By Riley Gibson, CEO, Napkin Labs
Quick serves are facing a constantly changing marketplace. Millennials are becoming a more prominent demographic, consumers are becoming more conscious of what they eat and who they support with their dollars. In an industry where standing still means losing relevance, QSRs need every advantage to evolve quickly and efficiently. However, many companies still centralize innovation, creating labs and test kitchens where new products are formed. Centralized innovation can work as an ingredient in a larger innovation infrastructure, but a siloed approach on its own is slow, costly and one of the reasons new product failure rates in the food industry are as high as 50 percent.
QSRs need to adopt new digital tools to connect networks of franchisees, frontline employees and managers to the innovation process. Connecting these groups can make companies more nimble, responsive, decrease manager turnover and help to identify a broader set of new product, experience and operational innovations at a more local level.
Proximity to problems and to customers
Staying nimble and innovating as a large organization is difficult. Small restaurants and startups continually innovate faster with fewer resources than large established chains. One of the key issues is that as companies develop more layers of oversight, the top inevitably becomes further removed from the consumer. In an effort to stay consumer-centric many companies invest deeply in surveys and market research — but many of these mechanisms are slow and form diluted and skewed insights into consumers, or miss emerging markets and trends altogether.
Creating more connections with managers, employees and franchise owners who work with customers on a regular basis will inject new perspective into the innovation process that are rooted in observations and experience. These stakeholders also live through the day to day operations and can more quickly identify key problems. Getting closer to customers and to real problems creates more potential for QSRs to innovate with purpose and solve real needs for consumers.
Diversity of perspectives
Multidisciplinary thinking and a diversity of perspectives is essential to the innovation process. In an interview at The Economist Innovation Summit, Steven Johnson, author of "Where Good Ideas Come From," identifies bringing together diverse groups to fuel innovation as a key piece of consistent and breakthrough innovation. Small groups of individuals with similar backgrounds within a company will inevitably hit a local maximum of ideas and begin recycling thinking. Bringing hundreds or thousands of outside perspectives, who are not constrained by the same patterned thinking, can inject new life into the innovation processes.
Open lines of communication
Tapping managers and employees for ideas has the advantage of creating more dialogue between corporate headquarters and individual restaurants (and even more importantly, between restaurants). As ideas get shared, various restaurant owners can help vet them and work to build on them based on their unique observations and experiences. This knowledge sharing can help keep everyone in the company more aligned with the strategic vision of the business and helps make them more connected to solving key problems. Best Buy has actually seen decreases in employee turnover as a result of engaging a broader set of employees in the innovation conversation, for example.
Every town is different and as marketing and digital platforms get more targeted and more sophisticated, we become more aware of the importance of localization. By creating stakeholder networks of franchisees and managers across the globe sharing ideas and observations, companies can begin to form a richer picture of local needs in real-time. Having a local ear to the ground and being able to mine ideas from around the world relative to location is essential to identifying innovations and connecting the dots for where those innovations may work well and where they might not.
Creating forums for ideas and connecting managers and frontline employees to the innovation process is critical for QSRs to stay nimble. Just creating an online community for managers to share ideas is not enough though. Too often, companies launch an idea management platform that is feature packed — but carries a steep learning curve for employees. These systems are only as good as the level of engagement, so they cannot be like business software. They need to have simple interfaces that encourage and incent meaningful engagement. In this sense, these communities should be more closely modeled after social media platforms, where engagement is a key metric to be optimized.
Riley Gibson is CEO of Napkin Labs, a software company "primely positioned at the crossroads of bustling social media and illuminating consumer insights. On one end, consumers get to play a bigger role in the success of their favorite brands, and on the other, companies gain access to the invaluable insights held within their existing online communities."