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D an Cathy has just returned from Dubai. Walking through the lobby holding a biscuit and a Styrofoam Chick-fil-A cup of coffee, the president and COO of the popular chicken purveyor grins at the wagging finger of his public relations director, Brenda Green. "You didn't return my calls this morning," she scolds. He gives her a hug with one arm, the other hand balancing his breakfast, and reminds her, he's just returned to the country, and it is only 7:30 in the morning. His energetic demeanor matches his friendly face and bright blue eyes. 

The lobby of the Chick-fil-A corporate headquarters is large and open. The building itself is gray, cold concrete, but inside, the atrium literally sparkles, decorated now for Christmas with dozens of green trees, white lights and red poinsettias, unusual for early November. There is a wide, curving staircase to the left, comfortable couches and chairs in the center, and a shiny collection of vintage automobiles displayed - Truett Cathy's own collection - in the rear of the lobby. Chick-fil-A employees drift in, some wearing their name tags, proudly proclaiming their first name and the number of years of service they've had with the company, and the elevator dings regularly as they head up to their offices.


The environment is comfortable, with happy employees and a true sense of warmth in the air. When Dan Cathy arrives in the room, you get a sense of where it begins. 

Eight years ago Dan Cathy, 53, took over the operations of Chick-fil-A from his father, Truett, now 86. The family business was born as the Dwarf Grill, which opened in Hapeville in 1946. Dan and his younger brother and sister learned to pick up cigarette butts in the parking lot and sing to customers on Saturdays. It was there that Truett invented the chicken sandwich. In 1967, he created an entire brand with this chicken sandwich, and opened the first Chick-fil-A.

Since then, the company, still privately held, has grown to more than 1,400 restaurants in 37 states. It's the second-largest quick service chicken restaurant, based on last year's $2.6 billion in sales and 16 percent growth, according to QSR magazine. (KFC is the first, with $5.3 billion in sales last year. In the overall quick service restaurant industry, Chick-fil-A ranks 14th, with McDonald's at No. 1 and $28 billion in sales, and Burger King a distant second, with $8 billion in sales, according to the same magazine.)

So how does Chick-fil-A, 2009 Business to Business magazine's Company of the Year, break its own revenue records year after year, celebrate 37 years of consecutive growth and continue to grow, even when the rest of the economy is grinding to a halt?

Slow And Steady
Several factors contribute to their success. While this chicken company makes us think about cows, the true metaphoric animal may be the slow and steady tortoise. "Our growth strategy and our growth philosophy can be summed up with words at the bottom of a painting in my dad's office," Dan says. " 'No goal is too high if you climb with care and confidence.' That really epitomizes our strategy as it relates to growth. We're not aggressive; we plan. We know several years in advance how many restaurants we'll be able to open.

"A lot of it is determined by cash, and how much we have based on how many happy customers are coming in and eating with us. Our customers are our venture capital source for growing our business, and it's a very, very stable way to grow the business."

Dan tells the story of a young Truett, growing up as a child in the Depression. One day, sent by his mother to the little Rogers grocery store on the corner, the store owner said, "I'm not going to let you have any more groceries until you pay the bill for the account that you already have."

That stinging experience in young Truett's life taught him always to be conservative when spending cash, and frugal and careful in the way he stewards resources. Chick-fil-A has never tried to compete with others in terms of how fast it grows, nor ever had a goal to be in all 50 states or any other expectation that would push them to irresponsible ways of doing business.

The Original
"I think the success that we've had is really because we're working with some timeless principles," Dan says. "Someone once said, 'The main thing is to keep the main thing the main thing.' "

Their main thing is a core menu - a chicken sandwich with two critical pickles, waffle fries or maybe some carrot and raisin salad, and some fresh squeezed lemonade - from which they never stray.

"I think success in the quick service restaurant industry comes down to identity," says Jim Grien, president of TM Capital and head of M&A International's food and beverage group in Atlanta. "Chick-fil-A has done as good of a job or better in carving out their identity. What do you go to Chick-fil-A for? A chicken sandwich. Even with wraps and salads and an attractive product array, a lot of people are just like me and don't look at the menu board because it's just a clearly identified product."

Grien says while restaurants such as McDonald's and Burger King also have clearly identified products (the Big Mac and the Whopper, respectively) others in this space are struggling because they've changed their menu too frequently. "What's Wendy's big name sandwich? They are constantly promoting different things. They've lost their identity a little bit," he says. "Chick-fil-A, though, is razor focused on a core product that's highly differentiated, and it's one that consumers want."

If imitation is the highest form of flattery, Chick-fil-A ought to feel well complimented by the fast food big three - McDonald's, Burger King, Wendy's - and other restaurants now serving a Southern-style chicken sandwich that's awfully similar to Chick-fil-A's menu staple, the Original Chicken Sandwich. And it's not just a "me-too" menu item, Grien says. These other companies are advertising their chicken sandwiches, with McDonald's even test marketing its creation in Atlanta, considered the backyard of Chick-fil-A.

Helping Chick-fil-A's brand identity, are, of course, a bunch of cows trying to save their own hides, climbing on billboards or water towers across the country, painting poorly spelled quips to remind us all to "Eat Mor Chikin." This campaign, created by The Richards Group in Dallas 12 years ago, is a textbook example of marketing mastery.

Last year, the cows were recognized as one of America's most popular advertising icons in a public vote sponsored by Advertising Week, becoming the newest members of Madison Avenue's Advertising Walk of Fame in New York.

The cows have also enjoyed the arena of sports marketing, specifically in college football as the sponsor of the Chick-fil-A Bowl (formerly the Peach Bowl), the match-up between SEC and ACC contenders. This year, the Chick-fil-A Bowl, scheduled for December 31 at the Georgia Dome, is expected to have more than 75,000 in attendance, and coupled with the SEC championship game on December 6, have a $55 million impact on Atlanta. Each of the last four Chick-fil-A Bowls has placed in ESPN's all time top 10 most-viewed bowl broadcasts.

Dan won't disclose their "Eat Mor Chikin" marketing budget or its percentage of the company's overall budget, "But I know that it's a lot of money because we want to get the story out there," he says. "We're infatuated with these cows. We plan to milk it till the cows come home."


Principled Leadership
With a focused core product, careful growth goals and award-winning marketing, Chick-fil-A's ability to weather an economic storm is no surprise. Some wonder whether the quick service industry is recession-proof. After all, with a $6 average ticket, restaurants like Chick-fil-A are positioned to attract customers when they begin to trade down from quick casual - like Applebee's and Chili's.

But Chick-fil-A hasn't rested on its laurels, or on the assumption that a low-price meal will suffice. The restaurant, and the company, is really founded on the principle of service. Asking Dan Cathy why their restaurant has found such success, he first mentions service, which is in conjunction with his Christian faith.

While they do not consider themselves a Christian company, certainly Truett and his children are known for their faith. After all, who can forget that all Chick-fil-A restaurants are closed on Sundays?
"About 25 years ago a group of us got together and asked, 'What are we really in business for?' And out of that came a guiding light for us. Our corporate purpose is to glorify God by being a faithful steward of all that is entrusted to us. And secondly, to have a positive influence on all that come in contact with Chick-fil-A," Dan says.

In the lobby, to the right of the curving staircase which many employees pass on their way to their office or to and from lunch, is a bronze, life-size statue of Jesus washing the feet of a disciple. The Bible uses this metaphor to humble people and remind us of our obligation to serve others. Chick-fil-A makes the same use of the symbol.

Every year, each of the 500 corporate employees spends a day working behind the counter of a Chick-fil-A restaurant. When a new Chick-fil-A opens, it often promotes a year of free chicken sandwiches to the first customer. People spend the night in the parking lot, hoping to be that first customer, and usually Dan Cathy is there with them, shaking hands and introducing himself as "Dan, and I work in customer service."

And he truly believes he does. Mark Miller, vice president of training and development for Chick-fil-A, came up with an acrostic to define the company's leadership style, and Dan says he lives it. Their SERVE philosophy focuses on what great leaders do: "Great leaders See and Shape the future; Engage others; Reinvent continuously and stay Relevant to the customer and to the times; Value results and relationships; and Embody the values."

"Great leaders serve, S-E-R-V-E," Dan says. "You need to have a heart for service, and to be focused on others rather than ourselves." His recent trip to Dubai was all about this leadership philosophy. He presented the SERVE model to business leaders in the United Arab Emirates hungry for Western business wisdom. Of all that Dan Cathy has learned at the helm of his billion-dollar company, the focus of his speech was service.

Paul Facella, a New York-based restaurant consultant for eight-years and a 34-year veteran of corporate McDonald's, believes this style of leadership has made Chick-fil-A great. Since he began consulting, Facella has been surprised at how little time other quick service corporate employees actually spend at their restaurants. Chick-fil-A is an exception, he says, and it shows. Like General Patton walking beside his tank troops while bullets were flying, great leaders are in the field, he says. "You lead by example. You have to be in there with the customers, making sure standards are there, patting employees on the back or letting them know when standards need to be improved."

Facella sees many parallels between Chick-fil-A and McDonald's, the undisputed quick service restaurant leader in terms of revenue and number of restaurants, and says the leadership makes the difference. The Cathy's are moving into their third generation of Chick-fil-A leadership, as the 12 grandchildren now begin introductory jobs after a mandatory two-years of work outside the company. When leaders care for the company's heritage, and not just the bottom line, they create a better company.

Like the concrete structure of the Chick-fil-A building, it's a solid company that has withstood decades of growth through good economies and bad. And like the white lights and poinsettias, and the uniqueness of Truett Cathy's faith and car collection inside that building, Chick-fil-A's spiritual core will continue to give a patina of radiance to its success.