Courtesy Red Lobster

Dan Morrell: Kim Lopdrup (MBA 1984) is a turnaround expert. Early in his career, he helped revive Dunkin Donuts’ American coffee business and then turned his attention to the company’s international business, bringing it back to profitability in 100 days. His next stop was Burger King, where he helped relaunch the brand and turnaround same store sales.

Lopdrup first joined Red Lobster as president in 2004, and led a company that was facing slowing sales and store closures to its seven most-profitable years to date. He returned to Red Lobster as CEO in 2014, and in this episode of Skydeck, I talk to him about the challenges and opportunities he saw, how to lead during times of change, and why social responsibility is so important to both him and the business.

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DM: Red Lobster: Big, iconic brand. Well-known, right. How do you change people's vision of what that is?

KL: So that is a really terrific question, because our brand is 51 years old and there are a fair number of people who may not have been to one in the past 20 years and their image is what it was 20 years ago.

What we've tried to do is work on is following a phased plan. And there are three phases to the plan. Phase one was fixing the fundamentals of the business, which are making sure you're operating well, making sure you got high-quality food and system. Like in our case for Red Lobster, it was getting high quality ingredients—the bigger, better shrimp. Replace the outdated kitchen with the awful equipment and put in the very best cooking equipment. Those are fundamentals. They are not visible to the consumer. But if you don't fix these things, it's like building a house without a sound foundation. Once you are doing those things and operating well, then you can start making the changes that are visible to consumers. You know, now you can start rolling out a new menu. Now you can start rolling out a new value menu. Now you can start rolling out takeout programs or delivery programs, because now you're building on a sound foundation. But even when you do those things, the truth is, most of the people driving by your restaurant still don't know you've done those things because they're focused on other things, your restaurant still looks the same. Then what we find is when you finally remodel to a new image and people say, oh that changed, wow, that building looks so much better. Now they're willing to try it, but even when people do try, you only get one chance to knock their socks off. Right. And that's why it's important to do it in that order: Make sure you're operating well so that you can implement the changes, then you make the big remodel change and become visibly different. And we're actually right at the point of making that transition where we've gotten the new initiatives in place and are beginning to remodel and open new units again.

DM: You've led so many of these organizations during times of transition. What has it taught you about leading during times of change?

KL: Well, the number one thing is building and maintaining trust. And then really analyzing what's really going on, not what you would like, wish was going on. What is really happening. And you have to be extremely open and solicit feedback from the employees closest to the action. I have lunch—one on one lunches—with employees at all levels of the company to really hear. I do that all the time. But that lets you hear the stuff you can't hear in the large meetings. You know that people won't say if their boss is in the room or things like that. So you get more accurate information if you're talking to the frontline employees constantly and if you're in the restaurants constantly. Then that lets you figure out, OK, what do I need to do? And you have to be not wed to things that have been done in the past. And what I try to do is really focus on the things that need to change. I'm willing to delegate letting the trains run on time and the normal stuff that that's going well, I focus my time on the stuff that's not going well.

And fortunately I'm pretty good at coming up with solutions in complex situations, but I but I try to seek out others points of view rather than jam my own. And I typically won't come in like a field marshal and say, do this, do that, do that, you know, get it all done by the end ... I actually will initially state hypotheses. Well, it seems to me based on this, that we ought to be doing that, what do you think? And find out what the objections are. And I'd say 95 percent of the time when I do that, I find legitimate objections, but they are objections in how to do it, not whether to do it. And once you solve the how, then it becomes quite easy to persuade the organization [about] what needs to be done. But at the end of the day, with all change, the number one thing is building and maintaining trust with the organization. And, you know, I've found it's important to be transparent about what's working and what's not working, where we need to get better. And then the plan for doing it. Difficult situations can actually be a blessing in disguise because they are when you have the opportunity to make changes that frankly, would have been unpopular unless there was a need to make those changes.

DM: You've mentioned in interviews that there are these core principles that guide the company —quality, value, convenience, growth and social responsibility. I want to talk about the importance of social responsibility. The company Red Lobster recently announced a partnership with the Monterey Bay Aquarium Seafood Watch program, and this is to help ensure it hits its mark in sustainable and responsible sourcing efforts. You personally are in the midst of developing a task force in central Florida to combat the opioid epidemic. Talk about why social responsibility is important to Red Lobster, the business, and why it's important to you personally.

KL: First of all, from the from the business perspective, again, our vision is to be where the world goes for seafood now and for generations. To be true, we have to take great care of the oceans and in fact, so we have to do the right thing. We also need to convince others to do the right thing. We have joined the Monterey Bay Seafood Watch program. We've actually partnering with Worldwide Wildlife Fund on fishery improvement projects.

We've had we've actually had NGOs audit our supply chain which was which was pretty interesting. We also need to actually work with those organizations. It is very much in our interest. Indeed, it's the right thing to do. Clearly, it's also in or interests, too. In fact, it's mission critical to promote sustainability. Otherwise, how would we be around 50 years from now? It is mission critical for us.

It is also very important to our employees. You know, the interesting thing -about the hospitality industry, it tends to attract people who actually have pretty strong values, pretty strong caring about others. And that's actually the number one predictor of who's successful in the hospitality industry is do they genuinely care about other people? Well, those folks are not going to be part of an organization that does not have good values. And, you know, we try to build in corporate values that just briefly they’re respect, integrity, genuine caring, hospitality, teamwork, excellence and fun are our values.

But back on the personal level. I believe we're here for a purpose and that we should try to make a positive difference in what we do. I read the book “Purpose Driven Life” many years ago, and that was extremely helpful to me personally.

And that frankly drives a lot of what I do. And actually what I concluded my purpose was from that book is this was this was you may you may be too young for this, but there was there was a time when we had a bunch of a number of companies like Enron and WorldCom and HealthSouth and having all these corporate scandals. And I actually was part of a program sponsored by Don Soderquist, who was Sam Walton's righthand man through the Soderquist Leadership Program to actually study those scandals and what went wrong. We got to talk to people were part of those and were affected by them and then learned what do you do to prevent those? So that that also fed into this. But I concluded my purpose is to create a company with a workplace that truly has a positive impact on its employees. That requires, by the way, we be successful as a business for sure, is a big part of that. It requires we develop people, which is a win for them and a win for the company. Sometimes it does require hard decisions for the greater good. No question about that. But fundamentally, that reading that book, you know, my own Christian faith, I believe we have an obligation to make the world a better place and have a positive impact on others, and leave things better than we found them.

Skydeck is produced by the External Relations department at Harvard Business School and edited by Craig McDonald. It is available at iTunes or wherever you get your favorite podcasts. For more information or to find archived episodes, visit alumni.hbs.edu/skydeck.

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