Ted’s Montana Grill CEO: ‘In a 100-yard dash, I give people a 99-yard leash’

While successful, Ted Turner hasn’t partnered with many people in his business career. In fact, he grew even more gun-shy after losing most of his wealth in the Time Warner-AOL merger. Still, Turner put up $5 million a decade ago to partner with veteran restaurant owner George McKerrow. They started Atlanta-based Ted’s Montana Grill, partly to create a commercial demand for the threatened American bison, which Turner raises on his vast land holdings.

George McKerrow

George McKerrow

McKerrow, 62, is a self described serial entrepreneur who began in the restaurant business as a teenager. The founder of LongHorn Steakhouse and current co-owner of fine-dining restaurants Canoe and Aria, McKerrow is also CEO of Ted’s. The casual-dining restaurant firm has grown to $104 million in revenue from 44 company-owned locations in 16 states. Making it in the restaurant business is difficult, but McKerrow shares some of what he’s learned since his early days as a busboy.

Q: You got the entrepreneurial bug early in your life. What happened?

A: I learned how to make potholders in the eighth grade and then started mass producing them. I’d go after school on my paper route and knock on every door. I’d sell potholders to the housewives for 50 cents and a dollar, in addition to delivering the paper.

I learned that if I tried things that were unconventional, that they would probably work. I found out that I needed to be busy. I’m probably a little bit ADD. I always worked when I was in school. If I had a lot of idle time, I probably would have done stuff that wasn’t real good.

When I was 16 and a sophomore in high school, I got a job at Uncle John’s Pancake House in Cleveland for gas money for my little Corvair. I got a job as a busboy and then got promoted to lead cook six months later. I was ordering the food, writing the work schedules and running the kitchen in the summertime. Here I am 16, and there’s a bunch of guys much older than I am, but I’m in charge. In hindsight, it wasn’t a very smart move on the manager’s part.

Q: You were accepted to law school but decided not to go. Instead, you ended up with several bartending and restaurant jobs before launching LongHorn Steakhouse, which struggled in its early days. Would you please discuss?

A: I kept migrating back to the restaurant business because I enjoyed the interaction with people. Working in a law office while in college taught me I never wanted to be a Monday-to-Friday, 9-to-5 guy. I would have shot myself if I had to go in rush-hour traffic every day and live a routine life.

Early on in LongHorn’s life, there were lots of times when I could not afford to pay the staff. I was hiding the paychecks. For marketing, I’d take $20 out of the till every night and I’d go from bar to bar. People would say, “I’m so sorry to hear about your restaurant failing.” I’d say, “No, it’s succeeding. You should come by. We had a record night.” Now the truth was we did 36 meals instead of 35, and we were failing.

But it’s all about being positive. During the times I couldn’t afford to pay the staff, I would greet you at the front door, I would seat you, I’d take your drink order and then run behind the bar and make your drink. I would cook your meal and deliver it to you. I might have one other person there.

Slowly but surely, the restaurant started to take off. During a big snowstorm in Atlanta, I kept the restaurant open. I put up a sign, “Drinks $1 while it snows.” We did $700 in drinks that night. The whole neighborhood came. Because we were on the grid with Piedmont Hospital, we never lost power.

Q: Many people dream about owning a successful restaurant. What was a turning point for Ted’s Montana Grill?

A: Ninety-five percent of all restaurants fail and they fail because they’re under-capitalized. Most people use up all their capital getting to day one. You have to have staying power after you open the door. Once you do, you’ve got to have a minimum of six-months of operating capital, preferably a year. Then you’ve got a chance to build a reputation.

Look, we’re the only industry that orders, receives, produces, sells, delivers and collects all in one day. We’re only as good as the number of people who come through the front door. So, without any marketing dollars, without any reputation, you can’t expect everybody to find you overnight.

At Ted’s Montana Grill, it took us 10 years to be an overnight success. Ted’s capital is the only reason we’re here. The recession hit and we lost 20 percent of our sales. We had to close underperforming locations. Ted never gave up. He could have bailed out. We started losing a couple of million dollars a year and he had to give us the money to keep the doors open.

Now, we are becoming a profit center. The last two years have been good. Our goal is to double the size of the company, from 44 to 88 restaurants by 2021. We’ll do it all with internally generated cash.

Q: What’s your management style?

A: The biggest thing I’ve learned is that if you inspire people around you to work together as a team, and you get the right people, you can do amazing things. I treat people with respect. I work side by side with them and I advocate for them. When we open a restaurant today, I still relieve the dishwasher for 20 or 30 minutes and let him sit down or have a Coke. When the whole team sees the top guy doing the lowest job on the totem pole, they gain respect for you.

I believe that the job of management is to lead from the front, but to support from the rear. You give them the tools, inspiration and recognition. You can’t say thank you enough to people.

Power is an elected position, where people trust you and believe in you. Managing by the authority of a title rarely works.

Q: So you’re not a micro-manager?

A: In a 100-yard dash, I give people a 99-yard leash. I trust the right to people to go out and accomplish the mission their way. Everybody gets to where you need to go differently. There has to be a corridor of tolerance.

For me, having a tight rein doesn’t work. First of all, you can’t get very big like that, because a human being can only control so much. Because of my style, the No. 1 quality I look for in hiring people is their demonstration of loyalty. Many people move around a lot and are self-centered. For my management style to work, I have to find people who are going to stick around for awhile.

Each week, Sunday Business Editor Henry Unger has a candid conversation, called “5 Questions for the Boss,” with a top executive in Georgia. Some remarks are edited for length and style.

15 comments Add your comment

Jim

October 20th, 2012
3:42 pm

George needs to come to Bozeman and roll some heads…..

babs

October 20th, 2012
3:53 pm

fyi, we went to a nearby Teds (Peachtree Corners, GA) about a year ago. Almost put our name on the list to be seated but checked the health department score and saw that it was in the 80s. We left and went across the street to a new place that had 100. Well, last weekend, my husband wanted to try Ted’s again because he is a fan of the one in Decatur, GA. The health score this time was 100 and we, therefore, stayed, had a lovely dinner, and will return again. People do notice, at least I look before I eat, even at a food court. I’d rather starve than eat at a restaurant with a low score. I’d even cook first!

babs

October 20th, 2012
3:54 pm

Maybe it was two years ago……..but the one in the Forum, at Peachtree Corners, is worth the trip now!

Kristine Suber Hanchar

October 20th, 2012
7:51 pm

I love Ted’s Montana Grill. You’re awesome George and thanks to Ted for the capital.

J Charles Scott

October 20th, 2012
11:26 pm

I want to work for this gentleman. After having agreed upon marching orders, being left alone to DO the job–in the confidence that the best possible job would be done–is almost unheard-of in today’s business environment. I have a saying: being a manager is like being classy: if you have to tell people you are, then you ain’t.

Juicy Bison Goodness

October 20th, 2012
11:47 pm

Before TED’S opened, I didn’t eat out very often unless I was taking a date out to dinner.

For TED’S Bison burgers, I will go out there to eat even if I l already have something cooking.

When that Buffalo craving hits, IT HITS, and only one place satisfies it.

Juicy Bison Goodness

October 20th, 2012
11:49 pm

I am glad 0bama JiveTalker has not yet been able to put TED’S out of business like we’ve seen so many other established, even beloved, companies shutter during the last 4 years.

Ellie

October 21st, 2012
6:22 am

I was in Atlanta for the grand opening of the very first Longhorn. George McKerrow is one of the finest people to come down the road. It is a honor to know him.

Mogul

October 21st, 2012
8:17 am

I guess Juicy Bison did not read the article. The restaurant business is a tough business period. It took 10 years to be an overnight success.Mr. Obama has not been President that long. Quite blaming Mr. Obama and go learn how to manage your finances. Great useful article!

james

October 21st, 2012
9:28 am

Great Article- George if your expanding please
built on over here in Athens!! The Bulldog nation
will support Ted’s for sure….

Angela Simpson

October 21st, 2012
9:46 am

Being the recipient of welfare funds must make it easy for Mogul to keep all the McDonald’s and Taco Bell locations in his/her neighborhood open during a bad economy.

Ted’s Montana Grill wasn’t having to close multiple locations during the previous President’s administration. Maybe Mr. McKerrow should’ve followed GM’s lead and asked for some of that free bailout money from the federal government instead of Ted Turner, too, eh?

Don’t “Quite” believing in your Hope & Change, Mogul!

Hope & Change!

Rik Warren

October 21st, 2012
10:59 am

I worked for George way back when in the Victoria Station days. Subsequently followed to Longhorn Peachrtree, which was irreplaceable. George was not only fair, he was fun. I have many long standing friendships from those days and I thank George for helping in some way to foster each.

George we are considering a VS reunion, are you in?

Rik

Leadership in action is always good to see

October 21st, 2012
2:51 pm

” I treat people with respect. I work side by side with them and I advocate for them. When we open a restaurant today, I still relieve the dishwasher for 20 or 30 minutes and let him sit down or have a Coke. When the whole team sees the top guy doing the lowest job on the totem pole, they gain respect for you.

I believe that the job of management is to lead from the front, but to support from the rear. You give them the tools, inspiration and recognition. You can’t say thank you enough to people.”

If only my PhD-educated manager were as smart as this guy!

PM

October 22nd, 2012
1:19 pm

Before I went vegetarian, Ted’s Montana was the place where I had some of the finest meat meals of my life. The food was always amazing and more than once my dinner party left the place wondering if we’d just imagined eating there, because nothing could be that good. But it was.

And yes, I have eaten at the Peachtree City location. Took dates there, took my brother there, took my mom there. She could out-cook anyone but still loved it. The beans and rice might even have been better than hers. Anyway, it was good eats.

The staff and chefs have much to be proud about. Just wish I could still eat there. I miss it.

CS

October 23rd, 2012
9:51 pm

I’ve worked for Ted’s Montana Grill since 2006. They began closing locations in some places as far back as 2005. It had less to do with the economy than it did with poor fit in the market i.e. they found bison a hard sell in beef country like Omaha. They also over-saturated certain markets in the beginning. The Peachtree City location has always performed well, but they opened locations within 10 miles of that location (Newnan & Fayetteville) and neither did well. But those both closed prior to our current president (late 2005, early 2006.) Contrary to popular belief not everything that occurs in this country, good or bad, is because of the sitting president.