Strategy and operations don’t typically fall under a CFO’s purview, especially at a corporation that’s a household name. In that sense, Kerrii Anderson, finance chief and executive vice president for Wendy’s International, is a rarity.
Shortly after joining the fast-food chain in 2000, Anderson was thrown into deep water. The new finance chief was asked to oversee the development of a five-to-ten-year strategic plan for the company. As strong as sales had been for the company’s two meal tickets — Wendy’s in the U.S. and the Tim Horton’s coffee-and-bakery chain in Canada — the remarkable growth at those units couldn’t last forever. Working with CEO John Schuessler, Anderson and her team turned out Wendy’s masterplan in March 2001. The heart of that strategy: Focus as much as you can on the efficiency and quaility of your core business, and then start looking to expand.
The product of humble origins (her father was an Elon, N.C. tobacco farmer, and neither of her parents went to college), Anderson prides herself in her ability to pick up new skills.
In a recent conversation with CFO.com Assistant Managing Editor David Katz, Anderson talked about jumping from a small company to a large one. She also discussed career development, business partnering —and taste-testing as due diligence.
Two years ago, you joined Wendy’s, a very well-known company, after 13 years with M/I Schottenstein Homes, a much smaller and less well-known company. What similarities and differences between the two companies have you found most striking?
The biggest difference is that I went from selling houses to hamburgers. Speed of service is critical at Wendy’s, but the truth is, speed of service is important at M/I. It’s just a longer time frame.
There were so many similarities. Both companies were [also] very operations-focused. What drove the business at M/I was selling homes and satisfying customers. And what drives the business at Wendy’s is delivering a smile and a thank you to satisfied customers.
How did the focus and scope of your job change?
With Wendy’s being a large organization, my focus became less hands-on and more strategic in nature. I had a few more people to work with, too.
When I came on board at Wendy’s, we had a business plan for Wendy’s and a business plan for Tim’s. But what we needed to develop was an over-arcing strategic plan for the entire organization. And that became one of the first assignments I was given.
I worked closely with the CEO, and then a council of twelve other members of Tim Hortons and Wendy’s. [The focus was] “OK, take off your Tim’s hat, take off your Wendy’s hat, we’ve got this organization called Wendy’s International. Where is it going to be in five to 10 years.”
What prepared you for working on strategic planning?
Well, first of all, I had gone back to Duke and gotten my MBA at the young age of 29. My first education was towards a CPA, and I majored in accounting and economics [at Elon College in North Carolina]. I also had years of experience in public accounting as well as industry at that point. And I had worked with strategic planning at M/I.
What do you believe are your strongest job skills?
I believe the areas I’m strongest in are financial reporting and accounting. I’ve been working with publicly held companies now as CFO or controller for over 20 years. I began adding responsibilities in risk management, investor relations, and IT. I oversaw HR at M/I. I work closely with HR here, but they report in to the CEO.
My approach is to focus on continuous learning and how I can strengthen skills in other areas. One of those other areas might be operations. For instance, the first thing I did after I joined Wendy’s was to spend three days out in the restaurants. I got up at five o’clock in the morning and walked in with the manager. I learned what their challenges were every day.
That really gave me tremendous insight into how as a CFO I could be a better business partner to operations. It helped me focus on technology needs and how to improve the efficiency of operations from an administrative perspective.
Wendy’s has been active recently on the M&A front, recently acquiring the Baja Fresh brand in June for $275 million as well as picking up a 45 percent ownership position in Café Express. What’s been your role in the M&A process?
My role’s been to eat the food — it’s all about the food here at Wendy’s. I’m really serious about that. With any business partner we deal with, it’s critical to us that they have the same values we have. If we do not believe in the same quality proposition then there’s really no need to discuss the financial elements of the deal.
So yes, in the case of Baja, once we got past those issues, I worked very closely [with Baja executives] to focus on the financial parameters of the deal and what is the right risk return for Wendy’s shareholders long term.
When we sent our questions to you in preparation for this interview, you replied that they were “easy and fun” compared to those of analysts. Might we assume that investor relations is not your favorite part of the job?
The questions are tough, because it’s frustrating to not see your performance reflected in the market at times. The relationship with the analysts that we’ve worked hard to establish — and I’ve worked hard to establish in my two years at Wendy’s — is one of credibility. In other words, when we give you guidance — right now we have [earnings per share] guidance out there from $1.90 to $1.95 — we need to able to be prepared to deliver on that guidance. And if you’re not going to deliver, then you need to be communicating to the street otherwise.
When were you frustrated with Wall Street’s perception of Wendy’s?
I guess it was when the dot-commers were growing at 30 percent. Somehow or other, 10 or 15 percent didn’t seem real exciting to Wall Street at that point.
But we now see that it’s more important that people understand what your business is. I think people understand the Wendy’s hamburger business pretty clearly, and that it’s transparent.
Interestingly, quick service in the drive-through lane and size of bill per patron are key indicators that fast-food companies measure. What role does finance play in meeting such targets?
Here’s a great example. We have just completed an implementation of what we call “new store systems” at each of our company-owned restaurants. They are composed of a POS [point-of-sale] system on the front counter, a kitchen video for racking orders, a managers’ workstation, satellite technology, and computer-based training.
Because we now have technology in the store which helps facilitate operations, it’s easier to operate the registers, and therefore, the orders are taken more quickly. Employees are able to stack the orders in a better manner so food is prepared and put together quickly and orders are sent out the window at a faster rate. If we can allow technology to better assist operations, [line workers] can better service their customers and continue to drive speed times.
Now that we’ve placed this infrastructure in all of our stores, we can really begin to leverage our supply chain and move into demand forecasting. When you order product and inventory, you need to make sure you’re ordering the right amounts of the right things.
Today that is done manually. As a result of getting product mix data from your stores and being able to analyze it, you can then forecast demand, have suggested inventory, scan inventory into your bar coding, and have more up-to-date information on the current activity and productivity of our stores. If you’re getting better information, your suppliers and distributors can better forecast what your needs are.
So how do you have an impact on service times?
Well, I was involved in the decision to purchase [the system] and in the installation. The CIO, John Deane, [who reports to Anderson] oversaw it. He came on board when we were beginning this rollout. And prior to his coming on board I had been heavily involved in the project.
Strong cost management would seem to be a crucial metric in your business. How do you assess your ability to manage costs?
Domestically, we have improved our margins at Wendy’s, and it is due to increased sales. We certainly hope they come from more customers and faster service, as well as introduction of a number of products like our “Garden Sensations” salads this year. As a result of higher sales, we have been able to really leverage labor at the stores. We have seen some improvement in food costs this year over last year.
I also have a role to play in SG&A. In many of my areas of responsibility, we spend money, we don’t make money. So we have to make sure operations makes more money. While we’ve focused on headcount, we look at how we can improve processes throughout our organization, continue to get more efficient, and drive costs down.
Finally, what achievement in your career are you proudest of?
I’m probably proudest of the fact that a girl who grew up on a tobacco farm in North Carolina could work hard and aspire to be the CFO at Wendy’s. And at the same time, I have a great marriage and two great kids — a six year old and a nine year old.
Where do you get the energy to do all of that?
I have great fire power.