Casey’s Leaders On Driving Culture And Change

When Darren Rebelez took the top job at Casey’s in 2019, he found a solid business that had been around for 50 or so years but had lost more than a bit of its mojo. The Ankeny, Iowa-based company’s traditional hierarchical structure felt out-of-date and off-kilter for an unconventional business model aimed at delivering both convenience-store, well, convenience and delicious, handmade pizza. So Rebelez set about trying to pull off one of the tougher tricks in C-Suite leadership: turning around a company that isn’t exactly an obvious turnaround.

A big part of that entailed working with CHRO Chad Frazell to usher 45,000 employees scattered across 17 states through a gigantic cultural shift where everyone—from C-Suite leaders to cashiers—is guest-focused in ways that remind you of best-of-breed companies like Chick-fil-A and Four Seasons. The duo did that while also diving full on into M&A, buying up mom-and-pop shops and smaller chains across the Midwest and South and working hard at making them all play as one team. In five years, shares rose more than 138 percent, far outstripping the performance of giants like Starbucks and McDonald’s. Casey’s General Stores is now the fifth-largest pizza restaurant in the country—and the only one that also sells gas.

During Chief Executive’s CEO Talent Summit at West Point—Rebelez’s alma mater—editor Dan Bigman spoke with Rebelez and Frazell about their experience keeping a business as fast-growing and sprawling as Casey’s cohesive and mission-focused. Excerpts of that conversation, edited for length and clarity, follow.

Darren, when you came into Casey’s from IHOP, how did you learn what you needed to tackle?

 Darren Rebelez: I spent the first 60 days or so out in every part of our operation, out in stores—a lot of time in stores—in our distribution centers, in our store support center, just spending time with people and listening more than talking. I didn’t know what I didn’t know at that point, and I really wanted to understand everybody’s different perspectives on what was going well with the company and what wasn’t.

You come [into a new role] with a toolkit of things from different experiences, and what I always try to be cognizant of is just because something worked somewhere else doesn’t mean it will work here. You really have to understand the problem you’re trying to solve and then lean on your experiences. I always say the answer to every one of our problems lie with our people themselves. All you have to do is ask what the real problems are, ask people what they think can help fix those problems. You pull that together, and a lot of magic happens.

One of the first things you did was a town hall, a standard thing for most companies. Why was this town hall different for Casey’s, and how did it feed into what you were trying to do?

Rebelez: Our company had never had a town hall before. So just the mere fact we had a town hall was pretty impactful, but I wanted to take that opportunity to demonstrate transparency. So, we got in front of the entire organization shortly after the earning call to share the results from the quarter. That’s something they’d never heard before. I also wanted to recognize people for doing a good job. That was also something that we just didn’t do very well publicly. And we wanted to set some expectations for the company—one of which was that I wanted to be a team-first culture.

We weren’t going to operate in silos anymore. We were going to be one store-centric team focused on the stores. If you weren’t working in a store, you would be working for a store. People needed to get their heads around that. I said, “So, as a result of that, we’re going to change the name of our headquarters to the Store Support Center.” When I said it, I think people thought, “Yeah, whatever. This new guy is changing names.” What they didn’t realize is that I had our facilities team out front changing the sign while we were in the town hall. So literally when everybody drove by that sign to go home, they saw that it had been changed to the Store Support Center. That was my little version of burning the ships in the port and no turning back. It not only demonstrated a commitment to that culture, it also said that when we say we’re going to do something, we do it.

How did you two go about assessing talent during those early days?

Rebelez: When coming into a new organization, there are different schools of thought on whether you should wait and get all the people right first and then use that team to develop a strategy. The way I look at it is you need a plan, because how do you know you have the right people if you don’t have anything to measure them against? So we did a lot of pre-work and locked everybody in a room at an off-site to build our strategy. You learn a lot in those sessions. You learn the people who will buy in vs. the guys sitting in the back of the room rolling their eyes while you’re talking.

You see people who are fighting anything that’s different. You see the people who are really collaborative, who want to pull their peers together and be part of the solution. So you learn a lot in that process. Then, when you have that plan, you can assess, “Are the people bought in? Do they have the capacity? Are they willing to do the work?” That’s how I view that assessment process: You’ve got to have a plan, and then you have something to measure them against.

Chad Frazell: One of my favorite stories is we had a 30-page dress code policy. Pictures and PowerPoint—I’m not kidding. Darren famously basically torched the dress code policy and said, “Dress like an adult.” Things like that really set the tone. The pandemic really accelerated this process. You were dealing with things that nobody had ever dealt with before, so it’s an opportunity to learn. How they handle pressure is really important to understand. In a leadership team, Darren looks for composure. It’s really important to be a composed leader in an organization, especially under stress. Those who are not able to be composed in those moments, or, as I like to say, are chasing ghosts, generally speaking will tell on themselves. We give them the opportunity to develop, but in the end, you can really assess talent, especially under pressure.

When you say “give the them the opportunity to develop,” what does that mean? It sounds ominous.

Rebelez: We did 360s on the values that we introduced for every VP and above in the organization. Through that process, we got to learn about them more closely. We absolutely invested in coaches with all the leaders, certainly some a little bit more than others in the end. Through that process of seeing them grow, develop and learn the direction and the new strategy, you’re able to make decisions about talent for the long term.

You mentioned the need to be conscious about culture as you developed a strategy and made decisions on what to keep and what had to go.

Rebelez: Des Moines, Iowa, has good Midwestern roots, hardworking, honest people who wanted to do well. It wasn’t a toxic, dysfunctional culture, but there were a lot of opportunities. It was very siloed, very top-down. Chad and I wanted to build a culture based more on commitment, where people bought into the vision, bought into the company’s plan and wanted to put in the discretionary effort because they believed in what we were doing. So we really focused on that teamwork aspect. And the most important thing that we’ve done over a few years of maintaining and growing the culture is not allowing people who were going to go a different way to stay.

We’ve all been at companies where we’ve seen a lot of stuff. We all know who those people are who say they’re in but then try to undermine you. And everybody else knows who those people are also. So you get to a point where you try to coach somebody up, you try to bring them along. I had that with one of my direct reports. He was probably the smartest guy in the room, just ask him. And he was very talented, but he was a political operative; he went around people’s backs, he pointed fingers at everybody else, accepted no accountability. And we gave him some feedback after a while, but that was who he was and the way he was going to be.

At a certain point, it’s all eyes on you as a leader. They’re looking at you. Are you going to do something about that, or is that an acceptable norm? I did something about it. At first, people were surprised, because this was a really smart, talented guy. But itsent the message: “Wow, really smart, talented people can be shown the door when they don’t live our values and our culture. So I guess I need to get on board or maybe find a different place too.” People start to buy into that culture more when they see there’s some level of accountability around it.

An interviewer once asked Lou Holtz, the famous Notre Dame coach, “Coach, how do you always have these teams that are so positive and so motivated all the time?” He said, “Well, it’s real simple. I just eliminate the ones that aren’t.” I’ve always taken that with me.

After you get the leadership team together, how do you start to win over the rank and file who are spread out in so many different locations?

Rebelez: We focused on the subordinate leaders: district manager, region director, division vice president. They’re the ones touching people every day. There’s no way that I or anybody who works directly for me can touch everybody in a company our size with 45,000 people in 17 states. You have to have leaders at every level who are bought into the culture and trained on how to be good leaders, and they have to carry the load.

Frazell: Over the course of a rolling 12 months, we developed a DM development program. Those are the linchpin folks who hit 10 to 14 stores worth of team members. We knew that we needed their buy-in on leadership and values and all the work that we’d done prior. So, we brought them into our Store Support Center in cohorts of 25 to 28 over that year period. We developed a week’s worth of content that involved executive support but not reading a rule book to them. Historically, they had: “Here are the rules, policies, procedures you must enforce.” Instead, this was different people throughout the entire organization coming together to talk about, “What do we do? And how do we support you? What can we do to make your lives easier?”

That program really changed the culture. We see it in our engagement scores; we have 100 percent engagement with our 26 region directors, and with our district managers, it’s in the mid-90s, up from the 70s when we started. So, we really invested in them, their growth, their development.

And we talked about career paths. Over the last three years, we’ve seen continued improvement in our district managers moving to other areas of the organization, from 5 to 7 to 11. That may not sound like a lot, but we’re not talking about a ton of open positions. What that does visually and culturally is huge. People feel like they can have a career with our organization. We did the same program with the region directors, and we’re now taking the same approach to our new leaders in our Store Support Center. It’s really helped us reach culturally.

Our values work was also important. We worked with a third-party organization to come in and interview all levels of the organization to develop our values. When we rolled out the values, they weren’t mine, they weren’t Darren’s. They were the organization’s. We talked to the people that drive our trucks. We have 500 truck drivers. Obviously, the store managers. We did focus groups, one-on-one leader interviews, and as a result of that, we came up with our CARES values. That was huge to meeting the needs of the workforce all the way down.

One example was that 30-page dress code we talked about earlier. Casey’s was a very command-and-control organization, so the word on the street when I got there was, “Follow the rules to failure. You just need to follow the rules, even if that means you failed.” Right? And there were lot of rules.

We do not have an employee relations organization at Casey’s. I got rid of it. We have HR generalists and business partners. We talk to team members. We don’t open cases. We don’t have a big policy manual. If it’s illegal or immoral or unethical, you’ve got to have policies for that. Everything else is a guideline. An example is that we used to have a policy that you couldn’t [use] a cell phone if you worked in a store.

Rebelez: We’re in small towns. So if you go into a store that’s slow where somebody’s daughter just had a child, and you ask to see the picture of the grandchild, and the cashier says, “Oh, I could get fired if I show you,” that doesn’t mesh with our values, right? So we got rid of the cell phone policy. It’s more about using it properly, right? Making those rules go away. Just have guidelines for good behavior and support it through your values.

You’ve grown through M&A, about 400 stores in five years. As you scoop up businesses, how do you scale and get buy-in from employees?

Rebelez: Every one is a little different. It ranges from acquiring one store that the owner is selling all the way up to 100-or-more-store chains being sold by the founder. We’ve had people say, “Oh, thank God you’re here to rescue us.” Your buy-in is pretty easy there. And then you will have a small family-owned business with employees treated like a family. Those people are scared, thinking, “Now here comes a big, bad company. We’re going to lose that family feeling.”

We try to understand what we are acquiring from that perspective. And we have a dedicated integration team. We’ve learned from the school of hard knocks. I will be completely transparent on that. But we’ve got a rhythm now where our team knows how to meet people where they are and share our values, our culture, how we like to do business—but not ram it down their throats.

What’s the methodology behind that operation?

Frazell: We have a 48-hour process that we go through to get those mechanics done—things like changing over inventory, hiring everybody because we supply the vast majority of our own products and run our own trucks for fuel. So we have to get everybody up and running on those processes. But one of the things that I’m really proud of with that team is that they’ve instituted a discipline of after-action reviews. After every integration, that team gets together and asks, “What did we screw up this time? What worked this time?” They have a playbook that involves every single acquisition. They have that discipline and process. So, the ones we do today look like clockwork compared to the ones we used to do. We still have bumps in the road, but they do the A.A.R., and then they come back in and get better the next time.

How do you keep 45,000 people in 2,600 stores across 17 states aligned, feeling part of one company?

Rebelez: The reality is you have to hit it from a number of perspectives and try a lot of different tools. We have people who drive trucks and people who are busy in stores all day. You can’t just send an email. It’s tough to get them all on town halls. So, we use a number of different communication vehicles. And we count on our subordinate leaders to really carry the load.

The other thing that we do a decent job of is with our strategy. We keep it very, very simple. We boil down our strategy to one page, and it’s not a lot of words on that page. We know what we’re trying to achieve financially. We know what our guests are looking for. We have a few things operationally we’re trying to achieve, and then we have our people we’re investing in to support that, to execute those things that will deliver the results. That’s it.

What should CEOs be expecting from their CHROs?

Rebelez: When I got to Casey’s, I would’ve characterized our HR function as more like the personnel department. They got you hired, they got you paid, they got you fired—that kind of stuff. I told Chad in the interview process that I can hire anybody to do that. What I’m looking for is a strategic leader, somebody who will help us build the talent of the organization. It was the first move that I made from a leadership perspective—and it took me six months—because I felt that if I was going to be successful in this role, the only shot I had was to get the people right. To get the people right, I had to get the right guy leading that operation and leading that function.

I really liked that he came from store operations. He had walked a mile in the shoes of everybody who works in our company. When we’re having discussions, Chad’s always the first one to say, “How will that impact somebody on the pick line in our distribution center? How will that impact our third-shift fuel driver?” That is the right perspective.

What other advice do you have for today’s leaders?

Frazell: Keep the main thing the main thing. It’s about the team and about winning. We want our pizza to taste good to everyone. No matter where you come from, no matter what your beliefs are, we want everybody to eat that pizza. So we focus on taking care of our guests and doing it together.

Rebelez: I’d say separate the signal from the noise. There’s a lot of noise in the world right now. And there’s always something new. For us specifically, a year or so ago, EVs were going to take over the world, and we’d be out of business because you couldn’t sell gas. And, wow, that whole thing got turned on its head. So it’s important, like Chad said, to keep the main thing the main thing. Be aware of those other things, but don’t chase all the shiny objects, because there are a lot of them out there, and they run their course. Focus on what’s most important. That’s what’s worked for us.