What is stealing profit from your bottom line – an amazing case study
What steals profit in business, more than anything, is lack of connection. This is especially true if you are trying to expand. Lack of connection makes your customer experience more clunky than it should be, loses you business and makes you spend more on staff hours or head count. The first step to improving connection is, to change the way you look at the talent of the business.
What is stealing profit from your bottom line – an amazing case study.
by Rob Keogh | 12 September 2019
What steals profit in business, more than anything, is lack of connection. This is especially true if you are trying to expand. Lack of connection makes you hard to find, means your customer experience is more clunky than it should be, loses you business in a range of ways, and makes you spend more on staff hours or head count. The first step to improving connection, is to change the way you look at the talent of the business.
Doesn’t matter what industry you are in. What people are looking for when they interact with your business from G’day to Goodbye, is one seamless, connected experience. People’s expectation of what constitutes a great customer experience is developing every day. Click, splash, tap; you’ve got your coffee or beer and you’re gone. You might not be in retail, but that type of experience increases the expectation that all business or sales interactions will be that smooth.
Our homes are connected to the latest services and we talk to a box to select music, watch movies and turn on the lights. We update our phones at least every two years, but when did we last update our business structure? Technology has massively changed in five years, but so many businesses are still using old systems and processes – “because we have always done it that way”.
The way to stop profits leaking out as you grow, is to create a process with in-built scalable capacity. You do this by creatively combining people with technology to create a talent that is unique to the business and can be replicated to meet expansion. Today, it is possible to pretty much remove most labour intensive, mundane and repetitive tasks by using AI and automation – even in small business. This massively improves efficiency and removes pain-points for both customers and staff alike.
Here is a current case study that most people haven’t heard of, that I find mind-blowing.
When I look at McDonalds talent, I see a $200 billion company that on the surface seems to be run by fifteen-year-olds. An incredible feat in itself. Most families are happy if they can get their fifteen-year-old to mow the lawn or turn up to dinner on time.
Not counting franchisee enterprises, in 2018 McDonalds employed 210,000 people. The thing is, just five years earlier (2013), they employed 440,000 !!! During the time that they were reducing their human resources, McDonalds were simultaneously following an aggressive expansion strategy named the “Velocity Growth Plan”. They now have over 38,000 locations with less than half the staff, having experienced year-on-year location growth over thirteen years.
According to Statista.com; McDonald’s process of updating its stores used three accelerators - “Digital”, “Delivery” and “Experience of the Future” – two of these three initiatives are technology-based. McDonald’s investment in technology resources is no more evident than in its move earlier this year to acquire a new AI company, Dynamic Yield, for $430 million.
The “Digital” initiative allows customers to order eat-in, takeout and drive thru food through a mobile ordering and payment system. Customer to kitchen connection. Meanwhile, the “Experience of the Future” accelerator includes self-serve digital kiosks and table service. While people are still needed for many aspects of the work (serving, delivery, management to name a few), many of the ordering components have now been taken over by technology.
In McDonalds case, talent “the natural ability to do something well”, is an attribute of the business structure, not exclusive to the individual. That is not to say that you don’t need talent to work at McDonalds. No doubt, the fifteen-year-olds working there hold an incredible array of real and latent talent. However, in the context of their employment, the talent that is needed on the job, is intrinsic motivation and the skills to deliver specific task/s throughout the duration of each shift. That is a talent that should not be under-estimated.
So, once you create a seamless process, you need people who are skilled and motivated to deliver that task – without deviation. Here is an example of what you will hear when you don’t have that combination right:
I forgot, hate doing it, not my job, it’s a waste of time, too busy, didn’t think it was necessary, Bill said he’d do it, it’s boring, repetitive, wasn’t a priority, couldn’t find the details, skipped it this week, was away that day, I don’t see why it’s important, didn’t get around to it, felt sick . . .
That is profit leaking from the bottom line.
If you want your business to be more profitable as it grows, then redefine the talent of the business. Most people don’t do this because it is easier to allow each individual to design their own process for their role, or at least to create their own rules as to how and when they use the business process.