Category Archives: Thinking Aloud

The Fundamentals

I was watching the College World Series the other night. My Wolverines are in the final with a chance to win a very surprising national championship (they weren’t supposed to get this far). Go Blue!

Many of the articles attributed their success to great pitching and that’s something whose importance you can never overstate in my opinion. However, there is one other factor I noticed in watching this team that’s applicable to any business. This team has been well-coached in the fundamentals. Let me explain.

Bunting is a lost art in baseball. It’s attempted in many of the major league games I watch and is rarely executed perfectly. Maybe I’m yearning for the age when Phil Rizzuto would school the Yankee teams on bunting (he was among the best ever at it) but I’ve now seen Michigan lay down several perfect bunts on the correct side of the plate based on the situation and the defense. That’s knowing and practicing the fundamentals.

They run the bases well and don’t make bad decisions. Sure, a coach is involved in the decision, but if you don’t hit the bases in stride and run with your head up you’ll miss the “stop/go” signal. They are not too anxious at the plate, often running the pitcher deep into the count. Over time, that has an impact and the more pitches you see, the greater the likelihood that you’ll get one you like. Again, these are fundamentals.

The same holds true in your business. How well schooled is your staff – or are you – in the fundamentals of your operation? Does everyone understand how you are creating value for your customers and your enterprise? Since, as Eisenhower said, the plan may be useless but planning is essential, is everyone involved in that fundamental process? You probably use a lot of industry-specific terms in your office. Does everyone fully understand them and speak your language fluently?

As managers, our job is to make sure that the team has the skills to perform and that skill almost always relies on some fundamentals. Teach them, practice them, and make sure that they’re executed perfectly every time. Like this Michigan team, you’re probably going to overperform and get unexpectedly great results. Make sense?

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Vendors And Partners

President Reagan has been quoted as saying “I’m from the government and I’m here to help” are the most terrifying words in the English language. One phrase I used to hear a lot that was just as terrifying to me was “we want to be your (fill in the blank) partner.” That could be a tech partner or a marketing partner or whatever. The thing was that most people have a tremendous amount of difficulty distinguishing between a partner and a vendor. The sad truth is that very few people or organizations that you’re in business with want to be the former and that’s a shame. Vendors are a dime a dozen while good partners are rare.

How do I distinguish between the two? Vendors send you bills while you usually end up sending a partner their share of your joint profits. Vendors come into your office and tell you how great their product or service is, even if you’re using it or them. They tell you their story and ignore yours.  Instead of telling you what they are doing for you specifically, they tell you about the latest success story they’ve had, usually with some other “partner” of theirs.

It’s always easy to spot the vendors and the potential partners almost from the second they walk in the door. Partners will talk about you and your situation and tell you specifically how they can help. They’ll ask for reasonable compensation but also volunteer to share in the upside because they believe in their product and its ability to help you. Vendors come in with a canned, generic pitch. Their rates are fixed in stone and they don’t share the risk and so don’t have any interest in sharing the rewards.

I’ve always felt that my goals and those of my business partners were very much aligned. I can’t say the same of many of the vendors I’ve worked with over the years. I’ve also always tried to do business with my consulting clients and franchise candidates in that way – as a good partner and resource rather than as a vendor. Is that a difference without a distinction? Not in my book. How about in yours?

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Finishing In Style

Let’s think, this Foodie Friday, about how dishes are “finished.” No, I don’t mean how you eat every last bit off of your plate. Instead, I mean those last few things you do as a cook when the dish is done but you’re adding what I would call a lagniappe of sorts – a little something extra at the end, almost a gift.

For example. Let’s say you’ve just cooked your guests some perfect steaks. Now you could certainly just let them rest and present them to your hungry diners or you could finish them in style. Maybe you make an herb butter which you allow to melt over the warm steak, adding another layer of richness and flavor. Maybe you provide a container of truffle salt, adding heady umami to the dish.

We’ve all been offered grated cheese to go on our pasta. That’s finishing in style in my book, especially if the cheese offered is correct for the dish itself and not just the same cheese for everyone (and heaven forfend that’s it’s grated ahead of time!).

Finishing in style can be as simple as offering a drop of true balsamic vinegar for aged cheese or even ice cream (don’t knock it until you’ve tried it). What I think it really shows is that the cook is willing to go the extra steps to make a meal memorable.

It’s the same in business. When was the last time you hand-wrote a thank you note to a customer for an order or sent a gift to a new client to welcome them aboard? When I joined my franchising network and finished training, a lovely bonsai tree showed up at my house to congratulate me. Did it make me work any harder? No, but sure showed me that I had exercised great judgment in joining the group that I had. That was finishing in style.

Business today is way too competitive for any of us not to think about the lagniappe – the something extra. How can we finish each transaction – each dish we prepare – in style?

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Who Owns You?

Foodie Friday! I installed a couple of the food-delivery apps on my smartphone this week. Some of my favorite local places use the delivery services to expand their business and I thought having the ability to order in might be a nice option. Of course, that got me thinking about what exactly the restaurants got besides the additional order (at a lower price when you factor in the service’s cut but no service cost). The answer, as it is with almost everything today, should have been data but as it turns out, not so much.

The reality is that the delivery apps hang on to the data. They “own” the customer, not the restaurant, and that’s a problem, or it should be. Restaurants are giving up the direct connection to their customer by not getting that data and they have no way to combine it with their offline, real-world data gathered when I actually show up to eat as well as with the data they might get from a reservation service such as Open Table.

Ownership of the customer is an enormous issue no matter what business you’re in. For example, your car spits out reams of data about your location, your driving habits, and many other things. How many? A report by Consumer Reports said that “There are more than 200 data points in cars today, with at least 140 viable business uses.” Who owns the data and, therefore, the customer? The dealer who sold you the car? The manufacturer? I, of course, think the right answer is that YOU own the data until you give it to someone for a specific purpose.

Think about how many things around you gather data these days. Your TV, refrigerator, heck, even your toothbrush might be collecting information about you and your habits. Who owns you as a customer? I bought my TCL TV through Best Buy. It has Roku built in. Who “owns” me? What’s being shared?

It’s a question you need to ask as a business person when you partner or work with a third party. I think customer ownership is a fundamental issue and it’s only going to become more important. Of course, as a consumer, you ought to be every bit as concerned but we’ve talked about privacy a lot here so not today (84 posts and counting in the last 11 years!).

I really don’t care much about DoorDash or GrubHub. Without the restaurants they serve, I wouldn’t ever install or use them. I’m not their customer in any real sense – they provide a nice service but it’s the food I’m after, right? So why do they think they have a right to own me? Are you asking that question at all? Maybe you should!

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Ghost Kitchens In The Sky

Our subject this Foodie Friday is kitchens, specifically kitchens that service your takeout order. Think about it for a second. You place an order for a meal to go at your favorite dining establishment. In some cases, you go there to pick it up. In many other cases, even years ago, you’d order a pizza or some Chinese food and it would arrive at your front door looking just as it did when you picked it up yourself. You probably didn’t think about if it was actually cooked in the restaurant’s kitchen since it looked and tasted the same as when you ordered at the place. In fact, it almost certainly was cooked by the same hands that were serving the dine-in customers at the same time.

Fast forward to today. With the advent of food delivery services, many more establishments are offering food for delivery. Most sit-down places have experienced a big jump in takeout, so much so that it’s become a significant percentage of their business. I think it also has to do with our general impatience these days. Who can sit still long enough to enjoy a meal cooked to order? So, many places are asking themselves why not set up a kitchen specifically to handle the delivery business rather than expand the restaurant kitchen to handle the additional orders. Ghost kitchens have arrived.

As one article described them, ghost kitchens are delivery-centric cooking spaces without the added hassle of in-person dining that a traditional restaurant brings. Think of them as cooking-focused WeWork spaces. Lower rent, no front of house, no cashiers and no customers tapping their feet waiting for their food are all part of the appeal. As long as the food tastes the same, why would the customer care?

I could write another 1,000 words about ghost kitchens and the pros and cons but the point I want to make today is that they exist because restaurants are rethinking their businesses. If they can grow at better margins and lower costs by doing that rethinking, can’t you? Some pretty big players – Google Ventures among them – are getting involved, and you know it’s just a matter of time before Amazon through Whole Foods starts delivering all those great dishes you can buy at your local store for a take-home or to work meal.

Is it inconceivable to you to share accounting, legal, and other back-office functions with another business that’s non-competitive? A ghost kitchen for your business? How about having your sales staff pick up some lines that complement yours and offer both to customers that might be interested?

If you’re not thinking out of the box, the box might just become a coffin. Instead of a ghost kitchen, it might be a ghost business!

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You’re Missing The Target

Many of my friends are over 65. Most of them don’t act like it. Sometimes they – and I  – contemplate being younger but I’m always of the mindset that the only way I’d take back 30 or 40 years would be if I could keep the bank accounts and credit cards I have now. While it’s true it used to be a lot easier to get out of bed in the morning, it’s also a lot easier now once I’m out of it to pretty much engage in consumer behavior with a lot less care than I did all those years ago.

It’s baffling to me, then, why most marketing budgets ignore those of us over 55. In fact, according to U.S. News & World Report, we baby boomers control 70% of the country’s disposable income and spend $3.2 trillion a year. We provide over 50% of consumption and yet we are targeted by 10% of the dollars. My kids are millennials and while they’re both gainfully employed they don’t spend nearly what I do. Most millennials don’t spend like boomers yet they’re the target audience for a lot of marketers.

I don’t get it.  Not only is my generation spending more, but I think we’re also more available to be marketed to. We’re heavy digital users (got to keep up with those reunions!) and use Facebook and Instagram quite a bit. We also are still watching “traditional” tv and news. We read our email too. It’s like we’re begging to be sold.

Millennials tend to rent. That means traveling light – who wants to move a ton of stuff when the lease is up? And unfortunately, they’re also the first generation that entered adulthood in worse financial shape than their parents. They spend every dollar carefully.

Marketing has always been “square peg, square hole” to me. Unless your product can’t be used by older folks (pregnancy tests is about the only thing I can think of), the reality is that you should be targeting older folks. Yes, we’ve built up many years of brand preferences but hey, I just switched to a new toothpaste so you never know!

So why aren’t you marketing to boomers? Seems like an opportunity, no?

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Shopping At The Farmer’s Market

It’s Foodie Friday and the local farmer’s market opened up here a couple of weeks ago. Of course, the state farmer’s market is open year-round but it’s huge and a 25-minute drive. The one here in town is more intimate, less-crowded, and only 6 minutes away.

I like farmer’s markets for a few reasons. The first is that the quality of food – mostly produce – is generally higher than what you can get from the supermarket. It’s likely it was picked either that morning or the day prior. It certainly didn’t have to travel from Mexico or South America. Most importantly, these markets are inherently seasonal. You don’t get watermelons until late summer (OK, earlier here in the South) and there aren’t red things masquerading as tomatoes in March.

As a cook, the farmer’s market presents both an opportunity and a challenge, one that actually is mirrored in most businesses. The opportunity is to find ingredients that are in peak form, and because they’re plentiful, at a lower cost (that whole supply/demand thing, you know). The challenge is that to take real advantage of the market, you have to be willing to work with what’s available and that can be limiting. You might want to make a peach cobbler for dessert this week but it’s blueberry season now so that’s dessert.

Businesses face the same challenges as cooks. There is a seasonality involved in almost every business and the opportunity in season is to maximize profits. I think there’s a real opportunity outside of your prime season as well. This is when you can experiment with new products or promotions. You can look for niche audiences (what’s available!).

There’s also the challenge that my little market faces each week. It’s 15 miles from a much bigger market. How can it attract high-quality vendors and draw from surrounding communities? Obviously, most businesses face similar issues to distinguish themselves if they’re realistic about the choices consumers have these days. When I was working in TV we worried about the other networks. Broadcasters today have to consider anything with a screen as competitive.

Mostly I like farmer’s markets because they force me to be thoughtful and creative. How can I plan out a menu that’s the best within the limitations of what’s available? You might ask yourself the same thing about your business. Every business has limitations, whether financial, supply chain, or even people. How do you get the best out of what’s available?

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