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Buffalo Wild Wings

Sally Smith Riding High At Buffalo Wild Wings

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CEO talks strategy, branding, international expansion and recession
By Ellen Koteff October 2012 Stub

Sally Smith

Title: President and chief executive

Age:54

Concept, headquarters location: Buffalo Wild Wings, Minneapolis, MN

Number of Units: More than 840 restaurants

Hometown: Grand Forks, North Dakota

Education: University of North Dakota with a Bachelor of Science in Business Administration and Accounting.

Hobbies: Travel, time with family and friends, golf, and reading.

Personal: Divorced; Two adult children

Ever since Sally Smith joined the executive ranks of Buffalo Wild Wings more than 18 years ago, the Minneapolis-based chain’s numbers have been climbing. Starting out as chief financial officer and then becoming chief executive, Smith primed the casual-dining chain for growth. With a background in accounting and an easy Midwestern way with people, Smith was a natural for the job. When she joined the company, there were 35 units, and the chain’s finances were on life support. Smith changed the name from BW3 to Buffalo Wild Wings and she also changed the chain’s logo as well as closing some units and modernizing the look of others. Now the head of a robust chain with more than 840 restaurants and a healthy balance sheet, Smith is eyeing acquisitions and global outlets. A former IFMA (International Foodservice Manufacturers Association) Gold Plate winner and an Ernst & Young Entrepreneur of the Year, Smith serves the industry in myriad ways. Most recently she was chairman of the National Restaurant Association and still serves on its executive board.

How has your leadership of Buffalo Wild Wings evolved over the years?

I have been with the company 18 years, and I started when there were about 30 units. It used to be within my role in the company to oversee even the smallest details. I can no longer do that, and now I have to delegate more. It is not possible that our executive team can take a look at every little thing that comes across our desks. We are trying to pass some of that detail work onto the next level. The larger we have gotten, the more I have delegated.

Now I spend a lot of time sharing the vision for the company. I don’t think 18 years ago I thought much about the vision. Leadership is all about communication, and I have to be much more thoughtful about how and what I communicate. Understanding that I can’t know every micro detail of the business is all part of the evolution.

What is the vision for Buffalo Wild Wings?

Our vision is to provide the ultimate social experience through restaurant brands worldwide. At the end of 2013, we will have achieved our goal of 1,000 units.

What new markets will you be opening up globally?

We just signed a deal for 22 restaurants in Middle East countries and a four-store package for Puerto Rico. I am also going off on a trip to Russia and Poland. We also have a lot of interest from Asia, Malaysia, China and the Philippines. (There are already units in Canada.)

We are very excited about the opportunity to bring Buffalo Wild Wings across the globe.

What about your year of being chairman of the National Restaurant Association? What was involved, and what was the upshot?

I completed my year as chairman last year. It was an incredibly rewarding experience, but I was on the road all the time. Luckily, I was able to combine a lot of Buffalo Wild Wing store visits on my travels. Working with the NRA provided me contacts throughout the U.S. and the world. I was able to make wonderful connections from not only the operator ranks but the vendor suppliers as well. Getting to know those people and having someone to call on was very rewarding. This is a very passionate industry.

What are the biggest challenges for your company right now?

The price of wings is very high. It is the highest it has been for a decade, and last year it was the lowest. There is lots of breast meat out there, but still only two wings per chicken. We manage by staying very nimble, but as you get larger that is harder and harder to do.

What are the growth plans for Buffalo Wild Wings?

For 2012 we will open about 100 restaurants, 55 company and about 45 franchises. We also have the opportunity to buy back a couple of franchises. We will be 1,000 units by the end of 2013, and we will be expanding internationally.

We say we would like to have 3,000 restaurants worldwide in the next decade. We are also asking, Who is out there that we can acquire and grow?

How has your marketing changed over the years?

We are now on national TV, and we are also partnering. We will be the sponsor for the Buffalo Wild Wings Bowl on Dec. 29 in Tempe, Ariz., between the Big Ten and the Big 12. We are doing a number of promotions around the bowl, and our entire leadership team will be there.

Most of the time you think of traditional advertising, but we are also seeing different kinds of opportunities to work with vendors. And we’re asking, How do we manage the whole social networking thing? We don’t do a lot of Facebook, or coupons, or anything like that. We work with communities and are really trying to be a part of the community. And we do a lot of local store marketing.

How is customer feedback used at Buffalo Wild Wings?

We’ve always done a lot of research, whether it was about our menu or our service. We want to find out who are our guests, and how often do they use us. We know our customers love sports, whether watching or playing. We also do a lot satisfaction surveys. I think we try and act on them in as real time as possible. When we fail we want to make it right. Our goal is to have the brand promise, anytime, anywhere.

After close to 20 years with the brand, do you ever think of what might come next?

I love what I do. I work with a great team and I am really lucky. I am also really excited about our next steps and to think about how to help incubate small concepts. I have a very curious mind. I also do some outside board work. Is there something that would lure me away? I have thought about going back to school and getting a new degree. Now I just want to get to 3,000 restaurants by the end of the decade. That would be quadrupling our size, but we have done it before.

What is the process for rolling out new menu items at Buffalo Wild Wings? How long does it take?

We go back to our customer research, and we find out what our customers have let us know. We work with our vendors and suppliers, and we will test a new product in anywhere from 30 to 60 restaurants. First we test it without a price point, and then we test it with a price point.

We need to work with our vendors to see if they can produce it. Most new products will roll out in July/August before kids go back to school and then again the end of January and the beginning of February. Sometimes we will just do an LTO because it’s summer, and some of our new products are truly that. We might introduce four sauces with the thought of adding one or two of them, and we do the same thing with appetizers. We see which ones resonate the best with guests, and then those dishes make it onto the menu.

What are some the biggest changes you have noticed during your time in the restaurant industry?

I think one of the areas probably has to do with guest choice. The consumer’s voice is now clearly heard by restaurants, and the industry now, more than ever, wants to be cognizant of what the customer wants. It is much easier to get input from guests.

Guests also want to know where their food is coming from. I think food safety has gotten stronger. Clearly the ability to trace back to a food’s origin has gotten faster and stronger.

I also think people now see more of a career opportunity in the restaurant business, and I think the industry has tried to be very responsible by providing nutritional information to its guests. Programs like Kids Eat Well and Healthy Dining Finder are very helpful in that regard.

What do you think is the biggest misconception about the restaurant industry?

Some people don’t realize that you can absolutely have a career in the industry. It is often your first job, or the job of last resort.

How do you train leaders within your organization?

I believe that moving people around and exposing them to different aspects of the business is important. So if they are on the franchisee side, I might want to move them to something different. We also choose specific conferences, picking the best ones that apply.

We do make a lot of promotions from within. Asking the right questions is one of the most important things, like we find out if they are interested in traveling and what else they are interested in doing.

Within the company there are more than 20,000 employees in the company-owned stores, and with the franchised units, that number goes to about 50,000. I remember having 20 or 30 people at our first company luncheon, and I remember thinking I am responsible for all these people. I take it very seriously. It is still important to talk to people one on one. People are looking to you for support, and it is an awesome responsibility.

Do you think the industry is attracting better talent?

I think the industry has attracted great people all along, but I think now people are more willing to look at the industry. I think they look at it as a growth industry. You still have to eat every day.

How often do you eat at BWW?

If I am on the road, I eat there very frequently. If I am in town, probably once a week because I have a lot of other events where I am speaking to a group. Franchisees like to go somewhere else when they come into Minneapolis because they eat at Buffalo Wild Wings all the time. I also want to see what else is out there.

What strategies did BWW use during the recession to stay proactive and on top of the financial challenges?

We were very fortunate in that we weathered 2008 and 2009 because we have strong balance sheet. And because we had cash, we were able to take advantage of great sites that became available. Other retailers probably stopped their development, but we didn’t. We got some really great locations. So we were able to take advantage, and we have always been very conservative. We continued our advertising, but we didn’t do discounting or couponing. Our menu has always been competitive, so we are not digging our way out of that. We upgraded our TVs and continued with our remodeling. We continued investing in the business.

How do you attract women to BWW?

By doing a lot of research. I think they like that we have a variety of menu items, and they do like wings. And they like it if their kids like it. They are very cognizant of nutritional components, and there are a lot of women who are big sports fans. We also have very clean bathrooms, good food and a place where they feel safe.

How much experimenting can Buffalo Wild Wings’ franchisees do?

Some of our greatest ideas come back from the franchisees. The menu is consistent, but they may want a bratwurst special during football season in Milwaukee. We grant variances. They can choose what beers they have on tap, but there are a few they have to have. It is to their advantage for them to buy through our supply chain. When you go from 35 to 840 restaurants, you can leverage your costs, but we pride ourselves on being long-term partners with our suppliers.

What do you like best about your job?

I like that the brand is recognized. For so many years nobody knew us. What I really enjoy is watching people develop and grow, whether it is one of our franchisees who started with one and now has 25 restaurants or someone who starts in the restaurants and has worked their way up to a director of international. I have many stories like that. I really get a kick out of that. I love going into our restaurants and talking to someone who says they have been with us from the beginning of that particular restaurant.

What other kinds of restaurants do you enjoy eating in?

Sometimes I like cooking at home with my daughter. But when it comes to restaurants, I like them all. I like good food. I like trying out new restaurants. I think there are some wonderful small chains. I love to go to In-N-Out Burger when I am in California, and Minneapolis has really good food and wonderful restaurants.

What is your prediction about the economy in the next few years?

I don’t think it will turn anytime soon. I think we have some rough sailing over the next 12 to 18 months. People keep talking about the tax cliff coming up, and I think the unemployment numbers have got to get better. In the meantime you have to control the things you can and don’t worry about what you can’t. For us that means when people decide to go out, we have to make sure they choose Buffalo Wild Wings when they do. We have to give them a reason to come out and make it affordable.