By Lauren Burnhill, @LaurenOPV
With two client deadlines this week, I was working diligently and then bam! Windows updated itself at 1 am on Monday and Tuesday the computer would no longer start. Hours of various recovery efforts led to one conclusion – in order to meet my deadline, my computer needed to be replaced. Re-installing software and tweaking settings into the wee hours, I thought, this week for sure the blog won’t happen.
Funny thing though, as I was catching up on magazine reading while waiting for programs to install, I stumbled across a couple of things that I wanted to share with you all. We’ve been talking about replication versus scale, and I’ve pointed out that scale is difficult to achieve, suggesting that replicating #sustainable small business models might be a better way to achieve economic development and job creation goals.
The problems of scaling up are nicely highlighted in this month’s #Wired magazine piece “Drowning in Cash” by David Downs. David identifies five #Kickstarter projects that brought in much more funding than intended and discusses the headaches these firms experienced as a result. The fact that your target market is keen on your product doesn’t mean that successfully expanding your operations to meet that demand is a “slam dunk”. Building your human and organizational capacity doesn’t just happen, it requires conscious thought and planning.
Last week I somewhat jokingly suggested that we should find a way to franchise everything so that #replication could happen more effectively and efficiently. This month’s Washingtonian magazine had a great article on local hero Chef Geoff Tracy (“Everywhere at Once”) that hinted at a way to improve replication without franchising. Disclosure: I happen to like Chef Geoff’s restaurants: consistent quality and service at a reasonable price point. These aren’t “cheap eats”, but nor are they pompous over-priced tributes to the Chef’s ego.
What struck me most reading this article is the amount of time and effort that Geoff and his brother Chris have put into codifying every aspect of their operations so that expansion doesn’t threaten consistency. Chef Geoff didn’t set out to replicate anything. “Consistency” he says “is a lot harder than it looks. It might just be the hardest thing to achieve”. Much like hospitals increasingly use checklists to ensure top quality patient care, the initial goal here was to ensure that the customer’s dining experience is equally positive whether Chef Geoff was in house or not.
Today, Chef Geoff’s restaurants are graded regularly across 800 standards or “metrics” as we call them in the #ImpInv world. Incentive compensation is driven by these numbers as well. Wait staff scoring higher than 90/100 points receive a $250 bonus. For managers, a positive increase in profit rate vis-a-vis the previous quarter triggers a bonus of 40% of the increased profit. What a fantastic way to align behavior – help the company achieve its goals and you gain too! It wasn’t a topic in the article, but I’d bet Chef Geoff has lower turnover and higher employee loyalty than his competitors, which will help make his business more sustainable in the long run.
The unexpected bonus for the Tracy brothers is that their standards and scoring tools are enabling them to continue expanding from one restaurant to two, then three, and now a fourth is in the works as well. Figuring out the challenges to translating initial success into scale for a particular industry, developing tools and techniques for replicating that success and then testing and refining them over time, that’s the “secret sauce”. Replication as a path to #scale may not sound like a big deal, but for most businesses (excluding #disruptive technology #innovations), codifying success may be the best way to create sustainable #growth.