Lessons From a Blue-Collar Millionaire

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Michael Edwards

Community Organizer Sarillo is obsessed with treating his customers well. And they return the love: Three waitresses have received $1,000 tips.

All of this has an ancillary benefit for the business. "It reminds our team members how incredibly different we are from any other place they know," says Adams.

2. Hire only A+ players

Forty-one percent of the company's 182 employees are ages 16 to 18, almost all of them still in high school. The others include a large number of mothers, college students, and people whose main job is somewhere else. Such employees do not typically make for a stable work force. Yet people who work at Nick's seem to find the culture irresistible. "When I come here, I really don't feel like I'm coming to work," says server Aubrey Judson, 25. "My boyfriend doesn't understand it. I just like to be here." She works only on weekends, she adds, as she has a full-time job at an online advertising agency during the week.

Her job as a server was very likely the more difficult of the two to land. Just one of every 12 applicants to Nick's gets hired. "I was really surprised by the process," she says. "You get interviewed twice, and you take a personality test."

The explicit goal of the process is to hire only the best of the best -- A+ players, in the language of the company. People who inquire about a job receive a handout detailing the company's purpose and values. They are advised not to waste their time applying unless, after perusing the sheet, they think Nick's sounds like a place they would like to work. If they decide to move forward, they first have a talk with a manager. Nearly all of them are then invited to an interview. Twenty percent of those are invited to a second interview. Two managers are in each interview, and one sits in on both. In other words, candidates need four yes votes from three managers to receive an offer. Those who aren't selected get a thank-you note and a voucher for a free pizza.

Along the way, the applicants are scrutinized and tested. There is a lot of role playing, not to mention the occasional off-the-wall question. "They asked me, 'What are you doing to improve yourself physically, mentally, or spiritually?' " says Scott Jewitt, who had been a manager at Bennigan's, Lone Star Steakhouse, Boston Market, Panera Bread, and CiCi's Pizza before joining Nick's in the fall of 2008 and now is an operating partner. "I was speechless for a moment. It was so different from any interview experience I'd been through. And I'm not an amateur." Ninety-six percent of those hired stay at least a year.

3. Learn, grow, compensate

Getting hired at Nick's is a ticket -- not just to a job, but to the company's training program, which is elaborate, rigorous, and ongoing. It begins with a two-day orientation, which includes more role playing and discussion of the company's purpose, values, and culture. That's followed by 101, a four-hour stint in the kitchen, where everybody goes through a basic pizza-making course. The new hires then separate into work groups and move on to 201, in which they are trained and certified in specific jobs. A pizza maker, for example, may take two to four weeks to reach the level of proficiency required for certification, after which she can make pizzas on her own. When she gets certified in two other jobs -- say, salads and sandwiches -- her wage goes from $8.25 to $9 per hour. After certification in six positions, it increases to $9.50 an hour, and she gets a red hat. (Up to then, she has been wearing a tan hat.) Certification in nine positions earns her a black hat and a raise to $11 an hour.

It's her choice, however, whether she goes for any certifications beyond 201. She can stay at one certification as long as she likes. Then again, she might want to go on to 301 and become a trainer, which offers a variety of benefits, including eligibility for profit sharing and preference in scheduling. To qualify, she must achieve mastery in her certifications -- that is, a top rating on a one-to-five scale -- and read the book Mastery: The Keys to Success and Long-Term Fulfillment, by George Leonard. She then takes a three-day course on communication and leadership. At the end of the course, she receives a Leadership 301 Passport with a checklist of 30 specific behaviors she is required to model or recognize someone else modeling. She has five weeks to complete the passport, which involves observing and describing two such incidents for each behavior and getting a member of the leadership team to sign off on it. Finally, she takes a train-the-trainer course. On completion, she becomes a trainer.

4. Systems are for building trust

This is not the sort of training curriculum you expect to find in a company doing just over $7 million a year in sales. Then again, the same could be said about all of Nick's systems -- from hiring to inventory management to the handling of workplace conflict. Pretty much everything that happens in the business has been thought through, defined, and taught, right down to the best method for greeting a customer.

Take the process of opening and closing the kitchen. In a typical restaurant, a supervisor is responsible for both, has a long checklist of things to be done, and tells everyone what to do. At Nick's, by contrast, the whole kitchen crew is responsible. To help people keep track of what needs to happen, there is a laminated "ops card" for each task involved. Each ops card is red at the top and green at the bottom and has its own slot in a converted timecard holder. In the morning, when staff members come in, the ops cards are in the slots with the red end showing. Whenever a task is completed, someone turns over the corresponding ops card so the green end is showing. By closing time, all the cards are showing green. It's then the manager's job to make sure they are all red again before people arrive the next morning.

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Bo Burlingham: Burlingham joined Inc. in 1983. An editor at large, he is the author of Small Giants: Companies That Choose to Be Great Instead of Big. The book was a finalist for the Financial Times/Goldman Sachs Business Book of the Year Award in 2006. Burlingham is also the co-author with Norm Brodsky of The Knack; and the co-author with Jack Stack of The Great Game of Business and A Stake in the Outcome. @boburlingham