hen I first came to southern California twenty years ago I was initiated to one of the local icons unceremoniously. I was on a late-night coding binge in a North Hollywood incubator and one of my colleagues, knowing I was new to town, perked up with a growl in his belly and asked, “Have you been to In-n-Out yet?” I replied that I hadn’t. He straightened up, kicking out his chair and said, “We’re doing this. Let's go.”
And so we did that.
I got what he recommended from the secret menu and it was glorious. Since then I’ve been a “double-double with grilled onions fries and a chocolate shake” acolyte. In-n-Out was like no other. Not just in food but also in style. I love their immaculately clean facilities, infectious workplace ebullience, and scrumptious food. I also appreciate their substance. They make sound business decisions and have invested heavily in their corporate culture.
I have come to know that all of it – the food, the workplace, the vibe – is steeped in the Christian values of its founders and erstwhile heiress. While religion is not my source for values, we overlap in our desire to do right by our world and not just ingratiate the wants of shareholders. For In-n-Out, it's not just meat between buns that matter.
I appreciate that In-n-Out has an average salary for a manager north of $100K. But it's not just managers. Staying on the career path at In-n-Out is encouraged and has become the norm unlike so many of its competitors. Entry-level full-time employees are provided benefits (healthcare, vacation) and a decent higher-than-minimum wage pay rate. Even Fast Food Nation writer Eric Schlosser had this to say about In-n-Out: it would be the only fast food place he’d spend his money after his exhaustively researched examination of the industry as a whole.
''I think they're great,'' said Mr. Schlosser, whose less appetizing findings included that some ground beef destined for fast-food restaurants had been contaminated with bits of cattle spinal cord. ''It isn't health food, but it's food with integrity. It's the real deal,'' he said. https://www.nytimes.com/2002/08/14/dining/the-secret-behind-a-burger-cult.html
In spite of these facts, I am cautious in my enthusiasm for the company. As a private company, there is very little we can know about the way the company is managed. We rely on its own PR and whatever investigative journalists can eke out of the folks who have worked there. Which ain't a lot.
The civic sector requires very little disclosure from private companies. In California, we have the Transparency in Supply Chains Act of 2015 (PDF). Which I believe is one important regulation among many I would recommend. It states that any company with sales greater than $100M operating in California must reveal whether it verifies its supply chain is free from human trafficking. You can find In-n-Out’s terse statement here. Compare that to Patagonia's (PDF) and you can see there’s a very wide spectrum of how seriously companies take this compliance task.
For public companies, regulations are more numerous but few of them are put in place to protect the environment and workers. Indeed, the purpose of regulations on public companies is to protect shareholders from fraud, where financial interests are the loan goal. As such we are missing a huge opportunity to hold businesses to the same standards we reserve for ourselves.
Public or Private, many companies have chosen to get on a path of good Corporate Social Responsibility. They are trying actively to boost their ESG scores and many of the brands normally associated with egregious business practices (like Wal-Mart) have some of the most progressive and impressive CSR work. And vice versa, some of the brands that are almost universally praised (I’m looking at you, Berkshire Hathaway) have incredibly big social liabilities on the books.
The opportunity to do better by our world will always be lagging behind the immediate gratification of shareholders. It needn't. The times have changed in so many ways these past few months. The Overton window for regulating public and private businesses ESG work is opening.
Unless you are a values-driven organization like In-n-Out and Patagonia, you will need regulations and frameworks to guide your responsibility.
Where do those frameworks come from? Right now, a lot of places.
Diversity, Equity and Inclusion. Carbon emissions and greenhouse gasses. Fair foods and organics. To name a few. Some are driven by industry workgroups like the Certified Organics and B-Corp.
Most of this activity is targeted at consumers who look for signs of ethics in the brands they consume. But the truth is there is no precedent for a standards-approach. Good business practices are ad hoc, homebrewed best practices, as it were, which reflect what’s desirable by the company and not necessarily driven by a concern for the greater good.
Regulation could change that. As consumers and shareholders, we deserve more robust disclosures.
I am very much looking forward to helping money flow to what works if for no other reason than to have more things to share with the next generation of creators on a late-night coding binge.