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Building on Your Success

Building on Your Success

IDEAS FROM A VARIETY OF PLACES. The FM Ideas Conference featured both formal presentations and panel discussions moderated by FM Chief Editor John Lawn (top l.), and informal social gatherings where attendees could mingle and exchange ideas. Winners of FM's Best Concept Awards like Best of Show winner Purdue University Dining Services, represented by Assistant Director Kathleen Manwaring (bottom l., with Lawn and FM Publisher Tom McIntyre), were presented their awards at the Best Concepts Awards Banquet.

“Traditionally, we told parents to stay out of [campus dining issues], but that was a mistake.” –Frank Gladu, Vanderbilt U.

"A good way to validate potential innovations is to discuss them outside your core group with other departments in the organization." –Sally Minier, Lehman Brothers

"I told the front-line staff, 'If you just take care of the customers, I'll take care of the bottom line.'" ¯Chris Concepcion, Sodexho

Innovation. Managing new business models and multi-concept portfolios. Positioning. Harnessing the idea power of your team. Developing a culture of accountability.

These were just some of the subjects explored at the recent FM Ideas Conference in Chicago. Ideas 2006 was held May 17-19 in advance of the National Restaurant Association Show to allow attendees to double the value of their trip to the Windy City. The conference, held at the elegant West Chicago City Center Hotel, drew a diverse collection of onsite professionals from across a variety of segments, from colleges to B&I, and from healthcare to K-12 schools.

One clear message from the conference: onsite professionals can learn a lot from each other irrespective of the segments in which they operate. Indeed, sometimes the brightest light bulbs are brought to full incandescence when juiced across onsite environments. The increased candlepower comes courtesy of someone with a fresh and different perspective.

Think of it as thinking outside the box by peeking into the next box.

Ideas Conference attendees took advantage of this opportunity for segment cross-fertilization at the formal presentations, where each panel discussion encompassed a diverse set of representatives from various segments, and also in the informal settings of the meals, break periods and the conference social agenda. The latter was highlighted by an opening night reception featuring a chef demo, and by the gala Best Concepts Awards Banquet, honoring the winners of FM's 2006 Best Concept awards (see the March issue).

What Is Innovation?
FM Publisher Tom McIntyre kicked off the conference agenda by noting that "some of the most exciting things in foodservice are happening here, in the operations managed by FM's readers." The theme of the gathering, he suggested, was that "the spirit of enterprise is vital to any organization, no matter the size," so the goal of the meeting was to provide attendees with ideas they could take back to stoke that spirit in their operations. "Then," he said, "we invite you to come back next year for more ideas—and bring a colleague!"

McIntyre's opening remarks were followed by the first presentation, by Robert Wolcott, an adjunct professor at the Levy Institute for Entrepreneurial Practice at the Kellogg School of Management at Northwestern University. Wolcott spoke on "Intrapreneurship and the Seven Myths of Innovation," concentrating on how an organization—and its managers—can encourage and nurture innovation. This, Wolcott stressed, applies to all organizations, even big ones, which are generally stereotyped as being resistant to innovation.

The core of Wolcott's talk was his discussion of the Seven Myths of Innovation (see sidebar).

For instance, he suggested that asking customers what they want is often unfruitful because "they only know the familiar; they don't know the unknown." Yet, it is in that "un-known" that real innovation lies, in meeting needs customers don't yet recognize. Wolcott's suggestion: "watch what they do."

Wolcott's talk was followed by a series of presentations by onsite operators representing different segments: Sharon Cox of Memorial Sloan Kettering Cancer Center, Shawn LaPean of the University of California at Berkeley, Leo Lesh of Denver Public Schools and Sally Minier of Lehman Brothers. Each described his or her challenges and the steps they and their teams had taken to meet them.

Afterwards, the four gathered for a panel discussion moderated by FM Chief Editor John Lawn. The whimsical topic title referred to developing and managing new onsite business models, a necessary outgrowth of the innovation imperative. Each panelist also offered insights on how innovation can be cultivated in the kinds of environments in which they work.

Cox, for example, noted that large institutions like Sloan Kettering "encourage 'evolutionary' rather than 'revolutionary' change," while Minier suggested that potential innovations should be discussed out-side the core group directly involved in its implementation as a way to validate them.

All panel participants acknowledged the difficulties of pursuing innovation—necessary as it may be—in a hectic, day-to-day-battle environment like onsite foodservice, where a host of other priorities, from food safety to nutritional content, crowd for attention. "Sometimes we forget about how to make money!" Lesh humorously lamented, to everyone's fervid applause.

Multi-Concept Management
The day's second topic involved the management of multiple concepts, a challenge faced by an increasing number of directors in various segments. The topic was discussed from a macro-cultural standpoint by Loret Carbone, a veteran restaurant company executive who now works as an industry consultant. In her presentation, Carbone emphasized the need to keep offerings fresh in an onsite environment by spurring internal competition among distinctive operations. She drew a parallel with the Lettuce Entertain You restaurant company, where she had been a partner and vice president. Lettuce Entertain You is noted for developing distinctive individual concepts rather than multiple units that duplicate the same menu.

By providing customers with different dining options in the same market, the restaurants were able to capture a greater share of the dining dollar even though they competed with each other, Carbone noted.

Her presentation was followed by a panel discussion on the subject of going beyond the "cookie cutter," featuring Sodexho District Manager Chris Concepcion, Disneyland Resort F&B Vice President Mary Niven and Assistant Superintendent for Facilities & Operations John Peukert of San Bernadino (CA) Schools.

Each gave a brief opening address discussing the challenges of their respective operations and how multiple concepts play a key role in keeping customers satisfied. Concepcion, for instance, noted that the U.S. Marine facility where he oversees the in-house dining operation serves more than 70,000 meals a week. The customers, with an average age similar to that of a college operation, demand the kind of branded fast food and casual dining typical of that demographic.

"So I took the campus services approach," he said. "We offer multiple service points with brands like Quiznos, Taco Bell, Pizza Hut, KFC, Starbucks, Jump, La Salsa, Freshens and Sky Ranch Grill."

Concepcion also talked about motivating staff who feel anxiety about things they can't control. "At one of our new operations, morale was low among the front-line team because the place didn't seem to be doing well, so we had a meeting and I told them, 'If you just take care of the customers, I'll take care of the bottom line.'"

Peukert discussed how he systematically converted San Bernadino school cafeterias into themed and branded dining locations and the customer satisfaction benefits (and bottom line results) that accrued from that change in approach.

During the panel discussion, again moderated by Lawn, the subject came around to measuring the success of various concepts. One measure, it was suggested, is food cost. Niven strongly objected, noting that in her experience food cost is "not money in the bank— gross margin is money in the bank! I'd rather sell a $37 filet mignon and put $25 on the bottom line than a bunch of tacos with an 18% food cost."

The second day's session kicked off with a presentation by consultant Christopher Brady, president/CEO of Romano Gatland. Brady addressed the topic of "positioning," and how it is especially vital for foodservice departments that are generally seen as adjuncts in larger organizations where the core mission or business has nothing to do with foodservice.

In his remarks he alluded to a massive hotel project his firm is currently consulting on in China (the 22 million-sq.ft. MGM Mirage-Beijing, which will have a population of 18,000 and 60 restaurants; Brady says the estimate is 24,000 meals a day in foodservice requirements).

He noted, somewhat humorously, that in the initial planning meetings he was known only as "the kitchen guy," the implication being that he represented a minor, peripheral part of the project. It was only when the CEO of the MGM Mirage showed a pie chart indicating the anticipated breakdown of revenue streams—with food and beverage constituting 29% of the total, second only to gaming—that the "kitchen guy" suddenly gained new respect.

"That CEO positioned F&B in a way that made us suddenly important to everyone," Brady noted. He suggested that foodservice operators similarly need to position themselves in a way that makes them important in the context of the priorities of the organization.

Brady was followed by Bruce Kane, director of culinary and program support for HDS Services. Kane gave a motivational presentation titled "Young Man, You'd Better Go Back to Pie School," about how preconceptions can hamper the effectiveness of a foodservice operation. The anecdote referred to in the presentation title had to do with a demo cooking exhibition at an eldercare facility where Kane decided to make pies in front of the customers, naively assuming they would appreciate the chefs' culinary expertise. Instead, the residents—many of whom had been baking pies all their lives—ended up teaching Kane a lesson about respecting the customers. The clincher was one critical elderly woman's pithy zinger: "Young man," she told Kane, "you better go back to pie school!"

Kane was joined in the subsequent panel discussion by Frank Gladu of Vanderbilt University and Mary Kate Harrison of Hillsborough County (FL) Public Schools, two

respected veteran industry figures overseeing substantial foodservice operations in the college and K-12 segments, respectively. Gladu talked about the importance of positioning campus dining to not just students, but to their families.

"Traditionally, we told parents to stay out of it, but that was a mistake," he said. "Now, we're positioning ourselves as a department that cares about the health and well-being of their sons and daughters while they are at Vanderbilt." He added that with the university moving to a residential college system, the dining department must plan for significant growth in the coming decades and also a mind shift, away from a role of selling food and toward one of providing food.

Harrison's district is one of the fastest growing in the country, adding six new schools and 6,000 new students each year, she noted. Meanwhile, half of the students are on free/reduced meal status, and over half of new employees don't speak English. Yet, despite those challenges, "we are the only department in the system that has branded itself successfully," she said proudly.

The Achilles Heel of the positioning problem in schools: "price gives the perception of quality," Harrison said. "What quality is there in a $1.75 meal? We need to change the paradigm of school meals as regards pricing."

Closing out the second day's sessions were two speak-ers coming from outside and inside the industry, respectively. Jonathan Vehar, an innovation consultant to a wide variety of industries, discussed how to harness the idea power of a team, and then Debi Benedetti, who has had long experience working in onsite, closed proceedings with a talk about "developing a culture of accountability."

"You can't force people to take responsibility," she warned. "Instead, you have to create an environment where it is encouraged and valued."

Organic and Generation Y

In his presentation, Cal-Berkeley Dining Director Shawn LaPean identified three top trends for Generation Y, the demographic group born during the "echo baby boom" of 1979-1994 that is currently swelling college enrollment figures. They are:

  • Taste & Flavor in High Volume (i.e., authentic regional/ethnic flavor)
  • Nutritional Awareness
  • Environmental Sustainability

Organic options "hit all three Gen Y trends," LaPean noted, explaining part of the reason his department recently implemented the college segment's first all-organic salad bar. The challenge of the salad bar, as LaPean noted, was to manage its costs while realizing the benefits accrued from its presence. "I think that onsite foodservice operations that can't manage their costs will have a very hard time with organic," he predicted.


Robert Wolcott

  1. "Innovation is about technology": so how come Starbucks convinced Americans to pay $4 for a cup of coffee...without inventing anything?
  2. "We need more new ideas!": actually, organizations get plenty of new ideas, but often have no way to nurture them
  3. "Innovation is a department": relying exclusively on R&D or a similar department neglects the insights/capabilities of the company at large
  4. "Let people loose to innovate": people have to be enabled through structure and process to pursue innovation; otherwise, ideas often are stillborn
  5. "Innovation is a radical departure": actually, innovation often just recombines existing components rather than introducing revolutionary new technologies
  6. "Avoid the detours": detours are often the destination; take mobile phone ringtones, which were created as a marketing gimmick (a detour) that became a huge business in its own right
  7. "It's about creating new things": Dell Computer didn't invent anything yet leads its industry

Mary Niven on Building the Case for Change

Here are the questions Disneyland Resort F&B VP Mary Niven says she asks when confronted with the question of changing dining concepts:

The Product

  • Why do we need to develop/change this product?
  • If it's a new product, why does it need to exist?
  • What is the marketing reason that F&B needs this product?
  • How big is the potential market that would purchase this product?
  • Is this product part of a platform initiative or a single-impact item? ("I would rather have a tweakable platform idea than one for a single location only," Niven noted.)

The Guests

  • Why should our current guests buy this product?
  • What unfilled need does this product satisfy?
  • What objections might the current guest demographic have to this new product?

[As an aside to this particular question, Niven related a story about how, soon after she arrived, she decided to upgrade a pickle product that had traditionally been served at the resort. The change, though it was to a higher-quality product, prompted severe backlash from customers—"It took over a year to get over the problem caused by my improving the pickle," she ruefully noted.]

• What marketing approach should we use to overcome these objections?

Product Benefits

  • Why should the guest care that we made this change? ["If no one notices, it's not a good change," Niven added.]
  • What is the benefit that the guest will get from the change?
  • How will this change improve the guest experience?

System Impact

  • What is the guest buying instead of this product?
  • Why is the guest buying this product?
  • How will this change impact the current purchased product?
  • What is the disadvantage of the current buying behavior that is solved by the new product?
  • What are the compelling points of differentiation between existing products and the new product?


  • What is the impact to the system's business drivers by not offering this product?
  • What improvement on average product contribution will occur with implementation of the product?
  • What is the return on the investment of time to develop the product, source the product, create menu collateral, conduct training and implement the new product?
  • How will the price value of all products be impacted by the implementation of this product at the necessary price point?


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