Equal parts old-fashioned dictator and New Age father figure, Jack Hartnett breaks nearly every rule of the enlightened manager's code. What's most surprising is how well Hartnett makes it work
The phone rang loudly, rousing Jack Hartnett from a deep sleep. He glanced at the clock; it was 1:30 a.m. As he picked up the receiver, the thought of his daughters started his heart racing. "Who is it?" his wife, Vicki, demanded. A distraught woman's voice came on the line. "Jack," began the caller, "can you help me with my sex life?"
Recognizing the voice, Hartnett calmed himself. The woman said her husband was impotent and she didn't know what to do. By now Hartnett knew what to say to reassure her; it was hardly the first time he'd received such a call. Another woman, Sharon, had called him to complain that she hardly saw Andy, her spouse, anymore. Andy worked 80 hours a week managing a fast-food drive-in restaurant. Sharon told Hartnett that Andy had brushed aside her concerns when she had pleaded with him to work less.
What Hartnett did to help such people was hardly extraordinary. It was nothing more, actually, than what any good friend might do. Except that Hartnett wasn't a good friend or even--by most definitions--a friend at all. He was their boss.
Hartnett, 46, is president of D.L. Rogers Corp., a company based in Bedford, Tex., whose primary business consists of owning 54 franchises of Sonic Corp., the drive-in restaurants that dot the South. At Sonic's eateries--which accounted for $44 million in revenues at D.L. Rogers last year--roller-skating carhops race out to serve customers, taking orders for malts through car windows. Every burger comes piled high with nostalgia.
Hartnett, too, seems like a throwback. At a time when management experts preach the importance of companywide learning and patty-flat hierarchies, Hartnett's personal management guru could be Frank Sinatra, whose signature phrase--"my way"--sums up his approach. Other bosses may boast of their skill at persuading workers to "buy in" to their vision; Hartnett instructs his to "do it the way we tell you to do it." He doesn't need to plaster up slogans or benchmark other businesses' practices to stay focused. "Some management theories are good, but how many people actually implement them the right way?" he says.
Not for him that academic mumbo jumbo. To be honest--and Hartnett promises he'll never be anything but--he's supremely confident that he knows how to elicit the best performance from his crew. Rare is the company builder who doesn't bemoan the looming presence of change and uncertainty; Hartnett indulges in no such bellyaching. He's perfectly comfortable claiming the authority that's rightfully his, using it to make the rules and mete out the punishments. So old-fashioned are his fundamental precepts that they stand out as wildly experimental in an environment in which most companies struggle to accept uncertainty, ambivalence, and ambiguity. In certain circles, he's a role model. "He sets a good example for a lot of franchisees and promotes a lot of straight talk," says Kenneth Keymer, Sonic's chief operating officer. "He's bigger than life in a number of ways."
By virtue of his crystal clarity, Hartnett offers his people a benefit few companies would even try to match: he creates a sensible and predictable world for them, eliminating the stress that confusion breeds. And based on any standard measures--such as per-store revenues, which, at about $837,000, are nearly 18% higher than the chain's average, and profits, which are soaring 25% above the norm--they reward him for it. That's not the only reason they stick around. He also pays them well, as much as 336% above the industry norm. Further, his involvement in their personal lives creates a bond that--no matter how else you characterize it--becomes hard to break. Hartnett plays golf with his managers and supervisors, sends them personally signed birthday cards, and drops by their homes to take them to dinner. If they've got marital problems or credit-card debt, he wants to know. "I get in the middle of your mess," he says. To help the woman who called him about her husband's sexual problem, Hartnett met with the couple in a motel room, where he prodded the fellow to confess to an affair and to beg for forgiveness.
Andy Rhue, the workaholic drive-in manager, didn't get off so easily. Sharon's conversation with Hartnett--whom she describes as "an attentive listener with great judgment"--inspired Hartnett to have a chat with Rhue, manager of a Sonic in Tyler, Tex. "I really chewed his rump out pretty good," Hartnett says. "I told him he needed to get his stuff straight because his wife had married him and not the drive-in." Rhue now puts in 65 hours a week. His relationship with his wife has improved so much, he says, that they are trying to adopt a child. Hartnett is a sponsor. "I don't want you to go to work unhappy, pissed off, upset, or mad about anything, because I don't think you can be totally focused on making money if you're worried about what's happening at home or at school with your kids," he says. "I wanna help you."
Of course, what he regards as helpful may not be what his managers and supervisors need. Kristin Anderson, a Minneapolis-based consultant who has studied similar businesses, fears that those who work for Hartnett may become too dependent on him for their own sense of self-worth, losing their individual identities. "He may be creating a cult of personality where he gains control through the guise of offering personal assistance," she says. But the scary part is how well it's working.
In an industry known for high turnover and rapid burnout, Hartnett's managers stay about 9 years, compared with an industry average of less than 2. The average tenure of a D.L. Rogers supervisor is an incredible 12.4 years, compared with the industry norm of about 3.5 years. As with nearly every aspect of management, Hartnett reduces his approach to the simplest of calculations. "Don't lose nobody if you can," he advises. "Work it out. Talk about it. It's too costly to start all over again with somebody new."
Last March, Hartnett was driving down the highway in his new Ford pickup truck, expounding to a visitor on his many hobbies. "I love hunting, working on my ranch, gambling, and having sex with my wife," roared the burly former high school fullback, who stands six feet tall and weighs 300 pounds. Suddenly, the car phone rang. Hartnett's mood, like his face, soon darkened.
A manager was on the line, threatening to quit. She was having problems with her supervisor and couldn't take it anymore, she told Hartnett. "You gotta cowboy it up," Hartnett instructed. "Listen, give me 45 minutes to see what I can do. The last thing I want to do is lose you." Hartnett called James Junkin, vice-president and director of operations. "Listen, James, maybe she's under a lot of financial pressure. Her husband's unemployed, you know. If she needs a little money, I want to help her out," Hartnett said. A few minutes later he was back on the phone with the manager. "Darlin', I'm proud of you for not walking out. You can call me at home until midnight. I'm here for you," he said. That apparently wasn't enough; a few days later she bolted.
Hartnett's personal touch worked better with Pat Langston. A Sonic manager in Manhattan, Kans., Langston wanted to resign in 1994 because his store wasn't performing. Hartnett encouraged Langston to drive down to Texas for a tête-à-tête. Looking him squarely in the eye, Hartnett told Langston he had complete faith in him and advised him to hang in there. Langston stayed on. He's glad he did. "My store did over $1 million last year, and I made over $100,000," he brags. "If I'd quit, I'd probably be laying bricks or something. I owe Jack everything."
Such loyalty can't be bought, although it could be argued that Hartnett tries. D.L. Rogers managers and supervisors earn an average of $60,000 and $125,000, respectively. By contrast, the industry average is $30,000 and $52,700, according to a 1995 survey by the National Restaurant Association. Still, Hartnett isn't merely counting on the simple gratitude that raw dollars can purchase. The compensation structure at D.L. Rogers is designed to fortify strong links between Hartnett and his workers and reward them for meeting certain cost guidelines he hands down.
Hartnett wants his managers and supervisors to have a stake in the outcome--in fact, he insists on it. His managers must purchase 25% equity stakes in the restaurants they run. In exchange, they receive 25% of the monthly net profits, a $1,200 monthly salary, and full health benefits for themselves and their dependents, a rarity in the burger world. That's just for starters. Managers who have been with D.L. Rogers for more than 18 months qualify for a bonus of up to 15% of net profits if they meet certain food, labor, and paper costs. And three-year veterans can buy a 1% stake in a new Sonic outlet for about $1,750, as long as they meet certain goals, such as posting an annual net profit of 20%. Supervisors can receive up to 13% of the net profits from the stores they oversee. "You've got to give them a piece of the action. That gives them their drive and their desire to hang in and do it well," Hartnett says.
Hartnett's largesse might not stand out in the high-tech industry, where competitive pressures have turned stock options into the standard burger-and-a-shake benefit. But "the fast-food industry has historically paid workers minimum wage and those in managerial roles not much more," notes Ann Dugan, director of the Small Business Development Center at the University of Pittsburgh. By contrast, Hartnett has "gone to the opposite extreme," she adds.
Hartnett also takes the hiring process to the extreme. An interview with him is grueling: sessions with prospective managers and their spouses--who he insists come along--can last up to 10 hours, spilling into lunch and dinner. Hartnett fires questions rapidly, asking for the kind of up-close-and-personal details that would make most lawyers cringe. "I ask them about the state of their marriage, how many kids they have, how they plan to finance their children's college education, whether they've ever filed for bankruptcy," Hartnett says.
Hartnett knows what he's after: those who fidget or fail to make eye contact lose points. Ditto for prospective managers with severe money problems. He's less interested in what candidates say than in how they say it; if they're uncomfortable with his prying at this stage, there can be little question about how they'll feel about calling him to make a late-night confession. "I want them to understand this is not a job to me. This is a lifetime of working together," Hartnett says. "I want partners who are going to die with me."
On a cool morning in March, Hartnett arrived unannounced at the Sonic in Quinlan, Tex. (population 1,360). It was 8:30, and manager Gilbert Alvarez was nowhere to be found. "Can you get Gilbert on the phone?" Hartnett instructed an employee. "Go ahead and wake him up." Minutes later a harried Alvarez arrived. Hartnett looked at his watch and then glared at Alvarez. "What is this? Banker hours?" Hartnett asked, apparently unaware that Alvarez was actually early. For the next 20 minutes, Hartnett and Alvarez toured the drive-in, with Hartnett providing a running commentary: "Are we going out of business or are we going to repaint those lamps?" he asked. "This tree here dies a little bit every year. Maybe we're going to have to take it down," he said. "What's Debbie making, $6.25 an hour? Well, maybe it's time you started thinking about a raise."
The meaning was clear: Alvarez would repaint the lamps, mind the trees, boost Debbie's paycheck, and do whatever else Hartnett had mentioned. Hartnett didn't have to raise his voice to strike fear in Alvarez's heart. Not that Alvarez is scared of Hartnett--anymore. "I used to feel a little shaky and nervous when Jack dropped in," Alvarez admits.
Hartnett rises from his desk several times a month to pop in on some of his stores. He wants to keep everybody slightly off balance so people will work even harder, lest they unleash his Texas-sized toughness. Once, during a dispute with a manager, Hartnett even hurled boxes of frozen hamburger meat against the wall in anger. "We went eyeball-to-eyeball, or in our case belly-to-belly," recalls supervisor Jim Simons. Do Hartnett's bidding, and he'll be "the nicest man in the whole world," as Hartnett himself puts it. But wrong him, he warns, and "I'll go after your jugular vein, and I'll get it. I'm very Old Testament."
So Old Testament is he, in fact, that he has his own version of the Ten Commandments--granted, there are only eight of them. Hartnett requires new hires to adhere to them. He will fire anyone who breaks the same commandment twice. Behind his guidelines lurks another of his harsh but simple principles: the best way to foster a company culture of openness, integrity, and honesty is to demand one. Unlike the original commandments, Hartnett's version--which includes "I don't steal from you" as the first commandment and "You don't steal from me" as the second--communicates a sense of impatience. Take the eighth commandment, for instance: "I will only tell you one time." Not that Hartnett is deaf to employee suggestions. The installation of larger grills and the computerization of company stores came at the initiative of managers and supervisors, who lobbied hard to sway him. Still he spins out the big ideas, which range from the addition of an ice-cream menu to the introduction of children's playgrounds and--in some spots--even volleyball courts.
Those with the impetuousness to implement their own ideas--without his blessing--suffer. In 1996 a Texas manager who took it upon himself to computerize his store and take Saturday nights off was passed over for a promotion to supervisor, even though he ran the most profitable store in the chain. "Jack wants you to do things exactly the way he tells you," says the manager, who eventually quit in frustration. As Hartnett sees it, the manager behaved in a way he simply couldn't abide: the guy wasn't a team player. "We have a success formula that works," Hartnett says.
That rationale also explains Hartnett's broader ability to see complicated management issues in black-and-white terms. Although Sonic operates in a competitive industry (see "Sonic's Boom," below), D.L. Rogers is merely a master franchisee, forking over an average of 3% of each store's monthly revenues to Sonic headquarters, in Oklahoma City. Hartnett owns as much as 15% of several Sonic drive-ins and also receives a salary and a 5% bonus that is based on net profits. It's not up to him alone to map out the issues of grand strategy--the pace of technology, the whims of the marketplace--that tend to leave most company builders convinced that their own brainpower can carry them only so far.
Hartnett stays focused on running the drive-ins, where he's sure he knows exactly what needs to be done. "We can teach you to make money if you do it the way we tell you to do it," he says. Remember, he'll tell you only one time.
Like most exemplary entrepreneurial leaders--Herb Kelleher, CEO of Southwest Airlines, for example, and Mary Kay Ash, founder of the cosmetics empire--Jack Hartnett isn't just running a company. He's filling a void. "The better business leaders understand that employees are coming to their jobs looking for a sense of community, family, spiritual fulfillment, and a place to develop themselves," observes Jay Conger, professor of management at the University of Southern California's Marshall School of Business.
Of course, that's also the same vacuum that most self-serving cult leaders aim to exploit. Not that Hartnett is leading his band of loyalists toward some intergalactic Eden. Still, some of his methods are scarily primitive, the kind that leave you thinking there must be a better way. Yet given the results he's getting, it's hard to make a compelling case for why Hartnett should be shopping for one.
Take, for instance, the crudely effective exercise he's devised to foster bonds among executives. Once each quarter Hartnett holds a "lock-in" meeting, whisking his supervisors off to an undisclosed locale for several days for a management conclave from which there is no escape. For the memorable 1996 Missouri lock-in, Hartnett had his supervisors awakened at their hotel at 3:30 a.m. He spirited all eight of them away in a van, blindfolding them and making them listen to music from Phantom of the Opera. "I would drive them through ditches to mess up their equilibrium," Hartnett says. At 5:30 a.m., he dropped them off in a national park, divided them into teams, and sent them on a three-hour scavenger hunt that ended with a sprint back to camp for extra points. Unbeknownst to Hartnett, one supervisor was afflicted with a heart condition and had to be dragged part of the way back. "I almost killed him," Hartnett says with a laugh.
The group slept in tents, nodding off to Hartnett's admonition that they all "stank" and could look forward to bathing in a nearby creek. Instead, the next morning he dispatched them to a beautiful lodge, where the grateful supervisors spent the next couple of days discussing budgets, future growth, and potential managers. "These things bring all of us together and build camaraderie and teamwork," supervisor Simons says. "If somebody has a problem, we're all willing to step in and help out. I don't think we'd do that if the only time we saw one another was across a boardroom table."
Of course, there are less traumatic ways to forge links. And Hartnett doesn't always go to such extremes--although he's the only one who knows what's in store. Two years ago Hartnett spent nearly $200,000 to take 254 managers, supervisors, and their families to Cancún, Mexico, for a four-day convention. Between volleyball matches, banquets, and lounging at the beach, they attended seminars on time management and marketing. One guest speaker addressed how to be a better spouse. "I got my money's worth and then some," Hartnett says. "People came away feeling totally appreciated and hyped. It was cool."
As if Hartnett didn't already assume enough roles in his employees' lives, he also acts as Minister of Fun. He'll pull such practical jokes as gluing a supervisor's shoes to the floor, an antic carried out at a store opening. "When you're a kid, it's easy to have fun," he reasons. "But when you get older, who's worried about you having fun? No one. But I am." He makes a similar vow about tough times. "I'm gonna be there when you mess up," he promises.
That kind of consistency is hard to find in anyone. It's even harder to dispense. Hartnett's operating style hinges on his ability to serve as the management equivalent of a 24-hour diner, always equipped to serve up just about any form of sustenance. "I know my dad sometimes wishes he could spend less time with work, but he doesn't want to let anybody down," notes Jason, his 20-year-old son.
In fact, Hartnett's impulse to do it all--"It's his deal," admits D.L. Rogers chairman Darrell Rogers--was fortified by his own experience of having to assume grown-up responsibilities at a young age. When his dad, a factory foreman, died at 60, he left his 26-year-old son with a long trail of debts. "I inherited my father's bills," Hartnett says. "I don't want my family to inherit mine." That's hardly a concern; he and Vicki own five cars, and they are building a 6,700-square-foot house on a 42-acre ranch south of Fort Worth. He's certainly banked away enough to take it easy on himself, at least indulging in a few restful days to repair a slipped disk or to heal burning blisters. But he can't do it. "I'm gonna be there for you," he says.
If that means logging two straight 100-hour weeks to get a new Sonic unit opened, as he did last March while training workers in Fayetteville, N.C., he'll make do with a paltry four hours of shut-eye. Or fewer. One night, a group of supervisors gave him a dose of his own medicine, waking him at 3:30 a.m. for a marathon poker session. "Come on, you guys," a bleary-eyed Hartnett pleaded. Though Hartnett didn't appreciate it at the time, their behavior showed just how much they consider him--a poor boy from Mexia, Tex.--to be one of them. But the late-night wakings also emphasize the appeal of a more decentralized brand of management; it's unsettling to see a business that revolves so much around one man's personality. D.L. Rogers would be in deep grease without him.
Simplifying so many lives, it turns out, makes for a complicated burden. Hartnett isn't working smart; he's working all the time. And workers at D.L. Rogers repay him in kind partly because, despite his nearly 35-year tenure in the fast-food business, he's not above choosing the grimiest of jobs out of a distinctly unglamorous lot. Hartnett's rock-steady presence confers a certain dignity on what employees do, even though it drains him. "Jack works off pure adrenaline sometimes," says his wife. "I've told him he needs to chill a bit." He's aware of the toll it takes, but suggests that he won't live a long life and accepts that it's beyond his control to change that. "I hope somebody in my family one day says, 'You know, we wouldn't be where we are today if it hadn't been for that sacrificial lamb of our family," Hartnett says.
Between now and then, for as long as he can, Hartnett vows to be there for his employees in any way possible: as a caring confidant, a stern taskmaster, a clear-eyed caretaker. He'll even cook for them. At a recent store opening, he whipped up a vat of taco salad from scratch for 20 workers at the end of a grueling 15-hour day. "Go on and help yourself," he urged, clad in gray sweats and a Big Dog T-shirt bearing the phrase "Leader of the Pack." "There's plenty more."
Marc Ballon is a staff writer at Inc.
What makes Jack Hartnett's recipe for managing people so pungent is the fact that he combines, in equal parts, ingredients from both the Stone Age and the New Age.
The blunt-talking president of D.L. Rogers doesn't shy away from making--and rigidly enforcing--his distinctive set of rules. But his penchant for hardened hierarchy doesn't preclude him from caring about his employees' personal lives (in his characteristic over-the-top fashion) or from demanding that they share in the ownership of the company's 54 franchises of Sonic drive-in eateries.
Here are some of the management principles that Hartnett has put to use at the high-frying company:
1. Show Them the Money. Hartnett believes the best way to motivate people is to give them what he covets most: cash, and lots of it. If money is what makes the world go round, it's also what keeps D.L. Rogers managers moving. "We're all money motivated," he says. "If someone tells you they're not, they've just committed one of the eight sins of this company." Those who have had to memorize his roster of commandments know that he is referring to the fourth commandment: You don't lie to me.
2. Share Their Secrets. Hartnett has built D.L. Rogers on a complicated web of relationships. The more he knows about his workers, the more he can help them stay focused at work and happy at home. No subject is too delicate for his ears. "There are no secrets here," he says.
3. Serve Them Thick Stakes. Most fast-food chains give managers and supervisors little more than an occasional free meal. At D.L. Rogers, executives have to buy equity stakes in the stores they run. "Some franchisees in Sonic say to me, 'Jack, I can't believe you sell 25% of your stores to your managers.' I think to myself, 'You greedy bastard. You'd do a helluva lot better if you did, too."
4. Put Butterflies in Their Stomachs. Hartnett rarely yells or screams at his managers or supervisors. He doesn't have to; as far as he's concerned, queasy does it. So frightened are they of provoking him that they go out of their way to please him. "If you're really nice and you occasionally get upset, you'll get their attention," he says.
5. Be a Commanding Presence. Hartnett doesn't hope people do what he wants; he tells them exactly what he expects and how to get there: "I want people to want to do what I want them to do."
6. Sweat the Small(est) Stuff. In Hartnett's world, to delegate is to shirk responsibility. He's the master of minutiae. He can converse as easily about hamburger buns as cash flow. Nothing escapes his attention. He'll even rummage through a trash bin to see what customers are not eating. "If they're throwing away fries, maybe we're not cooking them right," Hartnett says.
By now you'd think that drive-in restaurants would be in the same shape as that other icon of the 1950s, Elvis: occasionally sighted but hardly vibrant. But in a $36 -billion industry dominated by the Big Three (if you've got a television, you know their names), Sonic Corp. has steered its way through cutthroat competition to claim the title of America's fifth-largest hamburger chain . Last year Sonic--which comprises 1,769 company-owned or franchised drive-ins in 27 states--posted revenues of $1.1 billion with net profits of $19 million, up from $46 million and $941,000 in 1990. Over that same time span, the publicly traded company, which is based in Oklahoma City, also recorded aggregate same-store sales growth of 7%, the industry's highest.
What consumers seem to savor most about Sonic is its decidedly retro flavor. "With the exception of McDonald's, they have the best brand loyalty in the business," says restaurant analyst David Geraty.