MOD Pizza: Culture Creates Purpose
Posted by Joseph Phillips on Thursday, October 12, 2017 at 11:05 AM PDT
When Ally and Scott Svenson started MOD Pizza in 2008, they wanted to create an organization with a distinctive people-first culture that met a market need – fast-casual family-friendly food that happened to be pizza. Today, MOD has 265 stores across 24 states and the UK, employing over 5500 “Mod Squaders.” The brand has been named the fastest growing restaurant chain in the US for the last two years, and recently landed in the #2 spot on the Puget Sound Business Journal’s “Fastest Growing Private Companies” list. On October 11th, the Svenson’s joined the Albers Executive Speaker Series to explain their journey in progress with MOD pizza. They are the first husband-wife team to participate in the Speaker Series, now in its 16th year! :}
The Svenson’s are serial entrepreneurs, recently being named the EY Entrepreneurs of the Year in the Pacific Northwest. The couple co-founded Seattle Coffee Company in London in 1994, and in 1998 sold it to Starbucks as their entry into the European market. Scott remained on as President of Starbucks UK, and subsequently President of Starbucks Europe, while Ally helped to oversee the transition of the Seattle Coffee Company stores to Starbucks branded stores. While in the UK, the couple were also instrumental in growing Carluccio’s Ltd, a London based operator of Italian deli/cafes.
In 2001, the Svenson’s returned to their hometown of Seattle to raise their family. Their entrepreneurial spirit again kicked in, and they began exploring ideas that combined their passion for business, people and purpose. The first MOD opened in downtown Seattle, and the pioneer of fast casual pizza known for its individual artisan-style pizzas and salads and people-first culture was off and running.
More recently, MOD has become known for the purpose part of the business – hiring “second-chance” employees who experienced difficult times due to addictions, mental illness, or prison – people who few employers want to provide opportunity to. The Svenson’s knew they wanted to have a business with a cause beyond earning profits, but did not start MOD with the goal of providing opportunity to at-risk individuals. Instead, that distinctive mission emerged from the people-first culture they created at MOD.
As they tell it, at the “five store mark,” they were still searching for a successful concept, with some stores doing OK financially and some struggling. What was working was the culture. The second-chance employees they had hired were doing well and were grateful for the MOD opportunity. They were using MOD as a platform to change their lives. Seeing this, the Svenson’s now knew what the purpose of MOD would be – instead of writing people off from the workplace like most of society was doing, they decided they would intentionally hire at-risk employees and give them a chance to reclaim meaning and purpose in their lives. The MOD culture created the MOD mission.
They had a “dining room table” conversation about whether MOD could scale and whether they should try to expand the business. It would have been easy enough to keep things simple, manageable – and small. It was their second-chance employees who convinced them to go big. They wanted others in similar circumstances to have the same opportunity for change that they had. Now MOD is on a mission to spread this opportunity both nationally and internationally!
The Svenson’s noted that having a strong people-first culture and a purpose of hiring those who others would pass over is not just the right thing to do. It also makes sense from a business standpoint. It can give you a sustainable competitive advantage. It will be something that is very difficult to replicate. In the long run it will increase productivity because you will have engaged, experienced employees. It will also build customer loyalty and connection. Today, more and more consumers are drawn to brands that are about more than profits. That promise of sustained competitive advantage has helped MOD raise $150 million from investors. The Swenson’s said they cannot prove it is a winning formula – yet – but they believe it!
Ally and Scott shared their initial reluctance to promote the MOD purpose of hiring at-risk employees. They were afraid it would come off as self-serving and insincere. It was their second-chance employees who convinced them otherwise. A TV station had gotten wind of the hiring strategy of MOD and wanted to do interviews on it to put together a story. Those employees jumped at the opportunity to tell the MOD story. They were proud of their accomplishments and wanted to give hope to others in similar circumstances. That convinced the Svenson’s that it was OK to be more public about the MOD purpose.
What is next for MOD besides expansion across the globe? They are working on a community store concept – something that has positive impact and will be “about and for” the neighborhood it serves. Some of the initial thinking is being done with Seattle University’s Center for Community Engagement and the Entrepreneurship and Innovation Center in the Albers School, looking at the Yesler Terrace neighborhood near the SU campus. It will be a facility that provides opportunity, training and feeds people, but does not duplicate services already available. It is a work in progress but something that MOD is very serious about.
Scott and Ally Svenson have created a distinctive business with a strong people-first culture and a mission to provide opportunity to those who frequently are without one. MOD Pizza is an inspiring story for all who know that business is a mechanism for social good and not just earning profits. It is a belief they are turning into reality, thanks to a culture that creates purpose.