Issue link: http://www.e-digitaleditions.com/i/62201
Krispy Kreme CEO Scott Livengood discusses the allure of hot doughnuts, the with an almost devotional enthusiasm. He describes the dynamic among his company, its staff, and its customers as "fascinating," and he sees that dynamic as the most important measure of the com- pany's failure or success. It was his interest in human interaction, in fact, that led him to earn a degree in industrial relations with a minor in psychology from the University of North Carolina, Chapel Hill, in 1974. In 1977, he came to Krispy Kreme as a human resources trainee. He became president in 1992, just as the company began its plan for growth; he moved to the CEO's position in 1998 and became chairman of the board in 1999. Livengood's vision for the now-renowned purveyor of nuts—is something Livengood strives to maintain. Livengood speaks of his role with Krispy Kreme warm dozen of the company's signature Original Glazed. The company has become such a part of American culture that last year the Smithsonian Museum in Washington, D.C., held an exhibit titled "Krispy Kreme: Taking a Bite out of History." That means much more than "just doughnuts" to Livengood, whose own 16th birthday included candles on 16 Krispy Kremes instead of birthday cake. That link to history and nostal- gia—not to mention the promise of hot, fresh dough- "just doughnuts." As the CEO of Krispy Kreme Doughnuts in Winston- Salem, North Carolina, Livengood (pro- nounced "lye-ven-good") knows better. From its 1937 roots as a small wholesale operation, the company has become a fixture in the family rituals and childhood memories of millions of customers. Some customers even travel hundreds of miles to attend Krispy Kreme grand openings and wait hours in line—all for a what his company sells are Scott Livengood that Don't tell Kreme has expanded from 140 to 270 locations in 37 U.S. states, Canada, and Australia. Locations in the United Kingdom, New Zealand, Spain, Japan, and South Korea are in the works. Livengood's tenure has not been without some criticism: After Krispy Kreme's outstanding initial pub- lic offering on the New York Stock Exchange in 2000, the value of its stock soared, leading many stock analysts to deem it "overvalued." And recently, when Livengood announced plans to use synthetic leases among franchisees (a legal off-balance-sheet arrangement that reports leases as expenses rather than liabilities), he was met with an uproar of protest. Understanding the new order of a post-Enron world, Livengood cancelled the company's plans and addressed the issue head-on by making the subject of ethics the centerpiece of the compa- ny's next corporate report. That kind of openness is doughnuts has earned him industry kudos, including the 2001 Executive of the Year award from Restaurants & Institutions magazine. Under Livengood's leader- ship, the company has eschewed traditional advertising in lieu of enhancing its customers' in-store experiences, promoting charitable efforts, and, above all, maintaining the strength of Krispy Kreme's existing brand identity. Since 1999, Krispy work. When the company's trademark neon sign, reading "Hot Doughnuts Now," is lit in the window, people outside know that the doughnut machine is up and running—it's time for what Livengood calls "the Krispy Kreme experience." Visitors gaze through a large pane of glass at the center of each store to see hundreds of raw doughnuts travel up and down through a rising station. Rows of doughnuts then float through a river of hot oil, cooking to a golden brown. They then glide via conveyor belt through a cur- tain of sweet powder-sugar glaze, to be boxed hot and fresh for the next customer in line. Hungry for a hot doughnut now? Livengood certainly hopes so, as he discusses the building of a powerhouse brand. photos by Will McIntyre, courtesy Krispy Kreme 16 BizEd MAY/JUNE 2003 "doughnut theater" showing the operation at at the heart of Krispy Kreme's success, says Liven good. Even individual Krispy Kreme franchises integrate a sense of trans- parency. Rather than relegat- ing doughnut-making to a back room, most locations feature a