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Jack Gets a Grip

Sonic operator Jack Hartnett has a controversial hold on his managers-but they're not complaining about the payback.

It's 4 AM. You're sitting blindfolded in the back of a van trundling into the Missouri wilderness as music from The Phantom of the Opera blares from the cassette deck. After this jarring ride, you find yourself at a camp site. Your next several hours will be spent in the woods where, with the help of clue sheets and warnings about snakes and bears, you and your teammates will have to find ribbons faster than the opposing team can. But you won't win unless you return to camp playing kazoos.

Welcome to a supervisors' meeting of the D.L. Rogers Corporation, part of the managerial play book of president Jack Hartnett, an outspoken yet exceedingly polite 44-year-old Texan who's expanded his Sonic franchise business to 51 units using management methods even New Agers might find strange.

The trek through the woods typifies the "Lock-in," an intensive meeting often held in a surprise, no-escape location. Object: to build teamwork and "put the fun back into management," explains Hartnett. His brand of fun and management involves tactics as leisurely as a staff picnic, or as hard-nosed as firing a manager for telling a lie. "Some might perceive my style of leadership as unorthodox," he says, "But no one can question my numbers."

With the Bedford, TX-based company's 12 straight years of record profits, no one is likely to. "They have some of the highest profits in the chain," says Sonic marketing VP Pattye Moore. Hartnett won't get into specific figures, but fiscal '95 sales for D.L. Rogers' Sonic drive-ins have been estimated at well over $31 million, the highest of any franchisee in a chain that has 1,550 units in 27 Southern states.  Hartnett says simply, "We're kicking everybody's tail."

If that sounds over-confident, Hartnett is unfazed. He's been in the restaurant industry since he was in junior high, and knows well enough what doesn't work. "I saw things I didn't like," Hartnett says of his ill-paid early days in fast food, "Honesty wasn't rewarded, the owner was unapproachable, there was no fairness" It was early on that what Hartnett calls the 'I would have's" began. Seeing one supervisor lambaste an employee for offering criticism, he internalized the things he would have done differently in the same situation. "1 wanted to create an environment," he says, "based on truth."

His chance would come soon enough. While Hartnett first came to Sonic as a manager trainee in 1976, D.L. Rogers founder and namesake Don L. Rogers made him director of operations in 1983 after luring him back from a stint as general manager of the Steinmann Corporation, an operator of nightclubs in the Houston area.

On his return, Hartnett saw the company as "a very splintered organization. There was no communication, no authority." He likens his reorganization to "getting control of a raging fire."

Much of the success of his managerial model has to do with company openness. "I'm known as ruthlessly honest," Hartnett says. He expects the same from the ranks. To this end, he Instituted Internal Health Surveys, questionnaires given intermittently to managers with hot-button fill-ins like 'My supervisor's three worst traits" and Yes/No's like "My supervisor manages me through intimidation." To assure candor, nobody has to sign his (or her) name. Similar surveys are also given to front-liners. "Then we go to the manager," Hartnett says with frank enthusiasm, "and say Here's what your employee said about your restaurant. How can we work on this?'

D.L. Rogers' no-secrets atmosphere springs from Hartnett's eight rules, a sort of 10 commandments for restaurant operations. Admittedly, some can seem Biblical in their seriousness. The first two ('I don't lie to you," "You don't lie to me") are the foundation of Hartnett's corporate culture and not to be taken lightly. "It has to do with the ethics of this business. We don't build a company on mistrust," he says. "If you were late because you overslept, you'd better tell me you overslept. If I find out you lied, I'm going to fire you."

Similarly, rule number eight-"I will only tell you one time"-allows little room for unwillingness to correct mistakes.  "The first [mistake] is ignorance," Hartnett says. "The second time is from a willingness to not do the job."

For employees willing to work under such standards, the returns can be significant. The average store manager in the D.L. Rogers Corporation took home $65,000 last year; (1995) three out of his eight area supervisors made $150,000.  Managers also enjoy a 15% bonus plan, 100% health coverage, and the chance to buy a 1% interest in other stores after three years. Hartnett's own compensation includes loyalty: The average managerial tenure is over nine years.

The proving ground for that loyalty is Hartnett's insistence on personal involvement among managers and supervisors, their families, and the head office. Regular phone calls and visits among managers and supervisors are expected, and visits at home are not unusual. Even combined vacations are encouraged. Perhaps most surprisingly, Hartnett's engagement in managers' personal problems is commonplace. "We get very involved in these lives," he says. At various times, Hartnett has interceded in managers' personal finances ("If they can't handle their own money, they can't handle mine," he says) and even in their marital problems.

That troubles Kristin Anderson, principal with Performance Research Associates, a Minneapolis-based management consulting firm. "A manager and owner's job is not to be a parent figure or a psychologist, nor is it to erase that line between work and home." She goes on to liken Hartnett's managers joining the company to joining a church. But for those in the Rogers camp, the blurring of boundaries between personal and professional lives has had recognizable benefits. "I can't tell you how many people are still with us because Jack knew what the problem was, [and] we were able to help them overcome it," says Oklahoma area supervisor Jim Simons. "It's not that Jack tries to intrude on private life. I think he's genuinely interested that things are going okay at home,"  "Jack has never gotten into my personal finances without an invitation," says Michael Lewis, a manager in Oklahoma City, "I'll call him and say 'Jack, I've got problems' [and] I felt better once I had talked with him about it."

Andy Rhue, manager of the Tyler, TX, Sonic observes: "To me, if the CEO calls me at home, I say he cares.'" Of course, Hartnett's reasons for caring go beyond altruism.  The Sonic units of D.L.. Rogers are limited liability companies based on shared ownership. A "manager/partner" typically owns a 25% stake, with 5% belonging to the area supervisor and the balance to Rogers. With compensation resting solely on unit dividends, "It's in our interest to make sure those managers are profitable, and that they make a good living," Simons says.

That effort extends to managers' personal lives because Hartnett believes troubles at home can quickly become company issues. "A [manager's] tax problem is really none of our business, but it is when it affects how he runs his store," says Simon.

Such financial scrutiny, however, seems secondary to what Hartnett and his managers describe as the overriding family atmosphere In the company. Simons envisions management in other restaurant outfits as "cutthroat situations [where] everyone's trying to up the other guy. But [here]," he says, "with the other supervisors I'd do anything in the world to help them." When Hartnett opens a new Sonic, he'll typically rent a house nearby and invite up to 20 managers to live there together while the new unit's operations are polished. For Hartnett, it's an opportunity to cement relationships and do some cooking. For managers like Lewis, it's a chance to pick some brains. "I usually try to bring back 10 new ideas each time I go."

But for some, Hartnett's brand of team work is too intense. Recently D.L. Rogers' top-netting manager left the company, literally, by packing his bags in the middle of the night during a store opening. "It sent a huge, bad message to the rest of the group," Hartnett says. It is also a reminder that tactics like Hartnett's, however successful, don't have universal appeal. They rate high in what's become known in the training field as the "woo woo factor," which is used to describe out-in-the-woods scenarios replacing in-office training techniques. "A lot of people are doing those kinds of things," observes Ron Zemke, Performance Research Associates' president, "but there's not much data that says it's better or worse than anything else."

The World According to Jack

'The president of a company renting a house, putting his directors in a van, blindfolded, and making them listen to tapes, that's a very different approach," admits Sonic's Moore. "Jack doesn't do business the way most managers do, but there's no disputing that it works. In fact, I've contemplated doing some of his techniques myself." If she decides to, she'll have to be willing to spend $190,000 to bring 234 people (managers, supervisors, and families) to Cancun, Mexico, which is what Hartnett did this past July for D.L. Rogers' biennial convention. This year's four-day gathering featured supervisors and their spouses dressed like tribal warriors and ancient Egyptians.

But the events, in true company form, mixed clowning with education. Employees attended seminars with titles like "Epoch Mythology" and "Sand Skirmish" which were actually brass tacks classes about time management and teamwork. And in true Hartnett form, they also blended business with home life. The "Romancing the Stone" program featured tips on being a better spouse.

For a manager like Michael Lewis, the seminars are the only cure for "store blindness," which sets in when the 65-75-per-week on-site hours dull his senses. "When I come back from a convention," he says, "I come back with an attitude change. It's about improving me, because by improving me my store improves."  Lewis tracks about 750 people through his Sonic every day, and his $75,000 in monthly sales are a good return for an event that seems no more complicated than a family reunion.

Nonetheless, Hartnett's management model thrives only because his people, although franchisees, act as independent operators. "You can't do some of the things we do if [managers] were employees," he says. "You can if they're partners."  Zemke concurs. "The idea of being partnered with your managers is a really good idea," he says, "but it would be awfully hard to have policies and procedures like his in a large company." He calls Hartnett an entrepreneur whose methods, while "powerful stuff," are "limited to the entrepreneurial venture."

"Entrepreneur" is one way to describe lack Hartnett. The managers who presented him with a plaque which currently hangs in his office have another. "Thank you for your time and your effort," it reads. "Presented to our mother superior."