Retail fast food
outlet: proposition: a case study of living and measuring business values
The McDonald's fast food chain has translated its
proposition into a set of business values, which are used to drive the entire
global business. The founding fathers of the company set out four key values of
the business and communicated them to all staff: quality, service, cleanliness
and value. These described the basic company proposition. Objective descriptions
of these dimensions were developed and these were tracked and monitored by
area/regional managers who regularly measured each outlet against these
dimensions. Performance against these measures formed a key component of staff
remuneration, so these dimensions were not only in the front of their employees'
minds as operational measures, but the impact on personal remuneration meant
that they were considered to be really important by individual staff.
What was so simple, but effective, was that each dimension
constituted an important part of the basic proposition.
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Quality measures compliance against
core operating and product standards (particularly helpful in a franchised
business). All staff in 'meal assembly' at the back of house have in front of
them a picture and a detailed description of how each product should be presented. This is often shown in terms of
'too little pickle, too much pickle, just right' so all staff are clear about
what needs to be done to achieve compliance. In staff briefings to launch new
products, it is explained to staff why these dimensions are important and how
these make the product different from competitors'. In marketing parlance, this
means that product differentiation is understood and regularly maintained and
measured at the customer interface. Product consistency is key to the company's
basic proposition, 'Wherever you buy your fast food you know you'll get a
consistent product'.
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Service measures delivery of detailed
operational standards. Again, the company specified the service to be delivered
in detailed operational manuals. Each franchise operator has to undergo detailed
training in how to handle and motivate staff, queue length, how staff should
greet and offer cross-sell/up-sell to customers and so on.
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Cleanliness measures how effectively
product and service standards are being met. Observational standards cover staff
cleanliness (hands, hair and clothing), how often table surfaces and floors are
cleaned, and other aspects of front of house presentation. All these can be
monitored and the company can track how well the outlet is delivering this part
of the proposition. A benefit of the company's offer is, 'No matter where the
outlet is, you can rely on knowing what food to expect and on getting it in
clean surroundings'.
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Value measures how competitive the
products are in their local markets. Many regional and area managers are trained
to use a range of local interventions such as promotional and pricing offers to
respond to competitors' offers and keep the McDonald's offer perceived as 'good
value' in each of its markets. This has the added benefit of directing the
corporate marketing budget to support local pricing incentives where they will
have greatest impact. It also allows the company to maintain a higher price
premium, discounting only where necessary.
Outlet managers expect to be monitored against these dimensions.
and the area/region manager completes a checklist of them against a graduated
scale. (A characteristic of good measurement systems is that they enable
monitoring of movements in delivery, rather than simplistic yes/no responses.)
The location manager must sign off this checklist before it is filed in the
regional office. Improvement activities are focused on where performance is
deteriorating. Here again, area managers may suggest interventions as they are
trained in intervention diagnostics.
Another benefit from such a widespread and consistent measurement
system is that it enables good practice to be identified. The service and
product specification manuals are now built upon good practice in delivering
high performance. It also means that all locations are measured against best
practice next time they are inspected, so continually stretching business
performance.
The measures work at several levels, with performance aggregated
and reported at area, region and country level. Improvements form the basis of
regular performance reviews between each
manager and his or her superior. These measures work at every level of the
business, and are aggregated into an overall performance measure presented at
each Executive Board meeting.
This case study highlights what a company needs to do to
translate its proposition into values that drive the business, and to ensure
that these values are supported by measures that are understood and tracked at
each level of the business. It is not enough just to articulate values. They
must be translated into pervasive measures and staff incentives which work at
all levels of the business, to ensure that they drive values, beliefs and
behaviours. The company says that it knew this approach was working when the
'war stories' shared when their people met socially related to these
values.