Friday, November 30, 2007

Kids these days

If you’re hoping to snag employees with money and perks, we need to talk, bunky. Pay just doesn’t pull young people the way it might’ve in the pre-Halo III days, probably because youngsters assign far more value today to sugar cubes like free time or the opportunity to learn something. Or as People Report CEO Joni Doolin expressed it during her company’s recent conference in Dallas, “maybe it’s time to think about the employee value proposition in a different way,” or what’ll make your restaurant beam like an iPod in a Sony Walkman world.

Maybe that’s a bad metaphor, given potential hires’ indifference to material draws in general, including any slim differences they may spy between one pay package and another. Not that they’re likely to spot much variance. “Welcome to Commodity Hell: We’re at the point where our compensation and our benefits programs are the same,” Doolin told the room of restaurant CEOs and HR execs.

“We’re not differentiating ourselves, so we have to think about different concepts,” she continued. Indeed, said Doolin, the whole “command and control model,” where directives are ramrodded down from the CEO or other corporate C’s, is “a half-truth,” a bewildering mode of operation to youngsters who have studied, played or even dated primarily in teams or groups.

If the foodservice industry truly wants to sweeten its appeal for new job-market entrants, it has to leave nothing beyond reconsideration, including the hierarchical management structure used by almost every company in the field, she explained.

She depicted a model of what tomorrow’s org chart might look like; it resembled a blueprint for one of Buckminster Fuller’s geodesic domes, with employees serving as nodes as from which radiated lines of communication to nearly everyone else in the organization. This was not the usual model of one layer stacked atop another, and a rigid pipeline of communication from the top down.

What else might appeal to a workforce whose values are drifting far a-field from Baby Boomer sensibilities? During the prior year’s People Report conference, Doolin noted, the research concern had underscored the wooing power of continual learning opportunities and a culture that fostered a sense of community, societal values and inclusion. Those qualities not only appeal to potential hires, but also help to distinguish one employer from another.

But as every company embraces those enticements—no doubt a factor behind the greening movement evident at so many chains—what’ll be the next magnetic point of differentiation?

“We think lifestyle benefits are really the way to go,” said Doolin. By adjusting rules and cultural underpinnings to accommodate the lives that candidates want to lead, an organization can truly set itself apart, she stressed.
”This is where you go beyond the mission statement,” to experience, Doolin said. “It’s the sum experience of working for you.”

Speakers appearing later in the program suggested what some of those draws might be. And try to keep an open mind here, because they’ll sound like blasphemy to anyone who grew up with the rigid rules of foodservice circa the 1980s.

For instance, one speaker noted the importance of accommodating—if not fostering—employees’ efforts to maintain their health. One of the presenters noted how his company, albeit a healthcare firm, allows doctors to take a break at two or three to hit the gym.

If that might’ve sounded far-fetched to the restaurateurs in the audience, their skepticism might’ve been allayed by the comments of James Broadhurst, CEO of Eat’n Park Hospitality Group, operator of the Pittsburgh-area family dining chain. In accepting an award, Broadhurst noted in passing that he was wearing a pedometer to record his steps for a headquarters-wide health initiative. Pedometers had been issued to all of the home-office staffers, with a recommendation that they walk 10,000 steps a day. Another Eat’n Park staffer later told me that the office is divided into four teams, with a heated competition among them to see which was covering the most ground. The results are listed on an intranet site, and the leaders are rewarded with treats like a gift card.

Some of the other suggestions were more outlandish. Penelope Trunk, a Gen Y-er who acknowledged she probably wasn’t on the same wavelength with the audience, suggested during her presentation that inter-company dating be readily accepted, a reflection of how work life and social life are converging today.

Trunk also indicated that the promise of a promotion is no longer a motivator because young people don’t think in terms of climbing a ladder. They think of what they’d like to do next, and not in terms of a career path. If they’re likely to be gone in two years, who cares if they can move up a rung within that organization?

Instead, she stressed, ongoing education “is the coin of the realm.”
Other presenters stressed the importance of flexibility and of giving constant praise to youngsters who probably graduated from kindergarten with the same pomp and celebration that were reserved for an older generation’s graduation from high school. This, several speakers observed, is a group of people who probably were each presented with a trophy of one sort or another at the end of their Little League or soccer seasons.

In any case, noted People Report president Teresa Siriani, this is not an age group that feels it has to work. “We are at an historic low in the employment of 16 to 19-year-olds,” she said. “It’s not that there are not 16 to 19-year-olds out there.” Rather, “they’re opting out,” a result of their busy daily schedules.

“Guess what?,” concluded Doolin. “People don’t work where they have to, they work where they want to.”

Wednesday, November 21, 2007

A yellow light on voluntary menu labeling

Chain executives will be hyperventilating into brown paper bags next week when the push for menu labeling is taken up again by New York City’s health department—or as some restaurateurs view it, the castle of the mad Dr. Friedan. The agency will invite the public to comment Tuesday on its latest calorie-disclosure proposal, which is widely seen as a possible model for jurisdictions throughout the country. But it’s probably better they copy that measure than reach across the Atlantic for the approach now being pursued in the U.K.

The Food Standards Agency—Britain’s Food and Drug Administration—is pressing McDonald’s, Compass and other multi-restaurant companies to go beyond merely disclosing nutritional information on their menus, according to London press reports. The regulators want the big operations to steer patrons toward more healthful choices, and away from options with high sugar, salt or fat contents, by using stoplight symbol. A green circle, like a “go” light, would designate the best choices. A red circle would send a not-so-subtle message of, “Stop!” And a yellow indicator would be the equivalent of a Larry David-like, “Eh.”

Lest you think the restaurant industry is crying wolf, consider that the alert system is already being voluntarily followed by a number of major supermarket chains across the pond. The foodservice chains are being asked to adopt the program voluntarily, but the esteemed London Telegraph said the present “talks” could build into out-and-out pressure on the operators.

The news reports say that regulators are focusing their sales efforts on quick-service chains because children account for a big portion of their clientele. It’s the argument that the industry has struggled in vain to parry: Adults may be able to make an informed choice about what to eat, but how can you expect children to comprehend nutrition stats as they’re standing in line? Why not just give them a simple symbolic rating of each item?

It’s a powerful argument, and one the industry would no doubt like to bar from these shores.

Friday, November 16, 2007

Try this survival technique, Grasshopper

I was having an out-of-body experience the other night when I bumped into Confucious, who was surfing the ether to dream up sayings that might impress women. “Hey, Cunfucious,” I shouted, “people have been gushing for centuries about how wise you are. Any sage advice for casual-dining execs trying to get through this rough time without a pink slip?”

“Buzz off, Scooter. I’m a philosopher, not a miracle worker.” He tugged on the Fu a few times. “Aw, alright. Tell ‘em, ‘That brand which commoditizes must make the Target dog its own.’” He smugly smiled.

“What the hell does that mean?”

“You meatball, don’t you get it?” he retorted. “They who squeeze all the character from their concepts are marketing wrung-out washcloths.”

Still a blank stare.

“Look, dummy, these chains all scrambled to sand off the rough edges that made their concepts different because a simple oval makes a better cookie cutter than a silhouette of Carmen Electra. It’s easier to duplicate blandness 1,200 times.”

Still no light-bulb bubble above my head.

“Yikes, don’t you see? They’ve turned the industry’s strongest segment into a commodities game. You could step into any of the grill concepts and have no idea which one you were in. And they who commoditize buy cut-glass thongs from Victoria Secret.”

Embarrassment, but no flicker of comprehension on my part.

He heaved a heavy sigh. “Look, if you’re a commodity, the only way you can compete is on price. That’s great if you’re the size of Wal-Mart and the whole market is expanding, so you can make it up on volume. But restaurant spending is softening overall, and margins are already thinner than Kevin Federline’s talent.

“The only other option,” he continued, “is differentiating yourself as a brand with pronounced character and flavor—a distinct experience, where you stake out a specific piece of the market instead of trying to be all things to all consumers. That’s exactly what Target did.

“It’s going to turn off the customers whose idea of spice is mayonnaise on plain macaroni. But it’s going to be embraced as a standout by the folks who wouldn’t mind something different from the status quo. And there are a lot of those people.

“Otherwise,” he said, “You’re the Kmart of a few years ago.” He saw my puzzled look. “It went bankrupt, Einstein. While Target was kicking butt.”

And with that, he gave the Fu Manchu another tug and was gone. All I could think to do was yell after him, “Don’t take any wooden nickels.”

Who gets the top job?

Two days, two telling indications that marketing may be the preferred path to the corner office during these trying times for casual dining. Add the appointment of another one-time marketer to the presidency of Mimi’s Cafe and you have a Johnny Cochrane-gauge argument that old hands at snagging sales are the chain chiefs of choice during a downturn in customer counts.

Yet, as a speaker stressed Wednesday during the People Report’s annual summit in Dallas, the era of the specialist leader is waning elsewhere in the business world. As consultant Rand Stagen put it, you can’t dominate the game today if all you have is a killer forehand swing. Today, at least in fields outside foodservice, the person with first dibs on the corporate jet is the one who’s closest to a renaissance chief, with talent across a number of disciplines. And that includes such superhero skills as brainstorming whole new business lines, or spotting a door to opportunity where others see a wall. The example he cited was Steve Jobs, a one-time animation-company exec who took over an ailing computer firm and forever changed the music industry, with the television business now eying him as the guy in a hockey mask at an abandoned summer camp.

So is this just another crazy uncle in the attic for foodservice? One of those peculiarities, like embracing the internet more slowly than several tribes that still wear huge plates in their lower lips?

Hardly. Or maybe not exactly. The situation does underscore a kink of the business. But the quirk in this instance is not a time lag. Restaurant-chain boards may be giving an edge to marketers in filling the corner office, but a foodservice marketer isn’t your typical slogan-hatching ad or promotions vet. Marketing has seeped well beyond the cubicles with all the whacky stuff on the walls to infiltrate such departments as design, operations, sometimes recruitment, and certainly whatever brain trust drafts overall corporate strategy. It’s like the bass line that drives a hit song.

Clay Dover got the nod to head up Metromedia Restaurant Group, the parent of Bennigan’s, after spending much of his time at that concern in marketing. But his knowledge clearly extended beyond the traditional boundaries of the discipline. Awhile back, I wrote a column that lamented casual dining’s transformation from the Rolling Stones into Debbie Boone. Its rock-and-roll spirit had been neutered into dentist-office music, a process business gurus would tag as homogenization. Dover dropped me a quick e-mail expressing his agreement, then spelled out Bennigan’s intended direction in a few dozen words. It was the view of a person thinking far beyond marketing, all the way to gene splicing. We’re not talking about a zippy ad slogan and market-speak about demographics. His comments hinted at a chief’s pride and vision.

Similarly, Bruce MacDiarmid rose to prominence as a marketer for Chevys, which hit gold by trademarking the descriptor “Fresh Mex” as part of its name. Clearly it was a brand where marketing influenced the whole system, a point verified during the People Report conference by Mike Hislop, Chevys’ former CEO. Now the CEO of Il Fornaio, Hislop revealed that he only took the top job at Chevys after securing a guarantee that marketing would be interwoven into his corner-office strategy, which had been forged by his first-hand experiences in operations. With the marketing department elevated to that role, is there any doubt that MacDiarmid was involved in a lot more than crafting ad strategies?

On Tuesday, he was named president and COO of the 82-unit Black Angus steakhouse chain.

I don’t know Tim Pulido, the longtime industry veteran who was named Mimi’s new president on Tuesday. Most recently, he was leading the attempt at a comeback by the venerable Shakey’s Pizza chain, and earlier served in an operations role at Pick Up Stix. But perhaps it’s not coincidental that his resume also lists a stint as chief marketing officer of Pizza Hurt.

You can almost see a path worn into the carpet between Marketing and that big office in the corner.

Friday, November 09, 2007

1,000 words on bad service

The editorial staff of Nation's Restaurant News has been guffawing over this since Dallas bureau chief Ron Ruggles passed it along. Apparently it was anonymously e-mailed to him, without any indications if the sender was the restaurateur, the offended customer or just an amused onlooker. In any case, you have to admire the artwork for this piece of feedback.

Thursday, November 08, 2007

Anti-theft tactic

How can I put this so I don’t offend?

After enough restaurant visits, even a dim-wit would notice that a place’s hot sellers tend to show up on other menus in nearly an identical form. Clearly all the establishments must’ve been struck with the same inspiration. How else would you explain why one outlet is peddling a Bloomin’ Onion while the joints up and down the street are pushing Awesome Blossoms, Onion Straws, Onion Crunches or an Onion Loaf? It’s the darnedest thing.

That’s why you have to appreciate Vicorp’s forthrightness in touting the new limited-time offers for its Village Inn and Bakers Square family-dining chains. The showcased items, it readily acknowledges, are the specialties of other restaurants. There’s the stuffed French toast from Maine’s Maples Inn and the steak dishes from Texas’ Perini Ranch Steakhouse, with other restaurants’ signatures to follow.

There’s no coyness to the effort. “We hope the association with unique, high-quality, award-wining recipes will help create a powerful new reason for guests to try our food, and to set us apart as highly innovative,” said chief executive Ken Keymer.

Presumably it’s kicking back some coin to the restaurants for the use of their dishes, a rare dash of legitimacy in an industry with more thieves than a medium-security prison.

Sunday, November 04, 2007

Testing less testing

Taco Bell probably has nothing against surveys, but it won’t be getting the usual Christmas card this year from whatever company makes the forms and the stubby pencils that consumers use to fill them out. The chain alerted financial analysts last week that it, too, is veering away from the traditional process for gauging customers’ reaction to possible menu additions, a detour that’s already being explored by McDonald’s, Wendy’s, Baja Fresh and presumably other chains. The old standard of exhaustively testing new products is apparently going the way of the rabbit-ear TV antenna as restaurant brands try to respond with more alacrity to the zigging and zagging of consumer preferences.

But not all franchisees view shortened product tests—or the elimination of testing altogether—as a positive shift. Some licensees of McDonalds, Wendys and Baja have yelped about having to add products or a whole new menu line before the operational and marketing support has been adequately pressure-tested. And misfires, they complain, can do more damage to their businesses than to a franchisor. They say the streamlined assessments fail to balance sales benefits against such factors as local labor expenses, the cost of capital, or the longer-range perceptions about service times.

At least one Baja franchisee is irate because he believes the home office isn’t effectively gauging even the top-line impact of introductions. He asserts that the chain recently shot-gunned a product into the market with advertising support, only to discover that it didn’t have sufficient supplies to meet the heightened demand. But, in fairness, that couldn’t be confirmed with the franchisor.

Wendy’s, on the other hand, has publicly disputed franchisees’ even louder assertions that the chain is inadequately testing new products and operational changes. The charges were levied in a letter sent to headquarters late in the summer by 16 franchisees, who cited the current testing mindset as one reason for “the slow decline of our brand.”

Having seen my share of franchisee disputes, I’d be a fool to take sides in a fracas like that one. But it certainly was curious that Wendy’s current management included a rollout of breakfast in the turnaround strategy it disclosed last year. The same announcement noted that the meal service would be tested. That’s like proposing as soon as a blind date opens her door, then suggesting the two of you discuss compatibility after you’ve been getting together for a year or so.

Franchisees of McDonald’s have been more discreet in their complaints about the chain’s recent quickness in adding new products, particularly beverages. But the dismay was evident in the latest survey of McD’s licensees by former analyst and current restaurant-company investor Mark Kalinowski. In his most recent quarterly canvass of the operators, several complained that lattes and other specialty drinks were being shot-gunned into the market without sufficient research on service issues or even the long-term payback of buying the required equipment.

"The Combined Beverage Initiative is a real concern for me," said one respondent, refering in McDonald's-speak to the beverage program."I have heard a number of
estimates from $100,000 to $130,000. The train has left the station, stores surveys are being done and we have yet to see any FACT-BASED INFO to know if this is a good
investment or not."

One anonymous respondent suggested that franchisees form a renegade association that’ll be more vocal than the official franchisee organization in shaping the chain’s strategy.

In fairness to Taco Bell, there are no evident signs that its franchisees have an issue with the new testing strategy, known internally as the Explore in Store process. The shift is intended to help the chain double the number of new products it fly-casts into the market in any given year. To crank out products at that speed, Taco Bell execs told analysts at last week’s special meeting, possible new options will be introduced in just a few stores, with the new choice highlighted in signs. If the reception by consumers is encouraging, the item could be quickly rolled systemwide, presumably as a limited-time offer.

Lehman Brothers’ Jeffrey Bernstein, one of the restaurant analysts who attended the meeting in Taco Bell’s hometown of Irvine, Calif., said in a report that some products will continue to be developed and tested in the chain’s usual fashion. Indeed, he noted that Taco Bell is still testing breakfast, an initiative that executives disclosed at the same meeting one year earlier. Yet the testing is continuing, and “the expansion appears slower than initially expected,” Bernstein wrote in a report to clients.

The new streamlined rollout process could serve Taco Bell well in catching up with other quick-service chains on two fronts. During the meeting, executives aired intentions to add a frozen beverage to the Mexican chain’s menus, and to explore some health-oriented “better-for-you” products.