“As a result of all this change, it’s harder than ever to run a successful business in a people-centered industry.”
Three years ago, during Summer Brand Camp I had the opportunity to meet Joni Thomas Doolin, the architect behind the event that includes a big dose of community, connection and philanthropy along with a whole lot of killer content. Camp rocked and left a lasting impression on me. So did Joni Thomas Doolin. She is a transformational trendspotter for the service industry, leading TDn2K™ (Transforming Data into Knowledge) and People Report™, and helping companies turn the massive amount of data they’re tracking about human, financial and social capital into insights that shape business strategy.
We caught up recently and had an interesting conversation about the evolution of the service industry and how category-leading companies are responding. Joni’s perspective can help any leader looking to accelerate change, improve customer experience and cultivate a culture that becomes an enduring competitive advantage.
Adapt to Thrive
Like most sectors, the restaurant industry has gone through major disruption in the past few years. TDn2K has been tracking the industry through multiple up and down cycles, since the 1990s. They tracked businesses through the “go-go” years of the late 90s, through the bubble and recovery, the Great Recession, and the financial impact that has come after.
Here’s what’s interesting, she says: “These cycles are tightening, and that’s causing the pace of change to get faster. The need for companies to respond just accelerates in insane ways.”
She points to a few major trends that are impacting the restaurant industry: the explosion of social media and mobile, the rise of the sharing economy, and major demographic shifts. She thinks back to just a few years ago when experts were writing books about how to approach the “new generation” of millennials. Millennials are here now, and that shift has happened, she says. Most employees and many managers in the industry are now millennials. “In our business now, in some cases 70 percent of employees are millennials. They’re in management. But we still have all this turmoil in corner offices where that change hasn’t occurred yet, even though the change has happened in the rest of the business.”
What does the next generation of leadership want? Joni points to research from Deloitte: “Their findings were crystal clear. Millennials want to work at organizations that focus on purpose, not just profit. And here’s a scary stat: Two-thirds of them want to exit their current jobs by 2020.”
The lightning-fast change in the employee expectations has left some companies flat footed and playing catch up. The chain restaurant industry was founded, and grew, on a command-and-control, hierarchical leadership foundation, she says. But “that’s been blown up and has moved toward collaboration. The rate companies have been able to do that is an indicator of how successful they can be.”
Put People First
As a result of all this change, it’s harder than ever to run a successful business in this people-centered industry, she says. “The issues get more and more complex. Who has time to study insurance laws, or whatever it is they’re faced with today? People don’t have time to process all of the information.”
But staying frozen in the face of change isn’t the answer. “Being the manager of a Whole Foods, a CVS or a restaurant — any employee sector, customer-facing business — is dramatically different than it was ten years ago.” But, she says, “we haven’t dramatically changed the profile of who we’re hiring for these jobs.”
During the recession, no one was investing in recruitment, not to mention talent development or e-learning. Everyone had plenty of employes. “So we got lazy, and went through a time frame where we weren’t making those investments, and the tightening in the labor market snuck up on a lot of people,” she says. Now, in the food services industry, turnover for both employees and managers is at a historic high and a lot of organizations are trying to play catch up to compete.
Recruiting is a whole lot more challenging. Employees have options and expect more from their employers. That creates opportunities for companies that are progressive. Thinking from the employee perspective, Joni says, “take something as simple as your schedule. If I can log into my phone and get my schedule, why would I go work for a company where I have to call or go into a restaurant?” Or, if an employee is used to working with a POS system that makes their life easier (not harder), it’s not worth the aggravation to move to a company that doesn’t have that technology.
That kind of tech might seem like a minor convenience, but focusing on the employee experience matters and over time you’ll see that translate into a better experience for the customer.
Joni is seeing major shifts in industry data and trends. In the past, most companies clustered around the “average” level for stats like turnover. But now, instead of seeing most companies cluster around the middle, “the divergence between top performers and the lowest performers has increased dramatically. There’s a much wider gap between the top and bottom.”
In other words, success is harder to come by, and the companies that rethink their models are moving away from the pack, while companies that are complacent can struggle to stay in business. To thrive in this market, you have to adapt! She predicts the tipping point is near: “There will undoubtedly be an acceleration of companies that either fail or reemerge in a different format.”
She points to emerging brands that are finding wild success, and veteran brands (like Denny’s) that are rethinking the way they do business. While their models vary, the best brands are all doubling down on their employee value proposition, she says. Focusing on people is the key to success.
One example: Greg Creed, the CEO of Yum! Brands, says “the guest experience can never exceed the employee experience.” That’s a simple concept, but it makes a big difference in the lives of the people who work for you. She says that when Creed was leading Taco Bell, the company started investing millions in education for high school employees, with the idea that if they could get their people through high school, they could change their life trajectory.
“A lot of the companies that are successful have those paths for employees clearly identified. They invest in education and learning,” she says.
Successful companies also work hard to create a culture of trust. “After 9/11, J. Walker Smith of Futures Company wrote a white paper about the whole issue of crumbling institutional trust, which obviously has sunk to even lower levels,” she says. “I still use one of his quotes:
A new basis for trust is needed. Not big pronouncements but small promises, immediately fulfilled and tangibly delivered, one after another, time after time.
“That formula works in any relationship – even the workplace. As institutional trust continues to crumble, and the levels of cynicism continue to rise, there is no challenge or opportunity bigger or more important for us to tackle in the workplace.”
How can leaders take all of this advice — promote collaboration, proactively embrace change, improve the employee experience and build trust?
“I really believe in conscious capitalism,” she says. (For more on “conscious capitalism,” shorthand for using business to create better lives for everyone involved, check out Whole Foods CEO John Mackey’s book by the same name.) “In our industry, I see that the businesses that are outperforming are doubling down on kindness, elevating the lives of all their stakeholders, not just their shareholders.”
A rapidly changing world requires us to change. That’s not only uncomfortable, it’s required for survival. To help you move faster, I gathered the best advice from six progressive sales leaders navigating transformation at some of the world’s best brands in my new ebook, Adapt and Thrive.
I’ll be working with Joni again for TDn2K’s Global Best Practices Conference, delivering the 2018 keynote. Can’t wait!
Ryan Estis helps companies and individual contributors embrace change and achieve breakthrough performance. Each live event blends original research with compelling stories that move participants to take action. Ryan has 20 years of business experience working with the world’s best brands to initiate change, inspire innovation and deliver growth. Learn more about Ryan Estis.