Doing business the right way

Jollibee Foods Corp. executive vice-president Ernesto Tanmantiong received the news ahead of brother and chairman/president Tony Tan Caktiong. He got an e-mail congratulating his family for his brother’s new award, the Management Man of the Year given by the Management Association of the Philippines.

"The grapevine quickly picked up the news but we waited for the official letter from MAP before celebrating," said vice-president for corporate affairs Claro Certeza.

Tan will receive the award during MAP’s 54th inaugural meeting at Malacanan this Wednesday.

Long time coming

The award comes 25 years after Tan and his three brothers put up Jollibee and 18 years of market dominance in the burger and chicken business.

"Our success formula is to deliver great taste and happiness to everyone," said Tan, whose definition of happiness (or the pleasant experience that translates to repeat business) is, however, different from most successful food service chains in the world. While other chains equate the pleasant experience with familiarity that comes from the same food served across all stores, Jollibee believes the consumer’s pleasant experience comes from food that tastes good but may differ from culture to culture and from one generation to another.

"We have no undying desire to keep the taste the same. For us, the important thing is to find the winning taste profile for each of the markets that we operate in. To do that, we listen very closely to what our customers want and we give them what they want," said vice-president for finance and chief financial officer Miguel Jose Navarette.

For example, Chicken Joy, which accounts for 35% to 40% of the company’s product mix, has evolved since its introduction in 1980. In a series of calibrated re-inventions, Chicken Joy today has the crunchy skin (like chicharon or deep-fried pork rind) that Filipinos like.

A professional family

"It’s a professionally-run company within a family-like environment. At Jollibee, managers are highly empowered but whatever successes are made are always team, rather than individual, successes," said vice-president for marketing Carolina Inez Reyes, one of eight women vice-presidents that include commissary head Belen Rillo.

Jollibee’s flat organization has 14 vice-presidents.

Following the core value of humility, everybody in the organization is addressed as "Sir" or "Maam", from "Sir Tony" as he enters the elevator that everybody at head office uses to the crew member taking orders at the Agoo, La Union branch.

"Our culture is very much like our chairman: fair and decent. You don’t shout at a subordinate and expect to get away with it," said Certeza. "If you’re unhappy with the performance of a subordinate, you discuss it one-on-one. If you have to fire anybody, you have to remember that you are depriving a person and his family of income."

The leadership by example extends to Jollibee’s many stakeholders. The story of the napkin is still told by employees. At one store inspection, Tan saw a paper napkin on the floor. Without saying a word, he picked it up, threw in the trash bin, and went on with his inspection. That particular outlet is now one of cleanest among Jollibee’s 400 or so outlets.

Long-term

That Jollibee intends to be in business for a very long time is clear.

It has spend time and money to find out what customers like. For example, it has studied aspects of multinational companies which customers have used as benchmark – such as the clean and well-lighted look of McDonald’s; the efficiency of Singapore Airlines; and the marketing zeal of Disney – and adapted these ideas to the Philippine environment and to Jollibee’s core values.

"Time will come when companies will no longer be measured by just how they fared in terms of profits but also by how they were able to balance the varying, sometimes conflicting, needs of their stakeholders. Companies that will be considered stakeholder-friendly will be the ones that will reap better business benefits," said Tan.

These benefits include profits of P744 million for the first nine months of 2002, market leadership in three of the four categories it is competing in, and jobs for 40,000 nationwide.

Right now, the Jollibee name or goodwill is valued at billions of pesos. The next step is to translate those pesos to dollars. Tan and the Jollibee family have set a deadline for themselves: 2020.