Sally Smith didn’t take the typical route to the CEO chair, if there is such a thing.
Smith is an accountant by trade, and worked her way up to the CFO role at a hearing aid company before it was sold in the early 1990s.
A friend told her about Buffalo Wild Wings, a 35-unit chain in Ohio that sold chicken wings, and needed help raising money and getting its finances in order. Smith took a part-time position with the company while she raised her children, and kept moving up to CFO.
In 1996, when the CEO hired to take the chain to the next level didn’t show up for the job, Smith took it herself. She has been the CEO of Minneapolis-based Buffalo Wild Wings Inc. ever since, a 20-year tenure that stands out in an industry known for chewing through executives every few years.
Along the way, she took the chain to well over 1,000 units, making it one of the most successful casual-dining concepts in the country. She has become one of the most visible leaders in the restaurant industry, and has earned this year’s Norman Award.
Named after the late Norman Brinker, the award is given to restaurant executives who consistently mentor and inspire future leaders.
“She’s a force,” said Phil Hickey, a longtime restaurateur and the 2011 Norman Award winner. “She is one of the premier leaders in our industry.”
Hickey, along with other former Norman Award winners, selects each year’s honoree. The committee also includes industry executives Cheryl Bachelder, Doug Brooks, Patrick Doyle, Rick Federico and Jon Luther.
Smith’s long tenure makes her a rarity. On average, publicly traded company CEOs keep their job for just over seven years, according to the research firm Equilar. Smith exceeded that number 15 years ago.
“I’m passionate about this company,” Smith said in an interview at Buffalo Wild Wings headquarters. “I’m excited about the opportunities we have ahead of us, as much as we’ve had behind us. And when you’re passionate about that, it’s easy to stay somewhere.”
While Smith has remained at Buffalo Wild Wings for years, so too has much of her staff. That lack of turnover, she said, has helped the company achieve many of its long-term goals without disruption.
Smith’s former longtime CFO Mary Twinem — who worked alongside Smith for 20 years before retiring last year — explained that Smith has created an environment where people can thrive.
“She has created a company where people are valued and respected,” Twinem said. “She leads by example. She equally values the opinions of the leadership team and the opinion of restaurant managers and heart-of-house and front-of-house team members. She has instilled in others to do the right thing, and this is permeated throughout the organization.”
The lack of turnover also helps the company in relationships with its franchisees. Nearly half of Buffalo Wild Wings’ 1,200 locations are franchised, and franchising remains vital to the chain’s ability to expand.
Michael Ansley, the CEO of longtime Buffalo Wild Wings franchisee Diversified Restaurant Holdings Inc., said he appreciates the franchisor-franchisee relationship. “Sometimes they’re not going to agree with us,” he said. “But we have a great collaborative relationship and two-way communication.
“I’m glad Sally’s there,” he added. “And I hope she’s there for a long time.”
Ansley noted that there were a lot of problems with the chain when Smith arrived. “She rebranded it, brought in marketing talent and identified a niche. Nobody really owned the sports bar/entertainment market.”
There’s little question of Buffalo Wild Wings’ success under Smith. The chain has added an average of 51 locations a year over the past 22 years. Systemwide sales in just the past four years have increased 45 percent, according to Nation’s Restaurant News Top 100 data.
The company’s stock price since 2006 has increased five-fold. The chain’s same-store sales over that time have been remarkably consistent.
“We’ve had three negative quarters at company stores in the past 50-plus quarters,” Smith said. “Two of them have come in the first half of 2016.”
Indeed, that first half has given Smith perhaps her biggest test as CEO. The company has drawn the ire of activist shareholder Marcato Capital Management, which is pushing for major changes at the company. Those issues can be tough on executives.
“One of the things I’ve never done is watched our stock price,” Smith said. “I usually know where our stock price is near the quarter, when we do our earnings calls. But if you’re focused on the long term and have strong fundamentals on the long term, your stock price will take care of itself.
“There may be a lot of pressure on me from Wall Street, or shareholders, or whatever. But my job is to make sure that pressure doesn’t get to the server on the floor.”
Smith said the company will get through the sales trough much like it’s gotten through every other economic cycle.
“Our board of directors, our shareholders, have believed in the long term,” she said. “I’ve spent a lot of time focused on the long term. We’ve been through a lot of different economic cycles. As long as you’re trying to understand how this is different, and what are the components, you can make it through economic cycles.”
Leading like a visionary
Smith gives a lot of credit to the people she’s surrounded herself with at the company. She did not have a restaurant industry background, and so relied on top managers to fill in the gaps.
“I had to hire great people to fill in the areas that I didn’t know,” she said.
Smith was circumspect about her own abilities and what she brought to Buffalo Wild Wings.
“I’m not the great visionary,” she said. “I’m not the great strategist. But I’m very curious. I read, and I listen to and I talk to lots of people.”
Twinem offered a different take: “She’s a visionary,” she said. “[Smith] transformed the company from a struggling college bar to a multi-national sports bar where everyone, from sports fanatics, singles, couples, families with young kids, business associates after work, can all gather to watch sports and build community.”
While Smith said her previous company had some things in common with Buffalo Wild Wings — like franchising — she said her relative inexperience in the industry was an advantage.
“Because I didn’t know what you couldn’t do, we could try some things,” she said.
Buffalo Wild Wings’ growth has been due in large part to its focus on customer experience. The concept has been devised to enable customers of all kinds to come in and spend some time watching a game with friends, teammates or coworkers.
Smith seemed to suggest that this had at least something to do with good fortune, that the chain emerged at a time when consumers’ views of restaurants evolved, and they began demanding more experiences with their dining dollar.
It also emerged as fantasy football became popular. In 1994, when Smith arrived at Buffalo Wild Wings, perhaps 3 million people played fantasy football. This year, that number is 56.8 million, according to the Fantasy Sports Trade Association.
Large televisions enable customers to watch a number of games while they eat chicken wings, but Smith also pointed to the tables, which can be easily moved and therefore easier to assemble large parties on the fly. It also enables those parties to grow and shrink as needed. As long as servers are there, the chain can accommodate customers.
And that’s the difference: As Buffalo Wild Wings was growing, other casual-dining chains focused on table turns — getting customers in and out. But Buffalo Wild Wings went in a different direction, giving customers permission to stay longer.
The chain’s focus on experience enabled it to thrive.
Franchisee Ansley said Smith is like the chain’s “fourth founder,” along with Jim Disbrow, Scott Lowery and Bernard Spencer.
“She has the passion of a founder,” he said.
Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze
