Cerius Journeys: Who Would Want To Be An Interim Executive?
One of the first questions we get from business owners at Cerius Executives is, “Why would a top level executive be available to step into my company at a moment’s notice and help me for a short period of time?”
In this series, we talk to some top executives and learn more about their journey to being an interim executive.
Denise Montgomery: Hi, I’m Denise Montgomery for Cerius Executives, and this is Cerius Journeys, a series dedicated to exploring the ways and career paths in which C-suite expertise can help small and medium sized businesses grow and solve the right problem at the right time in the right way. Today’s guest is Larry Behm, a CEO who helps food service in production and retail challenges.
Larry Behm: Hi, Denise. How are you?
Denise Montgomery: I’m fantastic. So, go ahead and let us know, in your own words, the quick outline of who you are and what you do and how you help people. And then we’ll get into some more informal discussion.
Larry Behm: I advise companies from a board interim or consulting role. I focus primarily on franchise, multi-unit, consumer-facing retail and restaurants, and I mentor executives to create a sustainable, differentiated consumer experience through culture and [00:01:00] operational excellence.
Denise Montgomery: You’ve got that down! We’re going to talk about what that looks like when you get into the companies. Let’s actually back up a little bit. I like to talk to people about how they got where they got and what the journey looks like. So where did that start for you? Geographically, where’d you come from? And, where’d you grow up? What shaped you?
Larry Behm: Originally I’m from Montana. I went to high school in Michigan and went to college in Nashville. So, a lot of different kinds of cultural background. The first half of my career I did a lot of international work.
I’ve worked or lived in over 15 countries. So it’s kind of hard to put a single spot on the map that says where I was formed.
Denise Montgomery: Well, Montana, enormous and wide open and [00:02:00] to go from there to 15 different countries must have been a huge shift in your perspective.
Larry Behm: Yeah, it was. It started off in high school as an exchange student in Finland, and that’s a quite different kind of experience, a little tiny country. So yeah, that kind of started me on quite a path of exploring the world.
Denise Montgomery: Did that exchange student experience do anything to whet your appetite for seeing larger perspectives and did that do anything to open up your career path?
Larry Behm: Yeah, I think it did. I think it helped me understand how to interact with different cultures. It gave me an interesting perspective. Nixon resigned the year I was over there, and so I was struggling to learn Finnish and watching the news in a foreign language, trying to understand what was happening back here.
And that just kind of created an interesting curiosity just to understand [00:03:00] what other people see and how they live.
Denise Montgomery: Interesting. Thank you for sharing that. So the next question is how did you arrive at what you do? Everybody gets their education differently. Some people do it very formally. University, march through, get the first job, learn on the job, get there. Some people go through the school of life. How did you gain all of the expertise, knowledge, skills that you did?
Larry Behm: Probably a combination of the two. I started off learning mechanical engineering at Vanderbilt University and that caused me to see things as a connected network, start thinking in a kind of systemic way, understanding how systems work.
I went through college on an ROTC scholarship, so I became a Marine officer and spent four years overseas, deployed almost the entire time. That taught me a lot [00:04:00] about dealing with people and how to lead, how to accomplish the mission no matter what. And how to handle a crisis. Certainly had several of those during my time.
And then I went to work for Proctor & Gamble, which was an interesting transition, a very regimented company. Somewhat like the military. But, at the same time, very different and obviously focused on different objectives and I really learned food from Proctor & Gamble; I ended up in the food division and I understood what it took to be an organization that really was sustainable. The company has been around for over 180 years. A typical company in the United States lasts about 30 years. And so for something to survive for 180 years- they obviously have some processes that I think somebody can learn from. So I tried to learn as much as I could.
When I was at Proctor & Gamble, I was doing the heavy-duty engineering, designing and running factories. Then, Pepsi called me up and [00:05:00] they said, “We want you to look at restaurants like they’re a factory and figure out how to rationalize restaurants.”
I was basically assigned 7,000 restaurants around the world and said, “How do you rationalize that?” And so that started me in a path of going down in the services industry, leaving heavy-duty manufacturing, going into services. Along the way, I just learned a tremendous amount there, and really tried to figure out how to engineer systems that people work in.
That was a lot of on the job kind of stuff. I don’t know that anybody teaches that in school. Certainly relied on a lot of my education, a combination of engineering and my MBA, to apply it all together there.
After I left Pepsi, I went and helped start a company called Turbo Chef. We did an IPO, ended up selling to a large conglomerate and Pepsi convinced me to come back and help spin the restaurants out of PepsiCo. So I came back and helped create a company called Yum. [00:06:00] And that represents the large restaurant brands that Pepsi owned at the time. After a while, I left and went off and did some other things.
Then I joined Panda Express. The owner was looking for a team that could take his company from being a regional player to a national chain. So I went in as the COO and expanded the company pretty dramatically.
I have recently been focused on movie theaters, movie cinemas, as they try to figure out how to survive in the world of streaming. Netflix has really inflicted some serious disruption on that industry. I’ve worked with a couple now trying to work through different approaches to interacting with what customers want and when they can get everything they want at home, when they [00:07:00] want it.
How do you provide a service and an experience in a confined space on our timescale and not theirs? So that’s been a distinct challenge the last few years.
It’s been, as you said, a combination of schooling and experience.
Denise Montgomery: It sounds like it has been a fascinating journey.
Larry Behm: Oh, it has been. Certainly not what I expected from the beginning.
Denise Montgomery: So my next question, I wanted to ask, and I’m asking everyone that I talked to, about a teacher or a mentor or a significant figure that you encountered through your journey, who taught you an especially memorable lesson that you have applied through your leadership.
Larry Behm: Well, I suppose, the probably most important metric is my folks, and they did a wonderful job of teaching me to respect everyone and to find good in everyone. [00:08:00] That has proven to be particularly useful as I worked across different cultures and so forth. Senn Delaney had a phrase in some training years ago. They said, “assume positive intentions.” That’s always a nice way to start a relationship. So that’s been critical other than the way my folks taught me that kind of stuff.
Early on in my training, I ended up working for a guy named Buck Godard.He was a Marine captain at the time. He was my Marine instructor. He ultimately ended up becoming the number three guy in the Marine Corps, chief of operations for the Marines. And that fellow taught me how to hold high standards, really set the bar high and get things accomplished.
So I’ve really enjoyed a neat relationship with him over the years, and he’s been quite an inspiration for me.
And I could go on and look like the Academy Awards, thanking everyone. But, probably the other one that’s been most [00:09:00] unique and different was Andrew Churn at Panda. Andrew is the consummate entrepreneur. I started a couple companies on my own, and one of them actually worked, though I had a failure also, so I thought I understood what it was to be an entrepreneur. But watching how Andrew operated and how he thought taught me an awful lot about what it really means to be an entrepreneur.
So I’d say those are probably the big ones. A lot of folks in between, but I would focus on those three.
Denise Montgomery: I actually want to go back to what you mentioned there. You mentioned failure, and failure is a really critical teacher. I wanted to follow up there and ask if you have something that you’ve learned from failure that you’d like to pull out and comment on, I’d love to hear that.
Larry Behm: I think failure really is the only teacher. When something is successful, it’s awfully hard to know exactly why. But when [00:10:00] something fails, it’s really pretty clear what happened, usually. I think success comes from a whole series of failures and the perseverance to just keep getting back up and going at it and so on.
The key thing I learned early on was resilience. I know from some other training, other folks focused on success. Resilience is really a key part of success. And so when something doesn’t go the way it’s supposed to, stepping back, learning your lesson and then going back at it again and trying to figure out a different way to accomplish whatever the task is is the key element that I get out of failure, anyway.
Denise Montgomery: That sounds very much after-action report, very military. Is that something that you picked up there or did you already have that?
Larry Behm: Some of it comes from sports. I mean, you get back up when you get knocked down. It’s formalized in the military; that’s a way to learn, the after-action report, [00:11:00] but there’s a real time element to it. The kind of training I went through as a Marine officer- it was all about resiliency, putting us into very stressful positions and figuring out how to get out of it.
At the time there’s not enough time to sit down and to have a group discuss what they saw. So it’s a combination of doing it on the fly and then having the courage afterwards to step back and really learn some lessons that you can carry with you going forward.
Denise Montgomery: So it sounds to me as if what you’re discussing is actually applicable, both in terms of long term strategic management and also crisis management.
Larry Behm: Yeah, I think so. The key thing in a crisis that I’ve experienced is just keeping your head about you. Fear creates some interesting emotional reactions and a crisis always generates fear and the fear makes things look worse than they are.
Keeping your head about you and trying to figure out how to move forward, I think is the key element.
Denise Montgomery: That’s going to lead us right into my next question. [00:12:00] We’ve only got a couple left. The next one is: everybody does what they do a little bit differently. So what would you say is your particular secret sauce, your most unique and special way of doing what you do, your leadership style?
Larry Behm: I focus on solving the immediate problem, with an eye towards building the capability of the organization. I find that a lot of organizations spend too much time working in the business and not on the business.
I think those are two different skills and mindsets. So, obviously, if you’re in a problem, you can’t work on improving the business, you gotta survive. But, usually they’re in that mode because of some deficiencies in terms of the way they’re set up with their systems.
So, I focus very quickly on solving the immediate problems. You’ve got to survive to be able to thrive. And then set them up for making some longer-term [00:13:00] changes. And generally, the kinds of solutions I come up with are related to the interaction between people and technology.
I’ve got a skill set that works pretty well with my technical backgrounds. I understand most technologies and, with the years of experience I’ve had leading people, I can figure out how to smooth out that interaction and really leverage the two. People do certain things really well and other things not, and technology is the same, and they’re usually complimentary, if you do it right. Trying to figure out what that complementary solution looks like is really where I think I can excel.
I also bring a fairly large Rolodex of world-class resources. I don’t pretend to know it all. If we can identify a problem, I can usually find somebody from prior experience where I know them personally, I know the level of work they do, and we can bring them in and solve a problem pretty darn fast.
The way I’d sum it up is that the [00:14:00] range of experience I’ve got is that I’ve had success in startups all the way up to a Fortune 50. And I’ve worked in jobs from being a dishwasher up to chairman. So, I think I understand the breadth of the challenge and I could identify a pretty large range of solutions.
Denise Montgomery: Could you walk us through what that looked like in a particular assignment, from beginning to end? The client, the challenge, the thing that they were facing in one of your interim or, part time or fractional assignments?
Larry Behm: Panda Express probably expresses the range most succinctly.
As I mentioned, the owner wanted to go from a regional to a national chain. We built a team of top level folks to come in and do that. Some were folks that I knew from the past and others were recruited specifically. When I started, Panda had 450 stores and it was pretty obvious that for the kind of growth we [00:15:00] wanted to achieve, we had to build what I call a leadership engine.
We promote from within. We tried not to hire from the outside. There are a few strategic hires, but primarily we tried to promote from within. And that meant we needed to have a system that developed and built out a hierarchy full of leaders that really could operate on their own- folks who are working remotely and not a lot of post supervision. It’s not so much about skills as much as their attitudes, their capability, that type of stuff. So we worked through an entire organization up and down and it’s just a very people-centric approach to the way we did things.
The key idea there was actually embedded in what Andrew was doing, but he hadn’t articulated. Andrew was really trying to build a better life for his people, and we were able to articulate that clearly, then I was able to set up the [00:16:00] expectation with everybody.
Statistics say that 50% of Americans’ first job is in food service. We wanted Panda to be the best first place. So if someone’s going to look for a first job, we wanted them to come to Panda because it was going to be the place where they would learn the most. They’d be with us six or eight months, and then move on. We set up a training mechanism to deal with that.
What we found, as a result of that, was that people like to stay around when they’re being educated and trained like that. It gave us tremendous flexibility. Then in selecting the people, we found that our costs went down because our training actually got reduced. Our turnover dropped dramatically and people just stayed around there as we were teaching them, basically, life skills. A lot of them are folks that didn’t know how to use a bank, didn’t know how to buy a car. So that just became part of the job. We built a whole system that trained all that kind of stuff.
The other areas that I focused [00:17:00] on were supply chain, all up and down. We had to find new suppliers. We had to figure out ways to get it spread around the country effectively and efficiently. In terms of having an IT infrastructure, Panda started off way ahead of the curve. However, it had fallen a little bit behind and we really needed to just change that whole approach.
So integrating those three into really one program, and working on all three of those simultaneously, allowed me to tell the organization that we were building a $2 billion organization. At the time, we were about a half a billion dollars in revenue. But with the growth rate that we were trying to achieve, I figured that we’d be probably at a billion dollars before he got the organization built.
Having an organization that was bigger and stronger than what we really needed allowed us to then continue the growth. And that’s the way it worked out. Today, Panda is about $3 billion. I left when they were 1500 stores, so we went from [00:18:00] 100 or 450 to 1500 stores in about 5 years.
They’ve continued to grow. I think I set them up on a very clear path. They’ll continue to grow quite well.
Denise Montgomery: And it sounds like you did it by touching almost everything from the people on the front lines to the logistics at the back and the IT that holds it all together.
Larry Behm: Yeah. Eisenhower had a nice, simple way of saying it, basically: the best strategy is no good if you can’t execute. So, what I really focused on is that integration: start off with a good strategy, but execute very well.
I think that’s the key to success.
Denise Montgomery: It’s interesting that you bring that quote up right now because here we are, where we’re sitting in a situation in 2020 where a lot of companies are sitting on strategies they can’t execute on right now because of the global circumstances that are blowing up everybody’s [00:19:00] strategic plan.
That’s part of the journey that everybody’s going to be undertaking in the next who-knows-how-long is revising strategies to match circumstances. So it’s interesting talking to you about looking at reality on the ground and just dealing with crisis as it comes and meeting reality and moving.
Larry Behm: That’s right. Planning is particularly useful because I think it helps you to think through what’s relevant, what the key issues are. But I think, as Clausewitz said, the plan was the first casualty of war, so as soon as you actually engage your plan, it will be wrong and you need to adapt.
That’s what folks are feeling right now at this time of rapid change. Thinking it through, trying to figure out what the path is, but then recognize as soon as you start, you get new information. Probably have to rework the plan.
Denise Montgomery: How do you deal with heightened emotion during crises? Because that [00:20:00] really is something that I think everybody is feeling right now.
Larry Behm: It’s a discipline. I learned through some of my early training that losing control of emotions is really losing the ability to accomplish the mission.
So keeping the emotions under control, and I suppose the key thing is expressing what you’re feeling so everybody can understand that, but not letting it dictate and govern how you behave. That’s critical.
Denise Montgomery: Right. Thank you very much. Appreciate it.
And that leads us right to our final question, which I borrowed from the Inside the Actor’s Studio host James Lipton, who just departed this incarnation for whatever comes next. And that makes it a good question. The question is: if heaven exists, what would you like to hear when you approach the pearly Gates?
Larry Behm: The core of [00:21:00] my personal mission is to build loving organizations and relationships. So, at heaven’s gate, I hope to hear that I’ve done that and that way I know I’ve left the world a better place.
Denise Montgomery: That’s fantastic. Thank you so much for joining us on Cerius Journeys. We appreciate your insights and thank you for your calming influence during this uncertain time.
Larry Behm: Thank you. I hope this is useful.
Denise Montgomery: Thank you for joining us on Cerius Journeys. For more information, join us at ceriusexecutives.com.