Why Saving The Pots Is Bad Business

I’m not a fan of The Olive Garden which is our topic this Foodie Friday. I grew up eating (and cooking) Italian food and Olive Garden is pretty far from the cuisine I love. That said, I appreciate that it’s a lot easier for one to find authentic Italian food in New York and other big cities than it might be elsewhere in this great land of ours. The Olive Garden might have to do for those poor souls.

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A hedge fund recently produced a very lengthy report on Olive Garden’s parent company.  You can read the entire report here – it’s a fascinating look at how a company can lose its way.  I want to focus on one very specific aspect of the report: the food at Olive Garden.  The lessons we can take from it are very instructive for any business.

One main criticism the deck makes is this:

Olive Garden has seemingly lost its Italian heritage and  authenticity.  (It) lost ties to suppliers that offered authentic Italian ingredients and Italian wines at compelling price points. Now Olive Garden serves dishes that are astonishingly far from authentic Italian culture, such as burgers & fries, Spanish tapas, heavy cream sauces, more fried foods, stuffed cheeses, soggy pasta, and bland tomato sauce. Olive Garden has moved away from its authentic Italian roots and now offers what appears to be a low-end Italian-American experience.

The deck has photos of dishes as advertised and as they actually show up on the table.  The difference is amazing.  But it was one last complaint – along with the reasoning behind why the situation is the way it is that really got my attention:

According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots. Pasta is Olive Garden’s core dish and must be prepared properly.

Uh..duh!  Which is the lesson for any brand.  Diluting your brand causes consumer confusion.  Olive Garden for tapas or a burger?  I think not.  Saving the pots to reduce costs at the expense of the customer experience is lunacy.  Damaging the product – especially the signature product – is a big step down the road to brand destruction.

Many companies lose their core identity in the chase for revenues.  That’s bad.  Hurting the products that got you to this point is worse.  It’s not, as the report points out, just one instance. Breadsticks are another signature dish.  “The lower quality refined flour breadsticks served today are filled with more air and have less flavor (similar to hot dog buns).”  Can your brand survive while committing this sort of product suicide?

Without a brand identity, you’re done.  When any home cook knows more about making your product than you do, it’s time to pack it in.  That’s true if it’s pasta or clothing or web sites or anything else.  Agreed?

 

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Polymaths

An item came across my inbox this morning that concerns what college kids are studying.

English: Self-portrait of Leonardo da Vinci. R...

(Photo credit: Wikipedia)

No, not their phone screens. Instead:

A new study from the American Academy of Arts & Sciences on course-taking patterns of undergraduates finds a significant lack of crossover by majors in the humanities and majors in STEM fields. According to the data, engineers earned approximately 11% of their credits in humanities courses. Meanwhile, humanities majors completed just 8% of their credits in STEM fields.

That’s from the folks at Phi Beta Kappa and the rumor is they’re pretty smart.  STEM is an acronym for Science, Technology, Engineering and Math.  What this is telling us is that something is happening in colleges that, frankly, seems to be happening to society as a whole.  Kids are tuning in to what is of primary interest and tuning out almost everything else.  That’s a shame.  What if Leonardo daVinci had stuck with one or the other?

Higher education is the one chance that those who are lucky enough to experience it have to explore everything.  That’s not happening:

  • Students who received undergraduate degrees earned more credits in humanities subjects than in STEM. Humanities credits represented approximately 17% of the total credits earned by the typical graduate, while the STEM share was 13%.
  • Approximately 37% of credits earned by humanities majors were for humanities courses.
  • Both in terms of absolute numbers and share of all courses taken, engineering students earned the fewest humanities credits (11% of median number earned by these students in all subjects) while social scientists earned the most (equaling 22% of all credits).
  • Humanities majors tended to earn fewer STEM credits than STEM majors earned humanities credits.

College should breed polymaths – a person whose expertise spans a significant number of different subject areas. Such a person is known to draw on complex bodies of knowledge to solve specific problems.  In other words, they’re well-rounded.  They have critical thinking skills and a broad range of knowledge from which to draw conclusions.  Those are the sort of people I want when I’m hiring (or making friends).  You?

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Telephone

Everyone has played the game of telephone.  Not telephone tag in which you and someone else keep exchanging voicemails: telephone.  You whisper a sentence to someone next to you who repeats it to the person next to them and so on until the message comes back to you.  Inevitably, what you said is not what someone heard.  In fact, it’s quite possible that the message is completely different when it comes full circle.

You don’t need to be playing that game to have this happen.  What we say isn’t always what people hear. You may not have malice, you might be telling a joke. They might hear it as threatening or as disgust.  When the cook asks you how you liked supper and you smile and say “it was pretty good” they might be hearing “I didn’t like it at all but I want to be polite.”  When you tell a salesperson that you don’t think you need what it is they’re selling, the good ones hear “I can convince you” instead of the firm “no” you were unable to say for some reason.

Listening is a critical business skill.  That said, people are often distracted as we speak to them.  Maybe the phone buzzed; maybe they are thinking about their last email or meeting.  Because of that, making sure that the message we meant to convey to the listener is what they heard is just as critical a skill.  We must think about how what we’re saying or presenting could deliver an unintended message.

For example – Malaysia Airlines recently ran a contest in which they invited travelers from New Zealand and Australia to answer the question, “What and where would you like to tick off on your bucket list, and explain why.” It offered them the chance to win an Apple iPad or return trip to Malaysia.  Message received?  Well, since a “bucket list” is composed of things one wants to do before one dies and the airline has lost two planes recently, any association with death is probably not the message you want people to hear.  You say win something; they hear that you are insensitive.

One trick I’ve learned when I have any doubt about if what I’ve said was heard as meant is to ask someone to repeat it back to me.  Obnoxious?  There is that risk, but in my mind the risk of being misunderstood is far greater since we’ll never know until the message comes back around.  Speaking and writing clearly are table stakes in business.  Getting people to hear you clearly is part of those skills.

Clear?

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Can You Trust Your Customers?

It’s not news to any of you who are paying attention to media but we’re at a tipping point.

1898 advertising poster

(Photo credit: Wikipedia)

The cracks in the traditional patterns of media consumption have widened to a point where the foundations of those patterns are falling down. Need proof? How about this morning’s piece is the Wall Street Journal:

Hopes that TV advertising will rebound this fall are beginning to dim. TV networks have been banking on a surge in ad spending in coming weeks, ever since an anemic second quarter reported by media companies and a weaker-than-expected “upfront” advance ad-sales market for the new season. The new season doesn’t kick off until next week but already sentiment is starting to change. On Monday, Jeffries analyst John Janedis lowered his estimates for advertising revenue growth in the second half of the year for most of the biggest media companies

Or this from Kantar Media:

“Four of the nation’s five biggest advertisers,” including Procter & Gamble and AT&T, “cut ad spending on traditional media and online display in the first half of the year.”

So now what?

Millennials spend 30 percent of their time with content created by their peers. This means they’re spending more time with peer-created content than traditional media combined (print, TV, and radio).  Nielsen’s most recent study indicates that Americans aged 18-24 watched a weekly average of 19 hours of traditional TV during Q2 2014. That was a substantial 2-and-a-half-hour drop-off from Q2 2013, which in turn had been down by an hour from the year before.  Spending more heavily in those channels isn’t going to happen.  The impact of most digital display is negligible.  Where is the light at the end of the tunnel?

The answer might just be in the audience itself.  Putting consumers and their messages about the brand front and center – probably through social channels – might just be the way forward.  That’s where is the audience is spending time and the messages are from trusted sources.  As Nielsen found:

Word-of-mouth recommendations from friends and family, often referred to as earned advertising, are still the most influential, as 84 percent of global respondents across 58 countries to the Nielsen online survey said this source was the most trustworthy

The real question is do you trust your consumers enough to hand over your brand?  Can you get on board with them creating content that you’ll push for them?  Are you willing to provide tools – images, logos, whatever – or to promote the products that consumers choose, not those slated for promotion in the marketing plan?

Interesting times.  What’s your take?

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Filed under Consulting, digital media, Reality checks

Stupid, Not Evil

Over the weekend I was catching up on my reading. It’s way too easy to fall behind given the pace at which content – useful content – presents itself into my various methods of listening.

English: Rheinkirmes 2006, Düsseldorf, Germany...

(Photo credit: Wikipedia)

One theme that popped up several times was that of allegedly evil actions on some company’s part. Maybe it was the revised Facebook Messenger application which seems to be gathering anything and everything about anyone who installs it on their mobile device. Other were highly suspect of Apple’s intentions as it rolls out the Apple Watch which is capable of gathering quite a bit more data than we might care to share about ourselves. I mean do I really want my pulse rate out there?

There were several more but it got me to thinking. Having worked with many clients and companies over the years, could I recall an instance where some nefarious ulterior motive was discussed as products or services were rolled out?

Nope.

That said, I have seen many instances where those sorts of evil intentions could plausibly be ascribed without stretching the facts to suit that scenario.  After all, in my mind a complete lack of care for other people or who one’s actions harm them is what separates good from evil.  But honestly, it’s more likely to be something else: stupidity.

My guess is that in most of the cases where an app or service over reaches there isn’t evil intent.  It is probably just someone being stupid.  They think it’s ok to gather data just because they can or that they might want it at some point.  They may be programmers who think they’re being helpful but haven’t had any supervision from a businessperson.  One key in my mind to great decision-making is to consider the consequences of that decision.  I suspect that thinking never happened.  In other words, stupid.

I’m not naive.  There are evil people out there.  However, before we go crazy calling for the heads of whomever released an app that gathers a lot of seemingly unnecessary information about us and our habits, perhaps we should remember that there are way more stupid people than there are those who are truly evil.  That’s my take.  Yours?

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Pay In Advance

Foodie Friday at last! Here is a question for you: why is it that we pay for a meal in most restaurants after we are done and yet we pay at most quick service places before we actually even get the food? I’m guessing the immediate thought you had was that you sit and enjoy the meal in a restaurant, perhaps ordering as you go, while at a fast-food joint you’re eating and running. Is that really true though and what effect might changing that thinking have on both your experience as a customer and the restaurant’s business?

A meal at Claim Jumper which has its headquart...

(Photo credit: Wikipedia)

Let’s give it some more thought. How often does your party order additional food (other than perhaps dessert and/or coffee) once the initial order is given? Do you usually order your appetizers alone or are you specifying your entrées at the same time? I’ll bet it’s the latter.  I’ll make an argument that changing that thinking might be better for both parties: the customer and the restaurant.  There’s a business point in here too.

First, the customer (always in this space!). By ordering the entire meal upfront and settling the bill even before the food arrives the customer is free to leave when they’re done.  How many times have you finished a meal and then had trouble getting the server’s attention?  Haven’t you ever given a server your credit card only to have them get another table’s food while you wait around?  Annoying, isn’t it?  And good luck if there is an error on the bill – that can take quite a while to fix while you’re ready to leave.

The tip isn’t an issue either.  In many other countries, service is stated upfront and tipping is discouraged.  Sure, we like to think of the size of the tip coinciding with the level of service but there is nothing that prevents you from putting some additional cash on the table as you leave if you feel the service charge isn’t enough.

Next, the restaurant.  Turning over tables is the business.  The longer people stay put the fewer meals you’re serving.  With the bill settled I’m wagering people will leave sooner.  In doing a little research on this I found that when upfront payment was tried it increased table turnover by over 80%.   Sounds like a win-win to me.  So why isn’t this the norm?

That’s the business point.  Too often we do things just because that’s how we (and in this case almost everyone else) do things.  Part of our job as businesspeople is to ask questions about our systems and processes and remember that made sense a year ago may not make any sense now.  Even if it does, maybe there is a better way that works both for your business and for your customers.

Make sense?

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The Data Sandstorm

One client is in the midst of the back to school season and the data is flowing in like water over the Niagara Falls.

English: A massive dust storm cloud () is clos...

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There is so much coming out of web activity, social activity, email activity – where does one begin? It got me thinking about how it is like driving around in the fog or a sandstorm. The data get more dense and navigation becomes impossible.

One thing some people do to clean off the windshield is to wipe away the data.  They regularly make decisions based on gut feel or something they read that may have worked foe someone else.  Why let facts get in the way of a good story, after all?  I am not a fan of using data as a crutch nor as a shield.  It should be used to guide decision making but not as a replacement for your own vision. However, if you don’t measure the impact of whatever decisions you’re making and confronting the results of those decisions, the business is managing you and not vice-versa.

Data needs to support decisions.  When someone says we’re going to do X ask them what data they used in deciding to take that course of action.  The less data-driven the decisions was (and that’s OK), the more rapidly the action needs to be measured and the result quantified (although some of the results may be qualitative instead of quantitative).  I’ve found that just asking the questions can have a beneficial effect.

Yes, it’s inconvenient when the numbers don’t back up the course of action you (or your boss!) have in mind.  It may be inconvenient but it shouldn’t be ignored.  It may be hard to navigate in the sandstorm of data that overwhelms us but no one said business was easy.  Thoughts?

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