The equivalent of a tsunami of double-doubles and a mountain of fries has been written about the Burger King-Tim Hortons deal. Permit me to add my thoughts from a managerial leadership point of view.
A megadeal of this magnitude would create challenges for any CEO. As it happens, Burger King's CEO is the youthful 34-year-old Daniel Schwartz, who background is in "financial engineering". For those of you who may be unfamiliar with this field, financial engineering is defined as the study of financial theory and the application of mathematical and computational finance. This is an fascinating choice for a CEO who now becomes accountable for the effective performance of 135,000 employees (about 35,000 from Burger King and 100,000 from Tim Hortons) in the fast food industry.
The Burger King CEO is used to managing numbers, and not people; he spent several years after college on Wall Street, primarily working for 3G Capital, the giant investor group who owns Burger King. For both the U.S. and Canada, there are several major questions to be answered: is this deal occurring so that Burger King can take advantage of the more favourable Canadian taxation rates? What repercussions would this have? And will the combined fast food chain undergo the process of slashing and selling that 3G Capital is infamous for?
More immediately, what skills will Daniel Schwartz need to effectively
manage a workforce of that size? The employee count will triple and he will be overseeing two separate business units. With twice the work, will the complexity be twice as much?
My advice to Mr. Schwartz is this: remember the basic insights of CEO management! They are:
1. You have more, not less, people to manage.
You may think you only have to manage a few direct reports at the executive level, but in actual fact you are accountable for the management of thousands of employees. You need to make sure that the environment in which they work is energy-inducing as well as their performance is efficient and effective.
2. You are accountable for everything - yes, everything.
You are a manager-of-the-whole. That means you set the standards everywhere. It's your company, your structure, your results.
3. You need to manage more, rather than lead more.
You may think that leadership is the key element in a CEO role, but it's management that focuses, organizes, teaches and helps enable 135,000 employees succeed at their work. Leadership is hollow without the management processes to support it.
It will be interesting to see what philosophy of management Mr. Schwartz espouses and what he will extract from this merger.
