Interview: Sam Heath, Head of Retail and CPG, Tim Horton's

  
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Sam Heath and I worked together at McKinsey many many years ago. He is now responsible for marketing Tim Horton’s in Canada (where it is by far the largest quick service restaurant chain), and Timmie’s fledging business of selling its product in grocery stores. Last year, out of nowhere, Sam’s heart stopped and he “died”. We explore how that event affected him and his overall career in this episode. Next week we dive into Tim Horton’s - both the stores and the CPG products - and how he is growing the two inter-related businesses.

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Transcript:

Edward: My guest today is Sam Heath, head of retail for Restaurant Brands International. That's the CPG group for Tim Hortons. Today, we cover Sam's path to overseeing the restaurant chains, the entire CPG business—Brown, McKinsey, OLG, Burger King, and Tim Hortons. I worked with Sam when we were both at McKinsey Canada. I'm excited to chat with him today.

Sam, in 2015, you were the Senior Director of Innovation for Burger King, but then you left that to run all of marketing for Tim Hortons Canada. You've never had a marketing title before. How exactly did you get that role? How did you jump from running innovation to running marketing?

Sam: At the time, Burger King was a little bit crazy in a way that I describe match my type of crazy. They took people that had done well in whatever roles that they'd had and gave them more stuff to go do. I'd look at marketing. I've done analytics. I've done other things like that, but I'd never done the actual direct-to-consumer go get impressions, sell the product, sell the brand marketing. It was a really pretty big jump. It was taken by the people I work for on faith that I could do a good job at it.

Edward:At that time, Burger King owned Tim Hortons. It was one organization.

Sam: When I joined, it was just Burger King, but when they moved me up, it was about a year after the merger had happened.

Edward: You had delivered for them around innovation. They said, hey, we trust you to run innovations. Now, we're going to trust you to run marketing.

Sam: For the most iconic brand in all of Canada, yes. Go from this team of six people that are sampling hamburgers in the test kitchen. Why don't you take over this team of 70 with a $300 million marketing budget up in Canada?

Edward: Why did they think you were capable of doing that? I know you're capable of doing that, but why did they think you were capable of pulling that off? That seems like a big risk.

Sam: It is a big risk, but it was taken by people who had taken risks like that at Burger King and seen them paid off. They also were willing to replace me if it didn't look like it was working.

Edward: You said they took risks like that before with you, or are they just risk-takers in general?

Sam: Just risk-taking in general. It was very much the culture of the organization. This was a bunch of people who looked at Burger King and said, this is a good brand—it's just clearly not doing well back in 2011—bought it and said, we need to change everything to turn this around.

They went from a 300-person organization in 2011 when they acquired Burger King, I think about 20 of those people were left when I had joined 2½ years later.

Edward: When that opportunity came up, did you put yourself forward for it, or did they come to you and say, hey, we have these gaps. Sam, can you step into it?

Sam: It was very much the second. They said, we have this gap. The semi-annual upside is what's happening. I got invited there under the pretense of making a presentation on something else. When I met with the President, Tim Horton, he said, congratulations, we've got a new role for you. It was a jump of a couple of levels, at least, and an order of magnitude more responsibility.

Edward: What do you think when you do that? Did you think you had the marketing skills to do this? Did you think you're going to figure it out as you go along? What was going through your mind?

Sam: I've always been interested with everything that's going on around me. It's not like I was ignoring the media advice and the creative that was happening while I was designing hamburgers or working on pricing. I just liked to see how things plug together and organize, and I trusted myself to learn the pieces that I didn't know. Also, as you get more senior, you trust yourself not to need all the details and build a team that's capable of filling in for your own gaps.

Edward: What skills did you think you were missing going in? What did you think that, hey, these are the things I need to figure out fast if I'm going to be successful on this job?

Sam: Honestly, all the pieces that people traditionally think about as marketing—creative review, creative design, how do you translate what the brand stands for into what you're actually saying in the advertising, going from overall marketing strategy down to campaign, sliding down to briefs, down to approvals of the creative that's going out on television, digital, and other places.

Edward: Now you think you know what you don't know. How do you go about getting those skills? What did you actually do to be ready?

Sam: The previous CMO did a great job of setting me up for that. I had his team to rely on. Clearly, Tim Hortons was a brand that had had a positive store sale count for over 20 years. They had a team that knew how to do this. Just being gentle and being careful. Just being given a job doesn't mean you need to change anything. Often, you're a caretaker for what came before. It's a mistake marketers make to say that, well, I'm here now. I need to change everything. Rule number one should be first, do no harm.

Edward: It's interesting. Oftentimes, when things are going well, that's not when they replace the head of marketing. Here's a place where they replaced the head of marketing. They brought you in but things were already going really well.

It feels like that's a time when you hire someone who is a caretaker marketer, but you're in a place where they brought in somebody who wasn't even a marketer at all. That almost feels like they want to shake things up, but in this case, they didn't want that.

Sam: There was, again, that culture piece from Burger King of risk-takers, people who want to be bold and change things up. They wanted to put that culture in place at Tim Hortons. They wanted to maintain the results but still move over to what is now the RBI culture of being a bit more bold and taking a few more risks.

Ultimately, if you look at the performance of Tim Hortons in the few years after that happened, there was a bit of a stumble. It was a bit of a mismatch for the brand. We can talk about strategically, whether that was the right choice, but that's the position that I was placed in.

Edward: That's interesting. I'm thinking about you, particularly, rather than the company. How do you think about changing things up and making things better when you don't have a lot of expertise? You're reliant on the team because they're the experts on this, but at the same time, they hired you on to change things. How do you make those changes without messing things up?

Sam: If you have learned how to do a new job enough times, you start to get an idea of what it feels like to learn a new job. You know that there is a structure that you're trying to understand, a set of processes, a set of routines, and things that are done for particular reasons. You have an idea of what that wheel looks like once you do understand it as you're trying to figure out.

Taking that meta approach to learning a new job while trying not to disturb things, what I try to bring to that was I like to measure everything. I like to have a bottom-up roadmap or scorecard of how things fit together so that we can see whether things are going well or not.

Often, that type of high-level organization, that connective tissue that plugs together all the little bits and pieces that marketers are doing every day, every week, every month, that I found is where I can usually add value and help people see what they're doing better.

Edward: I want to go back and talk a little bit about the path that got you there. What were you passionate about when you were 12–14 years old?

Sam: I was passionate about Space Lego and role-playing games, whether computer games or specifically, Dungeons & Dragons.

Edward: Do you think diving into Lego, diving into D&D affect your later life at all? Did you develop skills there that play out today or was it a one-off and it didn't really matter?

Sam: I'm not sure that I developed skills during Lego and D&D that changed me. I think it's more that I chose the things then that I liked doing and I honed skills that I may have already had.

Lego is a lot of organization, seeing how things get put together, and being patient as you meticulously follow these rules to achieve a great product. D&D is just a really interesting game. It lets you explore everything from how rules create conduct in the world to all sorts of other things that are useful for managing around the management table.

Edward: Let's go forward a little bit and talk about your first job. In your first job, you were a bike courier?

Sam: Pretty much, yes.

Edward: Talk to me a little bit of what you learned as a bike courier and how that affected things later.

Sam: First, just to set the stage, in the 90s, there were a lot more bike couriers hopping around than there are now. You've probably seen a few in cities but they have largely been replaced by Adobe Acrobat, esigning, and things. There were hundreds in Vancouver.

Edward: This was not a food delivery. You aren't Postmates of the 1990s?

Sam: No. I was doing bank deposits, getting documents signed, dropping off documents to be signed, everything else.

At one point, I showed up at the bank and realized I've been riding around with $40,000 cash in my backpack for the previous 1½ hours. People would hand you deposits. It was interesting, which was for some reason really motivating and inspiring for me. It felt like I was the grease that was helping the wheels of commerce keep turning. I was helping real estate deals get signed, seeing big contracts get closed, seeing how and why people were soothing each other for different things because these were the documents I was carrying around.

Edward: You became aware of that stuff or was it a matter of, hey, Sam, take this piece of paper and get it across the street? It was like you've learned what the pieces of paper were for and the impact of your decisions were.

Sam: You do because people don't call a bike courier when a document needs to get there eventually. I would show up at offices seven minutes before a bank six blocks away was going to close and something you needed to get to the back before close. They wanted me to know how important it was.

There were times I was delivering legal depositions or summons and I couldn't deliver it. I would go back and give a statement that would get taken down and taken to court.

People would talk to me. People like talking to people. I was friendly and personable. I learned a lot more of how these businesses were running and people would think I would.

Edward: It's almost like those stories of the guy working in the mailroom who learns how the CEO operates and then moves up to the ranks.

Sam: The secret of my success.

Edward: You got your PhD in Computer Science. What were you planning to do with that before you actually left the world of academia?

Sam: I planned to leave the world of academia since I realized that I was in the world of academia pretty much. I thought that getting a PhD in Computer Science would be a good way of getting a good-paying job as a teacher. I like teaching people. I like helping other people understand problems and dive their way through things. Once I realized that all I had to do was research and that was what I've built myself a path to, I got out as fast as I could.

Edward: You went to McKinsey. Why did you end up in McKinsey?

Sam: I ended up at McKinsey because they dropped off a stack of brochures in the mailroom of the computer science department where I was at. A friend of mine said that one of his high school friends went there. They were smart, liked it, and so would I. It was no more strategic than that.

Edward: On that note, I want to jump ahead a little bit. In 2013, you joined Burger King to develop their pricing strategy. After spending a bunch of time doing strategy at McKinsey's, strategy at OLG, you're doing more strategy at Burger King, but then you left a year later to run product innovation. That seems a pretty big switch for someone who had been spending their career doing strategy. How did that happen?

Sam: One thing, you may have guessed from why I decided to leave academia, every time I've tried to make a strategic choice or plan out who I want to be in five years, I've been spectacularly wrong in my career. A decent explanation of what strategy works is the questions that clients don't know even where the question fits. It's not even that they have a question they don't know how to solve. They don't even know where it fits. They go, oh, it's not operations or it's not marketing. It's a strategy. Let's call in somebody.

Edward: It's the other.

Sam: It is really the other bucket. After a career literally of answering the random questions that nobody could figure out how to answer, I got pretty comfortable with just jumping into, this topic looks interesting. I'll go do that now.

The opportunity came up in Miami to go do pricing for a year. I did that. Because I correctly guessed that Burger King was a company with a culture that was pretty well-attuned to how thought, after a year of doing pricing, they said, hey, why don't you move to the test kitchen and figure out what sauces we should put on our original chicken sandwich and extra-long cheeseburger? You seem like you might be good at that. I'm like, okay.

Edward: It is interesting the way you describe it because it feels like coming from a career in strategy, people think of strategy as, hey, what's the five-year plan? What's the 10-year plan? But for your own career, you're saying that strategy is the last thing on your mind.

Sam: It could sound like that, but in my experience, strategy isn't a bottom-up, let's think about what we should be doing in five years. It's more a matter of, we're doing a bunch of stuff and we don't know how it fits altogether or we don't know that it all makes sense. Can you come in and take a look at all the things we're doing and make sure that there is a connection to our underlying core of who we are as a company?

I think of strategy not as a bottom-up, high-level thinking but more of an organization, seeing how things that a company is already doing fit together. I think that's similar to how I've thought about my own career. We can figure out how it fits together afterwards. It's more a matter of making sure that the individual ideas make sense at the time.

Strategy is looking across things going on and plugging them together. Career decisions are doing things and figuring out how they fit together afterwards. You've probably got a pretty good intuitive idea of what you want to do next.

Edward: It almost sounds like strategy is story-telling.

Sam: I think that's very, very much the case. You need to help senior executives figure out how to tell the story of who they become as a company.

Edward: Your career is almost the same idea. You do the things. You take opportunistic chances. Then, after the fact, you can go back and tell a story about how it all fits together.

Sam: Which interestingly, if you go back to when I was 13 years old and running a Dungeons & Dragons game, sometimes, your players just do stuff. You go, yeah, that makes sense. I can fit that together into the story I'm telling. It's not that it was pre-planned. You're just working with what exists.

Edward: Sam, what were the biggest failure points in your career? Where did things not go as expected?

Sam: I think if you look at any of the times I've switched companies or switched careers, that's when I realized that the current plan that I was on wasn't working anymore. I [...] those things as failures. I spent five years getting a PhD that I realized four years in I did not want. At one point, I realized that I didn't want to be a consultant anymore.

There haven't been any spectacular failures where people have come to me and said, you've really disappointed us and we're going to fire you now. Instead, I'm more a matter of the thing that I thought was interesting. It evolves or changes in a way that I no longer like or I evolve and change in a way that I'm no longer interested in. That happens every 3–5 years. We just change.

Edward: Sam, you're now a head of the retail of Restaurant Brands International. I want to cover more of that in part two, but I want to touch on an experience you had last summer, if you're comfortable talking about it. Tell me, about 40 minutes last summer, you died and they managed to bring you back to life. In a movie, that would cause you to reevaluate everything in your life and change who you are and what you think about. Did it do anything like that for you? How did you change after that event if at all?

Sam: That's a really good question. For anybody thinking about business was spectacular, it would be like a scene from the most over-the-top hospital drama you've seen. The first defibrillator did not work on me. They had to go find an antique one that happened to put out more power. That's what eventually restarted my heart back to life.

I thought about this and I still think about whether I should be reevaluating my life, but my approach of, am I happy with what am I doing right now and if not, then I'll go find something else to do has served me pretty well. I haven't spent 10 years chasing a goal that's 10 years down the road in the hopes that once I achieve it, I'll be happy. I try to make sure that I've enjoyed what I'm doing along the way.

I came out of that. Actually, the first thing I did was send a selfie while I was still intubated to my Microsoft Teams group at work saying, don't think I'll be in at work today. I was back on the job within 8 weeks of meeting 39 minutes of CPR with a very talented team at the Toronto General Hospital.

My reevaluation of my life ended up not really being one. I'm still pretty comfortable with the choices I've been making.

Edward: Sam, what are your productivity tricks? What do you do to be productive that most people don't do?

Sam: You're either doing things or you're not doing things. If you're doing things, it's less of a worrying about focusing on staying on one task or focusing on the highest priority item, than continuing to work on it until you lose momentum, you lose steam.

I would rather finish 60% of one task, get distracted, go to 50% of another task, go back to the first one, and then force myself to finish something after I lose interest. As long as I am being productive, I don't really worry necessarily whether it's my top priority item or third or fourth in my priority list. I just enjoy the fact that I'm getting things done.

Edward: There's something about that. Like prioritization is overrated in that you're much better just be getting something done than spending a lot of time trying to optimize for the right thing to do.

Sam: Things are either important or they're not. If they're not, they shouldn't be on your list. If they're important and they're on your list, as long as you're doing anything, you're doing well.

Edward: I read somewhere—I can't even remember who it was—their model of as long as your distractions are also something you want to get done, then you're fine. If you stop doing what you want to do because you go and spend time on Facebook, that's not so good. But if you're stopping doing project A because you're distracted to do project B and then you get distracted and start working on project C, you're probably going to be in a good place by the end of the month.

Sam: Yeah. That's exactly right.

Edward: Sam, this has been fantastic. We're going to pick this up next week under my new publishing model. We'll pick up with part two. We're going to dive into Tim Hortons’ business.

Sam: Right. Thanks, Ed.