Russell Weiner - CEO of Domino's Pizza | In Good Company | Norges Bank Investment Management

Thanks so much for having me.

Yeah, I'll tell you the thing that is amazing about pizza: it's got these three core ingredients—dough, sauce, and cheese—and you can pretty much put anything in the world on it and it tastes great. We're in 94 markets around the world, so I've had things that I didn't think, as a New Yorker eating pepperoni pizza my whole life, I'd ever have on a pizza, like shrimp and corn and all these different great cheeses. Pineapple is absolutely included. There are 34 billion ways to make a Domino's pizza.

Well, we've got folks who go visit our stores two or three times a year to do spot checks, as well as we take customer feedback. But pizza making is actually pretty difficult. One of the innovations we're launching into our stores over the next few years is what we call an auto stretcher, because stretching pizza usually takes about 20 shifts for someone to get good. With the new auto stretcher, it takes about two. Why stretching is so important is that unless you have your center that's too thin or what have you, it can really... Like I said, anything with dough, sauce, and cheese is going to taste good, but we want the ingredients to be in the right place, we want the pie to be crunchy and not soggy. So those are all the things that we look for.

Not surprisingly, pepperoni, cheese, sausage, mushroom. That's 40 to 50% of what we sell, at least here in the States.

No. The great thing about pizza is it's a sharable occasion. Our head of international always says you never hear anyone talk about 'let's have a chicken party,' they say 'let's have a pizza party.' And the thing about pizza parties is it's sharable, and that's where you get to really try and experiment with other people. So like me as an example, I'm a pepperoni pizza guy. But I remember when we were working on our specialty pizzas, my wife's a vegetarian. I worked with our folks in the test kitchen and I said, 'You know what, we need a vegetarian pizza that I can eat with my wife.' And our vegetarian pizza is my second favorite to pepperoni on the menu. So we really have something for everyone, and I urge people: the beauty of Domino's is you can mix and match even within the pizza, so try something you've tried and try something new.

We started a lot of the trends. Back when digital ordering was nothing, people used to call and come in, and Domino's and the pizza companies in general were the ones who started online ordering. We and our major competition have upwards of 80% digital ordering. When you think about the pizza companies today, by the way, everyone's caught up, people are catching up. So now you've got aggregators, and everyone from mom-and-pops to burger places are now digital. The next steps for pizza really, I'd say there's something that everybody's doing and there's something that pizza is doing. If you run a restaurant today and you're running at scale, you've got to be working with big data—data on your customers and data on how to optimize your operations—and using AI around that. We can talk about that if you want. That's what we're seeing in general in the restaurant industry. Within pizza, folks are starting to do what Domino's did a while ago, which is launching items that go with pizza that may be a veto vote. So you've seen a lot of single-serve sandwiches and items like that that have been launched recently.

People call us a technology company. I think one of the biggest compliments I heard one time was that Domino's is a technology company that's a marketing company that just happens to be a pizza company. When we look at our business today, we just launched a new five-year strategy with investors, we took them through it on December 7th. One of the things that we realize we need to lean more into is the deliciousness of our product. So I think while we will always be technology, technology will always be an enabler and we're always going to be at the forefront, we have to be at the forefront of deliciousness. Technology can support that, but I think what we've seen is when we spend too much time talking about technology, even though we have the best pizza in the business, we don't get credit for it. So today, this is one of the first interviews I'm having where I still want our amazing team to get credit for all the technology we're going to, and we're going to continue to lean in, but if we don't drive deliciousness, if we don't have people thinking of us as a pizza company, then what technology is is an enabler. All we want as a pizza company is for the product to be great, for the service to be great, and technology is a part of that, but it's part of us being fanatics about the pizza experience.

Well, let me tell you, there are things in your life that when you look back you say, 'Oh my God, this thing was meant to be.' And for me, it was Domino's, and I'm not kidding you. And it has to do with pizza boxes. In college, like any college person, me and my roommates didn't have a lot of money, didn't have a lot of furniture, but we pooled our money once a week and we'd order Domino's Pizza, hand to heart on this. And the boxes were so sturdy at Domino's because we were a delivery company, so boxes need to be piled on top of each other without hurting the product. The boxes were so sturdy that we would make furniture out of them. So my end table was five pizza boxes on top of each other, our TV was on a bunch of pizza boxes. This was in college. So I talk to college friends and they say, 'Wow, this Domino's thing was meant to be a long time ago.' So the boxes have to be sturdy, but they're also all about quality. There's venting in the box that enables the product to stay hot while not being soggy. So boxes are critical to us. Now, because of all the boxes we do, we also want to make sure we're doing as much as we can to minimize our impact on the environment, and 70% of the materials used in our boxes are recycled.

I was much faster in folding boxes and making pizza when I started. The interesting thing is we've completely revolutionized the way... It's just a box, but all of these things that you do over time make your operations better. If you walked into Domino's five years ago, it wouldn't look like a pizza store, it looked like a box factory because our guys and our team members came in early, they would fold the boxes, all the boxes would be folded, the pizza would come out of the oven, we'd unfold the box, put the pizza back in, and then refold it—so three times. During COVID, we had some real volume pushes and we had some shortages on people, so we completely redid our circle of operations. One of the things is boxes. So even someone like me now can fold a box quick because we don't prefold, unfold, and refold. All our boxes are flat outside of the oven. When the product comes out, you put it on a flat box, you box it around the pizza, and then it goes out. So it's only one fold, and it's a significant time saving, makes the job easier too.

It was the pizza and the business. Just a little bit of background: I joined in September of 2008, and we were just on our way to our third negative year of same-store sales in a row. In September, the stock was maybe around $14. By November of that same year, it was below $3. And a good number of our franchises were running below breakeven at that point. So when we looked into all of the opportunities, one of them was the taste of the pizza. But I'll tell you the other piece, this was a really important piece of insight research that a lot of people don't do. There's how something tastes, and then there's how the brain perceives it. One of the best things we did, and this was just an accident, one day I asked someone to do this in research: we took our pizza and we put it in a competitor's box, and we put a competitor's pizza in our box. Not only did blind our pizza not taste as good as the competition—not a huge difference, but wasn't as good—but the bigger thing was the brand issue. We put our pizza in somebody else's box and all of a sudden it tasted better, and vice versa with theirs. So the biggest thing with the pizza turnaround was not just changing and improving the product, it was the marketing behind it. I think the marketing was the bigger piece because we had to change 50 years of perceptions around the brand.

I'm a big believer in marketing. I'll take you back to writing the creative brief because I was the marketing guy at the time. I was writing the creative brief and I went on Google, this is 15 years ago, and I googled 'new and improved' and I got 14 million hits. And I realized we can't just say this is a new and improved Domino's Pizza. Everyone says 'new and improved,' that doesn't mean anything. So how do you get people to really listen? We started throwing around this idea called 'ten tensions.' The idea here is if you understand the tensions in your brand and you understand the tensions in society, and you can address those two together, you've got a big idea. The tension in our brand back then was we were a pizza company and our pizza didn't taste very good. That was kind of a secret we weren't telling everybody. Not that people were walking the halls saying 'I know our pizza doesn't taste good,' but in theory, the tension was a pizza company sitting on a pizza they knew they'd get better. Well, what was going on in 2009? That was when the banks were going under, the CEOs of the car companies were flying down to DC to ask for bailouts. So what customers were telling us the tension was in their life was 'I can't trust anybody anymore, whether it's the companies, the banks, nobody's telling me the truth.' So we felt like, all right, we're just a pizza company, but if the world wants to hear the truth and we have a truth that's pretty harsh, we will be doing something that everybody wants all the pillars of society to do, even though we're just a pizza company, and that'll get people talking. And that's what happened. So we went on air with this background of these tensions—everyone in the world seems to be lying to me, kind of the American consumer thinking that—and we went on and we told them the truth, and more importantly we did something about it. It was the most amazing experience to be a part of. We were three days away from running out of pepperoni, we sold so many pizzas we were all going out and working the stores. And that was just the start of the turnaround.

We didn't say we were fooling them because we weren't. I think over time, what happens with any company—now it won't happen at Domino's anymore—think about the quality of product X is over here. Well, you want to save money, so you take some ingredients, change them around, and you say, 'Is the new product X statistically taste the same?' It does. But then you do statistics on that one and you innovate on that one, and all of a sudden, five generations later, this product does not taste like this product. So what we did not have, and we have now, is a gold standard. Any change we make has to be better than the gold standard. What had happened over time is from a cost perspective, and sometimes even just to enhance the quality of the delivery, the product changed and it wasn't like we were significantly worse than the competition, but it wasn't where it needed to be. And the perception was there about us. So yeah, we went on air with one of the best-scoring ads in the history of QSR, where we went out there and we said, 'Hey, actually...' We had customers do it. We showed customers the pizza, we talked to them about the brand, and we showed what they said about the pizza. And then what we did was, using some reality TV techniques, we surprised them at their house with the new pizza, showed them what they said about the pizza, and said, 'Hey, what do you think?' And people were just blown away by the transparency of it. And then we had all this other stuff online.

Well, obviously there was lots of data behind all this, so it was clear to our management that the new pizza was better. But because we also did what was then considered pretty risky ad, you don't want to be the new Coke of pizza. We tested the ad and we had a backup ad, so we felt like we were prepared from a risk mitigation standpoint. But the other piece was we had franchisees who had put their heart and soul and their lifeblood into this brand, and we wanted to make sure they came along with us and they understood why we were doing what we were doing. So we did a couple things. One is we actually went out and did a road show. We had a blind taste test of the old product versus the new product. Literally, I remember to the day, only one person liked the old product better. And so we got them buying in. Once they were all in, we were able to go for it. So it was a great example of partnership turning around the business.

Well, I think a couple things. One is having the right partner. For example, I look at our China business now and it's on fire. It was not that way with our first partner. So you've got to find the right partner. And then you've got to make sure you launch the product that's right for that environment. When we look back at what we did in Italy, the decision was made to launch a product that tasted more like an Italian pizza versus embracing really who we are. So Italy is a huge market for us, at some point I'm sure we'll give it another shot, but when I look back at why that didn't work, I think those were two of the larger reasons.

Well, we're not. If you don't love who you are, why should you expect anyone else to love?

At this point in my life, in my career, it is leaving this brand, and eventually whatever I can do broader in society, a better place. I know that sounds really corny and maybe people just start understanding it when they get older. But Domino's changed my life, both in the opportunities it gave me and turning the brand around from where it was to where it is today. Some of the best individuals and friends I have in the world are here, including our franchisees. So at this point, my feeling is I am both actively trying to drive the business today, but more importantly, leave it in a great place for the folks who are coming behind me. Because I know a lot of these people. You may have a lot of CEOs saying 'I'm working towards the future' because they know, and look, I'm going to be doing this job for a while, but they know at some point when they retire they're going to still be stockholders. I'm a shareholder in Domino's Pizza, so that's a real big piece for me. And then outside of work, just trying to do what I can with local and national charities, giving back, teaching. Those types of things are fulfilling because at this time of your life you realize your kids will never listen to you no matter how old they are, but for some reason when you present to other people and you give them input, they listen to you. So that's fulfilling as well.

The biggest one for me is 'do unto others.' It's just 'do unto others.' I think there are maybe a couple ways to do these jobs. One is through intimidation—we've all had those bosses—and the other is taking other people with you. Now, taking other people with you doesn't mean it's all hugs and happiness. Sometimes you're going to have clear, transparent, sometimes tough conversations. But I've always tried, because in my career, I'm sure you too, you've had bosses that have and haven't treated you well. I treat people the way I would want to be treated. That's something that we make sure is part of our training program and part of what our leadership team does on an everyday basis.

I would say probably what is good for me in this role... There are a lot of challenges. Someone asked me the other day and I said, 'There literally is nobody who brings you any easy questions. One day I just want an easy question.' So that's probably that. And the fact that everything you do, the repercussions of a mistake on the business and people's lives, especially when you care about those people, it will keep you up at night. So I think it's all about keeping that perspective. What I am able to do because of my time here at Domino's is I want to be part of Domino's, I want to make Domino's better. So what I'm able to do when decisions come my way is really just say, 'Hey, you know what, if we're doing the right thing for the business, then that's the right thing for Domino's Pizza.' And that's freeing. I think a lot of CEOs are... Believe me, I know you're an investor, we care about what our investors think, but I think what investors want is they should want a CEO and a leadership team that sometimes doesn't care what they think, as long as it ends up in a better result. And everything we do here is with the desire to make Domino's better, and that's a little freeing.

Her name is C. Nicholson. I just actually she just got married, I just went to her wedding a few weeks ago. Let me talk to you a little bit about why. When you talked about leadership principles, so much of what I learned was from her. There were other people along the way. She was my boss at Pepsi. I worked at Pepsi for 11 years before I came here, and she was my first boss, she hired me in at Pepsi. This was during the dot-com boom, so all these public companies or companies that were going to go public were trying to hire Pepsi people to be in their business. I started as... There's a whole other story about how I got into marketing because I never took a marketing course in my life, and the first part of my career was trying to compensate for that and get over to do marketing. And C kind of gave me that chance. She hired me from another place and I was running marketing in their food service division, which is not very sexy from a marketing perspective. But anyway, what I was saying is all these people were leaving to go to these internet startups, and I was maybe working for C for about four or five months. And I think they were running out of brand managers, so they came and said, 'Hey, who's got someone they can move over to be brand manager on Pepsi?' And she brought up my name. Very few people, when they're starting a whole new part of the organization, four months into a role, give up somebody. And that changed my life, changed my career. She then became Chief Marketing Officer at Pepsi and brought me over to be Vice President of Colas, which is a big job there, well before I think most people would have thought I was ready. And lastly, when Domino's was looking for a Chief Marketing Officer, I guess I could say this now because it's 15 years ago, they actually wanted her. They kept calling her and calling her because they wanted a sitting Chief Marketing Officer. And she said, 'I'm not going to do it, but I've got the guy for you.' And they didn't want to interview me, but she got them to interview me, and obviously that brought me here and changed my life. So on the personal side, that's one piece. On the other side, on the business side, I'd say Dave Brandon, who's our chairman. I'm not just saying this because he's our chairman, I'll give you a really clear example about why that's the case. So I told you we launched this new pizza, we went on air with this really controversial campaign. When I pitched the idea to Dave, what I didn't know at the time was Dave was planning on retiring from Domino's and he was going to go work at the University of Michigan, he played there undergraduate on the football team, he was going to be the director of athletics. I would say nine out of ten CEOs, when you bring them a controversial idea that they can only be on the bottom, if this controversial idea didn't work, Dave would have been the guy who screwed up Domino's. Maybe me, but he would have been much better off telling me, 'Hey, do that new and improved idea that you said wasn't really big, just do it, it'll be up 1%,' and he could go on his way because he would have turned around the company. And he approved it with nothing to gain. I still say now to this day, I get credit, certainly our former CEO Patrick Doyle, who's another mentor of mine, should get credit, but that never would have happened if Dave was worried about anything other than the success of this business. So those are two personal and business examples for me. They're both in different ways very brave.

Well, I try to be brave from a business perspective. I could just point to that pizza turnaround campaign. Similar with people too. But what is important to me is I think about it as jumping out of an airplane. I think you've got to be brave to jump out of an airplane, but you have a parachute. The key in business is to be brave and bold, jump out of that airplane, but have the parachute. So when we made the decision on the pizza, we had all the data. When we make decisions on the people, we see what they've done and we look at not only the what but the how. So I think when folks say 'take risks,' if you just say 'take risks,' that's just something to put on a t-shirt. You should take educated risks. There's still room for error. So I think I know I'm a risk taker, I try to be bold in our decisions, but the example I tell people is I like to have the answers for the test before I go into the test. So when we do these things, I think I hope to our customers and our team members they look like bold decisions, but we try to take them responsibly.

To me, gut feeling is what brings it all together. When you make decisions, hopefully they're not in a vacuum. You have the point of view of your leaders, you've got data, but there are no black and white decisions as you get further up in your company. They're all gray. And what the gut is is taking all those different points of ideas and bringing some fabric to them and interpreting that all together. So I think that's a balance that I look for and that I feel like I have. The other piece of it though is making sure you're surrounded by people who know they can push back, because the day you think you know everything is the day you've failed. So gut feel is important, but also taking the input of the people around you that you trust is also important.

I do not use a knife and fork. I'm from New York, by the way. As a pizza guy, however you eat pizza, we endorse that. Our only party here is the pizza party, we're not any political party. But I'm from New York, and in New York you fold your pizza and you eat it like this, and it's even okay to drip a little bit on you. So that's the way I eat my pizza. I wear it.

I could eat it, and I don't kid you on this, I could eat this. This could be my desert island food. When they say if you're stuck on an island, what could you eat? Absolutely be pizza. But probably two or three times a week.

There is a... I won't give the name because we've got stores in New York too, but there's a pizza joint in New York that is fabulous. In Manhattan.

It will taste good on a pizza. Actually, it actually won the World Championship this year.

The one in Italy? Are you going?

If you come along, let's do it. Let's do it. Absolutely.

Sounds good. Thanks so much. It was great meeting you.