James “Buck” McCabe keeps the books for Chick-fil-A, but it is the corporation’s adherence to a simple code of ethics that he most enjoys about his job, the chief financial officer told Darden students Feb. 12.
As CFO and senior vice president, McCabe works closely with S. Truett Cathy, founder of the privately-held chain of fast-food restaurants that has grown in 40 years to 1,400 restaurants in 37 states. Retail food sales in 2000 topped $1 billion, McCabe said, and the corporation doubled that figure for the 2006 fiscal year. Chick-fil-A is on target to hit $3 billion in sales next year, he added, and the corporation will be completely debt-free by 2012.
“But it really is more than profits at Chick-fil-A,” the executive said. “It’s nice to work for a business where doing the right thing is always approved.”
Founder Truett Cathy in his biography of the company wrote, “I see no conflict between Biblical principles and good business practice.”
This epiphany followed a difficult time for the corporation in 1981, when Chick-fil-A same-store sales posted the first decline since the founding of the restaurant chain in 1967. It was a time when the prime interest rate spiked at 21 ¾ percent and inflation was rampant.
McCabe earned laughter from the students when he said corporate executives did the only sensible thing in a time of declining revenues: “We went on a retreat.”
The upshot of the two-day retreat was a new corporate mission statement – essentially a variation on the Golden Rule – that remains unchanged today: “To have a positive influence on all who come in contact with Chick-fil-A.” Something clicked. In 1982 the corporation posted a 32 percent increase in sales year-over-year, McCabe said.
Today Chick-fil-A in addition to managing its independently-owned restaurants provides operating funds for 13 foster homes and sends 2,000 children to summer camp each year, McCabe said.
Famed investor Warren Buffett made several overtures to buy the company over a 10-year period, but during that time he evidently had never tasted a Chick-fil-A sandwich, McCabe said, smiling. When Buffett accepted an invitation to visit corporate headquarters in Atlanta, Chick-fil-A executives served two sandwiches to him. Buffett immediately lifted the buns and began shaking copious amounts of salt on his sandwiches. McCabe recalled someone asking the investor, “What are you doing? You said you’ve never even tried one.”
Buffett evidently took the comment in good humor as he later sent a letter to the company founder: “Your offer of a Chick-fil-A sandwich is powerful – particularly with the added salt thrown in,” Buffett wrote. “Keep a seat reserved for me at your lunch table.”
McCabe’s presentation was sponsored by the Darden Christian Fellowship, with the goal of providing real-world examples of ethical and moral leadership to underscore the business values that are an integral part of the School’s curriculum.
Founded in 1955, the University of Virginia’s Darden School of Business is a professional school that works to improve society by developing leaders in the world of practical affairs.
For more information contact communication@darden.virginia.edu.