Leadership Lessons from Dunkin’ Donuts

October 15, 2020

Leadership Lessons from Dunkin’ Donuts

Robert Rosenberg served as chief executive officer of Dunkin’ Donuts from 1963 until his retirement in 1998. He began his tenure as CEO just weeks after graduating with an MBA from Harvard Business School and under his leadership, the company grew from a regional family business to a global brand. In his book Around the Corner to Around the World: A Dozen Lessons I Learned Running Dunkin’ Donuts, he shares his expertise in leadership and strategy. 

HR People + Strategy: In your 35 years as CEO, how did your leadership style change?

Rosenberg: I don’t think my style changed much. I came to my job at 25 most comfortable with a collegial collaborative style. That said, there were lapses. As I lived life and had more experience on the job, I’d like to think my emotional intelligence grew and I became more aware of myself and others and became more consistent.

HRPS: How did the business strategy shift over time? How did the top leadership team decide upon certain strategies?

Rosenberg: Over my 35 years as CEO, there were six distinct eras we lived through—each with its own set of challenges and opportunities and each with its own strategy. In five of those six eras, our strategies were effective, and we were able to fulfil our mission and achieve our objectives. We were rigorous planners and yet open to emergent opportunities when they presented themselves. We were good at defining reality and adjusting our plans. We were sure to plant saplings along the way to ensure big shade trees down the road when we needed them. We’d water and grow those that looked promising and we’d shut down those that didn’t.

HRPS: What are some lessons you learned about culture? 

Rosenberg: Culture is hugely important. It shaped most of our policies and practices. We had a team culture. We were a team that served together for decades. Despite teammates with varying backgrounds, we shared a respect for each other and celebrated our complementarity. We were aspirational, we liked to win. We valued trustworthiness, flexibility and excellence. Our culture shaped our hiring and pay practices as well as our communications. 
 
HRPS: As a franchise company, what role did organizational design play in your success?

Rosenberg: Unlike a high-tech company that responds to Moore’s law, our customers came to rely on consistency in our brand. Our organizational form and procedures had to support consistent execution from store to store. Yet, that formal military organizational format was supplemented by a communications and governance network that helped create innovation and esprit de corps. We invited franchise owners into the planning process. We had every store vote for district representatives who met with regional management. Regional representatives met quarterly with senior leadership including myself. We, together, set annual store profit objectives and decided on the four or five strategic levers we’d pull to achieve those objectives. 

We’d work together through these councils on major policies matters as well. When it came to a crisis or major corporate change, for example, revamping our distribution system or international expansion, etc., we’d cleave off a whole separate team to work exclusively on that project. 

HRPS: What helped build the teams successfully? What helped top leadership work together better?

Rosenberg: When a team culture exists, it becomes the natural way for an organization to tackle problems. 

  • We found for many tasks a cross-functional team composed of department representatives essential to planning and executing deliverables works best. 
  • We also found a team works best when the originator and team work out agreed deliverables, budget and milestone dates.  
  • We had best results when the team devoted all their efforts to the new task leaving the rest of the organization to handle day-to-day operations. 

As for top management, that team worked well together because of mutual respect and trust. Back-biting and politics were not tolerated. For senior managers, including myself, annual bonuses and long-term incentives were based on the company’s overall performance, not on a department’s specific performance.

HRPS: What are the key factors in successfully scaling a business?

Rosenberg: We focused on three Ps: planning, people and product.

In planning, we had an aspirational objective to grow earnings 15 percent compounded. That objective required us to repeatedly define our reality and insure we had a distinguishable competitive advantage. That forced continual experimentation and adaptation. 

We matched our talent to the assignment, and we relied on the complementary strengths of each team mate rather than try to remediate an individual’s weaknesses. 

We strove to ensure our products were made from the best ingredients available. And we trained and supervised to continually improve our execution.

HRPS: What advice would you give a rising leader today?

Rosenberg: Keep learning and growing. Stay humble and open. Have a passion for your business and the job you do. Be trustworthy and build trust. Surround yourself with people smarter or more knowledgeable in important areas of the business than yourself. When things go wrong, take the blame and the pain. When things go right, share the glory and the rewards.

Hear more about leadership from Nigel Travis, Chairman of the Dunkin' Brands Group, at Visionaries 2020, a virtual event October 19-21, 2020. Learn more and register. 

The Authors: 

Robert Rosenberg is author of Around the Corner to Around the World: A Dozen Lessons I Learned Running Dunkin’ Donuts (HarperCollins Leadership).