#213 Robert Rosenberg – Episode Notes

Key Takeaways

Newly graduated from business school, Robert was offered the CEO position of his father’s failing business at age 25. Robert took 6 weeks before he accepted the job. These 6 weeks allowed him to analyze the business and create potential strategies to get the company back on its feet.

“I came to the conclusion of watching how the executive team was handling issues, that the problem really lay with the leadership of the business”

The first 5 years of Robert’s time as CEO were incredibly successful due to his decision to change the business strategy. However, the 5 years following led the company to a ‘near death’ experience due to a second strategy change that ultimately led to Robert convincing the board of directors to give him “just one more quarter.”

“From ‘63 to ‘68 I could do nothing wrong luckily, from ‘68 to ‘73 I could do nothing right”

After Robert’s successful trial quarter, he went on to continue as CEO of Dunkin’ Donuts for 35 years. His new book Around the Corner to Around the World dives into the roller coaster that these years were. As Robert reflects on his career, he is continuously proud of the product, the millions of customers, and the differences the franchisees are making in their communities.

“You could say it’s just donuts and coffee, but the fact of the matter is that we were fulfilling people’s needs everyday. When people start their day with a cup of Dunkin’ Donut coffee and a baked good or a donut it was bringing a little bit of joy”

3:39 Robert’s Coffee Preference

Robert likes to start his day with Dunkin’ Donuts Iced Coffee. Due to living on Martha’s Vineyard, there is no Dunkin’ Donuts store so he buys it from the grocery store.

“A cold beverage generally suits me, even in the morning”

4:17 June 1963 Conversation with Robert’s Father

In 1963, Robert had just completed his MBA and describes himself as ‘kinda cocky’.

His father asked him to assume responsibility as CEO of his company, which was called Universal Food Systems at the time. The company was not doing well at the time and Robert was both excited and anxious about being a 25 year old CEO.

“I knew I was going to join the family business but I never expected the request that he made of me”

Within 6 weeks Robert accepted the job.

7:10 The Determining Factor for Robert to Accept Position as CEO

Robert’s father had hired an Executive Vice President that Robert worked alongside, and soon he realized that this Executive Vice President was the problem within the team.

“I came to the conclusion of watching how the executive team was handling issues, that the problem really lay with the leadership of the business”

This conclusion confirmed to Robert that he was on the right track towards fixing the company, which led to him accepting the role as CEO.

8:03 Identifying the Problem With The Executive Vice President

Robert had recognized that the problem was the company’s strategy, and the Executive Vice President was not a strategist.

“The strategy of the company, in my view, was totally inappropriate for the size of the company”

Robert describes the problematic strategy as being a series of 8 little businesses.

“It was my assessment of him and his limitation to tactics as opposed to strategy that spelled the difference”

9:14 Skills Prior to the Role

Robert had grown up working many jobs within the company that taught him various skills. Some of these included working in cafeterias, pushing canteen carts, made pizzas, and covering shifts of Dunkin’ Donuts Managers.

“I do believe that’s a big secret to people’s success, you have to learn your trade”

Robert references Malcom Gladwell’s identification of the 10,000 hours of apprenticeship.

“I came to the job more naturally suited to a collaborative collegial style of leadership”

Robert also credits his time in business school, hotel school, and his service in the army.

“Later on as I came out, all of those skills sort of came together to enable me to be suited to the job”

12:11 Employees Reaction to Robert’s CEO Authority at 25

Robert describes the other employees as “astounded” when he was hired as CEO at age 25.

“It’s hard for them to visualize this boy taking over”

Robert says that he got a phone call right after the announcement was made that he remembers vividly.

“He said, I understand what you’re going to go through, I stand behind you, you’re going to do just fine”

This encouraged Robert and his first 6 months in the role went great.

13:34 Robert’s Early Wins In the First 5 Years

Robert and his team sat down and identified the strategy.

“The team that was there had started to lose confidence in the donut and coffee concept standing alone and being strong enough to be able to scale”

The team decided to cut all money and attention to the other various businesses and focus on Dunkin’ Donuts.

“Instead of doing a lot of experimentation, a lot of new businesses, we were basically going to really exploit what we call the diamond in the rough that we had in our midst”

Robert tells the story of what he called “the best break he had very quickly”. A franchisee was about to open a store in South Bend, Indiana, and wanted to stick to the previous Dunkin’ Donuts format prior to Robert’s changes. Robert and his team decided to give the franchisee his money back and open that as a company owned store.

“We opened that store, and in those days a typical Dunkin’ Donut shop was doing about $2,000 a week, $100,000 a year, this one opened at $9,000 a week”

This helped Robert get off to a great start and build followership.

17:24 Robert’s Belief in His Drastic Company Changes

Robert credits his confidence in his drastic decisions surrounding Dunkin’ Donuts strategy change to his mentorship from business school.

“I came away from business school realizing that if you get two things right in a business, you really have the makings of success. And maybe more than that but at least the two building blocks, and that’s strategy and organization”

Robert recruited his business school classmates to join him which he says changed the company immensely as well.

“It was changing both activities, both the strategy as well as the key members of senior management.”

Robert had been able to develop the ideas for his dad’s business while he was in business school writing papers so he already had dissected the in’s and out’s of the business.

19:34 Identifying His Classmates Talents & Recruiting Them

The first classmate that Robert recruited was one that he had carpooled with to class. Robert labels this classmate as his coach during his first year in business school while he was also balancing being in the reserves and on high alert due to the Berlin Wall.

“He brought with him another classmate, who graduated a year behind us, who ultimately became almost my business partner over the years”

Robert’s selling point to his former classmates on joining his team was that they would join a business that they could own part of and build together.

“The opportunity to work together over a long period of time on building a business, as opposed to working on transactions which a lot of investment banking is, was appealing”

21:34 Robert’s Failures In the Second 5 Year Span as CEO

After Robert’s successful first 5 years, they were a publicly owned company that had been growing earnings because of the change in strategy. Robert was actively involved in the International Franchise Association at the time, and a fellow leader in the association promoted the idea of having a number of franchise businesses, and so Robert changed his strategy to fit this idea.

“I changed the strategy of the company from being a focused donut and coffee company in markets to becoming a franchise business, and that was an element of arrogance”

Robert lists a number of the problems that occurred after the strategy changed such as relationships with franchisees started to deteriorate, profits stagnated, and they had a class action lawsuit on behalf of franchisees.

“In ‘68 we went public, by ‘73 I was sitting in a boardroom and I was fired”

The board of directors asked Robert to find his own replacement. Robert said to them

“Give me another quarter, I’ll prove to you that we’re on the right track”

They agreed to another quarter and they never looked back.

“From ‘63 to ‘68 I could do nothing wrong luckily, from ‘68 to ‘73 I could do nothing right”

These five years reinforced his belief in strategy and this is what he covers in Around the Corner to Around the World.

“If you have the wrong strategy and the best people in the world, it’s awfully hard to be successful”

25:44 Robert’s Confidence in Fixing The Worst 5 Years

Robert credits himself as always having been persevering, specifically during his schooling years.

“I don’t know if I was born with it or whether or not I discovered it, but I can persevere”

This perseverance is what gave him the confidence in his ability as CEO to learn from his mistakes and get the company back on track.

“I had confidence in the people, I had confidence in the strategy, and I had confidence that we had learned our lesson”

Robert says that he believed they had realized the problem and the solution they needed to implement to get the company back on its feet.

“I knew that in order to succeed in life you’re going to kick a lot of stones, and you have to persevere and that’s a critical element that you have to have to keep going”

27:55 Robert Takes Responsibility

Robert describes the team as being extremely talented and that the problem began due to his decision to change the strategy.

“Without being very thoughtful, I basically changed the strategy of the company. I did exactly what my father had done before me that had led to problems”

Once Robert recognized that he was the source of the company’s problem, he took full responsibility for the downfall of the company.

“You don’t blame the followership when things don’t go right, it really has to start with yourself”

Robert reflects on a moment during this time when he was in his living room reading the book The Best and The Brightest that focuses on arrogance fueling leadership decisions.

“I sat there in that chair and I said, “Oh my god, Halberstam could’ve just as well have been writing about me”

At this point Robert had already been running the company for 10 years but this realization added a lot to his own repertoire of things that he learned.

30:28 Robert’s Outlets for Learning

Robert reads about 3-4 books a week covering topics such as history, business, leadership. He is currently reading How to Lead, How Will You Measure Your Life, and Think Outside the Building.

“I get a lot out of books and I got a lot out of my colleagues”

31:38 Robert’s Identification of Other’s Traits and Talents

Robert credits his 35 years of experience to being able to understand his coworkers strengths and weaknesses. The top 15-20 people in his company were together for 20 years building the business, which allowed Robert to really understand each member of his team.

“You get to know people by watching actions over a long period of time”

Robert advises two things for leaders to in regards to their team:

Define the assignment very carefully, match the person to the assignment. The better you define the assignment, the better off you are
It’s very hard to remediate weaknesses, so you are far better off building on someone’s strengths.

“If you have a team, try to ensure that you have complementarity of skills within that team”

34:57 Importance of Emotional Intelligence

Robert references the book Emotional Intelligence when talking about his recognition of his own strengths and weaknesses.

“A critical element of anybody, not just leaders, anybody in life, is really just to know your strengths and weaknesses. To understand yourself and then try to understand others”

Overtime, Robert improved his self-awareness and accepted that he was going to have weaknesses.

“I understood that it was not important for me to be good at everything, but to have people around that were better, smarter, knew more about different things than I did”

36:45 Robert’s Key Frameworks for Leadership

Robert sees leadership as four functions to focus your time and attention towards.

Strategy
Organize
Communication
Handling Crisis

39:17 Crucial Elements for Leaders During Times of Crisis

Robert describes three elements that he believes are necessary for leaders to do when in a crisis:

You have to have a plan
You have to organize for the management of it
Communicate with the team about the crisis

“Anybody who possesses particular skills to deal with that particular crisis, invite them into a team, make that team, and separate them from the rest of the organization. Let the rest of the organization run the business while that team deals with the crisis”

41:14 Robert’s Management of Dunkin’ Donuts Stores

Robert would meet with the District Manager of each store and ask them a series of questions to get to know them and their store well.

“I wasn’t there to inspect the store, I was there to listen to them”

Robert had two fundamental questions he would ask.

If you had to do it again, would you invest in this franchise knowing what you know today?
If you were CEO what would you do differently than we are currently doing?

“I would say hello to all the staff, I would have a cup of coffee and a donut, but it would be the franchise owner I would go to and get their feedback”

43:35 Robert’s Calendar Commitments

Robert explains that he was able to narrow down his priorities as a leader while working the same job for 35 years. He organized these priorities in his calendar which he swears by.

“Once I put something in my calendar I always fulfilled it”

Robert talks about his various activities as CEO that were spent outside of the office and the mistakes that he persevered through.

“The mistakes I used as triggers to try to improve”

46:06 Dunkin’s Aspirational Mindset

Robert describes the culture at Dunkin’ Donuts as being aspirational, which then allowed them to be adaptable. They were always forecasting 5-7 years ahead and trying to plant ‘saplings’ which Robert learned from Clay Christensen.

“Things that didn’t work out we were quick to close down and stop, those that did work out we would water and grow for the future”

Robert talks about how Dunkin’ Donuts is more than just their product.

48:42 Robert’s Most Memorable Day as CEO

Robert’s 40 birthday was one of his most memorable days. The company had previously lost a class action lawsuit and they had appealed. On his 40th birthday while he was skiing on Loon Mountain, he found out that they had won 3-0 at the court of appeals.

“We were innocent. I knew we were innocent, but the judge had made a mistake and it could’ve spelled the difference in the company”

50:01 Robert’s Key to Sustaining Excellence

Robert has two lessons that he has told his children and wants to share with listeners.

The Golden Rule: Do unto others as you would have them do unto you
All Things in Moderation

Robert’s interests and activities outside of work was a key component for his sustainability as CEO. These included his passion for art, traveling, and being involved in his children’s lives.

“It was having balance of another activity that could take my mind and my energies away”

He also credits his sustainability to his team and their successful dynamic.

“There wasn’t anything we couldn’t get through together”

Robert never felt overwhelmed by work or that he was working too hard.

“I guess I knew the secret to life at least was to always have something going on in your life where you thought you were making a difference”

52:25 Robert’s Favorite Piece of Art

After hearing about Robert’s passion for art, Sean asks him what his favorite piece of art is.

“I like Edward Hopper paintings from the 1930’s”

Robert says that he doesn’t have a singular favorite piece and that his taste in art has changed throughout the years.

53:27 Robert’s Change in Leadership Over 35 Years

Robert doesn’t think his leadership style changed much after his initial collegial and collaborative approach he instilled day one on the job.

“I think what changed as I grew was my ability to better understand myself and to better understand my teammates, their strengths and their weaknesses”

54:36 What Robert is Most Proud of

The millions of customers that enjoy Dunkin’ Donuts everyday and the business opportunity of the franchise is what Robert is most proud of from his time as CEO of Dunkin’ Donuts.

“Even over the years, the changes that we made, the business went from not just enabling a family to have a better standard of living but really as we changed the business, an opportunity for huge wealth creation”

Robert is proud of the franchisees for becoming pillars in their communities and for their charity Joy in Childhood.

56:18 Writing Around the Corner to Around the World

Robert describes the writing process as fun, challenging, educational, and collaborative.

“It helped me come to grips with some issues that had sort of haunted me for awhile”

57:18 Robert’s Next Chapter

In 1968, Robert was coming into leadership at the International Franchise Association and he had an idea to take a group of franchise businesses into underserved communities.

“In terms of the franchise businesses, these complimentary groups of say 12 or 15 businesses that are all franchisable could be franchised in an underserved community to minority owners”

Robert is looking to focus on that idea after he is done with book work.

“Start to rebuild neighborhoods and build employment and middle class entrepreneurship”

59:28 Roberts Resources

Go to Robert’s website Around the Corner to Around the World and you can get early excerpts and lessons.