When Hala Moddelmog took over 48-year-old sandwich chain Arby’s in 2010, sales had been falling for years, profits were down and the then-parent company Wendy’s/Arby’s Group posted a $4.3 million loss. However, in the last three years, she’s led an aggressive turnaround plan that’s starting to pay off. Arby’s has had nine consecutive quarters of same-store sales increases and year-over-year profit growth of nearly 85%.  How did she do it? She sold 93 of Arby’s 3,500 franchise units, improved in-store operations, launched a new ad campaign to reposition the brand and quadrupled the number of products in development, with 12 new menu items expected this year. Most importantly, she brought in a new leadership team to transform the iconic brand. She believes the secret to great leadership is hiring people who are smarter, faster and fundamentally different from her.  Moddelmog sat down with me to discuss her approach to leadership and Arby’s recent success.  Jenna Goudreau: Since you started at Arby’s in 2010, you’ve set the company back on a path to growth. How did you turn it around?  Hala Moddelmog: We’ve had a great deal of success in the last couple of years. We just finished our ninth quarter of comp sales increases, and during many of those quarters we were outpacing the whole QSR [quick service restaurant] industry. We had come off about four years of negative sales before that. The brand was ready for a turnaround. We have done several things: New product introductions, a new ad campaign and brand repositioning.  The most important thing we’ve done during this turnaround is to hire an incredible leadership team. My philosophy is to hire people who smarter than I am. A lot of people say that, but few actually do it. I also try to hire people who are different from me.  Studies show that one of the reasons we see fewer women in leadership positions is that male leaders tend to hire people like them—other men. Is that a larger issue for the business community?  I absolutely think it’s a failure of modern business that people hire people who are exactly like them. You really don’t need another you. You don’t need repetition after repetition. There’s still an awful lot of that going on. The Catalyst numbers show that companies with more women in the c-suite and on their boards outperform the S&P. There’s plenty of data to support diversity. And diversity can mean all sorts of things: gender, ethnicity or even socio-economic background. You may have a very different view and way of looking at a low-income consumer in a way that others couldn’t.  What are some of the differences you look for?  I’m an extrovert and a lot of people in leadership positions are. I’ve learned to pay attention to the introverts and make sure their voices get heard. Sometimes they’re the smartest people in the room, but they’re not playing that role of look at me I’m the smartest. Also, sometimes the introverts need to go away from a meeting and take some time to percolate on an idea, and then they can come back with something that truly has a big impact.  What was the light bulb moment for you?  When I was president and CEO of Susan G. Komen for the Cure, there was a very different group of people. Beyond the standard marketing and finance people, there were also many scientists, PhDs and MDs who had a very different management and interactive style. What they brought to the equation was pretty phenomenal. That’s where I really learned to stop and take in and give those people time to come forth with their ideas.  Are there other personality types you look for to round out your leadership team?  I look for people who think differently in the way they analyze situations. Some people are much more linear, which can be really positive especially in operations and IT and systems. However, my background is marketing, and so I am more attracted to people who think in a holistic, not-so linear fashion. Many times I might be ready to jump from A to F, and then there will be people who say let’s lay out the steps in between. There’s a lot of value to that. I have to be careful to make sure I’m hiring them.  Has that mix of thinking and personality difference contributed to Arby’s recent success?  Not only are we moving the brand forward through marketing-driven things, we also drove the brand through better operations. That comes back to making sure you’ve got that linear thinking. We’ve improved our speed of service. We’ve improved the temperature of our curly fries. That may not sound like much, but when someone walks in and wants hot curly fries—they better be hot. We also improved our order accuracy. We had what sounded like great accuracy of 98%. But when our operations guy, who is very analytical, sat down and did the math that was a lot of customers leaving our 3,500 restaurants everyday with a potentially inaccurate order. The way I see my job is to understand all four personality quadrants and bring those together with our executive team and take the time to really listen to them all.  It sounds great in theory. What does it look like in practice?  Frankly, I do have to work at hiring people who are different from me. Because you end up enjoying people who are like you, who you can have easy conversations with. As you go through this a few times, you learn.  What is the most important thing you look for in a job candidate?  At the c-level, I look for a demonstration that in their careers they have been highly engaged and focused on winning. That they are driven by building a legacy, something that will last. That’s so important in the Arby’s case because we’re an iconic, 48-year-old brand, and we’re looking to expand that brand. I look for people who have a hunger for brand legacy and want to build something. You’ve led several high-profile companies, from Church’s Chicken to Susan G. Komen to Arby’s. What set you apart?  When I was young, I thought I’d like to run something, but that was about as far as it got. I never sat around thinking about fried chicken or roast beef. I was raised on the Puritan work ethic and valued working hard. I paid for my undergraduate and graduate school by myself. I had a real sense of independence and felt like I needed to prove to myself that I could be successful.  What’s your best advice for young people coming up behind you?  Do the absolute best job you can in the job you’re in. Get results. Be super engaged. Let the people around you, above you and beside you know how engaged you are in building whatever you’re working on. People love brand builders. Then the next promotion or job will take care of itself.  Follow me on Twitter, Facebook and Google+.
Arby's President Hala Moddelmog reveals how she took the sandwich chain from years of decline to a top performer in the industry.