Crucible: Losing the Top Job—and Winning It Back

Until he was 39, Michael Mack had a perfect CV: a BA from Brown, an MBA from Harvard, six years at the consulting firm Bain & Company, and then a successful move into entrepreneurship—as co-owner of a healthy-dining chain. Launched in 1983, his restaurant group, Garden Fresh, grew rapidly, leaving Mack and his venture capital backers riding high. But then came the smackdown. In 1990 the business started to lose money. Mack’s partner, Anthony Brooke, stepped down, and although Mack worked feverishly to cut costs, in April 1991 his directors decided that he should go too. “I was out visiting our Rancho Cucamonga restaurant and got a message from one of our board members, which I returned on my car cell phone,” Mack recalls. “He told me I was fired, and I was rocked to my core. This company was my baby. I called my wife, who was eight months pregnant at the time. And then, since I didn’t feel like driving the three hours home, I went to a hotel and spent the evening alone with my thoughts.” Later he called his father, who was a Garden Fresh investor and a board member. “I wanted to hear, ‘Let’s get back at these guys,’” Mack says. “But he told me, ‘This is done. Wrap your head around being supportive. We have an investment here.’ That was a foundational lesson in accountability: How do I accept responsibility for what I did and move toward what is in my and the company’s best interests?” It was the start of a transformation that would eventually result in Mack’s being rehired as CEO by the same board that had fired him. He has since built Garden Fresh into a $300 million company with 117 restaurants in 15 U.S. states operating under the names Souplantation and Sweet Tomatoes. And he attributes much of that success to the “opportunity for learning” created by the gap on his résumé. From High-Handed to Humbled A common criticism of MBAs and consultants is that they don’t know how to operate in the real world. Mack says he fit the stereotype perfectly. “I thought if I crunched the numbers, I would have the right answer,” he explains. “I missed the importance of working with others to structure and interpret the analysis.” He describes his former self as arrogant, self-righteous, and overly independent. Jerry Magnin, the Garden Fresh director who told Mack he was fired, offers a gentler critique. “Sometimes people who come out of high-level jobs have trouble translating it into the skills it takes to run a small business,” he says. But more important, Mack “had no experience in the restaurant industry.” Indeed, he and Brooke had both moved directly from general consulting into restaurant ownership, buying two eateries that would become the Garden Fresh business. Colleagues say that as new co-CEOs, they tended to focus more on numbers than on people; rejected advice from retail veterans like Magnin, who had, for example, suggested switching the chain’s folksy decor to a cleaner, more modern style; and fought with the board over how and where to expand. Mack admits to rookie mistakes: “We expanded too rapidly without paying enough attention to the quality of our managers, and we weren’t scaling costs back fast enough in the poor-performing restaurants.” The worst moment might have been at the end of September 1990, a few months after Brooke had left, when Mack realized the company would post a half-million-dollar monthly loss. After that, his directors told him they wanted “more-professional management,” demoted him to interim CEO, and hired a headhunter, though they said he still had a shot at keeping his job. Even then, his confidence wasn’t shaken. “I felt I was the one that could really straighten things out,” he explains. And, thanks to a combination of cost cutting and marketing initiatives, he did. By early 1991 the company was profitable again. That’s why Magnin’s news came as such a shock. “It seemed obvious to me that the performance would speak for itself and that the other candidates were flawed. But rather than having a discussion about that with the board, I just assumed everyone would see it as I did.” He admits to being very angry about his dismissal. But he took his father’s advice, cleared out his desk quietly, and met with the new CEO, former Bojangles’ executive John Bifone. “I said, ‘Let me know if there’s anything I can do to help you. Otherwise, I’ll stay out of your way.’” Mack remained a Garden Fresh shareholder and director and, at the next meeting, told his colleagues he wanted Bifone to be chairman. “He acted like a professional,” Magnin says. “That’s what made it easier to bring him back in.” Taking Stock For the time being, however, Mack was unemployed, with a baby on the way. “It was pretty scary,” says Ruth Mack, his ex-wife. (The couple divorced in 2008.) Yet thanks to Mack’s severance package, they were able to stay in their San Diego house, and Ruth left her job in real estate to be a stay-at-home mom as planned. “Actually, it was amazing timing,” she says, “because he was available and we were so involved with being parents.” Their daughter, Logan, was born in May, and although Mack devoted mornings to his job search, he spent a lot of time getting to know his child. “Most men when they have babies are a bit scared of them. But being home, he was so comfortable with her,” Ruth says. “It developed a relationship between them that is unsurpassed.” Mack remembers highs and lows during that period. On one hand, “it was extraordinary being with my daughter for the first part of her life.” On the other, “I was concerned about being able to get back on track again. I remember sitting in my office and just not having the heart to do anything.” Within 12 months, he had picked up some consulting work. But after two years, “things were getting pretty thin,” he says. He called in at Bain, only to be told that the business had changed and wasn’t right for him anymore. He researched a move to Seattle, where he thought there might be more opportunities. And he did every exercise in What Color Is Your Parachute? Meanwhile, at Garden Fresh, Bifone was bringing more structure to the business, instituting training programs in an effort to standardize the restaurants’ appearance and quality, for example. Still, top-line growth wasn’t hitting expectations. Mack had stayed on the board and developed a good relationship with his colleagues, dropping “any ill-founded resentment” and focusing instead on working with them for the good of the company. So, as the group evaluated its options in 1994, it seemed somehow natural to turn back to him as the CEO. When Brooke, who’d remained on the board, called to formally ask if he would take the job, Mack said, “Tony, I would love it. It’s exactly what I want to do.” A New Openness Mack thinks his determination to do things differently after his dismissal is what redeemed him with the board. “I learned to focus more on outcomes and not on my way of getting there, to be open to the fact that someone could easily have a better idea, and to involve others in setting targets to create more buy-in and motivation,” he says. “I learned to focus more on outcomes and not on my way of getting there, to involve others to create more buy-in,” Mack says. Magnin noticed a change in Mack immediately: “He was a little more understanding of the fact that he didn’t write the book, which makes it a lot easier to deal with a board of high-powered individuals who all think they wrote the book.” Kenneth Keane, a 24-year Garden Fresh veteran who is now one of two presidents under Mack, agrees. “When he came back, he was fired up and more focused, yet more open,” he explains. “Before, he still acted like a consultant in some ways. Then, when he was away, he was a distant coach, telling us, ‘Hang in there.’ But after, you could see he was taking responsibility for all of it, saying, ‘Give us your best thinking. Let’s solve this. We’re not going to let things fester.’” For example, during Garden Fresh’s annual budgeting process, instead of saying “yes, no, yes, no” to requests from frontline managers, Mack now considers why his priorities might differ from theirs and works with them to identify how to get the results everyone wants. Similarly, where he previously shared the bare minimum with his board, he now goes out of his way to explain what’s behind the numbers. “That’s the way to get the best ideas,” he says. He’s clear about his primary goal—Garden Fresh’s success—and that it supersedes any personal ambitions. Before he was fired, he had rejected a board suggestion that he share the CEO seat with a more seasoned executive. But “if the goal was a successful company, I could have worked with someone as a mentor or as a peer,” he now acknowledges. Indeed, when Garden Fresh, a public company from 1995 to 2004, decided to take itself private again, he was willing to consider options that involved his stepping down, as long as the organization’s interests were protected. Mack says he’s “very disciplined” about sticking to the new path he’s set out for himself but concedes “there’s always room for improvement.” His methods for increasing self-awareness include the use of outside advisers and little techniques like recording thoughts in a journal. Another big shift in Mack’s attitude post-firing involves his approach to balancing work and family. Prior to his dismissal, he typically worked from 6 am to 11 pm, six days a week. But after three years as a house dad, he aimed for a more reasonable schedule of 7:30 am to 6 pm, with Saturday and Sunday off. “His goal was to always be home by dinner,” Ruth says. “If I needed to work late every night for a week or travel, I would do it,” Mack says. “But then I would drive Logan to school every morning for a week or plan a short trip with her.” He brought the same sensibility to Garden Fresh, supporting Keane’s proposal to create a 40-to-45-hour workweek for restaurant managers, without sacrificing performance, in an industry where 60 to 70 hours a week is standard. “I recognized that if I can find ways for people to find fulfillment at work and in their personal lives, we’re going to get more out of them,” he says. Although he and Ruth have split up, she still gets choked up talking about his changed outlook, his commitment to his employees, and the ongoing success of his enterprise. “He’s created a work climate where people cherish and adore him and the company,” she says. “He’s just dedicated to getting it as right as he can.” Today, Mack describes his firing as “a gift.” “It had a tremendous impact on me and, as a result, on Garden Fresh. And I would never give back that time with my daughter. I had a dream for my company, and my role in it, which got sidetracked. But by accepting my role in all that happened, I put myself in a position to change it and make the dream work.”

Crucible: Losing the Top Job—and Winning It Back

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