Success Secrets From Papa John: The Entrepreneur Behind a Billion-Dollar Business Who Started Out as a Dishwasher
Entrepreneurs make plenty of mistakes, particularly when first starting out. John Schnatter is no exception, although he learned at least one major lesson well before he built global pizza franchise Papa John's: Hiring the best people doesn't necessarily mean hiring the most experienced people.
Schnatter, whose father owned a tavern called Mick's Lounge in Jeffersonville, Ind., remembers being puzzled when his father hired a cook who couldn't cook.
"She's got good attitude," he recalls his father saying.
The cook ended up being a dynamite hire, staying with Schnatter's father for more than three decades.
"You look for people who are positive and who have integrity," Schnatter told Entrepreneur.com last month in Washington, D.C., during National Small Business Week. "That's how he taught me to train for aptitude, hire for attitude."
Schnatter started Papa John's pizza with $1,600 worth of used restaurant equipment that he installed in a broom closet in his father's tavern in 1984. Since the early days, Schnatter has turned Papa John's into a global franchise that brought in revenues of $1.4 billion last year.
Schnatter studied business at Ball State University in Indiana, but he's had three decades worth of business education through experience. Here's Schnatter -- in his own words -- with some of his best pieces of advice on growing a business and managing employees.
On the most important element to growing a blockbuster business:
"You have to have three things. You have to have a passion for what you are doing, you have to be best in your class, and you have to have a business model that works. And so, as a franchisor, we give [franchisees] the ability to produce the best in their class, we give them a business model that produces, if you do the revenue. So their job is to best in their class. And that starts with passion. It's all about attitude. If you think you can, you are right. If you think you can't, you are right. And so we are very keen on having people around us that have a great attitude, that have a can-do spirit. That starts with passion."
On motivating employees:
"I don't think you can control people. I don't think you manage people. I think you give people a direction, you give them the resources, you lead by example. They get it right, you say, "atta girl.' And they get it wrong, you say, "not good.' I think you give yourself that culture and you have that culture of entrepreneurship, that culture of tinkering, making mistakes, honest mistakes, and you support your people with rewarding them when they do things right. And that goes from top to bottom, then I think people will manage themselves, they will motivate themselves."
On what's awesome about being a boss:
"I love my business. I love my employees. If you are a success, you can take care of people, you can give a lot to your community. You create win-win-wins, I mean I love my suppliers to make money. I love my franchisees to make money. We gave seven raises today at Papa Johns: seven in one day. We give an average of about 40 a week. That means 40 people go home and tell their spouse and their kids, I got a raise. I mean, wow, that's pretty cool."
What Schnatter knows now that he wished he understood when he was just starting out:
"I don't think I realized "til the last 10 years that you have to make mistakes to innovate. You have to make mistakes to get better. I used to make a mistake and I kind of get down on myself. And now I make a mistake and I go, Okay, did you learn from this? Did you stick to the facts and did you stick with the logic, did you have the analytics. And if the answer to that is yes, and I just gave the best decision, I gave it my guts, made the best bet I could make, and it ended up being wrong. Ok, study why it was wrong, learn from it, but don't beat yourself up. Make mistakes."
On how to stay competitive:
"Yes, every day, we find better ways to do things every day in every way. You have to constantly innovate. The market dynamics force you to get better. The marketplace is not going to let us slip on quality, of slip on taking care of our people. Yeah, we get better every day. We wake up every day and try to get better. And have fun. That's a big thing. Have fun. My gosh, life is short."
Oh how to establish a culture of entrepreneurship:
"You are kind of asking me how does a bird fly. You just kind of do it. You just ah, when somebody makes a mistake you support them, you don't get down on them. Well, you do that enough times, then they know they can make a mistake. If you get on them too hard, then they are going to be scared to make a mistake and then they are going to make another mistake! And so I think you just you really respect the interpersonal relationships and you build collaborative alliances and you don't break them. And if you do break them, you put them back together quickly."
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