Leading with Edge

Anita Brick: Hi, this is Anita Brick, and welcome to CareerCast at Chicago Booth. To help you advance in your career. Today, we're delighted to be speaking with Jose Costa, who is an alum of Booth. He is the author of Leading With Edge. Excellent, excellent book, the CEO of Four Eyes, which is part of Grand Vision, a global leader in optical retail with more than 7000 stores worldwide. Prior to his current role, he served as Group president of Driven Brands, where he led Meiko before joining Jordan Brands. Jose was vice president of marketing, R&D and supply chain at Burger King, where he grew Latin Americans EBITA from 50 million to 80 million in 26 months. There's a great story about that in the book, too. It was a little pressure on you.

Jose has a master's degree in integrated marketing communication from Northwestern University, and an MBA from the Booth School of Business and a fun fact that you may or may not know because you may have seen him, is that you are also an undercover boss. That's right. I know you have stuff going on in Chicago, so thank you for carving out a little time for us today.

Jose Costa: Appreciate it. Thank you so much for having me. I'm excited to be here with you.

Anita Brick: I read the book. Really enjoyed it. I especially like your orientation to leadership. It's very humanistic. Could you define for us what leading with edge actually means?

Jose Costa: To me, it means having a very high level of self-awareness in everything you do, how you communicate, how you engage with other people. Leading with the Golden rule. Many times when you have tough conversations, you want to treat people the way you want to be treated. At its core, is standing up for what you believe, holding the balance of your life, in your family, in your community, at work, on the back of the book cover, I use a phrase I learned when I was very little resist the usual, which means standing up for what you believe and dreaming big and working hard.

Anita Brick: You know, it's interesting that you mention that because a student asked about that and he said, I like your father's philosophy to resist the usual. It sounds wonderful in principle, but how does this apply practically, when I'm not the CEO like you are?

Jose Costa: It applies in any aspect of your life. You can do it regardless of your title or position within a company. And I'll give you an example. Earlier in my career, I was with yum brands, the parent company of Taco Bell, KFC, and Pizza Hut. I got hired right out of Northwestern, the CMO said. I hired you to do brand management about 6-12 months after work.

I went back to him and I said, thank you for hiring me to do brand management. But on the side, I would like to work on that guest experience. And it became my side project over the course of time, it actually became my full time job. I had the courage to not only do my day to day job, but to go up and ask if I could work on a side project, and he agreed to let me do it. And I was an associate brand manager, someone very junior in the marketing team. If I did it back then, anyone can do it.

Anita Brick: When I first heard resist the usual, I wasn't thinking what you just described. I was thinking to make sure that everything is innovative and everything is outside of the box and all of that. What I just heard you say is that just because your role is defined a certain way, doesn't mean that you have to stay within those boundaries. If you have the support and if you can actually pull it off.

Jose Costa: You're absolutely right.

Anita Brick: From knowing you and from what I read in the book, you have a higher level of courage to take things on.

Jose Costa: I think so. I'm the eldest son of two immigrants. At its core, being an immigrant takes courage, right? Because you're starting from scratch in another country. My grandfather did it, my father did it, my mom did it, and I did it here in the US. So I think it's in my DNA.

Anita Brick: There you go. An alum had an interesting question, he said you talk about creating and keeping an edge as a leader. What advice would you have on how to do this while retaining one's values, authenticity and integrity?

Jose Costa: To me, those three things are non-negotiable, right? You need to stay true to who you are to your moral compass all the time, regardless of the circumstances and situations you may encounter. Two basic components. Number one is around continuously learning and being inquisitive. You cannot be complacent about what you know and you don't have all the answers. I think it's getting knowledge and insight from anywhere, from your children at home, from your spouse, your partner, at work, at church, throughout your life.

I think you can continuously learn. And the second component to me is humility. Having a high sense of awareness around staying humble, not because you have the title, doesn't mean that you have to behave differently. If you grow up as a simple person that can connect with people, that shouldn't change throughout your life.

Anita Brick: It's kind of interesting when you talk about the knowledge piece. I can just hear people asking the question, who has time? How do you work in learning as a continuous process? I know you're a busy person. Family's very important to you. Your faith is very important and of course work is very important. And on the side, clearly I don't know where you found the time to do it, but you wrote a book here. And so how do you carve out the time to keep learning.

Jose Costa: Where there's a will, there's a way.

Anita Brick: Okay. But in practical terms.

Jose Costa: I wake up at 5 a.m. every morning. I work out from 5 to 6, shower, shave, have breakfast, and I read for an hour every morning. There's about 12 to 15 websites I read every single day. Some of them are business related, some of them are not. That drives my knowledge. Number one. Number two, I'm on planes a lot of the time.

So on some legs of some flights I don't use wifi and I use that time to read. I try to read 1 to 2 books a week. The other thing I do is I have lunch with a different person every day in different departments. It could be a supplier, it could be a client, it could be a team member. And that allows me the opportunity to ask questions and continue to learn. So that's just three examples right there.

Anita Brick: Got it. You know, there was a question about feedback. I would bet that when you have these conversations, you may not always get positive feedback. You may get some feedback that is constructive.

Jose Costa: All the time.

Anita Brick: There you go. So the low said feedback is a wonderful and scary thing for me. How would you balance the risks with the benefits?

Jose Costa: I think there's no risk to having honest, good feedback. All of it is upside. I think that if you seek feedback, it will always make you better. Every 90 days I give feedback to every single person that reports to me, and I expect them to give feedback to everyone that reports to them. It's a formal review process. It's simple, not complicated. It takes as short as half an hour as long as an hour.

Anita Brick: Is that your one pager?

Jose Costa: It is my one pager. Three strands about Anita, three opportunities about Anita. And then I tell you where you stand within the organization. And we develop an action plan together. And in 90 days, which is a very quick timeframe, we review it again. That way you're never caught by surprise. So it shouldn't be an uncomfortable conversation because we reviewed this in 90 days ago and hopefully you made progress.

Anita Brick: Okay, so here's a question from someone who is not affiliated with Booth, and I found this to be a really interesting question. I'm in an organization where senior leadership has one set of rules for themselves and another for the rest of us. I believe this creates dissent and disunity. Any advice on what I can do as a leader of a small team?

Jose Costa: I think that's a tough situation to be in, especially if you don't want to deviate from your moral compass. Staying true to who you are and what you believe to me is very important. I'll give you an example. Once in my career I was in a similar organization. What I did was I shield my team as much as I could from the toxic culture of behavior.

I would take them on side questsI would reward them, I would motivate them. And our results outpaced anyone in the organization. So I used that as a token to show them that by building a true positive culture, we could grow. The company and other leaders in the organization started seeing our resolve and they followed. So it doesn't matter if you're someone lowering your organization, you can always lead your team in that way.

Anita Brick: I agree, I like that. So in the book you talk about a deal that you made in Latin America, and a student asked when you decided to make the deal for the soccer organization in Latin America, how did you assess the risk of doing this, knowing that this wasn't the vision of the SVP who did not like people to go against her.

Jose Costa: Even though the SVP of marketing had a different viewpoint, we based our decision on data. I'm personally a very data driven person, and if I have the consumer insights that are telling me something, I'll go ahead and do it. Even though it might not be what the SVP wants to see or do, it was a risk. I have to be honest, I could have lost my job, but at the end of the day it was the most successful marketing campaign probably ever executed in Latin America and the Caribbean.

I talked to consumers, I talked to our franchisees, I talked to suppliers and many different constituencies were pointing the same direction except as one SVP, and we took a risk. I had a dotted line to her, but I had a direct boss who supported me and it turned out to be a good decision.

Anita Brick: Okay, just out of curiosity, how did she react when you implemented, even though it went against what she believed.

Jose Costa: She never argued publicly or was against it. I don't think she was very happy about it, but she never confronted me. The results spoke for themselves.

Anita Brick: Did it carry forward?

Jose Costa: It was a non-issue and other regions picked it up and became bigger and bigger. So it was a good, I think, a good initiative for Burger King overall.

Anita Brick: Yeah, I think this is at a similar time in Mexico. There was one focus. This was on young adults, especially young adult male, and you realize that the data didn't prove that out. And so we did a really big shift, both in terms of quality and experience. It was more like casual dining than fast food. How did you get the support to do that?

Jose Costa: 3G capital had just acquired Burger King. This is late 2010, early 2011. There was a big restructuring taking place. Bernardo has the CEO who hired me. He said, you have six months to fix Mexico and if you don't fix it, I'm going to fire you. I thought that was great because I knew what I was getting myself into right off the gate. First day on the job, I flew to Mexico, met with the team.

Anita Brick: Didn't even go to the office the first day.

Jose Costa: I didn't go to our office in Miami. I went straight to Mexico because I knew the clock was ticking. I had six months. I remember getting into this very, very long boardroom and I asked the head of marketing, can you please put out on this table every single research piece you've done over the last 2 to 3 years? He went and gathered, printed every material. We put it on that table. And over the course of a week, we went through every single research piece, and the research was telling them what to do.

They were just trying to follow the US versus staying true to the Mexico, the Mexican consumer. So if you recall, back then, Burger King in the US was using the King and it was very irreverent. It was 18 to 24 year old male focused, and it just didn't resonate at all with the Mexican consumer. So the first step of the strategy was, let's say then to find a good price point. Carl's junior was closer to $100. McDonald's was at 29. All of the product attributes in the brand tracker gave us the lead that we had very good quality product and a bigger portion. So we carved out a 49.99 price point, went back to product attribute advertising, and focused on the quality of the product. Flame grill, fresh vegetables. That was the main focus to turnaround traffic.

Anita Brick: And the dessert piece.

Jose Costa: It was a full size Whopper, medium fries, medium drink, and a free dessert. And that was the kicker that basically started bringing people back in. The platform had four sandwiches, and we rotated the four sandwiches every eight weeks to bring you news. So we kept the best seller and rotated three of them. Phase two was to change the experience.

In Mexico, 70% of the transactions are Dine-In. In the US it's backwards, 70%. Our drive through a lot of focus around family, the restaurant dining experience that was face to face. Three we started partnering with great properties. We switched from Coca-Cola to Pepsi, which was a very risky proposition, and it was probably one of the best decisions we made because with Pepsi we got Frito-Lay, and with Frito-Lay, we got Tropicana, and we got so many other properties like Quaker, and we started accelerating menu innovation. So we brought kids properties and tied them with new sources and new toys and promotions, and we had over three years of growth by doing that.

Anita Brick: Okay. So you met your six month deadline?

Jose Costa: I did, yeah, I got that right.

Anita Brick: I really admired when I was reading that in your book, I was thinking, wow, you must have been very confident in your ability to do that. Or you figured, you know, even if it didn't work, it was going to be a great experience.

Jose Costa: Right, for the latter. And that's funny. I had my own company at the same time, so I thought, if I fail, I can always go back to my agency because my agency was doing well. I knew with my marketing knowledge and my passion for branding, I could turn it around. But honestly in the back of my mind, there was always the doubt that if I couldn't do it, I could go back to my main agency.

Anita Brick: Well, there was another student who said, I'm new to my company and I do understand how important listening is, especially in a new role that has a leadership component. I will admit, I keep hearing the same comments over and over again when I visit people throughout the organization. I hate to ask, but how can I continue to be attentive under such circumstances?

Jose Costa: Well, it's twofold. It's not only being attentive, but it's taking the insight that you are getting and taking action on that insight. Right? Because if that person keeps hearing the same feedback, that means that whatever they're telling him or her needs to be addressed. I think number one is removing all distractions from the conversation. So you're not bringing your laptop to meetings, bringing a clean notebook to take notes, having good eye contact, sort of like repeating the questions that are being asked or the information that's being shared, just to make sure you're listening and internalizing what you're hearing.

And then once you gather all of the insight after a couple of weeks, if you keep hearing the same feedback, I think you have enough data, even though it's qualitative, to take action. And I talk in the book about the listening tour. When I switched industries from fast food to automotive, our franchisees gave me a lot of pushback.

I was young, I was international, I didn't know much about cars and they felt that I didn't have the right experience to lead Meeko. So my way of building credibility was not to make any decisions. For the first 90 days, all I wanted to do was listen, and I was very intentional in those meetings how I paid attention and listened.

Anita Brick: Do you commit to action in the meetings, or do you gather multiple data points of information?

Jose Costa: I see themes. After 90 days of meeting, almost, I would say almost 100 franchisees and employees, I could see themes and patterns that are showing up at the end of each individual meeting. There were key action items, and I would communicate to the franchise owner. He or she may have given me either something to fix or address, or something that needed follow up, and I would bring that up at the end, and they would agree on the key items and I would follow up on a lot of the conversation. Didn't have follow up items, they just wanted to give me feedback. They had my position. What would they do? That was the main premise of the conversation. What worked in the past? What's not working right now, and where do you want the brand to go forward?

Anita Brick: Your situation with Mako is interesting because someone came up to you, I think,  twice and said that was my job.

Jose Costa: Yes.

Anita Brick: I can understand when someone says that, but it also sounded like I'd been there a while and might have some internal credibility and also a network. How did you turn that person around so they didn't become an anti advocate?

Jose Costa: I can tell you six years later his name is Jason. He's a dear friend. And it turned out that he had been in operations and he wanted the role of president. The new private equity firm, the new CEO made a different choice and they brought me on board. So we had a very honest conversation upfront. I told him, you want my job. I came from the outside, let's work together and make the best out of this. He had incredible knowledge. He had been with the company for ten years. He knew the founder, he knew all the franchisees, and in the long run, after three years, it turned out to be a great partnership and he eventually took over. And when I got promoted to group president, he became the president of Mako.

Anita Brick: I admire you for having the wherewithal to not get swayed by that.

Jose Costa: It depends on the situation. At one point in one of the fast food companies I work for, I had a very similar situation and it didn't turn out well.

Anita Brick: The cake of it.

Jose Costa: So both of us agreed to work together and it was a great partnership.

Anita Brick: Good. I'm glad. So here's an alum. As a leader of a midsize company, I struggle with creating a meritocracy and having that be the core of our culture. How have you done this and what advice can you give me to get that started?

Jose Costa: I think it starts with transparency around the performance of the company and the metrics you're trying to accomplish. Sometimes as leaders, we want to boil the ocean and measure everything we do. When I develop KPIs and bonus programs for the companies I work for, the more senior you are probably between, I would say between 8 to 10 metrics.

Not more than that, because you cannot focus on more than 8 to 10 things. The lower you go in the organization, the smaller the metrics get. So it may be a point where maybe you're focusing on one KPI of maybe 3 or 5. I believe in the budgeting process, you should have full transparency with your team, what you're trying to accomplish, assign the accountability by the person that's responsible and cascaded down through the organization, and then you measure it every 90 days.

And then the meritocracy piece, at least right now in Grand Vision, every six months after two performance reviews, we want to promote people. So if they've shown us a track record of success two quarters in a row and there's opportunity to promote that person, he or she may get promoted. If it doesn't happen in two quarters, it may happen in 3 or 4, but we tend to do that process twice a year of promoting from within, because we want to make a merit based promotion.

Anita Brick: Now, did that culture exist when you got there, or was that something that you helped shape?

Jose Costa: I helped shape that. It's something that I learned back from 3G when I was with region Capital. It's a very good playbook that they've implemented in multiple industries. And for me, it worked in fast food, automotive and now in optical retail.

Anita Brick: Is there anything that if you were guiding someone to look for a culture that was truly based on merit, anything that they should look for or listen to?

Jose Costa: I think you bring up a very important point for transparency over communicating how we're making progress as a leader. Removing obstacles I meet weekly with everyone in my management team, both as a team and individually, and part of my job is removing obstacles. How can I help Anita be more effective? Are you maybe not talking to finance or I'm not talking to marketing or is this something I can help you with?

I want to know where I stand and everyone in the team should want the same thing, right? You want to get better. You want to grow. You want more opportunity, more title, more money, whatever that driver may be for you. We're all seeking something. And the more you know about yourself, the more you can improve. That's the premise.

Anita Brick: No, you're absolutely right. So this is an interesting question. You're really big about humility being part of leadership. So an alum said I have founded three companies at this point in my career and humility is not one of my strong suit. Since I've been successful, I've never felt the need. What are some steps to become genuinely humble rather than exhibit or pretend? Trust? Humility.

Jose Costa: I think video is a very powerful tool to record yourself, either in presentations or in meetings, and see your behavior, because then you can go back and watch the video and see what you're doing wrong. Asking for feedback at the office. Sometimes you get the most honest feedback from your family. I talk about this in the book. One of my hardest critics is my wife.

When I am on stage at a big convention with thousands of people, I come off the stage and she just gives me coaching right there at that moment, and it's fresh in my mind. So I leverage my family, I leverage my team, all the tools and processes that we have to gather feedback and video. I think video is a powerful tool.

Last but not least, having self-awareness. You as a leader, you know what you're saying. You know how you're addressing. You know what communication you're sending out via email or phone. And you know when you're not humble, you see that behavior. You see it in public office. You see it in sports. There's athletes that are very arrogant and there's very good athletes that are not introspective. And looking at yourself in the mirror, you have the answer.

Anita Brick: And I think it's a good sign that he asked the question.

Jose Costa: Absolutely. Yeah. That's the beginning and.

Anita Brick: That's the beginning. Do you have time for a couple more questions?

Jose Costa: Absolutely, yes.

Anita Brick: Okay. A student said you are clearly a busy and very successful person. How have you managed to have a strong personal, family and community with your incredibly time consuming career? I haven't mastered this yet and I'd like to learn from you.

Jose Costa: I think it's about structure and prioritizing. When I'm in Charlotte with my family, I'm very intentional about having dinner with my kids. I'm very intentional about putting them to bed, reading a book, praying with them. I'm intentional about waking up at 5 a.m. to work out and to read. And if you prioritize the things that are important to you, then everything falls into place.

I try not to book meetings after maybe 6:30 or 7 because I want to be home with my kids, my travel schedule. I try to be in Charlotte on Fridays because we may have a soccer game or a baseball game in the afternoon, and that's important to me. On Sundays we go to church, and I think it's just building a routine around what's important for you, and it's good to let your boss know.

When I was a Dreeben brands, I let my boss know that I have small children and I want to be home from 6:30 to 8:30. I want to be with them. I'll jump back on email at 8:30 after dinner, after we put them to sleep, and I'll work for 2 or 3 more hours. I don't have any problem doing that, but between 6:30 and 8:30 is my time to be with my children.

Anita Brick: I think it is very important to set expectations and to have a dialog. I also think that because you're so intentional about these things, they've become habitual right? And well, bad habits are hard to break. So a good one, right? I like that. Lots of great stuff in the book. So if you're thinking about someone who is listening to this episode, what are three things that you would advise someone who wants to lead with edge? Three things that that person can begin doing today.

Jose Costa: Number one, gather feedback from anyone you can from your team, from your spouse, your partner, your children. Gain as much knowledge and feedback as you can. Number two, build a personal board of directors of 3 to 5 people who can truly help you shape into the leader you want to be. If you want to be the CEO of a publicly traded company, stripe.

Hard to find a mentor who had that position and can coach you and develop you. And I would say, number three, you need to own your career and your balance. It's not up to your boss to own your career. It's up to you. And if you really want to do something, be intentional about it.

Anita Brick: I love when you say you need to own everything and take responsibility for everything.

Jose Costa: Let's be honest. How do I stay true to who I am and how do I get better? How do I continue to learn and grow?

Anita Brick: And I think for you, based on our conversation today, our conversations in the past, and the book, you think about both. So you think about how you're going to advance, but you think about how you're going to bring others along with you, which I think is a very important quality for a leader.

Jose Costa: Oh, absolutely. I would argue that they are equally as important, because without your team, you're no one. I've had people follow me through multiple companies, and I think it's because of number one, good leadership, number two, giving them the opportunity to grow and develop. And three, when you truly care about your team and you're honest about your beliefs and honest about what you want for them, they'll follow you to the end of the world.

Anita Brick: You're absolutely right. I really value the way you look at leadership, and I want you to spread that everywhere, because we need leaders that are competent but who also care.

Jose Costa: Absolutely. Thank you.

Anita Brick: Thank you so much for making the time. Great to talk to you today. Really insightful book and I really appreciate your taking the time.

Jose Costa: Thank you Anita. Thank you for having me.

Anita Brick: And thank you all for listening. This is Anita Brick with CareerCast at Chicago Booth. Keep advancing.