The right ingredients

by 28 Apr 2009

The CEO and corporate head of Domino’s know that clear communication and foresight are vital ingredients in a successful business. They tell Sarah O’Carroll how they are coping with big business, engaging their employees and shaping their future

While companies the world over are slashing staff, Domino’s Pizza is on a recruitment drive to find 2500 new employees in Australia and New Zealand. It reported an $11.8 million net profit last August, up 27 per cent from the year previous.

In the first half of this year it opened 15 new stores – including 11 stores in Europe and four in Australia and New Zealand – bringing the total number of stores in the network to 756. As the economy slides, Domino’s climbs.

This growth might not be unexpected, given that more people are leaving cafes and restaurants and migrating to more affordable meals to save cash during the downturn. And although the commercial food sector is tipped to decline by more than 2 per cent in 2009-10, according to the Fast Food in Australia 2009 report, the fast food industry is not going to suffer the same fate. In fact, sales in fast food are pre dicted to grow.

This is good news for one of Australia’s leading food and beverage retailers – Domino’s Pizza.

But, according to CEO Don Meij, that doesn’t mean it’s time for Domino’s to rest on its laurels. As consumers trade down their dining choices in these uncertain times the group can’t simply sit back and enjoy the ride, he says. It must adapt as much as every other company in changing times – but just in different ways.

“In the current environment there has been a move by people to supermarkets and cheaper alternatives,” says Meij. “While we fit into the cheaper alternatives,we still have to earn that business – which we are doing – but it’s not a fait accom pli that we just get that business. There are many other afford able meal solutions that are doing well. And it’s clear to see that those that are doing well are the ones that have a good business model.

“The way it works is that a customer will buy a pizza on average once every fortnight. If you don’t impress them they have myriad options to buy elsewhere, so to get them back every couple of weeks they have to like what they are getting – the image, the service.”

That’s why, even with things going so well in the fast food sector, Meij and his team have upped the ante on some core strategies such as recruitment and encouraging an entrepre neurial culture.

Domino’s entrepreneurial culture

Tough economic times and job losses have led to a trend where some people are using their redundancy payouts to buy into franchises. Domino’s says interest is so strong the com pany has had more than 200 applications since January – a 75 per cent increase on the same period last year. Many of the applicants are senior white-collar workers from the finan cial sector who have taken redundancies.

The pizza chain has been able to use this trend to its advantage to attract young ambitious workers – such peo ple fall into line with the strong entrepreneurial culture the company has nurtured.

This culture helps to not only attract motivated employ ees but also retain them. From day one when an employee starts as a pizza maker, delivery person or manager, they are clearly shown the different career paths that are available to them within Domino’s.

According to Kerri Hayman, head of corporate opera tions, employees can see clearly a career path through Domino’s.

“One example is they could go the corporate route,” she says.

“For example from delivery person, to store manager, to regional manager to operations manager etc. But what is pretty unique to Domino’s – and what we encourage very much – is the entrepreneurial route. This is great for young employees who dream to own their own business.”

Meij started out as a pizza delivery driver 22 years ago. He then went on to operations, became a sub-franchisee, owned 17 of his own stores, then used equity from that to buy part of Domino’s. Now he is the CEO.

Hayman had a similar journey.

“It’s a very common career path within Domino’s,” she says. “So from day one a new employee is shown where they could possibly go within the company and the types of salaries each level attracts.

Innovate …

Domino’s is a good example of a company which has used the economic downturn to its advantage and stepped up mar keting and recruiting policies since economies have slowed.

One such example is what global CEO Dave Brandon touted as “Domino’s big taste bailout”.

Filmed in Washington DC, television advertisements showed Brandon travelling from Capitol Hill via Wall Street to Main Street, with an offer to deliver three or more medium pizzas – or oven-baked sandwiches – for just $5 each to American consumers.

“We know times are hard – it’s a reality we are all facing,” says Brandon in the ads. “But I didn’t go to Washington to ask for a bailout. Instead, we are giving one. I’m proud to be able to offer our consumers a promotion with such a great deal on pizza. By adding our oven-baked sandwiches to the mix we are further increasing the number of taste varieties to the offering.”

Using this downturn to its advantage is important, accord ing to Meij, because now the company is vying for a new pool of customers who have turned to the cheaper alternative.

Although it hasn’t had to restructure the way other companies have needed to in this environment, it says it has still been vital to innovate and communicate to stay ahead of competition.

“Although there is a good air of confidence among employ ees we still have to constantly communicate with staff,” says Meij. “Where we’ve had to energise our team is that we have had to change our strategy so that it is suited to the current economy. And staff have to be clear on these changes.”

… and communicate

Domino’s was active from November to March in launching its biggest new menu in history.

A total of 15 new products have been addedand their smooth introduction has required an immense amount of communication.

This fast – and clear – talking called for road trips to meet franchisees, town meetings and meetings with all man agers to explain the new strategies. Technology has been a big player in this. Because of the huge landmass of Aus tralia and NZ and their far-reaching points, Domino’s use of technology has been vital to this communication.

“Video communication and video training pieces have been vital in explaining to staff why we were doing what we’re doing,” says Meij. “It can be streamed into the store and explained immediately. Just like every other company, we have had to adapt – but in our case it’s because we are winning.”

Without technology such as the services the company has used with Premiere Global Services it would be virtually impossible to communicate over the huge landmass of Aus tralia and New Zealand, says Meij.

Competition is healthy

Advanced communication systems have also been key to motivating employees through competitions such as “Store Wars”.

Each store is linked live 24 hours a day and management can see live on screen how each store is doing in real time in terms of sales and service. Through a live tracking system which measures results, stores can also see their results and performance against every other store in Australia live.

The system measures sales, the products being sold, and general productivity. Updates of this are also sent directly to Meij, which he receives on his BlackBerry live every 30 seconds.

“Through staff surveys we have found that team members really liked seeing themselves competing against other stores in real time,” says Hayman. “Through competitions such as Store Wars, workers become proud of their store. We find they really enjoyed the friendly competitiveness of Domino’s. Fun at work makes them want to stay and instead of watching the clock they’re racing the clock.”

Technology recruitment

Cutting-edge technology has had a large part to play in Domino’s success according to Meij, particularly in the area of recruitment.

The launch of a separate job site has made the whole process of recruitment a lot more transparent and easier to manage. The site, which connects to the company’s main page, is specifically for recruitment and contains profile videos and more detailed application forms.

“It is a much more transparent measurement system so we can see who is being hired and who is being replied to,” says Meij. “It gives us more transparency. [Under] the old way when somebody applied online we had no way to mon itor back up the stream to know if people had been hired or followed through.”

Hayman says it’s a great tool for managers and allows them to tap into a much broader pool of candidates.

“We used to have a local approach, but now it’s much more a national approach,” she says. “It gives us a better window to the applicant as they can find out a lot of info about us before applying and through a filtering questionnaire we can determine quite early if they’re the right person. It has revolutionised our recruitment.”

Domino’s was previously feeling the pain of the skills shortage that gripped Australia and continuously struggled to get staff. Now, with increasing unemployment in other sectors it has really put a drive on to recruit new people.

“In the previous economy we were always short of staff. Because of the tight employment environment we found it dif ficult to get people,” says Meij. “This is the reason we need an additional 2500 people. We were already short on staff but now we are growing as well.”

Positions the franchise is short on vary from store to store and include everything from drivers, to pizza makers to store managers.

“Different stores have different needs – from delivery drivers to people applying straight to be managers who want a career with us,” says Hayman.

Now, with increasing unemployment levels, Domino’s is generating a lot more interest.

“We are finding that there is a different kind of candi date coming our way – which is very encouraging for us,” Hayman says.