Julia Stewart, chief executive of IHOP Corp., is known as a turnaround artist. After choreographing a dramatic resurgence at Applebee's International Inc. during her three years running the company, she was recruited to do the same at the pancake house chain. She says that part of the reason she said yes was that her first job was serving food at a local House of Pancakes when she was 16. When she joined IHOP, she was the only woman running a publicly traded restaurant company; now there are several others. Stewart marched in and upended the franchise, changing the business model from one in which the corporation absorbed all construction costs, to one in which franchisees do most of the work and pay for it. The extra capital was reinvested into the company. Today, company stock trades at about $55 a share, more than twice the level when she took over the company. Stewart says that she isn't surprised at the way her life has turned out. Growing up in San Diego as the only child of two schoolteachers, she always dreamed of running a company. And after 14 years in a restaurant marketing career, Stewart joined a management program at Taco Bell, then owned by PepsiCo Inc. Starting as an assistant district manager in 1991, Stewart took on more and more territory, eventually overseeing the entire western region, including 6,000 restaurants, by 1998. These days Stewart, who's getting married next month, admits she still struggles to balance her demanding career and caring for her 8- and 10-year-old children. Because she loves her job, she says, her family and management team respect her.

Question: Has your gender made it hard for you to reach this level in your career?

Answer: When you get to the level of CEO, it's more about our your skills, your level of talent and capability than anything else. I think people really do want to make certain that you have the appropriate skill sets to lead and direct. But I don't think it's about being a man or a woman.

Q: Was it an issue when you were working your
way up?

A: I think 20 or 30 years ago, the environment was very different. It didn't matter which company you worked for. There were issues I faced being a woman, but in the end I overcame them because it really was about delivering results.

Q: Since you took over IHOP, a number of women have been named chief executives of restaurant companies, including Jack in the Box and Del Taco. To what do you attribute that?

A: The normal maturation of the industry and more talented people to chose from as time marched on. I think there was always talent out there. But I believe more and more people are recognizing that it's just a matter of finding the best talent out there.

Q: What differences do you notice in the women working their way through the ranks these days?

A: My mother used to say that she had three choices. She could get married, she could be a nurse or she could be a teacher. There isn't that structure today. There isn't the mommy track or the career track. People get on and off, they work for a while, they have children, they work their whole lives, they don't have children. There's this wide range of possible avenues to choose from.

Q: How have expectations changed?

A: College students I'm meeting may have some unrealistic expectations about the first job you get right out of college. You interview these people getting ready to graduate from college and they're so cute, they say, "I want my $100,000 a year and I want to work 8 to 5, five days a week and you know, my weekends have to be free."

Q: What are you doing at IHOP to manage the expectations of the younger generations?

A: We really do spend a great deal of time educating our franchisees on what the expectations are of millennials, Gen X, Gen Y. This is literally probably the first time you could have all of those groups sitting there next to you in four different booths and you could have all of those employees in your restaurant.

Q: If someone told you 30 years ago that you'd be running IHOP today, would you have laughed at them?

A: Oh, no. I always had a desire to run something. I think I got hooked on the restaurant business with my first job as an IHOP food server. I was either 15 or 16.

Q: What got you?

A: I loved that you got feedback everyday. You didn't work a shift without learning what you did and didn't do. How it worked, how many re-fires, how many tips. There was always some mechanism for knowing how you delivered upon their expectations and I loved that.

Q: You spent 14 years in marketing and you quit your job as vice president of marketing at a large company to become an assistant general manager at Taco Bell. Why?

A: That was a calculated risk for me because I knew I would never be able to be CEO of a company if I didn't have profit and loss experience.

Q: Did people say you were crazy?

A: I'll never forget some of my close friends in those days you wore a uniform, so there I was with my uniform and my big key chain seeing me standing behind that counter as the assistant manager selling burritos and dealing with issues, and my friends sitting in the back in a little deuce coupe saying, "you have lost your mind."

Q: But you eventually became vice president of operations for the Western region with about 6,000 restaurants. What did that experience teach you?

A: You're talking about a huge number of people, so being able to motivate and lead at a very high level. I don't think somebody just wakes up one day and says, "I'm going to manage and lead a couple of thousand people." That's a skill you develop over time.

Q: What are the other qualities someone needs to do what you do?

A: I get asked this question a lot, and I don't think there's one style that fits. I think there are a couple of things that in order to be a CEO, you've just got to have inherently. You have to have the depth and breadth to manage different departments. So maybe I've never been the CFO, but I need to be able to ask all of the right questions.

Q: What else?

A: I also think you have to be able to juggle and manage different constituencies. If you think about it I've got a board, I've got shareholders, I've got franchisees, employees, franchisees' employees, guests. I've got all of these different constituencies and making certain that you're touching them and that you're listening and learning and communicating, that's critical. And I think what also goes with that is just you better be very good at providing vision and leadership and direction because at the end of the day, they're all looking to you.

Q: What's one of the biggest pitfalls when you've got the biggest chair?

A: I think the biggest trap one can get into when they get to be the CEO and they have all of that experience is to stop asking people, "What do you think?" I think you absolutely have to ask and listen.

Q: What made you take the IHOP job?

A: Somewhere deep inside there was that little tug on my heart saying, "Oh my God, I started there as a food server, I get to go home." Secondarily, I saw this as a brand that had tremendous upside. I didn't think it was broken, but I did believe that it needed to be re-energized and I thought that's something I would enjoy.

Q: Any surprises in this job?

A: I had no idea how open the franchisees were to change. But I'll never forget my first speech in D.C. where I said I had a clear vision. I'd spent a couple of months researching and we're going to be number one in family dining. And I kept waiting for the thud in the audience. And they were like, "Yeah, let's go!"

Q: What's been the biggest challenge of your career?

A: I would say the biggest challenge was here, and not because they weren't open-minded but because we were trying to do so much simultaneously. It was changing the business model, which required a tremendous amount of communication to shareholders. It had huge financial implications, and there was some calculated risk in doing that. There was some risk that shareholders would say they weren't interested And while we were doing that, we were trying to make all of that effective change here.

Q: What was involved in make those changes?

A: We put in a structure for how to measure success with our operators, getting rid of some of the franchisees that weren't very good operators, hiring a brand new advertising agency, creating an environment where franchisees could develop, getting them access to capital. We were doing all of that simultaneously and changing the culture here to say, "You know what guys? I need you to be accountable." You can't have the same environment where it's 8 to 5.

Q: How did the pitch go over with investors?

A: I remember when I went to my first meeting with an investor after we announced the change in the business model. It took me about 15 minutes to explain it. He said, "I know you're new and you've got all this energy and you did a great turnaround at Applebee's, but I've got to be honest with you, you haven't had any real organic growth in over 10 years. I don't think you understand. You took over something that's pretty far gone."

Q: But in the next year, you got great comp sales, and things started turning around. At this point, what does it feel like to be ahead of the rest of the family dining industry?

A: Now the second part, which is the hardest part in my opinion, is staying there. It's kind of a fun ride, there's a common enemy, and then once you get there and I think we're very close to saying we're there you have to stay there.

Q: What are the particular challenges to staying on top?

A: The competitive landscape changes because it's not just your direct competitors, but now you've got specialty that wants to be in the business. Now you've got to steal from Starbucks and Dunkin' Brands and on the other end you've got to steal from casual people who want to get in the breakfast business.

Q: Who gave you the best advice?

A: I'd probably have to say my dad, who early on in my career said, "Never be afraid to be who you are." It's harder to do when you're younger. When you're older something happens to you. You just wake up one day and say, "I kind of like who I am."

Q: How do you keep balance in your life with two young kids and a fianc & #233;? Are there days when you don't work?

A: Laughs.

Q: Really, how do you do it?

A: I think it's about harmony. If I'm happy, my family's happy. If I'm doing what makes me happy, my children respect that. Tim, my fianc & #233;, admires it. If I'm doing what really truly makes me happy, I think everyone will respect that. Do I think it's 50-50 every day? No. Do I think some days I'm giving 180 percent here and everybody back at the home front is coming in fourth? Absolutely.

Q: How do you integrate family into work time?

A: I love to entertain, and frankly, I like it because I can have my kids there. You know they've got their PJs on and they're going to bed, but they feel very much a part of that. I think nothing of taking my kids to three IHOPs on a Sunday. I'll say, "OK, we're going to eat three times today," and they say, "Cool."

Q: What was your childhood like?

A: My father taught U.S. history, civics and government and had very strong opinions about everything and my mom taught girls' physical education. I don't think about it now, but I was a latchkey kid. My parents worked, so when I finished school I let myself in and did my homework, stayed there and waited for my folks to come home, but never thought two shakes of it.

Q: What did your parents think of your career choice?

A: I think my dad really just assumed I would go into teaching because teaching is noble; you make a difference in people's lives. When I graduated from college and got my job I think he was ready for me to say assistant teacher and I said, "I am the head of marketing for Northern California for Carl's Jr." He said, "You're what?"

Q: But you got to show him what you were doing, years later during site visits. What was that like?

A: He said, "I owe you an apology. You're right. You coach and you teach, you just do it in a different way." I said, "Dad my classroom is these restaurants." And with Taco Bell you have to understand that a lot of the people my dad was seeing me interact with were 16- and 17-year-olds. This was their first job. I was having a major influence on their work ethic, the way they thought about themselves, the way they thought about authority. For a lot of these kids, it was the only time of the day they ate, it was the only time of the day they got a please and thank you.

Q: There's also some more respect that comes with teaching as the head of a public company, right?

A: When I was in junior high and high school and the kids were spinning my mother's whistle and making her fall over. They didn't want to be there. In dad's classroom they were throwing spit wads, and I was thinking there's got to be another way.

Julia Stewart
Title: Chief executive officer
Company: IHOP Corp.
Born: Visalia, 1955
Influential Person: Her father, Dan Stewart
Hobbies: Cooking, entertaining, wine collecting, snow skiing
Personal: Lives in Los Angeles with children, aged 10 and 8, and fianc & #233; Tim

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