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GLOBAL INNOVATION

Fusion Series

How World Class Innovators Create the Unexpected

Fast Food in Laid-Back-Land

USD 1 Billion+ Business Built (KFC, Hungry Jack’s, Domino’s Pizza)

 

 
The Fusion Series Part 4: Sensing

Jack Cowin fused:
- fast food & a “laid-back” location
- ideas across industries

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“How long is this queue going to be?

“I have no idea, but I’ve been here almost half an hour already.”

“Look — There must be 50 people here!”

“Yeah.”

“Do you even like Chinese food?”

“I do, but it’s really just a way to eat fast. Even with the queue, it’s still the quickest way between my office and my son’s soccer game. You?”

“It’s not my favourite, but yeah, you’re right — the fastest way to eat between here & there. ‘Be nice if it were a little faster.”

“Oh — they just called my number — good luck!”

Australians are known for their prowess in sports and for taking life at a “pace” that promotes health. According to the Australian Institute of Health & Welfare (Australia’s Health 2016), life expectancy is one of the world’s highest. The nation is getting continually healthier, with declining rates of smoking, alcohol consumption, heart attacks, and cardiovascular death. According to the OECD, they avoid the dangers of over-working, as well. From the late 1970’s to the late 1990’s, Australia’s average working hours were consistently lower than the US, at about 36 hours per week (without adjusting for vacation time). (Employment Outlook 2017)

Ironically, pursuing a healthy lifestyle with sports and freshly-prepared food can also pressurize time in a way that destroys “pace.” Isn’t there some way to balance food, sports, and time?

What Do You See? KFC?

A Canadian insurance salesman working in Australia saw a situation just like the above in 1969. Young Jack Cowin was a keen observer and listener with a degree in psychology and desire for entrepreneurship. He knew fast food in Canada kept life moving at a faster pace and wondered if the same would work in Australia.

Convinced that it would, he borrowed AUD 10,000 each (USD 7,800) from 30 friends to buy a KFC franchise. At age 25, with no experience and no collateral, half-way around the world from home, it was the start of a bigger adventure than he realized.

He started with one KFC, then opened another, and another. He learned and grew and took calculated, self-funded risks, without visions of a grand food empire. Having opened 8 KFC outlets, he decided to branch out into burgers.

How Hungry Jack’s Beat Burger King

He bought rights to the Burger King franchise, but unfortunately, he and Burger King discovered someone else had already bought them. So, they dusted off an old pancake brand — Hungry Jack’s — and re-launched it.

Jack launched and grew, but eventually his relationship with Burger King turned sour. They began five years of “fair practices” court cases, and Jack realized at one point that having invested AUD 8 million (USD 6.2 million) in legal fees, he would have to decide whether to settle out of court or fight to the end. He realized he would feel better about himself wrestling it to the end instead of conceding, so wrestle he did.

However, back-channel negotiations ensued, and they asked him how much he would sell Hungry Jack’s for. He said no sale. They told him, “fine — we’ll find another way.” That meant they intended to stop him from opening stores, and they competed ruthlessly wherever he did open — with (over the years) 50+ stores of their own.

Jack eventually did set a price — almost USD 180 million. Burger King offered just under USD 170 million. Jack returned from a meeting with lawyers in Miami and realized the whole case depended precariously on the judge’s mood that upcoming Friday.

Realizing it would probably cost him almost USD 80 million in back fees and other costs if he lost, Jack decided at the last minute to cut his losses. He phoned the lawyer in Miami at 9:00 pm and was told, “Congratulations. It’s been a difficult experience, long and drawn out, but I’m glad we’ve finally reached an agreement. There’s a board meeting in the morning, and when you arrive in the office tomorrow, there’ll be a fax confirming everything.” Jack recalls:

 

“So, I go home, have a good night’s sleep, come to the office the next morning, and here’s a fax saying there’s no deal. If you thought there was a deal, you’re mistaken. So, at ten o’clock, the court decision is done. We won! And they had to pay us AUD 72 million in damages (USD 56 million).”

Despite being on opposite sides of the courtroom, over the years Jack got to know the people involved not only as opponents but also as people. Jack saw his counterpart at Burger King one day, and:

“I asked him, ‘How did this ever happen?’ He said, ‘Well after having fought, kicked, and scratched for 5 years, at one minute to midnight you all of a sudden decided you’re finally going to accept the offer. The consensus of the board was you must have some inside information that you’re about to lose the case.’”

Jack had no inside information but did learn two lessons. First, something he’d been doing all along — listening to people and making friends — helped him learn the reason for their refusal. Good listening means good learning.

Second, never give up if you think you’re right. Courts are littered with big corporations wanting protection from little guys. This time, the little guy won.

Domino’s Rising Dough

The little guy wouldn’t be little much longer. Jack bought pizza stores that became part of a large stake in Domino’s Pizza Australia. He acquired 10% of Dominos stock at less than USD 2 a share — now worth over USD 36. In 2005, when Domino’s Pizza Australia listed on the stock exchange, Jack’s family holding company owned 75% of it.

Its market capitalization is now over USD 3.2 Billion. Jack became chairman of the group in 2014, and share prices more than doubled in 1–1/2 years. With 26,000 employees, it’s the largest pizza chain in Australia (in stores and sales), as well as the world’s largest Domino’s Pizza brand franchisee.

Jack gathered KFC and Hungry Jack’s, along with food retail and manufacturing, property, and distribution, into Competitive Foods Australia (CFA). Privately held, it is Australia’s largest restaurant franchiser and one of the nation’s largest and most diversified private companies.

 

Idea Delivery

CFA staff always know when Jack’s been to Domino’s because he brings back new ideas (mainly about technology) and wants to apply them to other companies and other industries. Indeed, cross-fertilization is a big part of what he does now. He’s on the board of a TV network, Chancellor of a university, director of an Olympic park, and involved in newspapers, printing, manufacturing, sports, beef production, seafood, horticulture, salad processing, wine, railways, scaffolding, and much more, all over the world.

He even integrated infrastructure and tourism, paying USD 6 million for government rights to the Sydney Harbour Bridge so tourists can climb up and see the view (guided and with safety equipment, of course). Bridge Climb Sydney now earns over USD 24 Million/year.

With a track record of success and a reputation as a cautious and canny investor, people now bring ideas and deals to Jack, and he’s remarkably adept at spotting good opportunities. However, he doesn’t rely solely on the financials. Jack buys businesses that have people inside on whom he can rely and trust, cultivating long-term relationships.

It’s still all about people.

Early Jack

Jack’s mother was attentive to people and relationships and influenced him to be, as well. His father was a Ford Motor engineer who worked his way up through the ranks. Jack remembers as a kid listening to all the drama of corporate politics — who got promotions, who got fired, who did this, who did that, and he decided he wanted to control his own destiny. Control wouldn’t have to come from being in business or from enormous wealth, but it would have to come from a position of strength — the freedom to change if he was unhappy with what he did.

His parents didn’t pressure him to pursue a particular career. They were open to whatever he was interested in and just wanted him to be happy — to go out and do his best. So that’s what he did. With a keen desire to make his parents proud and excel at whatever he did, he put his people skills to work in sales.

 

“From the age of 10 years old or less, I was always selling things. I sold newspapers. I sold Christmas cards. When I got to university, I did summer jobs selling trees and shrubs, farm to farm, door to door. One of my professors said it really bothered him that I was earning more that summer than his annual salary.”

Selling door-to-door, Jack never encountered a customer who immediately welcomed what he had to offer. However, he was always quick to listen and offer help (including products that fit client needs).

He was an excellent football player and wrestler — a national junior heavy-weight wrestling champion. When he finished university, he thought he would become a professional football player. But it didn’t inspire him to prepare enough, so he followed his passion for sales, joining an insurance company.

Again, he did extremely well and learned that whatever you do, you have to love it, pour yourself into it, build confidence, take some risks, and connect with people.

 

Connecting and Collecting

He’s a master connector — and collector — building not just investment capital, but also social capital, which is also useful as creative capital. He was International Chairman of the Young President’s Organization (with 24,000 members), and has someone at hand to call for any question.

Jack spends about half his time maintaining his extensive network and communicating with people from all walks of life. He has a remarkable ability to charm people, understand them, ask questions, and bring out the best in them. A good noticer and listener, he’s insatiably curious — a hunger that’s never quite satisfied.

“He’s not a time-waster and doesn’t accept invitations for a beer after work to while away the evening…. He cares about and is fascinated by people in all walks of life; last week he spent half an hour talking to the janitor.”
- Ian Parker, CFA Executive

He constantly seeks people to learn from and collects new experiences and ideas from a variety of fields. He likes being challenged and thinking at depth.

Relationships are truly important to Jack. Among his tens of thousands of employees, he engenders incredible trust and loyalty, some working for him over 40 years. He carefully maintains his global network, as well as his nucleus of close friends and family.

Conventional and consistent, he’s lived in the same house for 36 years, and has been married for over 50. Every weekend, he and his wife spend time with at least some of their 4 kids and their spouses, as well as 12 grandchildren. They’re very close.

“He’s a very charismatic guy and the best relationship manager I’ve ever met.”
- Ian Parker, CFA Executive

Although aware of others’ emotions, he is not dictated by them and is not overly-demonstrative of his own. He remains emotionally stable and takes a long-term view. He watches things evolve, and eventually the right decisions become obvious.

 

Reading, Energy, & Creativity

What’s the first thing he does when he gets to office? Read. He subscribes to 4 newspapers and collects (or is sent) a variety of other material. His says his biggest problem in life is information overload, because he wants to read everything.

At the corner of his office there’s a pile of bags filled with paper. Everywhere he goes, he’s got 2 bags of paper with him, because he’s collected things he wants to read and is always reading. He’ll read at 2 o’clock in the morning then attend a board meeting that day, then the next midnight he’ll have a conference call with shareholders in Canada.

“He’s 74 years old and works 15 hours a day, every day. He works harder and travels more than anybody I ever met.”
- Ian Parker, CFA Executive
“I could go play golf, but I’d rather be doing business.”

For Jack, work, life, and play are all integrated. He’s not striving to gain money and success. He already has them. What motivates him is people, life, and creating, even though he doesn’t see himself as creative. When asked for an interview, he responded,

“I’m happy to meet, but I’m not creative — I don’t think I fit into your study.”

When his colleague at CFA overheard, he responded,

“Nonsense — look at what he’s created and how many people’s lives he has influenced.”
- Ian Parker, CFA Executive

In fact, in a separate interview, another colleague commented,

“He’s a creator, not a trader.”
 — Atul Sharma, Hungry Jack’s

Jack asks “why?” to understand, then asks “why not?” and acts. If something fails, he learns, lets go, and moves on. Beyond the above, friends describe Jack as humble, adaptable, competitive, patient, and persistent, with a wicked sense of humor.

He meditates, focuses, and is in control of his own mind. Beyond reading prolifically, he hand-writes prolific correspondence. He has a strong sense of fairness and will go to great lengths to ensure a right outcome, be it for himself or others. He knows people can sense whether you’re doing something for your own gain or because it’s right and creates value for everyone.

Seeing Differently Over Time … and Differently from Others

Jack didn’t start his adventure wanting to be a billionaire. He simply wanted control over his own life. Jack didn’t start by studying business or high-tech. He studied something he loved that’s the foundation of organizations and how he sees the world — people.

He spots opportunities and makes them happen through his interest in people. That said, how he sees has changed over time. He began his entrepreneurial journey observing 50 people ordering take-away. After building organizations and a people-network, now they bring ideas and opportunities to him or — when he’s read or heard something of interest — serve as experts, filters, and sounding boards. Having started seeing opportunities with his own eyes, now he sees with many more.

How he creates has also changed. He began his entrepreneurial adventure across nations and now puts new ideas to use across industries, too. He creates value reaching across them and taught me something about diversity.

Business leaders in a VUCA world (volatile, uncertain, complex, and ambiguous) seek diversity for their organizations so they have resources at hand no matter what happens. Jack goes a step further and diversifies his people-network and his own mind.

Instead of organizational diversity, tomorrow’s leadership imperative may be social and mental diversity.

What do you see, with what desire in your heart?
Will you act, persist, and build?
Will you connect with others and see with their eyes, too?
How long have you been waiting in the queue?
fusioneer
ˈfjuːʒ(ə)nɪə/
noun
1. one who innovates across domains of industry, field, country, social class, etc.
◦ s radical innovator, interdisciplinary creator, T-shaped person, borderless freethinker, boundary-crossing integrator, oddball;

Jack Cowin is Chairman & CEO of Competitive Foods Australia Pty. Ltd. He introduced KFC to Australia and created the Hungry Jack’s fast-food empire, following a “fair-practices” lawsuit with Burger King (rare event: the individual won against the corporation). Majority owner of Domino’s Pizza Australia (which he considers a technology company), this “self-made” billionaire originated in Canada then settled as an adult in Australia. For more information on his work, see : LinkedIn, KFC Australia, Hungry Jack’s, Domino’s Pizza, and CFA’s Wikipedia page.

I thank the participants in this study (Fusioneers and Friends) for your insights, sharing, help, and patience. You inspire me, and I am honoured to know you. Special thanks go to Gladys Lee for her marketing excellence and video- and podcast-production brilliance, as well as the host of creative professionals involved in producing the videos and podcasts (you’re all listed on YouTube, iTunes, etc.). I extend a warm thanks to Fusion Research Assistant Dr. Lee Poh Chin for her continually-wise and dedicated contribution to this research, as well as i2i Executive Shareff Uthuman for managing the rats-nest of global research travel and budgets. I thank Nitish Jain and the S P Jain School of Global Management for supporting this research — you’re the foundation that enables the whole project. You are all God-sends. It takes a village to write a paper.

Currency translations from AUD to USD are at 2017 rates (not historical).

Photo/video cuts courtesy of Jack Cowin, Depositphotos, and our own creative team.

For more Fusion articles, click here.