3 Leadership lessons from restaurant business's tech transformation
Leadership insights that helped transforming P.F. Chang’s restaurant biz during COVID and beyond - Use the Product, Focus on a Category and Tech+Power of Data
Sometimes I enjoy reading about innovation that are at the intersection of tech and traditional industries. I found the story of P.F Chang’s recent transformation very interesting, here are my top 3 take aways from a recent interview of their CEO Damola Adamolekun with Fortune
“ [PF Chnag’s] Revenue rose 32% to $922 million last year. That growth stems partly from the eatery’s embrace of digital tools like apps, delivery services, and the expansion of smaller restaurants with limited menus solely for pick-up orders”
Use the product: Do it, learn it and then change it: It’s very easy for us to use the product when its an app, most of us do it on the very first day - eg: when I joined facebook I was using Instagram and Facebook every day etc. Now, imagine, if you are the CEO of P.F Changs (or any restaurant chain Mc Donalds, Starbucks etc). To understand the business one has to go as deep into its operations, as the cook or the server in the restaurant to get direct feedback and create a point of view. I remember when I joined Uber back in 2014 all of us were encouraged to drive Uber and go through the entire driver onboarding flow. This was also called out by Howard Schulz in his journey of recreating Starbucks [Book: Onwards] and Neville Isdell on building Coca Cola [Book: Inside Coca Cola].
Next time you join a team/company - "Use the product and go as deep as you can to create your POV, your truth", this learning will help in creating a solid foundation to your strategy.
Damola (CEO of PF Changs) says.. “I went out to the field and spent a lot of time with the operators. It’s not rocket science at the end of the day; it’s something to learn, but it’s learnable”
Power of focusing on a category: As we focus on the core product, it’s important to take a step back and think “is there a gap” for a specific segment in the market that we can fulfill v/s focusing on all users/market. This often becomes winning a “segment” in the market v/s focusing on “we will go win every customer that comes to us”. PF Chang’s found that in becoming the “delivery king in Asian food” similar to dominos for pizza etc. At large tech platforms like Facebook, Amazon etc. we call it looking at “internal emerging organic behavior” or finding the category from outside which could be complementary to our offering.
Think about your “category” that you want to own to become no. 1 in the category!
Damola (CEO of PF Changs) says.. “Delivery was growing rapidly even before the pandemic. Some chains own the space for pizza and wings, the biggest delivery categories, but nobody really owns it for Asian food”
Tech and Data is the key to transformations: Capture data understand the operations and then make informed decisions. This is the mot interesting part for me as it opens up a whole new world, pick a transitional industry, identify the operational problems, bring them online through tech touch points (mobile app etc.) and then start optimizing it. This is exactly what PF Chang and other restaurants chains did with Restaurant operations and delivery - Mobile App offering with real time tracking, feedback etc. When you work at a high tech company like Facebook, Google, Amazon etc. this come naturally, but you will be surprised there are many big tech companies and startups who still make decisions based on the CEOs instincts vs using the right data.
Check you product/company and push the teams to collect data (data instrumentation) to make informed decisions v/s relying on personal opinions or hunches of sales, design, product, engineers.
Damola (CEO of PF Changs) says.. “I wanted to build a heat map of sorts to see what’s happening with in restaurants, so it’s not all anecdotes. The heat map for each restaurant measures culinary performance, the time to get an order to the table, audit scores, hospitality performance, and wait times. Customer scores and turnover rate are in there, too”