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Cookies with Cranor
LEADERSHIP by Mark Gordon | Managing Editor
Kentucky Fried Chicken CEO John Cranor looked at the data and came to one conclusion: The famous name of his company, a legendary American brand icon thanks partially to the ubiquitous Col. Sanders and his secret recipe, had run its course.
It was time to drop the name and replace it with KFC.
"The country had a negative attitude toward all things fried," says Cranor, recalling the time in the early 1990s. "When fried is your middle name, that's tough."
Plus, canning fried and switching to a big, billboard-style lettered KFC could give the fast-food chain a leg up with customers identifying the store from the road, evening up the competition with the easily visible golden arches, for example. And it would be a good step toward introducing healthier, non-fried foods.
Still, there were doubters. Franchise operators were worried about cost and changing history. One of Col. Sanders' daughters was tough to please on any issue, and this was no exception. Even though she did not have a vote in the decision, Cranor looked to keep her included in big company doings.
"Anytime you make a change," Cranor says, "someone is going to be against it."
Cranor moved ahead. The results were a clear success, as profits and revenue shot up and customers, employees and franchisees accepted, even grew to appreciate, the new name.
To those who know Cranor, both colleagues and people who worked for him, the delicate balance of handholding, yet firm resolve he showed in ushering in KFC was not surprising.
"Even though the colonel had passed away years before," said Kyle Craig, another KFC executive at the time, "John made everyone feel as if the colonel had blessed the move."
Preparing people for change and shepherding them through tumultuous times has been a defining characteristic of Cranor's lengthy business career. Whether it's the family of a fast-food icon or hundreds of employees at a national sporting goods store worried about losing their jobs in a company sale, Cranor's easy-going, folksy manner and sincere down-to-earth approach has won him many fans, from top-tier executives to drive-thru cashiers.
And not only has Cranor, 59, prepped people for change, he, too, has weaved through significant changes in his business life. Since 2003, Cranor has served as the head of the New College Foundation, the philanthropic arm of the Sarasota-based liberal arts and sciences school. It's Cranor's second time living in Sarasota: He graduated from New College in 1967, a member of the school's first graduating class.
After New College, Cranor began building a resume that 35 years later would resemble a smorgasbord of American brands. In addition to KFC, career highlights include a term as chairman, president and CEO of fellow fast-food player Long John Silver's, leading the company through a bankruptcy; running the marketing and new products units for Frito-Lay, where his team created new chip dips, among other foods; and a stint as president of Wilson Sporting Goods as the parent company, PepsiCo., prepared to sell off the unit.
It hasn't been all potato chips and soda, though. Post-Pepsi, Cranor, with some partners, formed a venture capital firm, where he served as managing general partner. And, for a few years, before he rose through the ranks in the Pepsi family, Cranor was president of a plastic ice scraper manufacturer in Emporia, Kan.
"John's business acumen is unmatched," said Dale Boden, a managing partner with the Yearling Fund, the firm Cranor co-founded. "Above and beyond all that, he's a hellavu a lot of fun."
No two days are the same
Cranor wasn't always set on a life in corporate America. A native of Salina, a small city in central Kansas, Cranor came home on a break from New College hoping to work for a lawyer, as he was thinking about going to law school.
But Cranor's father, who worked for the local chamber of commerce, wanted his son to have options. So the elder Cranor set up two appointments for his son, one with a lawyer and one with a grocery store manager.
The attorney spoke about the grueling post-law school process of doing work for others on the sidelines, waiting for a chance to be a partner. The grocery store supervisor told Cranor how no two days were ever alike; one day you might work on a labor contract with a union, the next day you might be dealing with an issue from vendors.
Sold. Cranor graduated from New College with a degree in economics. His next stop was Boston, where he earned an MBA from Harvard. He hoped for a job in marketing.
One detour stood in his way: Vietnam. Before his second year at Harvard, Cranor served nine months as a part of a psychological warfare unit in the Vietnam War, where his main role was to serve as a translator for his battalion. He went to language school to prepare for the assignment. The war "was such a major shaper of our national psyche," Cranor says. "I was glad to be there."
Cranor's first major corporate job after Harvard was with General Mills, working in marketing on new products. He developed a passion for researching why people buy what they buy.
Trying to think like the average Jane shopper became a Cranor trademark. When he first took the top job at Taco Bell, for example, he turned in his suit for a lettuce station and worked as an assistant store manager to generate ideas from the ground up; he says he remembers one teenage employee wondering why he was moving so slowly with his tasks.
In 1989, Cranor took the head post at Kentucky Fried Chicken. Keeping with the theme, he started a program called coloneling, where he again worked low-level jobs in the restaurants. He spoke with customers, refilled drinks and cleared tables, according to a 1994 article about Cranor in Nation's Restaurant News, an industry trade magazine.
The best-kept secret
But Cranor's success was about more than mopping floors and folding tacos. He was involved twice in taking over companies soon before the entities were sold. At Wilson Sporting Goods, Cranor was charged by PepsiCo executives to strip the company down and make it attractive to potential buyers. Besides the business challenge of the sale, there was the human element of dealing with the hundreds of employees worried about the future of their jobs.
He set up a weekly session called Cookies with Cranor. It was a freewheeling discussion held in the cafeteria, where employees could ask any question and Cranor would give an honest answer. But there wasn't any sugar coating on these cookies; sometimes Cranor didn't know an answer, but he says he remained as frank as possible, so the employees knew what was coming.
"We didn't lose anybody, they all stayed on with us," Cranor remembers. "It was a good learning experience, in terms of managing people."
Cranor was also responsible for the sale of fast-food chain Long John Silver's. When he was hired as CEO, the company was a mess, Cranor says, coming off a failed leveraged buyout. It was "leveraged to the hilt," he says, with no capital to spend on improving the restaurants. Cranor, working with the principal owners, Credit Suisse First Boston, took the company into bankruptcy before a buyer was ultimately found. "I sold myself out of another job," Cranor jokes.
In Cranor's current job as head of the New College Foundation, the attitude of reaching out to all parties still comes through. New College President Mike Michalson said Cranor's relaxed approach and sense of humor help him relate to just about everyone, from students to wealthy octogenarians.
Cranor travels nationwide regularly, selling the merits of New College to current donors and recruiting new ones. He calls New College, well-known in national education circles but not as much in Southwest Florida, one of the "best-kept secrets" on the Gulf Coast.
Michalson said the college was lucky to get Cranor. Besides his business experience, Cranor has been involved in higher education for most of his career, including serving on New College's board.
"We are obviously in a lot of competition for the philanthropic dollar in this area," Michalson says. "He's not one more fundraiser off the fundraising circuit. John gives us real creditability."
Change agent
In John Cranor's business career, he's been at the helm of two companies going through a sale, with employees' livelihoods at stake. He's also instituted a culture change at other companies, eventually leading to higher revenues and profits. Finally, the husband and father of two has changed addresses more than a few times with his family for work.
Put together, Cranor has become an expert in getting people ready for change. "You need to create a vision of what things can be like," he says, "and get them to buy into the vision." Here's Cranor's six tips for managing successful change in an organization:
• Normalize change: Cranor says people change every day, from what they eat to the books they read. Corporate change should be treated the same way. "Get people comfortable with the concept," he says, "to make it familiar on a daily basis." That can be done in little steps, like changing the time of meetings and giving people new tasks.
• Sense of urgency: Paint a scenario that projects the current situation into the future. If the change doesn't happen, those problems will consume the organization, from shrinking sales to layoffs to going out of business. Send the message that no matter how painful the change may be, it's still better than not changing.
· Don't look back: Create a "no going back" environment, while at the same time, pointing toward a new direction. Understand that some change efforts will fail, but keep plugging away.
• Communicate constantly: Celebrate small day-to-day victories. Things like an increase in sales or a point gain in share of market. Use any opportunity to "communicate the positive momentum that change is creating," from team meetings to birthday parties.
• Transparency: Don't "hide the salami," Cranor says. Show all the numbers. Emphasize the positive, but never hide the negative.
• Share success stories: When you hear about a successful venture, no matter how small, share it with the staff. Make the success creator a "company hero," Cranor says, because knowing that somebody else is doing it makes it easier for others to try. And knowing that person is becoming a hero gives others positive motivation.
The Cranor File
Born: Salina, Kan.
Family: Wife, Kitty; sons, Jake 16, and Luke, 10.
Current job: President of the New College Foundation, the philanthropic arm of the Sarasota college. The foundation has about $37.6 million in total assets.
Past jobs: President and CEO of several companies under the PepsiCo. banner, including Frito-Lay, Wilson Sporting Goods, Taco Bell and KFC. Also served in leadership roles with the beverage company's fountain beverage and Eastern units. Outside Pepsi, he has been head of Long John Silver's and co-founded a venture capital fund.
Business hero: Don Kendall, founder of the current version of PepsiCo and longtime CEO of the company. One of the things Cranor learned from Kendall was to always think big.
Celebrity contracts: As head of marketing at Wilson Sporting Goods in 1984, Cranor was tasked with signing then-NBA rookie Michael Jordan to a contract promoting basketballs. But Adidas offered $100,000 a year to Wilson's $40,000. Cranor added two sets of custom-made golf clubs each year to the soon-to-be NBA superstar's contract. Jordan took the Wilson deal.
Personal accomplishment: Cranor ran the New York City marathon in 1989. He recalls the streets being filled with a diverse crowd of well-wishers and says it was the "single most exceptional experience of my life."
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