How A Jack-Of-All-Trades Can Still Reach the Top with Former Sonic CEO Clifford Hudson
J. Clifford Hudson is an American business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corp. He is the author of the new book Master of None: How A Jack of All Trades Can Still Reach the Top. He has served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation.
In this episode we explore...
Lessons from early childhood that shaped how Cliff would go on to approach his life and business.
How a lawyer in his late-twenties was hired by one of his top sales prospects!
How to identify strategies that are sustainable in the long term versus goal-oriented in the short term.
How renegotiating a franchise license agreement molded Cliff's understanding of the Sonic Business.
How a late-night conversation led to one of the most powerful and impactful organizational shifts for Sonic and their business.
Why keeping your head down is generally a bad idea.
How to create your own luck and find opportunities around every corner.
Cliff's three basic rules for life.
Homework - Engage in a new activity, hobby, or task that gives your brain a new shot of energy, and keep your head up!
Thank you so much for listening!
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Want To Dig In More?! - Here’s The Show Notes, Links, & Research
General
Clifford’s Website and Wiki Article
Master of None Podcast
Media
The Daily Record - “Former Sonic CEO shares business experience, wisdom” By Jack Rooney
The New York Times - “The Delicate Dance of a Progressive C.E.O. in the Trump Era” By Sapna Maheshwari
Oklahoma University - “Public health research, education focus of Hudsons' $5 million gift”
[Podcast] Thrivetime Show - CLIFFORD HUDSON | THE CEO WHO GREW SONIC DRIVE-IN FROM $800 MILLION TO $5.5 BILLION
[Podcast] Justin Brady - Clifford Hudson, former CEO of Sonic Drive-Ins On How They Nearly Killed Their Best Idea
Videos
Alain Guillot - 176 Clifford Hudson How a Master of None Reaches The Top
Red Twin (Roland’s Food Court) - Cliff Hudson, Full Interview [10-09-2020]
Yahoo Finance - Former Sonic CEO talks shift in restaurant industry plus, key leadership traits for business leaders
Oklahoma Today - Nate Interviews Sonic CEO Cliff Hudson
Journal Record - "Make that 300 and One" The Wit and Wisdom of Cliff Hudson
Funniest Commercials Compilation - Best of Sonic Drive In Ads - Funniest Commercial Compilations
Books
Master of None: How a Jack-of-All-Trades Can Still Reach the Top by Clifford Hudson
Harper Collins Book Page
Episode Transcript
[00:00:04.4] ANNOUNCER: Welcome to the Science of Success, the number one evidence-based growth podcast on the internet, bringing the world's top experts right to you. Introducing your hosts, Matt Bodnar and Austin Fable.
[00:00:19] AF: Hello ladies and gentlemen, welcome to another episode of the Science of Success, the number one evidence-based growth podcast on the internet with over 5 million downloads and listeners just like you in over 100 countries. I'm your co-host, Austin Fable and today we've got an absolutely incredible guest, Clifford Hudson.
We dig into his incredible journey throughout his life from lessons he learned at a young age, why being a generalist is more powerful than you might think, and how you can find more opportunities in your life and chances to grow and learn than you ever thought possible.
If you're looking to learn about leadership and growing not only a business, but personally from a man with not only a great story, but the results to back it up, then this episode is for you. And who are we kidding, of course that sounds like the kind of thing you want to learn, you are after all listening to the Science of Success.
But before we dig in, are you enjoying the show and content we put out each week for you? If so, there are two incredibly easy yet tremendously impactful things you can do for Matt and I. And as longtime listeners know, we're always looking for little changes and big results. First, leave us a quick five-star review on your podcast listening platform of choice. It helps other people like you find the show. So, do them all a favor and leave us a quick five-star review.
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On this episode we interview an incredible guest, as I mentioned, Clifford Hudson. Clifford is an American business executive best known for serving as chairman of the board and Chief Executive Officer of Oklahoma City based Sonic Corp. He is the author of the new book, Master of None: How a Jack-of-All-Trades Can Still Reach the Top. He has served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation.
We had a great conversation and we're talking about getting Cliff back on the show. He's got a number of topics he's discussed that we didn't get to today. We had a great conversation about many, many things, including personal stories from his life, the learnings he's taken from them, and a lot of the different things that he enacted at Sonic that really changed his view on the world. And with that, here's our interview with Clifford Hudson.
[00:03:17] AF: All right, Cliff, welcome to the science of success.
[00:03:19] CH: Good morning. How are you doing?
[00:03:21] AF: I'm doing pretty good. How about yourself?
[00:03:24] CH: Doing fine. Doing fine. It's great to be with you. I appreciate the opportunity.
[00:03:27] AF: Absolutely. Well, it's great to have you on the show. I really appreciate the time. I know that it's kind of a hectic time of year especially we're talking kind of before the show of you being on the road traveling around see family. So, we really really do appreciate the time.
I want to start with, for listeners who may not be familiar with you and your story. You've got a fascinating journey, ending in Sonic and really taking that company not only to the next level, but out of the stratosphere from where it was. But let's start as a lot of great stories do at the beginning. Just tell us about yourself and your journey.
[00:03:59] CH: Well, my entire family is from Dallas, Texas originally and all of us born there. My early years, elementary school years were spent in Wichita Falls, Texas. My family then moved to Oklahoma City for my teen years. And something really hugely impactful in my life, which I refer to as the book contributed to that move. And that is when I was finishing elementary school, my father's business partner after some period of embezzlement, at least according to story I was told, years later, when the business slowed the shortage of funds and shortage of capital became painfully apparent. Business failed. My parents lost everything. And at that point, he took a sales position with the other company and we moved to Oklahoma City, which is the intersection of I-35 and I-40, great for a sales position. We were there. The family is there for the next 10 years.
I then went east with my wife, in our 20s, to law school at Georgetown University. We were at the Baltimore Washington area for five years and then moved back to Oklahoma City. And this kind of set the stage for what ultimately became my Sonic career, did go into business law practice in Oklahoma City, but my timing was tough and that was something we couldn't have foreseen. That was an oil bust in that region of the country that really unfolded 1982.
So, I was involved in a business law practice from ‘82 to ’84, but the clientele had changed so radically, changed radically because the economy changed radically. I was pursuing Sonic as a, as a client as a potential client and had a former neighbor that was an officer of the company, there was a new CEO, and he asked me if I wanted to be a CEO. And here I was, 29 years old, the idea of being of a CEO, the company was fantastic. And in essence, they kind of turned the table on me and convinced me to come inside. And so, at 29 years old, I found myself as a general counsel of what was a turnaround candidate.
I didn't altogether appreciate that at 29, but I became General Counsel of Sonic at 29. So, that's kind of my path professionally, that led me to join Sonic earlier my career.
[00:06:21] AF: What an incredible compliment to be calling on essentially what is a prospect and have them ask you to come in house?
[00:06:29] CH: Well, that's an interesting observation on your part, because, in fact, I think what the then CEO, he was 36 years old, I said, I was I was 29. I know, I came to understand that his strategy was not one of them. Let's get a young general counsel in here. His strategy was, he secretly wanted to buy the company and he wanted a general counsel of the company who had sophisticated business law background. I think to be blunt, so that he wouldn't have to pay outside counsel to help him strategize about how to do that. That was ‘84 when I joined the company, and lo and behold, two years later, we did buy the company at a circuitous route. But two years later, we did buy the company.
[00:07:19] AF: I want to back up for a moment. I'm always interested, and you mentioned, kind of one of the big defining moments was, was your father's business sort of going under? What did you learn from that? Because I do always feel, I'm a father now myself of a two-year-old, but I always kind of think it changes the way you look at things, like I now kind of look at my parents’ life and I'm wondering what my kid will look at mine the things that you kind of learn and how important those lessons are. What lessons did you learn from experiencing that and seeing that? And was any of that facilitated maybe by a family member or was it all just observation on your part?
[00:07:55] CH: Well, I handle those in kind of reverse order. I would have to say that the learning from that was more by observation, frankly. I think it was a life experience that my family didn't talk a whole lot about, the impact was negative and pretty obvious. We didn't spend a whole lot of time talking about it.
The impact on me, I would say, was twofold, at least. One was early in my life as possible, my adult life, once I had assets that were sufficient to do so, it was my objective, my wife and I were quite aligned on this, to pay off our house, retire the mortgage, way, way in advance. I mean, most circumstances, I don't recall, but for a 20 to 30-year mortgage. I think we bought that house in ’89 and I'm sure we had a paid off by ‘93.
So, one was to not have creditor liens against house, which most people have called a mortgage. So, that was one. That was one takeaway, because I felt like it left my family in a more secure position if the house wasn't subject to creditors, regardless of what happened in my life, otherwise. The second thing, second takeaway, I would say in my my dad's business career, watching him and various aspects of real estate, construction, and otherwise, I think it's fair to say, I could use a bit of a euphemism. My dad had no concept of retained earnings. So, it seemed that the quality of his business was reflected even after his bankruptcy. The quality of business was reflected besides the airplane he was buying and flying. The bigger the business more widespread. I mean, he had a new airplane and sold the old airplane and just kept – I mean, he was, I think, aggressive with real estate background. He was aggressive with the use of debt, on every single project, et cetera. And I'm not really sure that any sense of building and enterprise and sustainability was part of his scope.
So, that was the second thing that I learned in watching him was work to build wealth and set it aside. And now, it’s not the right word, but set up a children's college funds early on and let that build separately in segregated manner. So, these are these are lessons I learned not by seeing them done but but by seeing them not done and what the what the consequence was. I'd say those were probably two of the biggest takeaways from that experience.
[00:10:38] AF: Yeah, it's interesting that sometimes the most powerful lessons are the ones that you see from people that aren't necessarily acting out the lesson that you ultimately learn.
[00:10:50] CH: Yeah, that's right. Well, I think, first of all, negative events always have a bigger drive or motivator to learn a lesson because everybody likes to avoid pain. And oftentimes, in our lives, I think when we have success, we really don't learn lessons, because we don't take time to reflect on it because we're successful. And secondly, we just like to assume it's because we're so brilliant and capable, so why question it.
I do think the negative. Now, in that case, you could say I learn from my father, but believe me, the pain is quite personal. I think our family enjoyed the house. I know our family enjoyed the house we were living in, the neighborhood we were living in, the schools we're going to, and so it was quite disruptive to lose pretty much everything, including the house, and then to relocate to a different circumstance where my parents didn't own a house for so more years. And when they did buy a house several years later, they only had it financed through seller financing. The owner took back the mortgage on the new house. So, it was damaging to him and them and to our family and a damage I wanted to avoid as I started my own family.
[00:12:02] AF: Well, it sounds like lessons that definitely hit home and that you've taken with you to to make some decisions to make sure you don't fall into the same traps.
[00:12:12] CH: Absolutely
[00:12:14] AF: I do want to segue a little bit here. So, let's talk about the book, Master of None: How a Jack-of-All-Trades Can Still Reach the Top. Now, I want to dig in but just tell us a little bit about it.
[00:12:28] CH: Well, late in my career, I became CEO of the company in 1995. Late in my career, I think around 2016/2017, I had come to conclusion, for variety reasons that many aspects of our company, its growth, stories that contributed to it were interesting stories. And they were peculiar to the brand itself. And there may be variations on other settings, but I thought the stories alone were interesting stories. But the second thing was, I also felt like I had an interesting leadership story to tell, not so much a – here’s how to manage a company. Rather, here's how to provide leadership in an organization that has application broadly, even if someone's not involved in a franchise organization, if they're not involved in a restaurant chain. There are lessons to take from those stories that I share in the book. And I felt like before writing a book, I felt like that was the case, good stories and very good leadership lessons in a setting in which they had those leadership methods had succeeded quite handsomely.
So, those were the motivations for writing the book. And then it took a while to put it together in no small part because 2018 was quite interrupted with the work group approaching the company and kind of rattling our cages about selling it, which they eventually did make their beds at the board simply couldn't go around.
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[00:15:48] AF: So, I'm curious to like as someone just – I have this pipe dream of one day writing a book as well. What was it like writing kind of like a memoir with a message? And I apologize that's a little bit of a mischaracterizations. But like, what was the process like? And through the process of putting it together, did you learn more? Did it reveal anything that you hadn't expected when you kind of set out because telling these stories of your past but then weaving in sort of a leadership message, you're almost viewing it from like a retrospective lens, but it's kind of like reading old notes, right? Or like old journal entries, you can oftentimes learn something from reviewing them years later that wasn't immediately apparent at the time.
[00:16:33] CH: Yes, I mean, you're just right on there and nothing else. When you spend 20 plus years running a public company, and you have other things in your life, in addition to that life's full, it's busy. And so, the process of writing something like that, does demand by definition, demand reflection, recollection, reconsideration, did we make the right decision in those circumstances, so on and so forth.
I mean, the answer is yes. Looking back in the process of writing the book, it was instructive to me about certain things that occurred along the way and the role these things played in my own development, my own understanding of our company, perspective as a company, but also leadership style, affirmation of styles and methods. So, it was a big time of reflection, and an interesting one and it was rich in its own way.
One of the things that was quite pivotal in my development as well as ultimately the company's development, I was made Chief Operating Officer in 1993. I've been with a company at that point nine years, eight years as General Counsel a year as CFO, and then was made Chief Operating Officer in the summer of 1993, end of our fiscal year that coincided, so that put me in a position, obviously of more control and oversight of the company. And I was the only person reporting to the CEO. And so, all the other folks marketing and finance and legal and real estate and franchising, all reporting to me. So, I was very much in charge day to day operations of the company and strategic development.
So, one of the things that began at that time, and in a way, it was kind of technical, but it was ultimately transformative is we entered into what ended up being a 13-month process, a renegotiation of our base license agreement with our operators. Now, what was the motivation there? Well, that was ‘93, going into ’94 and in within two or three years, we were going to have an enormous number of license agreements come to conclusion and our franchisees, a nightmare for them here they're needing to make long term plans on debt, people, and real estate, so on. And the last thing they wanted was to run up against a deadline on license agreements.
Same thing is true for us. We were public company, last thing you wanted was to have thousand license agreements come to an end and not get renewed. I mean, it would be disastrous for the brand or for the company. So, there we were, three, maybe even four years in advance of that deadline, agreeing to sit down with a franchise leadership and renegotiate. So, why was that transformative? One, it was transformative for me because it forced a broader review process of what was in our license agreement and why and how did that come about in the early ‘80s where versus what was in competitor peer companies license agreements and when I compare those, I compared them just for purposes of negotiation. It's part of the process, but it became very apparent that we were really lacking some of the authority and you might say, authority that led to strategic direction, but authority that was in some of our key competitors license agreements.
So, in that 13-month process, we negotiated to put to “modernize” our license agreement. But we put all of those paths and powers and authorities in that new license agreement that our peer companies had. Over the next five years, that opened doors for us that we could not have opened otherwise. But perhaps first and more importantly, was it educated me, just coming into the COO role, about what our alternative paths could be in advertising, and marketing, in facilities, retrofit, trade drafts of existing facilities, these types of things that you might know, intuitively, but you could see were very much of a long-term path with most of our competitors.
So, that was a big change for me but it also then set us up to have the authority as we sold, we didn't tell, we didn't make our operators adopt these things. But as we moved into new initiatives to grow the business, we had the backbone of knowing they were right, because we'd prove them out to our operators. But we also had a big stick that we could hide of knowing we had the license, the authority and the license agreement.
So, this was at the time, you move through it, you move quickly, you implement some things that are new and powerful for growing sales and profit, the business moves quickly. But only when you go back and reflect later, do you see and recall what a significant impact this thing had on my own mindset.
Now, let me give you an example of where that clip became critical, just as we're completing the process. And I refer to this in the book, my boss, the CEO, really did not participate in that process with us, he delegated it to me, almost completely. We had a team of people within the company that were managing the process, and by the time we were finished with it, 11, 12, 13 months later, I could see the dramatic importance of these new provisions and being able to manage and lead the company going forward, not just the company, but the brand.
So, why was that a big deal? The franchisees on the other hand, were getting a little tired of some of it, and began to publicly a little bit of an embarrassment. They were saying things publicly in the industry press about my boss. And he pulled some of us aside and said, “Have we gone far enough? Can we shut this thing down? What if we give them what they want in terms of trade area protection? We just take the money and forget all this other stuff.” And it was so interesting, because I had gone through such an education to the process, that my reaction was, “If you don't get these other powers and authorities, we will have cut ourselves off in terms of future path for growth.” And it was interesting, because at that moment, and later, I came to understand, that was an experience and an outlook that he and I had come not to share. I think I came to see it, but it wasn't part of his outlook. And that was ‘94 when we completed the deal, just to give an idea of where his head was, really about six months later, he left the company anyway and took a new position.
So, it was interesting, the education for me and what that meant, and yet the lack of impression on him, and how he was willing to kind of throw it out, you might say, yeah, even as we were winding up the end of the process. So, you can virtually forget that because of the intensity of the next literally 20 years and 25 years. But as I went back writing the book, this was a fundamental period, fundamental piece and shift in our authority to manage the business, but also, I think, my understanding and appreciation of the levers that we would have to pull to move the brand forward for the next two decades.
[00:24:27] AF: It's interesting, there's a lot of things we could unpack there, but it's like your boss at the time, was really trying to avoid short term pain at the expense of long term control, but also what a great project to be a part of because you know, even going back to the book, renegotiating this agreement required you to have at least some understanding of every single aspect of the business, and maybe not be a tremendous expert in everything but really understand at a high level what it entailed, but not only that, but what the pieces meant for long term strategic growth, like, may not be a deep expert in advertising, but the power of advertising with one voice across the organization.
So, it almost seems like a crash course in becoming a generalist, because you have to understand these levers and which ones are important, which ones can be kind of not discarded, but maybe negotiated, to really gain back control of the entire ship.
[00:25:28] CH: Well, I think that's an interesting perspective. And maybe, maybe in a way, it's a parallel path on the generalist and yet the “expert” I want to use, I'm going to use that term and the most, in the most general sense that meeting to that point in terms of the generalist, I mean, I've been General Counsel the company for eight years, CFO for one year, and then moving to COO, I had enormous on the job training of all kinds of things, not just how the company ran but we had bought the company in ’86 in a leveraged buyout, we didn't have the money to buy it, and so, we leveraged the assets of the company to buy it. In ‘86, we bought it. In ‘88, we did a recapitalization.
So, was I involved in all these? Absolutely, front and center. In each of those cases, I learned a lot of things about the company. But I also learned about more about corporate finance, dealing with investors and the light. I then also oversaw the public offering at a company in ‘91. So, I got all kinds of you could say expertise, but really what it was was a lot of training about various aspects of the company, how we made money in company stores, how franchisees made more money, why we we’re predominantly franchised, these various license agreements over the years and what these meant, but then also dealing with the marketplace, private investors, private equity, and then the public marketplace, what those expectations were, corporate governance with a new board of directors and so on.
So, I really in a corporate setting, I was the ultimate generalist, and yet at the same time, the parallel path would have been in that process of reviewing license agreements, et cetera. It really was to start getting down into more of a lever of a modern franchise or more of the levers of a modern franchise or what these were, that could help an executive, elite executive, move a business forward.
So, in a way that parallel path was getting more expertise in more areas and I would say, one that I grew in tremendously, one board member said I had in my bones, but in fact, I got more and more comfortable with over time, no marketing background whatsoever in terms of education, then yet, I got very comfortable with marketing more and more over time, and really enjoyed it quite a bit. So, again, some development of expertise, you might say, but I was also dealing with wider variety of things within the company. So, that generally installed a while, so your point about the preparation that appears well taken, demanding enjoyment of that generalist path, and yet periodically diving into specific areas and the need for specific involvement of a little bit more “expertise”, you might say.
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[00:31:10] AF: So, let's dig in. There are three basic rules in the book. So, number one, don't plan, explore. Number two, don't specialize, generalize. And number three, don't keep your head down, turn it up toward opportunity.
I want to double click really quick on number three because I feel like there's this interesting idea. The 10,000 hours to become an expert in something, like do you really need to put your head down focus that much time. I also think being a jack-of-all-trades can sometimes be seen as like a negative, meaning you're not great at one thing. All these I think are kind of misconceptions. But what what does number three mean? I mean, instead of keeping our head down, turning it up towards opportunity, what does that mean to you?
[00:31:53] CH: So, let me answer this in a couple of ways directly on the concept itself, but also the reader and the person depending on what path they're on in life, and what clicks for them and what they want to be doing.
So, one of your recent podcasts was with the sleep deprivation fellow, and talking about, you know, since the 1940s, help develop society generally has moved towards less and less sleep. I think his comment was reduction of 20%, even 25% average sleep hours in the last 60 years. For a person to develop the expertise that your guest, if I recall, his name was Matt Walker, I think, Dr. Walker, I assume that for him to develop that level of expertise, have a clinic that he had, the publications that he had, et cetera, he's got to dig in with a level of intensity and focus that exceeds what many of us are likely to do in in our positions, that art of, that degree of specialty.
Now, if a person had worked that way, and I do do think, clearly, from person to person, our brains are different and some people enjoy things much more broadly and with greater variety and some people enjoy things much more intensely and more narrow. If your brain works more that way, one and two, you find topics for which you really do have a great passion, then I think the Malcolm Gladwell, 10,000-hour things as as more application to that type of person, then I can easily say someone like myself, because that whole 10,000-hour thing just wouldn't have worked for me. And so, a lot of it does depend on the individual the skill sets, the way your brain works, what you want to do with your life. But the fact is, in this context, speaking to a younger or mid-career person who doesn't find themselves on that kind of specialty path.
Let me just make the point this way. Someone could have insisted that I be on that specialty path and I suppose early in my career, I was. I mean, a more tedious corporate law practice. It didn't work for me and it wasn't going to work. I needed to the latter part of that, don't keep your head down, turn up toward opportunity. I needed to have my head up and engage broadly, soak stuff in, engage in new things on a regular basis, even if they're in the same subject matter. And so, in many ways, going from private law practice to in-house counsel, in some ways enabled me to do that because it was essential that I learn about the business broadly instead of burrowing in on one document or one transaction, which a law practice, particularly as a younger attorney demanded more of a narrow and tedious focus.
So, my pitch to folks for whom this works, that's a funny caveat, because someone that's 30 years old and already finds themselves on a very narrow path that really clicks for them. They have passion for it, they like it, they can tell it works because they're happy doing it, this comment has a little less application for them than the generalist, the person who does enjoy a variety of topics, trying to explore in life, what works for them. The opportunity is going to come along, opportunities will come along. It's a mistake to believe you got to create all your own options because options are presented to you. And if your head is down, if your nose is to the grindstone, if you're too narrowly focused, you're going to miss the opportunities that come along. And if you mistakenly believe you've got to create your opportunities, you're going to miss the ones that are presented to you that you could seize, but not if your nose is to the grindstone and you don't see it coming.
Let me give you an example that that I use in the book, there are a couple of different ways to go about this. The biggest one was when we bought the company. My boss wanted to buy the company, but there were 300 stockholders, there were a dozen stockholders that control the company, literally a dozen that had over 50% of the stock. So, he really had a hard time breaking that circumstance, breaking that log jam, the founder of the brand, the founder of the company, owned 12% himself and he wasn't interested in selling to anybody.
What happened was another fellow, he was a stockholder and a franchisee, but he was a former board member and former officer of the company and very aggressive individual. I talked about him in the book, he approached my boss and I one day with his counsel, and basically said, “I'm going to buy the company fire all of you. And I'm taking over this is what I'm going to do with the brand.” Well, my boss wisely, he didn't do it all by himself, but he wisely used this as a way to alert the board that if they didn't want that to happen, they better do something. So, what they did was they got their dozen stockholders together, 51%, they all put it in the founder’s hands gave him an option to buy the stock, they head off this fellow.
Now the founder, I think because he was on the board of directors, I don't know, but he had some fiduciary duty not to totally frustrate this effort to find that new value, and a higher price for the stock that the said fellow was offering. So, what he did was, what the founder did was, he took his option, and he put it in management's hand and said, “You, I'm giving you this option. You have a year or whatever to close on it at fair market value.” The founder viewed that as end of the story. But my boss, the CEO saw it as an extraordinary opportunity. All of it had been done simply to quiet things down and head off this wily coyote of a franchisee. But instead, my boss did work to raise the money, mostly did, and that's how we bought the company. It was not an opportunity we created, but once it was there, we seized it and ran with it.
So, I think there are other circumstances where people might not have been as aggressive about seizing the opportunity. There are smaller ones and bigger ones like that, that I experienced repeatedly regularly over my 23 years as CEO. But that that is to a large degree, whether it's a small opportunity, or a larger more meaningful opportunity. If your head is simply down all the time, you're going to miss things that come to you. And you've got to have a broader stroke, got to be listening and have your eyes open when those opportunities arise.
[00:39:09] AF: That's such a great story and it's it's interesting and it kind of reminds me of another guest we've had on the show, Dr. Richard Wiseman, but I'm curious Cliff, do you think that you're a lucky person? Would you characterize yourself as a lucky person?
[00:39:09] CH: I would characterize myself as a very lucky person. That there are a lot of fortunate developments in my life.
[00:39:29] AF: It's interesting because don't keep your head down, turn it up towards opportunity and hearing your story about the the kind of crazy wily coyote of a franchisee and the owner, it reminds me of a study they did and basically in summation, the founding was that people that consider themselves to be lucky actually find more opportunity and really do kind of to be a little cliché, create their own luck, and it's really not about some force in the universe. It's not about like karma. It's really about you having your head up and saying, “You know, good things do happen to me, so I'm going to look for them.” And then when you find these opportunities you actually seize on them, as opposed to someone who may not consider themselves to be lucky, or in this case kind of keeps their head down and tries to just get by might just completely miss the opportunity and therefore, become less “lucky”.
[00:40:20] CH: Yes, I can tell you in the great recession, one evening, at a franchise leadership retreat, several of us, I think there were at least three, maybe four franchise leaders there and officers at my home, it was a lake home, we often retreated at the lake so it's more relaxed setting and one where I could deal with these guys late in the evening more comfortably. But we were sitting around living room area late one evening at this retreat and one of my fellow officers was really digging in with the chair of our franchise advisory council about information systems and his need to go through and update.
The franchise leadership fellow kept saying he wanted to talk about challenges and newer markets. Now, mind you, we're coming out with great recession ‘9 and ‘10 had been very tough. This is actually ‘12, this is the spring of 2012. At one point, he remarked that for our newer markets, we refer to them as developing markets. He said that he thought franchise leadership will do almost anything to try to drive sales there. And I heard him say that, but I also heard this other officer come back to him and say, “Look, let's talk about your systems conversion.” And it was so funny, because here this franchise leader was opening a door to an opportunity that because of the history and the culture of our system, I didn't think the door would be open. He was willing to open it. But my fellow officer, on the other hand, wanted to keep going back to a more tactical, narrow systems discussion.
The reason it was a pivotal was because when that fellow, when the franchise leader said that, he’d do anything in order to drive performance of these new markets, I asked him something historical and kind of sacred. Are you saying to me that our franchise operators would be willing to break this half advertising local, half national, if we could show them by moving more of the money, if not all the money to national, that 100% of the system would come out ahead? And said to me, “I'm sure we could sell that.” Well, that was a total breakthrough thinking on his part, because this half of the money, local half national had just been sacred for a number of years and franchisees really liked spending their money local, because it made them pretty important players on a local basis.
At any rate, this was a breakthrough piece and it was interesting how it's something that could have been swept under the carpet that night, never heard if we'd kept narrowing in on what about your systems conversion in your own stores, at any rate. So, the point being really was almost immediately that opened up discussion about changing our advertising expenditures, so that ultimately, in negotiation with franchisees, we shifted so that 85%, roughly 85% of all funds went into a national fund. That took us just four months to get consummated with the leadership amendments, all license agreements. When we did that and bought airtime for the following January, January 2013 and beyond, every single market in the system experienced a minimum of a 20% increase in gross rating points in their advertising. And some markets experienced as high as a 60% increase. So, it's so odd, that that single little statement by him, one of us hearing it and the other one not, one of us burrowing down, keeping their head down on an old topic, the other one listening to what the guy was saying head up. Our business absolutely took off 2013, 2014, 2015, 2016 because of that change, and then some other marketing activities with it.
So, that was a very small, very slight example of burrowing in and keeping your head down versus head up looking and listening for opportunity. Long story but transformational for the business, but really made us a real national brand.
[00:44:43] AF: Yeah, that's an incredible story. It illustrates the point so clearly and so well. I think everyone listening to this interview right now is aware of the results. I mean, I have to imagine that must have led to opening up a lot of budget for the different things you could do which like everyone in their mom knows the the Sonic dudes, sitting in the car like rapping or rhyming or kind of bantering back and forth, which since then, you have been expanded on to be more diverse and a little bit different include different ethnicities and women. And really, this whole idea of just kind of two, three people kicking it in a car at Sonic has just become like, something you can mention really in any dining room in America, and people are going to know exactly what you're talking about.
[00:45:28] CH: Yes, you're right. It had an effect in several ways. One is what you're describing in terms of just the reach of the advertising becoming very national. But the consequence of that as well was that our operators, who had jumped out to some of these newer markets, which for us was particularly northeast and northwest, and the West Coast, suddenly, instead of lackluster sales growth and below average unit volumes, suddenly their businesses just took off. And with that their profits took off. And with that, their willingness to open new stores took off. The growth of the business through those years was huge and very positive. It also gave us badly needed money to reinvest in our stores, particularly by the way, information systems and management systems within the store.
And so, through that decade, this really became an enormous investment in infrastructure to carry the business forward after that. So, it was transforming for the business, more importantly, for the brand, because the brand became – when I say the business, I'm talking about corporation versus franchisees. When I say the brand, I just means Sonic. And the brand became a national brand, and a much stronger brand with that sustained national advertising.
[00:46:56] AF: So incredible. And Cliff, I definitely want to be respectful of your time. You've shared so many great lessons and good stories today. But one thing we always like to ask our guests before we let them go is if you could give our audience one piece of homework, what would that be?
[00:47:12] CH: Wow, that's an interesting question. Well, I think that one of the first things that comes to mind is in this category of turn your head up toward opportunity and exploration, I think that because the orientation is to double down, and we use that phrase often and all kinds of ways rarely is it seems being a negative. I think it could be interesting for the reader or the listener, rather, it could be interesting to turn their head up and give themselves an assignment, look for a new opportunity that’s broadening, that’s good for the brain development and good for their perspective, whether it's a new book, or a new a new line of reading of books or musical instruments, art, engagement and community.
I think this is something that's a contrast, but a compliment to what they're otherwise doing in their working activities, not only is good for brain development, I think it makes them a better employee, it makes them a better officer of the company, it makes them a better citizen of their community with that kind of broader enrichment, broader engagement. So, in some ways, that made the person thing about their career that may be counterintuitive, but that kind of refreshing energy and information for the brain, I think helps an individual in everything they do, not just in the new engagement.
So, the homework for someone, maybe find that new thing that does give your brain a shot of energy, and then exercise it regularly not to the exclusion about the responsibilities. But if you find something, find something that works for you feels good and that’s energizing for you, then work it into your calendar, do it regularly because it'll make you richer person overall, I think.
[00:49:18] AF: I love it, such great homework advice and just advice in general.
So, Cliff, where can people find you? If we want to learn a little bit more, they want to buy the book, they want to dig into all the great stories you offer, where should they go?
[00:49:18] CH: Well, to learn more about the book, they can go to cliffordhudson.com, and that will direct them in a variety of ways related to the book and its messages. Beyond that, as you might expect the book can be bought at Amazon, amazon.com or Barnes and Noble or any number of other book purveyors across the country including, often I think, in their independent bookstore, locally owned and operated.
So, either way, it's widely available. Harper Collins is the publisher and hopefully they'll find it enjoyable experience that will not only be a diversion to their work in some ways, but ultimately a little bit of an augmenter to the career experience that the average listener is experiencing.
[00:50:19] AF: I love it. And for everybody listening right now, go to www.successpodcast.com and we'll include all of this in the show notes, including the links to Amazon, your website, socials, Harper Collins as well.
Cliff, thank you so much for the time again, it's been great talking to you, great meeting you. We wish you much continued success and be safe while you're up in New York, all right?
[00:50:39] CH: Okay, awesome. Thank you. I appreciate the opportunity as well and best of luck to you.
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