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My Biggest Mistake: Chris Sullivan

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CHRIS SULLIVAN
Founder and CEO of Outback Steakhouse Inc. In 1999 the Outback chain included 611 restaurants generating revenues of $1.6 billion.

My biggest mistake? Clearly, it was the way I handled the rollout of the Carrabba's Italian Grill concept. After we entered into a development agreement with the founders, Johnny Carrabba and Damian Mandolo and their families, we let a lot of our disciplines -- systems we had used in the past with Outback -- get away from us.

With Outback we would approach a new market by developing one new restaurant in the first year and two or three more in the second year. With Carrabba's, we developed four, five, and six restaurants in the first year. We should have gone in and made sure our franchisee partners had opened their first restaurant in a successful manner before we started with a second one. We said, "We know we're going to be successful at this. We've been successful with Outback, so let's just build them."

We had plenty of capital because of the public offering and the success of Outback, but we didn't get the people side right. And we didn't keep with our belief that you've got to develop people so that they're prepared to be successful. This really caused us major problems that took two years to correct. Fortunately, we were able to handle them, but it was painful. It cost us a lot of money, and we had to close restaurants for the first time in our careers. A lot of good people lost their jobs. I hated that.

Afterward, we took our time and got ourselves positioned correctly, and the last eight restaurants that we've opened have been extremely successful.

Capital is always great to have, but in almost every business we know of, you've got to have the right people, and you've got to give them time to be successful. If you don't do that, and don't have the right support systems in place, it doesn't matter how much money you have. You can lose it very quickly. --Written with Emily Barker




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