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11th October 2010
Dynamic CEO of the Year: Woods Staton – The man with the golden touch

By Charles Newbery

BUENOS AIRES — Woods Staton is constantly on the move.
As president and chief executive officer of Arcos Dorados, Staton runs the biggest franchise in McDonald’s worldwide holdings. Arcos Dorados is also the biggest restaurant chain in Latin America. With 1,800 restaurants, it is the only Big Mac chain that encompasses so many countries and such diversity, from booming Brazil to leftist Venezuela and mercurial Argentina.
Staton likes the challenge.
“It is a big game,” he told Latin Trade in a recent interview at his headquarters on the outskirts of Buenos Aires. “I have a lot of fun.”
Staton, 60, describes himself as a maverick but is quick to point out that he doesn’t shoot from the hip. He believes his success and that of his company are the result of balance, dedication, enjoyment, focus, passion and a good team. “You have to surround yourself with people who are better than you,” he said.
Staton structures his operations as flatly as possible to give his managers room to flourish. It might be easier to centralize the decision making for his more than 100,000 employees in his office. But that, he thinks, would smother the spirit of entrepreneurship that has helped build the company and is driving it forward.
“We are not great innovators. What we do is we take good ideas and put them into play,” he said. “Everybody on the team is very well versed in numbers and they have all been trained cross-functionally. We have all been around and we know what is important for the other people. We have a generalized view of the business, and this makes us quicker and more profound in our decision making.”
Take McCafé, which brings coffee drinks like cappuccinos and pastries into the traditional burger outlets, launched originally in Australia. Staton imported the concept, tweaking it based on adaptations tested in Austria.
It is flourishing in Latin America, with 263 of the cafes tucked into the restaurants where they boost between-meal business. The comfortable seating and pleasant woody décor of the McCafé has influenced overall design in the eateries, sunnier with softer lighting.
“Good ideas can come from anywhere in the region,” he said. “The challenge is to allow the Mexicans, for example, to create their own ideas that can then be used in Brazil as opposed to them waiting for us to tell them what to do.”
Staton said such efforts foster entrepreneurial thinking. “Otherwise we will be a bunch of bureaucrats saying yes, no and blaming the other guy,” he said.
The privately held Arcos Dorados increased its annual revenue by 2.6 percent to a record $3.6 billion in 2009 from $3.5 billion in 2008 despite the global recession.
Staton is fine-tuning his strategy to grow more in a region prone to economic, political and social fluctuations. It is a region he knows well. Born and raised in Medellin, Colombia, by a Brazilian father and Czech mother, Staton studied economics at Emory University in Atlanta before getting an MBA from the International Institute for Management Development in Lausanne, Switzerland.
His first big job was with Panamerican Beverages, a Coca-Cola bottler in Latin America that his paternal American grandfather, Albert Staton, built into the second-largest in the world. Staton ultimately became CEO.
McDonald’s sought him out in 1982 to open its first restaurants in Colombia, but guerrilla violence and import restrictions frustrated the venture. Not until 1985, then with two kids under the age of 4, Staton accepted an offer to launch the chain in Argentina with the backing of McDonald’s Chairman and CEO Fred Turner, who was spearheading a massive international expansion.
It was good timing. Argentina was opening its doors to foreign investment after eight years of military dictatorship ended in 1983, and the economy was growing. “There was a wave of confidence after so many years of hardship, and we were a breath of fresh air,” Staton recalled. “We took off like a rifle shot.”
It wasn’t easy. Argentina’s economy stumbled with hyperinflation in 1989 and 1990. But Staton held out. McDonald’s expanded his duties to oversee Chile, Paraguay and Uruguay, and later Colombia, Ecuador, Peru and Venezuela.
Perseverance and the fear of failure are other drivers — and what kept him from nearly losing the business. In 2006, McDonald’s put the franchising rights to the chain in Latin America and the Caribbean on the block. Staton assembled a group of partners — U.S.-based The Capital Group, Brazil’s Gavea Investimentos and Credit Suisse-backed DLJ South American Partners — to bid around $700 million against investors like Switzerland’s UBS and the Brazilians Pactual and GP Investments.
The tough negotiations were gut-wrenching. “There were many moments when we thought we would lose,” Staton said. “When we won, I told the group that we were the last ones standing.”
It is a way of business he likens to a tale of Julius Caesar, who when celebrating the conquest of a new territory would have a slave whisper in his ear, “Victory is only passing.”
“We don’t get carried away with how great we may think we are or how great our accomplishments might be,” he said. “I think the fear of failure keeps you moving. It helps you make more careful decisions.”
Much of Latin America is politically stable and economically on the rise, yet Staton stays on his toes. “You can’t ever sit back on your laurels,” he said.
He divides his time between Buenos Aires and Montevideo, but for much of the year he is on the road. He is trying to scale back his travel and is cutting back on board activities, but is spending more time on Ashoka, a nonprofit promoting social entrepreneurship.
“At the end of the day it is not what you leave behind, it’s who you leave,” said Staton, recalling how Turner once told him that a big regret was not spending enough time with his family. So he aims to promote work-life balance at McDonald’s.
“It makes the company better and attracts better people to the company,” Staton said.

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