Friday, September 2, 2011

Jamba's juiced-up turnaround

This is the final installment of a three-part celebration of the industry's top turnaround stars. You can read the first installment, on Popeye’s Cheryl Bachelder, here, and the second, on Ruth’s Chris’ Michael O’Donnell, here.

Under the cobwebs in some business school’s library is a volume entitled, “Standard Procedures in Restaurant Turnarounds.” It’ll be covered with an inch of dust because anyone who’s spent time in the business will know the prescription: Expand your menu to draw new customers while tapping wholly new sources of revenue like catering.

Rare is the executive who hasn’t thought along those lines. Scarcer still is the one who was able to make the plan work.
So meet James D. White, the CEO of Jamba Juice. You might not know him, or of him, because he’s kept a low profile. But he’s quietly engineered what may be one of the most astounding turnarounds in foodservice.

White took over the chain in late 2008, as its glitter was starting to wear off. It’d drawn considerable attention, from consumers as much as the industry, as a “lifestyle brand”—a Starbucks that sold cold drinks instead of hot ones.

That’s great for a niche brand. But the concept’s limitations were becoming evident. It actually sold a liquid meal replacement in a cup—a relatively high-ticket smoothie that takes a considerable amount of time to finish, if you can consume it all. To say it’s filling is like referring to Lady Gaga as kind of different.

Jamba wasn’t where you’d stop for breakfast, lunch and dinner, day after day after day.

The chain’s management was addressing the problem by adding a smaller-sized serving and adding breakfasts you could suck up through a straw.

Enter White, who, significantly, was recruited from the grocery business, not another restaurant chain. He’d developed proprietary brands for the Safeway supermarket chain.

White quickly came up with a strategy. If you’d stopped any attendee of the Restaurant Leadership Conference and asked them on the spot for a plan, you’d have gotten almost the same thing:

--Cut expenses
--Expand the menu to bolster traffic
--Focus on service
--Emphasize franchising
--Expand overseas
--License your name to food products.

Fast-forward to the present. The chain now features products as diverse as soft yogurt and steel-cut oatmeal. Breakfast wraps are being tested in more than 200 stores.

Jamba’s memorable name appears on retail products ranging from trail mix to toy blenders. G&A costs were cut by more than 14%. Its franchisees include tennis superstar Venus Williams. “And we have zero debt on the books,” White told investors two weeks ago.

As far as we can tell, White didn’t log any time at Hogwarts before joining the restaurant business. He has no pact with the devil that we’re aware of. Nor is he using some special ray gun.

Yet he was able to execute a plan that stymied other chains, of all shapes and sizes. There’s no magic to it. Indeed, the difference was as simple as drinking a smoothie through a straw: He built a team and instilled a culture that enabled the strategy to work. The “how’s” were details that management could supply because of its experience and insights.
White provided the leadership to make the thinking and execution possible.

It sounds like an easy formula. But as Vince Lombardi famously said, You can use my playbook, but you still have to beat me on the field.

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