A Client Close-Up: Domino’s Pizza, Inc.
While one of the core values of the Adizes Institute is client confidentiality enough time has passed and permission has been granted to allow us to share this client closeup describing our work with Domino’s Pizza.
This client close-up is a 1982 interview with Tom Monaghan, former president and CEO of Domino’s Pizza, Inc. The following is a published introduction to and transcript of that interview.
Tom Monaghan is the fast-moving President of Domino’s Pizza, Inc. He built Domino’s Pizza around a single concept: pizza should be delivered hot to the customer in thirty minutes or less. Monaghan’s commitment to the customer, attention to the details of production, and dedication to quality have revolutionized the pizza industry and made Domino’s Pizza a household name in America. Adizes has been working with the Domino’s Pizza family—including Domino’s Pizza Distribution Corp. and the franchisees—since 1980 when Domino’s was a fledgling $400 million company. Domino’s now (as of 1982) has annual sales in excess of $1.5 billion. Domino’s is headquartered in Ann Arbor, Michigan.
Where was Domino’s when Adizes associates came in?
We were in the upper stages of Go-Go, moving into Adolescence. I have always agreed with the kind of things taught by the Adizes Methodology, which are now much better articulated in our company. At first, there was a certain amount of dissension, but everything that was then a problem has now been resolved.
Was the company growing by leaps and bounds?
The company was growing but at a slightly slower rate than is normal. By most standards, however, that growth would still be very fast. Domino’s Pizza had just digested a large acquisition. Geographically, we were spreading at a rapid rate. We were healthy and profitable and not unmanageable. Yet, we were not doing as well as we could.
Was that when Adizes got involved?
During the summer, I invited Adizes associates out to the headquarters in Ann Arbor, and they worked with us for two days. They led us through a Syndag, which then led to the development of Synerteams. These included separate teams dedicated to cost-cutting in the corporate office, improving our banking relations, and improving our pizza dough. That Syndag indicated that our biggest (EI) PIPs were perceived as relating to those areas.
While working in the Synerteam regarding home office expenses, we found that we were already tightening our belts, something which was very valuable for the company to know.
The dough improvement Synerteam was a very high priority, and it was a very difficult team due to its diverse composition. It made major improvements. The team decision was to invest $500,000 in new equipment. This investment has paid for itself many times over. The quality of our product improved, our sales went up, and a record number of franchisees stopped their own dough production and began to buy directly from Domino’s Pizza commissaries.
The banking Synerteam found that bankers did not understand our pizza company. The Synerteam brought about very positive direct results. We held a two-day seminar focusing on our company operations to which we invited a number of bankers and investors. By offering bankers a better understanding of Domino’s Pizza, we were able to secure three times as large a line of credit. This, of course, has enabled us to grow faster.
What phase of the methodology were you in at this point?
We had just finished Mission Definition. Our mission stayed about the same as it always had been. More importantly, however, was that we achieved group ownership of the mission. The mission, coincidentally, was the same mission as mine, but it became our mission. Also, getting company ownership for decisions was occurring much more frequently and in a more positive manner.
Did you then move into restructuring?
Yes, we moved into that with much more positive mutual respect. At that time, I had too many people reporting directly to me, so we worked towards changing that structure.
There are clear and obvious benefits for Domino’s in all that you have said so far. Are there other benefits you have not mentioned?
Because some of the benefits are of a preventive nature, it is hard to say exactly what the Adizes method did. It definitely helped create a climate in which we could generate better ideas, but it also helped create a climate where we could be better implement those ideas. The best thing that has happened over the past two years has been the development of mutual respect among the team members. It allows an appreciation for what other departments are doing.
Where are you now? Which phase are you in?
We are now in the Budgeting Phase, and I am sure we are on target with that. We are looking forward to the Incentive System. I feel as though we are pretty strong in that area, so I have high expectations for that phase. We want to do something with incentives that has never been done before.
We have also had a second Syndag resulting in some new (EI) patterns and Synerteams. Our inside coordinator, Don Dufek, is doing a super job. Also, Cascading has been taking place. We have at least thirty trained Integrators. Some of the regions have already held Syndags, and other regions are scheduling their Syndags.