Executive Started at Bottom--and He Returns There Every Chance He Gets : Management: Shoney’s Arnett believes that good bosses have to be in the trenches. He’s come a long way since making minimum wage as a cook.
When James W. Arnett flunked out of college and went to work as a Shoney’s Inc. cook flipping burgers and stirring soup, the thought of running the company was the last thing on his mind.
But in his 20-year career at Shoney’s, Arnett has gradually moved from the frying pan of a kitchen into the fire of a big-business boardroom, making decisions that affect 28,000 employees in a network of restaurants and hotels in 30 states.
“I guess it’s easier to teach somebody when you know how to do it yourself,” said Arnett, 41. “I said awhile back that I’d still like to be a teacher. Somebody pointed out that’s what I do today.”
Arnett’s elevation to president and chief operating officer of Shoney’s, announced last month, is unusual in an era when companies usually fill top executive positions with number-crunching MBAs.
Many executives don’t necessarily have experience on the assembly line, shop floor or, in this case, the kitchen, where Arnett began toiling in 1970 for minimum wage.
“I worked hard,” Arnett said in a recent interview in his office at Shoney’s Nashville headquarters. “I took out the trash, swept, mopped, whatever it took.”
Arnett said his self-imposed discipline stems from flunking school and anxiety over becoming a loser in life.
He was living with his parents when his casual attitude about studying and grades resulted in a near-zero grade-point average at Tennessee Tech in Cookeville, a 90-minute drive east of Nashville.
“I think I made a C in something,” he said.
Arnett’s father, a retired Marine Corps sergeant major, demanded repayment of $1,400 in tuition money and ordered his son to get a job. He found one at Shoney’s, a growing chain of restaurants known for its Big Boy burgers and for pioneering the family style “breakfast bar” buffet.
“There’s no doubt in my mind that fear of failure is what keeps Jim Arnett motivated,” Arnett said. His father, he said, “literally picked me up and carried me to work every day.”
Arnett gave most of the earnings from his 80-hour week to his father, eventually repaying the $1,400. At the same time, Arnett said, he discovered something he could do well.
He soon became kitchen manager, then store manager, before working his way up into the higher levels of the company.
Shoney’s since has grown into a large publicly held company that owns and operates 1,600 restaurants and motels, including Shoney’s Restaurants, Shoney’s Inns, Captain D’s fast-seafood chain, Lee’s Famous Recipe Chicken, Fifth Quarter and Pargo’s restaurants.
Six feet tall and slightly overweight “due to sampling our foods all the time,” Arnett says he enjoyed his early cooking career and still makes occasional forays into a company kitchen. Just a few weeks ago, for example, he did a stint at a Captain D’s to assess its efficiency.
“The reason is sometimes you have a tendency to over-complicate things,” Arnett said. “You have to keep it simple to put the food out in a reasonable amount of time.”
Arnett’s appointment has been widely praised among securities analysts who follow Shoney’s, which is under pressure from a large debt load and must seek ways to economize and become more efficient. Arnett’s experience in everything from menu planning to mixing vegetable soup gives him an advantage.
“In our opinion, that was the correct move for the company,” said John Lawrence, of Morgan Keegan & Co. in Memphis.
As the No. 2 executive, Arnett is heir apparent to Chairman and Chief Executive Officer Leonard H. Roberts.
Shoney’s founder Ray Danner, who retired as chairman but is still on the company’s board and executive committee, said Arnett “was a good kid. And now he’s a great man.”
“I would say he has all the ingredients to maybe one day be a CEO of the company. In my opinion, he certainly has the qualities,” Danner said.
Arnett credits his success to simple hard work.
“I still consider myself an employee. I’ll go around pouring coffee,” he said.
“If you don’t go to the stores, you’re making your decisions in a void. It’s easy not to go to the stores. It would be easy to have a fancy office.”
Arnett’s office is not fancy. It has a desk, work area, five chairs and no paintings on the walls.
Instead, a wall near his desk holds framed copies of the goals of Shoney’s divisions, along with a statement of the company’s business philosophy.
“Our philosophy is you can’t run a business from an office,” he said.
Arnett declined to disclose his salary, though he said it was close to the compensation of predecessor Gary Spoleta, who according to the company’s latest proxy statement earned $388,202 in fiscal 1989. That’s a far cry from the $1.25 an hour Arnett pulled in 20 years ago.
“Let me put it this way,” Arnett said. “I owe more money now than I did then.”
The company plans to more than double its operations to 3,400 motels and restaurants--mostly Shoney’s family-style restaurants and the Captain D’s and Lee’s chicken fast food outlets--by 1995.
