Baseball and pizza pie: a success story
Ann Arbor, Mich.
IF Tom Monaghan owned just the Detroit Tigers baseball team it would be easier to figure out what makes him tick. But he also owns the world's largest pizza delivery chain, an animal petting farm, a fleet of antique boats, 220 antique cars, and one of the largest collections of artifacts designed or owned by architect Frank Lloyd Wright - his boyhood hero.
Variety is clearly the spice of Mr. Monaghan's life. Even so, he still might be passed off as just another millionaire businessman with a few expensive hobbies. Yet, it's difficult to give such short shrift to a man willing to take a chance on planting new pizza stores in Central America. A portion of the profits from his outlet in San Pedro Sula, Honduras goes to fund a nearby Roman Catholic mission.
``The golden rule is something I've always said is the corporate policy of this company,'' Monaghan says. ``I've never been interested in profits to speak of. I've always been more interested in outperforming the competition.''
Monaghan says the most important ingredient for success has been his ``30-minute free delivery'' guarantee and assurance of hot pizza. It has made customers happy, and his company, Domino's Pizza Inc., has grown from one small store in the 1960s to 4,279 stores and $1.9 billion in sales last year.
``He's like one of the early pioneers in fast-food service,'' says George Rice, president of GDR/CREST Enterprises, a market research company based in Chicago. ``Everybody has great ideas, but ideas are a dime a dozen. It's putting an idea into action that counts.'' Monaghan's business practices, which stress ``caring'' about employees and customers, are models for corporate America, says management guru Tom Peters in his recent book ``A Passion for Excellence.''
Real caring has to be demonstrated if it isn't to be just a lot of talk, Monaghan says. While many companies contribute money to charities and arts, Monaghan has also managed to integrate ``fun'' into the structure of the business.
So, here on a green hillside next to his new, low-slung, $150 million corporate headquarters building is a squat, red barn with outdoor pens containing ducks, pigs, sheep, and other barn animals. The bleating and squawking is part of the way Monaghan likes to do business.
``We used to bring animals over and put them in the lobby of the old headquarters so people could experience a little flavor of the farm,'' he recalls. ``Bunny rabbits, or roosters.'' People called the reception desk ``and heard a rooster in the background - it was fun.''
Then there's the tower - the Leaning Tower of Pizza - that Monaghan plans to break ground on this year. Based on a design by Wright, the 35-story executive conference center (also available for public meetings) will lean 15 degrees to the east, out over the headquarters building.
Monaghan's 4,485 Domino's Pizza franchises have expanded at a rate of 50 per month in recent years, allowing him to follow his instincts and interests.
``When a company gets this big, any businessman gets all kinds of temptations to get into other businesses,'' Monaghan says with a wide smile now, hands folded in front of him on his desk. ``A lot of mine are ... hobbies or dreams I've always wanted to do - and I've wanted to find an economic way to justify them.''
On the company's 300 acres there is a small-scale working farm designed to demonstrate how small farms can survive by diversifying and marketing more effectively. There is also a museum Monaghan built to display Wright's work to the public, and a mime center with activities directed by Marcel Marceau.
The angular corporate headquarters is designed to look as much as possible like something Wright would have done. It has an indoor track and fitness center. Employees are encouraged to take time off each day to use it. The building even has a bookstore that sells Detroit Tigers' sweat shirts, baseball caps, running shoes, and paraphernalia. The architecture and amenities achieve the desired effect: to be more like a campus than a corporate headquarters.
Monaghan admits that franchisees and his executives - most of whom have worked their way up from delivery boy, to store manager, to executive level - occasionally chafe at the cost of some of his projects. This is especially true when earnings drop, as they did in the first half of 1987. In the wake of increased competition from other pizzamakers, Monaghan last year ordered a back-to-basics movement that has boosted the upward swing in profits. The last six months of '87 and the first quarter of '88 were strong.
``It's really not a problem until profits start going down,'' Monaghan says of his company-related hobbies. ``I think they kind of humor me along.''
A self-avowed fitness nut who reads the sports page religiously, Monaghan runs six miles a day, and always uses the stairs. He has had the elevators in his new corporate headquarters set slow - it takes about a minute for them to arrive - to prompt people to take the stairs. Weighing scales will soon be placed beside each set of elevator doors.
The effect of this sports/fitness ethic on Monaghan's pizza business is clear in other areas. He has geared company management along the lines of teamwork and individual competition found in athletic competition. Regional divisions compete to make the best pizza, deliver it faster, and sell more of it than the next region.
Monaghan's background has helped define his style. Orphaned at a young age, he grew up in St. Joseph's Home for Boys, a Catholic orphanage in Jackson, Mich. He left there at age 12, living and working on five farms in five years - the inspiration for his corporate headquarters farm.
But Monaghan's long-lasting love has been for Wright's work, which began after he read a book on the architect while a boy. From that developed his aspiration to be an architect. He was forced to drop out of college for lack of money and then unwittingly joined the Marine Corps. ``It's the best organization I've ever joined,'' Monaghan says of the Marines. ``The irony is I thought I was joining the Army.''
After his tour with the Marines, he and his brother plunged into the pizza business, opening their first Domino's store in 1960 in Ypsilanti, Mich. Not long afterward, Monaghan traded a Volkswagen delivery car to his brother for controlling interest in the struggling company. After several false starts, the business finally took off in the early 1980s.
``I always felt I had something most businessmen missed,'' Monaghan says. ``Yet, if you were to line me up with a bunch of other business executives, I'd be voted last every time.