Tag Archives: Strategic management

Tasks And Experiences

Happy Foodie Friday! This article came into my news feed this morning. It’s about Walmart’s store of the future, where robots can fill grocery orders up to 10 times faster than humans. Pretty spiffy and it’s an interesting read, but it also got me thinking about a pretty important distinction about which I think you may want to ruminate.

When I go to the grocery store (every Thursday!), I have a list of things I want to buy. Most of the things on that list are there because I’ve planned out meals for the week and I need things to make those meals possible. It’s a pretty straightforward task. Other things are on the list because I use them in general and they’re on sale. Maybe I have a coupon that for them that is expiring. Maybe they’re on sale AND I have a coupon (can you feel the excitement?). Again, it’s pretty cut and dry – here’s the thing on the list, buy it and bring it home.

That’s really only half the trip, however. Inevitably, I find things to buy that aren’t on the list. I’ve found them as part of the shopping experience. Maybe it’s an unadvertised sale, maybe some local produce came in and looks spectacular. This is experience-oriented shopping versus the aforementioned task-oriented shopping.

Back to the article. It’s lovely that Walmart (and Amazon and others) are extremely efficient in servicing these orders, but they’re only serving the task-oriented shoppers. In-store discovery is impossible when there is no in-store experience. That’s why you always see “people who bought (the thing you’re buying) also bought (another thing).’ I think it’s also why Amazon is moving into physical stores, both through Whole Foods and their own “register-less” stores. Obviously, serving the task-oriented shopper is only half the battle.

I think it’s the same in other businesses.  Almost every business interacts with customers, partners, vendors, and employees in a task-oriented framework. When you stop and think about it, good businesses make sure there is an experience-oriented aspect to the relationship as well. What I mean is an experience that the participants can enjoy for its own sake and not as a means for accomplishing a task or achieving an extrinsic goal. Maybe it’s just drinks after work with no agenda. Maybe it’s a round of golf. All of my best business relationships had both task-oriented and experience-oriented aspects.

Think about how you interact with your customers. Is everything a task where items get ticked off a list or is there an experience that’s part of the relationship? How can you bring that balance?

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Filed under food, Thinking Aloud

Most Read Post Of 2019

Happy New Year and a new decade to boot! This post was the most-read screed I published in 2019. It’s fitting both to end and to begin the year with it since the topic involves change. This is the time of the year when many people stop and assess their lives which often leads to change. This piece, originally titled “Taking The Beaten Path” has to do with some issues involved in starting your own business. I published it last February and I hope you’ll give it a read and some thought if you’re thinking about starting fresh in 2020.

One of the questions that has come up often in my newish role as a franchise consultant has been why one should look to invest in a franchise to begin with rather than starting a business from scratch. After all, there are generally fairly substantial franchise fees associated with a franchise along with the other expenses one might expect when starting a business plus you usually have on-going royalties. You’ll still have to pay to incorporate, you still often need insurance, licenses, equipment, space, and people. Why incur the extra fees on top of the ordinary expenses? It’s a good question and I have what I think are some good answers. If you’re thinking of starting a business or maybe changing the nature of the business you’re running, here are my thoughts.

First, the biggest advantage of buying into a franchise is that it’s a business in a box. It’s a proven business model, one that comes with built-in support. Almost every franchise I work with has some form of training and on-going mentoring. I think about that in terms of the businesses that have hired me to consult in the past. Much of what I did would have been covered by that sort of support, negating the need for an outside consultant. The franchise will have research and the business results of all the other franchisees. That’s invaluable and beats the heck out of going it alone.

Another consequence of that is you’ll probably experience much faster growth. You won’t be spending time formulating a business plan. Instead, you’ll be getting trained and executing one that has been time-tested. Something as simple as logo design, which can take time and several iterations, is not really a concern. You’ll generally be presented with operations manuals and marketing materials. Your time to market is greatly decreased.

One thing that is much easier is financing your business. Franchises are less risky in lenders’ minds since they’re known brands and proven businesses. While banks aren’t the best source for franchise ending, there are many lenders who specialize in that (I work with 6 of them) and SBA loans are easier to come by as well. Finally, your potential customers will already know who you are. Most franchises have good brand recognition, and even those that don’t have a current local presence can often benefit from being seen as part of a bigger entity.

The Bureau of Labor Statistics says that roughly 1 in 5 of all businesses in the U.S. close after the first two years of operation and a little over a third shut their doors after four years. You can beat those odds by taking the beaten path and investing the franchise fee to gain the above benefits. In my mind, and why I added this to my consulting portfolio, that investment yields as good or better returns than blazing your own new trail. What do you think?

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Filed under Franchises, Helpful Hints, Thinking Aloud

Eating In The Cafe Car

This will probably be the last original Foodie Friday post of this year (and decade!). I’m writing it whilst barreling north on a train. I’m a fan of train travel. Putting aside the environmental pluses, I think it’s more relaxing and more social than driving or taking the plane.

The train has a cafe car that offers up snacks, drinks, and food. The “food” consists of microwaved stuff – burgers, sausage and egg biscuits, wraps, etc. I think you can probably find most of the items at your local Costco or supermarket. The drinks are generally unhealthy sodas (yes there’s just water) and the snacks consist of candy bars and chips. It’s not the sort of stuff that you would choose if you had a choice, but when you’re on a 9-hour train trip you really don’t have much of one, which explains the line out the door.

Most of the time you would not catch me eating anything that’s offered here. Oh sure, I love me some sausage and egg on an English muffin, but I’ll usually have a multigrain muffin with plenty of fiber, not some white bread masquerading as a muffin. I might put some interesting cheese on mine and not the “cheese product” I’m sure is on this thing. Oh yes, of course, I had one. I’m hungry and they were out of the healthier options

The cafe car got me thinking about what sometimes happens in business. When businesspeople find themselves in an unusual circumstance they often will let their standards slide. I suspect they feel much as I do now – they solved the immediate issue (hunger in my case) but there is guilt and the knowledge that the “solution” they found might have created more problems than it solved.

If I had planned ahead, I’d have packed a decent snack and brought my own beverages. Money isn’t the issue – everything in the cafe car is reasonably priced (except the liquor – $8 for a drink? And I thought the airlines were committing skyway robbery!). The issue is solving my problem without lowering my standards. That takes planning. Is your business doing that?

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Filed under food, Helpful Hints, Reality checks

Looking From The Inside

While you’re busy reading this, I just might be anesthetized. Today’s screed was actually written yesterday while I was preparing for today’s colonoscopy. For those of you under 50 who have yet to enjoy the ride on what my friends and I call “The Silver Stallion”, you’re really not missing much. Anyone who has ever had one will tell you that the prep is worse than the actual procedure. Then again, how could it not be since you’re mostly unconscious during the exam?

The prep involves a day of a liquid-only diet. Clear broth, coffee or tea (NO milk though), sports drinks (nothing red or orange). You get the idea. At some point, you drink some nasty stuff that evacuates your bowels. It’s basically the worst case of diarrhea you can have without a trip to some restaurant with a D health rating.

OK, you get it. So why am I bring this up on a business blog? Well, there are lots of other ways to screen for colon cancer but colonoscopy is by far the best. If you’re over 50 you need to get one and keep getting them every 5-10 years (your doc will tell you how often). The reason it’s so good at detecting a problem is that you’re being examined from the inside out. It’s not looking at symptoms, it’s not guessing. It is a first-hand observation of what’s going on.

That’s something more businesspeople need to keep in mind. Too often we don’t do the first-hand investigation or look directly at what’s going on, preferring to look at data. Sometimes you need to speak to the people who are producing what’s reflected in the data. You need to reach out to customers, partners, suppliers, and employees. You need to get inside the business.

The other thing that goes on during a colonoscopy is that the doctor will remove any polyps that are found. Most of them are benign but can become something that’s problematic. The scope can spot even tiny ones. That’s another advantage of getting inside the business – you can often spot small issues and address them before they become big problems.

Unlike a colonoscopy, getting inside your business isn’t something that can happen every 5-10 years. It needs to occur regularly, with quarterly mini-reviews and annual exams. Like the colonoscopy, prep for that review makes people uncomfortable and unhappy. The good news is that the prep is worse than the exam, and isn’t it nice to know that you’re in good health?

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Filed under Consulting, What's Going On

Another One Bites The Dust

You didn’t think that you were going to escape Foodie Friday without a missive from me, did you? This week our story is a little sad (OK, quite sad for those involved) but instructive as well.

You know that I’m a huge fan of sous vide cooking. In fact, I wrote all about those feelings just about 5 years ago after I received my first immersion circulator. To review, you French scholars out there will recognize that the term means “under vacuum.” You place whatever you’re cooking into a plastic bag, extract the air, and seal it. The bag (or bags) is placed in a water bath. The immersion circulator holds the water at a steady temperature which is the desired end temperature of the food.

All those years ago, immersion circulators cost around $1,000 and were not really marketed to the home cook. I remember watching the Top Chef contestants using them but not fully understanding that this was a tool that could be widely marketed to the home market as well if the cost could be brought down.

Enter our subject today. I’ll let TechCrunch take it from here:

Founded in 2012, Nomiku became a plucky Silicon Valley darling by bringing affordable sous vide cooking to home kitchens…The company was able to bring a cost-prohibitive cooking technology down to an affordable price point, only to see the market flooded by competitors.

This is a perfect case study for businesspeople. First, the company was founded to solve a problem the founders had. Importantly, they realized that many others – home cooks who were aware of sous vide but who couldn’t afford a $1,000 kitchen toy – had the same problem. They raised money (on Kickstarter), solved the engineering and production problems, and produced a beautiful product for $300.

Unfortunately, an immersion circulator isn’t really a defensible idea. Sure, you might be able to protect certain elements but as most computer manufacturers found out during the PC boom, there’s kind of a race to the bottom. I actually have two immersion circulators in my home now and neither costs more than $200. The Nomiku is still listed as costing more.

How does Apple manage to market products that cost significantly more than its competitors? Because they differentiate the bulk of their products. The function differently. They’ve got better security. For the most part, an immersion circulator does what it does. Sure, bells and whistles such as Bluetooth and timers can help justify a higher price, but sadly, not in this case.

Could they have foreseen that a lab products company would migrate into making products for cooks? Who knows, but it does remind us that having a great idea and even great execution isn’t necessarily enough. If the idea is great, competitors will be at your door quite soon. You must always be looking at how to stay one step ahead while building up defensibility on your rear. Easier said than done, I know, but the business world is unforgiving as these folks found out.

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Filed under Consulting, food, Reality checks

Pots And Pans

Happy Foodie Friday! Have you recovered from last week’s massive food fest? If you were the host of the festivities, at some point you hauled out some pots and pans. Cookware is the most basic kitchen equipment besides a great chef’s knife (you have one of those, right?) Other than when you’re outdoors cooking on a grill or smoker, you pretty much need a pan or a pot or several of each to get the job done.

This isn’t going to be a “how to equip your kitchen with cookware” screed. The reality is that my favorite sizes and types of cookware may not be at all appropriate for you. I mean, I cook on a gas cooktop which means that I like cookware that can handle high heat and distribute it evenly. You may cook on an induction stove which means your pots and pans need to be a “ferrous” metal – meaning a magnet needs to cling to them to work properly on an induction cooktop or range.

I often will start something on the stove and then move it to the oven. That means I want pans that have handles that can go in the oven without melting as well as pans that won’t warp in the oven heat. In fact, thin, insubstantial pans may be less costly but single-ply cookware does not heat evenly nor does it retain heat well. This means that you are likely to burn things. Thin pans warp easily as well and if you’ve ever tried to maintain a thin layer of oil or butter for sautéing in a warped pan, you know it’s damn near impossible to get it right in that case.

You might insist on everything being non-stick or you might have concerns about the surface leaching into food. You might love ceramic pans while I don’t like how they discolor over time. To each his own, right? But what’s important is that you THINK about what you cook and how you cook before you invest in cookware. Ideally, it’s something you’re only going to do once for each pot or pan you buy.

The same holds true in business. What’s right for my business may be totally wrong for yours and, like a non-ferrous pan on your induction cooktop, might not work at all. You need to do requirements planning with input from all constituencies (all cooks weigh in!). You need to evaluate all the options and costs, while always important, can’t be the primary criterion. I generally buy my stuff at a restaurant supply place that sells to the public – it’s high-quality, will stand up to my home use since it’s made for much heavier use than I give it, and it’s less expensive than the stuff you find in the “consumer” stores. That is a great guideline for anything you’re doing in business as well. Plan, research, evaluate and buy for the long-term. You’d be surprised where the best solutions can be found!

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Filed under Consulting, food, Helpful Hints

The Grocery Store

The topic for this Foodie Friday is the grocery store. Think for a minute about where you do the bulk of your grocery shopping. Is the merchandise that it carries substantially different from one of its competitors? My guess is that it probably isn’t. All the national brands are there and the same person who stocks the snack or bread aisle at your store might have left a competitor twenty minutes earlier. So why do you go?

We had a Wegman’s open here. The lines to get in were HOURS long. I’ve never shopped at a Wegman’s but those who have proclaimed their undying loyalty. There’s been a rumor floating around my neighborhood (since confirmed!) that a Publix will be opening in the not too distant future. People who’ve missed their sandwiches and service are swooning. In the case of these two stores, they separate themselves from everyone else in very clever ways; Wegman’s via setting themselves up to feel like a European marketplace and Publix via their signature subs.

Some of it is just smart branding. While my local Harris Teeter and Lowe’s Foods both make various types of sausages in-house, Lowe’s brands the entire operation as The Sausage Works and gives each type of sausage a clever name. They even sell “My Sauageworks” tee-shirts (and you can imagine the looks I get when I wear mine in public). They pride themselves as being the Best Of The Wurst and are constantly inventing new flavors such as their newest, The #63 Philly, which they describe as a brotherly love blend of chicken sausage, mozzarella, green peppers, onions, mushrooms, and spices. No commodities here but while both stores sell the same basic sausages, Lowe’s goes the extra mile and can market behind it.

I think may business sectors have become quite commoditized. When I was running a sports site, we would often remind ourselves that people can get a game score or most statistics anywhere. The only way we could compete was to provide something unique, better, and in-demand. I think every business needs to think of itself in terms similar to that, even if you really do have unique aspects baked in. It won’t be long before someone has what you have and maybe is offering it on better terms.

Why do you shop where you shop? If “better prices” is the only answer, that store might have trouble the minute a competitor decides to price match.  It’s much harder to match a better experience or unique merchandise, no matter what business you’re in. Don’t you agree?

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Filed under food, Thinking Aloud