On Feb. 15, Paul Hollands will officially assume the reins as chief executive of A&W Food Services of Canada. Chances are he'll be staying a while.
Hollands and A&W go together like - well - a Teen Burger and root beer. Both the man and the company boast a history of longevity.
The 48-year-old Hollands, who is succeeding Jeff Mooney, is in his 25th year with A&W and one of four owners of the private company. A&W of Canada is only slightly older than Hollands, having opened its first burger joint in Winnipeg 49 years ago. In that time the company has had only three CEOs.
Holland emphasizes that the hamburger chain's traditional staples such as the Teen Burger and root beer aren't going anywhere for a long while. And you can probably say the same thing about the incoming CEO.
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| Bayne Stanley, Business Edge |
| Paul Hollands, the soon-to-be CEO of A&W, is proud to be only the third top executive in the company's 49 years. |
1. What career did you aspire to as a youngster?
"I wanted to be in business. I had a grandfather who was a merchant and that always interested me. I was particularly interested in retailing. That's what I loved."
2. Do you remember your first day on the job with A&W as an assistant marketing manager 25 years ago?
"Absolutely. Actually, the first thing you did in those days was work in a restaurant. That was the orientation program. The first restaurant was an old drive-in restaurant in East Hastings (Vancouver)."
3. At that time, did you see yourself climbing the corporate ladder to senior management?
"I joined the company because it was a real interesting company and there was an opportunity to do really good work and interesting things. I don't think I ever joined with the intention of being president. I joined to make a difference in what's going on here."
4. How do you explain your longevity?
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| Bayne Stanley, Business Edge |
| Hollands promises aggressive moves in menu and facilities in coming years. |
"That's the culture of the company. If you look at the senior management team, we have an average of 15 years with the company. There are a lot of long-service people and that's what this place is about. One of the things that is unique about A&W is our 'climate goal' process. We have a very well-established set of climate goals that really talk about the way we want to work with each other. That makes A&W a really unique place, a fun place to work."
5. What does your recent appointment to CEO mean to you?
"In its lifetime, almost 50 years in Canada, A&W has only had three CEOs. That's certainly a rarity in an age where the lifespan of a CEO is about three years. This is an organization that has been blessed with incredible leadership and consistency of leadership in its history. For me personally, I feel a great sense of responsibility and obligation to all the people in the company, and it's an honour following (Mooney), who is a fantastic leader. It's a very exciting time in the company's life. We've got fantastic momentum going and such a bright future in front of us."
6. What's the transition going to be like for you, taking charge of the company?
"I've been here so long that I think it's going to go very smoothly, primarily because of the leadership of Jeff. We've really worked hard for almost three or four years to manage this transition effectively. Obviously, having the CEO and CFO (Axel Rehkatsch) retire concurrently has the potential to be very disruptive to an organization, but we've planned this really carefully so that this transition goes brilliantly in terms of the business. Transition is something that a lot of organizations have difficulty with, so we decided that we would make this one very successful."
7. What have you learned from Jeff Mooney?
"I've learned about strategy, climate, trust, integrity and honesty. Plus incredible caring."
8. How are your philosophies and goals in operating the company different from Mooney's?
"Two things set this business apart. One is climate. The second one is our absolute bone-deep commitment to managing the business strategically. We've followed the same strategic renewal process for the business now for almost 30 years. That strategy process really engages the whole senior management team and, in many cases, beyond that in developing the strategic direction for the business. So, when you look at the success that A&W has enjoyed, there's no one author of that success, as we've engaged a lot of people. And that process will continue. So, in terms of the future, the business will change, reflecting different conditions and opportunities, but it will all be driven by that same strategy-making process we've followed for so long."
9. What are your key priorities as CEO?
"Our mission is to be the No. 1 choice of the baby-boomer generation, and that's provoking us to make a lot of changes in our business - whether it's remodelling our restaurants, an active level of menu innovation or a rapid level of new restaurant growth. Those are the key initiatives that we've been working on for four or five years and we'll continue to work on those. We're looking at strategic growth in the coming year, mainly in Ontario and Quebec."
10. What do you think you need to learn to become a better leader?
"You never know what's going to be right around the corner, and what you've really got to be good at is responding to changes in the world around you and responding quickly. That's one of the things that I'll look forward to working on."
11. What percentage of your customers are baby boomers?
"Forty-eight per cent of the customers in our restaurants are baby boomers. The baby boomers were born between 1947 and 1966, there are about 9.5 million of them in Canada and they represent about 30 per cent of the Canadian population. The cool thing about the boomers is that they grew up with us in the drive-ins. If you're a boomer, there's a better-than-average chance that you hung out in the drive-in with your pals, cruising the 'Dubs in the '50s, '60s and '70s. What's increasingly happening is that most of the boomers don't have little kids in their families anymore. But they're still very active and energetic. They're still high consumers of hamburger fast food. And they're turning to us."
12. Do you foresee a shift in the market in the future, perhaps to younger customers?
"A&W has always been an adult-oriented restaurant. It's primarily because the taste and flavour of our food is much more adult-focused, with sharper tastes and stronger flavours. We will always be an adult-focused restaurant chain.
"Having said that, the median age now of the boomers is 43, so we've got a long run in front of us. However, we're also clearly focused on what the strategic implications would be if the boomers get to a stage where they aren't as important a target group for us and how we would make sure we remain relevant to a broad range of customers over the long-term life of the business. It's one of the issues that we're looking at and actively managing now."
13. How often do you eat at A&W?
"Twice a week . . . at least twice a week."
14. Why hasn't A&W followed McDonald's Restaurants in providing healthier menu alternatives in recent years?
"Over the last 15 years, we have consistently worked on items to try and reflect the changing eating habits of Canadians. The bottom line is that those eating habits, at least in food service, are changing very slowly. The primary reason people come to us is for best-tasting hamburgers, for onion rings and for root beer. Certainly, we need to offer consumers who want alternate choices those kinds of choices. For example, we were the first Canadian hamburger chain to offer an all-white-meat grilled chicken sandwich that we launched over 15 years ago. We introduced salads to our restaurants around 1990. We've consistently offered those items for consumers who want them, but the primary reason they come to us is for hamburgers, root beer and onion rings. The primary driver is the taste and flavour of our food."
15. Are there plans to make menu changes to accommodate a more health-conscious society?
"It's really simple. We're really clear. We'll sell whatever our consumer wants. This is not something where we need to take a philosophical position. If customers want veggie burgers, we'll sell veggie burgers. When the low-carb issue or craze was on, we experimented heavily with a low-carb offering and, in the end, it (low-carb trend) didn't turn out to be something that stuck. As a restaurant chain, we'll offer just what the customers want. We see consumers taking a much more balanced approach to their overall eating. They may eat bran and fruit in the morning, they may have a hamburger at lunch and they may have pasta for dinner. That's one of the trends that we've observed. So they still indulge themselves, but balance it out across their whole day. People's consumption habits are changing, but not as fast as anyone would think."
16. I caught a glimpse of an A&W commercial where a couple takes a nostalgic trip to A&W where they're served drive-in style. Does that mean that the drive-ins are coming back?
"No, there are no drive-ins coming back. The thing about A&W is that people come to us for the taste of the food and we save them time. The other thing that we have is this rich emotional connection that goes back to the drive-in days. Our consumers talk about it (drive-in days) and they love us for it. So what we're trying to do in that spot is remind boomers in kind of a fun, playful way that, even though we don't still have a drive-in service, A&W is as relevant to you today as it was 20 or 30 years ago. It's remarkable the positive feedback we've gotten from doing that. The problem with drive-ins in Canada is that you've got a country with nine months of winter and three months of bad sledding. The drive-in just isn't that good in winter that people will sit there with a tray hanging off their window. So the bottom line is that I don't think the drive-in will be back anytime soon."
17. What does A&W need to do to gain market share from McDonald's?
"We have a very aggressive strategy. I can't tell you about any of that stuff yet, but over the next few years you'll continue to see very aggressive moves in terms of changes to our menu, changes to our advertising and upgrading of facilities."
18. What's your vision for A&W for 2010?
"I don't know if I can look out to 2010, but our medium-term objective is to have more than 800 restaurants in the chain (it's now about 650) and ultimately we believe we'll have more than 1,000 restaurants in Canada.
We have a neat sponsorship program now called 'cruise nights,' where we connect with local classic car clubs in communities. We've got lots of ideas of things we can pursue along the same vein."
19. If another restaurant chain tried to woo you to their company, would you consider it?
"I've had lots of offers in my 25 years here and I'm still here, so if the best predictor of future behaviour is past behaviour, you can draw the conclusion from that. I wouldn't do anything else. Bottom line, I love this business. I don't think I'd work anywhere else. And I have lots and lots of miles on the odometer yet, and I could be here a long while."
20. How do you reflect on your career with A&W?
"Frankly, I just think about all the fun we've had in creating a great Canadian business that competes against these big U.S. giants and is very successful. So there's an enormous source of pride in terms of what a group of Canadians, franchisees, employees and so on can do to build a really vibrant and highly competitive Canadian business that is growing and prospering."
IN PROFILE: PAUL HOLLANDS
* Title: President/chief operating officer/part owner, A&W Food Services of Canada.
* Promotion: Effective Feb. 15, Hollands succeeds Jeff Mooney as CEO.
* Born/Raised/Age: Cornerbrook, Nfld./Duncan, B.C./48.
* Family: Wife Maria, one son.
* Education: University of British Columbia, bachelor of commerce degree.
* Career: Hollands joined A&W 25 years ago in the marketing department. He was promoted to executive vice-president and chief operating officer in 1995 and president in 2002. Prior to joining A&W, he spent one year as a merchandising manager with Shopper's Drug Mart. He is a past chairman of the Canadian Restaurant and Foodservices Association.
* Moonlight: Hollands is on the board of the St. Paul's Hospital Foundation in Vancouver and on the faculty advisory board for the Sauder School of Business.
* Accolades: Hollands has been recognized as one of Canada's 'Top 40 Under 40' business leaders.
* Passions: Running, cycling, swimming.
THE COMPANY: A&W FOOD SERVICES OF CANADA
* Profile: A&W is a quick-service restaurant chain with 651 restaurants in Canada. The private company also owns 31 per cent of the A&W Revenue Royalties Income Fund (TSX:AW.UN), an income trust that pays distributions to unitholders based on sales at 638 restaurants in the royalty pool.
* History: The first Canadian A&W opened in 1956 on Portage Avenue in Winnipeg. The first A&W restaurant was opened in Lodi, Calif., in 1919.
* Website: www.aw.ca
* HQ: #300, 171 West Esplanade, North Vancouver, B.C., V7M 3K9.
* Phone/Fax: (604) 988-2141/ (604) 988-0553.
(Gyle Konotopetz can be reached at gyle@businessedge.ca)
