Why America Is Addicted to Olive Garden

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CEO Clarence Otis is bringing Darden's brands together in a single building for the first time | Photograph by John Loomis

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Kitchen Monitors run Meal Pacing software created by Patti Reilly White and her IT group

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The Darden Menu

Darden was already an institution. Its founder, Bill Darden, at just 19 years old, opened his first restaurant in 1938 -- a lunch counter in Waycross, Georgia, with 10 stools, two booths, and curb service. (My dad, who grew up in Waycross, was a fan of the fried shrimp.) Darden called the place the Green Frog and promised "service with a hop." It was fast and affordable, and became a must-stop for families on their way to and from Florida. Over the next 30 years, Darden added nearly two dozen Howard Johnson franchises, but his breakthrough was Red Lobster, which opened in Lakeland, Florida, in 1968. He saw that a seafood restaurant that was nicer than still-young fast-food and more affordable than white-tablecloth restaurants would fill a niche.

Otis moved up, from treasurer to chief financial officer of Darden and then president of its Smokey Bones Barbeque & Grill chain. In 2004, he was tapped to run Darden, becoming one of the few African-American CEOs in the Fortune 500. He plotted a new course for major growth, and began making changes. He sold Smokey Bones, after deciding the 127-restaurant chain lacked national appeal, and, in 2007, engineered Darden's first acquisition: a $1.4 billion deal for Rare Hospitality, parent of LongHorn Steakhouse and the upscale Capital Grille.

Now, Otis says, Darden's future growth will come primarily through taking market share. Even before the financial crisis tightened consumers' budgets, he was aware that Americans were dining out less frequently. Today, the average American has 79 sit-down meals in restaurants per year, 16% fewer than 15 years ago, according to analyst Harry Balzer of market-research firm NPD Group. Meanwhile, the number of casual-dining restaurants has grown at roughly twice the rate of population.

Part of Darden's strategy is an updated version of the comment cards Bill Darden put on tables at the first Red Lobster. Over the past year, Darden's 22-member customer-insight team invited 16 million customers across its six chains to answer guest-satisfaction questionnaires. The company won't disclose results but claims the feedback predicts shifts in traffic at individual locations. "In restaurants, consumers are always shopping the competition, which reinforces the need to monitor how you're doing," says J.J. Buettgen, head of consumer insights. "We sample guests every day. We want to know how their last meal was."

Given the competitive pressures, says Otis, it's more important than ever for the company's 180,000 employees to work collaboratively. Its three major brands should operate as test labs, sharing the best ideas and even personnel, while maintaining their distinctive identities. Nothing embodies Otis's vision for Darden better than its new headquarters, a $100 million state-of-the-art building in Orlando. More than 1,400 executives and restaurant support staff are scheduled to relocate there in October; until now, they have worked in 12 buildings spread out over 2 miles. In the new arrangement, the brands' test kitchens will operate side by side, to both practically and symbolically epitomize Otis's mandate for sharing.

"When we talk about working smarter, that means stronger working relationships across different levels of the organization," he says. "We have a lot of great brand leaders who aren't taking advantage of each other's expertise." In other words, a restaurant tour of brand presidents should be the norm, not an anomaly.

David Pickens, 53, the president of Olive Garden, knows firsthand how grueling -- and how fulfilling -- restaurant work can be. At 17, he started as a line cook at a Red Lobster in Nashville. The pace was relentless, the pay wasn't great, and he never saw the people he cooked for. It was just a job. Then he became a waiter, interacting with customers, shaping their dining experience, and getting rewarded for it. He set his sights on becoming a restaurant manager, got the job at 21, and never looked back, opening and overseeing restaurants for Red Lobster, Olive Garden, and the short-lived China Coast.

"I went from Nashville to Memphis to St. Louis to Evansville, Indiana, back to Nashville and Memphis and then to Little Rock to Houston to Philadelphia to New York and finally here to Orlando," says Pickens. "Got all that?"

We're talking over dinner at an Olive Garden in Orlando. ("Chicken marsala? Good choice. That's in my top five.")

The Olive Garden brand is built around the notion that guests are treated like family, but Pickens knows that isn't likely to happen unless employees feel like family too. Employees, he says, need to believe that serving meals and cleaning tables and cooking pasta in a hot kitchen is meaningful. "It's very difficult for the experience of the guests to exceed the experience of the staff," Pickens says. "We put the two together."