Todd Diener's On-the-Job Training
Brinker's Todd Diener builds on his Chili's experience to fine-tune emerging brands.
By Lisa Bertagnoli, Contributing Editor -- Chain Leader, 5/1/2004
Success stories in the hospitality industry sometimes have a touch of serendipity about them. People take a summer job at a restaurant; they end up president of the chain. They plan to become a doctor; 20 years later, their business card reads CEO, not M.D.
 After 22 years at Chili's, Todd Diener took over as COO of Brinker International in June 2003 intent on freshening up some of the company's concepts. |
Todd Diener’s story is not one of serendipity.
Diener, 46, prepared for a career in foodservice by attending the Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston. His first foodservice job was managing nightclubs. After an exhausting three years of the late-night life, he interviewed with Chili’s on the advice of a friend.
Back then, in 1981, Chili’s was a small regional chain with 12 units and $17 million in annual sales. Diener signed on as a manager trainee after an interview with Chili’s founder Larry Levine (Norman Brinker would buy the chain three years later) and soon found himself immersed in the fledgling chain’s entrepreneurial “let’s play restaurant” spirit.
Diener was not impressed. “I thought they were a bunch of yahoos,” he says.
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But after six months of playing restaurant with the yahoos, Diener “drank the Kool-Aid,” as he puts it. He remembers no eye-opening occasion, no “aha” moment, just a gradual realization that a restaurant that had a wait every night 15 minutes after the doors opened most likely had a future.
Diener decided to bet on that future, and by all indications, the wager paid off. From 1981 to 1998, Diener held the posts of assistant manager, general manager, area director, regional director, regional vice president, chief operating officer and president of Chili’s. He remained president of the brand until June of 2003, when Ronald McDougall retired as chief executive officer of Brinker International.
In a transition that analysts and shareholders seemed to take in stride, Douglas Brooks, chief operating officer and another career Chili’s man, took McDougall’s place as CEO, and Diener replaced Brooks as COO. Wilson Craft, a 15-year Chili’s veteran, was named Chili’s president.
“He did it the old-fashioned way,” says Brooks of Diener’s ascent. “He worked hard and made tough decisions, and look where he is today.”
Strong Suits
As Chili’s president, Diener was in charge of a 925-unit chain that accounts for 60 percent of Brinker’s sales and 72 percent of its profits. As executive vice president and COO, he shares responsibility for the entire 1,402-unit, $3.8 billion company.
These days, it’s a good company to be in charge of. Brinker’s established brands, among them Chili’s, Macaroni Grill and Maggiano’s Little Italy, are among the most successful players in the strong full-service-casual sector. “Brinker, along with other players in that space, can see strong sales and improving financial conditions over time,” says Bryan Elliott, restaurant analyst with Raymond James & Associates.
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The company’s balance sheet is strong as well. For fiscal 2003, ended June 25, 2003, Brinker posted systemwide sales of $3.8 billion and revenues of $3.3 billion with 1,402 units open, up from sales of $3.4 billion and revenues of $2.9 billion with 1,268 units the prior year. Buoyed by a strong February, in early April Brinker’s stock was trading at about $38 per share, close to a 52-week high of $39.80 on March 8.
A key strength is the company’s management team, which Elliott praises for its experience (together, Diener and Brooks have nearly 50 years of Brinker experience) and for the seamless changing of the guard that took place last spring.
“They have a great management-development program for store-level operations and up through the ranks of senior officials,” Elliott says. “It’s a strong, well-positioned company.”
Brand Evolution
Expansion plans for fiscal 2005 include adding 95 Chili’s locations, five Maggiano’s Little Italy dinner houses and about 20 Macaroni Grills. The company also plans to fine-tune the brands it terms “emerging”: Corner Bakery Cafe, Rockfish Seafood Grill (a joint venture in which Brinker owns 43 percent), On The Border Mexican Grill & Cantina, and Big Bowl Asian Kitchen.
“People think the heady growth days are over, but the best is yet to come,” says Diener.
Thanks to Chili’s 925-unit national presence, Brinker can expand almost any of its concepts into any area of the country, according to Diener. “There’s really not a market Chili’s isn’t in,” he explains. “We already have a template for real-estate development costs, wages, and we know who the best produce vendor is. Chili’s is the company trailblazer.”
Management’s job is to evolve the brands, keeping them fresh “so something doesn’t go wrong and you need a revolution,” Diener says. “Our challenge is to not let the brands get stale.”
Chili’s founder Levine, who now owns restaurants in Dallas, agrees. “[Brinker management] has done a wonderful job keeping Chili’s fresh with the menu, look and the way the concept is positioned,” he says. “If you don’t keep it fresh, you’ll wind up in trouble.”
 Brinker is evolving emerging brands such as Big Bowl, Corner Bakery and On The Border with new menu items, prototypes and service styles. |
In the name of avoiding trouble, Brinker has evolved several of its brands, among them 202-unit Macaroni Grill. As a regional manager for Chili’s, Diener visited the original location in Leon Springs, Texas. “The parking lot was filled with Mercedes and BMWs and people standing around,” Diener recalls. Inside, the wide-open space filled with tables (no booths) and decorated with vases of white gladiolas reminded him of an old-fashioned dance hall. “The food was awesome,” he says.
While Benzes and Beemers are still welcome in the parking lot, several changes have made Macaroni Grill more appealing to the Chevy and Ford market. “It used to be a dinner house, but if we are going to grow it, we need to broaden it beyond the special occasion,” Diener says.
The company added lasagna, meatballs and other familiar Italian items to the menu. A redesign breaks the space into smaller, booth-equipped areas so when the restaurant is half-empty, it doesn’t feel like it. The 35 remodeled locations are seeing sales increases in the high single digits, Diener says.
More To Learn
At 133 units, On The Border racks up 9 percent of total Brinker sales, more than the 6 percent that 25-unit Maggiano’s generates. Still, Brinker calls On The Border an emerging brand because the company is still in the process of understanding the full-service Mexican concept’s business model: its marketing position, how well it will travel and who its customers are.
Responding to focus groups that called On The Border’s interior “too brown,” a year ago Brinker remodeled existing locations and saw a mid-single-digit jump in sales. In March Brinker opened an On The Border prototype featuring a fajita grill and a light, colorful interior in Little Rock, Ark. A Brinker spokesman says the prototype is too new to determine its effect on sales.
Other evolutionary changes include refining the service style at Corner Bakery, the 87-unit fast-casual chain. Customers in the original model push trays, cafeteria style, through the serving line. That works in urban markets “but not in the suburbs, where you have a mom with two kids and one’s in a stroller,” Diener explains. All Corner Bakery units are adopting a limited-service style in which customers order at the counter then wait for servers to deliver to their tables.
A People Person
After 22 years at Chili’s, Diener admits that he needs to become as well-versed in Brinker’s other brands, an exercise that involves plenty of family dinners. So far it’s working, at least for Diener’s two children: “I’m chagrined to say that my kids like Macaroni Grill more than Chili’s,” he says.
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Diener lists other social challenges. He wants to keep one step ahead of customers’ concerns about nutrition: “We can’t make people eat a certain way; we can only offer them a choice.” And he’s an advocate of responsible drinking. “We want drunk drivers off the road,” says Diener.
Management concerns include labor. Chili’s expansion plans alone require hiring 1,200 managers this year. So Brinker wants to “be a bit more diligent in how we run the business,” especially regarding employees and their development, Diener says.
That’s not to say that Brinker, known in the industry for its esprit de corps, will become a less-than-desirable place to work. And that’s not to say Diener will stop recognizing employees, as he does when he leaves congratulatory voice-mail messages to those celebrating anniversaries with the company.
Rather, “we’re raising the bar around here for performance,” he says. “Some people might say that’s a little bit of a shift in culture. We’ve always had high expectations, but we’re holding people to a higher performance level throughout the whole organization. We’re being more honest with people regularly.”
According to Brooks, Diener’s the right guy to spearhead an honesty campaign. “I met him 22 years ago, and from the beginning, he’s had the ability to be honest with people. He was better than most of us on that,” says Brooks. “Sometimes people think it’s a negative, horrible job to tell people what they could do better. [Diener] has always been comfortable with an honest, open style.”
Brooks credits that style, and Diener’s overall ability to run the company, to the years he spent as a Chili’s manager. “Every time he opens his mouth to give an opinion or thought...those years of running a restaurant are part of his training,” he says.
“That’s his role on the leadership team,” Brooks continues. “That’s the responsibility he brings to the table.”
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