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Pizza With Purpose: How MOD Pizza Leans Into Its Internal Culture To Take On A Crowded Category, Even In Crisis

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Of course we love our pizza here in the U.S. and there are many well-known brand names like Pizza Hut, Dominoes, Little Caesar’s and Papa Johns that have built formidable businesses.

So how is it that one of the youngest brands in the category – MOD Pizza — has managed to take share and grow in such a crowded space?

The answer lies in how the brand is built from the inside out, around a core idea that is infused into every action it takes, from business decisions to marketing ideas—I call this whole brand thinking, a holistic mindset that brings with it a competitive edge. In addition to a good product at a fair price MOD has a purpose advantage: the company exists to serve people in order to contribute to a world that works for and includes everyone. Built from the inside out, MOD screens then hires people who often have a gap in their work history, gives them a competitive wage and benefits package, training for both their job and life skills then a potential career path.  

The impact of this is MOD gets the benefit of a strong internal culture, employee loyalty and lower turnover – which means less recruiting, training and other related costs.  More importantly, MOD gets a more engaged, committed employee who delivers a better guest experience. This model has served the company well as it navigates a convergence of crises these past few months.  

I sat down with Scott Svenson, CEO & Founder of MOD Pizza to discuss his business and brand strategy.

Jeff Fromm: Talk to me about your company mission so we can ground people.

Scott Svenson: We're a Seattle-based fast casual pizza company. We have been around for about 12 years. For four of the most recent years, we've been the fastest growing restaurant brand in the US, and what has really propelled that growth is a purpose, which is probably best articulated as MOD exists to serve people in order to contribute to a world that works for and includes everyone. And that's been a purpose that has come to life organically over the last 12 years. And it is not just an important part of who we are. It is the essence of who we are.

Fromm: Yeah. And, boy, inclusivity is a huge topic. Just to sort of give me a little sense, fast casual restaurant. How have you addressed employee safety just to be able to stay open during this crisis?

Svenson: We have said throughout that our most important priority is to keep our Squad and our customers safe. But at the same time, we're running a business and we want to keep the viability of the business healthy. We exist to serve, but in order to serve, we have to survive. And so there's been an interesting tension or balance between keeping people safe. If you want to go to the extreme of keeping people safe, you would just close your restaurant, send everybody home and pay them during the duration of the crisis, but that's just not feasible. So we have taken incredible steps. We have an amazing operating team, and they've really leaned into all the protocols and all of the steps that you would expect us to take to keep people safe. 

 Fromm: How has MOD fared during the pandemic?

Svenson: From the middle of March until the end of May, with 10,000 Squad members  spread across nearly 500 locations, we only had three confirmed cases amongst all of our employees. And that, I think it was a byproduct of, one, everybody being very careful during that time, staying home and staying safe. We did have restaurants that were open for customers to walk into. Our dining rooms were closed, but customers still walked in the stores.

 Since the beginning of June, after Memorial Day, that's changed quite a bit as dining rooms are started to open and people have been getting back out into the community and socializing. We do an intake process for anybody who has symptoms. That intake process has spiked, as well as positive cases. But what we found is through extensive study, we can't tie any of those cases that have been positive back to the working environment in the store. They've all linked to a roommate who got sick, or a family member, or they were at a rave. Safety has been critical, and it's been an ever-moving target of “How do you make sure that we're doing everything we can?”

Fromm: Given the size and scope of your business, that's impressive. Tell me a little bit about the impact on your mission, if any, the crisis has had on your focus on inclusivity and crisis. Has it changed, or has it just further strengthened that mission?

Svenson: I would break the current moment apart into two buckets. One, you have the coronavirus crisis, which is still with us and is this new environment we're operating in. And then the social justice movement, which has been an equally disruptive and reflective time. And I think pulling those two things together, the virus has caused us to be very nimble, operate in new ways, and change the business. Our culture and our commitment to using our business as a platform to make a positive social impact has really engaged and energized people to do what's necessary to protect the business, and preserve it, and make sure that we can serve in the future. So it's been, I think, a positive. And then the social justice movement, we've said many times that in so many ways, we were kind of made for this moment. From the beginning, we've been about acceptance and inclusion and providing opportunities for all.

 What's happened in the world around us has really shone a light on this topic, but it's been an authentic part of who we've been since the beginning. And so I think, in some ways, it has, it's been reaffirming and energizing for the team, and we've tried to find a way to bring our voice to it. We have to be a little careful. It's been an interesting topic of conversation internally. It's such a charged time right now in society that, whereas we want to be a positive voice, we want to contribute to the conversation in a constructive way, if we're not careful, we could put our squad members into a situation where we don't want to provoke or cause conflict or confrontation in the stores.

Fromm: How do you determine what brand actions to take to show support for issues you care about?

Svenson: We came out with a T-shirt, which was a way for our squad members to show solidarity with the social movement, and it has a very simple statement, which is "social injustice has no place at our table." It was something we put out on social media early on. Our squad loved it, responded well to it, so we made it into a T-shirt so that our squad can wear that with pride in the stores. And even that simple statement, which is not a political statement, it is really a social statement, and it's really an uncontroversial social statement, has nonetheless caused some controversy. And there will be that minority of customers who come in and view that as provocative. And I think people are looking to be provoked at a time like this. This falls into the category of, in many jurisdictions, they've asked that everyone wear masks. It's a requirement. And so we want customers to wear masks in our stores. But if a customer walks in not wearing a mask, do you deny them service?

 Fromm: How do you engage with them? 

Svenson: We have taken the decision, rightly or wrongly, not to confront customers who are not wearing masks. And the simple reason is, (and based on all the experience of our operators) that it could put our squad members into a very charged situation with somebody who, generally speaking,  know they're supposed to be wearing a mask. Therefore, if they don't, quite often they're looking for an opportunity to express their civil liberties And we  don't want that to cascade into a bad outcome from a health and safety perspective. It’s about protecting our Squad, and it becomes a more multidimensional issue than just the virus. We’ve all  seen the videos of customers becoming very aggressive to people in restaurants or retail locations, including some who've actually brought guns into the store. So yeah, it's a fraught issue.

Fromm: Tell me a little bit about the things you've done to support customers, communities, employees during the past couple months.

Svenson: One of the themes that we have right now is this: it's really important to have strong beliefs and values and convictions that underlie your culture. But none of those ultimately matter if they don't translate into action, and there's that saying, "You are what you do."  So we've spent a lot of time talking about what we are doing that is reflective of who we are and what we believe.

 Through this crisis, we've had to adjust our employment levels. We had to furlough some people. We had to actually lay some people off, which comes back to this issue of we have to survive in order to serve long-term. As the CEO, ultimately my primary responsibility is to ensure the long-term viability of the business, but as we've done this, and squad members have had hours cut back, our business suffered a pretty dramatic fall in revenue right at the beginning of the crisis. We've been recovering from that ever since.

One of the things that we did, though, is we said, "Under no circumstances do we want a squad member to go hungry. Or, for that matter, anyone in their family to go hungry." We've always had a policy that when you're working a shift at MOD , you get a free meal, and during the crisis, we expanded that.  If you're a MOD squad member, you can come into the store at any time, and you can bring your entire family, and we'll feed you for free. We want to ensure   that no one, because of losing hours or other distress caused by this moment in time, would miss a meal or go hungry. It originally was going to be for the first month of the crisis,  and right now, it's kind of an evergreen benefit that we may well make permanent. So that was one important gesture that we offered our squad members. For our communities, We did a “Day of Love”, where in every one of our stores, Squad members  delivered pizzas to  first responders or people in the community who were in need. In one day, we gave away 10,000 pizzas. We also delivered hot pizzas to thousands of nurses during National Nurses Week.

 As my wife, Ally says -  those were organized days of Spreading MODness. But what we found is there were so many authentic, true, and non-organized moments of Spreading MODness already happening in our stores We found our Squads were getting out and supporting their communities in many ways – and some were doing it daily. And part of that was a reflection I think of, if we take care of them the right way, we will motivate and inspire them to take care of their teams and their community. And that's what we found happening during this crisis.

 

For questions about this interview or to see a short video interview between Mr. Fromm and Mr. Svenson, please contact Jeff at jfromm@barkleyus.com

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