Extreme Managing

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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.

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