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《竹经:经商经世离不得立根创新》 nnovator bamboo R.E.S.-ilience in Value Creation 33 Q: “Tony, the success of the Jollibee story is truly inspiring. Jollibee not only grew into the country's biggest food giant, even beating McDonald's, but has also been embarking on an international expansion. Can you share with us the story of how the Jolly Bee started? What are the business and personal challenges that you face along the way. how did you overcome them and what are the lessons that you have learnt?” Tony: Being born into a poor family which migrated from Fujian in southeastern China to the Philippines in search of opportunity, I became involved in the food and beverage Industry at an early age as my family ran a restaurant which sustained the family and put me through college. At the age of 22, my wife Grace and I put up an ice cream parlor two months after graduating as engineers from college. We got the idea of putting up an ice cream parlor after visiting a Magnolia shop which had a notice saying a franchise for a store is available. We spent P150,000 for the store which opened its doors to customers in 1975. There were many ice cream parlors at the time, and they were all selling the same stuff. Our challenge was how to attract customers to our stores. We decided to offer extra-big scoops of ice cream, provide cleaner stores than others, and super efficient service. Happily, customers flocked to our stores and way back then, we learned that it pays to give customers more than they expect. That was the first lesson - and it is something that Jollibee espouses to this day. I believe that we should give our fellow men more than they expect, whether they be customers, co-workers, suppliers, family and friends. I think that comes from the view that we don't have to be greedy in our daily lives or business. If we strike the right balance, we share the benefits with whomever we're dealing. This eagerness to give people what they wanted and more, was what pushed the firm's entry into the fastfood business. When we found out that our customers were craving for something hot, we introduced sandwiches until we decided on adding the store's popular Yum burger and Chicken Joy to the menu in 1978. And soon enough, the hamburgers were outselling the ice cream. “… way back then, we learned that it pays to give customers more than they expect. That was the first lesson - and it is something that Jollibee espouses to this day. I believe that we should give our fellow men more than they expect, whether they be customers, co- workers, suppliers, family and friends. I think that comes from the view that we don't have to be greedy in our daily lives or business. If we strike the right balance, we share the benefits with whomever we're dealing. Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong Jollibee’s Founder Tony Tan Caktiong and wife Grace Ang Caktiong 《竹经:经商经世离不得立根创新》 nnovator bamboo R.E.S.-ilience in Value Creation 34 Tony: The idea of expanding the store's menu came from the store's patrons. From early on, we were already listening to our customers. At first, it was actually chicken sandwich, and hotdog, and cheese--those were the three sandwiches we started with. They were very simple but good. Then we embarked on a ‘research’ stage, looking for the right hamburger we can add to the growing menu. We went out almost everyday to all the hamburger stores in town. We bought burgers and we dissected them... we tried to see what each was made of. We kept on eating until one day, we said, 'this is good'. Before we came out with the burger, it was, I think, over a year. So we were eating burgers everyday for over a year. The second lesson was endurance. Just as Jollibee started growing, we found out in 1981 that the world's biggest hamburger chain McDonald’s was about to enter the Philippines. Many of my well-intentioned friends advised us to sell out while we still could. The mindset was, 'How could a small Filipino company with only 5 stores take on a big multinational company in a business they practically invented?' Friends started asking us if we were going to get a McDonald’s franchise but I remember saying, if you franchise, you can’t grow outside the Philippines. This was a moment of truth for us. A moment that directly tested my hope and ambition. In one of our early planning sessions, my vision was to create the largest food company in the world. Some people thought I was overly optimistic. The mindset and optimism in making a business succeed is very important. If I had no hope, I would have sold out the business right then and I would not be standing in front you of today, I might just be flipping burgers for you-know-who. Was it naiveté? Maybe, but it was definitely not blind faith. I believed that we could succeed in the hamburger business even against the biggest player in the world. I did not make up that belief - I really believed it. For better or worse, that was my mind-set. That's because I knew our customers liked our hamburgers. They liked their taste and they kept coming back. “Many of my well-intentioned friends advised us to sell out while we still could. The mindset was, 'How could a small Filipino company with only 5 stores take on a big multinational company in a business they practically invented?' Friends started asking us if we were going to get a McDonald’s franchise but I remember saying, if you franchise, you can’t grow outside the Philippines. This was a moment of truth for us. A moment that directly tested my hope and ambition. Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan ... · PDF filewhat my father told me--you have to make sure your food tastes really good. Jollibee’s ... janitorial services

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《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

33

Q: “Tony, the success of the Jollibee story is truly inspiring. Jollibee not only grew into the country's biggest food giant, even beating McDonald's, but has also been embarking on an international expansion. Can you share with us the story of how the Jolly Bee started? What are the business and personal challenges that you face along the way. how did you overcome them and what are the lessons that you have learnt?” Tony: “Being born into a poor family which migrated from Fujian in southeastern China to the Philippines in search of opportunity, I became involved in the food and beverage Industry at an early age as my family ran a restaurant which sustained the family and put me through college. At the age of 22, my wife Grace and I put up an ice cream parlor two months after graduating as engineers from college. We got the idea of putting up an ice cream parlor after visiting a Magnolia shop which had a notice saying a franchise for a store is available. We spent P150,000 for the store which opened its doors to customers in 1975. There were many ice cream parlors at the time, and they were all selling the same stuff. Our challenge was how to attract customers to our stores. We decided to offer extra-big scoops of ice cream, provide cleaner stores than others, and super efficient service. Happily, customers flocked to our stores and way back then, we learned that it pays to give customers more than they expect. That was the first lesson - and it is something that Jollibee espouses to this day. I believe that we should give our fellow men more than they expect, whether they be customers, co-workers, suppliers, family and friends. I think that comes from the view that we don't have to be greedy in our daily lives or business. If we strike the right balance, we share the benefits with whomever we're dealing. This eagerness to give people what they wanted and more, was what pushed the firm's entry into the fastfood business. When we found out that our customers were craving for something hot, we introduced sandwiches until we decided on adding the store's popular Yum burger and Chicken Joy to the menu in 1978. And soon enough, the hamburgers were outselling the ice cream.”

“… way back then, we learned that it pays to give customers more than they expect. That was the first lesson - and it is something that Jollibee espouses to this day. I believe that we should give our fellow men more than they expect, whether they be customers, co-workers, suppliers, family and friends. I think that comes from the view that we don't have to be greedy in our daily lives or business. If we strike the right balance, we share the benefits with whomever we're dealing.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

Jollibee’s Founder Tony Tan Caktiong and wife Grace Ang Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

34

Tony: “The idea of expanding the store's menu came from the store's patrons. From early on, we were already listening to our customers. At first, it was actually chicken sandwich, and hotdog, and cheese--those were the three sandwiches we started with. They were very simple but good. Then we embarked on a ‘research’ stage, looking for the right hamburger we can add to the growing menu. We went out almost everyday to all the hamburger stores in town. We bought burgers and we dissected them... we tried to see what each was made of. We kept on eating until one day, we said, 'this is good'. Before we came out with the burger, it was, I think, over a year. So we were eating burgers everyday for over a year. The second lesson was endurance. Just as Jollibee started growing, we found out in 1981 that the world's biggest hamburger chain McDonald’s was about to enter the Philippines. Many of my well-intentioned friends advised us to sell out while we still could. The mindset was, 'How could a small Filipino company with only 5 stores take on a big multinational company in a business they practically invented?' Friends started asking us if we were going to get a McDonald’s franchise but I remember saying, if you franchise, you can’t grow outside the Philippines. This was a moment of truth for us. A moment that directly tested my hope and ambition. In one of our early planning sessions, my vision was to create the largest food company in the world. Some people thought I was overly optimistic. The mindset and optimism in making a business succeed is very important. If I had no hope, I would have sold out the business right then and I would not be standing in front you of today, I might just be flipping burgers for you-know-who. Was it naiveté? Maybe, but it was definitely not blind faith. I believed that we could succeed in the hamburger business even against the biggest player in the world. I did not make up that belief - I really believed it. For better or worse, that was my mind-set. That's because I knew our customers liked our hamburgers. They liked their taste and they kept coming back.”

“Many of my well-intentioned friends advised us to sell out while we still could. The mindset was, 'How could a small Filipino company with only 5 stores take on a big multinational company in a business they practically invented?' Friends started asking us if we were going to get a McDonald’s franchise but I remember saying, if you franchise, you can’t grow outside the Philippines. This was a moment of truth for us. A moment that directly tested my hope and ambition.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

35

Tony: “Taste - that was the secret, and what made the difference. We had a meeting to strategize how we could compete. After a long trip to the U.S. to study how McDonald‘s operated, top managers brainstormed over every attribute that helps decide where customers go to eat and measured how Jollibee compared on each one. We found that they excelled over us in all aspects--except product taste. It suited Americans but not really Filipinos. Our food tends to be sweeter, more spices, more salty. We were lucky as it was not easy for them to change their product because of their global image. We innovate smartly - taking risks while focusing on known strengths. My father who once helped found a restaurant in Davao once told us that in the restaurant business, it's the taste that counts. That sounds elementary, doesn't it? And very basic. But it is very important. My mother would say I was the most difficult to bring up because I was the choosiest in terms of taste, whereas my brothers would just eat anything. She would say, ‘You are the hardest to satisfy.’ I was convinced that our company could offer better-tasting products than our competitors. So we went ahead and we opened up one store at a time, slowly at first. Then when we saw that each store was making money, we opened more. And since then, we never lost our leadership position, and I guess that's because our customers really liked our products. Till today, we keep things simple and fill a simple need: very tasty food at a reasonable price. To this day I repeat to my people what my father told me--you have to make sure your food tastes really good. Jollibee’s mission statement is ‘To serve great tasting food, bringing the joy of eating to everyone’. But even with better-tasting food, could we really compete? If we want to compete we have to make sure we at least equal them in all the other attributes. It was a challenge because in advertising, promotion, store look, size, playgrounds, service speed, we ranked lower. We focused on the other attributes one by one. Sometime later we did a customer survey, and we were surprised we ranked higher than McDonald's on a lot of attributes.”

“Till today, we keep things simple and fill a simple need: very tasty food at a reasonable price. To this day I repeat to my people what my father told me--you have to make sure your food tastes really good. Jollibee’s mission statement is ‘To serve great tasting food, bringing the joy of eating to everyone’.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

36

Tony: “We were surprised customers ranked us higher in courtesy and service style. Maybe they felt we were warmer? And then they liked our marketing, promotion and advertising better. And then customers kept just coming back. But those early days were not easy. We faced many challenges and took many risks. In taking these risks there were times we lost money due to the mistake we made. The brands that we started but failed to grow included Mary's Chicken and Copenhagen ice cream. Lots of research went into these brands but the products that were eventually launched were far from what was originally tested. We thought that barbeque chicken product was our best product. We did a lot of work on it. But it didn’t do very well. Do I call it a major mistake? Maybe not a major mistake but it’s a failure we have in our history. When it comes to education, the only school I can learn from is the school-of-hard knocks. And I'm still learning today. Failing is just an experience or a learning. If you can pick up some learning’s then it’s worth it. It’s like paying tuition fee. Saving every peso we could was our mindset during the early days of Jollibee when we had a lone store in Cubao. We had to do everything by ourselves in the beginning. Pati janitorial services –Grace and I even cleaned the toilet. When there's no cashier, you do the cashier, if there's no cook, you do the burger, if there's no janitor, you clean the toilet. It's like your neighborhood mom-and-pop store. We also served the customers as waiter and waitress, and then at night, we do the accounting by ourselves. As Grace said wisely, ‘There's a Chinese saying that says it's easier for you to save than to earn’. So if you have something and you can save it. Don't waste it because to earn money, it takes a lot of hard work. We worked hands-on but as the business propels, we noticed they could not do it all so we started to set up an organization hired store managers, and trained people.”

“Saving every peso we could was our mindset during the early days of Jollibee when we had a lone store in Cubao. We had to do everything by ourselves in the beginning. As Grace said wisely, ‘There's a Chinese saying that says it's easier for you to save than to earn’. So if you have something and you can save it. Don't waste it because to earn money, it takes a lot of hard work.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

37

Tony: “During those challenges I continued to have high hopes and optimism that anything is possible. I think I pick up this belief from my mom. Our role is to do what we can as best we can and don’t worry about the outcome. The outcome will take care of itself. This belief has allowed me to sleep well at night. It gives me new hope everyday. The third lesson is that innovation starts in our minds. Our mindsets determine what we're able to accomplish. The story of Jollibee is a story of finding opportunity amidst difficult times. The main thing is to dream, dream big and not be afraid of it. Dreams are free. Why limit what you are aspiring for? But dreaming is not enough. One must be willing to put in the needed action and hard work to make these dreams come true. If you dream big and put your dreams into action you will indefinitely make mistakes. But don’t be scared to make mistakes. Just be quick to recognize them and learn from them as fast as you can. Learn from each mistake and it will not be a waste of time. If we place no restrictions on ourselves, then we're capable of doing anything. If we are not greedy, then more things will return to us. If we give more to our fellowmen and to our customers, more than what they expect, they'll return over and over again. Q: “How did the iconic bee mascot came about?” Tony: “While searching for the business name and a mascot for our first fast food store, I came across my valuable collections of Disney memories and found, a character of a bee, that somehow represent my philosophy of spreading happiness and being productive, and added jolly because I believe that people should be happy with their work and also enjoy working at the same time. When we aired our animated commercial on a Philippine Basketball Association finals match, overnight, Manila woke up to—what seemed to many—a foreign brand. To the consumer, they will remember that the brand connotes very tasty food and also the experience, the ambience, the service, and they are also proud to be a part of that brand.”

“Our mindsets determine what we're able to accomplish. The story of Jollibee is a story of finding opportunity amidst difficult times. The main thing is to dream, dream big and not be afraid of it. Dreams are free... But dreaming is not enough. One must be willing to put in the needed action and hard work to make these dreams come true. If you dream big and put your dreams into action you will indefinitely make mistakes. But don’t be scared to make mistakes. Just be quick to recognize them and learn from them as fast as you can. Learn from each mistake and it will not be a waste of time.. If we are not greedy, then more things will return to us. If we give more to our fellowmen and to our customers, more than what they expect, they'll return over and over again.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

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Q: “Can you share with us more about Jollibee’s ambitious international expansion? How does Jollibee manage the risk of expanding into new markets?” Tony: “Our vision is clear: We want to become a global player, with a 50-50 split between domestic and international sales by 2020. It's a challenge to reach 50% because the Philippines is growing fast so the outside has to grow much faster. We are adding outlets in the U.S. and other places where large parts of the Filipino diaspora have settled. We are also buying local chains in huge markets such as China and Vietnam that have few Filipinos. Jollibee made its initial moves abroad confident in the brand loyalty of the 2 million Filipinos working overseas. The company opened Jollibee, Chow King and Red Ribbon stores in the U.S. in the 1980s. We first entered California where the Filipino population was more than 25%. By 2008 we had franchises in Saudi Arabia, Qatar and the United Arab Emirates. Opening Jollibees in places with large Filipino communities will continue. We don't have to advertise when we open in these places. The longing for home is there. It's just packed. They come here because it's the taste of comfort food. When we opened a store in the Middle East, a customer asked me, ‘Sir, can you play your old jingle? I want my daughter to hear it.' All overseas Filipinos love Jollibee because they feel like they are at home. The sight of the bumblebee logo outside of the Philippines fills them with pride: ‘Jollibee can do what other food chains can do, franchise to other countries. It means that Filipinos can make their name around the world.’ But the road to becoming an international force must go through countries without a strong Filipino presence. In China the company opened a Jollibee in Xiamen in 1998 but had to close it three years later. So instead of building our own brand, Jollibee decided to buy already-popular brands and work to improve their strength in the marketplace.”

“Our vision is clear: We want to become a global player, with a 50-50 split between domestic and international sales by 2020. It's a challenge to reach 50% because the Philippines is growing fast so the outside has to grow much faster. Jollibee made its initial moves abroad confident in the brand loyalty of the 10 million Filipinos working overseas. All overseas Filipinos love Jollibee because they feel like they are at home. But the road to becoming an international force must go through countries without a strong Filipino presence. So instead of building our own brand, Jollibee decided to buy already-popular brands and work to improve their strength in the marketplace.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

39

Tony: “We decided the harder thing to do was marketing the brand, so we buy brands with a following and just have to improve the back end of the operation. Jollibee bought the Yonghe King fast-food outlets in China in 2004. With our Hong Zhuang Yuan chain, a congee brand purchased in 2008, Jollibee improved the taste of the food, redesigned the restaurants and introduced new products. In March 2012 it paid $6 million for 55% of Chinese beef noodle chain San Pin Wang. We don't even have to launch a Jollibee store in China--these branches in themselves can be a major business. In 2011 we opened a food processing plant in Anhui Province and built a R&D center and corporate offices in Shanghai. We are also entering Taiwan with an agreement to join with a subsidiary of the country's largest restaurant-chain group, Wowprime. Together, we will own the hot pot dining chain 12 Sabu and plans for more in China, Hong Kong and Macau; Jollibee is making an $8 million investment. We broke into Vietnam, spending $25m in Jan 2012 to buy half of the SuperFoods Group, which operates Highlands Coffee Shops, Pho24 noodle houses and Hard Rock Cafes. The deal expands Jollibee's business in Indonesia, where it had 2 Chow King outlets and now also has 13 Pho24s. The company is ready to expand because we have developed a management corps with the right experience in catering to local customs and preferences, but we are aware of the challenges, such as maintaining consistency. Food development is key, in terms of making sure that the hamburger here and there tastes the same regardless of whether ingredients might be different quality; beef might vary in taste or tomatoes in sweetness. And as it's a location-based business, we need to know the community very well in order to understand traffic flow, where people stay. Understanding that local consumers might have different tastes--Jollibee's products are often saltier or sweeter --the company is open to adjusting recipes if needed.”

“The company is ready to expand because we have developed a management corps with the right experience in catering to local customs and preferences, but we are aware of the challenges, such as maintaining consistency. Food development is key, in terms of making sure that the hamburger here and there tastes the same regardless of whether ingredients might be different quality; beef might vary in taste or tomatoes in sweetness. And as it's a location-based business, we need to know the community very well in order to understand traffic flow, where people stay. .”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

40

Tony: “Core products like chicken don't need to be adjusted because, all over, they love chicken the same, but our spaghetti might be adjusted, as it's super sweet. For the Filipino market, we just have to do our job very well and it's there. For the others you have to go beyond that. You have to build a brand because they don't know anything about it. I take a hands-on approach to product development. If I taste a new product and like it, I will say, ‘Wow, this is good, we can do this. But the marketing department will want a product survey, which takes time. A lot of times I give in to them, but I try to balance the organization. Everyone can do market research. We also need gut-feel. It didn’t take us long to introduce new products when we were starting out. The family members would discuss what new products customers would like, and without much marketing we would bring something out – like spaghetti. My sister is also a good cook, so she would come up with a new recipe, we would comment on it, and then she’d fix the recipe before we started offering it. Before, it was simple. Now, there’s a formal structure. There’s a big R&D department and a marketing department. The marketing department gets inputs from customers and the products they like, and then communicate that to R&D. R&D then develops it. We have an internal taste panel that taste the food and comment on it, and when a formulation is needed they do it. The next step is a consumer panel test. We have the product taste-tested by consumers, and if it’s okay, we test the product in a few stores. Before it was easy, but now it takes three to six months to roll out a new product. Another time-consuming process is training our people on how to prepare and serve the new product. Many countries share our taste in food, and the opportunity is in going to China, India and Indonesia- countries with large populations. We usually do a very broad 10-year horizon but it’s not detailed. We have a five-year plan, a three-year plan, and a one-year plan.”

“I take a hands-on approach to product development. If I taste a new product and like it, I will say, ‘Wow, this is good, we can do this. But the marketing department will want a product survey, which takes time. A lot of times I give in to them, but I try to balance the organization. Everyone can do market research. We also need gut-feel.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

41

Tony: “We have plans for China and India, but if we want to go to India, we’ll need a long-term plan. We might have to start putting Indian people into the organization and it would probably take at least three years before we sent them back. In China, we had an opportunity to break into the market with Yonghe, but because our people didn’t speak the language, we had to hire translators to help us out. We still send our people there, but they have to work with translators. We also need good people here. We’re lucky to be the leader, but it’s still a competitive market. You can’t afford mistakes because customers will leave if they’re not happy with you. The food business is still very basic. It’s still about taste. It’s still about How did you serve me? Is your place nice? Am I treated well? Do I get value? If you think about it, if we’re going out to eat, these are the basic things we look out for, but the execution is the difficult part. It’s not like other businesses where it’s the concept or the knowledge that’s difficult. Here, there’s no secret; it’s very easy, but it’s the execution that’s hard. If you ask a lot of restaurant, they know all these things. Executing day by day is what’s hard.”

“The food business is still very basic. It’s still about taste. It’s still about How did you serve me? Is your place nice? Am I treated well? Do I get value? If you think about it, if we’re going out to eat, these are the basic things we look out for, but the execution is the difficult part. It’s not like other businesses where it’s the concept or the knowledge that’s difficult. Here, there’s no secret; it’s very easy, but it’s the execution that’s hard. If you ask a lot of restaurant, they know all these things. Executing day by day is what’s hard.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

42

Q: “What is the wide-moat competitive edge and critical success factor of Jollibee to keep growing and scaling up?” Tony: “Food is our business. This is what we're good at. During the heydays before the Asian crisis, a lot of people were telling us that we were limiting our focus. Since we were catering to children, they said we should consider operating theme parks. We opted to keep to the food retail business. As the regional financial crisis unfolded - and as numerous companies divested themselves from non-core businesses, our focus paid off. Jollibee was listed in the Philippine Stock Exchange in 1993, and was the first food service company in the local bourse. After this milestone came a series of network expansions - local and abroad - and acquisitions to corner more of the local food market share, such as Greenwich Pizza in 1994, Chowking in 2000, Red Ribbon bakeries, Mang Inasal grilled chicken outlets, Delifrance and Burger King. Greenwich pizza started as an over-the-counter pizza store at the Greenhills Shopping Center in San Juan, Metro Manila, in 1971. One time, the founder approached me to ask if we were interested – at that time she has 50 kiosks and having difficulty managing the business – when she asked us if we were interested, I said, ‘why not? Let’s form a joint venture.’ We took over the management in 1994, but we retained the taste of her products because it suits the local market. On the other hand, we took over Chowking in 2000 because Chinese food is also very popular among Filipinos, but there was no good company serving the market. So we took over and worked on it. A big part of Jollibee Foods' success has been the development of market-leading brands across several categories. Most competitors have single brands. Having multi-food concepts enables Jollibee to capture a bigger chunk of the dining-out market.”

“Food is our business. This is what we're good at. During the heydays before the Asian crisis, a lot of people were telling us that we were limiting our focus. Since we were catering to children, they said we should consider operating theme parks. We opted to keep to the food retail business. As the regional financial crisis unfolded - and as numerous companies divested themselves from non-core businesses, our focus paid off.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

43

Tony: “For example, a typical customer can eat at Jollibee on Monday, Chow King on Tuesday, etc. For us to sustain a good growth rate on a long-term basis, we have to continue acquiring businesses. In terms of the value chain in the Philippines, the downstream end franchise partners, 50% of our outlets, were supported and strengthened – being the customer face. In order to protect the company’s high quality and service standards, potential franchisees have to conform to a specific profile: self-driven entrepreneurs with good management skills, good community standing and excellent interpersonal skills. Successful franchising applicants undergo a 3-month full time Operations Training Program (BOTP) at a designated training restaurant, supplemented with other programs that will enrich the franchisee's management and analytical skills needed in the operation of the restaurant. However, support for franchisees does not end there: Jollibee provides advice for and assistance with restaurant layout and design, equipment specifications, furniture and fixtures, and construction management. Field personnel renders consulting services once the outlets are operational. Creative advertising and marketing programs, product development, manufacturing and logistics facilities provide further support to franchisee restaurants. The franchise partners true to Jollibee’s values were treated like family members. On the upstream end were the three Jollibee Commissary Systems, ensuring the manufacture and distribution of safe and high- quality food to all our outlets in the most cost-efficient manner is made possible. It operates 24/7. To keep Jollibee growing, we are always on the lookout for new global trends, innovations and technology in the industry. We study the design and product mix of other fast-food chains such as Wendy's but look beyond them. We also look at airlines to see what they are doing on the service side, as we are also in the service industry. And Disneyland--we learn how they keep their look. It's more than 50 years old but if you go there it looks like it opened yesterday. And people are always courteous.”

“A big part of Jollibee Foods' success has been the development of market-leading brands across several categories. Most competitors have single brands. Having multi-food concepts enables Jollibee to capture a bigger chunk of the dining-out market. For example, a typical customer can eat at Jollibee on Monday, Chow King on Tuesday, etc. For us to sustain a good growth rate on a long-term basis, we have to continue acquiring businesses.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

44

Tony: “As part of our strategy to counter the Western image of McDonald's, Jollibee's marketing campaign promoted Filipino values like respect for elders, patriotism and loyalty to the family. We have even launched a TV show (“Jollitown”), established a line of toys and published several children’s books. Apart from marketing, our organizational culture can be identified as Jollibee’s key core competencies. Our organizational culture is the alchemy of many attributes of Jollibee, the main being its values. And therefore not easily copied by its competitors. Employees give suggestions and ideas to the boss directly – thus generating innovations. All managers followed suit and upward-downward flow of communication improved. I took pride in serving the employees through a culture of family bonds and belonging. Many social causes were taken up faithfully such as medical assistance to the underprivileged and for hearing impaired children. Collection of toys and story books for children and housing projects for the poor. The company has tapped its nationwide presence to assist the Department of Health (DoH) in its immunization program. The opportunity came up when a former DoH secretary asked company officials if the government could use the by then popular Jollibee food chain as patak centers for its polio vaccine drive. 2014 also marks the 10th year of Jollibee Group Foundation (JGF) in spreading joy in programs that create valuable and meaningful impact in the community, including the Busog, Lusog, Talino (BLT) School Feeding Program for undernourished pupils, Farmer Entrepreneur Program (FEP) to enable smallholder farmers to become entrepreneurs and directly supply fresh produce to institutional markets, with records showing that farmers delivering to JFC can earn up to five times more compared to when they sell to local markets. All such initiatives and more turned Jollibee into a national level icon. From a rather crude, strange-looking bee that no bank dared to touch back in 1978, Jollibee and his cheeky smile today have become synonymous with a truly Filipino success story that is now a source of patriotic pride. It used to be that a local government unit would aspire for cityhood when it has a San Miguel beer warehouse in town. Now, having a Jollibee branch in a locality has become the measure of progress.”

“As part of our strategy to counter the Western image of McDonald's, Jollibee's marketing campaign promoted Filipino values like respect for elders, patriotism and loyalty to the family. We have even launched a TV show (“Jollitown”), established a line of toys and published several children’s books. All such initiatives and more turned Jollibee into a national level icon. From a rather crude, strange-looking bee that no bank dared to touch back in 1978, Jollibee and his cheeky smile today have become synonymous with a truly Filipino success story that is now a source of patriotic pride. It used to be that a local government unit would aspire for cityhood when it has a San Miguel beer warehouse in town. Now, having a Jollibee branch in a locality has become the measure of progress.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

45

Tony: “Thus, Jollibee’s strong focus on product development, operational excellence, customer service, marketing and promotion, and social responsibility, and the leadership helped it become the market leader in the Filipino fast-food industry, beating all the multinational companies. Aside from having our fingers firmly on the Filipino pulse and staying several steps ahead of the competition, a big moat for Jollibee is classlessness. You go in there and find corporate chiefs with their kids, office girls and gardeners. Rich and poor alike are regulars. If you have to ask, the secret of Jollibee’s success is sharing. We share our success with people; we give good compensation; we share any honor that comes our way. Actually, this idea of sharing didn’t come from me. It came from a friend. He said: ‘You know why you’re successful? You know how to share. A lot of people do not share, but in Jollibee you share a lot with your people.’ If you treat staff well, they treat the customers well. We have profit sharing, stock-option plans-our compensation for employees, if not the highest, is one of the top in the industry. We treat our people well.” Q: “What is the corporate culture at Jollibee? What is your management style?” Tony: “I believe in persuading people instead of ordering them, emphasizing coming to a consensus. I motivate people by delegating and maintaining a strong rewards system. I learned to be kind to people, so I seldom scold a person in the organization, even in private. I try to put myself in his shoes--try to imagine how he feels and respond from that point of view. I try to see if he did something wrong, is it intentional? Usually it's not. You try to understand why so you can teach him. We are always concerned with our organization's capability to handle change. We worry about how we deal with our customers, the quality of our products, and how well we listen to customers' needs.”

“Aside from having our fingers firmly on the Filipino pulse and staying several steps ahead of the competition, a big moat for Jollibee is classlessness. You go in there and find corporate chiefs with their kids, office girls and gardeners. Rich and poor alike are regulars. If you have to ask, the secret of Jollibee’s success is sharing. We share our success with people; we give good compensation; we share any honor that comes our way.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

46

Tony: “Good times don't last forever. Decisions made in good times affect the impact of bad times on an organization. The time to reorganize, realign, and reposition one's self is when times are good. Then your change can be managed better without the sword of closure hanging overhead. Jollibee's corporate philosophy is summed up by the acronym, I CARE: I - signifies personal commitment C - denotes communication. When they keep communication lines open within the company, they create a positive working environment. A - means appreciation. Letting the employees realize that their contributions are vital to the business. A gesture of appreciation often comes free, but it is a priceless way of giving proper recognition. R - is for rewards and remuneration. To attract the best and the brightest to work for them, they pay them competitively. E - is for empowerment. This means giving their professional managers the license to take charge and run the company as best as they see fit in consonance with their corporate goals. The I CARE philosophy has helped Jollibee weather uncertain times.” Q: “Who inspires you the most? Tony: Ordinary people who do extraordinary acts. I admire people's will to do something despite their handicaps, like when you see people without hands who use their legs to paint beautiful pictures. It motivates me-here I am a physically perfect person, but look at what they can do. If I had that person's will, then I could really do more.”

“We are always concerned with our organization's capability to handle change. We worry about how we deal with our customers, the quality of our products, and how well we listen to customers' needs. Good times don't last forever. Decisions made in good times affect the impact of bad times on an organization. The time to reorganize, realign, and reposition one's self is when times are good. Then your change can be managed better without the sword of closure hanging overhead. Jollibee's corporate philosophy is summed up by the acronym, I CARE.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong

《竹经:经商经世离不得立根创新》

nnovator bamboo R.E.S.-ilience in Value Creation

47

Q: “Tony, your entrepreneurial journey in building Jollibee is truly heartwarming and inspiring, just like the red jolly bee! Do you have advice or message for the next generation of leaders?” Tony: “Work hard. Deal with people honestly. Always look to improve yourself. Celebrate if we outdo ourselves, not when we outdo others. Enjoy what you are doing. This will help you to deliver the best products and services to your customers. It will also help you to strive to improve until you achieve excellence. Be ready to innovate. And never be afraid to dream big! The advice and motivation comes from one source – my mother. She is steadfast in counselling us, on how to live the life that is upright.”

“Work hard. Deal with people honestly. Always look to improve yourself. Celebrate if we outdo ourselves, not when we outdo others. Enjoy what you are doing. This will help you to deliver the best products and services to your customers. It will also help you to strive to improve until you achieve excellence. Be ready to innovate. And never be afraid to dream big! The advice and motivation comes from one source – my mother. She is steadfast in counselling us, on how to live the life that is upright.”

Inside the Leader’s Mind: Jollibee’s Founder Tony Tan Caktiong