Pat Walsh: I would break it down into two things. One is we were really focused on a new chapter of growth for the organization and so that was turning the page to a new outlook for us that we felt like needed to be matched by a really strong foundation of mission, vision and values that was gonna guide our path for what that growth was going to deliver on. The second piece, and really complementary to that is we had a pretty new leadership team. Our CEO had been here a few years, but really all of the rest of us had come in at some portion following that. And we had finally completed the leadership team with my, my hire and one other individual. And it was about, we needed a shared vision and a shared focus that we could really get behind as a leadership team that would allow us to really drive the culture and the results of the organization. So I think those two things are probably two sides of the same coin. But we knew that it was really time to lay that foundation for that next step for us as an organization.
So the growth of the organization that was a shift in where the organization is going, and then this new leadership team comes in, and we need to all be aligned, and so that refresh was prompted?
Pat Walsh: Yes, it was really that we made our decision to become a growth organization and properly had grown since 1977 had grown to over 400 units, but our aspirations had us and we say this in our public statements, we want to be a 2000 unit organization really across the company. And that's a different mindset and a more ambitious mindset that I think the brand had for some time. And so with that, I feel like we'll talk about this later, I'm sure about mission vision and values really is where everything starts. And we didn't have one that had been recrafted, or reshaped within the last really three to four years coming out of COVID was certainly challenging. It was challenging on the industry as a whole, of course on many industries, but food service and restaurants in particular. And so a lot of the company was focused on emerging from COVID, successfully and stronger. And then this was basically taking that step to our next phase of growth, which we were looking to achieve.
Felicia Shakiba: Great. So let's talk about the process.
What was that process that you used to engage the leadership team and defining these new statements?
Pat Walsh (03:30): First off, we had a really aligned leadership team that came in and said, we recognize there's a gap here and so when I think about any process like this, I think about it as a bit of a change management process, because you're starting at one point, and you got to look at the other point. So there are a lot of great change management models out there. I really liked the idea of a five step Harvard change management model that I've leaned on throughout my career. And one of the things that we started with is they talked about preparing the organization creating the case. And that was largely done for us, I think that was already there was already an underpinning that said we need a fresh focus and fresh start here.
And we decided as a leadership team, we're gonna get in a room, the old fashioned, hey, look, we have to work together to craft what this is gonna look like for the organization, but also integrate different perspectives from our teams and from veterans who've been with the organization for some time, as well as maybe folks who are newer to the organization and bring a set of diverse perspectives to how we were gonna approach that. So that was the first thing I did was really enlist some support of our leadership team, in particular, our CMO David Daniels. He and I really co-led this, I think he brought a really great perspective on the brand perspective and what was true to us. And I was focused on bringing what's our underpinning of our culture of listening to her that I did as a fairly new Chief People Officer, really feeling like I had a good pulse of some of the perspectives of what the organization was feeling.
And so you mentioned this five step process. What does that outline look like?
Pat Walsh: Yeah, absolutely. I think preparing the case for the organization understanding that crafting a vision for what you want to achieve would be step two, implementing what you want to achieve once you have that vision and that outline together, and then ultimately embedding the changes. So you've got a sustainable approach and sustainable foundation for the future. So that's the way we approached it. And I'm happy to elaborate a little bit on some of those steps, if that would be helpful.
We can maybe dig into what part of those steps allows you to identify the exercises that really helped surface those key themes and priorities and assuming that is where you might have started?
Pat Walsh (05:33): Yeah, absolutely. I think when we decided we needed to craft this vision and put this together, I was fortunate to have a really strong leadership team and a really well tightly knit leadership team. But like in any environment, you're going to have different perspectives, you have to be open to a healthy tension and an open dialogue. And so we were preparing for an onsite face to face leadership team meeting. We're fully remote based culture and organization. So we scheduled those sessions and they're really critical for us to make the most of that FaceTime together.
One of the things I was thinking about is how do we make sure we can make the best use of this time and get everyone's perspective out without taking three days to debate a few sentences of a mission, vision and values and one of the things we did is I actually had folks fill out information ahead of time, put their perspective down on a survey that I did.
And I was able to compile that information results and share that back with them as part of our prelude to the session. And I think what came out of that was, we immediately recognize that we all had really similar sentiments and aspirations for what we wanted to achieve, we may have had a slightly different way of talking about them, or wording it. But ultimately, we were aligned on the core principles and values of what we felt like that should be and I think that saved us a accelerated the process, if you will, because rather than have to start by just openly debating conceptual ideas, we really were able to coalesce around, hey, we have a lot of common here, it's really gonna be about refining it to the point that we feel great about taking this to the organization.
Felicia Shakiba: I love that you talk about healthy debate, because I think that sometimes in organizations it's hard to get there. So I have more questions, but I want to start with:
What does healthy debate look like?
Pat Walsh: Honestly, this is, in my mind, this is one of the most important roles that certainly any leader can play. But I think as HR leaders and as stewards of the culture of the organization, and as the people that are connected to the people of the organization. This is one of the key roles we play is to create an environment where you have a safe space for healthy debate and one of the things that we've done in this environment, right? We didn't have our first set of mission, vision and values yet, and a lot of us were newer as a leadership team. What we did was we simply talked openly about some ground rules and expectations for this exercise. And some of those things were essentially you have to check your ego at the door, we have to be ensure that we are elaborative, we're all focused on the same outcome. And we can't take anything personally around feedback, thoughts, perspectives. And so we agreed to that.
The other thing is, and I won't go through all the ground rules we talked about, but just being open minded, we had a lot in common, which helped establish that I think that survey that I talked about earlier, I think that helps get people on the same page and realize that, again, we might have slight differences in how we're thinking about this. But ultimately, we're shooting for the same goal. But I think in those sessions, I felt it was incumbent upon me to make sure that we were drawing out people's true feedback, but also sometimes interjecting and ensuring that we were staying true to those principles when things may have started to elevate a little bit. And so it was something I was very cognizant of throughout the process.
Logistically speaking, how long did this process take? Where did you go? Was it an off site who was invited to this meeting? What were the types of different exercise? Was it one exercise? Just trying to wrap my head around the logistics of the technique that you're using.
Pat Walsh: It was about three different face to face sessions with our senior leadership team. So there's eight of us, including our CEO, that our C suite executives, and we did that across several offsite live sessions, and a couple of virtual follow ups that involve some things, like I said, the survey that I mentioned in a couple of follow ups with recapping some of the work that we did. So that was really the group that shaped it in between there we were intentional about because that is that can be a bit of an insular group, you want to think about, hey, we're the most senior leaders of the organization. But we also want to make sure that we're connected to other inputs across the organization.
So we were intentional about ensuring that we each spent time within our teams getting feedback, socializing some of the concepts in between the sessions we were talking about, and getting some perspective to say, 'Here's what we're thinking, are we on the right track with this? Because I think anytime you're doing something like refresh or a new mission, vision and values, you got to think about this organization has a history. There are people that have been here for a long time that may be very attached to something about the history and in our case, they had a right to be proud of what Potbelly started as an antique shop that sold sandwiches in Chicago in 1977 and grew to 400 plus unit location. And a lot of folks have been here since the 90s, when it became more of the business, we know it as today.
And so you gonna think about if I'm going to chart a new course, I don't want to alienate folks that are passionate about the brand and that have contributed a lot to our success. But at the same time, we want to chart that new course and engage people going forward and so you're walking this line of, we want to feel fresh, but familiar. And so I think that was our key focus and I'm confident where we landed that we achieve that.
How did you achieve consensus among these differing yet similar perspectives? Because at the end of the day, we can't have three different mission statements, and vision statements and so forth. So when it came down to the decision, how did that work itself out?
Pat Walsh (10:45): It's funny, I wish I had very magical type of input on this, I think it really most of it came down to very old fashioned, we're gonna write it on the board, we're gonna write it out, we're gonna look at it, we're gonna discuss it, and we're literally gonna debate words. I mean, I remember standing up there and crossing out a word and writing a new word above it, right? We did that numerous times and as sometimes tedious as that could feel in the moment, you recognize that words matter, and word choices really matter and it's worth it to invest that time.
So I think a lot of the consensus was looking at it and literally discussing and debating a word or two here or there, and there were a couple of situations where it just in reality, the way organizations work, there were a couple of different perspectives that we're all hovering around the same outcome and a couple of times, our CEO, Bob said, 'I think that's where we're gonna go,' and I think we did a great job though overall as a team, and sometimes you need that person to make the decision and ultimately, we all landed in a place where everyone feels good about where we landed with the Potbelly way.
Felicia Shakiba: Okay, so you found the right words, you made a decision, you did the entire process, everybody feels good.
And now what do the new statements communicate about Potbelly culture and direction?
Pat Walsh: We're really excited about it. It's known as the Potbelly way. When we look at it, we didn't try to reinvent the wheel. The concepts that are here, I think are things that are really authentic to our organization. I think that's ultimately what's most important about any set of mission, vision and values. And so I also think back to when a video that probably many of us have seen with Simon Sinek back in a number of years back where he talked about the 'why, how, what'-what you do, and to me, I think about mission, vision and values really being that so to me, our 'why' is our vision, which is to be the most loved sandwich brand in every neighborhood. And the why of that is we're aspiring to inspire emotional connection with our consumers, right? We want people to love who we are and what we do. We want we talked about the category that we're in what we provide, we're a sandwich brand. Certainly we have other things on the menu, but at our core, that's what we do. And we want to be in every neighborhood, we think of ourselves as a neighborhood shop, we want to have that feel and we want to grow, right? We're not in every neighborhood today. But we want to be and we aspire to be. And so we think that conveys Hey, this is why we exist and what we're trying to accomplish.
Our mission is delight customers with great food and good vibes. That's what we do. That's what we aspire to do. Everyday great food and good vibes has been a part of Potbelly for a long time. And it's simple, we kept it because we didn't do away with that we kept that integral because that means a lot to people. It speaks to delighting people who come through our doors, serving them food that they love, and creating a positive good vibes environment.
And then the last couple of things, we've got eight values, those were all very intentional there. And that's about how we're going to achieve what we achieve. And so the values individually are again, very intuitive and things that I think felt like your typical person that we want to come and join popular you want a customer to experience are things that folks generally would all feel good about experiencing things like community belonging, teamwork, integrity, things that are not really debatable, but in combination are really powerful, particularly in the service industry. And the very last piece that I'll mention and this is outside mission, vision, values, but this is a part of where we felt like we had to incorporate this is we have something in Potbelly we call 'Sideway Service'.
And it's we put it in our statement in our visual as how we distinguish ourselves with one of a kind service from our brand. That is a legacy Potbelly thing, again feels like it has differentiated Potbelly over the years, it was passionate to a lot of people and the sideways is an acronym. I won't go through all the letters because it's a lot of letters for customer service approach. But there's a story behind it that if you work for Potbelly, you understand, and it's something that's unique to us. So we incorporated that in there as well, because we felt like it was really the heart of our customer service mantra. So I think what it ultimately back to your question, what it says about us is we exist to bring great food to our customers. And ultimately we have a really clear way that we're going to do that. That's going to help guide all of our decision making around what we do, how we operate, how we behave and what we do as an organization.
When we think about what we've created-mission, vision, values-that's only the starting point, right? And I know that the work that I've done with organizations, it's like how do you really allow the organization to live and breathe these values? And so what was your strategy or the steps that you took, to introduce the new framework internally?
Pat Walsh: Yeah, absolutely. So we wanted to communicate it really as one leadership team, and really clearly, as we were unveiling it.
Felicia Shakiba: I think that's so important, by the way, and making sure that everybody's on the same page. It's harder said than done. But yeah, that's a very key piece of that.
Pat Walsh (15:36): Absolutely no, and we were really excited. This was late last year, when we were probably in October, November timeframe. We had a town hall, which we do every quarter, after we release our earnings, we want to get our folks together and talk about the business and talk about what we're doing. And it was prominently featured in that town hall, which I think is powerful, because there are a lot of different communications, that venues that you can use that companies do use- town halls are common venues, particularly to talk about the business and earnings growth and business health. I think when you can dedicate a big portion of a company wide venue like that, where the CEO is a featured speaker, that conveys a lot about the importance of what you're communicating. And that was the case here, Bob Wright, our CEO was a champion of this the whole way through. And he communicated, it talked about what it means to him, his expectations and that was our launching point from there.
We've had, I would say, we're still in the process of embedding this in the organization, it takes time, but some of the things that we are hard at work on is integrated into our training materials.
We train a lot of folks through down through our shops to folks, we bring it in corporate, it's being integrated into our training and leadership materials as we speak for performance reviews. It was new this year, we didn't make it part of the rating, per se. But we did include it in the performance review document at the end of last year where managers and their direct reports were having discussions about the values about areas that where they showed up strongest, where they may could maybe show up a little bit more strongly. And we felt like that was a powerful step as well. The last piece we're working on is the recognition element.
I think I'm a big believer and recognition; what you reinforce and recognize is what you tell people is important, or what people see is important and the behaviors that you get. And so we are working on a recognition program company wide that builds on this and even on an individual team level. Actually I have a team town hall for my HR team tomorrow and we're going to be unveiling a values based recognition program for our HR team based on our Potbelly way values at our meeting tomorrow. So a lot of work in progress, but something that we're incredibly excited to continue to drive forward.
Felicia Shakiba: I love everything that you talked about, because I feel like a lot of times when you're creating these mission, vision, values, that is just the core, and then the behaviors. And the recognition that goes along with the performance and the manager training. I mean, those are big hitters on how to make this work and come alive and design and shape and adapt culture.
What have you seen so far that has made an impact? Obviously, it hasn't been very long, like you said, what are you seeing that's really showing up that you're getting good feedback on?
Pat Walsh: I think certainly it is new, and we're looking to continue to drive that forward. I will tell you a couple things that come to mind.
We made a decision that I think last year was in concert, as we were thinking about the kind of organization we wanted to be and what this mission, vision, values would define for us.
And I'll go a little bit detail here on we recognize that we needed to hear more from our employee base just on an ongoing basis, right? If we're going to live up to the values that we're saying are important here and being a great customer organization, we've got to be a great people organization that comes from listening to feedback and getting feedback. And so we actually went out and we sourced a vendor partner that would help us do that better. And we implemented a program that fits with that we did that earlier this year. And I bring this specific example up because I've got a couple of pieces of feedback here that I wrote down because they were meaningful to me in thinking about what we'd be talking about today. We have an ongoing a lot of companies do engagement surveys, right? Once a year, every other year or something like that.
What we have, which I'm really proud about and excited about is something that touches folks throughout their lifecycle with the organization during their onboarding phase multiple times.
While they're ongoing, they get a quarterly pulse check. And they actually what they leave the organization, they get an exit survey check. And we're able to really internalize all this information and they can also provide us qualitative feedback. And so one of the things we ask them on that among multiple things is are we living up to our values of the Potbelly way? And how or why not? We've already gotten over 1000 data points of feedback-we've about 5000 little over 5000 employees. So we've been active on this since February, we've got over 1000 data points. We learned about opportunity areas for sure around how we can be better measuring up to our standards. But you get some comments that I think help you recognize, we are doing a lot of great things and that we can continue to accentuate and if I could I'd love to read just a couple of quick comments that actually came through this. So I've got two here and this person I'll protect well, they're anonymous comments, so I won't be sharing any names but this individual says I've been with Potbelly for about three and a half years.
I started out as an associate, I am now a catering coordinator, I was given the opportunity to move up and for that I am grateful. You also get a raise once a year with a good review. I'm blessed with a great GM and great coworkers. I plan on staying with Potbelly for many years, I'm very happy with my job. You read something like that and you think when we talk about achievement, one of our values, we talked about teamwork. Those are things that hey, that's an example of living up to this. I have one other one community and belonging is an errand this actually one just came across this morning, my desk, which I was excited to see. And we asked if you would recommend Potbelly as a place to work, why? And this person said, great team leadership, great team support with my career, but especially in store, I have intellectual and developmental delay, and my team is very, very good at helping me and making sure I'm part of the team and always checking in if I can better myself in my job. And I think about if we can have that type of environment, which is consistent with our values and the Potbelly way that's just gonna serve us tremendously well for not only just being a great place to work, and a place where folks are welcome to come and be successful. But our customers are gonna have a great experience when we have folks in that mindset as well.
Felicia Shakiba (21:12): I agree completely.
That mindset and the way people feel about the business 100% translates into how the customers feel about the business and that community and belonging piece. I think a lot of people think obviously, this was super important. But for those who are skeptical, I would say maybe move back a few more seconds and really listen to what that just said, right? Because whoever that person is providing excellent customer experience on the other end, because that's what they're committed to doing because they're thankful.
Pat Walsh: Absolutely, yeah. And we're putting this information, this data, obviously, it's designed to protect anonymity, which we will always do but putting this in the hands of our other leaders too. So it's not just me, as an HR person who's looking at this or my team. And looking at this, we do see these things. But we're actually putting this in the hands of our operations leaders to say, 'What is your team saying on an ongoing basis? How is that? How are you doing? How are we doing as leaders creating great environments within our shops that live up to our values?' And so I think that's where we see this being a real difference maker for us. And I think to your back to your original question, which is this is gonna help us shape and amplify and accelerate how we are embedding those values and the overall mission, vision, values across the organization.
One of the questions I have in seeing where Potbelly is going, I know that you're looking at franchisees and I always think about franchisees and worry about culture. What role are franchisees playing in adopting this new cultural?
Pat Walsh (22:45): Yeah, it's a great question. It's a unique and interesting space to be in the franchising business. I think, is a great business model for a lot of reasons, but it presents some unique things, right? Because they're a franchisee is their own business and they can run things in many ways how they see fit, although we do have certainly brands standards and things that they have to adhere to.
I would back up and say I think the first thing is selecting franchisees to invest in your brand and business who are in alignment with you. And that comes back to I think, why it's so important to have a set of mission, vision, values that are not just window dressing, because we recruit for franchisees we meet with franchisees that they're making a decision to invest in us.
But we're also making a decision whether we want, whether we feel they're a good fit, to come and be a part of who we are and grow their business with us. And so even in the selection process, we talk about this, we talked to them about it the candidates when they come in to present their business plans and through the recruiting process, and then we assess are they a good fit for who we are as an organization as defined by our mission, vision and values? And so I think it starts there, right? You want folks that align with you?
Well, the second piece is we shared this openly with franchisees we had our first franchise forum and several years recently within the past six months.
And we invited our franchisees in to learn row, many companies, many brands do this over a couple days we did our first one. And we talked about it there we had time on the main stage we said look, obviously you have your own, you're responsible for your culture, you're responsible for the environment you create for your employees in your shop. This is what's important to us as Potbelly is a brand. We're asking you to make this your own right? You might have your own slight spin on it, you might emphasize certain things. But this is what we expect. And this is what our customers expect. And so we have communicated, we've been upfront about it. And I think, again, new process, but we're looking forward to that.
The last thing I'll say at that same franchise forum, we do, I go back to recognition again, we recognize franchisees for their performance, there's a lot of sales performance and other customer satisfaction performance.
And we have some people recognition as well. Now, it hadn't been in place enough to do recognition for franchisees based on people elements tied to the Potbelly way, but in the future, that's something we'll be looking at because we want to get reinforced those franchisees that we feel really drive the Potbelly way spirit.
Felicia Shakiba: I think that's a fantastic idea.
My Last question is really more of something long term because we talked about the short term benefits so far, but what benefits do you hope to realize from having a clear cultural foundation in the future?
Pat Walsh: I think about our business strategy, and it's built on what Bob our CEO will talk about as a five-pillar strategy. And he will unabashedly say which I agree with our strategy, it's going to tweak and adjust, but the pillars of what we believe, uphold that strategy, they're going to be consistent, because we know those are the things that work, I view this in the similar way. It's like, could we tweak and adjust things as we grow as an organization? I think you always have to be open-minded to that, at the same time, there are a lot of core elements that really should be consistent, and that we should stand behind. Because if you change these things, I think on a whim, you run the risk of losing your way a little bit, or making it feel more trivial than it is.
And so for me, I look at this as a three to five year like we're continuing to build based on this. And I think ultimately, what my vision would be is we make all of our decisions through the lens, or we run it through the lens of this Potbelly way. And I also think, at a people level, it will help us I think it already is and will help us attract and retain just great people who are excited to be a part of an organization that operates in the way that we stay, and that are excited to be a part of the growth here. So I think if we do that, we're going to continue to win, and we're going to do it in a way that we all feel good about.
Felicia Shakiba: Well, Pat, this has been such a wonderful process to learn about from you, and I'm definitely hungry for Potbelly right now! It's lunchtime, and I'm just thinking, I'm like, I wish you guys were already in California, but let me know when the first shop goes up because I will be your first customer. Thank you so much for sharing, and thanks for being here.
Pat Walsh: Thank you so much for having me. It was a real pleasure.
Felicia Shakiba: That's Pat Walsh. Chief People Officer at Potbelly Sandwich Works.
