Simmonds Restaurant Management

An Interview with Michael Simmonds, Chairman of Simmonds Restaurant Management
By James Kelly and Ralph Shaver, Creighton University MBA students

The Ethics King of Omaha!

Burger King that is. While ethics is probably one of the last things in mind for someone driving through a Burger King restaurant to get a Whopper meal, it is at the forefront of the mind of Mike Simmonds. Mike Simmonds used to own over 72 Burger Kings and some of the Jimmy Johns and Taco Johns restaurants in the Greater Omaha area. Running his restaurant management business in an ethical manner was something that was very important to him both as a business man and a family man. Mike just recently sold all of his restaurants and moved on to new business ventures, but that hasn’t stopped him from thinking about ethics and how they affect business. This constant focus on ethics in business is why Mike was inducted into the Omaha Business Hall of Fame in 2009. While he is no longer a restaurant franchiser, he still applies a strong ethical character to his daily life as well as his new business endeavors.

Please tell us about your background – where did you grow up, go to school, what was your career trajectory?

I grew up in San Gabriel, CA where I attended high school. I was raised by my mother and father, who were business owners. My father owned a shoe store and he taught me much about running a business. After high school I attended college for a year, but then took a break and was drafted into the army in 1968 for two years. I left the Army in Alabama where I met my wife and embarked on completing my college degree at the University of Alabama – Huntsville. To help support my wife and by then two children, I took a part-time job at a Burger King earning $1.90 as a manager trainee. Why Burger King? Well, I had taken a trip with family to New Orleans where my mother-in-law brought a sack of Whopper sandwiches back to the motel. It was my first taste of a Whopper and it was love at first bite! My love of the food made accepting a position at Burger King easy. I thoroughly enjoyed the working environment –both people and the atmosphere. . . After graduation I sought to purchase my own franchise and opened my first Burger King in Fremont, Nebraska in 1976. That company grew to about 90 restaurants as of a year ago.

What do you like most about your work?

The thing that I like most about my work is building something of my own. I enjoy growing the business from virtually nothing in the very beginning and turning it into a regional powerhouse in the fast food industry. I get a sense of pride and accomplishment from my work and energy level in the restaurant environment.

What is it about your work that you like the least?

The things that I like least about my work are the personnel problems that exist when you own a restaurant. While dealing with these issues can be difficult, I enjoy working through and resolving the problems that do arise. Also, being a franchisee, I was at the mercy of the franchisor. I had to adhere to their rules and their regulations, even if I didn’t agree with them. In the 32 years that I was a Burger King franchisee, there had been 12 different CEOs. Each one had their own ideas and their own stamp that they wanted to put on the business. Sometimes my ideas and their ideas didn’t always mesh.

Very generally, when you think of “ethics” what does it mean to you?

Very simply, it means doing the rightthing.Doing what isright for the givensituation.Thisapplies tome asboth anentrepreneur and a person. I try to apply this in my day to day life as well as when I make decisions about my company. I believe as a business owner one must strive to be a strong ethical business person with good character and set positive examples for others.

Have you always done business in Omaha? If not, where else have you done business? What moral values typify the Omaha business community?

I primarily do business in the Omaha/Council Bluffs area but I also owned Burger Kings restaurants in the Des Moines area. The Midwest has been a great place to build a business as well as raise a family. There is a strong work ethic and moral climate here in Omaha. I have always felt we were able to hire and retain better people than some of my peers in other parts of the country. I believe that many business leaders in Omaha have laid the ground work for other businesses to succeed. Omaha is a very charitable town and its community leaders are very giving. We are looked up to by business leaders in other parts of the country.

Describe an ethical situation in business you have faced that was relatively easy to handle – who was involved, where, what did you do, why?

The easy ethical situations are those that are open and shut cases. We don’t tolerate employees abusing each other or our guests. We don’t tolerate thievery. This not only sets an example for the other employees, it also establishes underlying values for the organization. Over the years in business, we have had to deal with a variety of harassment cases. We like to investigate the details with all parties involved. We realize there are two sides to every story. We make a determination and execute a solution quickly.

Describe an ethical situation in business you have faced that was difficult to handle – who was involved, where, what did you do, why?

The hard ethical situations, in my mind, are those with grey areas. There was a big push by the INS a few years back to round up all the illegal immigrants and ship them out of our area. Legally, we are required to obtain certain documentation from our employees, which we did. The INS came in and presented a list of names, all Hispanic, and told us we needed to bring them in to our training facilities to update their paperwork. It’s unfortunate that some of our hardest working employees would come to this meeting and present their paperwork to the undercover INS agents. The agents would confer with each other and line up all these people, put them in handcuffs and escort them out of our facility. They were not allowed to contact their family or friends. I personally believe this is wrong but, my beliefs may conflict with the law.

Another ethical dilemma that we faced was whether or not to institute a drug testing policy. We took the stance that what you do on your personal time is your own business. As long as employees performed their job well and met our expectations, we had no reason to drug test.

Why would you call the two previous situations ethical?

I believe that these situations present both a legal ethics situation as well as a moral ethics situation. Someone might be in this country illegally and provided illegal documents to obtain employment. However, my moral ethics tell me that these are good people. They are hard working individuals who only want to provide for their families. These types of decisions are tough and you have to go through much deliberation before making a decision.

How does it feel talking with us about these ethical quandaries you faced? Is it easy? It is uncomfortable?

Not uncomfortable at all. It is easy to talk about these situations because, in my mind, we did make the right ethical decisions.

What are the unspoken ethical rules in your organization? What is tolerated, what is not?

A healthy culture is extremely important. I believe the ethical culture at our company is strong. We believe in creating a positive environment in our restaurants and then expect the employees to adapt to that culture. We always treat the customer with respect and go the extra mile to satisfy him or her. If there is a problem with their order, we replace it free of charge with a smile or refund the customer’s money, if appropriate. At the same time, we want everyone to treat their fellow employees with dignity and respect. We require our employee’s to adapt to our standards or we may have to move on without them.

How do you infuse ethics in your organization?

You have to talk it and live it every day. We have an employee handbook that is to be followed.I have attended and participated in numerous management orientation sessions and meetings and I talk about the specifics of behavior around the customers and other employees. There are set rules that are in place that must be followed or else there will be severe consequences.

Have you had an ethics mentor? If so, who and why?

The two people I respected the most were my franchise owner from Alabama and my father. They were both truly quality guys. I worked in my father’s shoe store starting at the age of 12 all the way through high school. It taught me the ins and outs of how to run a business and the value of hard work. My boss in Alabama taught me the importance of respecting employees and the importance of teamwork. The two combined played a significant role in getting me to where I am today.

In regards to leaving a legacy, what are the biggest ethical challenges that you think face the younger business professionals today? Any tips for dealing with them?

One of the biggest issues young professionals face today are the horrible examples being set by some of today’s corporate leaders. That people abuse their positions, bankrupt their companies and then leave without consequence is not acceptable. Young people will see that if you take advantage of others and fail as a company, you can get a bail out. This does not teach personal responsibility. Successful businesses in America were built on their ability to either succeed or fail on their own. We are taught that if you fail, you should get right back up and try again. Government bailouts send the wrong message and will make it difficult for today’s young professionals to be successful.

When you think about the things that matter to you – your values – which of those are important to you to find in an organization for which you work? Why?

Respect! What matters is respecting all those in one’s business circle –customers, employees, vendors, etc. It is also important to be as generous as possible to employees and be open and honest with them.