Archive for May, 2015

McDonald’s Big Data?

Sunday, May 24th, 2015

What do you really want?
by Roger La Salle

Revive to survive

McDonald’s fast food group announced in January 2015 that Steve Easterbrook, its senior executive brand president and chief brand officer, is to be the new chief executive of the ailing fast food chain. He has the task of returning the fast food giant to its former glory days.

Reportedly, McDonald’s saw a 15% drop in revenues in the past year.

Maybe this revenue hit is a result of both increased competition and the message that fast food has some downside health effects; a message that may finally be getting some traction.

Improve efficiency and cut jobs!
Organisational changes reportedly will contribute to $US300 million ($A383 million) in cost-cutting targeted by McDonald’s. Without providing much detail, Easterbrook said “the cost-cutting will affect jobs”.

An interesting comment that perhaps speaks to the risks of cost down initiatives made in isolation was made by Mr Larry Light, who served as chief marketing officer of McDonald’s between 2002 and 2005 and now runs a brand consulting firm, he said Easterbrook offered little in the way of what matters to customers.

“Being more efficient, having less bureaucracy will buy you time, but will not buy you enduring success,” he said.

Unfortunately jobs are one of the first things that suffer under cost cutting initiatives with Light’s message that this alone will only buy you time, time to explore the opportunities and to innovate and change what you are doing.

Interestingly, one wonders if McDonald’s really does know what the customer really wants. Its new bold initiative of “build your own burger”, which was no doubt very expensive to implement and probably even more expensive to service, may have more than one purpose.

On the one hand it allows customers choice, on the other it may be an admission that McDonald’s wants to take on all comers but is not sure what the market really wants any more.

The big picture!
However, if one likes to dig deeper there may indeed be a hidden agenda with McDonald’s “build your burger” program.

This program will allow the collection of so called, “Big Data” as to the most preferred custom built burger. Armed with this information McDonald’s will be able to better understand what the market really wants and moreover the geographic profiles that various tastes dictate.

If this is the real reason, it’s a clever initiative and one wonders how long the
“build your burger” initiative will prevail. My guess, just as long as it takes to get the big data they need.

I applaud this initiative on the part of McDonald’s, it’s smart and will provide huge strategic market insights, insights that may lead to the innovations that will again set them straight.

What’s the message?
Never stop looking at the market and your customers, Innovate or perish.

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Roger La Salle, trains people in innovation, marketing and the new emerging art of Opportunity Capture. His creation, “Matrix Thinking”™ is used in organisations in more than 29 countries. He is sought after internationally as a speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australia and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. www.matrixthinking.com

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Reduce your budget and grow the business

Wednesday, May 13th, 2015

Reduce your budget and ”Grow the Business” – Now there’s a novel idea!
by Roger La Salle

The business of business is simple

Essentially all businesses are driven by simple arithmetic and at this time of year we start to review our budgets.

In business the aim is to grow revenues and of course profits. The mandate to achieve this is given to the senior executives that form the so called management team.

The message is to grow or risk stagnation – it’s that simple.

The inevitable budget session

Predictably, as our executives develop their next year’s budget you can be sure there will be a requirement for more funds, more money to spend so the department can grow and consequently achieve the forecast improved outcomes.

It’s quite amazing, despite all of the technological marvels we provide to our staff to make them more effective, costs and budgets continue to grow.

Of course in Government departments it is a long held tradition to get together in early June to “blow the budget” by purchasing anything that can negotiate the “system”: before that mystical 30th of June.

Is this a better way?

One wonders what may happen to ever expanding budgets if some inversion to this thinking was applied.

Take for example the head of a department that may have an annual expense budget of, say $20 million. Predictably the executive comes to the budget session with a well justified request for an additional 7% for the next year. Say an increase to $21.4million. Quite a modest increase, but one the executive assures top management is essential to “grow the business”.

It may be interesting to consider what may happen if that very same executive was to be challenged.

“No, instead of seeking more funds, if you can achieve your goals with 10% less, you will receive 75% of the reduction, in this case a whopping $1.4million, as a cash bonus, to be split among your staff in proportion to their salaries.”

Now there’s a novel and innovative approach to management.

What now?

As the budget process starts maybe it’s time to give consideration to this radical, but perhaps very practical way of still achieving the desired results without the never ending need to spend more money.

Instead of more money, find better ways to achieve your outcomes – that’s innovation.
which is not a bad thing to introduce to a business.

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Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to one of the world’s largest consulting firms. www.matrixthinking.com

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