Tag Archive for: Corporate culture

New Year’s Reflections: Sentiment, Satisfaction, and the Power of Frontline Obsession

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The beginning of a new year is traditionally a time for reflection and planning – a moment to assess what worked in the past and to set ambitious goals for the future. Since I spent much of my time last year building and investing in new companies for the first time in quite a long time, I thought I’d share some observations about several nuanced changes I’ve noted, as well as the enduring principles that continue to shape successful ventures.

The Voice of the Customer

What hasn’t changed: Customer feedback is still the lifeblood of any business, and start-ups in particular. It provides valuable insights into user experiences, pain points, and expectations. By actively collecting and analyzing feedback, startups gain a deeper understanding of their audiences. Infuse Hospitality, a Phoenix3 portfolio company that provides corporate, commercial and specialty food and dining services, has leveraged feedback from building managers and end-users who are moving from remote to hybrid and in-office work to create engaging customized monthly promotions that serve each population’s specific dining preferences while maximizing profitability.

Remember that whether B2B, B2C, or B2B2C, it’s critically important that founders and executive teams recognize not all feedback is created equally. Be sure to prioritize feedback based on impact and feasibility. For example, a glitch in your product ordering system takes precedence over aesthetic concerns, such as tweaking the color scheme of an interface.

What has changed: Traditionally, customer satisfaction ratings have been the gold standard for evaluating success. For contract on-site foodservice relationships, that generally meant bi-annual surveys covering food quality, service standards, and a variety of other benchmarks. But satisfaction is retrospective; it measures how someone feels about a past experience. Today, it is imperative that founders leverage advances in AI and technology to capture how people feel in the moment. Real-time sentiment analysis enables founders to identify and address opportunities as they arise, rather than after they’ve become ingrained problems.

Waiting months to assess performance or customer satisfaction is no longer viable for any company – start-up or mega-conglomerate.

That’s why our Restaura team has built an industry-first resident sentiment analysis tool that analyzes comments, ratings, and team member inputs to tailor culinary experiences based on real-time input. Our talented technology team has created digital dashboards for our clients with real-time KPI tracking, including sentiment scores, so day-to-day decisions are guided by the most current insights. It’s game changing!

Ownership Involvement

What hasn’t changed: Since 1990, Bain consulting has analyzed the shareholder returns of public companies and found that companies with a founder still involved in the daily business outperform (by a factor of 3:1) companies that don’t have an engaged founder. This has been one of my core philosophies throughout my career as a founder, from start-up through acquisition, and carries through to my investment thesis at Phoenix3.

But here’s the thing I learned long ago. Being an engaged founder or business leader is really about creating a culture with a frontline obsession. You simply can’t succeed if there’s an ivory tower culture. The book Founder’s Mentality describes frontline obsession as a culture that keeps management laser focused on empowerment and respect for the team members who directly interact with customers. Founders who remain engaged in their business ensure this ethos is maintained by modeling frontline-centric behavior.

What has changed: We have all seen the dramatic shift in today’s workforce loyalty with employees more willing to change jobs in search of better opportunities or work-life balance. For founders this trend poses significant challenges, especially those in customer-facing industries where employee turnover can directly impact service quality and brand reputation.

There is a growing movement toward employee ownership models as a new standard of socially responsible business practice that can also drive company performance. Ownership Works is a nonprofit that partners with companies and investors to champion this approach which provides wealth-building opportunities for all employees, improves business performance and invigorates corporate culture.

I wholeheartedly believe that making frontline employees owners creates a win-win scenario. I have set aside over 30% of the equity shares in Restaura so all of our team members, from kitchen staff and servers to managers, have a personal stake in the company’s success. Providing ownership takes empowerment to new levels and fosters deeper engagement, accountability, and alignment with organizational goals.

Imagine what’s possible when the phrase “ownership involvement” is not just referring to the founder, it’s EVERYONE.

A Continuous Conversation

The future belongs to those who listen, adapt, and act. As we embark on this new year, let’s recognize that reflection and planning are no longer annual exercises but continuous processes. By embracing a frontline obsession and leveraging real-time sentiment analysis we can build organizations that are positioned for long-term success. Phoenix3 is actively looking to expand our portfolio with like-minded businesses. Click here to learn more about our ideal partner profile.

Let’s make it a year to remember!

The Anatomy of a Challenger Brand

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Founders are generally wired to seize opportunities. To build a better mousetrap, invent something new, expand a market. Yet certain new ventures tackle opportunities in a way that completely disrupts the status quo and, as a result, they earn the distinction of being known as a challenger brand. As we continue to build Phoenix3 Holdings through investments and our own start-ups, I have been thinking about the key factors that distinguish challenger brands from other start-ups.

It’s a Mindset

A challenger brand business model is designed to reshape a category and give customers a new way to think about their needs.

It’s about rethinking an accepted mindset based on evolving customer expectations and a sincere desire to change for the good.

Warby Parker is a great example of a successful challenger brand because the business redefined the rules of the eyewear industry with a direct-to-consumer model offering quality eyewear at a fraction of the traditional retail prices. The free home try-on program leveraged technology to innovate the customer experience. They grew quickly but continued to iterate with retail store fronts to further grow their brand presence. Warby Parker addressed customer pain points and focused on inefficiencies.

Technology as a Differentiator

In the food and dining space, Sweetgreen used its app to simplify ordering and emphasize sustainability when it launched in 2007. The company connected with an evolving tech-savvy audience and used customer data to refine their offerings and personalize experiences in a new way. This approach challenged industry norms and drove Sweetgreen’s early success as a challenger brand. In my opinion, challenger brands today must use technology as a differentiator. Whether through automation, AI or a predictive analytics, digital-first models are the only way to effectively respond to performance trends and succeed.

It’s Not Always a Challenge

Building a challenger brand is certainly not the only path to being a successful founder. If we stick with the fast casual segment, Five Guys and Raising Cains didn’t redefine their segment, but they successfully introduced higher quality options compared to industry stalwarts like McDonald’s and KFC. Similarly, when I founded Unidine in 2001, we adopted a fresh food approach to foodservice management, offering a higher quality solution for outsourced dining. We created a very unique corporate culture and built a successful business. We built a better mousetrap, but we were not a challenger brand.

Culture as the Lifeblood

When you take time to think about commonalities among challenger brands, you will find they all seem to cultivate an infectious culture. As the saying goes, “Culture eats strategy for breakfast.” Anyone who has worked with me knows how passionately I believe in a consistent culture – top to bottom, from year one to 100.

Challenger brands must hire employees who are mission-driven, ask provocative questions, take risks and solve problems.

This is a very different type of employee than someone who thrives in a large organization where being a maverick can be considered a flaw. One radical approach to culture came from Netflix founder Reed Hastings who decided to run the company like a sports team, only keeping the very best.  Performance expectations were unapologetically high but paired with radical freedom like unlimited vacation and no expense policies.  The result was a company that was constantly adapting to market changes – successfully growing from DVDs to streaming and now a global content studio.

A Founder’s Checklist

Modern challenger brands are not focused on slaying a dragon; rather they take on an industry based on market gaps and embrace the underdog mentality. This is the approach we’ve taken with the recent launch of Restaura. We took a fresh look at a stale industry that is no longer meeting customer expectations, and we have woven our fearless approach into the fabric of our business processes and culture. From first-ever technology solutions and powerful branding to an employee ownership model that is game changing, we’ve purposely designed Restaura to fit into the Challenger column below:

Take a look at this short video to better understand my vision for the future of Restaura as a challenger brand. We are up for this challenge!

When You Find a Market Opportunity on a Silver Platter. Introducing Restaura

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Today is a great day for Phoenix3 Holdings. I am proud to announce the debut of Restaura, a dining management services company exclusively serving senior living and active adult communities. We named Phoenix3 after the mythical phoenix, symbolizing renewal, hope, and better things to come, which is precisely my vision for Restaura.

Restaura represents everything that dining services must become to meet the high expectations of today’s aging Baby Boomers as they consider their retirement living choices. Our rapidly growing aging population today spends $7.6 trillion (with a “t”) annually and considers food and nutrition the number one factor affecting their overall health and well-being. Yet somehow, the $45.1 billion foodservice contracting industry has failed to evolve to capitalize on this “silver platter” business opportunity.

From where I sit, with a founder’s mindset and decades of industry experience, I believe the time is right to fill a void in the marketplace. Restaura is built to serve a new generation that expects the same variety, choice, and access in an active aging or senior living community that they have grown accustomed to in their home community. We are on a mission to establish new standards of excellence that are measured every step of the way and, importantly, will not be compromised.

Grounded and Co-Founded

One thing I’ve learned over the years is that no matter how brilliant your idea is, the complexity of scaling a business requires expertise, teamwork, and shared commitment. And so, for the first time in my career, I made the decision to select a co-founder for Restaura and feel incredibly fortunate to announce Joe Cuticelli as co-founder and Chief Executive Officer. Joe and I met many years ago when he was CEO of Sodexo Senior Living at Sodexo, and we developed a mutual respect grounded in our aligned leadership philosophy. In addition to his incredible industry expertise, Joe is driven to give back, both as a mentor to past and current colleagues and as Board Chair for a wonderful organization called Generations United.

Joe and I spent the last year reimagining what dining services should be and building a new industry solution from scratch that specifically addresses the market needs from the client and resident perspective. Given our shared passion for the value of a people-first culture, we started by inviting some of the best and brightest functional experts to join us. Quite frankly, I have been humbled by the talent level and character of the individuals who now comprise the Restaura executive team. You won’t find a better corporate team anywhere in our industry. They are passionate, driven, bright, and have found a way to make this hard work fun!

To Make a Difference, You’ve Got to Own It

We all knew that regardless of a solid business plan, groundbreaking culinary offering, or great marketing, only the front-line associates could truly bring the Restaura experience we envision to life.  In this business, it’s the sous chefs and servers, the nutritionists and dining room managers who have always been the key ingredient to success. We thought long and hard about the employee retention issues that senior living community operators face — often as much as 65 percent turnover annually. And we boldly decided to become an employee-owned company that grants each and every Restaura employee an ownership stake in the company.

I have set aside more than 30 percent of the equity shares in Restaura for our employees so that every team member has a personal interest in the company’s success. We are confident that this employee ownership model will empower our team to exceed expectations and will make them feel valued in a way that most of them likely have never experienced before in their career. This is a first for our industry and something our competitors cannot easily replicate.

To bring this transformative culture to life, we enlisted the help of Ownership Works, a nonprofit founded by Peter Stavros, co-head of Global Private Equity at KKR, to advance the employee ownership movement in corporate America. Peter is world renowned for his decades of work on the ROI of an ownership culture, which creates a different level of accountability, where employees are more engaged and less likely to quit. By 2030, Ownership Works aims to generate at least $20 billion in wealth for workers and create hundreds of thousands of new employee-owners. I am proud that Restaura is the first contract food and dining management services organization to join Stravros’ movement.

Technology on the Front Burner

The benefit of being an agile start-up is the opportunity to reimagine all the “what ifs.” It’s been more than two decades since I started a venture from scratch, and there are infinitely more tools available to embed technology into every facet of dining services. We spent the last year challenging the status quo to optimize client success, resident experiences, and operational efficiencies.

The result is truly game-changing. We’ve developed tools that automate highly personalized meal plans based on preferences and resident health profiles. Our sourcing solutions deliver a new level of predictive demand planning to minimize waste and maximize freshness.  We’ve leveraged the power of AI to create sentiment analysis tools that provide real-time insights by analyzing resident comments, ratings, and team member inputs to identify opportunities for improvement and respond to trends in real time.

One of the outcomes of all this work that I am most excited to share is how we’ve brought it all together for our clients. Restaura i-Cubed is a performance dashboard that integrates traditionally disparate KPIs for our clients to streamline operations, view real-time resident sentiment, and provide important financial updates. With dining representing up to 20 percent of an active adult or senior living community’s operating budget, this is a game-changing solution whose time has come. We’ll be at Leading Age in Nashville later this month, demonstrating our technology solutions, so please spread the word and stop by our booth to learn more.

Our Name Says It All

The Restaura name evokes a sense of culinary excellence and high-end service that is desperately missing from active aging and senior living dining today. It’s well known in the industry that food and dining are often the deciding factors in attracting and retaining residents. The incoming wave of seniors has higher expectations, more eclectic tastes, and a genuine appreciation for the impact of food on their health and well-being.

We took the time to study and reimagine culinary, so it replicates the lifestyle residents enjoy at home. Our research found that variety in meal options that cater to individual tastes and preferences is the single most important factor when older adults are choosing how they dine today (68%), yet only 17% of the 1,500 seniors we surveyed were confident variety would be accommodated in a senior living community. Again, my founder’s mindset saw huge opportunity here.

So, we brought in a distinguished culinary team to deconstruct the norms of senior living dining and deliver a level of choice and personalization previously unavailable. With Restaura, mealtimes will encompass curated menus, in-room dining options, flexible scheduling, and concierge-style personalized service.  Our culinary philosophy revolves around four core tenants:

Unapologetically delicious

Responsibly sourced

Scratch made

Nutritionally balanced

Make no mistake, my commitment to quality, scratch cooking has been at the core of my approach to this industry for decades. The Restaura difference is the ability to couple scratch cooking with technology and operations systems also built from scratch and a transformative employee ownership culture.

It is said that great moments are born from great opportunity. I see tremendous opportunity for Restaura with the 85% of the market currently not outsourcing as well as those building the future of senior living. They know how important dining is to resident acquisition and retention, yet they have not found a compelling outsourced solution—until now. Like the phoenix, Restaura is renewal, hope, and a symbol of better things to come.

If you’d like to take this journey with us, I invite you to reach out to me or visit www.restaura.com to learn more and explore our career opportunities.

Warm Regards,

Richard B. Schenkel

Founder & Executive Chairman

Culture Killers: The Hidden Threats to Your Company’s Success

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In the start-up world, where quarterly profit and operating expenses often dominate conversations, there lies an elusive yet powerful force that can make or break a company: culture. Often dismissed as corporate jargon, I firmly believe that culture is, in fact, the very lifeblood of an organization. It’s the invisible hand that shapes behavior, drives innovation, and ultimately fuels long-term growth. Yet, too many companies fall into the trap of viewing culture as a checkbox on a “to do” list.

If you think culture is just fluff, think again. It’s the difference between a thriving, dynamic organization and a house of cards.

Here are four common culture killers and how to steer clear of them.

1. Lip Service Over Genuine Action

I have seen what happens when culture is reduced to empty rhetoric—words on a career page or kitchen poster, a feel-good orientation message from the CEO. This lip service does nothing but breed cynicism and distrust. Culture must be a priority woven into every business decision, meeting, and customer interaction. It starts by clearly stating the company’s vision in ways that are very specifically relatable to the business. This month’s Harvard Business Review has a great article entitled, “Build a Corporate Culture That Works” that introduces “dilemma testing” to determine if your corporate values are actionable. For instance, to promote a culture of transparency and collaboration, Pixar’s values articulate “Regularly share unfinished work.” This type of framing provides leadership guideposts that bring the company’s values to life in corporate culture.

2. The Ivory Tower Trap

In distributed services businesses, the ivory tower mentality is a silent killer of culture. When corporate offices act as if they are superior, it demotivates frontline employees, creating a toxic divide. In my opinion, a corporate office should function as a support center with everyone, regardless of rank, committed to empowering customer-facing teams. The Four Seasons Hotels’ enviable culture is rooted in a philosophy called “Lead with Care” that directs the focus to the front line and empowers them to exceed service expectations. Remember, if the team on the ground interacting with customers isn’t delivering, no one will have a job! Bridging this gap can transform the entire organizational culture, fostering unity and shared purpose.

3. Toxic Talent

Nothing spreads faster and more destructively than a toxic hire. These individuals—the eye rollers, the naysayers, those who publicly conform but privately sabotage—can infect an organization with negativity, destroying collaboration and morale. I believe you can mitigate this issue by starting with rigorous hiring practices that prioritize cultural fit. I encourage founders to personally interview all hires until the company gets too big for you to do so (and then be sure your hiring managers understand your expectations for culture fit).

Author David Brooks has a thesis that, in any collection of humans, there are diminishers and there are illuminators. In his recent book, “How to Know a Person,” Brooks stresses the importance of hiring “illuminators” who uplift others with persistent curiosity and the ability to see things from someone else’s point of view. Of course, it’s not always possible to predict every hire’s true colors, so I believe it’s also critically important for leaders to act quickly and purge toxicity to safeguard the integrity of your culture.  

4. Cultural Atrophy

Culture is like fitness; it requires consistent effort to build and maintain. Leaders must stay vigilant, reinforcing cultural values in small daily interactions and major company decisions. I have seen what happens to organizations that come out of the gate with a strong emphasis on culture and then lose focus. Like muscle, it takes time to see the results but if neglected, culture deteriorates rapidly and can be incredibly difficult to rebuild. Trust me, ignoring this intangible yet critical business driver will lead to declining employee morale, lost clients, and reduced productivity.

Investing in culture is investing in growth. By embedding your mission and vision into the very fabric of your company, you create a roadmap that guides behavior and execution, fostering an environment where everyone feels part of a unified team. This is what sets great companies apart and paves the way for sustained growth and success.