#466: Cliff Hudson on Scaling Sonic Nationally

Cliff Hudson is a business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corp. He also served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation. In this conversation, we discuss scaling businesses, building a brand, intellectual curiosity, the value of being a master of none, and why flexibility and adaptation is so important. ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.io/. This is a no brainer for both newcomers and crypto heavyweights - go sign up today. ======================= Diginex is the first company with a cryptocurrency exchange to be listed in the US. Their ticker is Nasdaq: EQOS, and they are the first crypto company that you can buy stock in. They also have a crypto exchange called EQUOS, which has been built to institutional standards, but is available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees, by signing up using http://www.equos.com/pomp ======================= Sovryn is a decentralised Bitcoin trading and lending platform and one of the first Bitcoin-native DeFi platforms. Earn interest on your Bitcoin and get paid for lending assets, with up to 5x leverage on long and short trades using USDT, BTC and bitcoin-backed stablecoins. All with no KYC. Click the link below to get your first month’s trading fees for free. Be one of the first 100 and claim a $100 bonus! sovryn.app/pomp.html

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Cliff Hudson is a business executive best known for serving as chairman of the board and chief executive officer of Oklahoma City-based Sonic Corporation. He also served as a trustee of the Ford Foundation and is a past chairman of the board of the National Trust for Historic Preservation. I really enjoyed this conversation with Cliff, and I think you will as too. In this conversation, we discuss scaling businesses, building a brand, intellectual curiosity, the value of being a master of none, and why flexibility and adaptation is so important. Before we get into the episode, I want to quickly talk

• 0:43Anthony Pompliano?

  about our sponsors. First up is Exodus. It's an absolute game changer in the crypto wallet space. Exodus has a desktop wallet that features live charts and portfolios, a built-in exchange, and 24/7 support from real humans. They provide all sorts of online help desks and that customer support, and then their mobile wallet easily syncs with your Exodus desktop app. It allows you to exchange crypto in just two taps, and it monitors market movements on the go. If you're looking for a headquarters for your crypto experience, you've got to go try out Exodus. Exodus, E-X-O-D-U-S dot I-O. E-X-O-D-U-S dot I-O. Go check out Exodus,

• 1:24Anthony Pompliano?

  desktop or mobile, they're there for you. I'm a big fan, and you will be too. Go to Exodus dot I-O today. Next up, who do we have but Digenex? They're the first company with a cryptocurrency exchange to be listed in the United States publicly. Their ticker and the NASDAQ is EQOS, EQOS, and they are the first crypto company that you can buy public stock in. They also have a crypto exchange called EQOS, which has been built to institutional standards, but is available to everyone. You can trade Bitcoin in an Ethereum spot, as well as Bitcoin perpetuals, and you will get a 5% discount on all your fees if you sign up using equos.com/pomp. EQU-O-S dot com slash pomp.

• 2:10Anthony Pompliano?

  In the description and click on the link or EQUOS.com/pomp. Digenex, the first publicly traded cryptocurrency exchange in the United States under the ticker EQOS and you'll get 5% off all of your fees if you sign up going to EQUOS.com/pomp. Lastly, we have Sovereign, S-O-V-R-Y-N. They are an uncensorable, no KYC Bitcoin trading and lending platform and one of the very first Bitcoin native DeFi platforms. Finally, you can start trading your Bitcoin in a permissionless and decentralized way today just by connecting your private wallet. You can earn interest on your Bitcoin and get paid for lending assets via the Sovereign decentralized exchange.

• 2:54Anthony Pompliano?

  Get up to five times leverage on long and short trades using USDT, BTC and Bitcoin-backed stablecoins, all with no KYC and always maintaining control of your keys. Sovereign, S-O-V-R-Y-N, is one of the safest DeFi platforms on the market, built on the RSK Bitcoin sidechain. Block times are around 30 seconds and are merged mined with the Bitcoin blockchain. You can join today and get your first month's trading fees completely free. That's right, the first month of trading fees completely free on Sovereign. You just have to go to sovereign.app/pomp. Again, S-O-V-R-Y-N.app/pomp or go in the description and use the link there.

• 3:35Anthony Pompliano?

  S-O-V-R-Y-N.app/pomp, sovereign.app/pomp. And if you are one of the first 100 people to do it, you will claim a $100 bonus. That's right, they are giving away $100, the first 100 of you who hear this and go and sign up at S-O-V-R-Y-N.app/pomp, you get $100. Go do it, sovereign.app/pomp and you can thank me later. All right, let's get into this episode of Clip. I hope you guys enjoy it.

• 4:03Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:29Anthony Pompliano?

  All right, guys. Bang, bang. I have a very special treat for you today. Cliff is here and he's one of the rare people who comes on and he's done the work. He's, he's run a real business, scaled it, been super successful. So thank you so much for, for taking the time to come on and talk.

• 4:44Speaker 02

  Hey, good to be with you today. And I appreciate the opportunity.

• 4:47Anthony Pompliano?

  For sure. Let's just start with your background. You grew up where, got into law and eventually end up at Sonic, but kind of tell us a story of how you get to, to the business.

• 4:58Speaker 02

  Um, grew up in North Texas until finished elementary school. Adolescent years were spent in Oklahoma City. Kind of a pivotal point that really formative in my life. Um, we, my family moved from Wichita Falls to Oklahoma City after my dad lost his business due to a variety of circumstances. And, but he lost the business. He lost everything. And I was 11 going on 12 and to see that in my family, literally lose our home, you know, and that was impactful for

• 5:37Speaker 02

  all my life, you know? And I remember when my youngest kid was 11 years old, and then I told him, you know, when I was your age, we were evicted from our home. And he, my, my kid just couldn't believe it. Just couldn't fathom the concept, you know? So anyway, he took a sales job in Oklahoma City. That was, he was better off being at the intersection of I-40 and Interstate 35. So we moved to Oklahoma City and within two or three years, he was back in business for himself. He was really a serial entrepreneur and very impressive the way he recovered. But

• 6:16Speaker 02

  at any rate, so on the plains, North Texas, Oklahoma, here through undergraduate school, went east for five years, was in Washington DC, took a law degree at Georgetown University, lived in Baltimore, Maryland for a couple of years, practiced law while my wife is in graduate school there. Then we returned to the plains. My big idea, just because the economy was so hot and what I didn't realize it was overheated by a by a oil boom. That was debt fueled. And so, within a year after our moving back, all that came unwound. I spent a couple of years in a business law practice here, but I saw that going, I saw it going down. Because the, because the economy is going down.

• 7:00Speaker 02

  So, um, my view was, I either had the opportunity to um, try to get, maybe get inside a company that wasn't tied to the oil business. Uh, or frankly, leave the region. And at this point, I was, um, uh, late twenties, my wife was still in graduate school, should continue on with her studies. She's a epidemiologist and eventually became a, you know, PhD in epidemiology. But I decided I need to kind of stay here and help, um, help support her get through that process. So I left a lot, private law practice, went to Sonic, uh, I was 29 years old.

• 7:41Speaker 02

  So here I was, I mean, amazingly enough, 29 years old and general counsel of a public company called Sonic. Um, how I got into business. Our company went through two LBOs, they talk about that in the book. Went through two LBOs in the late eighties, went took it public in the early nineties. I was central to all of those in terms of helping orchestrate them. And, um, and then after we went public, I decided I was going to leave the company, told the CEO. And this is a compressed version of the story, but once I told him I was going to leave, he said, well, why don't you stay here and run the company? And so I became COO and it was a gradual process in terms of learning about the company. Uh, from the time I joined the company until I became COO, it was, it was like nine years.

• 8:26Speaker 02

  So it's not like I have it overnight. But I'd had an opportunity to really learn the business. And, uh, um, and so that's how I got onto the business side. And a year and a half, I'd say after I became COO. I was running the company day to day, day my boss left. And, uh, you know, rather suddenly, but he left the company and the board turned to me and said, you want to be CEO? And I thought, well, I'm already running the company, so why not?

• 8:55Speaker 02

  And same day, they named me CEO and I was CEO for the next 23 years. So.

• 9:00Anthony Pompliano?

  So when you come in as the general counsel and you eventually become the CEO, those are two very different functions.

• 9:07Speaker 02

  Yeah.

• 9:08Anthony Pompliano?

  But you're doing it at a time when there's multiple transactions going on. The company's growing. Talk through a little bit just as to in hindsight, what were the key pieces either of learning or people that helped you transition from that general counsel role into eventually the CEO role and then kind of set you up for success to thrive as the CEO of Sonic?

• 9:31Speaker 02

  Great. Yep. So, um, so, um, one, I gotta say, uh, I think one of the biggest factors was I was young. And because of that, when I joined Sonic, I'd been practicing law four years. If I'd been practicing law 20 years, I not might not have been malleable enough to move over to the business side. But I was 29 and it was this relatively small company and I was aggressive and curious and always pushing out, you know? So, um, uh, the team was light from a management, you know, quantity and quality of management.

• 10:12Speaker 02

  And so it really meant that I was often able to fill a void on special projects and so on. But it also meant that when he wanted to buy the company, uh, you know, a CFO might have stepped in, but we one, we didn't have a CFO technically. And, um, uh, this meant that I really just got to learn the business.

• 10:35Speaker 02

  My boss wanted to buy the company and, um, he wanted to do that from the outset, but it was, that was hard to pull off. But he, I think part of his thought in hiring me with a business background and then maybe expectations beyond ordinary lawyer from the standpoint of just life expectations. I don't know. Anyway, he, he saw in me somebody could help him do that. So the process is to a great degree, I joined the company in 84 and 86. We did buy the company and, and to do that, to structure that and, and sell it to lenders and so on, so forth. It really did, um, take more understanding of how we made money, didn't make money, how we, how we could change that going forward.

• 11:21Speaker 02

  And because the company was hit a bit of a low point when he joined the company and I joined the company. Um, but we were able to buy it in. Um, I got invested, you know, as a stockholder. So yeah, that gave me a little bit different view of things. Um, by within two years, we had a lot of motivation contractual motivation to buy out our institutional partner that had joined us in eighty six. Uh, in three years into the deal, the price was going to go up and by the besides that they wanted out, they need to show a return to their investors. So, um, uh, two years into having bought the company, we restructured the ownership. Um, and, um, and I was able to pull out a lot of, of my investment.

• 12:05Speaker 02

  Uh, I able to pull out a severe multiple of what I'd put in. Two years before, and you know, suddenly this gets your attention because in that eighty eight recap, I only, I mean, just to give you. And I talked about this in the book, it was all public too. But I, I, um, in, in cash out of pocket in eighty six, I put in twenty five hundred bucks. And two years later, I pulled out over six hundred thousand dollars. And, uh, so one was the leverage with a leverage buyout and two was the turnaround that started occurring in, in, in the value of the company was exploding. So suddenly here I am, early thirties. Now I've got a kid.

• 12:45Speaker 02

  My wife and I, uh, had, had our first son, we're both thirty and, um, uh, so, uh. Now I'm, now I'm part, a larger part of a company, larger ownership. I went from one percent ownership to eight percent ownership and had pulled out. This capital, which, you know, uh, I mean, here on the plains during all of us watching bankruptcies all around me. That was an extraordinary thing in my life. So it gave me a little bit more motivation to come to understand this thing. And, um, a couple of years into it, our new institutional partners wanted to take it public for their own purposes. Uh, they wanted to liquefy. So they turned to me, they said, advise the team on how to go, how to go public.

• 13:27Speaker 02

  So I took a central role in that for the next, you know, year and more. And we were successful in taking it public. So once again, two LBOs and IPO. Dealing with all aspects of this, but particularly from a corporate finance standpoint, I didn't have a finance background, but I'd gotten an extraordinary on job training, you would say. And so this was my introduction to the business and thinking more like business, how to strategize about growth of the business. What would I do with the team, meaning the management team, you know, if they were my management team, who would go, who would grow, and so on and so forth.

• 14:08Speaker 02

  So this was this kind of seven or eight years after I joined the company. It actually was in a short circuit of stuff earlier. It was in 92 that my boss came to me and said, you've been general counsel for eight years. How would you like to be CFO? And it was pre Sarbanes-Oxley and I kind of thought, fine, this should be, I'd learn more doing this, had good team in place and a good auditors and so on, good board. So I said yes to that. And then it was a year later when I said, okay, I'm going to leave. And he said, no, no, become COO, just run the company. So this was, it was a gradual process,

• 14:49Speaker 02

  but a very real one, a personal and professional development for me before I was made, before I was made CEO.

• 14:57Anthony Pompliano?

  Yeah, it's a fantastic story. While you were running the business, both as COO and then eventually CEO, the business had pretty explosive growth. It went from, you know, just over a thousand stores, I think, to over 4,000 locations, drive in sales, you know, up double digits, you know, year over year, and just by all measures, a very successful oversight of the business and the growth that it enjoyed. What was the secret to success? Was it improving the product? Was it better marketing? Was it investing in the brand? Was it just simply hiring great people? Like when you look back and you say, we had this, you know, epic run of success. Here is the playbook. What do you say?

• 15:39Speaker 02

  Well, in a way, all those things you just listed, the answer was yes, yes, yes, yeah. So a series of things that came together just as I, just as I became CEO. And then, you know, the question is, what do you do with them? But we drove them like crazy. So what were two of the things that came together?

• 16:03Speaker 02

  Okay, I should say three, but they all, they played in a huge way. Uh, the first was while I was COO, I conducted over a 13 month period, I conducted a license renegotiation with our franchisees, with our franchise leadership. Because um, the licenses were coming to closure in the late 90s. And our franchise leadership and us, but really our franchisees were very concerned about that. Because they did not want to get to the end of the license agreement. And then, you know, all of them have scores of stores that, you know, could, could lose their licenses. So they wanted years in advance to renegotiate this. And we were willing to because we built the value of the brand. So this was 93, 94.

• 16:48Speaker 02

  And I just moved into the COO role, literally, as that, as that began. And so 13 month process, um, the franchisees felt like it was painful. I felt like it was enormously successful because they got what they wanted and we got what we wanted. They wanted elongated terms and they wanted more protected trade radius around their stores. Um, um, meaning a little enlarged, it was one mile and they wanted to enlarge it in different circumstances and so on. So those are their two big points in negotiation, longer term, better protection, trade radius around the store. Uh, we wanted more authority as a franchisor, a modern franchisor, which we didn't have.

• 17:30Speaker 02

  And authority to require, you know, a single uh, agency for advertising. Uh, authority to require buying off of a single contract for goods across the system. Uh, authority to require every few years a trade dress upgrade at the store level. So we got all these things in there, plus we, we got a modern rate, royalty rate. Uh, which was, had been quite outdated as well. So that was, that was one thing. Simultaneously with that, we were leading them through a process to talk about where does this brand need to go? And, and the two fit together perfectly because the license agreement gave us the authority.

• 18:11Speaker 02

  In a way, it is a, this difference in authority of a de jure versus de facto, de jure being the law, de facto being, you know, building credibility, street cred with folks, you know? And so the authority we were building, we really had, in a way, had both of those because the new license agreement was the de jure, the new license agreement was the law that we had. But the process that we were taking the whole system through meetings to talk about facilities and, and, and uniforms and menu inconsistencies and so on, was the street cred piece. So that by the time we reached the finish point on this street cred piece, we had a new menu, we had new uniforms, we had a retrofit coming down the pike that they knew they

• 18:56Speaker 02

  had to do. And these two were beautiful because we engaged them in the de facto process. But they knew the whole time that we had this new license agreement and we, if we had to, we had to hammer. But we didn't want to use that, of course. So these were the two of the, the strongest things. But I would also say from a people's standpoint, we had a marketing person in Patty Moore, and with the new dollars we got from the license renegotiation, we rebuilt several parts of our company, including our purchase and distribution. And we, we bring in, brought in then a guy named Drew Richter. And, and Drew was fantastic on, on negotiating with these new requirements we had under the license agreement that everybody buy from the national contracts.

• 19:42Speaker 02

  Patty started driving same-store sales with some new promotional activities because we required, under that new license agreement, you know, everybody had to be on the same menu. So, and, and, and by the way, this is the, so license renegotiation, strategic focus with the marketing and, and more broadly. And then a third element, franchisee, and I say this in the book. Ninety-four, a franchisee came to me and said, "You gotta help me out." And he was a good operator. And I said, "Why? What's the problem?" He said, "Some of your, I got a great program that's helped me." He said, "Things are healthy in Texas and Oklahoma, but they're not healthy in the Carolinas."

• 20:23Speaker 02

  And I got a great program that's keeping me alive, and you guys are telling me to shut it down." I said, "Well, tell me about the program." And so he proceeds to tell me about an ice cream program he's got. And I say to him, "Well, what does your top store do with this ice cream program?" He said, "Well, my top store does 30% of its sales in ice cream." I said, "You must be kidding me." I said, "Well, tell me more." I said, "Don't change anything. I'm gonna send our marketing folks out there, and you show them what we're doing, what you're doing." And so he did, and a year later, we rolled the thing out. We didn't shut them down. We rolled it out across the whole system. Now, so here what we have is new authority under the license agreement to require retrofits and this kind of stuff.

• 21:04Speaker 02

  And by 96, we have sales exploding, but more so profit exploding because we've got this new frozen fountain favorites menu. And, and so profits begin exploding, 96 into 97. And we can require everybody to do the single promotions across the system. And we've now brought on this retrofit. And so once you get into, I became CEO in 95. And, and, um, in 96, uh, and 96, you start getting some benefit of Drew Richter's purchasing. 97, the drinks and ice cream come into play. Average store profits from 96 to 97 jumped 40% for the operator. I'm not talking about the company.

• 21:49Speaker 02

  I'm talking about the average operator, what was then 1,200 or 1,400 stores, jumps 40% in one year. These franchisees were suddenly just rolling in the dough. So what does this feed? It fed rapid rollout of a retrofit across the entire system. And what else does it feed? Rapid expansion of new stores. And, and, um, and then we negotiated under the license agreement, an ascending royalty rate. We said, "Okay, we've got the old time royalty rate, but if we grow your sales, we want a higher royalty rate." And so we, as a franchisor, started getting disproportionately positive benefit from all this. And so, and so, Anthony, we talk about this run up.

• 22:32Speaker 02

  When I left the system, it began to push 5 billion in sales. But when I became CEO, it was about 800 million. In 1997, we hit for the first time ever 1 billion in system-wide sales, all stores, franchise included. 1 billion in 97. It had taken 44 years for the business to get 1 billion. Four years later, we doubled it to 2 billion. This is the consequence of this kind of compounded same-store sales, new stores, et cetera. The business just exploded. And we had 97, we had 1 billion. Oh, one, we had 2 billion. And oh, five, we had 3 billion. So it was on a tear, you know? And as a result, so was the company.

• 23:16Speaker 02

  And we split our stock from 96 to 06. We split our stock, a 322 stock split. We split it six times in 10 years. And it was, it was just on a tear. It was a great run. It was fun.

• 23:31Anthony Pompliano?

  Yeah. And obviously, the success that you had not only gave you a bunch of experience and skills, but this book that you wrote, Master of None. I think the part to me that stuck out the most wasn't so much the individual stories or the experience or the skills. It was the mindset and almost like the philosophical take you have on business. And literally, Master of None is kind of a counterintuitive type piece of advice, where most people say, hey, you need to be an expert, right? You need to be an expert in the law to be the general counselor. You need to be an expert in finance to be the CFO. Or you need to have an MBA and be an expert in business to run the actual business. You seem to have drastically benefited from actually being well-rounded and not having

• 24:16Anthony Pompliano?

  just one expertise, but kind of having a command of multiple disciplines. Talk a little bit about why that's been so important to you in your career and how that made you successful.

• 24:27Speaker 02

  Well, so the title of the book is Master of None. The subtitle is How a Jack of All Trades Can Still Reach the Top. So in some ways, in this book, the subtitle is equally important to the title, if not even more so. But you know, this is the, that'd be an awfully long title to the book. How a Jack of All Trades Can Still Reach the Top. So it kind of turned it upside down. At any rate, um, so has it been important to me? I'd say it has been all my life because I, as growing up, I was active in formally in music in many ways, church music and, and, and, uh, school programs, music programs at school.

• 25:11Speaker 02

  But I was also active in sports and, you know, I, I excelled in each.

• 25:17Speaker 02

  I was also a good student. Unfortunately, I was a good student often without trying hard. And I might have, really in all my endeavors, I might have benefited from somebody pushing me harder, but usually when so I pushed, I walked away, you know? So I was an avid reader, good student.

• 25:41Speaker 02

  You know, in my book, I talk about really one of my first leadership positions, which would not be customary, I think, when you think about a, an executive, I was at public, public company.

• 25:53Speaker 02

  My first leadership position was president of the Boys of Glee Club, you know, when I was a junior, when I was in junior high, I was in eighth grade. And that actually was the confidence that my teacher placed in me really kind of helped my self-concept evolve to, in a positive way, fairly quickly. That was a very nice thing at thirteen, fourteen years old. But, um, you know, what was my next run of leadership, it really was student, student government in my high school setting, in no small ways, because the high school was undergoing a tremendous rapid change because of court order desegregation. And so that was a huge growing experience for me.

• 26:35Speaker 02

  So, but I've always had a wide degree of, wide degree of interests, you know, enjoy, not unlike a lot of people, I enjoy food, enjoy travel. But, so I think coming into the business, I probably discounted my ability or my capacity to move into a leadership position because I didn't see it as leadership, I viewed it as business management. I didn't have business education. My undergraduate degree was in history. My graduate degree was in law. I did go into business law, granted, but it's the difference between business law in, in, in, in business school, you know? And no MBA. And, but what I didn't appreciate was that I had

• 27:17Speaker 02

  Good education from a standpoint of critical thinking. In some ways, history and law are good counterparts to each other. History does let you go back and see where events occurred and can be analyzed in such a ways to draw conclusions or see different paths that might have occurred historically. Had leaders done one thing or another. Law is an analytical piece of finding similarities or where other people don't see them or finding distinctions where others think that the situations are identical.

• 27:58Speaker 02

  And the business law is a little bit different from trial work. But in many ways, the critical thinking that forces you through going through a legal education really makes that kind of separation. And the critical thinking piece moved to a very different level. So I think these really aided me when I got into business because as opposed to not wanting to look back, some people don't. As opposed to not wanting to look back and do a postmortem on something you screwed up. My reaction is no, you must go back and look at what you screwed up to not repeat it. So it was a different approach, I think, to understanding the business and how you could manage it. So I was, I think I was always a generalist.

• 28:41Speaker 02

  I enjoyed, I played piano, but didn't take lessons. I played guitar, but I didn't take lessons.

• 28:49Speaker 02

  And so this was, this was just kind of me, you know? And so as I look back over my career, I did, in business career, I did rely on strong people, I had good teams. I delegated effectively, brought the resources, worked hard to keep things aligned in terms of objectives and activities. I say that because what I'm saying is functional behavior in an organization. Keep the team aligned and then make sure the adequate resources are placed in order to drive the specific direction. And so as I look back at my career, late in my career, and then thinking about the stories and considering a book. I did come to see myself as a business leader.

• 29:35Speaker 02

  Okay, I had to be a good manager here and there and throughout. But the main thing I saw was I was running a franchise organization. Small, independent operators of our concept who were very independent minded. And you had to find ways to sell them continuously on staying aligned. You couldn't just order them. You could, but that's a, that's a short term game. So I, I think over time, I can look back and see that, um, uh, you know, kind of with that, that arc of history in my own life, enjoy, enjoying a wide array of activities and not

• 30:17Speaker 02

  seeing that as an impediment to growing a company like Sonic instead seeing as a, as a foundation for a good leader and, and seeing it as an empowering element in my own life rather than a limiting element, that, that jack of all trades.

• 30:37Anthony Pompliano?

  Yeah. One of the things you talk about is kind of this like narrow focus is unsafe and boring. And so I think that's like a really interesting framework because the boring part is more a personal enjoyment, right? Of just who wants to be bored their whole life doing one thing.

• 30:56Speaker 02

  Right.

• 30:57Anthony Pompliano?

  But the, the unsafe part, I think, is counterintuitive to people. So describe a little bit why you think of it as unsafe to have a narrow focus more, rather than a more generalist or broad view of the, uh, business world.

• 31:09Speaker 02

  Well, I think a lot of this depends upon the area you want to go into in life. Because if you do decide you want to be a brain surgeon, um, then, then I think you, you better get pretty specific about what you're studying and what you're doing every day. On the other hand, uh, if you decide you want to, um, go into even, even something technical, uh, and let's just say in the technology world, you better approach it with some flexibility because the pace of change there is so fast that if you are narrow with what you approach, even in the technology field, um, you know, if you're narrow on what you're approaching, you could be irrelevant in two years, you know?

• 31:53Speaker 02

  So from my standpoint, um, you know, my view, kind of back up and get off the brain surgeon thing or, you know, uh, it.

• 32:02Speaker 02

  Twelve years old, I thought I was gonna be a cleanup batter for the Yankees, but by the time I was fifteen, I knew that wasn't gonna be true, you know? So, so watch my prep. And so from my standpoint, it was get a good education about how the world works. And, um, and, and as I said, also the critical thinking skills. And, um, uh, use these skills, uh, to, um, be open to, um, opportunities that come along and ones that feel right for me intuitively feel right that I can embrace.

• 32:41Speaker 02

  But the, the, um, so in the book, yes, the discussion about being too narrow can, can do two things. One, the world can just bypass you. But the other thing is to the extent you're too narrow, your head's down, focused, not your head's not out, you're not keeping options open, opportunities can pass you by. And so my belief is with being that generalist and keeping your head up and being open to new opportunities, um, you, you, you, you gotta be able to see those opportunities to seize them. And, yeah, I think it's the narrow person who thinks they can create their opportunities for themselves.

• 33:26Speaker 02

  I think most opportunities we don't create, what we do is prepare and then the old adage that, um, fortune favors the prepared, you know? And so if you are prepared, it looks like you're lucky or whatever, but if you're prepared and your head's up and your eyes are open, uh, you can seize opportunities that come along that you would never see otherwise. And I think the more narrow you are, or narrowly prepared, the more narrow in your work, more likely to have your head down narrowly focused, you're gonna miss opportunities. And there's also a better chance the world's just gonna blow past you as your skills become irrelevant. So that's the gist of the book, I think, and at least that portion of it.

• 34:07Anthony Pompliano?

  Yeah, and the part to me that seems so interesting is like this idea of exploration leads to breakthrough, right? Like if you just sit and do the same thing every day, it's very unlikely that you are going to have any major breakthrough, create any sort of significant inflection point. But that exploration, that intellectual curiosity really kind of carries the day. Is that fair to say?

• 34:28Speaker 02

  I think that's fair to say. A lot of it is intellectual curiosity. You've got to be a curious person about how the world works and what's about, what may be about to occur, why it's going to occur, and how you're going to handle that. You're going to embrace it, you're going to avoid it, you know? And so I think being curious and open, those two elements are two of the most critical elements of having a rich life, I think. And in your profession or personally, if you do the opposite, you know, closed and not curious, you're going to have far less interesting business career, but also less interesting life.

• 35:05Anthony Pompliano?

  For sure. Is there anything that you've done, or anything that you can suggest to people in terms of how to increase intellectual curiosity, right? Like for you and I, who I think are generally or naturally intellectually curious people, we can just say, hey, be intellectually curious. But there's some people who just, that's not their inclination. Anything that you could think of that could help people become more curious, or kind of at least get started down that path?

• 35:30Speaker 02

  Well, it depends upon who you are, who I am that you're talking about. If you're talking about within an organization as an example, I often, very often, worked to make sure that I was including a broad cross section of our team in all kinds of activities so as to get a good functional behavior, a good integration of effort. And work as hard as possible not to have silos. So this is, if I take your question to be, what can a person who's already leading an organization do to help the organization? Achieve what you're talking about, you know?

• 36:15Speaker 02

  I mean, one of the things that I did is not so uncommon now, but 20 years ago it was. Um, we were designing a new headquarters building and the, the building is not what has to be new. It's the layout that is different. But I'd been now, I'd been, by the time we were designing this, I'd been CEO of the company six or seven years. We were in a, um, high rise downtown Maine and Maine. I had top floor, corner office, private bathroom, marble floors. You had to go through my secretary's space to get to me. Um, and what I found was the longer that went, it went on, the more horribly boring it was. I mean, the job of CEO is isolate, you're isolated enough and it's lonely enough as it is.

• 36:58Speaker 02

  If you make it physically isolated, physically lonely, it's even worse, you know? So, uh, we were designing new space. I, I had, um, picked up and visiting a couple of other CEOs and their, their businesses. A different way to approach that, and I kind of pulled together, uh, combined elements of what I saw in these other places. So when we designed this new space, I, I, I designed it first of all, so there's not a cor- a single corner office in the whole building. Every corner was a, was a conference room. Secondly, um, uh, change, went to modular furniture. So it wasn't about who got to fight over what size desk or what size chair. Everybody in the whole place had the same chair. I had the same chair as everybody else.

• 37:44Speaker 02

  And my floor was not in the corner, wasn't even on the top floor. I went to a, a middle floor and I sat in the middle of the building. I had a desk out on an open floor using the same chair everybody else used. If I needed privacy, behind my open desk was a, was a room that had a clear glass on all four sides. And so that if I needed quote privacy, I stepped into my glass room. And then all the employees that were going by could see, you know, business being conducted, et cetera.

• 38:19Speaker 02

  So my objective there was to blow up the silos and have the physicality of the.

• 38:26Speaker 02

  The office space work against building silos so that all employees could see each other every day and it was enormous contributor to just that. And so, but you can find processes as an executive leader, you can find processes to break down walls to include include people from other disciplines and key projects that you have and so on and so forth. Okay, well, that's the executive leader. For the individual, you know, you know, I think within an organization and individual can, you know, what you can do individually, of course, is just explore things through reading or or hobbies or otherwise to get into areas you're not naturally comfortable with.

• 39:10Speaker 02

  But within an organization, you know, volunteer for task forces, even proposed task forces that are cross functional within the organization, make sure you get into those task forces, that you meet other people in the company, that you engage the tasks that are beyond your department, beyond your comfort level to help you grow, et cetera. So it is a question of acting on your curiosity. It's one thing to have your curiosity, it's other thing not to act on it because you don't act on it, then, you know, okay, well, it's an academic point. So, but if you're, if you are a naturally curious person and you're in an organization that's run by silos and there's no way around it, well, you know, you probably need to look for a new employer.

• 39:54Speaker 02

  But otherwise, I think you you work to try to break down the silos or cross functional manner, then this, I think, can be really stimulating for a curious person.

• 40:06Anthony Pompliano?

  Yeah, it's so fascinating to hear about that glass room that you had where you would kind of step in for privacy. When I worked at Facebook, Mark Zuckerberg had one and we called it the fishbowl or the aquarium, right? Because basically kind of you feel a little bit like you're inside of that. And and it was fascinating because, you know, somebody who's the executive of a large company can go in there for a phone call, can go in and meet somebody that nobody knows, or literally at one point, the Prime Minister of India came and sat there, right? And everyone's walking. By and you kind of see the the business being conducted, as you mentioned. So it does have a very different effect than, oh, the CEO's office is up on the top floor. Right. It's almost like the physical proximity can have an impact.

• 40:51Anthony Pompliano?

  When you think today for a young leader who aspires to kind of have the successful career that you've had. What is the advice if you were mentoring them? What are the things outside of what we've talked about already that you kind of just, hey, keep this in the back of your head? Or these are the things that I wish I knew when I first got started that you would share with those young leaders?

• 41:14Speaker 02

  Well, I depending on the organization, depending on what you're wanting to pursue. But you're describing it as an organizational leader. So by definition, it this sounds like feels like

• 41:27Speaker 02

  the circumstance in which the, you know, the generalist can can benefit rather than the narrow specialist. So I think the, you know, at a really younger age, the issue is get a good education and and

• 41:47Speaker 02

  particularly in areas and on paths that do demand, you know, critical thinking skills and analytical skills.

• 41:55Speaker 02

  Beyond that,

• 41:58Speaker 02

  you know, life is not target practice, you know, life's a journey, you know? So don't try to aim at something that you think is going to enhance your path. Listen to your instincts now about so in other words, your intuition. You know what what sounds right to you, what feels right to you? And go on a path where things click for you, you know, instead of trying to pursue something that you think

• 42:28Speaker 02

  from an external standpoint, you know, on a resume or whatever, something that looks good. You know, pursue something that that feels right to you from your own intuition and and your your own talent and skill sets.

• 42:44Speaker 02

  And then beyond that, remain open to opportunity that comes along. Keep your head up, eyes open, remain open to opportunity. Yeah. One fellow that I've talked to about my book, he endorsed the book, and I had him in my home podcast, Bill Fromm out of Kansas City, that has formed several companies in Kansas City that are headquartered in Kansas City, including those International Scope. Bill makes the point, you know, just say yes, you know, which is titled one of my chapters, just say yes, because his comment is, now, when you say no, the door

• 43:23Speaker 02

  is closed, you know. Now, whereas if you say yes, and, you know, if you learn about the two later, six months later, that you just really can't pursue this path, you can always go back to somebody and say, listen, I gotta shoot straight with you. I thought we could do this, but I don't think we can do this, you know. I thought I could cut this, but I think we need this additional talent, whatever. But the point is, learn how to say yes to opportunity, and figure out how to do it. Because if you say yes, you're going to get full engagement. If you say no, you just close the door. So, these are thoughts along the way to a person younger in their career. The other things that you would say are a little bit more

• 44:04Speaker 02

  obvious, and they're almost jingoistic, but they're true. And that is, you know, work hard and do the job right, you know, and make sure the job gets done well. But those are somewhat generic, but they're accurate. Because if a person thinks that I got my college degree and now somebody owes me something, you know, they're going to be a little surprised and a little disappointed, you know, with that mindset.

• 44:31Anthony Pompliano?

  One of my favorite business stories ever is the gentleman who ended up coming up with Hot Cheetos. He was a janitor at the business before he came up with that idea. And he tells the story that he was working somewhere else, and he gets the job as the janitor. And on his first day as he's going to work, his grandfather says to him, you make sure that everyone in that building knows, Munez, you know, mop the floor. Right. Just to basically do your job, have pride in the work that you do. And that's the advice he's getting, literally to go mop the floors. And one day later, he ends up building, you know, what ends up being a couple hundred million dollar product line for Free to Lay. And I think that there's a lot of people who say, oh, that's luck or, you know, there's this or that.

• 45:16Anthony Pompliano?

  And it's no, it's the same things that you took to work with you around hard work and pride in your work and things.

• 45:23Speaker 02

  Right.

• 45:24Anthony Pompliano?

  As a janitor, he's now applying to, you know, something that people will think is much more aspirational. Right. But it's the same exact qualities.

• 45:31Speaker 02

  Yes. And he was also a guy who was in, within an organization where, you know, he, one, he would keep his eyes open. Cause the CEO, I talk about that example in my own book, because the CEO invited that kind of input. He developed it at home, you know,

• 45:49Speaker 02

  based on kind of some street food experiences that it had. And then called the CEO who took, who took his call, you know? Some organizations that wouldn't occur.

• 45:59Anthony Pompliano?

  Well, it's like your ice cream story, right?

• 46:01Speaker 02

  Yes. Yes. Yes. Exactly. The people that were trying to shut down our franchisee on his ice cream were two of the most senior people in our company. And they told him the reason he wasn't going to do it was just to say it. They told him that's too much like Dairy Queen. And we don't, we don't want to do it. And yet today, my, I've been gone from Sonic for two years. But my hunch is that at this point, Sonic has to be doing six or $700 million worth of ice cream. And at that time, as a system, we probably did 25 million, you know? But it wasn't just the increase, increase in sales.

• 46:44Speaker 02

  My then CFO liked to say anything, he said, I love any promotion where it's something mixed with air or water, you know?

• 46:53Speaker 02

  Because because the product margins were just extraordinary. And that's that's how with our frozen fountain favorites that we rolled out in 96, spring of 96, 96 to 97, average store profits jumped 40%, unbelievable, you know, changed everything. But we did, you know, back to your original question, we built on that, built on that, built on that. Everything that occurred, we used it to leverage something else. And and the business just flat took off, just a fascinating, just different way to look at the business over and over and over again.

• 47:27Anthony Pompliano?

  Yeah, it's amazing. I wrap up each conversation with three questions. The first one is a little bit more serious, which is just what is the most important book that you've ever read outside of obviously the one that you wrote?

• 47:41Speaker 02

  Most, one of the most I could say maybe one of the most important books I've read outside of the one I wrote.

• 47:49Anthony Pompliano?

  Um.

• 47:52Anthony Pompliano?

  And just a book that sticks out in your mind as having had an impact on you.

• 47:56Speaker 02

  Well, I remember as a kid, reading a book that kind of showed that even a kid could branch out and do interesting and curious things and didn't need to be limited by age or circumstance. But I played baseball as a kid. I enjoyed baseball a lot. As a kid, I read a book, Dave Palmer's Diamond Mystery.

• 48:16Anthony Pompliano?

  Okay.

• 48:17Speaker 02

  And a book about a young ballplayer, part ballplayer, part sleuth. And and it was, it was a fascinating book that that, I mean, it was appropriate for my age, but it really kind of, one, it got me into enjoying reading all the much more. And two, it kind of set me on a path that, you know, you can really be kind of quite aspirational. But in my adult life, I've mostly read biographies. And in some ways, going back into my twenties,

• 48:53Speaker 02

  a series by Stephen Ambrose on Dwight Eisenhower was one of the more fascinating and delightful sets of books I'd ever read. I think it was either either two or three book series. But Ambrose was a great author and and I read, I have read quite a few pieces by him. But in some ways, I'd say the Eisenhower biography was one of the most enjoyable. And just watching his life, growing up on the planes and and eventually becoming President of the United States, you know?

• 49:28Anthony Pompliano?

  It's absolutely incredible. The second question is a little bit more fun. Sleep. So in 2020, I made a massive focus on, hey, I probably should sleep more. I was one of these people who was flying around, took 120 flights. Literally, I think, was sleeping kind of four or five hours a night. And I met the the founder of Eight Sleep and Mateo was like, hey, man, you probably should sleep a little bit more. What is kind of your sleep routine as the CEO of Sonic? And then since you've left, is it something where you slept eight hours every night? It just kind of got what she what she needed? How did you sleep?

• 50:05Speaker 02

  I don't think I've ever slept eight hours a night regularly. And I don't get more than eight hours of sleep, but just a few times a year and certainly not continuously.

• 50:16Speaker 02

  I'd say, you know, so one thing that's say is when I was just going to my teen years, 11, 12, 13 years old, I started delivering newspapers. And this meant getting up 3am every morning and delivering newspapers, come back, go back to bed at 5am. The number of nights now still where I wake up at 3am, work for a couple of hours and go back to bed at 5am is more often than I've cared to admit to. But but this is This is a little bit of a pattern. I'd say in my years as being CEO that the most common deal was five to six hours a night of sleep, maybe catching up a little bit on

• 50:58Speaker 02

  the weekend, but five to six hours a night. And I try to get more than that now, and I enjoy, I enjoy getting, I enjoy not having to rush off to work per se, but whereas it is these days, working from home anyway. But unfortunately, I still wake up at 3:00 AM, I work for a couple hours, but I also now go back to sleep often for another three hours or so. So not uncommon for me to get seven hours sleep now, but it's often

• 51:32Anthony Pompliano?

  Improving.

• 51:34Speaker 02

  It's improving. I know the sleep experts would say, look, you need continuous sleep. But, you know, I can't do a whole lot about it. I wake up 3:00 AM and I'm wide awake, you know?

• 51:44Anthony Pompliano?

  Yeah.

• 51:44Speaker 02

  I don't fight it. I don't fight it anymore. You know, I just get up and read or work on some projects and until I get sleepy and I go back to bed and usually it's 90, 90 minutes or two hours of work. And I get a lot of work done in that two hours.

• 52:01Anthony Pompliano?

  Nobody around to bother you.

• 52:03Speaker 02

  Yeah, no phones ringing, no nothing.

• 52:05Anthony Pompliano?

  Absolutely. I love it. The last question is a little quirky one. Aliens, are you a believer or a non-believer?

• 52:14Speaker 02

  Well, it's my first thought to try to come up with some quip there, but as quickly as I do, I'll, I'll regret it. So I do think the, you know, the universe is a fascinating thing. And it's hard for us to imagine, you know, what all really is out there, you know, because we are limited to our own reality to the greatest degree. And so we try to reinvent things. Now, even to the extent we think about them being there, we reinvent them

• 52:52Speaker 02

  in our own likeness, you know? So on the one hand, I have to say, it's a big universe and the likelihood that this, this globe is the only one with life on it seems.

• 53:09Speaker 02

  There's no reason to be believe that has to be the case, you know? Um, and on the other hand, uh, the more uh, practical usage of aliens that we see in movies and, you know, other fearful sort of things. Um, I don't, I have a hard time going there, you know? But, um, uh, there are interesting things we all see and read periodically about things that appear in the heavens that, uh, uh, lack, lack any explanation. Um, so, so who knows? I don't know. Uh, I, I'm not into, uh, uh, the alien.

• 53:53Speaker 02

  I'm not into thinking about that or pursuing it, but nor do I totally discount it.

• 53:58Anthony Pompliano?

  Yeah, I, I think that is the most rational way to view it is a big world, probably life somewhere. But, uh, I doubt that they are the little green men that showed up in, uh, in some movies. So I think, uh, I think you're more on it than, uh, than you realize.

• 54:12Speaker 02

  I just hope they're, I hope they're, if they come around, they're jacks of all trades, you know?

• 54:19Anthony Pompliano?

  I love it. Cliff, listen, thank you so much for your time. I, I've, I've read through the book, uh, Master of None, uh, How a Jack of All Trade Can Still Reach the Top, and, uh, it is absolutely fantastic. And as I started off the, uh, the conversation, uh, it's just very obvious that you've done the work and, uh, and, you know, frankly, just thank you for taking the time to write it all down and share the knowledge with folks. Cause I think, uh, you know, folks like yourself who, uh, who have literally decades of experience building companies successfully. Uh, there's just so much information that you have that you can share with others. So, uh, highly recommend everyone go get it and, uh, just thank you so much for, uh, for taking the time to write the book and then have this conversation as well.

• 54:55Speaker 02

  Yeah. Well, and I appreciate, uh, being on your program today and, and, um, happy to be with you and happy to talk about, uh, one of the things I like to talk about, and it's my business, my career, my book, you know, so. Okay. Take care.