A personal note: This post is a tribute to Kent Taylor, founder and CEO of Texas Roadhouse who tragically passed in March 2021. Kent was one of the most intentional leaders I’ve ever met, and I am grateful I had a chance to make his acquaintance, and more importantly, learn from his example. He lead with heart and was beloved by his employees. This article is excerpted from my book, The Intention Imperative.
What kind of CEO displays his biggest failures on the wall of his office?
Kent Taylor, founder of Texas Roadhouse, not only openly admits that three of his first five restaurants failed, but he has a memento from each mounted behind his desk with a plaque detailing the money lost.
“That way,” he explains, “Visitors can see that failure isn’t a bad thing when you’re trying to innovate.”
Kent Taylor lived in my home state of Colorado and worked at nightclubs and restaurants. Known as a maverick, he often “got in trouble” with chain management for his innovative ideas and promotions. He returned to Louisville, Kentucky in 1990 with dreams of opening a Colorado-themed restaurant.
His new place opened in 1993 at the Green Tree Mall in Clarksville, Indiana. Today TXRH has 549 restaurants in 49 states and 7 countries.
Each store employs 170 to 200 team members, fondly referred to as “roadies.” The 6,700- to 7,500-square-foot facilities serve meat that is cut in-house and all made from scratch dishes (even the bacon bits). Their restaurants average 5,000 guests per week, and the chain serves 300,000 meals each day.
The six-ounce sirloin began as the most popular dish and remains so to this day—25 years later. The steakhouse prides itself on a six-ounce cut of meat that actually does weigh six ounces, which is surprisingly rare (pun intended). Each restaurant has its own meat cutter, who maintain their edge through competition. The top ten attend the company conference, and the winner brings home a new truck.
This might seem like an unnecessary expenditure to some, but an accurate cut means less wasted meat and money. The program to recognize their stars costs about one million, but they estimate it saves between 10 and 20 million dollars. It all comes back to the company’s views on employees: “embrace people and treat ‘em better than they would be treated at other chains.” And it certainly seems to be working.
TXRH, at the time I’m writing this, has enjoyed 32 consecutive quarters of positive comparable restaurant sales growth. The guest count continues to rise 3.5% in the past year. The chain is about half the size of Outback Steakhouse, but is valued at more than $3 billion. Compared to that, Bloomin’ Brands and its entire portfolio of restaurants—Outback, Carrabba’s Italian Grill, Fleming’s Prime Steakhouse & Wine Bar, and Bonefish Grill—is valued at well under $2 billion.
Intentional Leaders Are Involved Leaders
This kind of success doesn’t happen by sitting back and letting things fall how they may.
Like so many of the leaders we interviewed for this book, Taylor is highly visible, accessible, and involved in the field.
“I was only in Louisville 102 days last year,” he relates. But the best things we do at this company, I’ve learned from people in the field. Being involved, visiting stores, getting ideas— that is my main job. Too many times you have leaders who came out of operations as big shots and become isolated and hear what the world is through 4 or 5 people who report to them.” He prefers to get see things first hand.
“I still choose all of our real estate. We’ve only closed 3 of our last 500 Roadhouses. One reason I do the real estate is that it gives me more time in the field with people.”
While he can easily be seen as a leader with a lot of great ideas, he credits his team with helping him come up with and implement the best ones. “If we think about a new idea I run it through 20 people—area managers, kitchen managers, service managers, meat cutters. I don’t make ideas in a distant office.” He knows that his decisions will affect employees at all levels, so he strives to make sure those choices help rather than harm.
TXRH and its leaders have cracked the code on the emotion economy. Taylor says, “When it comes to employees, I am always asking are they happy? Do they enjoy their job? That’s important because I believe that happy employees create happy guests which creates happy accountants!” People who are happy in their work tend to spread that happiness around, which can only improve the experience for customers. Employees won’t do their job as well if they are only in it for profit—it has to mean something, from waiting staff to the managing staff.
They Don’t Just Say Act Like an Owner
They make you one.
The Managing Partner at each Texas Roadhouse has an ownership interest in their restaurant. In exchange for 10% of the profits, they are required to put down a $25,000 deposit and sign a five-year employment contract. To become an area partner requires a $50,000 investment.
Today you also get stock that continues to build in your own account and after five years you get your investment back plus appreciated stock. It may seem like a strange setup at a glance, but Taylor sees it as a kind of test to see who has what it takes.
Why? He explains, “They have skin the game and their name is on the door. When maybe you have to borrow money from family to work for us, it separates us from our competitors, and we get people who really want to be with us.” He wants potential partners to be intentional in their actions; he is not interested in those who merely join on a whim.
How you treat your work is a little like how you treat a car your own versus one you just rent. You might not think twice about driving over a pothole in a rental, but if you own the car you treat it a little differently.
TXRH Culture in Six Words
In a way, Taylor has a similar view of his employees. He sees people as an investment, rather than a resource to be used up and abused. Any employee who has been treated right is also a potential future guest. The same holds true for those who do not make it to employees, so it pays to pleasant during interviews. After all, pleasant is part of what Texas Roadhouse looks for in an employee.
The most important phrase when it comes to this company’s culture is also one that is frequently used: Hire right, train right, treat right.
While you can certainly teach people skills for a workplace, it is hard to train a personality. The ideal employee for TXRH is energetic and charismatic—“Someone you might want to party with.” Taylor feels that if you wouldn’t want to spend a vacation with the applicant, why hire them? The owners select their own staff, so they can customize it to their own preferences, to an extent. It comes back to the idea of having their names on the door; they are invested in each employee and even more eager for them to succeed.
That personal investment from owners actually began as a low-cost method of advertising. Before he started Texas Roadhouse, he founded and co-owned Buckhead Bar & Grill, and it wasn’t doing so well. Kent changed it around until it more closely resembled a pub, which he felt fit the clientele better. The problem was that the potential clients were beyond the point of the opportunity to witness the changes.
Inspiration struck when one loyal customer brought his mother in to eat one afternoon. The man spoke on the radio, and Taylor offered him free food if the man would simply talk about the restaurant while he was on the air. This seemed to go well, until the station manager pays a visit two months later. The Grill wasn’t advertising through the station, which meant they couldn’t keep bringing up the restaurant. Now the manager gets free food, too.
If Taylor could get great help by investing time and perks for them, couldn’t some extra consideration work to inspire loyalty in other aspects of the business? It was all a matter of maintaining a relationship where it matters, just like with owners and their hires.
Treat them right.
“Our managing partners who run the stores are the center of the universe,” Kent says.
TXRH believes in “service with heart.” That might not seem very original to the cynic, but think of all the times the service you received was vanilla and sterile? Service with heart is about injecting real emotion into what you’re doing. It is about the pride of doing work for people you care about because you want to do it. It isn’t obligatory, but enjoyable.
Taylor sees his restaurant as a reverse pyramid, or the Upside-Down Pyramid, as he calls it. He is the smallest section at the bottom, while the top is made up of guests, future guests, and the kitchen studs and service heroes that work in the business with him. While of course guests are crucial to the success of the company, this leader feels that to create the proper mindset, you have to love your employees first and your guests second. After all, you can’t really have one without the other.
Another aspect of the “service with heart” culture occurs outside of the restaurants. From the first store, Taylor began to ask, “What can we do to do some good in the community?” Not as a sales gimmick, but rather to instill a life lesson to his employees the way you would with your kids. He wants the Texas Roadhouse family to care about others before they care about themselves.
For instance, in 2004 a group of employees travelled to Mexico, where they rebuilt an orphanage and a community center. They had 120 restaurants at that point and they made a point to arrange groups with people from different states, letting them all bond as they labored together in the hot sun, proud that they were making a difference.
During the floods in Houston last year, Texas Roadhouse had to close 18 restaurants in the area. But only one of those stores had sustained water damage. The others closed to the public—and left their kitchens running. The meals they made were then served out to local people in need, offered door-to-door in flooded areas, and delivered to shelters, hospitals, and first responders.
The employees who live in those areas also received financial assistance to help them meet their needs during their troubled times. The decision was made independently of area managers or corporate and cost the chain quite a bit, but they considered the efforts well worth it. Taylor sees it as yet another way that his employees are exceptional. Their generosity had an unexpected benefit as well; the loyalty showed to the customers (and non-customers) in that area was reciprocated in a sales increase of 20 percent afterwards.
Culture Means Everyone Gets It
It is easy for a department or two to “get it” when it comes to culture, but often there are outliers who don’t see what they do as part of the culture picture. Not so at Texas Roadhouse. At the Support Center, Puja Gatton, senior counsel of litigation and employment, explains the culture there with admirable clarity:
Like Texas Roadhouse’s signature bucket of peanuts in the front lobby, fun pictures in the hallways, in-house contests, and the thank you notes that “roadies” send each other, the legal department’s attitude is quite befitting to the company culture. Our company culture helps shape what we do every day and creates a more emotionally invested and more passionate workforce. It is clear that we put our money where our mouth is when it comes to treating our employees like family.
Stop reading and ask your legal counsel to explain your culture. Will their description be so flattering?
Though Texas Roadhouse pushes forward with intention, some of their starting points were happy mistakes. This is one of the aspects that particularly pleases Tayor. As someone who was often discouraged from trying out new and strange plans, he believes the freedom to make mistakes is the only way to feel safe enough to have the best ideas. If someone is punished for one less-than-awesome idea, why would they try to come up with a better one?
He himself has had some of his best ideas on the spur of a moment—usually in restaurants—especially on napkins. If you ever visit the Texas Roadhouse Support Center in Louisville, Kentucky, you’ll find a museum of the restaurant’s history in the lobby. One of the items featured is one of the original napkins Kent Taylor used to conceptualize his business. He would have ideas while out with family or friends and need to get them out in a concrete way before the ideas faded. Then he would pull them out the next day and tweak.
“At one point, I had a whole box of napkins,” Taylor adds. It just goes to show that sometimes ideas are messy—and that’s the way they are supposed to be.
This probably won’t be the first time you’ve heard this, but if you can sketch out important concepts on the back of a napkin that turn into a $3 billion company—well, that’s clarity.
United in Legendary
Texas Roadhouse’s mission statement is “Legendary Food, Legendary Service”.
Taylor came up with it in 1995, when he had five stores, three of which closed (hence the decorations in his office).
“It was a pivotal point of survival,” he explains. “My original investors had given up and I needed two more investors to do store six in Lexington. I had to clarify what I wanted us to look like in a simple message everyone would get. It took us ten years from the time I wrote it down until we were really nailing it on legendary food and legendary service.”
Regardless of their position, Taylor hopes his employees will continually look to achieve “legendary” of their own volition. He knows that level of passion couldn’t happen without proper inspiration, however. The fact that they exceed his expectations again and again shows just how proud the whole company is of their food, their community outreach, and their commitment to their Texas Roadhouse family. He knows he certainly is:
I lead to inspire others to love their jobs and do it all with Legendary Food, Legendary Service as the driving force. My dream was to build a family restaurant and not just a steak restaurant, but a place where everyone could come and have a quality meal for a great value. I lead to protect what we’ve created over the last 25 years and to set us up for success long after I am gone. Success is not guaranteed – it’s earned.
By instilling these values in his employees, he ensures that they can continue even when he’s not around. Legendary is his legacy.
For Taylor, inspiration isn’t just something you do for others, but something you do for yourself as well. He feels that, “Inspiration opens our eyes to possibilities and give us a purpose to pursue our day-to-day tasks with intention and passion.” Not only is it helpful, but it’s essential:
I believe inspiration fuels our motivation and gives us that ‘extra oomph.’ You can be inspired, but until you’re motivated to take action, all you have are big dreams and no results. Motivation, along with a large dose of persistence, is the drive to get it done and to make it legendary because mediocrity sucks.
Taylor often talks about how important it is to be available and not to be a leader you only meet once a year at a conference. He relies on the true but often untried technique of listening way more than you talk and allowing people to not only make mistakes but celebrate them. Recognizing and celebrating employees can help to inspire them to even greater accomplishments and success. Not innovation for the sake of innovation, but innovation that helps operators and improves guest experience.
As a leader, Taylor takes several steps to inspire others. He listens to feedback, making sure to keep operators at the center of the Texas Roadhouse universe. He stays “in the game,” picking real estate sites, visiting stores, and generally keeping involved. As a company made up of independently owned restaurants, he promotes an entrepreneurial culture. Perhaps most importantly, he says, “I also act quickly when I see something that needs to be fixed.”
Whose Values are Core?
TXRH operates on four core values: partnership, passion, integrity and fun. Surprisingly, those aren’t words that Taylor chose.
“I didn’t come up with those words,” says Taylor. But before we explain how, you need to know about The Fall Listening Tour:
We do a fall listening tour to twenty-some cities to interact with kitchen managers, service managers, the team. We’ll meet with folks and take notes based on this question: How can I make life better for you in the field? The listening tour allows those people to have a voice and signifies a true partnership. We also believe that empowered people have more passion for the business.
So back to those four values. During one Fall Listening Tour they asked managing partners and others to suggest what they believed were the core values of TXRH.
“When we got back to the support center,” Taylor explains, “We put about 100 of those values on the board and gave people a chance to add their own. We then voted and ranked them to see what the most important values were.”
Last year on the Fall Tour, where the Leadership Team meets with every Managing Partner across the country to hear their feedback, Kent and Scott were meeting with Bubba 33 (their newest concept). The managing partners raised some concerns that were then discussed in the meeting. However, Taylor didn’t think that was good enough, so in the following two weeks, he called every attendee personally to discuss the issue. Impressive, but here’s the bigger point: he acted on what he learned.
“If you listen and don’t take action,” he says, “You’re full of shit.”
The Code for Roadhouse Culture
Not only does culture shape behavior and results, Taylor believes, but “Culture binds us all together. It’s how we treat others, how we put our core values into action, and it’s the vision that unites us. We say our culture is by design, not default.”
Intentional leaders are clear on the primary drivers of their culture, and Taylor is no exception. He says the TXRH levers are:
- Vision based on core values
- People who embody that culture
- Opportunity for growth, both financially and emotionally
- Outreach through service and charity, rather than advertising
- Staying true to their roots
Even more significant, each of these values are evident in the decisions that have shaped the company through the years.
Inspiration Means Celebrating What Hasn’t Changed
Kent Taylor believes you inspire not just with the new and exciting but by continually acknowledging and celebrating what hasn’t changed. At TXRH this includes:
- Compensation. The practice of paying $25,000 in and receiving 10% of profits has never changed. Other chains began with a similar model and infamously cut it back when managers—in their opinion—started making too much money.
- Managers control hiring. Let the manager bring in his or her own people to clear up the issue of accountability. They are responsible for any good or bad hires and are left to decide if these people are eagles or ducks? From that point, the next step is clear: “We shoot ducks and hire eagles, or they will mess with the culture.”
- Make mistakes. Give leaders the freedom to spread their wings and try new things.
Many organizations I’ve worked with have struggled to balance “staying true to their roots” and innovating. I asked Taylor how that affected progress. He responded that innovation is one of their roots:
I’ve consistently told the same message for 25 years, but always been open to good ideas coming from our restaurants. Years ago, in Ashland, KY, Neil Nicholas decided he was going to try line dancing in the store. I heard about it, went to see it, thought it was really cool. Since I was receptive, Neil— who is now an area manager—would tell me anytime he had a good idea. I would tell him to try it.
Line dancing has since become a trademark in most of the TXRH restaurants.
The innovations go on and on from stores all over. One location initiated Alley Rally, a sort of mini pep assembly before busy shifts, where an employee can create their own chant, winning the opportunity to “cash and dash.”
One company set out to host a coloring contest for children, only to create a new mascot for the chain. Reluctant to have the children associate the long horn with their dinner, an employee decided to use a more unique animal, and so Andy Armadillo was born. There’s even an armadillo costume, which Kent himself wore to the state fair.
Another started using a “manager in the window” rather than any employee to inspect all food before it headed out, and the food began outperforming other locations.
“Damn, that’s a good idea!” Taylor thought, and took it another step, hiring Product and Service Coaches for locations. He doesn’t like to take credit, though. Even when he comes up with the idea, he finds a store to try it out, and if it works well, then it “started in that store.”
He loves when roadies and future employees are innovative. When Steve Miller—now a Market Partner—came to interview, he came with a trophy, which read:
Resume of Steve Miller
To Kent Taylor:
Don’t put me on the shelf,
Choose me as the leader
Of your second concept”
Kent didn’t even have the second concept at the time, but he still has the trophy. He embraces people like Steve, with a high-energy personality and who loves others. They are the people who will spread the values of Texas Roadhouse.
“We want to make every decision, both big and small,” he says, “With our food, service, and people in mind.”
This ties into the “shared-ownership mentality” that employees must have to keep the culture thriving. This doesn’t just apply to actual owners; the vision is to empower employees in knowing they are the keepers of our culture. Their actions and values determine the future of the company.
How Do You Create Legendary Connections and Positive Emotions?
It begins with employees: Taylor wants you to be inspired before he even hires you.
“In the interview,” he says, “We ask: what are you passionate about? We want to hear good answers and hear excitement.” If you don’t have passion in your own pastimes, how can you muster any for your work?
“I remind people,” Taylor continues, “To look in the mirror every morning and to monitor how you are going to look when you walk into work. You may think you are happy, but you might need to notify your face.” Emotions pass from employees to customers; how will you influence the people you are helping?
The relationship between the employee and the guests has always been essential to the emotions created during the interaction. A positive vibe, great food and service, and emotional contact all contribute to that relationship; if one is off, the whole experience could be ruined for that guest.
To improve the chance of a great visit, Texas Roadhouse has decreased the number of tables each employee takes care of to three, even as competitors have increased to as high as six. This means TXRH servers will never have to focus on more than 15 people at a time.
Fewer guests means consistently better service. The servers introduce themselves by name, learn the customers’ names (written on the ticket if necessary), complement their kids or spouse, and generally create a more positive vibe. Besides improving the service itself, Texas Roadhouse has found a way to establish a relationship. Now their guests come in for their fix of energy and fun.
In the past, investors have encouraged the company to expand into lunch, but Taylor has refused. Much of the appeal lies in the energy provided by the staff, and it is much easier to hire energetic people who only work at night. For many of these people, this will only ever be a part-time job, but that doesn’t mean their experience is any less important. Twenty-five years in, they find that many of the people who worked with them for three years have become lifetime guests.
TXRH Monitors Emotion
Every interaction with a guest is an opportunity to create an emotion, either good or bad. Intentional leaders take active steps to make good ones and to circumvent the bad ones.
“Walk into one of our stores,” Taylor encourages. “Were you greeted with a smile? Do our employees seem to be having fun? How’s the energy level? Table Visits are an Operational Goal at Texas Roadhouse; our Managers check in to make sure our guests are enjoying Legendary Food and Legendary Service.” Keeping track of the current emotions allows you to predict future emotions and influence them through your actions.
The same holds true for keeping employees in an infectiously good mood. Texas Roadhouse receives feedback on every level; one-on-one to 360 degrees to their annual Fall Tour—just a few ways the company keeps their fingers on the pulse of how employees are feeling at any given time.
In addition, the company is always listening to reviews from customers through Guest Relations and social media. They work to correct any circumstance of negative emotions for guests and celebrate positive guest feedback through companywide communications and in Alley Rallies. Texas Roadhouse knows that those connections are imperative:
“As a family restaurant, we want our guests to enjoy an authentic experience with their families and friends through their interactions with our employees. Part of that authentic experience includes giving our employees the training and support they need to be proud of their job.
We want to avoid feelings of insignificance and feeling powerless. Every interaction we have, whether it be with a guest or with a fellow Roadie, we want our interactions to be authentic and genuine. As part of our local approach and people-first culture, our operators, store employees, and Support Center employees all have the opportunity to take ownership over their jobs to make a difference in their own way.
Once again, happy employees create happy guests which creates happy accountants! Good emotions are self-perpetuating.
Throw A Party
For those hoping to follow him in the ways of an intentional leader, Kent Taylor offers this advice:
“Here’s what I say whenever I speak and to any business I speak to: hire friendly, outgoing, and passionate. Every day we’re throwing a party in our restaurants. If you’re going to throw a great party, you make sure the lighting is right, the air conditioning is adjusted, the music is great, the food you serve your guests is great, and make sure you have enough cold beer. You can relate any business to this.
You have to love where you are at, know you are doing good things for people, that the training you’ve gotten helps you show you care. You care about your people, and you care about your mission, your people, and your customers. Everyone wants to feel loved and part of a group. And everybody loves a great party.”
Taylor’s vision for the future is that the party will go on with or without him—and that it continues to be legendary.
Mark Sanborn is an award winning speaker and Leadership Expert in Residence at High Point University, the Premier Life Skills University. For more information about his work, visit www.marksanborn.com.