Secret Sauce

Behind Whataburger's cult status--and rapid same-store growth--is its corporate Olympics.

Andrea Acerra gathers her team for a huddle. With heads bowed and arms clasped behind one another's backs, they send up a prayer. They've been training for this moment for months. Just one small error could be the difference between gold and not medaling at all. Acerra, a seasoned vet with two silver and two bronze medals hanging around her neck, leads the nine competitors in one last chant: "Shake and bake!" they yell before taking their positions in the kitchen.

Over the next 30 minutes, Acerra and her crew will cook and assemble 34 orders in a simulated lunch rush in an elaborate fast-food competition. Every two years, Whataburger--a family-owned business that started as a single burger stand in Corpus Christi, Texas, in 1950, and now spans nearly 700 restaurants in 10 states--gathers its best employees to compete for bragging rights, cash, prizes, and, yes, medals, in a slyly effective mass training-and-loyalty exercise that masquerades as corporate Olympics. It's called the WhataGames.

To Texans, Whataburger is a cult brand, inspiring the same feelings that Californians have for In-N-Out Burger. But even local pride can't inoculate Whataburger, which expects to hit $1 billion in revenue this year, from the fast-food industry's infamous employee turnover rate, which hovers around 300% annually by some accounts. Whataburger staged the first WhataGames in 1996, thinking that better training would improve retention.

The burger chain is certainly not the first company to host a competitive event in an effort to bolster enthusiasm within its ranks. But you'd be hard-pressed to find one that works as well as the biennial WhataGames, which uses employees' pride in their work to infuse corporate culture in a far-flung enterprise. The company credits its same-store increases for the last 54 consecutive quarters to its rigorous attention to doing things the company way. In other words, exactly what the WhataGames reinforce. Although the privately held chain won't release turnover numbers, John Heiman Jr., who runs 14 franchises, reports that his employee churn has dropped from 900% to 100%.

That explains what the company gets out of the games. It doesn't explain why employees care so much that they'll spend months poring over operations manuals and company history. Certainly, the prize money helps: The top teams split more than $140,000. But the raw emotion on display during the two-day event hints at something deeper.

Acerra, a 41-year-old general manager, and her "kids" from unit 717 in San Antonio, are one of only 16 teams to qualify for this year's WhataGames, in Houston. Their knowledge of menu items, procedures, and Whataburger history has already been put to the test, in a Jeopardy-style quiz show and a matching card game, in which they had to correctly answer such questions as "Grilled chicken must reach what temperature throughout to be properly cooked?" (Answer: 165 degrees.) But it's during the 30-minute What's Cooking? competition--when the hypothetical becomes real--that nerves really start to fray.

As soon as the clock starts, the orders come pouring in. Two judges take turns ordering at the counter while five more circle the drive-through, trying to stump the team with picky requests (a wheat bun toasted on both sides, grilled jalapeños) and large orders. Acerra's group seems ready to accommodate any of the 36,864 possible customizations, but the order screens are filling up fast. "See if he needs help," she shouts to a grill cook. "How we doing on drive-through?"

Meanwhile, five inspectors examine every order for accuracy and presentation: They count bacon strips and tomatoes and scrutinize the meat for rips. One judge weighs every serving of fries. "This one's a no," she says of a small order that doesn't come in between 2.75 and 3.25 ounces. She drops it in the trash. Another judge brings her burger back, insisting she ordered extra pickles, to test the team's response. If the entire sandwich isn't remade (a pinch of meat has been taken out of the patty to tell if it's the same one), points will be docked.

Soon, time is called. The group emerges from the kitchen with flushed cheeks and damp brows. Acerra huddles them up again. "Y'all are the best. Y'all rock," she says. Despite compliments from the judges, they don't look relieved. A young woman named Diana Garcia begins to cry, and Acerra rushes to put an arm around her. All they can do now is wait until the awards ceremony later that night.

The games cut to the core of what's important at Whataburger. "The best advice my dad ever gave to me," says CEO Tom Dobson, the eldest son of founder Harmon Dobson, "was, 'Do an honest day's work with integrity and respect.' And we don't want to lose that culture. The WhataGames are not just a contest--that's not the point."

Coming from the founder's son, Dobson's comments sound predictable. But franchisees and employees at every level echo them. Franchisee Heiman has two teams in the Sweet Sixteen--they are the only noncorporate units--and he even stages his own WhataGames in the off years to keep his workers' interest piqued. "Whataburger treats everyone like they're family," he says. Crystal Reed has been a team member at unit 421 in Mesa, Arizona, for six years. "For 16 years, I worked in restaurants, but it was just a job," she says. "Here, it's more; it's a family."

The WhataGames work because no one wants to disappoint their "family," which they come to believe includes everyone at the company, even Dobson and his siblings. And it works because the company has aligned its compensation with its values. It pays even entry-level employees above minimum wage, and the top 20% of operations managers earn double the industry average. Nearly half of its employees contribute a portion of their pay to the Family Foundation, which offers an emergency fund for coworkers in crisis.

On the final night, the awards ceremony is held in the grand ballroom of Houston's largest hotel, and in a scene lifted straight from the Olympics' closing ceremonies, the 16 teams march from the back of the ballroom to the front to plant their flags on the main stage. The team from Brownsville, Texas, clinches the bronze. One of Acerra's rivals from San Antonio, unit 698, takes the silver. Everyone at her table grabs hands and stares down at untouched dinner salads.

The room falls silent. The winner of the 2007 WhataGames is … yet another San Antonio outlet, unit 790. Acerra doesn't let her kids see any disappointment as she leaps to her feet to applaud the winners. The victors bound onto the stage. Some are crying as Dobson drapes medals over their heads, and they're all pumping their fists in the air and hugging.

There's still one more award to be handed out, the Thomas E. Dobson Award, which goes to the year's top general manager. Acerra is one of the four nominees. Two of her team members stand behind her chair, their hands on her shoulders. When Acerra's name is called, her team mobs her before leading her to the stage to receive her trophy--and keys to a brand-new Ford Mustang. The team forms one last huddle in the far corner of the ballroom and yells, "Shake and bake!" Tomorrow morning, they'll drive back to San Antonio--and start training for 2009's WhataGames.

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