Authors: Barry Gibbons
Tags: #Business & Economics, #General
Our SNAFUs are now legendary. Most of the industry is labour-intensive – unsurprisingly given that the middle letter in QSR stands for service – and a thousand gurus in ten thousand business books will tell you the key differentiator in a service business comes from the capability and motivation of the front-line people. So what do we do? We start them on minimum wage. And if we could start them on less, we would: correct? In London, it now costs about £6.00 an hour at a parking meter. If you work in a quick-serve there, you can look out of the window and see an iron pole earning more than you do. We usually train new employees by asking them to breathe on a mirror. If it fogs up, they’re in there straight away, facing the customer, determining their experience. Annual labour turnover on the front line often exceeds 100 percent and sometimes three times that. If we tried, we couldn’t do much more to alienate our troops. And then we leave our brands in their hands.
If sales are lower than planned, what do we do? We cut costs to defend earnings. Of course, if that’s at the restaurant level, the only short-term (variable) costs to cut are those associated directly with the food, labour levels and maintenance – and indirectly with the advertising. So we respond to what is very likely a drop-off in the customer’s perception of our market distinction, and/or their awareness of it, by worsening both of them. So, guess what? Revenues drop further. Now what can we do? Well, this time we’d better really reduce those variable costs …
Despite all this, the foodservice industry still fascinates us. Done correctly, it can still be the nearest thing to a theatre experience in the lives of millions of everyday folk. There are probably more smiles per day in the world’s quick-serves than there are in the world’s family homes. It has a special place in our hearts – after all, we know what goes on. Few people grow up without experiencing a spell working in a quick-serve. Those who do so are the worse for the omission. The pub in London, the noodle stall in Bangkok, the tapas bar in Madrid, and the infinite variety of quick-serves in the United States – they are all part of the host nation’s fabric, which is probably why we tolerate stuff happening in them that would turn us homicidal in a shoe shop.
The Queen is excited by my new project, and asks me to pass on a message. If any of you reading this have an entry-level position open for a trainee, she has at least two names for you to consider. One has big ears.
2. It’s only rock ’n’ roll
T
he history of the quick-service restaurant industry has an uncanny parallel with that of rock ’n’ roll. Oh, I’m sure some form of quick-serves existed long before Bill Haley glued his kiss-curl into place and launched a hundred thousand cinema seat slashings; I’m sure somebody provided burgers for the Pony Express riders; and an adapted teepee probably dished up buffalo wings (literally) for Native Americans centuries before that. But the fact remains that when Ray Kroc was shaping the genesis of McDonald’s, Elvis was howling his first attempts in the Sun studios for Sam Phillips. That’s alright Mama.
I fell in love with both industries at around the same time. It wasn’t always easy. On our new TV, my father watched as Jerry Lee Lewis sang ‘Great Balls Of Fire’ while playing the piano with his backside. Our TV was situated about three feet away from his collection of Rachmaninov records, which he played lovingly on a radiogram the size of a Land Rover. Thus we began a generation gap that eventually measured 2,309 linear miles in a house of about 1,750 square feet. We eventually narrowed it by me moving out.
I have watched both industries for half a century now. Surprisingly, rock music has some big lessons for quick service. Here are three to ponder.
If it’s long-term success you want, the benefits of constant reinvention are widespread and obvious in rock. Almost the opposite is true in quick service. Take Eric Clapton. Every couple of years, his hairstyle changes, his eyeglasses change, his clothes and imagery change, his musical genre changes, at least slightly, and his musical ‘allies’ and backers change.
But it’s still the same brand name, and the same core competence.
And it’s still fresh and relevant after forty years in the world’s most cluttered and competitive market. For Clapton, you could substitute McCartney, Paul Simon, Elton John, Madonna, or your own favourite rocker. Compare them with the big names in quick service – where all of them have faltered at one time or other, and had to scramble to try to recover. The lesson is in the adjective ‘constant’ fronting the word ‘change’. Change even if you don’t think it’s needed.
Second lesson? It’s the check and balance for the first one. Change isn’t just about adding. You can get too complicated and confusing. Most rock groups were lean and mean, of necessity, in their early days. But as they stayed around and got richer, they became reliant on studio orchestras, huge concert productions, choruses of backing singers, multimillion-dollar videos, and so on. Winning competitiveness is about being distinct, and it became tough to pin down exactly what these guys were about. Then, when it threatened to get out of hand, realization set in.
‘Unplugged’
saw them re-establish their basic distinction and offering, and many careers were salvaged.
In quick service, the lesson is clear. Change is needed, but don’t just grow by adding products, complexity, and confusion. You try something new. Ditch something that’s not working. Can you still perform unplugged? Don’t let the world lose sight of why you were, and still are, good.
Finally, rock teaches this industry that if you can’t perform live, you won’t make it in the long term. If you look at any rock stars who have stayed the distance – some of them for forty-plus years now – they all have one thing in common: they can deliver, live, in concert. Sure, they have complemented this skill with studio technology and theatre, but the long-term winners, bar none, have always been able to deliver the goods on stage in front of an audience. It is very easy to look at the emperors of quick service and come up with ideas that might ‘freshen’ their offering, and draw more new and repeat customers, and heaven knows I am an advocate of trying out new things. But if these ideas are going to go beyond market testing – if they are going to become a part of the daily offering of the brand – you have to be able to deliver them consistently, in all geographies, at all times. They must be delivered on specification in the drive-through on a Monday night, and at 3.30 p.m. on a wet February afternoon. That’s the ‘big test’ to put before the Chairman’s new brainchild, or the new product development team’s proposals. If you want to know how important this point is, buy yourself a ticket to a Rolling Stones concert – not to enjoy yourself, necessarily, but to understand the prime reason why they still fill venues and sell records more than forty years after I first saw them at the Apollo Theatre in Manchester, England. Does your brand deliver, to specification, every aspect of its act when you’re home asleep?
Enough lessons. But I figured out long ago that nobody on the planet has a monopoly of wisdom, and the idea of being able to learn something from ‘Keef’ Richards appeals to some warped part of me. ‘Keef’ really is astonishing. I haven’t seen anything as unwholesome looking since I once pondered the possibilities of eating a McRib.
Now, a competition: if the two industries are linked, what’s the rock song title, from the past fifty years, best suited for a potential new quick-service brand? Email me at [email protected]. We can only offer honour and publication as a prize. My entry is
Crying, Waiting, Hoping
, released by the Beatles in 1963.
3. Time for reinvention
I
am, of course, a definitive Boomer. I arrived at the ordering point of the drive-through of life in January 1946, the first full year of post-war peace. As it happens I arrived very early, weighed in at less than 4 lbs and was not expected to last the night. I survived, and immediately set about my life goal of putting on another 185 lbs.
Depending on which definition you use, I was followed by up to 100 million fellow-Boomers in the United States and Western Europe. From my deep research on the subject, I have one unchallenged observation about my peer group. We are all profound liars.
Here’s an example. At the drop of a hat, or at the remotest hint of a lull in a conversation, a true Boomer will regale you with a reprise of his or her exploits from the 1960s – which has to be a lie. If they were Boomers, they wouldn’t remember what happened in the sixties. Take my story, for instance. There were four of us who were inseparable friends: me, Ernesto ‘Che’ Guevara, Bob Dylan and Cassius Clay. We went everywhere together, and, my, oh my, did we get into some scrapes. One night, in the mid-sixties, just before the Newport Folk Festival, I remember we were crowded into Bob’s dressing room. We were all working with him on the lyrics to
Maggie’s Farm
when he suddenly looked up and told us he was going to forsake his folk-singing heritage and go ‘electric’. We told him he was mad. He had just achieved icon status as the legitimate heir to Woody Guthrie, and here he was throwing it all away.
As if that wasn’t enough, Cassius soon turned his back on everything that had secured his champion status – renouncing his name, religion and the establishment that had promoted him. He then re-emerged as Muhammad Ali, which seemed to us another daft idea doomed to failure.
What history shows is that neither of them threw anything away. They both looked at their level of achieved success, and – for whatever reasons – decided to change. In their case, however, change wasn’t about tweaking. It was a fundamental reinvention of everything they did and stood for. At the time, it wasn’t seen to be risky – it was seen to be suicidal, because nobody else saw the need for it. Everybody forecasted doom.
What happened, of course, was the opposite. In both cases, they took themselves to higher levels, actually grew the markets they operated in, and became global statesmen.
Let’s contrast their brave approach to change with the quick-serve restaurant industry generally, and some of its ‘stars’ specifically. For sure, there have been substantive changes. (And, equally for sure, still more are needed.) If you look at any of the great names of today, they bear little or no resemblance to their genesis models in the 1950s. There has been huge and fundamental change.
So, what’s the problem? The problem was – and remains – in the timing and mental approach to change in this business. Almost every substantive change in the quick-service industry came as a response to a period of worsening performance. It came after a peak of success. It came when owners, investors, franchisees and customers (delete as applicable) were becoming increasingly unhappy with what they were getting out of the current offering. It came from increasing pressure to do something – almost anything – to stop a down-trend. It was reactive to decline, not proactive to new growth opportunities. I do not believe the history of the quick-service industry has witnessed one Dylan-esque or Ali-esque example of reinvention before everybody else saw the need for it. The movers and shakers in quick service do not have the mindset to take risks with what seems a successful concept, one that seems to have some mileage left in it. The strategic approach to change falls somewhere between ‘If it ain’t broke, don’t fix it’ and ‘Milk it for every penny, then we’ll figure out what comes next’.
Does it matter? After all, we can cheerfully agree that ‘big changes’ have happened over the period in question, so what’s the big deal? I think it does matter. Reactive change is usually just a sticking plaster. It addresses the symptom, not the disease. The whole mentality of change management in this scenario is one of doing as little as possible to get by; to prop the figures up again for a few quarters. Then you repeat the whole thing – probably with a new executive team and advertising agency. Proactive reinvention is different. It is enormously risky, and you are constantly ambushed by the CW2 guys (‘It Can’t Work, Won’t Work’).
But you are thinking ahead positively, not backward negatively. You are planning your growth with a clear mind. You are also planning to change and grow the actual market within which you operate. And you are planning for long-term success – to be a market icon or statesman.
The quick-service world is now made up of brands and operations with sticking plasters all over them. How significant is that? If somebody had thought like Dylan or Ali,
one of the ‘Big QSR Names’ would have invented Starbucks
.
Now, did I tell you about the four of us and the Cuban Missile Crisis? How I won £10 in this crazy bet with Che Guevara? Man, those were the days …
4. Only the good die young
T
hose who are familiar with my entry in
Who’s Who
often remark on the things I have omitted. For rather obvious reasons, I have deliberately left out my gold medals from the Berlin Olympics, my ‘friendship’ with Tallulah Bankhead, and the fact that I am the last first world war fighter-pilot ace writing about fast food.
A rather more surprising omission, however, is my Nobel Prize for QSRs, awarded in the early 1990s. It was awarded, if you remember, for my breakthrough work on the genome of Burger King’s Chicken Tenders. Yes, it was I who finally solved the mystery of the DNA architecture of this astonishing product.
The linking of scientific thesis and fast food has been frequent, and, in my observation, almost always useless. In my time, I have personally been confronted by thousands of pieces of scholarship on the subject and ignored them all.