CHRO Conversations: Scott Weisberg - Wendy's

Summary

In this insightful conversation, Scott Weisberg, Chief People Officer at Wendy's, discusses the multifaceted role of a CHRO in driving business success. Weisberg highlights the importance of influencing enterprise-wide decisions, managing human resources across a global franchise network, and addressing strategic challenges like rising labor costs and technological shifts. He also emphasizes the value of hiring for potential and fostering an adaptive, motivated workforce. Weisberg's approach to talent management focuses on leadership development and collaborative problem-solving, providing valuable lessons for HR professionals and aspiring leaders.

Takeaways

• 💼 The CHRO plays multiple roles: senior leadership team member, function leader, manager, advisor to the CEO, and confidant to the board.
• 🍔 Wendy's faces strategic challenges, including rising commodity and labor costs, increased competition, and the need for restaurant image updates and technology investments.
• 🛠 HR plays a crucial role in redesigning work systems, improving staff development, and incorporating automation to reduce costs and enhance the employee experience.
• 🔄 Wendy's is addressing high turnover (168%) by making jobs more desirable and improving work systems and management models.
• 🧑‍🤝‍🧑 Hiring for potential is key at Wendy's: they focus on hiring based on capability, then training for specific skills, especially for customer service roles.
• 🎯 Scott Weisberg's 'smart, mature, motivated, and courageous' criteria are key for assessing potential hires, particularly for leadership roles.
• 🤝 The relationship between Wendy's corporate HR and franchisees focuses on enabling them with systems, tools, and best practices rather than direct control, fostering a collaborative learning environment.
• 📈 Franchisees are eager for solutions that drive better outcomes, and good ideas tend to gain traction organically within the franchise network.
• 🎓 Motivating HR talent at Wendy’s stems from the opportunity to make a large-scale impact, such as developing training that benefits 200,000 employees.
• 💡 Weisberg emphasizes the importance of listening and adapting when ideas face resistance, as strong solutions typically gain support without needing to be forced.

Q & A

What is the primary role of a CHRO in the executive leadership team?

A CHRO's primary role is to be part of the senior leadership team, making enterprise-wide decisions. While they lead HR, they also weigh in on broader business strategy and decisions from multiple angles.

What unique challenges does the CHRO face in a company like Wendy's?

The CHRO at Wendy's has to navigate the complexities of managing human resources for both the corporate team and 400 franchisees, which own 95% of the restaurants. They must ensure strategies align with franchisees' needs while also addressing company-wide HR initiatives.

How does the CHRO balance decision-making between corporate leadership and supporting franchisees?

The CHRO's role involves creating an agenda that aligns with the company's business strategy while also supporting franchisees. This includes providing tools, systems, and processes that can help franchisees improve their HR practices and operational efficiency.

What are some strategic obstacles Wendy’s is currently facing?

Wendy’s is facing inflation in commodity and labor costs, increasing pressure on franchisees’ margins. Additionally, there is a need for investment in restaurant upgrades and technology to improve customer experiences, such as mobile and kiosk ordering.

How is HR involved in technological changes and automation at Wendy's?

HR plays an architectural role, helping modify work systems and introducing automation where necessary to enhance the employee experience, reduce costs, and increase efficiency. HR assists in change management to ensure smooth transitions with new technologies.

What hiring philosophy does Scott Weisberg emphasize at Wendy's?

Weisberg believes in hiring for potential and capability rather than specific skills. He looks for qualities like being smart, mature, motivated, and courageous, which he feels are essential for success and future leadership.

What does Weisberg mean by 'smart' when hiring for potential?

Weisberg defines 'smart' not just as book knowledge but as incisiveness—being able to anticipate the right issue and having good instincts to address problems proactively.

How does the CHRO at Wendy's influence without direct authority over franchisees?

The CHRO focuses on providing solutions, tools, and systems that franchisees find valuable. Instead of pushing ideas, the CHRO listens to franchisee feedback and adjusts approaches to meet their needs, allowing effective ideas to naturally take off.

What is one of the biggest challenges in HR for the quick-service restaurant (QSR) industry, according to Weisberg?

One of the biggest challenges in the QSR industry is high employee turnover, which can exceed 160%. Addressing this requires making jobs more desirable, improving work systems, and focusing on employee development to reduce turnover.

How does Wendy's HR department support the development of franchisee HR teams?

Wendy’s HR department provides franchisees with systems, processes, and tools to improve their HR outcomes. It also fosters a learning environment where franchisees can exchange ideas and best practices to elevate their human capital capabilities.

Outlines

00:00

🎤 Introduction with Scott Weisberg, Chief People Officer at Wendy’s

Anthony Nyberg introduces Scott Weisberg, Chief People Officer at Wendy’s, discussing his role and the complexities of being a CHRO in a global company. Scott explains the unique responsibilities of a CHRO as part of the executive leadership team, highlighting the need to contribute to enterprise-wide decisions while maintaining a focus on HR leadership. His role encompasses making strategic decisions for Wendy’s, a $10 billion brand with over 6,500 restaurants globally, and balancing the needs of both company and franchise operations.

05:00

📉 Strategic Challenges for Wendy’s Amid Rising Costs

Weisberg outlines the strategic obstacles Wendy’s is facing, particularly the rising commodity and labor costs. He emphasizes the inflation in both food input costs and labor wages, driven by competition and municipal mandates, which puts pressure on franchisee margins. Weisberg also addresses the economic challenges of providing affordable meals while managing operational costs, and the need for investments in technology, image updates, and customer experience enhancements to stay competitive in the quick-service restaurant industry.

10:03

🔧 Improving Operations through Work Systems and Technology

Scott elaborates on Wendy’s efforts to improve work systems and operational efficiency. He highlights the company's changes in management staffing models and the integration of technology such as mobile and kiosk ordering to streamline restaurant operations. These efforts aim to enhance employee experiences, reduce costs, and tackle the high employee turnover rate, which hovers at 168%. By automating certain tasks, employees can focus on enhancing the customer experience, while HR continues to redesign roles to attract and retain talent in an increasingly competitive labor market.

15:04

🧠 Hiring for Potential and Building a Strong Talent Pipeline

Weisberg explains his philosophy of hiring for potential rather than specific skills. He believes in identifying individuals with raw talent, energy, and capability, who can be trained for skills required on the job. For leadership roles, he emphasizes hiring individuals who exhibit four key traits: being smart (with good instincts), mature (open to feedback and learning from mistakes), motivated (driven to succeed), and courageous (willing to address difficult issues). This approach fosters long-term talent development and prepares employees for future growth within the organization.

🌍 Franchisee Relations and Influencing without Authority

Scott describes the unique challenges of working with independent franchisees, who make their own HR and operational decisions. The role of Wendy’s corporate HR is to provide tools, systems, and processes that support franchisees in improving organizational outcomes. Weisberg notes that the most effective way to influence franchisees is by providing valuable solutions, not by imposing corporate mandates. Franchisees, he says, are eager to adopt systems that work and drive success, emphasizing the importance of listening to their needs and adapting solutions accordingly.

🚀 The Motivation Behind HR at Wendy’s

Weisberg touches on what motivates HR professionals at Wendy’s—namely, the opportunity to make a significant impact across a large organization. He discusses how the HR team is driven by the desire to create systems and programs that enhance the capabilities of 200,000 employees, aligning with the company's overall strategic goals. He also addresses the importance of influencing through good ideas, as opposed to enforcing decisions, particularly in the context of working with independent franchisees who are ultimately responsible for their own HR strategies.

Keywords

💡Chief People Officer (CHRO)

The Chief People Officer (CHRO) is the executive responsible for overseeing an organization's human resources (HR) strategies. In the context of the video, Scott Weisberg, the CHRO of Wendy's, plays a critical role in shaping both the HR function and broader business strategy, making decisions that impact the company globally. He discusses the unique position of a CHRO, balancing HR-specific duties with enterprise-wide leadership responsibilities.

💡Franchise

A franchise is a business model where independent owners (franchisees) operate their own branches of a larger brand. Wendy’s has over 6,500 restaurants, with 95% owned by franchisees. Weisberg highlights the challenges and opportunities of influencing talent and operations across these independently owned businesses without direct control, emphasizing the need to offer tools and support rather than enforce policies.

💡Quick-Service Restaurant (QSR)

Quick-Service Restaurants (QSR) refer to fast food establishments focused on speed, convenience, and affordability. Wendy’s, as the world's third-largest QSR, faces challenges like rising commodity and labor costs, which affect the business's profitability. Weisberg explains how the QSR sector must adapt to economic pressures while maintaining competitive pricing and high customer service standards.

💡HR as Business Partner

HR as a business partner involves HR professionals working alongside other business units to shape strategies that align with overall business goals. Weisberg discusses how the HR team at Wendy's is not just about managing human capital but also plays a role in broader strategic decisions, such as adapting to cost pressures and driving technology adoption in stores.

💡Executive Succession

Executive succession refers to the process of planning and selecting future leaders within an organization, particularly for senior roles like the CEO. Weisberg touches on the CHRO’s unique role in working closely with the board and the CEO on CEO succession planning, ensuring a smooth leadership transition that aligns with the company's long-term goals.

💡Cost Management

Cost management is the process of controlling and reducing business expenses to maintain profitability. Weisberg emphasizes how Wendy’s is dealing with rising input costs, including labor and commodities, while needing to invest in technology and restaurant renovations. This creates a complex environment where strategic cost management is vital for sustaining the business model.

💡Technology and Automation

Technology and automation in the context of Wendy’s involve the use of digital tools such as mobile ordering and kiosks to streamline operations and improve customer service. Weisberg mentions how the HR function is involved in designing work systems that integrate automation, aiming to enhance employee roles and reduce operational costs in the face of high turnover and rising labor costs.

💡Hiring for Potential

Hiring for potential refers to the practice of selecting candidates based on their future capabilities rather than just their current skills. Weisberg advocates for this approach, particularly in developing leadership talent at Wendy’s. He emphasizes the importance of identifying traits such as intelligence, maturity, motivation, and courage when making hiring decisions, believing that these qualities enable employees to grow and succeed within the company.

💡Turnover

Turnover refers to the rate at which employees leave an organization and need to be replaced. In the fast-food industry, turnover rates are notoriously high, with Weisberg citing figures as high as 168% annually. He discusses how Wendy’s HR department is working on solutions to reduce turnover by making jobs more desirable through better development opportunities and improved work systems.

💡Board of Directors

The board of directors is a group of individuals elected to represent shareholders and oversee the company’s management. Weisberg explains the unique role the CHRO plays in advising the board, particularly on matters such as executive compensation and CEO succession. This relationship requires balancing the needs and perspectives of both the board and the CEO, positioning HR as a key player in corporate governance.

Highlights

Scott Weisberg, Chief People Officer at Wendy's, discusses the unique role of the CHRO within the executive leadership team, particularly the need to provide input on enterprise-wide decisions.

Weisberg emphasizes the importance of balancing franchise and corporate leadership, managing both internal HR professionals and supporting franchisees' HR teams.

He explains the multiple roles of a CHRO: leadership team member, function leader, HR manager, and advisor to both the CEO and the board, particularly on executive pay and CEO succession.

The quick-service restaurant (QSR) industry is facing rising costs, including significant inflation in commodity and labor costs, creating challenges for Wendy's franchisees.

Weisberg notes that about 60% of Wendy’s restaurants need capital investment to improve their appearance and meet customer expectations for a better dining experience.

Wendy’s is investing in technology, such as mobile ordering and kiosk ordering, to enhance the customer experience and reduce operational costs.

High employee turnover in the industry (168%) is a major challenge, and Wendy’s is focusing on work system redesign and automation to improve retention and operational efficiency.

Weisberg highlights that HR's role in these innovations includes being an 'architect' of work systems to facilitate technological and operational improvements.

Wendy’s focuses on hiring for potential, looking for candidates who are smart, mature, motivated, and courageous, and then training them for specific skills.

Weisberg explains that hiring for potential at all levels helps build a stronger leadership bench and improves overall talent development within the company.

Weisberg believes in influencing franchisees by providing effective tools, systems, and processes, rather than enforcing policies, to improve HR outcomes across Wendy’s vast franchise network.

The importance of adaptability in HR is emphasized, as Weisberg shares that good ideas naturally gain traction, while ineffective ones do not, requiring HR leaders to listen and refine their approaches.

Weisberg stresses the role of HR in creating a positive work environment through better training, work systems, and technology, which leads to better customer service and lower costs.

Weisberg shares that his approach to HR involves designing solutions that elevate both employee experience and operational efficiency, benefiting the entire Wendy’s enterprise.

Weisberg closes by highlighting the excitement HR professionals feel in creating impactful training and development programs that can benefit hundreds of thousands of employees across Wendy’s.

Transcripts

[Music]

welcome to another CH ro conversation

hosted by the Center for executive

succession at the Darla Moore School of

Business

I'm your host Anthony Nyberg and today

we are speaking with Scott Weisberg

chief people officer and a member of the

Executive Council for Wendy's the

world's third-largest quick-service

hamburger company which includes more

than 6,500 franchise and company

restaurants in over 30 countries around

the world Scott thank you very much for

joining us today we sincerely appreciate

it as a CH ro can you tell us a little

bit about what the what's unique about

being a CH ro as part of the executive

leadership team compared to maybe some

of the other functions yeah I think that

if one way to look at the role of the CH

ro is to look at the various different

teams or roles that you end up playing

so I would say that the first and

foremost what I tend to think about is

that I am a senior leadership team

member so wow I'm the head of HR I'm I'm

sitting on a business team and we're

making enterprise-wide decisions for the

Wendy's brand which is a ten billion

dollar brand with over 6500 restaurants

and several countries around the world

and there are strategy decisions that we

all make and even though we have a

functional specialty we're responsible

for weighing in on all those decisions

from every single angle so that's the

first role that I play a second role

that I play is as function leader and

and that has a purpose both within the

company in terms of leading the HR

professionals and coming up with an

agenda to bring the business strategy to

life but within a corporation like

Wendy's where we have 400 franchisees

and 95% of our restaurants are owned by

those franchisees I'm putting together

that agenda to bring that strategy to

life that can be executed and we can

support franchisees as well as the HR

business partners throughout the company

there's a role that I play as manager

with the human resource leadership team

and so again there are management

aspects that I play with those folks and

then I would say that there are two

other roles that the HR leader plays

that's somewhat unique one is what I

call consigliere or a

to the CEO and then I would say that

it's also a unique relationship with the

board and so particularly when it comes

to executive pay decisions and when it

comes to matters of CEO succession

you're the one player on the team that

is both confidant to the CEO but also an

advisor to the board and how you play

all those roles builds trust and and

your relative effectiveness what are

some of the larger strategic obstacles

that Wendy's happens to be facing right

now yeah this is a time of significant

challenge for what I would call the Q SR

or quick-service restaurant sector

restaurant companies you know we've been

fortunate in the past few years in that

commodity costs which our input costs

have been relatively stable or down but

now we're seeing significant and play

inflation there well we're also seeing

is that labor costs are accelerating

quite dramatically and that's because

our competitors and other industries are

elevating their wages as well as certain

municipalities or elevating wages and

when you think of the pressure that put

that puts on our partners or our

franchisees that our small business

owners they're really feeling their

margins challenged and that happens to

be going on in at a time when I think

that we're experiencing kind of a

barbell economy and there are people

that are desperately shopping our

particular segment in the restaurant

industry looking for low price so what

you know the that's going to drive

people into our restaurants is low

pricing and yet what the franchisees and

what the company restaurant operators

are experiencing are higher input costs

right and then what we also know is that

the reason why people will come to a

restaurant is that they

look good and about 40% of our

restaurants have been what we call image

activated but that means 60% needs some

capital investment to look better and we

also know that people are leveraging

technology more and more for ordering

and for experiencing the brand in a

different way and that requires

investment as well so I would say that

this is a business proposition problem

and it's a leap of faith that a

restaurant operator would cut costs down

when input costs are rising betting on

the volume leverage that ultimately will

lead to a successful business

proposition so when you think about what

HR is there to help do is first thing

that we look at is our work systems and

so what we've actually done recently is

we've changed our management staffing

model to bring about greater

line-of-sight to the critical tasks that

need to be done and we can do it with a

better developmental path that helps our

young restaurant managers learn as well

as be a more effective on the job and do

it for less money we also are looking at

those work systems in the back of the

restaurant in terms of where to use

potential automation that actually

elevates the the experience of the

employee and makes it a better place to

work and at the same time takes costs

out as well as mobile ordering as well

as kiosk ordering in the front of the

restaurant so we can use our employees

to support the customer experience in

other ways rather than some of these

tasks and that's important what we're

seeing in the industry right now is

about a hundred and sixty eight percent

turnover and now that's off of a very

high historical base of about a hundred

percent annualized a year but I think

that we're going to have to continue to

push for ways to make our jobs more

desirable to keep that turnover

unchecked so it's interesting because a

lot of what you talked about there were

issues that people would not necessarily

associate with HR and even when you

talked about HR helping redesign

programs including thinking about more

automation also doesn't we don't

normally think of that as part of the HR

job so can you just say a little bit

more about how HR might be driving those

changes I don't know if it if we drive

all of them I think what ends up driving

them is the need to take advantage of

available technology or the need to

actually drive down costs and then I

think that it's the HR role to be an

architect to think of how do you modify

the work systems to make that happen in

the most effective way and I think that

that's the role that we play and so you

can be a player on the front end to

identify the need you can be a little

bit further downstream to once the need

has been identified to determine the how

or you can be involved even further

downstream in terms of working with the

relative management team and the

technology to come up with ways for the

change management to go more effectively

and smoothly the way your your going to

be involved in some segment of that or

potentially all of it I once heard you

say that you hire for potential can you

share a little bit about what you what

that means to you I believe that for

virtually every level at least deeper in

the organization as you're developing

talent it's better to hire for

capability and train for skill so for

example I have a belief that we can hire

for raw customer service aptitude and

skills and somebody that's got positive

energy and a great work ethic and likes

to interact with people and we can teach

them how to actually build sandwiches or

take orders on a register I think that

that's true though as well for

entry-level jobs I think that if you're

hiring someone for raw capability and

thinking about can you project them in

two jobs one two or three levels above

what you're hiring them for it creates a

much better success rate and it builds a

bench for potential talent so then you

might ask well what does it look like to

hire for potential and and and I could

give you competency speak and and give

you lots of words but I've simplified it

really and for various areas I say that

that's smart mature motivated and either

courageous or centered is the last one

and when I talk about smart it's not

just book smart what I think of is

incisiveness we all know that there are

people that tend to be successful that

tend to be on the right issue no matter

where they're working they anticipate

what is the right thing to do and where

to go that's what I consider smart

they've got good instincts and they

always seem to be on the right topic

the second is maturity and I think that

maturities critically important because

it's linked to this whole idea of not

being defensive when you make mistakes

so that idea to get negative feedback

incorporate it when you realize that

you've made an error and not be

defensive in the face of criticism is

critically important because that's what

helps you to grow from those experiences

and you've got to be mature to be able

to in the face of criticism or negative

feedback continue to grow obviously

motivation if you've got two people that

are equal levels of smart equal levels

of mature but one is just more motivated

than the other they're going to get more

times at the bat they're going to make

more mistakes they're going to

incorporate that feedback and they're

going to continue to learn from it more

times and if you think about that day

over day week over week month over month

year over a year

you see that the person that is more

driven is going to have significant more

experience in learning over the

course of a career and then finally I

talked about courageous or centered

because particularly for management and

leadership jobs sometimes you have to

address areas that people would rather

not hear about whether it's somebody

that's working for you sometimes you

need to wrestle with conflict with a

peer and sometimes you need to be

courageous until the boss that maybe

their ideas and worth pursuing and it is

amazing to me how many people shy away

from those discussions and as a result

you don't actually work the issue that

needs to be worked or you don't address

the problems that really need to be

addressed and and the organization is

less effective so I find that over the

course of time and it's not failsafe but

if you had to bet on only only four

things I go to smart mature motivated

and courageous and you think that those

work for this hiring for potential using

those four key attributes that is useful

across the whole across the whole

organization from hire and you talked

about a little bit at the entry level

and in the store but really everywhere

you're saying I think I think that it is

I think that that's very very helpful

you can probably get away with motivated

and and and and and mature and at the

entry level but as you're looking for

bets to make particularly for leadership

talent I think that you want to bet on

those four it's it's a pretty good set

of bets that sounds like it yeah so

being that chief people officer at an

organization like Wendy's with a number

of franchises must create a number of

really unique and interesting

opportunities and challenges can you

share what some of those might be the

thing that makes it exciting to interact

with franchisees is that franchisees are

independent business owners which means

they make their own hiring decisions

they make their own decisions around

promotion and determination and so it's

not our job as the franchisor

to actually elevate their human resource

organization what we're responsible for

is to make it easy for their respective

human resource organizations to get

better organizational outcomes and human

capital outcomes and I think that we can

do that by providing systems processes

tools available to them either through

third parties or creating venues where

they're picking them up with each other

so really what we're responsible for is

a learning environment that elevates the

actual human capital capability of a ten

billion dollar 200 thousand person

enterprise so when I think about

motivating the HR talent within Wendy's

I think that that's an easy thing to do

because I think that at the heart of why

people tend to get into HR it's that

they want to make an impact the best HR

people I've ever seen

whether it's very apparent or whether

it's a little bit more subtle or nuanced

can't stand the idea of putting their

feet in the sand and not making prints

right and the the idea and the notion

that you can come up with training

curriculum that's going to be helpful

for 200,000 employees is ultimately

exciting and I think that's what gets us

up in the morning so it's been really

interesting because now a couple of

times you've talked about the tremendous

responsibilities and all the hats you

have but having to influence without

having necessarily a lot of power you're

talking about that in terms of the

executive leadership team and now that's

very similar with the franchises where

you you have to help them develop their

own talent but they're independent so

you can't push enforce policies on them

necessarily so how do you do that how do

you manage to help them develop talent

develop their processes from an

influencer perspective more than a or

the hammer perspective I think that in

today's world we're seeing this more now

than ever before good ideas take off

bad ideas don't so i-i've once had a

boss early in my career saying you know

if you're working really hard to push an

idea maybe I ought to step back and

think about whether or not the idea is

that good right and I think that what I

find with our franchisees they're really

hungry for solutions that work and so

again if we can facilitate those ideas

those processes those systems that work

I think that that's a winner for

everybody and if I'm finding that we're

pushing an idea too much what I should

be doing is probably listening a little

bit harder about why this isn't working

for somebody and when you solve those

problems usually the idea takes off hey

Scott thank you very much for joining us

the wisdom you've shared with us as

always it's extraordinarily interesting

to me and I think will be very helpful

for HR professionals and HMH our

students going forward thank you for

joining us thank you very much I really

appreciated the opportunity you just

listened to another CH ro conversation

today Scott Weisberg of Wendy's shared

his perspective about how to drive

business success through identifying and

motivating talent on behalf of all of us

who are associated with the Masters of

human resource program here at the

University of South Carolina and the

Center for executive succession thank

you for joining us

[Music]

you