Thursday, May 03, 2007

On The Burger Culture

The fast food industry originated in the United States as "hamburger joints," but has become a global industry. As the industry has grown, so has the menu of a typical fast-food outlet, in number and variety of items. This trend has produced an opening for a fast food chain that concentrates on preparing a few items well, offering those items with superior quality at a competitive price. For purpose of discussion, this concept has been called Basic Burger.
Competitive Analysis of the Industry:
The fast food industry is an important and growing segment of the broader food-service industry, which can broadly be defined as providing ready-to-eat meals, as distinct from food items to be prepared at home, or snack foods requiring no preparation before eating. Fast food in some form is as old as sidewalk food vendors, but in the form we know it now it appeared in the United States in the 1950s, as particularly suited to drive-up or drive-through service.
Originally provided by individual stand-alone outlets or small local chains, since the 1960s it has been dominated by nationwide and then global chains, of which McDonald's is dominant. The primary advantage of large chains is branding (Bodine). Branding in turn implies a reliability of experience. A stand-alone outlet might well be better than any chain, but is at least as likely to be worse. At a McDonald's or KFC outlet, customers know what they can expect.
In addition to competing with one another, fast foods face competition from two sides. On one side, they are challenged by convenience stores or grocery stores offering food, sometimes heated. On the other side, they are challenged by the lower-priced and simpler-service end of the conventional restaurant spectrum, which (particularly in the United States) itself includes chains, such as Coco's, often located along highways.
This second group of restaurants have been a particular point of competition for the fast-food industry, which originated from "burger joints" appealing especially to teenagers. As the industry has grown it has broadened its scope, particularly in variety of items offered. Some of this growth has come in the form of chains that emphasize items different from the traditional hamburger-centered menu, such as KFC, which concentrates on chicken. The hamburger-centered chains, such as McDonald's, however, have tended over time to greatly increase the number and variety of their menu items, for example fish items and salads.

The Basic Burger Concept:
The expansion of fast-food menus has had important implications for their operations. As the menu grows, the kitchen operation becomes more complex. The imperatives of operating with a small and generally low-skilled kitchen staff have tended to push preparation back along the supply chain, so that handling and preparation within the outlet is minimized. The end result, for the customer, is blander and more "synthetic" food.
Fast food was never intended or expected to be a gourmet dining experience. However, Americans old enough to remember the earlier, simpler "burger joint" experience remember it fondly, while younger Americans have a sense that they are missing something. In other countries where American-style fast food has penetrated, the comparison is drawn to traditional local forms of convenient informal dining. Fast-food chains such as McDonald's are widely viewed as symbols of "globalization" in its negative sense, even while people around the world eat in them.
At the heart of the Basic Burger concept is menu simplification, and exploitation of the resulting simpler kitchen operation to provide a tastier, higher-quality product at a price point equivalent to existing fast-food items, particularly the McDonald's Big Mac. This, and its counterparts at other chains, along with a few other items such as french fries, continue to account for a large share of all fast-food items sold.
The center of the fast-food industry remains the United States, and the concept (including the name "Basic Burger") has been formulated with the American market in mind. However, the same concept could well be applied elsewhere, and if originating in a different national market, could draw on local casual-dining traditions rather than the American-style hamburger.
Assuming that the concept is first applied in the American market, subsequent global expansion might seem to be hampered by recent international consumer resistance to American-identified brands (Emling). Much of this recent resistance is due to US foreign policy, specifically the war in Iraq. As American public opinion has now also turned against the war and the Bush administration, however, this point of resistance can be expected to be a thing of the past before a new brand, having established itself in the American market, is ready to extend a global reach.
Returning to the Basic Burger concept, the trade-off, naturally, will be in having fewer items offered. Customers not interested in the handful of menu choices offered will have to go elsewhere. However, by offering popular items of superior quality at a competitive price, Basic Burger will still be positioned to capture a substantial proportion of fast-food customers, providing a substantial market niche that is in less competition with other segments of the food service industry such as conventional restaurants.
The Basic Burger Operation:
By selling only a few key items, the outlet can concentrate its effort on them. The kitchen and storage areas, not requiring provision for a large variety of items, can be designed with emphasis on the core competency. Less preparation at distant central distribution centers will be required, allowing greater emphasis on on-site preparation, in turn allowing delivery of fresher, more "natural" meals to the customer.
It should be noted here that some menu variations have minimal impact on operational complexity. For example, small, medium, and large hamburgers are made the same way, so this type of variety can be offered without substantially increasing the overhead of operational complexity.
Funding Mechanism and Price. The central concept of Basic Burger, as outlined above, is to reduce complexity of kitchens and supply chains, and apply the resulting savings to provide superior quality within a given price point. From the customer's-eye point of view, this can be expressed simply by saying that the offering of Basic Burger would most likely be about the size of a Big Mac, and offered for the same price, but tasting noticeably better, and in particular more natural.
It may be found in practice that a somewhat larger or smaller offering is the optimum, and as suggested above, offering two or even three sizes imposes minimal overhead. Larger sizes are generally advantaged, since the labor input is more or less identical for all sizes. It may also be found that the quality is sufficient to allow for a modest price premium as compared to other chains' similar-size offerings. However, the Basic Burger concept is not dependent on being able to charge such a premium.
Employee Management. Employee training can likewise focus on the core competency, simplifying operations. Cashiers, for example, will only have to deal with a few items. Moreover, smaller kitchen staffs will allow higher pay, at least in some positions, for example drawing cooks with a higher skill level. Additionally, though the number of items is restricted, some scope for individual skill will be available in these positions, making the outlets a reasonable entry level for cooks intending to move on to general restaurants, something that is not the case with conventional fast-food outlets today.
A reputation for quality will also tend to foster employee morale. The Basic Burger operation will not be a radical departure from fast-food operations. Thus it can draw on well-established management procedures for ensuring consistancy of quality in the product. At the same time, the focus on core competency will open the potential for pushing a bit beyond the standard, e.g., in allowing some scope for skill in cooking. The whole operation will be distinctly on the high end of the fast-food spectrum, with all the advantages that this can convey in employee management and relations.
Customer management. Customers are familiar with fast-food characteristics and operations. Thus, the Basic Burger concept is not requiring them to learn how to respond to an experience that is new to them. The customer will place orders and pick up food in the same way as at other fast food outlets. The one element of customer education required is with respect to the available variety of offerings, which will be considerably smaller than at McDonald's or other similar outlets.
In large part, this education will be handled by the advertising and overall branding, as in the proposed name, Basic Burger. People have an intuitive grasp that if you only make a few things, you probably make them better. Moreover, in a world where they are bombarded with choices, people will respond to "old-fashioned" quality and simplicity. These will be at the heart of the Basic Burger message.
Likewise, for customers who are unfamiliar with the offerings, the simplicity of the menu will simplify their task. They will see at a glance whether they want what is offered; if it isn't, their time and energy won't be wasted. More often than not they will want what is offered, and the quality of the product will bring them back.

Can Corporate Culture Be a Competitive Advantage?

Corporate culture has become an important topic in business primarily during the last two decades. While corporate culture is an intangible concept, it clearly plays a meaningful role in corporations, affecting employees and organizational operations throughout a firm. While culture is not the only determinant of business success or failure, a positive culture can be a significant competitive advantage over organizations with which a firm competes. This paper will review how the concept of corporate culture became popular, define corporate culture, show how it affects real-world organizations (both positively and negatively), and consider ways in which cultural change may be brought about.
The rise of corporate culture
People come from a variety of ethnic backgrounds and cultural heritages, have a variety of personalities, and have been shaped by a diverse range of experiences. When people from diverse backgrounds are brought together in a work environment, these factors will manifest themselves in an infinite variety of ways. Over time a dominant set of norms will emerge, guiding the way in which work is accomplished within the organization. This phenomenon gives rise to the concept of corporate (or organizational) culture. Corporate culture only began to be studied and appreciated in the USA during the last two decades. An influential book entitled Corporate Cultures: The Rites and Rituals of Corporate Life (Deal and Kennedy, 1982) popularized the notion of understanding, establishing, and fostering a positive corporate culture. In less than two decades since the time that this book was published, culture has gone from a relatively unknown concept to being widely recognized as playing a central role in corporate strategy. Literally hundreds of books and thousands of articles have been devoted to the subject (a recent search for books on corporate culture through a large Internet book retailer turned up 803 matches). It is clear that corporate culture has become an important consideration for top management, and therefore it is worthwhile to consider the definition of corporate culture in more detail.
Corporate culture defined
There are many ways to define corporate culture because it is influenced heavily by factors such as the industry in which the company operates, its geographic location, events that have occurred during its history, the personalities of its employees, and their patterns of interaction. Some of the formal definitions offered include “a cognitive framework consisting of attitudes, values, behavioral norms, and expectations” (Greenberg and Baron, 1997), “the collective thoughts, habits, attitudes, feelings, and patterns of behavior” (Clemente and Greenspan, 1999), and “the pattern of arrangement, material or behavior which has been adopted by a society (corporation, group, or team) as the accepted way of solving problems” (Ahmed et al., 1999). In more useful terms, a positive corporate culture typically encompasses several key elements. First, it is fostered not merely by a mission statement, but by a clear corporate vision, which is a mental picture of the company’s desired future (Qubein, 1999). Corporate visions are most effective when clearly communicated by top organizational leaders who exhibit strong values and have dynamic, charismatic personalities (Greenberg and Baron, 1997). Second, corporate culture is supported by corporate values that are consistent with the purpose of the company and aligned with the personal values of organizational members (Qubein, 1999). Corporate vision and values permeate all levels of the organization and are consistently modeled by top management. Third, employees are highly valued at all levels of the organization (they are often referred to as “associates” or “team members”), and there is extensive employee interaction both within and across functional departments (Clemente and Greenspan, 1999). Fourth, the culture is adaptable, adjusting quickly in response to external conditions and is consistent, treating all employees equally and fairly (Ahmed et al., 1999). Finally, corporate culture is perpetuated in some way, perhaps through tangible symbols, slogans, stories, or ceremonies that highlight corporate values (Greenberg and Baron, 1997).
The aforementioned characteristics of a positive culture cannot exist without widespread employee support. Even within an organization that has a strong overall culture (the “dominant culture”), there will also be many subcultures (Greenberg and Baron, 1997). These could form for many reasons, perhaps due to functional differences in the organization (finance, sales, marketing), or to ethnic or geographic differences among employees. The dominant culture in the organization must be strong enough for members of various subcultures within the organization to identify with, accept and embrace it. This necessarily requires that the values of the dominant culture be aligned with the values of each of the subcultures as well as the personal values of each individual.
Categorizing corporate culture
In order to provide a basis for further analysis, researchers have sought to place corporate cultures into general categories. One such categorization by Sonnenfeld (1988) defines four types of cultures: the academy, the club, the baseball team, and the fortress. The academy exposes employees to many different jobs so that they can move around within the organization. The club is very concerned with how people will fit in to the organization. The baseball team consists of talented people or “stars” that are rewarded heavily for their accomplishments but who will readily leave the organization when a better opportunity comes along. The fortress is an organization that is concerned mainly with survival.
Goffee and Jones (1996) offer another categorization, postulating that corporate culture is determined by levels of sociability (a measure of sincere friendliness among members of a community) and solidarity (a community’s ability to pursue shared objectives quickly and effectively) and they have developed a survey that can aid in understanding where an organization fits on this scale. The combination of these dimensions gives rise to categories that they have labeled as networked, mercenary, fragmented, and communal .None of these categories is considered to be better than the others. Instead, they serve as a way for management to determine where their culture fits relative to other types of cultures. A networked culture is distinguished by high sociability and low solidarity. Individuals in this type of culture feel like family and socialize often. Promotions are achieved and work is accomplished via informal networks or subcultures within the organization. This corresponds loosely with Sonnenfeld’s club category. A mercenary culture has low sociability and high solidarity. Individuals do not interact socially but are united in supporting strategic business objectives. They do not tend to exhibit a strong degree of loyalty, staying only as long as their personal needs continue to be met. This category is similar to Sonnenfeld’s baseball team. A fragmented culture has low sociability and low solidarity. People in this type of organization rarely interact. They may work with their office doors shut or from home. This type of culture might be found in a law office or in a company that is downsizing. This category would be similar to Sonnenfeld’s fortress. Finally, a communal organization has high sociability and high solidarity. This type of culture is often found in small start-up companies. Members of such an organization work very closely together for long hours and will likely socialize together. They strongly identify with the corporate culture and have a high sense of fairness so that rewards are shared equally. This category is most similar to Sonnenfeld’s academy.
Categorizing an organization’s culture can help managers in several ways. First, categorizing the culture is a precursor to better understanding the pros and cons of that particular type of culture. Second, a clear understanding of their corporate culture can assist managers in getting the correct person-organization match when recruiting for new employees. Third, knowing where a company is right now can assist managers in making decisions about and progress toward cultural change.
Benefits of a positive culture
An organization that is able to maintain a positive culture is likely to enjoy many benefits. When organization members identify with the culture, the work environment tends to be more enjoyable, which boosts morale. This leads to increased levels of teamwork, sharing of information, and openness to new ideas (Goffee and Jones, 1996). The resulting increased interaction among employees activates learning and continuous improvement because information flows more freely throughout the organization. Additionally, such a culture helps to attract and retain top employees (Greger, 1999), evidenced by books such as The 100 Best Companies to Work for in America (Levering, 1993) in which culture is emphasized as a primary determinant of the attractiveness of an employer. When considering corporate culture, it is helpful to consider actual companies that have demonstrated the positive effects that a corporate culture can have.
Wal-Mart’s founder, Sam Walton, showed concern and respect for his employees from the company’s inception (Discount Store News, 1999). This created an environment of trust that persists to this day. Walton also modeled the behavior that he desired from his employees, especially customer service (both to internal and external customers), by visiting his stores, meeting customers, and greeting employees by their first names. Walton also embraced and encouraged change in order to remain competitive, and developed employees by having them work in a variety of positions (Discount Store News, 1999). Wal-Mart considers its culture the key to its success, and to this day employees continue to think about “how Sam would have done it” when making decisions.
Southwest Airlines
Another good example of a positive corporate culture is Southwest Airlines. The company’s relaxed culture can be traced directly to its CEO and co-founder Herb Kelleher. Kelleher encourages employees to be very informal and have fun at their jobs. This is evident to anyone who has flown on Southwest and heard the jokes that the stewardesses tell. Kelleher fosters this type of culture by engaging in unusual acts, such as arriving at shareholder meetings on a motorcycle wearing jeans and a t-shirt, or holding a 2 a.m. barbeque for the company’s mechanics who work the night shift (Donlon, 1999). He even challenged another company’s CEO to an arm-wrestle to settle a dispute over the use of a slogan. Kelleher also strives to value Southwest’s employees, acknowledging births, deaths, marriages, and other events in their lives by sending a note or card. Employees are encouraged to pitch in where needed, a fact that is evident in airports where pilots are often seen checking passengers, for example. This has allowed Southwest to have a turnaround time at airport terminals that is less than half the industry average. In order to maintain the culture, prospective employees are carefully screened to make certain that they will fit in.
Hewlett Packard
Hewlett Packard is an example of a company that has been successful in improving its culture. A few years ago, employees at the company’s Great Lakes division had begun to feel the stress and pressure of their jobs. Attrition rose to 20 per cent and over 50 per cent of employees surveyed reported feeling “excessive pressure” on the job. This led the company to make some unusual changes in order to improve the culture. Employees are now required to formulate three business and three personal goals each year. Employees are encouraged to cheer on fellow employees who achieve personal goals, such as spending time with their children or getting away for a round of golf. Only two years into the program, the company reports no loss in productivity despite the reduced hours employees now work and has seen an increase in its retention rate. This success is attributed to the fact that managers strongly supported the program and modeled it in their own personal lives (Cole, 1999).
Changing corporate culture
The preceding examples show that a positive culture can make a significant contribution to organizational success while a negative one can lead to failure. While it is easiest to establish a desirable corporate culture during a company’s infancy, it has been shown in practice that culture can be changed for the better. In order to go about changing corporate culture, top management must first understand the culture, as it exists today. This can be accomplished by surveying employees on important topics such as their perceptions of and identification with the corporate values and mission, interactions with other employees both inside and outside of their departments, beliefs about whether they are treated fairly, and so on. This will help management to determine the type of culture that exists and to identify areas for change.
Once the current culture is understood, management must decide how the culture should be changed in order to improve results. For a culture to be effective, it should be consistent with the business environment in which the organization operates (Goffee and Jones, 1996). For example, high technology firms tend to operate better using a culture that encourages sharing of information (to support research and development) and that responds quickly to external events. As discussed previously, sharing of information and quick response to external events are fostered by frequent interaction among employees across organizational functions. If management wishes to encourage this type of behavior, they should plan events that foster more interaction among employees such as social events and ceremonies.
Management should seek cultural change by modeling the behavior that they wish to encourage, and then reinforce the desired culture by taking steps such as developing visionary statements and/or slogans, celebrating employees’ successes or promotions, distributing newsletters and videos that reinforce the culture, recruiting new people into the organization that are compatible with the desired culture, changing dress codes, and so on.
This paper defined the term corporate culture and considered the rise in popularity of corporate culture in recent decades. We also looked at two different ways in which corporations can categorize their culture, and considered the benefits of a positive culture to organizations such as Wal-Mart, Southwest Airlines and Hewlett Packard. Finally, we suggested that while a positive culture should be established during a company’s infancy, it is possible to change a corporation’s culture should it be necessary to do so. Today’s globally-competitive business environment has made a positive corporate culture a critical aspect of success for firms. No longer just a competitive advantage, it has become a prerequisite for success, allowing companies to attract and retain top employees. We strongly recommend that organizations of all sizes assess and categorize their corporate cultures, looking in particular at the impact of that culture on employee productivity and morale. Where the culture is serving to lower morale, we recommend that management take proactive steps to change the corporate culture using a top-down approach, establishing a new vision and demonstrating new behavior consistent with the revised vision. Much like national culture, our understanding of corporate culture and its impact on employee behavior is still in its infancy but one thing is for sure, culture can have a tremendous positive impact on employees. In conclusion, we urge companies to shape their corporate culture to their advantage in improving both their employees’ experience of the workplace and, in turn, improving their own profitability.

Bridging New Employees Performance Gap

The news is full of stories about talent management, the importance of getting and keeping the “right” employees, and the impending lack of employees as the workforce changes. With these dire warnings come many ways to select and retain employees.
if you travel, particularly in the U.K., you will recognize this often used phrase: "Mind the gap." You hear it as you enter and exit subways or when you embark upon or depart the trains. You are warned not to fall through the cracks as you transition from one place to another.
The same advice could be given to HR leaders as you start 2007. The news is full of stories about talent management, the importance of getting and keeping the "right" employees, and the impending lack of employees as the workforce changes. With these dire warnings come many ways to select and retain employees. However, in addition to getting them on board, you then have to keep them.
Minding the gap refers to a method of learning from your new-hire talent in order to help the new employee become productive right away. New employees want to be productive, and if they are not, they will leave. This is particularly true for hard-to-get talent.
In this article I will explain the results of a study done with a technology firm that was doing an incredible amount of hiring in 2006. They learned from studying—or "minding"—their gaps.
What is the gap? When you hire a new employee, there is a transition period between the hire date and the time when a new employee becomes optimally productive. This transition denotes a productivity gap, and it is important to minimize this gap in order to create and sustain long-term competitiveness and performance. In our 2006 study, we examined the "productivity gap" for a set of new technology employees.
Productivity gap is defined as the difference between an employee’s energy level at work "today," and the level where the employee is most productive. The calculation is as follows:
Productivity gap = (energy today – energy where most productive)
Why energy? We used energy because it is a validated metric that predicts performance, and our ability to quickly assess energy (one question) allowed us to conduct the research without taking so much time out of the employee’s day that the study itself negatively affects productivity.
How it works: We expect a productivity gap with the majority of new employees. It takes time to learn the job, to make things work with a new team of colleagues, to get processed (e.g., get new computer, find desk, learn how to use phone, equipment, etc.), and more. Thus, we anticipate and find in our work that there is a gap between an employee’s energy at the time of being hired (we study energy at work specifically) and the energy where the employee is most productive. In most cases, the gap is negative.
Typical new employee gap: Energy today = 3 Energy where most productive = 7
Productivity gap = -4
However, we want the gap to be minimal, and we want to close the gap as soon as possible. It is up to the manager to "mind the gap" and work to make sure the gap is reduced. You want the employee to be at the level where he/she is most productive as soon as possible, and you certainly don’t want the gap to increase.
Goals are to reduce the gap or move to a positive gap. It is better for productivity to have an employee working slightly above where most productive; however, our research shows that you do not want the employee to move to a state where she/he is more than one point above where most productive, because prolonged time in that "overly energized" state leads to lower productivity and burnout.
In this study: We examine the gap for 183 employees who started participating in the Pulse Dialogue process during 2006. In this snapshot of the study (which is now continuing), we report data from June to October.
Background: In each data collection, we asked employees to rate their energy level. We also asked for levels where the employee was most productive on this same scale. This is a process that I have researched and validated in numerous studies for the past 10 years (across hundreds of thousands of employees). Unlike many employee metrics, energy is an optimization construct, not a maximization one. That means it is negative to be at the too-high or too-low levels. Thus, we find out where employees are most productive (by asking them at multiple periods of time) and then run analyses using both energy and where people are most productive. Gaps predict outcomes such as turnover, customer service, sales and other performance outcomes. The goal is to reduce the gap and help employees remain at a level of energy where they are most productive.
What did we learn? First, we learned that the trend, overall, was headed in the right direction from June to October. The mean gaps from Time 1 (June) to Time 2 (October) are as follows:
June: -1.16 October - 0.97
Second, we learned that there were significant differences in the trends when the patterns were viewed by manager and then within a manager’s department by job level (or grade). See the graph below as an example:
Productivity Gap ChartManager No. 1: Gap by Job Grade
The goal is for the gap (difference between employee energy and where most productive) to be reduced over time (or for the trend line to go down). That means the employee is moving toward an energy level that is close to where he or she is most productive.
In the chart above, you can clearly see that when it comes to Job Grade 1, this manager is having a very positive experience. Between Time 1 and Time 2, the gap was reduced significantly. But for all other grades (grades 2 through 4), the gap increased. In addition to asking employees to rate energy and where productive, we also asked one open-ended comment question asking them about the new-hire experience. We content-analyzed this data, and we were able to connect the stories to the metrics.
In general, across organizations, we find that more attention is given to the Grade 1 (or entry-level) employees. Everyone expects they need training, mentoring and communications because they are really new. These are the people coming in who have less experience in the field, and it’s accepted by all peers that they need training. However, as one becomes more senior in a career, then there is a natural tendency to let new senior employees take care of themselves. In the current intensively busy environment in which we all work, no one would want to waste time trying to help someone who does not need help. In fact, you might think that it would be a waste of time.
Lessons learned It does not take long to see from the data that, at least with this particular manager’s team, all levels of employees needed help. The trends indicate that the productivity gap went up over time for the more senior people. This represents a productivity problem and a talent management challenge. If new senior employees feel their experience with the organization makes them less productive, they will not stay.
In this sample at least, the employees live in a city where there are ample opportunities to find employment elsewhere. Thus, if the HR team can diagnose a new-hire acculturation problem and act on it, they can save their organization money by reducing search expenses and by optimizing the productivity of the talent that just hired.
When an HR team has data across its organization, it can use data from other parts of the business to help a particular manager. In this case study, we look to the data from Manager No. 2 to understand positive experiences for the senior job grades (see chart below).
Productivity Gap ChartManager No. 2: Gap by Job Grade
The trend data above clearly show that Manager No. 2 is creating an environment where new hires in all job grades are experiencing a reduction in their productivity gap. In contrast to the data from Manager No. 1’s group, the more senior employees are seeing a significant reduction quickly.
The opportunity for HR is to assess what’s working for Manager No. 2 and share those best practices with other managers. This is one of the most effective forms of learning any HR manager can use because learning from peers creates the kind of tactical outcomes for managers that are rarely seen in other types of learning environments.Going beyond traditional talent management Talent management goes beyond just hiring; it means optimizing the talent that you bring into the door. However, in HR few employers are truly studying the new-hire experience in the detail that this case represents. We do a much better job of spending money to do exit interviews than we do to study the experience of new hires. This case is just one example of how data can be used to learn and to break through traditional ways of managing talen