Once the grand-opening festivities for the new Chick-fil-A restaurant in Evansville, Indiana, are over, you expect Dan Cathy, president and chief operating officer of the Atlanta-based chain, to head for the airport. Instead, he heads straight for the dozens of customers camping out in lawn chairs and sleeping bags; when the doors open at 6 a.m. the next day, the first 100 will win a year's supply of chicken-sandwich meals. "I'm Dan," he tells one after the other. "I work in customer service."
He sure does. Like his father, Truett, Chick-fil-A's founder, chairman, and CEO, Cathy, 51, believes that attentive, sincere, memorable service is a key ingredient to building a successful company. He talks about service plenty. How it's tied to the corporate mission. How it affects the bottom line. (Over the past four years, sales have increased 40%, to $1.53 billion, and the number of locations has jumped from 958 to 1,160.)
But what makes Cathy a leader worth watching is that he walks all that talk: At midnight in Evansville, he still hasn't left the restaurant. Cathy spends one day each year working behind the counter, just like all of Chick-fil-A's 494 corporate employees do. And new store operators even get a taste of Cathy's servant leadership through dinner at his home; the boss does the cooking, serves the food, and clears the dishes.
Because of him, franchisees and frontline staffers constantly think about service. At some restaurants, the first employee to memorize 100 customer names receives $100. If someone calls to say they picked up the wrong food, Chick-fil-A often delivers the correct order. Cathy says his role is championing the latest ideas, such as an Atlanta franchisee's notion of having an employee visit tables with a big pepper grinder.
Exemplary service, Cathy says, begins with hiring the right people. Chick-fil-A is notoriously choosy; it typically awards franchises to just 5% of applicants, and the selection process can take a year. Cathy wants operators to have business acumen as well as values. And they must be hands-on managers, not mere investors. "The closer top management is to the customer, the more successful an organization is likely to be," he says.
In Evansville, Cathy certainly gets close to his customers, spending the night with 100-plus diehards, his 16th campout this year. He doesn't feel his work is done until they've gotten their coupons and he has signed T-shirts for some giddy moms and posed for a few parting photos. Then, and only then, at 10 a.m., does Cathy finally head for the door.
Runner-Up: Costco Wholesale
Jim Sinegal runs one of the largest wholesale club chains, but there are two things he doesn't discount: employee benefits and customer service. Average hourly wages trounce those of rival Sam's Club, and 86% of workers have health insurance (versus a reported 47% at Sam's). Sinegal isn't just being nice. Happy employees, he believes, make for happier customers. Low prices (he caps per-item profits at 14%) and a generous return policy certainly help. Although Wall Street has long been arguing for smaller benefits, a stingier return policy, and bigger profits, Sinegal sides with customers and staff. "We're trying to run [Costco] in a fashion that is not just going to satisfy our shareholders this year or this month," he says, "but next year and on into the future." — Lucas Conley
Runner-Up: Enterprise Rent-a-Car
Andy Taylor became president of his father's $76 million rental-car company in 1980. Today, it's the largest in North America, with $7 billion in revenue. How has he kept customer service a priority? By quantifying it. Enterprise surveys 1.7 million customers a year. If a branch's satisfaction scores are low, employees, even VPs, can't be promoted. The result is self-propagating. Seeking better scores, managers make better hires. And because Enterprise promotes almost solely from within, nearly every exec — including Taylor, who started out washing cars — has a frontline understanding of what it takes to keep customers happy. Says senior VP of corporate strategy Sandy Rogers: "The company would never have gotten that 100-fold growth without Andy's knack for putting systems and processes in place so you can deliver consistent service." — Lucas Conley
A version of this article appeared in the October 2004 issue of Fast Company magazine.