September 2009 Archives

I have to say, I like all of Lin's brand principles, but I thought I would extrapolate a bit on each.

 

1.       Decide what the brand needs to accomplish short-term; then explore what needs to happen long-term to continue to stay relevant.

 

2.      Empower your management team to set the tone for culture and values, but encourage your staff to shape it.

 

3.      Ensure that transparency has a place within your corporate culture as well as sales and your customer facing experience.

 

4.      I like Dean's reference to BHAG.  Every brand should have one.

 

5.      Identify relationships that are achievable based on where you are as a brand today, and those relationships that are achievable as you scale.

 

6.      Build your team with talent that doesn't exist within you organization.  Don't replicate.

 

7.      Think revolutionary.

 

 

"A year ago, suddenly everything went over a cliff."

That's how Forbes' publisher, Rich Karlgaard, described the last 12 month's recession to Dine America attendees last week in Atlanta.

But before you close out of this window and go back to checking your Twitter updates (Hey, it's after lunch. Everybody does it.) because you think you've read all you can handle about the recession, the recovery, and the economy in general ... hear me out.

Karlgaard was straight-forward and honest with the audience of executives. The recession was and still is serious. But it was augmented by the changing administration (when banks were failing last fall Bush was a lame duck and neither Obama nor McCain could take charge) and the inflamitory mainstream press.

To put it bluntly, he called it a "financial blackout."

But it was not and still isn't anything like the Great Depression, Karlgaard insisted. The Great Depression lasted years and saw unemployment numbers far worse than anything the U.S. is experiencing in 2009.

It's ironic that Karlgaard, a business publisher, would point the blame at the media. Yet that's exactly what he did, saying recent reports about thefailing economy and inaccurate comparisons to the Great Depression are "like yelling fire in a crowded theater."

Unlike the Great Depression, the economy is already beginning an upswing and talk of a recovery is on everyone's lips. We've even recently discussed it here on the blog. Most importantly, what Karlgaard warned quick-serve executives of was what would happen after the recession was over. In a word: inflation.

As the economy begins to recover, which Karlgaard says it will do in pockets across the country before it's widespread, we'll begin to experience inflation. It's the inflation, not the depression, we should be worried about.

Karlgaard seems to believe the recovery is a double-edged sword. Do you agree? What else can business executives expect in the coming months? What can they do to maintain balance within their businesses as the economy rebounds?
 

 

You have to like a company whose CFO understands branding.  That's a sign of commitment if I ever saw one so hats off to Zappos.com and Alfred Lin.  I like all of Lin's recommendations although I wouldn't necessarily jump ship on networking.  Networking can be an important executive level stewardship mechanism where executives in non-competitive industries come together like a conference such as TED -- Technology, Entertainment and Design -- to learn from some of the smartest people in the world.  So network away, but be strategic about it.  

While Lin gets at this sentiment, in the spirit of Howard Schultz, all companies need a BHAG -- Big Hairy Audacious Goal.  I would place that somewhere near the top because often it's related to the brand.  

Additionally, I believe that all brands need to ask themselves what audiences they are willing to sacrifice.  You can't be all things to all people so you must go through the exercise of not only determining your audience, but determining who you will leave on the table.  

Blair, looking forward to your next round of content from Dine America.  

It's great that you were able to attend the conference, Blair - I'm looking forward to additional details and insights from your experiences there this year.

As for Lin's Seven Way's to Build a Brand, he's made some really good points. One that resonates with me, and I think with most citizens, even aside from being consumers, is the "commitment to transparency". I've often heard our President say something similar in regards to his relationship with the public, in essence, promising to give us the real deal. As for Zappoes, I appreciate and respect (especially after seeing the gap between their revenue and net profit) Lin's transparency - the consumer gets exactly what is advertised to them. There are no underlying commitments, no fine print, just a price that you see, and then pay, and then you get your product. And if you don't like it, hey, no problem, you can return it for free. No hidden costs. No hidden agenda. During the recession, we've all become way more aware of our financial standing and where/how we we choose to spend our hard earned disposable dollars. It's nice to know exactly what kind of commitment you're making without someone trying to take you, even when it just comes down to a pair of shoes.

Leadership would also have to be a key point on my list. While building a team is essential, the best way to do so is to have a Star at the helm who can lead you through the good and bad times while maintaining the values and culture that defined your company initially. So many companies haven't been able to survive, due, in part, to the fact that they give up the commitments they've made to their team and consumers when they are struggling financially, and thus, their culture falls apart.

And of course, we can't leave out social networking. This may be transient, but at this point, that remains to be seen. Sites like Facebook and Twitter have had a very positive impact on companies' visibility and profitability, and for a pretty small fee, no less. It will be interesting to see what other innovative solutions present themselves in the years to come.

I've just come back from QSR's annual executive conference, Dine America, in Atlanta and, like previous years' events, I've come home with a lot to think about.

We covered some great topics, and I spoke to passionate readers who care about their brands. Recession be damned, they're determined to make a profit and deliver stellar customer service no matter what's happening on Wall Street.

I'll share more details about the conference in following posts, but I wanted to start with some interesting insight from outside the industry. One of our featured speakers, Alfred Lin is CFO and COO of Zappos.com, which was recently bought by Amazon (you don't even want to know the price tag ... OK, maybe you do.)

Lin is passionate about delivering quality goods to Internet shoppers but he's also committed to builing a sound culture--something I heard echoed by countless other brands while in Atlanta.

Below are Lin's Seven Ways to Build a Brand. If you missed his presentation, this is a much abbreviated version and one that lacks his unique delivery, but you'll get the point. What I heard over and over again at the conference was that the recession really separated the motivated from the inspired.

Brands that are built on something more than food costs and build out equations are making it. Here's Lin's advice for creating that kind of brand.

1.Decide if the brand is long term.

2. Figure out your culture and values.

3. Commit to transparency.

4. Have a vision: "Don't chase the paper, chase the dream."

5. Build relationships, forget networking.

6.  Build your team. You can't do it alone.

7. Think long-term. 

Now it's your turn. What would you add to Lin's list? What do you disagree with? What resonated most?

After decades of controversy, the USDA has finally made the commitment to take a stand on defining the word "natural" when it comes to meat and poultry products. This is partially in response to the overwhelming amount of inquiries from confused and frustrated consumers and manufacturers since the controversy began back in 2006. The confusion (and resulting controversy) stems from the fact that the USDA currently adheres to two definitions of "natural", one from its FSIS (Food Safety Inspection Service) divsion; and the other from its AMS (Agricultural Marketing Service) division.

So what's the difference? Currently, the FSIS states that meat and poultry can be labeled "natural" only if the product is minimally processed and doesn't have any artificial flavorings, colorings, preservatives, or other additives. AMS's version of natural means that meat must come from animals raised with no hormone growth promoters, no antibiotics, and no animal by-products.

In all honesty, I have to say that I am a little taken aback that the USDA has not yet been able to "clear the air" on this matter. Since their inceptions, these variations have been creating loopholes for manufacturers and mass confusion for consumers and manufacturers alike. Wouldn't it be great if everyone had a clear understanding (right there on the label) of what natural means. The answer seems glaringly obvious to me. Would it be too easy if they just combined both of those definitions into one and called it a day?

Tom Vilsack might not be a name that jumps to mind immediately, so I'll save you the Google search. He's the Secretary of Agriculture and the head of the USDA.

I got the chance to speak with him last week at United Fresh Produce Association's annual policy conference in Washington, D.C. He was engaging, witty, and out to change the way Americans eat. (Industry side story: Before meeting Barack Obama for the first time he killed some time in a nearby Starbucks and got pretty "jazzed" off their coffee. His lesson to others was be very careful how much coffee you drink before meeting the president.)

Vilsack along with the help of United Fresh is encouraging Americans, especially children, to eat more fruits and vegetables. Seems simple enough, right? But in a country where the No. 1 commodity bought by U.S. school systems is mozzarella cheese, Vilsack has a tall order to fill.

According to Vilsack, the administration is identifying and working to eliminate "food deserts" across the country. What's a food desert? Well, it's an area in often very rural or inner city locales where fresh food is absent. There's no grocery stores, no farmer's market, and lots of quick-serves and convenience stores.

Now it stings me as much as the next industry insider when quick-serves are associated with menacing words like "food desert," but I certainly understand how it happens. Most quick-serves and fast-casuals offer some sort of fruit and produce menu items, but they are often much more expensive and the menu options are usually very limited.

If we want to stop being pointed out as one of the bad guys, we have to begin including fresh produce and vegetables in lots of menu offerings. And the chains that do serve fresh foods shouldn't just be isolated in suburbs and business areas. 

The administration is framing this goal as part of its preventative health care strategy, and the quick-serve industry has an enormous opportunity to step in and make a difference. Serving millions of people every day puts the industry in a unique position.

Why hasn't all this happened before? And is it likely brands will react to Vilsack's call to action? I hope so ... mozzarella just isn't the same without some fresh tomato. 

Reading the blog posts from this week brings back a conversation I once had with a former employee of In-N-Out. The concept is well known and loved in California, and for that matter fairly well-known and loved across the rest of the country as well. I mean, have you ever seen any other fast food restaurant chain t-shirts being sported around your city? Taco Bell? McDonald's? I didn't think so.

I was not at all surprised to learn from this person that she loved working at In-N-Out. After all, anytime I've been there, there always seems to be a slew of happy, young, vibrant, boisterous people behind the counter wearing aprons and these ridiculous looking deli hats running around and they're smiling ear to ear. It actually looks like fun! What I was surprised to learn was that she was paid $10/hour (and keep in mind this was at least a few years ago) and even had the option of buying health insurance through the company after a short waiting period.

There are companies out there doing the right thing. In-N-Out is just another case in point. Planet Smoothie is another. Chick-Fil-A is yet another. Sure, these companies are cool and unique in their products and images, which is very important, but they also share at least one common corporate value, they see their employees as Human Capital, their greatest asset and their greatest investment, not just a means to an end. And although employees may not know this term specifically, they feel its effect every day they show up on the job.

Blair raises a hotly debated topic ... Employee retention and loyalty. 

 

One, if you want to eliminate the stigma, your concept needs to resonate with the 25 and under crowd.  It has to be a place that their peers think is cool, regardless of the work.  We are fortunate in that we have a little of that cult following at Planet Smoothie.  Kids like working there because their friends like coming there.  It has attitude and so we do pretty good on retention and loyalty.  I'm sure Apple has great success with its Apple retail store.  Who doesn't want to work in the Genius Section?

 

So what if you don't have the cool factor working for you.  Well, then you have to develop a cool factor either through social media programs like a company's Facebook presence, phone apps as well as campaigns so once again, peers think you work for a cool concept.

 

Another consideration is to offer the 25 and under incentives beyond cash.  So for example, let's say you want your QSR to be more of a Green concept.  Try sending a group to the Len Foote Hike Inn (www.hike-inn.com) in North Georgia where they will live and learn about conservation.

 

I do think it is important that QSRs understand their goal should not be career retention unless they design a path to management from the front line.  The goal should be loyalty and near-term (three years) retention ... because even a 25-year-old knows that's ceiling for cool. 

The fundamental problem with the QSR industry is that it has survived and thrived based on price ... let's serve it cheaper.  Well, over the years, in order to serve it cheaper, QSR has had to find ways to produce it cheaper.  The days of Ray Kroc serving up an innovative burger sourced from local cows with new innovation in a cool atmosphere had consumers and employees excited the experience.  There's nothing innovative today about a QSR and so people who work there feel like they are part of a tired old assembly line serving up a lesser quality food product that's consumed by the American public largely around price.  The 25 and under crowd is smarter than that and so at first chance, they're jumping ship.  

With a new school year under way and the President's speech safely delivered to classrooms across the country, I think it's time to take a close look at the people powering quick-serve restaurants--the crew.

Go to any quick-serve on your lunch break and you're likely to find a young person staring back at you from across the counter. Although the recession did bring some boomers into the mix recently, let's focus on the under-25 demographic working in fast food.

There's a huge amount of turnover for most quick-serves. The industry calls it "the People Problem." We can't figure out how to keep 'em, where to find reliable ones, and how to fight the stigma that working for one of our brands is a First Class ticket to nowhere. I'd say this topic is ripe for discussion ...

First, there the industry's inability to retain crew members over a long period of time. I've heard of some various tricks: Keeping pay high or offering health insurance. But to date, no one has the secret to success.

Second, operators need their crew to be reliable and trustworthy. There's a lot of money changing hands, and we're constantly hearing about operators struggling to find honest crew.

Third, we're working against a pretty harsh stigma. Even Kevin Federline thinks he's too good for a job behind the counter. And, correct me if I'm wrong, but nowhere in the president's address was he encouraging kids to strap on an apron and move through the ranks in foodservice.

We have a lot to discuss. What do you think is the key to securing good people? Why do you think fast food is still the red-headed stepchild of the job industry? Chime in. I'd love to hear from you or your crew!

In Marin County, local organic farmers are as revered as doctors. And why shouldn't they be? Food is at the core of our existence. And, with so much focus on the health crisis in our country, I was pleased to read an article about county who is starting with the "roots" and working their way up. From the community, to the kids and their schools, to the economic and environmental sustainability of the county and its inhabitants, Marin County is getting it right. Marin Organic, who is at the helm of the community's commitment to sustainable living, is an association of organic producers in Marin County whose livelihood is based on a respect for nature and a sense of place. As the primary link between farmers and eaters, Marin Organic is committed to promoting and supporting a sustainable, organic county.

One of their programs is the Marin Organic School Lunch and Gleaning Program, a program that provides schools with organic produce and also addresses underserved communities in Marin County. 20% of all grown foods don't meet strict market requirements because they are too big in size or or slightly discolored, so they can't be brought to market. Marin Organic started three years ago to collect the 20% that is left in the field. The leftover food that has been "gleaned" from the field is perfectly fine organic food that is picked up by the school children as part on an education program and added to the mix of weekly school orders, which allows the schools to stay within the budget and allows farmers to sell organic farmers to sell the "not fit for market" produce. Beyond that, it not only teaches the kids where healthy food comes from, it gives them experience and ownership in making their world a healthier place to live in.

While the U.S. has really started to embrace the idea of natural, organic foods, I'm not sure if other cities in the nation are taking advantage of gleaned foods in the same way that Marin County is. I'm curious to see if programs like this start to pop up in other parts of the country, especially in communities that don't have access to locally farmed foods and that lack the school budgets that allow for these items to be shipped in. It would be great if all of our kids had the opportunity to be reeducated and had better access and knowledge of whole foods.

Survival of the Fittest was a phrase used for the first time by a British Philosopher named Herbert Spencer, coined after reading Charles Darwin's Origin of Species. Later, people like me used it in the context of, only the fittest organisms or companies will survive. That later became known as Social Darwinism. I respond to Blair's blog commentary with this preface because I believe we are seeing a recovery at various levels of the business, but it will naturally hit those brands, those concepts who are the most fit financially (meaning they have some deep pockets to weather the recession) and who are fit from a brand and marketing standpoint.

For example, any restaurant concept today who has failed to immerse themselves at some level in social media will recover more slowly in these economic times.  A restaurant brand must be exercising all its assets and resources otherwise it will atrophy and there's no place for weakness in today's economic environment.

From the franchising standpoint, I feel like there's interest, movement that seems to have an up-tick week after week.  Our two brands are gaining considerably more interest today than three months ago and getting past the summer and into a fall mode will only strengthen the recovery

However, any who says we have seen the death of the recession, well that's one rumor that's greatly exaggerated ... for now.