Episode Description:
This episode explores the keys that unlocked success for huge global franchise fast food restaurants. We will explore the processes and procedures that allow for the magic of managing and delivering a consistent experience across the globe. This episode will also compare this to much larger corporations and how their processes and procedures can differ to accommodate vast amounts of scenarios.
Action you can take right now:
- Determine what written procedures you currently have in place. If none, start by searching your industry + operating procedures template.
- Using the template as an outline, establish clear policies that will be consistent across the board.
- Share the finished document with your staff for feedback. Are there issues? Bad processes? Get them fixed!
Episode After-Thoughts
This episode really made me consider my love/hate relationship with procedures. Stringent procedures we’ve seen can result in catastrophic results – after recording the episode I thought of the popular Dr. Death podcast series (later made into a TV show) that explores how unwritten “procedures” led to patients dying in a hospital because it was procedure for doctors not to be corrected or questioned by supporting staff. On the other hand, we’ve seen the result of not having procedures – a confused staff, an inconsistent customer experience, mixed results, inefficiencies and more.
It’s important to have a base line of rules and processes that everyone will adhere to, but there should be some flexibility when it makes sense. Check out Episode 35 – Are Your Employees Empowered – this episode discusses the ability for staff to be empowered to make calls to better serve a customer. The link to that episode here: https://marketingandservice.com/are-your-employees-empowered-to-serve-customers/
Episode 36 Transcript:
Would you let a teenager run your $3 million year business? Why not? What’s the fast food business? Know that you don’t that and more coming up on the marketing and service.com podcast.
Hey Justin Varuzzo here from marketingandservice.com podcast, the podcast that’s designed to.
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I looked up some interesting information this week and I found that the average revenue of a McDonald’s is about $2.7 million in sales per year per store on average.
Of course there’s some McDonald’s locations that probably do a lot more, and some that probably do a lot less. But 2.7 million. Let’s just.
Round it down to 2,000,000.
And say that I’m not sure what the median is. I couldn’t find the median sales per store, but let’s say a McDonald’s is running about $2,000,000 a year.
Take a look at another fast food place like Dunkin’ Donuts and the average Dunkin’ Donuts. Does about $1,000,000 a year now I don’t think that it’s a secret that you do not need a.
Harvard degree or a Yale business degree to manage a Dunkin’ Donuts or to manage.
McDonald’s, these franchise operations are regularly run by hardworking people that don’t necessarily have a business background or academic pedigrees to put them in a position where they should be running a $3 million a year business but with hard work and dedication and proper training, these organizations are able to achieve.
Great success and utilize these resources at reasonable pay rates to run incredible businesses every.
So what do they do and what do they know and how do they get away with that? Because most people I know would not turn over their $3 million a year business to a high schooler.
Now, that’s not to say that everyone who manages a McDonald’s is a high school or I’m just trying to make a point here.
You can start at a McDonald’s without a college degree, maybe without a high school diploma.
And you do good work and you can work your way up from it.
Here to a fry hooked to the grill and then ultimately to an assistant manager.
Maybe a third key and then a store manager.
If you work yourself up through that career, and it’s a great career to work through, and one of the things that makes that a possibility are standard operating procedures.
And that’s what this episode is all about.
Standard operating procedures.
You also will see this abbreviated often as soap.
So welcome to the world of standard operating procedures.
Soaps are kind of like a framework for everything in your business.
They are super easy to follow instruction.
They’re systemizing behavior.
They’re systemizing every single process.
They’re systemizing responses.
They’re systemizing the entire business platform, and one of the biggest benefits of having really good standard operating procedures is consistency.
When you have a process.
That everyone follows the same way you are going to end up with a very, very consistent result, and This is why you can go to a McDonald’s in Maine.
Or you can go to a McDonald’s in Florida, New York, California, or anywhere in the world.
And for the most part, you’re going to have a very consistent.
Experience a cheeseburger.
McDonald’s in California is the same as a cheeseburger in McDonald’s in New York.
The one exception to this that I couldn’t find online is what process they use to determine whether or not they put mustard on that cheeseburger, because that seems to be a very geographical decision.
But jokes aside, I want to talk a little bit about my personal experience. Working almost 20 years ago as a network administrator at IBM. Now, of course, IBM is a very large Fortune 500 Corp.
And they have procedures that you would live and die by as a network administrator and in this application it is pretty much a necessity because you are dealing with thousands of systems with thousands of different processes and it doesn’t matter how long you trained on it, you would never be able to memorize every process on every system.
On a server.
Floor so procedures were incredibly precise.
They were incredibly specific and they were easily searchable in indexed and this is way back then, and those procedures would have very clear cut instructions for how to handle different things that might go wrong.
Now the only thing we did not have her procedure for was the.
Most important procedure of that organization, which in my department was cover your *** We called it the CYA procedure.
It was never actually written anywhere, but it was said over and over and over again.
Uh, and what this really meant was that your only job was to make sure that you followed those procedures to a tee, and as long as you did so, and as long as you met the time metrics and your response time was within the window that was specified in the contract and you met your service level agreement and you executed that procedure Flawless, Lee.
It didn’t matter what the outcome of that problem was or the outcome.
In the solution to that problem, you were off the hook.
Once you covered your end of the procedure and moved it onto the next level, you did your job and you would never ever have it come back to you.
And if you did, all you had to do was show the procedure and show that you executed those instructions, so everything was meticulously detailed.
And noted and timestamped every step of the way.
Now the upside of this is it makes things incredibly easy.
Anyone could really walk in, and if you taught them how to read the procedures, you could pretty much teach them how to do that job very quickly and with very little technical knowledge.
The bad part and the frustrating part of those very exceptionally specific procedures, was if one there was something wrong with the procedure.
Again, it wasn’t your problem to make that judgment.
You just had to execute it, even though you knew that it really wasn’t right.
The second issue is there were often things that were incredibly obvious that could have been.
Fixed very, very quickly and easily, but because the procedures didn’t permit for that, fixing it would not be enough.
So I’m going to give you an example of a classic thing that happened in the network administration world at IBM where a problem could be resolved incredibly quickly, but would not be because of these procedures.
A classic example would be a server that has a hard drive that’s rapidly filling up.
And running out of disk space now the majority of the time when this was happening on a system that had good amount of disk space to begin with, it was because there was usually a log file or a cache file or something that was kind of running a little out of control and growing this file enormous.
The solution 99.9% of the time was to delete the file. That would fix your disk space issue, because if the disk were to fill up, the server would ultimately crash.
And even though deleting that file wouldn’t fix the problem that was causing it to fill up in the 1st place, it would certainly fix the problem with the disk drive being full.
This was a classic example where we were not allowed to clear out that file.
We would have to escalate it according to the procedures to perhaps an AIX administrator and the procedures would be very specific that from the time we get the alert that the drive is being filled, we have 5 minutes to open that ticket and get that AIX administrator on the phone.
If they did not respond within 5 minutes, the procedures would dictate that we would have to contact them a second time and wait another 5 minutes.
So keep in mind at this point 8 to 9 minutes may have elapsed from the time we got this alert.
The systems that imminent threat to not be able to perform its function anymore as we wait for a call back from an AIX administrator.
Who we know at 2:00 in the morning is just going to log in, delete the file and then deal with it in the morning to find out why it was happening in the first place.
Step three of this procedure after not getting the call back after two attempts, is to escalate it to that person manager.
And now that process starts again, you have 5 minutes to execute this and get that person a message that they need to call back ASAP.
And of course, if they don’t within another 5 minutes, you have to make a second request and then there may be a further escalation procedure.
From there, my point is that this problem may have stretched to 10 to 15 minutes of time when it could have been resolved.
In about 30 seconds, this always was the baseline of very frustrating experiences.
When you knew how to solve the prob.
Now there were procedures and processes in place where you could make suggestions to update a procedure to a procedure owner, so each procedure had an owner whose entire job was to make the procedure and if there was an issue with the procedure or the procedure was broken, the requests to update it or alter it would go to the owner.
They would ultimately be the one who would decide.
Whether or not that change should occur so eventually with some of these things, especially if it was a specific system that was constantly problematic, we could.
Ultimately and slowly get these procedure changes to occur so we could quickly resolve any customer issues.
Now let’s take that same idea and apply it to a small retail business or a fast food restaurant, let’s say in that exact same corporate structure you saw that somebody spilled a glass of water.
On the floor.
Now you know you could just grab some paper towels and wipe it up, but that is not the procedure.
The procedure is you have to call someone in whose specialty is to clean up that spilled water.
So now you’re watching people come in and you’re watching them slip and fall.
But there is nothing you can do about it because your only job is CIA, and if you don’t see why A and you go above and beyond.
Do anything outside of that.
You’re putting yourself at risk if anything should go wrong.
So 5 minutes goes by.
You call the person to clean up the water.
They don’t come.
Yeah, another 5 minutes go by because you make the second request.
So now for 10 minutes people are slipping and falling in.
Getting hurt now.
You call the manager during the escalation procedure you can see how silly this might be in a small business environment.
But it can’t go unnoticed that franchises, especially your McDonald’s of the worlds and your Burger Kings and your Dunkin’ Donuts and your olive gardens and bigger restaurants.
And quite frankly, every major retail store your best buys your targets, your Walmarts, they all have standard operating procedures to handle all of these things.
So the first thing you need to do with the standard operating procedure is really define the scope of it and what I mean by that.
There’s a lot that you can choose to include or not include.
These are procedures that you’re going to make the other good news is there are a lot of places where you can actually purchase standard operating procedures by industry and then tweak them to fit your specific.
Business, so for example, if you have a service based business and you do digital Internet.
Marketing you could probably find a standard operating procedures for a digital marketing agency.
Make some edits and tweak it and tailored to your specific use case.
If you have a retail store, you could certainly find standard operating procedures for retail generally, regardless of the industry.
If you’re in the retail industry, the processes are usually the same.
Whether you’re selling cameras or if you’re selling computers, or if you are.
Selling candles, so some things you might have in your standard operating procedures would be policies like a dress code, a vacation policy, computer usage policies, right?
Or you could choose to have a separate employee handbook that deals with all of those HR issues calling in sick, taking a vacation, checking in and logging out your timecard.
All those types of things you can choose to make that part of the standard operating procedures.
Or you could choose to make that a separate employee handbook and have the policy be just refer to your handbook for any employment questions you might have a section in your standard operating procedures about operational policies.
That might be cleaning if you go into a McDonald’s bathroom, it’s more than likely as you leave, you will see there’s a clipboard with the little initials every hour because the standard operating procedures at McDonald’s is that the bathroom be checked and cleaned every hour of each day during the shift, and you can see that this is happening by just looking at that chart, and you’ll probably see initials.
There every hour because they usually take those things fairly seriously.
You might have an opening procedure.
What does someone do when they literally open the store or come into the business?
Or are they turning on the lights?
Are they turning on music?
Are they vacuuming the floor?
They counting down the register?
All of that stuff would be part of your opening procedure.
There’s usually the.
Opposite of that would be your closing procedure.
You’re shutting things down.
Where does the money go?
Where did the checks go?
How does this get processed?
What happens if this happens?
What happens if that happens?
What if someone?
Is there a little bit late?
What if someone can’t be there the next morning?
All of these things you want to try to account for every scenario you can think of and you would put that in your operational policies of your standard operating procedure.
You could have things like your dress code, inventory levels, purchasing guidelines, record keeping and administration, associated and supported documents like time cards, new hire paperwork, things of that nature, anything where someone might need merchandising, right?
So big stores like Banana Republic.
If you go clothes shopping.
They get these look books, and they’re essentially merchandising books that show the people who work there, how to put the outfits together on mannequins, and what things go with, what other things and what should be recommended so you don’t have to be a fashion expert to be an employee at Banana Republic.
You just need to be able to look in that look book and look up those.
Outfits for the season and then you can make really good recommendations based on that that follow and provide a consistent experience for the customers, right?
So you can shop at a Banana Republic in New York or again California.
I always use New York and California example.
Obviously, because I live in New York and California is the other side of the country, so it’s just the easiest.
Place to point out, but my point is that you can generally go to any.
State or any mall in the country or in the continent or the world that has a store.
And you will get a consistent experience if you ask what shirt goes with these pants, you should get the same answer everywhere.
Other things you could have in those standard operating procedures are things like reports, audits, inspections.
Is there a daily sales report?
Is there a weekly sales report?
Are there sales targets?
Are there annual sales targets sometimes?
You would log the weather.
One of the jobs I had back in the day was at World of science.
World of science.
Was this pretty cool store that had all these little science gadgets and polished rock?
It was exceptionally similar to the Discovery Store, which I’m not sure if that still exists, but if you’ve ever been in a Discovery store, world of science was exactly the same story, just with a different name, but there there were very specific procedures on how things were allocated, how hours were issued, how people were hired, the roles.
Of each person in the organization, just in that store.
So you had your.
Sales clerk you had a third key.
You had an assistant store manager and you had the store manager.
There was then a district manager, a regional manager, and then your national sales manager and these charts and definitions and names of the people in these titles and their contact information was all very crystal clear.
And when you should contact who for what?
But incident reporting would be something that should be in your standard operating procedures.
What if someone?
Gets hurt sexual harassment.
A dangerous situation in an icy roadway or parking lot.
Who do you call?
What do you do?
These are things that I think we often overlook because we’re used to doing it ourselves, and then when someone else needs to do it, it makes it very difficult because it creates that panic situation which we’ve all been in.
Anyone who’s worked anywhere has usually been in some position at some point where they’re like Oh no, Oh my God, this this happened.
What do I do?
Who do I call?
I don’t I don’t know I don’t know how to handle this.
And the idea of a standard operating procedure is to alleviate 95% of that. So even if you do get in a moment of panic and wonder, how do I do this?
How do I tackle it? How do I address it? The solution if you escalate it to your manager or you call someone say Oh my God, what do I do? They’re going to say you turn to page 45.
And the standard operating procedures and follow that instruction.
That’s where the name and.
And phone number and contact information for three plumbers is going to be because there’s a flood in the bathroom and water pouring out all over the place.
So the point of these procedures are to really provide a consistent framework and be able to deliver a consistent product with consistent expectations of the customer and provide a consistent experience.
All around now I’ll be the first to admit.
Following procedures at IBM was just a nightmare.
We all hated it.
Everyone in my department hated having to look up procedures.
It was mundane.
It was boring.
The procedures were always over articulated with way more detail than was necessary for very simple tasks.
But we just chalked it up to corporate America and bureaucracy.
And we went on with our lives.
On the other hand, I’ve seen procedures that are incredibly simple and that people still don’t look at or.
Follow a friend of mine worked at a Panera Bread and I saw they handed out to new employees a little book.
It was a basically a flipbook of all the different sandwiches they had in the names of them because quite frankly, you don’t necessarily go to a place like that and order a Turkey sandwich with avocado and mayonnaise.
There’ll be some fancy name for it, just like you go to McDonald’s.
Get a Big Mac, but you can’t really articulate all the ingredients that are in a Big Mac.
So if you work at McDonald’s, you need to know what’s on a Big Mac to assemble it.
And that was the purpose of this.
Truth be told, they admitted they never actually looked at this little flip book, but it was a cool little aspect of the training.
And if they had to look at it, they had the option to look at it.
I know that sounds sounds kind of crazy, but I I think what I’m trying to say there is that most of the time you’re going to train these things.
Out you’re going to train someone how to perform a task.
You’re going to train someone that these are the things you have to do every hour in the store.
You have to clean the bathroom every hour, right?
But that standard operating procedure always serves as a back up and hopefully whoever is training is training.
From that standard operating procedure, so again the expectations are consistent from branch to branch store to store location, location, state to state, country to country.
Another common thing within a standard operating procedure would be a non-disclosure agreement which would encompass the procedures themselves.
My favorite example of this, if you go back and watch the original coming to America, you had McDonald’s and Mcdowell’s.
And there is this great scene where Eddie Murphy walks into the business office and Mr.
McDowell has the standard operating procedure.
There’s binder for a McDonald’s in his hand and he hides it because he’s embarrassed that he just got caught looking at it, but that scene really goes to show the power of that.
If you have a business that’s similar to another business, yeah, it would be a great idea.
If you had a fast food business to try to get your hands on the standard operating procedures of the McDonald’s because it’s essentially.
Laying out the entire framework for their success, right?
Because we all know that there’s no such thing as a good idea.
There’s only good execution, right?
We know that McDonald’s doesn’t make the very best cheeseburger, but they do the best job in execution in terms of making it quick.
Really efficiently, very fast and very, very affordable.
And that combination for them has allowed them to be one of the largest fast food or the largest fast food franchise in the world.
So to summarize here, you should have.
If you don’t, you should definitely have standard operating procedures and just start by Googling.
Soap and whatever your industry is so you can do soap, retail, soap, automotive, soap, digital market.
Soap, real estate, whatever it might be, you’re likely going to find that some company is selling for a very reasonable rate, a template or a framework that covers your industry and the generalities of it.
And then you can go section by section and change what you want.
If you want to change the vacation policy or you want to change the dress code.
If you want to change how purchasing is done, if you want to change the contacts for the plumbing right, these are all things that you can kind of customize yourself, but at least it puts you in a huge step forward where you’re not starting from scratch.
Trying to write some 300 page document. Realizing that most people are never going to look at it. But the point of these procedures is.
That there will be some point where someone will need to look at it maybe once or twice and the point is that those few times that that does occur, it will save the day it could possibly save you a tremendous amount of money, especially if it’s an emergency situation or a liability situation.
So it’s not something you want to ignore or let go.
So my advice, if you don’t have standard operating procedures, start by trying to buy a template or a framework that matches your industry.
If you already have standard operating procedures, see if you can try to find again a template and see if yours lines up with all the policies that are in that template, because maybe there’s a bunch of things in there you didn’t.
Think about that you can add.
Lastly, if you feel like you have a really good set of standard operating procedures, if you haven’t looked in a while, take time to go through them quickly, charter by charter, and make sure that everything is still accurate.
One of the other things that happens is you might have these standard operating procedures.
Again, I’ll use the plumbing example.
Now, there’s water pouring into your business and you say.
It’s in the book they opened the book and there’s three plumbers that went out of business five years ago and now none of those numbers work.
And you’re back to.
Scratch that defeated the whole purpose of the standard operating procedures, so there’s a couple things you can do.
You can one make sure that when you write them, you try to write in the potential alternatives, give some alternatives, don’t just make it a single option, right?
Put 4 plumbers in there so at least if two go out of business within a year, there’s two other options on the list, right?
That’s not going to work.
For every single procedure, but if you can try to give multiple options, try to give escalation procedures.
Think about if this step one doesn’t work.
If step one is contact this person in this role to do XY or Z and that person can’t be gotten hold of.
What’s the next step?
Make sure that you give those options for the next step and the step beyond that listen.
They’re not infallible.
Even at IBM in Corporate America, there were procedures that fell apart.
There were escalation procedures that didn’t exist.
You would call someone they wouldn’t call you back.
That was it.
But the policy.
Was always followed.
You’d note that you called them.
You would note you followed the procedure and you would note why nothing happened because the procedure failed to escalate you to take the next step.
And of course, you should encourage anyone who works at your business and is going to be following these procedures to take ownership of them.
If there’s something they think should be better, let them take ownership of it.
Update the procedure and then everybody would get this update and understand that there’s a new procedure, maybe not for every business but IBM.
We would actually have an audit trail for procedures.
We could see every procedure who changed it when it was changed, why it was changed with notations fully documented, why any change was made, and normally it was because the result of a situation that it didn’t account for.
That was always the number one reason that procedure was changed because something happened and we realized that the procedure was wrong or it didn’t adequately address the issue and it would have to get updated then and that’s fine.
These are living breathing documents that evolve over time and will help your business evolve overtime.
But the goal here is at the end of the day.
You should be able to take this book this binder, this document, this PDF, whatever format it’s in, you should be able to take this and hand it to someone who could literally run your business from A-Z if they just took the time to read through those documents.
And how does this all tie back to marketing and service?
It was the first word that I said in the beginning of this is consistency and I said it a few times.
So I hope you caught on to that you want to be able to deliver a consistent experience to your customers.
And if you don’t have those standard operating procedures, you’re not going to be able to deliver a consistent.
Experience and if you don’t believe me, just go watch any of those business makeover shows on TV.
Whether it’s the cooking shows.
Or the profit or any of those things.
It’s usually like their standard operating procedure is to check for standard operating procedures.
That’s always the first thing they’ll do is go in and say, show me your standard operating procedures and nine out of 10 times the businesses will.
We don’t have any, and that’s where they’ll start with that guideline of.
OK, so here’s how we’re going to turn things around.
We’re going to start by having really clear.
Standard operating procedures.
And they do that because it really is important.
It’s a good thing to have listen.
I hope you appreciated this episode.
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