Beck, Scott

(1959-)
Boston Chicken, Inc.

Overview

Scott A. Beck along with two partners acquired Boston Chicken in 1992. With Beck as CEO, the chicken restaurant and carryout franchise, renamed Boston Market, underwent the fastest growth of any restaurant chain in the country. In 1998, however, Beck tendered his resignation after the company's stocks plunged for a year. Despite the company's financial setbacks, Boston Market's success as a home cooked meal franchise changed both the fast-food restaurant and supermarket industries.

Personal Life

Beck was born in Chicago, Illinois in 1959. His father, Lawrence, was the cofounder of a high-tech waste management firm. Beck attended two colleges over a 13 year period before receiving his undergraduate degree from Southern Methodist University.

Beck is married and has three daughters. Among corporate executives he is uncharacteristically religious, claiming he goes to church virtually every Sunday and strives, he has said, to serve God. "I think my primary purpose in life is to be a steward of what God has given me in talent, time, stamina, and I'm driven to do the best I can with those things," Beck said in an interview with Nation's Restaurant News. When not working, his favorite activity is spending time with his family; his personal hero is Winston Churchill.

When he was young, Beck spent several summers working at his father's company, Waste Management, Inc. and learned a great deal about business from talking to his father and his father's partners. In 1985 Beck invested in Blockbuster with his father, when the company had only one store. The two acquired a sizeable stake in the business, sensing there would be a strong consumer demand for this service. This was the same intuition, which would draw Beck to Boston Chicken six years later. In the case of Blockbuster, their instincts proved sound, and within a few years, the business had grown into a national enterprise.

In 1989, Beck sold his 104-unit Blockbuster franchise back to the company. As part of the sale, he became chairman and chief operating officer of the video chain; he also received $120 million in stock. Beck used the capital to join with two partners, Jeffrey J. Shearer and Saad J. Nadhir. Beck had initially met Shearer, who had been with Steak & Ale for 14 years three years earlier, after Beck's financial consulting firm, Pace Management, was hired for financial services. Nadhir had been a longtime friend and business associate. Shortly after their meeting, Shearer left Steak & Ale and went to work for Beck at his franchise company, Blockbuster Midwest. It was Nadhir who first foresaw the potential of what was then Boston Chicken. He was driving through Boston one night in 1991 and was surprised to see people lined up to get into the then-virtually-unknown restaurant. When the three men bought Boston Chicken in the Spring of 1992, the chain then had only 33 outlets.

Career Details

Upon purchase of the Colorado-based Boston Chicken Inc., Beck became chairman and chief executive, while Nadhir and Shearer, his longtime business associates and friends were vice chairmen. In the first three years of their association with the chicken business, the chain experienced almost unprecedented growth, from 175 outlets in 1993 (28 of them operated by the company) to 525 in 1995. Not surprisingly this rapid expansion brought renewed attention to a business—rotisserie chicken chains—that seemed ailing at best. Boston Chicken had found a niche, that of home meal replacement.

The idea behind home meal replacement is that consumers who longed for home cooked meals, but were too busy to cook them, could go to Boston Market and buy items that were fresh and either ready-to-eat or nearly prepared. Beck was a pioneer in this market, using research that tuned into consumers' shopping habits at the supermarket. At a 1997 conference, Beck described consumers who were buying fewer items and insisting on fresh products. Determined to deliver the meals that consumers wanted, but with no precedent to follow, Beck became a trailblazer in this new field of fast food. In an interview for Nation's Restaurant News he said, "We're learning on a daily basis. We're serving fresh, convenient meals in a fast-food environment, and there's not a model by which to do that." Beck and his partners managed to reach the market that they identified by offering freshly prepared side dishes along with chicken that was rotisserie roasted, rather than being fried in pieces.

During their early years with the company, Beck concentrated on the company's infrastructure, while Nadhir focused on both company operations and consumer trends. The two shared a common space with other members of the executive workforce. "It's a team approach and a team attitude that have worked here," Beck has said when he has been given credit for the success of Boston Market. Beck's team philosophy is reflected in the various programs that he implemented within Boston Market to gather data and feedback. The Performance Measurement System attempted to monitor feedback from every facet of the Boston Chicken chain, including from customers, shareholders, employees and management. The Boston Notes system allowed executives, employees and executives to share ideas.

Another of Beck's ideas was the establishment of flagship stores. These stores serve as a central location for the preparation of foods for nearby Boston Market stores. Beck hoped that this new idea of centralization would decrease labor and other costs for the individual satellite stores.

Beck's ideas about franchise management were different than any that had been implemented in the restaurant business before. He took what he had learned about retail through his success at Blockbuster and applied it to the restaurant world. In many ways he was successful, demonstrated by his fast growing company and Boston Market's establishment as the leader in homemeal replacement. Beck's company broke records when its stock prices more than doubled in its first day of trading in 1996.

It was when he strayed from his focus on home meal solutions and the retail aspects of the business that Beck and his company began to be criticized. When Boston Market began to focus on their lunch menu and on diversifying their menu, critics wondered if the restaurant had lost sight of its original and most successful market. The company began to lose money and as Boston Market restaurants spread rapidly across the country, the company's stock began to fall. Beck and Nadhir resigned in May 1998 following a 16-month period during which Boston Market stock lost nearly 90 percent of its value. In an interview with Nation's Restaurant News in June 1998, Beck blamed himself for the company's demise. He said, "We should have stayed at the retail end of it, the prepared food and packaged food for people to buy and take home, maybe with some groceries . . . . but we strayed from our core home-meal-replacement strategy. It was my mistake. What I'm talking about is leadership." Beck also admitted that he missed the retail business, preferring it to the restaurant business.

Social and Economic Impact

Even though Scott Beck blamed himself for his lack of staying focused before his resignation, he is known as a pioneer in the field of home-meal replacement. The success of this concept has forced both the fast food and supermarket industries to take notice.

A June 1998 Time magazine article commented, "Credit Boston Market (formerly Boston Chicken) with fomenting the HMR decade. The company . . . transformed the notion of fast food by serving the kind of fare one would expect to come piping hot out of the kitchen oven but instead comes right out of a ready-to-eat or ready-to-heat package." Beck and his coworkers studied consumers and identified a group of people that were longing for fresh homemade food that could be prepared with little or no fuss. Since Boston Market began there have been many similar companies who, have been focussing on the new consumer group that Beck recognized. The display of the fresh food by Boston Market has also been imitated by other chains.

Chronology: Scott Beck

1959: Born.

1985: Invested in Blockbuster video stores.

1989: Beck becomes vice chairman of Blockbuster.

1992: Purchased Boston Chicken with partners; Beck named Chairman and CEO.

1993: Boston Chicken went public.

1995: Boston Chicken announced record revenues.

1997: Boston Chicken revenues down sharply; company cuts-back staff.

1998: Beck resigns from Boston Chicken.

The magazine Chain Store Age Executive described Beck's influence on the supermarket world saying, "Beck and his company woke up the supermarket industry to the fact that many of their customers no longer have the time to prepare their own meals, no matter how much they yearn for the home-cooked dinners mother used to make." Supermarkets and convenience stores responded with what the magazine called the "most significant change in many years in the way they market food." Many supermarket and convenience store chains have begun to offer home-meal solutions. The trend of offering more prepared foods has extended to offering a variety of other goods, such as flowers and plants, and services, such as dry-cleaning. Due to Beck's strong retailing skills and his identification of a new market quick, homemade meals are within reach of the hurried consumer.

Sources of Information

Contact at: Boston Chicken, Inc.
14103 Denver W. Pkwy.
Golden, Colorado 80401-4086
Business Phone: (303)278-9500
URL: http://www.bostonchicken.com

Bibliography

"Beck: BCI Turning Around by Refocusing on Human Resources." Nation's Restaurant News, 27 October 1997.

"Boston Chicken CEO Wants to Rule Meal-Solutions Roost." Supermarket News, 16 June 1997.

"Boston Chicken Heads Roll." CNNfn, 1 May 1998. Available from http://www.cnnfn.com/hotstories/companies/9805/01/boston/index.htm

"Fears Come Home to Roost For Boston Chicken Speculators." The Dallas Morning News, 11 June 1997.

"Joy of Not Cooking." Time, 1 June 1998.

Melcher, Richard A. "Does Scott Beck Have Another Winning Recipe?" Businessweek, 13 December 1993.

Papiernik, Richard L. "Ex-Boston Chicken Chief Says Chain Veered Too Far Off HMR Path." Nation's Restaurant News, 29 June 1998.

Romeo, Peter. "What's So Special About Boston Chicken?" Restaurant Business, 10 April 1994.

"Scott Beck." Chain Store Executive with Shopping Center Age, September 1997.

"Scott Beck: Chairman, Chief Executive, Boston Chicken, Golden, Colorado." Nation's Restaurant News, January, 1995.

"Scott Beck and Saad Nadhir: Entrepreneurial Partners Balance Each Other as They Clide Along the Cutting Edge" Nation's Restaurant News, 9 October 1995.

"Scott Beck and Saad Nadhir." Nation's Restaurant News, 9 October 1995.