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Panera expects delivery at 15% of units by year end

CMO Perspectives: Blaine E. Hurst of Panera Bread

This interview is part of CMO Perspectives, presented by NRN in partnership with the National Restaurant Association’s Marketing Executives Group. The monthly feature explores how leading executives are navigating the ever-changing restaurant marketing landscape. In this installment, Clay Dover, CMO of Pei Wei Asian Diner, discusses driving innovation with Panera Bread chief transformation and growth officer Blaine E. Hurst.

I was very excited to interview Blaine E. Hurst, who serves as executive vice president, chief transformation and growth officer for Panera Bread, which has more than 1,900 bakery-café locations across the U.S. and Canada. Blaine joined Panera in 2011 to lead the team focused on the reinvention of the customer experience, known as Panera 2.0. Panera is considered a leader in innovation, named by Fast Company in February 2015 as No. 1 in the food category and No. 27 overall on its list of The World’s 50 Most Innovative Companies.

You have impacted brands from Boston Market to Papa John’s, and now Panera, with major innovations. How do you identify the one big thing to focus on? 

Blaine Hurst, EVP, chief transformation and growth officer
Blaine Hurst, EVP, chief transformation and growth officer. Photo: Panera

In the end, the one big thing is what matters next to achieve your overall mission. Deciding what’s strategic is generally pretty evident — we need to improve our guest experience and we need to drive top-line sales.

The challenge is that we often begin the journey focused on the result, not the things that deliver the result. I say, “Architect a little, work like hell.” Start with the mission. Then architect a holistic, integrated solve that will deliver against the mission. The trick is know when you have done enough architecting and not too much. People often struggle to find the balance. Many people don’t think ahead. Others think only about the next step. Others try to do everything at once. I believe it is imperative that you architect enough so you have a well-conceived plan, but give yourself the flexibility to adjust as needed.

In Panera 2.0, we knew the end objective. And we worked on the next thing in the plan. And we worked on it with gusto and constant reevaluation. We went fast, but tested and retested every idea as we worked against our mission. We constantly evolved the details of the plan, but never the end objective. And what was next, often changed as we learned. Too many people just work the plan, not work the mission.

What are the challenges brands must overcome as they implement big changes?

Numerous. But I think the biggest one is overcoming inertia. It is very difficult to launch a major change because organizations will always revert back to normal.  

Effective change management is always necessary. People must be unfrozen from their current state, and refrozen into the future state.  [So said Kurt Lewin, a pioneer in the field of psychology in the early 20th century.] This does not just apply to the internal team, but everyone — shareholders, board members, leadership, associates and customers — major change requires brands to think through and manage the impact of change on all those constituencies.

At most of the brands you have worked for, you have had a big budget to roll out innovations. What is your advice to a regional chain with limited budget?

No different. It’s just a different constraint. Panera 2.0’s original team was me, a manager of IT and a manager of ops services, working with [founder, chairman and CEO] Ron [Shaich]. My office was an internal conference room with two folding tables that I used as an office and the team room. We did everything as cheaply as we could until we demonstrated the business value. My total budget was at best a nominal amount plus the team. Understand the constraint, but don’t assume that you can’t make a difference because of it.

As you roll out a drive thru at Panera, how important is the drive thru for a fast-casual brand?

It would be difficult to imagine a situation where drive thru would not be helpful. Consumers are looking for more convenience, and drive thrus in effect extend your dining room into homes and offices. For us, the economics are compelling, with 25 percent to 35 percent of sales being drive thru in those cafés.

Do you have any other thoughts when you look back at your years as a trendsetter in the category?

Change agents require courage. There have been many times when I have laid awake at night wondering if I would get fired. But an unshakeable belief in the mission and the constant reassessment of the path we are on kept me going.

Change agents require a great team. No single person can make anything great occur. You can be a stimulus, a catalyst at best. You must find great people, enroll them in your vision, encourage them to help shape the vision, then they have to find great people, enroll them … The only thing I know for sure is that great change cannot occur without great people.

Change agents require courage

(Continued from page 1)

Pei Wei CMO Clay Dover reflects on his conversation with Panera Bread chief transformation and growth officer Blaine E. Hurst.

I want to thank Blaine for sharing his insights. I believe that he can inspire each of us in the restaurant industry to strive for something big, something better.  

As I read this article, I feel most of us go through similar situations as he outlined. Blaine’s comment, “It is very difficult to launch a major change because organizations will always revert back to normal,” is a great reminder for all of us to address the opportunity to innovate.

Each year, we start with the marketing calendar of what worked last year and then see how we can achieve the same with fewer dollars. This play-it-safe approach is making it easier for your competition to beat you by only doing slightly better to take your customers.

Another similar approach is to tweak what has performed in the past. Again, you start with what worked last time, and instead of Southwestern Chicken you do a Baja Chicken promotion at the same price. Continuity has its place, but in a competitive category. If you are relying on this idea to drive incremental traffic, you may not like the outcome.

This is a case where the consumer may not see the idea as different at all. This may be a scary option, as you are still taking your operation through the process of rolling out a change, but you are not getting the credit for a new idea. The outcome could be similar to the last option, and unsuccessful. Go for it, but making sure it fits the brand.

This is when you decide to push the envelope and trust your understanding of what the consumer wants next. Instead of the same discounting, you decide to go for a value-added offer that completely changes the customer experience. I have to warn you, there is a chance for failure. Think of how Steve Jobs would have reacted if everyone told him, “We don’t need an iPod instead of the hundreds of music CDs that are in our house.” But he took the risk, and those risks give a brand an opportunity to break through and go to the next level.

Blaine captured this emotion in his statement, “Change agents require courage.” I think that courage and resolve is needed for restaurateurs to step outside their comfort zone and try something innovative. His statement, “I failed because of which I succeeded,” is an inspiration for innovation.

TAGS: Marketing News
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