Ingram’s September 2022

Thought Leader Insights: On Getting to $1 Billion

Q&A ... W ith M ichael K ulp

The chief executive for KBP Brands, one of Kansas City’s biggest and fastest-growing companies, assesses a competitive dining market , scaling, leadership development and more.

Q: You all soared past $1 billion in revenues last year; was that ever really one of your leadership goals? A: It really hasn’t been, and it’s funny you ask because we talk a lot internally about that, primarily because we’re an acquisition-based business. We set orga nizational goals and do try to beat prior year revenue with organic growth, but it’s primarily through acquisitions that we grow, which is why we don’t like to focus on a revenue number as a goal. Setting any number, whether it’s a billion or $2 billion, or even when we were smaller, $500 million, was a bit dangerous for us because it could have pushed us to acquire businesses or grow for the sake of trying to accomplish a number, instead of keeping our focus on strategic growth and growing the right way. We’ve been really disciplined about doing that right over the years. Q: What does that discipline look like? A: One challenge many companies face as they grow is going through with an acquisition that doesn’t go well. Our view is that this often occurs because it was not the right acquisition for them. That could mean it was the wrong geography, or geography without the density you need to provide the right leadership and oversight. The fixed costs may be too great to overcome, or there are things that are too great to control when you’ve acquired. It can be as simple as not having done your diligence on existing earnings or the macro environment of the acquisition. For us, there’s a very clear lens we look through with key criteria that has to be met for us to move forward on it. That often means saying no to 10-12 deals before we say yes to one. Q: From the looks of your growth arc, you’re making the right acquisition calls. A: We’ve been extremely fortunate.

We’ve done north of 80 acquisitions, and I can count on less than one hand how many haven’t gone pretty much as planned, and none has been a complete disaster. The primary reason is, we try to stay very thoughtful about our investment in talent and infrastructure. We look at the leader to-restaurant ratio, and we’re wildly below the industry standard, which is why we are able to scale at the pace we did and why we are able to sustain that pace. We haven’t stretched those infrastructure investments post-acquisition to get more efficient. We have really great talent, and we’ve done things with less span of control than we see in our industry. Q: Let’s look at some of the chal lenges in scaling to your level, starting with company culture. A: We’re north of 20,000 employees now and running a large organization. This is an area that I focus on the most, personally. We have worked very hard to create a unique culture inside our business and industry. I firmly believe that all the key leaders are here in large part because of that culture, and they have helped us to evolve substantially over the years. Q: How so? A: One of the things we’ve recently done, in what could become a melting pot otherwise, is trying to amplify our culture, core values, our purpose in the business, and why we exist. We communicate those broadly, so we don’t need leaders who have to be around for a decade to understand and magnify that message. That’s a start ing point. Second, culturally, we expect a lot of our people, but on the flip side, we work hard to give a lot back. The way we celebrate, the way we incentivize and pay, we know that’s critical, and want them to be unique. I firmly believe in putting

our money where our mouth is, while representing the values we have in our organization, and moving people’s lives forward. Has that evolved over the course of our growth? Yes. Has it meant smarter use of technology? Yes. But we work hard not to have too much evolution culturally. A: Our structure has allowed us to execute against our purpose and values. One thing we’re very careful of is not pulling levers from the corporate location. It’s much easier to run a restaurant company than to run a restaurant. So making sure decisions to run the restaurant are coming from those who run those restaurants is critical. We feel like we’ve built a good mousetrap with those who work inside restaurants, but flip side, we have evolved a lot in terms of how we make decisions, how we elevate the voice inside each location, because it becomes a lot more difficult with 1,000 locations than it was with 150. A: The biggest differentiation factor we’ve always talked about in terms of non cultural attributes is our growth. We talk all the time about the opportunities at KBP for people to grow personally, professionally, or financially come faster with our organization than with others. Every time we grow, we need more talent, and that growth creates opportunities and upward mobility. Focusing on the development of those high potentials, we have a system to build opportunities for them to grow quickly, showing that we’re committed to moving people forward. That speaks volumes to potential talent who may be looking externally; they’ve watched the upward trajectory and the pace of growth and see that upward trajectory. Q: How has scaling altered operat ing processes? Q: On the talent and retention chal lenge, especially in this sector?

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I n g r a m ’ s

Ingrams.com

September 2022