Trial by Fire: Smokey Bones Journey of Rebirth in Crisis and Re-Emergence as Industry Leading

Rachael Kelly

Chief Human Resources Officer at Smokey Bones

Learning Objectives

Rachael is the CHRO for Smokey Bones. During the pandemic, Rachael led her team through drastic compensation and staff reductions, creation & implementation of COVID-19 safety practices, while facilitating overnight transformation of all aspects of organization design. This enabled the successful launch of two virtual brands, open additional locations, and a bootstrap financial recovery of the business without government assistance. Under Rachael’s leadership, Smokey Bones also expanded benefits to all employees, reduced turnover, and was certified as a Great Place To Work. Tune in for this lively conversation where Rachael shares the journey of how Smokey Bones was reborn in crisis, emerging as a top leader in the casual dining industry.

Key Takeaways:

  • Culture is the secret sauce of financial success

  • An agile and learning organization is the multiplier

  • Humancentric leadership role modeled from top executives is critical for the future of work

"For us, what humancentric leadership really means is that we're always considering people, their importance and our impact on people as a business, as the business moves, as it grows, as it evolves. People really are the soul of the brand and to facilitate and create this culture of valuing human beings and connecting together as human beings. "

Rachael Kelly

Chief Human Resources Officer at Smokey Bones


Hi, everyone, this is Rachael Kelly I’m the CHRO for Smokey Bones. Really excited to spend a few minutes with you sharing more about the smokey bones experience and really how we’ve navigated this last year and a half and, and how we’ve navigated through COVID. So excited to share some things and hope, hope you find it beneficial and maybe some tidbits that would be helpful in your organization. To share a little bit about me and my background, I’ve been in the industry for a little over 24 years, starting as a pizza cook, and really wasn’t sure what I was going to do with my life or what I could accomplish. And I quickly found a home in restaurants and was really excited to have a path and have a career path in which I could grow and learn and experience a lot of different things. And so I spent those early years working through the restaurant, all the different positions in a restaurant, you know, continue to expand and grow into multi unit leader roles and and then I started to come into human resources at that point, and really kind of just learned all the different parts of the organization both on the field side, you know, in multi multi unit leadership running an area and that region and beyond doing mergers and acquisitions with as Pizza Hut was going through refranchising at the time, and getting an opportunity to also work in an RSC in an office environment, learning all the back end parts of how you build a brand and make a branch run on the HR and on the operation side. And then later on, I started to get the entrepreneurial bug and really enjoyed the pace and the art and the kind of entrepreneurial thinking of that space. And so I jumped into a startup for a time period, and then ultimately landed in the PE space working for smokey bones. So it’s just been an incredible journey, where I’ve really been fortunate to have a lot of great coaches and have a lot of great experiences that I think helped me in the current role that I’m in today. So very excited to share with you and talk about smokey bones, journey through journey through COVID and all the craziness that we’ve all experienced in this last year. And so the title of his presentation is trial by fire, smokey bones journey of rebirth in crisis and reemergence as industry leading. We have all been on a journey. You know smokey bones, last in 2019 hired a new CEO James O’Reilly, who is an amazing and amazing leader. And James was really tasked with bringing in a new executive team and building you know, this brand, getting it ready for scale, rapid scale and and off to the races. And, you know, we were tracking along and doing a lot of great work, and prior to March of 2020. And then as we all know, the world change, and it changed over night, I can remember talking with James about I think we need to do this contingency planning. And we were doing this contingency planning and didn’t didn’t necessarily even think it was going to come to come to fruition. And it did very, very quickly. We were all just kind of feeling like I think this, this picture depicts of just being thrust into this, you know, feeling like we’re in a freefall not knowing what was going to happen, how long it was going to be, or where the bottom was going to be, and how long it would take us to recovery to recover. And everyone was scared. teams were scared. You know, suppliers are scared, customers are scared everybody was you know, we weren’t sure. What, what should we think about this? And how are we going to get through it? And how are we going to lead our teams, you know, through this crisis when people were afraid. And we’re worried about people’s health and life safety in a way that we’ve never, ever experienced before. When there’s so much turbulence going, you know, externally. It was a scary time. And you know, the way that we decided to focus and navigate the team through it, we were we defined what we needed to accomplish. And that ultimately, our true north through this pandemic would be navigating through it so that we come out on the other side strong and in a position to kick in a position to really to grow. So not just getting through it, you know, barely but beginning through this and to be in a position of strength to continue to grow this brand for everyone who is part of our family. But that meant some really hard things that we needed to do. Because we also did not take PPP money, we did not take any government assistance, we needed to get through this pandemic, through our own, you know, blood, sweat and tears and bootstrap step by step recovery. And this visual on image and slide is actually the same slide that I took. And we took our team through when we were walking through what we needed to do to get through this pandemic and come out on the other side. And so we put together the business plan, as many of us did, and that included a lot of very, very difficult decisions. And it included a lot of hardship for those who were on this journey with us, including reduced compensation and reduced hours and all the different things that were that we needed to do to financially survive. And we needed to figure out how do we both what’s the game plan, like what logistically do we need to do to survive, but also, how do we all walk across this bridge together, our teams, taking care of our guests, and our shareholders. And those balancing those three constituent groups in our decision making and how we navigate and cross and walk the bridge together, was really essential for our survival. Because we could have easily gone into bankruptcy as a result of this, had we not been able to walk across this bridge together as a team. And so when you’re in those crisis moments, it really is defining to who you are, you find out who you are, as a person, as a brand, as a team. And when we mean when we knew what we were facing, and we knew what we we knew, to an extent, at least, that we were going to need to walk through this together. And in some really difficult ways. We also said that, hey, you know what, we’re going to have to go through this together. And this is really hard. And we know it’s really hard. And we’re going to face the brutal reality, Stockdale, Pear, you know, paradox, we’re going to face the brutal reality of our circumstances, and be real about that. But we’re also going to do it in a way where we know with, with very strong optimism, that we will get through it. And that we will be able to get through it together. And we did that by as a team saying, you know what, this is what we have to do, but we’re going to do it with creativity, we’re going to do it with resiliency. And we’re gonna do it with integrity, and transparency. And so as we started to go through this, it was actually a moment where we redefined as a brand, internally as human beings in our brand, who we are, and what’s really important to us. And we learned that we are very real people, and we keep it real, we talk real, we needed to have real conversations. And for us, part of integrity was being transparent, which means having real and safe conversation. We’re raw, you know, we let some things sometimes things hang out. And we talk about the tough stuff. We are strong, you know, as a team, as individuals, the restaurant industry are some of the most resilient people that exist. It is a very resilient group of individuals who know how to get through tough stuff, and we were no exception. And so we leaned into that we really asked ourselves, who are we? What are we about? How do we get through this together. And together, we redefined our core values. And so you can see where I talked about being resilient and being creative and acting with integrity. We really codified those in our language around those core values. We also added in a drive for results at all, you know, at the end of the day, we’re a winning team that delivers, we’re committed, we’re going to make it happen no matter what. And being yourself that so as we were going through this, and leaning in on these kind of core values, it was so important to us as well, that we are celebrating each other as we navigate through that we celebrate our individuality, not just, you know, are okay with it. We’re celebrated. We respect the things that are our differences. And we value the things that bind us together. And it was leaning in and developing this language together as a team, and continuously reinforcing this and all of the decisions and all of the communications that we made and it How are we expected all of us together to get through this with each other, it’s our it’s our guiding, you know, values of how we interact with each other and how we approach our business. And for us defining that in a very real ways, together with people at all levels of the organization providing input, as we were walking across that bridge, and working this very tough plan together, had a huge, huge impact. And together, we wrote our huge Manifesto, which these are some of our value statements, they really kind of speak to what those how those values live, and look in our in our organization. And these are, these are words of our frontline team members and managers. And these are actually some examples of things that actually have happened through this pandemic. You know, when we talk about there, we’re the kind of people who will die or cut our hair for a cause or paint our nails or we wear a suit while dancing for sales. Those things all happen in this past year. And so we leaned into those values, and bringing those forward in people and celebrating those. And then they gave us safe and good language together as we navigated as we navigated through this. And it worked. We had 16 weeks of significant reduced comp up to 60%. Across the board with indefinitely at the time, we didn’t know how long it was going to last. Our business we got through this, our business has fully recovered. And we are now outperforming the industry. We maintained all of our restaurants throughout the pandemic, now, and we stayed open and operating successfully throughout the pandemic. And we kept people safe and healthy. Throughout the pandemic. We launched 122 virtual restaurants successfully, we opened our first ghost kitchen, we overhauled our menu, we’re now driving better prime costs than we were in in 2019. Our guests experience improved, there’s more I’ll share but the financial recovery and when we started to hit some really important milestones back in October even. And then the recovery that we have been able to navigate through to to accomplish, we firmly believe would not have occurred Had it been for the team and the culture and the energy that was driven, because we were all clear about what we needed to accomplish. And we were all clear and bought into how we were going to do it not just the tactical approach. But the how we were going to treat each other and work through this together as a family and who we really were at our core, it was a defining moment for our brand, a huge change some significant changes that we needed to make that this crisis enabled us to accelerate culturally in a very fast in a very meaningful way. And we believe that it is absolutely our culture that enabled us to execute that bridge plan and accomplish this success.

And then at the end of the the next piece of this I like to talk a little bit about is being agile, many of us you know, we’ve thrown around that word, we know how important agility is in a variety of ways and, and are working towards organizational agility in our own worlds is critically important. We saw how how that was a make or break with COVID and an organization’s ability to pivot and pivot quickly. And the more quickly you were able to pivot, the more successful you were through that. And so for us, we were no exception in that, while our culture and defining our values and defining how we were going to work and navigate this together and getting people’s hearts and minds committed to that our agility and our learning organization that we were able to facilitate dramatically accelerated our speed faster than we anticipated. We we far exceeded our bridge plan throughout because of how our teams came together and worked together around various work streams, broke down those prior silos and hierarchies and focused around how do we execute the best against what we need to do in order to recover and thrive. And so all those kind of old traditional, you know, work streams and hierarchies. We essentially cut it out and we said hey, look, it’s us together as a management team field and RSC together and we opened up channels to have very regular open communication We do an internal roomy channel with all of our restaurant management, field leaders and our RSC. And we have real time ongoing communication around our initiatives that enable us to dramatically improve the performance of the initiatives dramatically increase our speed to market of those initiatives, and our ability to refine as we’re implementing programs, processes, promotions, new tools, we’re able to get very quick real time feedback and make refinements that enable our success of those initiatives and has dramatically increased our success rate on those initiatives. we said to ourselves, okay, we’re running lean, we have a lot that we need to accomplish. How are we going to do this. And so we have started work straight work teams prod cross functional teams, that are collective of RSC and field leaders are at all levels across all verticals of the business, marketing, operations, HR, finance, it development, every single function has various cross functional and field leaders, working with them, providing them ongoing feedback around those work streams and shaping those initiatives and shaping those tools as we execute. That has also dramatically increased our adoption rate, our success rate, and and just our overall effectiveness as a brand is we also started a group of brand ambassadors. So we invite folks at all levels of the organization to be part of kind of an internal group where we talk about our culture, we talk about our initiatives, they give us feedback around they helped us to write and they were part of writing, there are authors of those values of our Humana Festo, they are then ambassadors that go into their restaurants, and they build in foster culture. And it’s just the inclusiveness and knowledge sharing that happens occur by pulling together those groups, where we’ve seen where we’re learning from each other. People are learning from each other in the field as they’re transitioning enrolls. So there’s all sorts of peer to peer learning, leader field leader to rse learning, and then and then internal advocates driving the message in it. And as ambassadors to foster adoption, and buy in and engagement across the field. This has been an incredible multiplier for us across all of the work streams that we’re doing, and we believe has been critical in terms of building our culture and achieving our business results. So these have been critical, kind of as I think about what is it that helped us How did we accomplish this, our board SS is how did you guys get through this and accomplish this with these? No, we’re just these incredible, incredible results. I think the final component to this of what really made the difference here is every organization has their core values that they talk about, and that they recognize right and various organizations have their different communication channels. But I don’t know anybody else doing brand ambassadors the way that we are. But I think that the the final thing that I left for the last part of this presentation is what we call human centric leadership. And for us, what human centric leadership really means is that we’re always considering people their importance, our impact on people as a business, as the business moves as it grows, as it evolves, that people really are the soul of the brand. And to facilitate and create this culture, of valuing human beings and connecting together as human beings. And always thinking about the human beings in our in our organizations, and how we connect and how we lead and how we impact each other. That type of leadership role modeled from the very top all of the senior executives demonstrating that through their conversation, the language they use, the decisions we make, how we talk about the decisions that we make, how we approach decision making, human centric leadership role modeled from all the senior executives and that team working together in a healthy productive, you know, high performing team way, you know, continuing to challenge each other, supporting each other working together role modeling those values, but coming from a place of human centric leadership. That intent. People feel that they know the difference between people who really mean it. And companies who really mean it, and leaders who really mean it. And people who are giving lip service, or propaganda, and there’s nothing, that you cannot fake this. And it, especially when you’re going through and people are going through their life being completely turned upside down, and everyone being traumatized. And in fight or flight mode, we were all walking around with what we call lizard brain, because we’re just constantly triggered, because everybody was just going, what’s what else is going to happen here? And how do we, you know, how do we get through this? And am I okay? And is this person or these people going to be okay, and how do we do this? They can feel this. They can feel it when people care. I can remember, this really hit me one night, it was Saturday night, probably close to midnight. And one of our managers who had been on for weeks, you know, the same compensation decline reduction that everyone had been on, and she was scared. And she went on our internal channel, and our internal channel is open to all of our management teams, everyone sees it. And she was talking about how scared she was because she thought she might lose her home. And she was going through chemo treatment as well. On top of taking care of her grandson, her young toddler grandson. And at first she went on to the channel and she was talking about this and a little angry and worried and going, when is this gonna change and when are we going to be through this and, and I don’t know what I’m going to do. And I’m afraid I’m going to lose everything. And it was a scary, it was a moment where you could feel her pain and her frustration. And we knew we couldn’t take away all of her pain and frustration because we didn’t know how long we were going to be in the circumstance. But what we did know was we could wrap our arms around her. And we could find all we knew what we couldn’t do. But we also knew we could find all the ways that we could support her. And all the ways we could support all of our other team members through all sorts of different ways to support them in their life, when from scholarships to to, you know, wholesale costs on food to, you know, differing health care premiums to help with unemployment, help with emergency resources to writing notes to landlords, all sorts of different things, we we could wrap around people to support them. But the thing that hit me the most in this situation, because we did all those things. And we did all those things for all of our teams. We constantly were finding ways and resources to support the team. But what struck me about this situation was in about 30 seconds, maybe less than 30 seconds, there was a pylon. There were all sorts of other managers that started to chime in. Any one of them could have said, yeah, this is crazy, too. And I don’t know how they’re doing this, and why aren’t we having more money? And why aren’t we this? And why aren’t we that. But that’s not what they did. What they did was they said, I’m here for you, I can help you. Here’s my phone number, call me. Here’s this resource. Here’s this resource, an anonymous donation came in. And it was, and I watched this unfold over the course of several minutes to the point where then down the road as the conversation continued, where she felt you could see the just stress level come down. And she felt like I have this social support. I have my community of people around me, that was the ripple effect of human centric leadership of executives, having those demonstrating those same behaviors, creating a safe space, and an environment for other leaders to be their human centric selves, and to bring forward their humanity in interactions with each other. And while it’s about the team and the team experiencing with each other, that doesn’t happen without the leaders of the business, creating and facilitating that environment, which I’m really proud of the team that I’m fortunate to be part of doing that. So at the end of the day, you know, as we got through this, we recovered our business as they were sharing some of those financial results earlier. We of course returns compensation and then some we are growing our business, we are continuing to work in a virtual space. And we also were certified as a great place to work, which we are so incredibly proud of.

We’re so grateful that our leaders were able to you know, rallied around those core values, embraced human centric leadership, you know, broke down walls and learned and grew from each other and sharing information and supporting each other as we went through This, and it showed in these results. And while we have a long ways to go, and we are just getting started in so many different ways, I am really it’s just it’s an incredible. It’s been an incredible journey with these leads with this leadership team and with the folks in our team. This is an incredible accomplishment to get through that type of business crisis and how complete devastation and the team rally together, we retained our teams we even reduced turnover. We recovered our business and our team celebrated around our certification of a great place to work. So very excited for you know, to hear stories from all of you would love to hear any comments, suggestions, feedback you have in the comment section as we go through this, this awesome virtual conference. Thank you for taking a few minutes to listen to me. I hope this was helpful and enjoy the rest of conference.

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