- Business Insider/Jessica Tyler
- Daniel Schwartz is the CEO of Restaurant Brands International, which owns Burger King, Tim Horton’s, and Popeyes.
- Schwartz started at the investment firm 3G Capital, which appointed him CFO as Burger King before promoting him to CEO of the company in 2013, when he was only 32.
- Schwartz also seeks out young talent to develop internally, which he says encourages a meritocracy.
- He credits his quick but successful advancement to not being afraid to ask questions and rely on others.
Daniel Schwartz is the CEO of Restaurant Brands International. It’s the parent company of Burger King, Tim Horton’s, and Popeyes.
He started out his career at the investment firm 3G Capital. In 2010, when he was only 29, the firm’s managing partner, Alex Behring, took a big chance on him, by making him chief financial officer of Burger King. At the time, he had almost no management experience.
Now, Schwartz is returning the favor, betting on young talent to lead his businesses.
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Transcript edited for clarity.
Daniel Schwartz: When we bought the business, Alex had suggested that I join as CFO, which is a pretty big position, especially for someone who didn’t really have all that much experience, and by all that much, I mean, like none, right?
Richard Feloni: Had you ever been a manager of anything?
Schwartz: I managed one analyst at 3G.
Feloni: It was big leap.
Schwartz: Yeah, it was definitely. It was a change in role for me. Just to give you a sense of how naive I was, I never worked in a company before. When people were talking and the folks at 3G were talking about we need to make sure that we set the business up with a great team from the start, even that idea I couldn’t really relate to it. I’m like, “Wait a minute, it’s a business. It runs itself.”
Feloni: It was really back to basics for you.
Schwartz: Then you get there, and you realize, well, it’s actually not a business that runs itself. All it really is is a bunch of people running around doing stuff. If have really good people that are running around in the right direction who really care, then you get stuff done much, much better, and much faster. I quickly learned that you don’t manage the business itself but manage the people, and help the people manage the business. That was the big contrast from working in finance and working in private equity at 3G, where I was able to manage the business effectively myself. I was working with the bankers and the lawyers, and we had a model for the deal, and I would do all that on my own and maybe together with an analyst. You get it done without a team.
In a company, there’s just so much to do and so many different things. Even if you prioritize, which I think we are particularly good at, just focusing on a few important things, but you’re only as effective as your team. I quickly realized the importance of having just an amazing team. I made some mistakes early on. There was one person in the team who wasn’t able to do something, so I just took the work back myself. I remember Bernardo [Hees], who was then the CEO, said, “This is wrong. You can’t do that. This is not sustainable. This is not scalable. You have to have a good team who’s able to execute.”
Feloni: It was like micromanagement.
Schwartz: Yeah, which just doesn’t work for a whole bunch of reasons. That was the big transition, realizing the importance of the team. That’s stuck with me, and recruiting, in general, is something that’s just always been and always has been and always will be a top priority for our company. I personally recruit at all the schools. I was at Cornell, as you can see from this notepad.
Feloni: You personally recruit even as CEO?
Schwartz: I and several other members of the leadership team all personally recruit. I’m on campus, as are several other leaders of the company, and we’re all personally interviewing candidates. Because this company, in all companies, they’re only as good as the people who work there. If you have great people, you accomplish incredible, incredible things. Unfortunately, the opposite is also true.
How to develop young talent
Feloni: Well, what’s behind this whole philosophy of hiring people who are young and giving them a lot of opportunities and seeing if they could rise to it? Why is that better than just taking in someone who’s a seasoned professional?
Schwartz: Look, there’s no right or wrong. That’s all I know. It worked out well for me. People bet on me at a young age, and I worked really hard to put myself in a position to get folks comfortable to bet on me. I, in turn, feel like I have to do the same. That’s all I know. That’s what our culture’s about. I think if you want to have a culture that’s centered around meritocracy, you need to be able to live it. You need to be able to live meritocracy, and living meritocracy is giving people a chance who perform well.
As I’ve mentioned, I was given a shot to be CFO at a young age, and then, in 2013, the CEO of Burger King went on to become the CEO of Heinz. Look, the board could have certainly gone elsewhere and found a more seasoned executive than me. I was 32 at the time. I had a done a good job, and the board had confidence that I’d be able to step up and go into this elevated role.
Then I remember the board had asked me, and the folks in 3G had asked me, “Well, who can succeed you [as CFO]?” The best person at the time was a 26-year-old person in finance who was a very mature, bright fellow who’d done an incredible job. I said, “Look, this is the best candidate, despite his age.” We made Josh Kobza the CFO.
Look, again, that was a big selling point for us to be able to attract a bunch of great people at schools and elsewhere around the country and internationally, that if you do well and if you work hard we’ll give you an opportunity faster than you’d get it elsewhere. I think that’s good. I fundamentally believe that that’s the right thing to do because it’s much better anytime you can make a bet on someone you know and someone who has in fact delivered. I think you’re more likely to be successful than if you go outside. Sometimes people like to go outside and call the headhunter because it helps. Almost in a way, it’s like anti-ownership, right, or anti-accountable in that like if it doesn’t work out, you can say, “Well, you know, the person was vetted by this great headhunter, so it’s really not my fault.”
Feloni: Pass the blame, yeah.
Schwartz: “Yeah, it’s this headhunter’s fault. It’s not my fault. It’s this headhunter, but they were vetted. He’d done great elsewhere.” Whereas if you make a bet on someone in the company and it doesn’t work, then it’s really on you. That’s how it should be, right, if you’re running a company, you should act like an owner. Owners can take chances. Owners can sometimes make mistakes, but that’s a much better way of going about doing things.
An unlikely executive
Feloni: I want to step back a little to see the path that you got on. How did you end up getting into finance in the first place?
Schwartz: I went to Cornell. I didn’t know I would do finance. I took some premed courses – a bunch of folks in my family are in medicine. I took some financial courses, and I read a whole host of different books about finance.
Feloni: When you were starting to study finance, were you doing your own reading as well, like when you were saying you were looking through business books?
Schwartz: Yeah, I read all the 1980s finance ones.
Feloni: Like “Barbarians at the Gate“?
Schwartz: Yeah, all those books. They were fun, and the books about all the creation of the leveraged-buyout industry, and at the same time, reading textbooks about basic finance 101.
Feloni: That was in your free time?
Feloni: That sounds like the last thing I would want to do in college, is read some business history.
Schwartz: I didn’t get on here and say I was cool or anything! I’m just being honest.
Feloni: That’s funny. Is this a habit that you still have, like self-teaching?
Schwartz: Yeah, I love reading interesting books.
Feloni: Do you take lessons from these books and actually apply them to your job?
Schwartz: It’s hard. I think if you find like one or two takeaways from each of these books. Now, someone told me there’s an app that you can go on to get the one or two takeaways from the books, but it seems like it takes away the fun of things.
Feloni: When you became CEO of Burger King, there was a lot of coverage calling you a “prodigy” or “whiz kid” and stuff like that. You’re shaking your head “no”!
Schwartz: Yeah, no. By the way, I think that might have been the Business Insider coverage.
Feloni: There was one. There were multiple ones, but I think BI was the one that gave you the “whiz kid” title, so you’re welcome.
Schwartz: Thank you, I think. No, look, I always did well at school. I always had good grades. I worked really hard. I always studied hard. No one had to tell me to do my homework or anything like that. I’m not a prodigy. I’m not like a whiz kid. I’m smart, but I think what has differentiated me is a combination of hard work ethic and humility and just willingness to learn, to grow.
I think we have some really smart people at our company. The ones who do really well, they’re really hardworking, and they have drive. They really care, and they act like an owner, and they want to get stuff done. What’s nice about our culture is that enables us. What we do is we make these people owners, right? We make them owners in the business. We grant them stock. We give them a piece of the pie. If they act like an owner, we make them an owner. That’s how I was treated, and that’s how I feel that we should treat our team members.
Ultimately, I think I always worked hard. I always really cared about the results or the projects that I was working on. I tell people in our company that you have to work, and this is advice someone gave me actually one time, it was, like, you have to work really hard to put yourself in a position to get lucky because a lot of what happens is circumstantial. It’s a function of what’s going on when, but the folks who do work really hard and really care about their results, opportunities come up for them because of the way we manage the business that we’re always looking to source talent internally.
Let’s say, if you’re working in marketing and you’re doing really great and everybody knows, because everyone talks about everyone – everyone knows, “Rich, you’re doing great in marketing” – and an opportunity for promotion comes in operations, well, we’ll give you a shot at that. We’ll give you a shot at that, and that helps accelerate this pace of opportunity creation for people that you’re not just going to be labeled as a marketing person. That you can move elsewhere, you can move to HR operations and because we look internally and we promote from within, that helps kind of perpetuate this culture of meritocracy and this ability to really give people a shot at a younger age.
Feloni: So it sounds like it’s an approach where the job title itself is less important. It’s more the person.
Schwartz: We like to make sure that people have the right skill set to be able to do a job. But yeah, ultimately for people who are really talented, who are really passionate, who really care. We feel like a lot of what we do you could acquire the skills along the way. I mean, there are some exceptions in specialty areas, but you have to remember we’re not launching rocket ships and we’re not delivering babies here. So a lot of the stuff that we do is fungible. And I’ve seen people move across areas who have been quite successful.
Flipping burgers and serving ice cream
Feloni: When you were growing into these roles and learning from mistakes, was there a method or insight you learned that, if you did run into one of these mistakes, you did something wrong, that there was a way for you to process it where it didn’t happen again?
Schwartz: The biggest lesson is to always realize that if something’s not working, you either have the wrong owner, the wrong person managing it, or the wrong strategy, and you need to be pretty sure which one that is. And more often than not, with us, it’s internally, it’s a people issue and we need to make sure that we have the right people in the right places. And that’s hard. I think that’s something that’s hard for companies and for people to act on quickly. But if you could be honest with yourself and you always put the business before any of these other personal situations that allows you to be more nimble and to fix things quickly. So, it’s my two cents on that.
Feloni: And when you joined Burger King, you were saying that you hadn’t had any experience in the restaurant and industry or actually even a company as you said, a traditional company, but how did you go about learning how the business works?
Schwartz: So I think the key to at least my transition and other people’s transitions is that when you come into one of these roles, you have to kind of realize what you know and have a full appreciation. And that comes back to humility of what you don’t know and you have to be willing to ask a lot of questions, and realize that most of the people around you have all the answers and it’s on you to ask the smart questions. And I remember I asked people so many questions and I’m sure some of them were perceived as being pretty stupid, but I didn’t know the answer, I wanted to know. And just asking lots of questions and building a really good team of people who really believed in the project and wanted to grow the business. That was the key.
Feloni: And would you visit some of the locations as well?
Schwartz: Oh for sure. I mean, I spend a disproportionate amount of my time on the road visiting restaurants and meeting with our partners all over the world. Just two weeks ago we were in Singapore with the local team in Asia. We were visiting restaurants with our team, our franchise partners in Jakarta, Indonesia, and in Shanghai, China. And just last week in Toronto. So I’m always spending time with our teams visiting restaurants because that’s where you learn the most about the business. Talking to the franchise owners, talking to the folks working in restaurants. When I became CEO, I spent a bit of time working in the restaurants to learn just to –
Feloni: Like actually making food and stuff?
Schwartz: Actually making food. Yeah, like making hamburgers, making milkshakes. My worst performance was making ice-cream cones. I was just, for whatever reason, never able to get the perfect swirl. And I spent a bunch of time in restaurants for several weeks, and it just helped me learn more about the business. And it’s important, it helps you stay close to what’s actually going on. You can lose sight of that if you’re just sitting in an office and working on PowerPoint and Excel as opposed to actually being in the restaurant. So I did that for some time at Burger King, right before I became CEO. And let’s just say if it was a busy day, the crew did not appreciate my presence in the restaurant.
Feloni: So you’d go to one of these locations and they’d be like, “Oh man, we have to have the CEO come cook with us”?
Schwartz: Yeah, but the then manager – she’s now one of the head trainers for us in Miami – she was kind and she gave me time, and she helped teach me a whole lot about working in the restaurant. I did not get any special treatment, I could assure you. And it’s a great experience and something I encourage other folks in the company to do.
Setting growth goals
Feloni: And when you had decided that Burger King would be a good opportunity to take to 3G, that there was a big gap in terms of market value with McDonald’s who was ahead of it. So was your first task, like, “All right, here’s what we’re going to do to lessen that gap”?
Schwartz: It’s all about growth. Burger King had less than, I think, 12,000 restaurants and was in 80 countries, but the brand wasn’t growing all that fast. I think that year that we bought it, in 2010, it only opened around 150 restaurants. Last year we opened up over 1,000 restaurants across the three brands, we opened a restaurant like every six or seven hours of every day, of every day of the year.
Schwartz: Yeah. So it’s about having the right growth strategy and making sure that we had the right partnerships around the world to accelerate the pace of Burger King growth.
Feloni: And key to turning companies around for your brands would be cutting costs where there would be excess spending in some if it was like a lavish perk, that would be something easily like an obvious choice. But I’d imagine there would be some that would be painful for employees as well. Have you run into difficulties with that when turning companies around?
Schwartz: We try not to look at it as much like cutting costs as ownership of costs, and so as the owner of the business, you treat the money as if it were your own. And so this idea of having a lavish party or a crazy perk like you’re talking about, it’s kind of pretty obvious to folks in the company – look, you should treat the company’s money as if it were your own. And we build our budgets each year with that philosophy, that you’re going to have a budget and you should spend accordingly. And if there’s an area that we want to prioritize, we agree we’ll prioritize that. If there’s an area that we don’t think adds value, we won’t spend as much money there.
In your personal life, you have a budget and you’re not going to spend more than you can afford. But when people work in a company, oftentimes that concept is lost on them and that, like, “Well, it’s not really my money; it’s just the company’s money; it’s the company.” But we’d say from the beginning, the company is just a bunch of us doing things. And so it’s important to view the money as if it were your own. We have consequences. If you spend more than your budget, then maybe you won’t be eligible to get a bonus or maybe you won’t be eligible for something else. And most of the folks who come work with us and do well with us, they like this, they act like owners. And they’re there because they believe in the project and they want to do something really great and they want to grow. And this whole idea of being trying to be more resourceful and having a budget. People don’t mind that, they like that, in fact, some of the best innovation, some of the best companies, they started out having to be very resourceful.
The greatest startups – people you guys interview here – they had to be resourceful and they had to think differently because they didn’t have endless budgets, and that idea of needing to be resourceful, that generates creativity and that generates a whole lot of good stuff for the company.
Feloni: I saw that you have a goal system that’s public, or some color-coded thing.
Schwartz: We have a handful of priorities that we as a company focus on, and there are goals that I have individually. I’ll cascade those goals to folks on my team, and they’ll cascade them, and so on, and so forth. So, everybody’s aligned, moving, marching in the same direction. People are very transparent. We’re very objective. If something’s going well, we give it a green. If it’s in the middle, we give it a yellow. And, if it’s not going so well, we give it a red. I think, again, that’s one of the benefits of this ownership culture, this 3G ownership culture that you can be real. You can be transparent, because that’s what owners are. Right? If you own the place, you’re not going to lie to any … You don’t have to defend yourself to anyone. You have to just be honest with yourself of, look, here’s what’s working, here’s what’s not. If I want to do things better, I need to improve this. That’s the difference between an owner and just an employee, right? It’s just a different mindset. So, that’s how we operate. It’s very transparent. If you come to our office, well, actually, we don’t have an office. We just kind of sit in open desks.
Feloni: OK, so, yeah, you don’t have a walled-off office?
Schwartz: No, I don’t have a walled-off area. It’s just a desk, just like everybody else. On my desk, or behind my desk, there are my seven or eight goals for the year and how I’m doing. We like to set big goals, so at any given time I’m probably not totally green. If I was totally green, it maybe would mean the goals were too easy.
Feloni: What do they look like now? Could we get some insight into any of them?
Schwartz: It’s a mixed bag with a path to … hopefully a path to green in most of them by the end of the year, but that’s OK. We like to challenge ourselves. These big bold goals. It’s not fun if you’re going to set really easy targets, right?
Learning about leadership and career advancement
Feloni: I’ve seen something where you said that you don’t raise your voice at work and you don’t have tantrums. Have you ever had a boss or a colleague who did have that approach?
Schwartz: Oh, yeah. Yeah, I did, and I didn’t like it. Now, the only people who are doing that in my life right now are my children.
Feloni: Oh, that’s good.
Schwartz: But, yeah, I had.
Feloni: When, just starting out?
Schwartz: Yeah, or early on. There was one guy who would have kind of crazy, crazy outbursts. I said to myself, “Look, I don’t want to act like that. That doesn’t make sense.” It doesn’t. You don’t get the best out of people. You don’t bring a good level of energy when you do that. You go to the office, you want to have a good level of energy. You want to be positive. You want to encourage people to work harder and work faster and get stuff done. Even if you don’t agree with people, if you do it in a respectful way and you let them know that you still think that they can do some great things, then they’ll be even more encouraged to go out there and do those things. Look, we all have our bad days. We all have our good days, but I try to be as balanced as I can and try to be honest and real with people I have meetings with at work.
Feloni: What drives you for all of this, regardless of what company you’re working with?
Schwartz: Look, I like to win, just like everybody else. I think we, as a team, we hope to be able to look back five, 10 years from now and say, “Look, this group of people really did something transformational. They really took these brands that maybe either weren’t going that fast or were more local, and they made them global. They did incredible work in marketing. They did incredible work in development, and they really … They transformed a company in an industry.” I think it’d be really cool for us to be able to say that, and the other piece that really gets me most excited is the people life cycle. I find it personally fascinating to get to go to college campuses or undergrad programs, MBA programs, or even just people who are within the network of people who work with us and meet these interesting people, hire them, and see how incredibly well they do in the company. That’s fun.
Now, I’ll go to Asia or I’ll go to Europe, and I’ll bump into someone I hired four years ago or five years ago. The person has since grown and is running a big business. That’s fulfilling. That’s a lot of fun, and I think hopefully the next phase of the story, if we can say that we’ve transformed a company or done something incredibly well would be that there’s this really strong bench of people ready to take the company to even the next level. So, that’s what kind of keeps me going.
Feloni: Looking at the span of your career, what would you say was the biggest challenge that you’ve overcome?
Schwartz: The biggest change in my career was the transition from the finance role, the day-to-day finance role at 3G, to a management role, actually working at a real company with a bunch of people. I got good advice from great people who made that transition, people like Beto Sicupira, who was a partner at 3G and at one point in his career ran one of the largest retailers in Latin America, from Alex Behring, who had a similar transition, and again the advice was just all about managing the people and not the business and making sure you focus on a few things, stay focused, don’t spread yourself too thin, but ultimately make sure you have the best, best people on your team. Make sure you have the right people in the right places, and always just eat and live and breathe the culture of meritocracy. I try and do that every day, and hopefully that makes the company a better place to work and a better company each and every day.
Feloni: What is the skill that you’ve found in yourself that has allowed you to progress so quickly through these roles?
Schwartz: I have a pretty good ability to spot talent, and I have a pretty good ability to make big people bets and also to make sure that we continue to make sure that we have the right people in the right places. By doing that, I think that’s what’s enabled the company to move at the pace that it’s moved. Not specific projects that I’m doing or not doing, but really making sure that we continue to bring in a high caliber of talent and make sure that our meritocracy culture is in fact working, and that doesn’t stall, and that we continue awarding responsibility to those who deserve it, which as the company grows in size, that’s something … If you ask me, “What was I worried about at points? Was that something would we steer away from our hands on ownership meritocracy culture with the growth in the company?” I think that’s something that we’ve been able to avoid. We’ve been able to stay pretty true to our culture of having really good people.
Feloni: How do you personally define success?
Schwartz: I think success, for us, if you want to step back and just be objective, you have to measure the size of the brands. If our brands are growing bigger each and every year, if people, if our guests love our brands, that will be the ultimate objective. If the brands are much bigger five, 10 years from now, people love the brands, as a company, that means we were probably pretty successful. In order to make that happen, we need awesome people. We need the right strategy, and we need awesome people. You can’t have one without the other. You need both.
- Joe Raedle/Getty Images
Feloni: Do you link your personal success with the success of the company?
Schwartz: I think there are other factors that go into personal success, right? You have to be successful at home and at work. I think objectively measuring success at work, growing the size of the brands, you’re attracting and retaining great people, then you’re successful at work. But, personal success, you need to also be successful at home. Is my family happy? Are my children doing well? Do I have a good relationship with them? Do I feel like I’m instilling good values in them? Are they growing as people and have a loving relationship with my wife? So, that’s also really important.
Feloni: It’s the balance.
Schwartz: Yeah, it’s a balance. It’s a virtuous cycle. You have to be happy at work. If you’re happy at work, when you come home at the end of the night, you’re going to be happy at home. If you’re not, you have to be happy at home, you’ll be happy. It’s a bit of a virtuous cycle, and other people have said that. So, I want to be successful at both. You can’t have one without the other.
Feloni: Is there a piece of advice that you would give to someone who wants to have a career like yours? Maybe they’re just starting out, or they’re just in the early stages of their career?
Schwartz: Yeah: Just work really hard. That’s how you can differentiate yourself. Be open-minded. Be humble. Work really hard. I think if you’re working really hard, harder than all your peers, you’ll eventually be in a position to do something big at some point.
Feloni: Is that what you mean by outwork the people around you?
Schwartz: Yeah, you have to work really hard because there’s plenty of smart people out there. There’ll be plenty of people who have more than you and all that. So, you just have to outwork people. That’s within your control.
Feloni: Well, thank you so much, Daniel.
Schwartz: Thanks for having me.