Dave Brandon

Thank you Les, it's great to be with you.

Well, I'm a bit of an unconventional CEO candidate. I've actually been the CEO of two terrific Michigan-based companies for the last 22 consecutive years of my life. But I went to school to study to be a teacher and a coach. I wanted to go into the field of education. I loved teaching and I wanted to coach because many of my role models growing up were coaches and athletics were real important to me. So I was graduating with my degree in education and I was contacted by a recruiter from Procter & Gamble who had been on campus at the University of Michigan interviewing, among others, my coach. They gave him a series of qualities they look for in people for their sales and sales management training program, and my coach gave them my name. So I was in the middle of doing my student teaching and got a call from this recruiter at a great company like P&G and asked me if I'd sit down and talk to him. The next thing you know, I walked away from my teaching opportunity and decided to give this business thing a try. That was 35 years ago. Since then, I've had a wonderful career in business. I was with Procter & Gamble for five years, then I went to a relatively small family kind of entrepreneurial business where I ended up being there for 20 years. By the time I left, I'd been the CEO for the last 11 years I was there. We were a New York Stock Exchange listed company with a market cap of about two and a half billion dollars. It was a really exciting opportunity to take a company public and do a secondary offering and really build a large company. Then I was recruited to become the CEO of Domino's Pizza from that job, and I've been in this job for 11 years now. All the leadership lessons and all the training and preparation that I got for the world of business was pretty much through athletics, observing coaches in terms of the kinds of approaches they took to recruiting talent, the way they prepared for games, the goal setting, the play calling and the strategy, the intensity of the competition. I took all those lessons from the athletic fields and put them to use in business, and at least for me, it's worked pretty well.

Well, we're all a product of our own environment. I can tell you that I'm less hung up on what somebody majored in or what school they attended because personally I don't feel that because I happened to study to be a good teacher and a coach, it prevented me from being successful learning what I needed to learn to be successful in the world of business. So I tend to look more for character qualities, aggressiveness, and the cultural fit between an individual and my team. I don't care where you come from, I don't care how old you are, I don't care where you went to school or what your major was. If you can add value to my team and contribute in a way that's meaningful, then to me that's what's most important.

Well, the thing that was the absolute most important thing for me to do when I came in here was to get the team right. I inherited a culture that was very different than the kind of culture that I could be successful leading in. I inherited a private company that had become far more inward in the way that it measured success. I knew coming into this job that this was a company that was destined to become public at some point during my tenure, so I needed to instill the Wall Street perspective, the Wall Street energy, and create a growth story that would become a value creator for our shareholders. That was difficult because I inherited a culture that was very different. So first and foremost, I had to find out who was on the team that could embrace a very different approach, a very different culture, and a very different expectation, and make sure I identified those folks and got them in the right spots. Equally as important, I had to identify those people that did not embrace that change or could not get comfortable with shifting gears and moving into that mode, and in those cases they had to leave. I had to go out and find the people I needed to put the team together that I knew I could be successful with. That's the most important thing that any leader has to do: surround yourself with terrific people who not only you can trust but, as importantly, they embrace your vision for what can be. Thankfully, I was successfully doing that here at Domino's, and I'm very proud of the things we've accomplished.

I think it's early work, but you have to be fair and reasonable. I always give people a chance. I knew coming in here that I was going to be a very different leader with a very different style, and I tried to balance my impatience for change with my patience for giving people an opportunity to change with me. I would say the first year I was learning the business, learning the people, observing them in situations. I made a couple of key moves in the first six to nine months, and within the first year and a half I had basically changed out two-thirds of the leadership team because it just became apparent to me that that team was too set in its ways and had other agendas in terms of what they wanted to accomplish and why they were here than what I was trying to accomplish. One of the early things I did that was very smart is I went out and found a really terrific EVP of HR who came in. I absolutely believe that the HR function should report directly to the CEO, and that if you're going to be close to anything as a CEO, you should be close to the talent management side. I brought a woman in here who has been a terrific partner over the last 11 years, and we began together balancing both the recruiting activities along with managing out some of the people that really needed to move on. That's hard work and tough work, but it's necessary work, and happily I had a partner that I could work with to help make it happen.

Absolutely right. It's really true here at Domino's. When I arrived, the HR function, the leader of HR reported to the guy that was responsible for it, who reported to the CFO, who reported to the CEO. That's why we were experiencing turnover at 158%, and that's why the culture wasn't really where I needed it to be, because that whole HR function had become almost handed off to whoever would take it, as opposed to being a very important part of the strategic purpose of the company.

Well, you bet. It's one of our responsibilities. First and foremost, we're a large restaurant chain in and of ourselves. We own nearly 500 of our own pizza stores across the country, so we've got to get this right for the sole purpose of our corporate operations. But one of the reasons we own all those pizza stores is to lead by example. We test programs and protocols to strengthen relationships, improve training, improve obviously production and quality and retention, and we hone those tools and then we take them to our franchisees. Whether they be our incentive compensation programs, our training programs, all the things that we put in place to attack this turnover problem, as those tools prove themselves, we took them to our franchisees and gave them the ability to gain from them as much as we did.

Well, I can tell you based on my experience that that treadmill phenomenon typically occurs when people get content and lazy, and that usually happens when things are going well. My own personal view, when you look at some of the nasty situations you've seen with huge corporations that used to be big and powerful and strong and now are going through the bankruptcy courts — we're headquartered in southeastern Michigan and the auto companies, some of them are a perfect example of this. When times were really good, they just kept giving away more and feeling like it was going to last forever and managed less intensely because they were making money and the shareholders were happy. My attitude is the best time to apply a shock treatment to an organization is when things are going well. If you think about it, it's the least risky time, it's when you're going to have the most resources. So you would find some of the people who work for me will tell you that I'm the most cantankerous when things are going well because I'm constantly pushing and leveraging to say we can't rest on our laurels, we can't get content with where we are. If we start to think that this is just going to automatically perpetuate itself, we know it won't. So I turn up the heat. We've done most of our layoffs, our reductions in force, some of the more direct and tough activities that we've engaged in to downsize, deep layer, and get the business trim and ready to fight — we've done far more of that during the good times. Consequently, when we've hit those difficult spots, and we have as anybody else does, we're ready for them. The volatility isn't as great, and we don't have to take an organization that's already traumatized by tough business conditions and further traumatize it by throwing a lot of change and tough activities at it. We've already done that work when it was easier.

I disdain silos. I think they're the most detrimental thing that I can think of to success, and I work on a daily basis to make sure they don't exist. We'll do about six billion dollars worth of global retail sales this year, we're in 65 countries, we will put the ribbon on the opening of our 9,000th store this month over in India. By some people's standards, this is a pretty large organization. At any given time across the system, we probably have 175,000 people working in Domino's Pizza stores. But I can tell you this: as it relates to the way we run this business, we're all in the same huddle. All of my senior leaders are all on the same compensation plan. None of them have their own individual plans based on their own unit's performance; it's all the performance of the whole. We don't do a lot of this transfer cost nonsense where I break up fights over who's paying for what internally. Everybody is focused on one number: how we perform as a corporation. All of our incentive plans, all of our measurements are based on how we do as a whole. So I don't get into that world where I'm spending way too much time and my people are spending way too much time fighting amongst themselves as to who gets credit. We are all focused on the same thing. I meet regularly, we just got out of a meeting, our bi-weekly meeting where I put all of them in the same room for several hours and we spend time communicating and making sure everybody knows what everybody else is up to and what they have going for the next couple of weeks. We share problems together, we laterally move talent from organization to organization. We call them developmental moves; many times it's not a promotion, it's a developmental move that broadens the horizons of the individuals but also breaks down the silo walls because the more you move people from place to place within the company, the more it comes together in terms of understanding and communication. So I'm really big on that. That also helps get folks out of complacency. If they're just in the same job until they're eligible for promotion or they get tired, that's when people get complacent and you get that treadmill effect coming to kick in.

Well, I think it's both. I encourage the people who work for me here at Domino's to do exactly what I've done, and that is to be more than just a pizza business nerd. I want people working for me that can talk about things that are happening in the world, things that are happening in the community, other businesses and industries. I want them to be people who have a broad perspective, and people who are interesting by virtue of the fact that they don't just get up every day and go to the same place and all they know is what they work on every day. The relationships that you build through those outside activities are helpful and important. The things that you learn seeing how other organizations do what they do, whether they be not-for-profit or for-profit, I think is also very valuable. It just broadens you as a human being to the point where you see a bigger perspective. Then when you're in a meeting talking about marketing decisions or communicating with customers or leveraging technology, I think you bring a completely different perspective when you've been out there and seen how other organizations are doing what they do. So I'm a big advocate. I know it's time intensive, and there are a lot of companies that have a very different philosophy; they want you to be chained to your desk and only work on those things that are integral to their own benefit. But I have a very different view.

Well, I was just going to say, we're in a relationship business. There's only like 71,000 pizza shops in the US, and pizza is a very local category. People have a lot of choices, and if you don't build a relationship that's just above and beyond a commercial or a printed advertisement, if you're not out there connecting with your customer at different levels than just the traditional media, you're not going to win. So we encourage it, and I think we do a pretty good job, particularly when the local pizza guy does literally live locally and he knows everybody, so you're battling that to start with. That's very insightful.

Well, there's always a checklist of things you want to get done, but I can tell you after 11 years, I've had plenty of opportunities to instill my fingerprints on this business and accomplish a lot of things. We're in the process right now of completing a rollout that we've been working on for almost three years of a new recipe and a completely different and new positioning from a quality perspective of our core pizza product. We've launched a lot of new product platforms; in fact, 80% of our menu right now is brand new versus where it was two and a half years ago. So we've done a lot of work on our menu, we've built a lot of stores. We'll build almost 3,000 stores since the day I walked into Domino's 11 years ago. So I'm very proud of what we've accomplished, and certainly there are all kinds of things I wish we'd gotten done better, and that's just kind of what makes leaders leaders. I can always whine about the things that didn't happen as well or as big as I wanted them to. But as I leave here, I feel very, very comfortable with what we've accomplished and the progress that we've made. I can tell you that the most important thing that I've done and the legacy that I've really left is in the area of succession planning. Because what you really want to see happen is the baton gets passed at the senior leadership level, and instead of what I went through 11 years ago as an outsider who was parachuted in here and had to change out the team and change the culture and go through all of the risks and work associated with that, I had an individual that I identified literally the day I got in the door here that has been number one on the successor list for the last several years, is absolutely ready to move into the job, understands and has been a part of the culture. The day that we announced Patrick Doyle's succession to the CEO role, our stock went up eight cents. It was a non-event to the street because they knew him, they know how qualified he is, they know how strong the team is around him, they know that this is not going to be an interruption to the business. To me, that's the most flattering thing of them all. Our business is performing right now as well as it ever has, and we've made this transition happen in a very seamless way. So we've got a great CEO coming in with a great team around him, and it doesn't get any better than that.

Yeah, it does. 22 years of being a CEO. If you think how many board meetings, how many quarterly numbers to hit, how many investor conferences, how many annual budgets to prepare. I'm a young guy with a lot to accomplish; there was no way I was ready to retire. But I've been doing this public company CEO thing for longer than most. I think I've lived beyond the norm by several times over in terms of my years in this job at these two companies. So I'm excited about my new opportunity. I'll miss the people here terribly, but I'll be very pleased and proud to be the chairman of the board of this company and from the boardroom continue to follow the great work of Patrick Doyle.

What will I miss? The day-to-day intensity of this business is just beyond belief. We drive 10 million miles a week with 9,000 stores and all the countries. Every day there's something going on, there's a different challenge every day. It's a little bit like a marathoner who gets up every day and plans on running 10 miles because that's what it takes to keep this thing going. That's the intensity of retail, it's the intensity of the Domino's Pizza enterprise. I'll miss that, I know I will. I'll probably sleep a little longer and a little better, but I'll miss that. I will also tell you my new job is definitely filled with its own set of challenges, and it's very much a full-time activity. So again, I'm not going in the rocking chair; I'm going from one challenge to another, but it's a new challenge and it's a different challenge.

You're most welcome. My very best wishes to you.