everywhere in your offices, factories or your stores. You need to talk about it when you’re doing business reviews. You need to make it a part of your lexicon and allow it to permeate the language of the company.
Beyond that, you have to use it as a decision-making tool. If you really believe in your value system, you have to be able to say, yes — this is consistent with what we want, or no — this is inconsistent. The no is the hard one, because sometimes there are compelling financial rewards or opportunities that come with a certain business decision; but, you have to say no because it’s inconsistent with who we are. That’s a hard decision but it reinforces your value system in the employees’ minds. You also have to be willing to call people out if they’re acting in ways that are inconsistent with those values, particularly within your leadership team.
Jack Welch’s model for cultural values has four quadrants:
- People who live the values and deliver the results — those are your superstars.
- Those who don’t live the values and don’t deliver results — they’re not going to be missed.
- People who live the values but don’t deliver the results — give them a second chance because they’re trying to do the right thing. Help them deliver the results.
- People who deliver the results but don’t live the values — that’s where your organization is going to decide how committed you are to your beliefs. If those people are allowed to continue, your entire value system and culture you’re trying to create becomes neutered.
Q6: In your experience, what essential elements or traits are you looking for in hiring and promoting leaders?
I look for people with a track record of achievement and excellence and see if they’ve delivered in an environment more than once. In other words, we see people jump from one company to another but a track record of successful achievements within one company speaks volumes. You want people who can get things done.
I also look at the cultural elements of those high-achieving leaders. Tell me how you did it. Tell me about how you lead. Give me specific examples of how you had to deal with a challenging employee or where you had to develop a winning culture where you were challenged. Tell me about your ‘family tree’ — the people who you have nurtured and developed. Have they gone on to bigger and better things, either as a successor to your role or in other organizations? I really want to understand how leaders think about building their organizations. I think you have to attract people who both can get things done and bring others along with them.
David Pace is currently a private investor with over 30 years of executive experience. Most recently, he served as President and CEO of Jamba Juice, a role that he took over in March of 2016 after having served on their Board of Directors since 2012. Prior to Joining Jamba Juice, Pace served as President of Carrabba’s Italian Grill, one of the casual dining concepts in the portfolio of Bloomin’s Brands, Inc. While at BBI, he also served as Executive Vice President and Chief Resource Officer where he had responsibility for leading the Company’s Real Estate and Restaurant Development and Human Resources teams, and also served as President of Bloomin’ Brands’ Fine Dining concepts; Fleming’s Prime Steakhouse and Roy Yamaguchi’s Pacific Rim Cuisine.
Follow David pace
David Alexander is a Managing Director at The Human Capital Group. Prior to joining The Human Capital Group, he served as a senior human resources executive for world-class firms including SAP, AT&T, Washington Mutual, Allied Signal, Gateway and Compaq. Most recently, David served as the Chief People Officer for Raising Cane’s, who under his tenure grew from 10,000 to 20,000 global employees.
Follow David alexander
Subscribe to our blog to receive the latest in our Transformational Leadership Talks series sent directly to your inbox!