In this podcast we look at Restaurant Innovation and Creativity.
What is Restaurant Innovation? How can you innovate and what techniques are there to help you be more creative in your restaurant?
The times, they are a changing. Customers are changing, tastes are changing, dining experiences are changing, competition is changing and the players in the industry are changing.
I was surprised to see the number of people who are still advertising in the Yellow Pages. The budgets that people are spending is amazing, when you think of the returns that you would get if you were spending that money online. We discuss the 7 best uses for the Yellow Pages in 2017.
The online startup space has innovation built in, but the imperative to innovative is a lot more insidious. The lack of pressure to innovate means that Restaurants often slowly decline in their Restaurant as customers needs change.
The rise of Delivery services, pre prepared food, Booking aggregators are all changing the restaurant business – the big companies are big on Restaurant Innovation, but it can be slow for many of them. For Small Restaurants there are a lot of ways that you can be very agile in the way that you innovate.
What kind of person is better at innovation and how can you use that to help your team innovate.
What kind of activities can help you with innovation. How can you change your habits and routines to increase your opportunities to innovate.
We look at how different actions, people and activities. I’ve started playing the drums and going to art galleries to change the way I think and the ideas that I am having. Without that external stimulas, it is very difficult for your to come up with different ideas.
We discuss business model innovation and menu innovation.
The Business Model.
We discuss how taking ideas from different industries can make a big difference in your industry. Plus or minus 10% everyone else in your industry is doing the same as you. In other industries, there may be much better results.
The Business Model Canvas covers:
- Key Partners
- Key Activities
- Value Proposition
- Key Resources
- Cost Structure
- Revenue Streams
- Customer Segments
- Customer Relationships
You take take existing products and techniques and fuse them together or your can take an object or concept and recreate it in food. We look at the Flavour Thesaurus by Niki Segnit.
We look at the work of Grant Achatz and his Apple Taffy and how it brings back childhood memories which are a fundamental part of the attraction of the menu item.
How can you recreate a menu with different items, maybe cheaper items.
We discuss failure and why it is important to embrace failure as a part of the innovation process.
Wolfgang Puck has said that he has opened a lot of successful Restaurants, but he has learnt the most about the restaurants that failed.
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Hey it’s James from Marketing4Restaurants and welcome to Episode 37 of Secret Sauce, the restaurant marketing podcast. Restaurant Innovation – what is innovation, why should you innovate and most importantly how should you innovate.
Hey everyone, welcome back! How did you go with the episode on Facebook live streaming? I guess the one thing I should’ve put in there is that you need to acknowledge the fact that this actually quite stressful for us it’s a little bit more complicated because we want to have a powerpoint going at the same time so you can sort of get an idea of what of we’re talking about. And I got to tell you I spent a not insignificant amount of time just to try to get it all right. On top of that we’re in an area where our local carrier Telstra, whose got really crappy internet at our LAN – ADSL is awful and our 4G signal is awful. So it’s really… it is actually quite a stressful process and then on top of that you’ve got all of the stresses of getting it all ready and up and ready to go – and then you’ve got the stress of actually producing live content. So, I do want to acknowledge that I find it quite stressful to do and I know a lot of other people stress about it as well. But you know what – just get out and do what I think that is the big thing you know. Take the Nike approach, “Just do it!”.
So today we’re gonna talk about Restaurant Innovation. Before we talk about that we’ve got customers now in Singapore and the Czech Republic – The Czech Republic, that’s super exciting! So um just really excited to how little Book A Table widget up on a restaurant website in the Czech Republic and same same for the Singapore. So really exciting! As we start to push out to more countries. I think we’re in eight countries now. I missed the sign up of the Singapore business. And we’ve got a series of world clocks displayed on our monitors so that we can see what time it is all around the world. And we’re running out of reels and I said to the guys, “you know why we have we got this Singapore clock over there we don’t have any customers in Singapore and someone say – yea we do”. And it’s like “oh wow! oh that’s awesome!”
So yeah the Free Restaurant Online Ordering System, the Free Online Restaurant Booking System – that’s up to our $17M worth of bookings. We’re putting in a few more additions to that this week. Really, really making a big in roads for people who:
- wanna take bookings online and
- be able to build their own database and of course the websites.
Don’t forget the websites. It’s really important that – you know I think, am very passionate about the fact that the website is the central part of your online marketing strategy. It’s the one piece of real estate that you control not anyone else. You don’t have a lot of control over Facebook, you don’t have a lot of control over Instagram, YouTube. The website though, that is something that you control, you can have – you can completely dictate what content goes up there. So it’s important I think that you get that right.
What Restaurant Innovation?
Now, Restaurant Innovation – I’ve researching this for a while, I wasn’t gonna do this podcast now there was a few others that I had lined up next but this has become really important – has become really important for a couple of reasons. The first one was I was watching on Monday there was a little bit of a conference which was being live streamed. And they had a panel discussion about innovation in the restaurant and it was a panel discussion – and someone stood up – a restaurant owner stood up and said – “okay, how do we innovate, tell me what it is that I should be doing?” And in fairness that the person who answered it probably not someone who works in the innovations space. So.. and I think it – that’s actually a really, really difficult question. But the answer that they got – they said you know just continue doing what you love doing – and if you’ve been doing something for 25 years and you love it just continue on. That’s a little bit disruptive because not many people would expect to do that. Now.. with respect and I know that – that was a question they probably weren’t expecting? I’m not sure that was the best advise possible.
A lot of people think that there’s a lot change going on in the restaurant industry as we speak. Competitions getting fiercer, there’s a lot more new techniques coming at and there’s a lot more ways of marketing, there’s a lot more ways of managing your staff. Each one of those things flows into an advantage for a restaurant – so I think the in need to be continually innovating and you need to be looking for the next big thing, you need to be trying things. So, doing the same thing I suspect that for a lot of restaurants that is gonna be a recipe for disaster. And I see that, I see that in our local restaurants – the restaurants that I went to twenty years ago that were really popular because they we’re offered a really really great experience – they have almost the exact same menu and they have the exact same service and they provide the exact same spirit. Experience as we got 20 years ago – I got to tell you that looks really dated and I remember you know you would book in to this places cause – particularly if you’re going on a Friday night, you probably wouldn’t go to walk in and get a seat there. Now, they are only half full on a Friday night. Who knows what it’s like midweek, really scary! These guys just aren’t innovating. And this is the thing that’s killing it for them, they’ve gotta be coming up with something new as people’s tastes change as what it is that define to dining experience change. And I think its really important. So what we’re gonna do, is we’re gonna go through – Why you need to Innovate, What is Innovation; and then we’re gonna – and look this is a really, really tough question – really though question! I’ve done doing a little bit of research and I’ve also been thinking about the way that we Innovate. How is it that we come up with new products.
So, the other thing that triggered me to do this podcast – was, I was actually planning on doing a little bit of a video about how marketing has changed but I needed the copy of the yellow pages. You know the directory book that they used to have. And I thought I, you know am sure we haven’t got any kicking around – that’s fine! I’ll uhm oh I’ll just show them on Facebook am sure someone would have someone would go and pick up a copy of the yellow pages. That’s a no brainer!
And late last week, we were having a meeting and a girl came into the office and she had something in her hand and I thought “Oh my God, is that what I think it is?” And I’ve run out and asked is that the yellow page (blur) and she was like “yes it is”. And I think she was overwhelmed cause I was super excited. Pretty sure that she didn’t think that I was gonna burn it. And I said “ahh this is epic” am super excited. And she goes, “wow that’s great!” And I said “do you mind if I have any more?” And she goes “oh and how many do you want?” So I ended up getting 5 off her. And we created a funny video – I’ll include a link to it, you know. 7 things that people use for the yellow pages. Because it is certainly not looking for businesses.
Restaurant Innovation prevents you from being outdated
Now, the really scary thing was – two things. I went through. And I so I opened it up to the restaurant section and it’s our local yellow pages. And I had a look in there – and I was like “wow there are some people taking out really really big ads. Really big ads! That — what would that translate as a Facebook budget? I can’t fathom why anyone would do that. And I know that there is significant flaws with the senses with the yellow pages product. I went through it and there was a restaurant that had closed three years ago – in there. Now they didn’t have an ad but they were listed in there.
The quality of the database has fallen off dramatically because of the fact that – you know people just aren’t paying for this anymore. We did go through it, it’s amazing – I find amazing the number of people who have got ads in there. Now, am not saying that it doesn’t work at all but am suggesting that there is significantly better return on investment marketing ideas that you can do. And this is the thing that a lot of people have struggled with is that they haven’t innovated in the way that they market. There’s a lot of places that you can innovate. I think that this is – this was the crystallization of the thought that this is why you have to innovate. There are people out there who are still doing what they have been doing for the last 20 years. Because they are not testing and measuring, they’re not saying if it’s working, they’re not asking the right question about what it is that they’re doing. They’re just on auto pilot going and doing what they’ve always been doing. If you’re not innovating – then you’re dying.
Now in online startups, that’s a given. That’s born into your DNA. Holy Crap! What can I do now? I’ve gotta change it up a bit. I’ve gotta come up with a new product. I’ve gotta be doing something new for our customers. I’ve gotta find a new channel. I’ve gotta be doing something new. Must must must! Innovate. Innovate. Innovate! Isn’t it a ridiculous amount of pressure to do that? In a restaurant? Hhm… Not so much!
And I think that has built in a lot of complacency in a lot of restaurants. Because there’s no over the pressure for you to innovate in your restaurant. One of the big trends, you know of the last 15-20 years, when you talk to you know your local sporting clubs, all sorts of participatory activities is that it’s really though to compete for people’s time. So you know, people use to play cricket or football. Whatever it was, it’s a lot – how did you get all those people into be able to do those kind of events now, because of the fact that people are a lot more time poor.
Restaurant Innovation and Technology
Now this is one of those big trends. You know – like a 20-30 years type cycle. So what is that mean for you? Well, they’re less likely to go out. Which is why we’ve seen the rise and rise of delivery services. So you know you’ve got the first wave of you know JustEat, Menulog, Eat24, GrubHub, then you’ve got the next brand of innovation. So they are the ones who solved the logistics problem for the restaurant. So before they were solving the discovery problem and the online ordering problem, you know – let’s do away with bringing out people to a restaurant and particularly if it was a foreign cuisine where they don’t speak the language very well. Let’s just make it all automatic – protect the payment online, that’s easy! That was the first round of innovation in delivery.
The second round of innovation was uhm – I reckon restaurants would be a lot more keen to use this if we fix that problem of actually delivering the food. Ta dah!!! That’s what gives you UberEats, that’s what gives you Deliveroo, that’s what gives you Foodora. We’re doing a lot of work in this space around the economics of it to. We’re still in the 100% convinced depending on one’s actually making any money out of it. And I know in Australia one of Foodora, Deliveroo, UberEats is gonna have to go – am not sure which one its gonna be but the market is no way any big enough to support all three of them. Now, that has created competitive pressure even if you never do take out. It means that people can now purchase a product around convenience. Rather than having to go out and which means they are more likely to eat in to spend on people who actually going out decreases because you know the economy is relatively tight at the moment.
Where to start creativity and restaurant innovation?
So, that’s just one area I think where innovation is something that you need to be thinking about in your kitchen. The rise of pre-prepared food. Now, I’m not saying that you should use pre-prepared food but am saying that you can innovate around the use of pre-prepared food. The flipside of that is that you can innovate around not using pre-prepared food. You’re not being pushed in the certain direction with a lot of these things, it’s about doing something, being bold with it – trying it out and seeing “how it goes”. So I think that’s why you really need to be looking at innovation. I think that’s the – the key thing. Now, what is Innovation?
Now I’m not gonna give you a text – well I will give you a text book definition of what Innovation is. But that’s not what you need to do, okay? And I think that a lot of people think “oh wow you know it’s gonna be really hard to come up with a new idea. I’ve got all of these competitors, I’ve got all of these things weighing down on me – it’s gonna be really hard”. It doesn’t need to be that difficult though. So, it’s simply, just a new idea, device or method and you can apply that to – to products so that the things that you’re preparing, processes, services, technology.
You can also innovate in your business model and we’re gonna talk a little bit more about that. Cause I think, I think … that there’s a lot to be done in that space. I find it really inspiring, to look at restaurant owners who are innovating in that space in the business model space. And coming up with something that’s and you think – “wow that’s really cool.” And its really working for them. They’re making good money out of it. You know the Innovation – the hard work that they’re doing towards the Innovation – is actually paying off for them.
Think of New Products is a part of Restaurant Innovation
And when we say, you know – a new product, it needs to be a new product for your market. Which is really, really exciting! Because if you’re a local restaurant, your market is probably the people within, what is it – 10 kilometers, 20 kilometers, how far is it from your restaurant that 85% of your customers come from? Cause that’s a really big thing. You can innovate by providing them with a new product. It doesn’t have to be the world’s first example of that. And this is what one of things I see all the time. And this is what happens in the start up community, people would go to Silicon Valley, or would go to Europe, to see someone with a great idea, and those guys are innovating and they’re working really hard to try and scale out their business in Europe or the United States, and they’re too busy to worry about overseas, so people would come back to another country – start up, basically copy the entire business model and run with it. Now they are called the Innovators, but on the global basis not the innovators but everyone in that market goes “oh wow this is cool, this is a brand new product, this is a brand new service, this is awesome”. And so they get to – and generally, what happens, this is I’ll end up getting bored out by the original innovators whose a little bit further ahead of them and probably got big evaluations.
For you though, this is the part of thing it’s in your market that you need to be innovative. And need to be seen as innovative. For a lot of – you know, single occasion restaurants – that’s not a huge market. So you don’t need to be incredibly innovative to be viewed as innovative in your market. And that’s gonna give you the edge when you’re going out in marketing that’s gonna be the edge when you’re looking at your profit and loss – that’s the exciting thing about it!
D.I.S.C. Profiling and the Processes of Restaurant Innovation
Now, the hard bit is how to innovate. How are you gonna come up with a new product? How are you gonna come up with a new menu item, how are you gonna come up with a new process. I think there’s a couple of things that you need to – and I don’t have an answer for this – This is just the way that we do within our company. The first part about it is, it’s a lot easier to do in a team environment. One of the things that we do is D.I.S.C. profiling. And we talked a little bit about disc profiling when it comes to hiring people. When it comes to building a team.
So four personality types – D.I.S.C. The D’s tend to be leaders, short, sharp communications; I’s they love talking to people, S’, stable – they like to follow procedures; and C’s they’re very detail orientated. So they will be the one who – you know if the reconciliation’s out by five cents they would wanna know why it’s out by five sense. Now, the in- the really really really interesting thing is, so, my business partner is my wife – am very lucky to have her, for the- probably the first five years though, one point of friction between us, was that it was always me coming up with the ideas. Tina really rarely came up with an idea. And it was only after we did DISC profiling that we realize that Tina couldn’t come up with the ideas so I myself can – I can’t implement an idea to save myself. I am an ideas’ person – they come easily to me, I could have ten ideas that today. It’s not a drama for me.
The beautiful thing about having, working with my beautiful wife, Tina though is that she’s the one who will always start asking questions about it cause if we didn’t have her I would have tried to execute on half the ideas that I have. I would have got a quarter of the way through them then I would have lost interest and move on to the next things and we would have gone bankrupt about a hundred times. What is your personality type? And I’m asking that question because if you’re not good at coming up with ideas, you need to build a team of people who can come up with the ideas or you need to start thinking about how you can start having those ideas. How you can start innovating because someone – someone in the restaurant needs to be innovating.
A lot of the research suggests that you should be doing the best ideas and this is what I find. They come in the time when your mind has got downtime. I love mowing the lawn. It is a mindless activity – there is nothing to think about. You just stand behind the mower and you push it. Cutting the grass is the perfect opportunity to let your mind wonder. And I actually think that the loud noise that is associated with it – that blocks everything else. You just hear the noise of the mower, you don’t hear anything else. It’s just a loud drone. It’s like white noise. There is nothing to think about. And your mind wonders. And it thinks about things. And it picks up ideas and it puts them down – it picks up problems and starts unpicking them. And that is where the ideas start to come from.
I have a lot of ideas in the shower. Which is you, know can be quite awkward in the office. Yeah I was thinking about you this morning, in the shower. As I was actually thinking about the problem. It’s a process that you do – it’s almost automatic. Your brain has got nothing to do. And it just sorts. And I think it might there might be something with that connection water and that’s what you know, people use floatation – floatation tanks and all sorts of things like that. Once again, another place that you can have ideas.
Now, a couple of things that I do and changes that I’ve made this year to try and be more innovative. I used to – you know, first thing in the morning before I go out of bed – I’d be checking emails and you know what was happening on Facebook and all of those sort of things, not my personal Facebook – I’d be checking ads, and things like that that were running. I’ve cut that away! Now I just try and lay there for 10 minutes and just sort of think because you’re just waking up. And it’s the same when going to bed. So now, I will try and read – not use any electronic devices. And I think that this really do stifle innovation. Because you continuously being stimulated and your brain doesn’t have time to wonder, to meander to think about things.
Who are the innovators in the business?
Now one of the other things that we’ve done, because I don’t want to be the only person coming up with the ideas. I’m trying to drive innovation in our company – I want our company to be a company of innovators. So one of the things is that we started to designate rooms where you can’t take a mobile phone in. One of the things that we found is that you know.. if a meeting was gonna start in five minutes, people would start filling in they all put their phones out and no one would talk. This is a team that works together, we’ve been together for a really long time but people weren’t talking. So I’ve started putting up signs. No phones in this room. Ah why not? Oh, cause I want you to talk to people. And that’s where, oh, you know I’ve got this problem – Aah have you?
You know its the communication but I also think that its the inspiration and innovation that can come out of those conversations that’s absolutely critical to the success of a company. Now the other things that I think that you should do is – you need to think about the thoughts that you have. And the thoughts that you have I think are some of the experiences that you’ve got. So, if you’re not overly innovative, then you should go out and try and do different things.
A great example of that I think is I’ve got a drum kit now and I’m slowly teaching myself to play that – we’ll people say do you play the drums and I say “well I have two sticks and I bang them and I make noise, its not playing the drums, it’s not – well, um am slowly getting there”. But the beautiful thing about that is that I can get in to work and I find it’s a really good way to just sort of just set the tone for the day – I’ll get on there, and I’ll try and it’s really interesting cause I woke up one morning and I thought I should buy a drum kit. Because am not musical at all. At all! And I thought – that’s a really weird thought. And then you know I found myself googling it and looking for, oh how much would a drum kit cost. And then about two weeks later I don’t know it was like – I don’t really know why I needed a drum kit and then I thought so I could play heavy metal music. Which is completely bizarre cause I don’t listen to heavy metal music. Am now teaching myself Enter Sandman I don’t know why. But am not musical I find it quite stressful trying to do that sort of thing but it’s a challenge and on top of that am doing stuff that I don’t normally do. Like I’ve taught myself to read some sheet music and some semblances. I am doing different things, I’m watching different YouTube videos, there are a whole series of different problems now that I try and learn the skills of a drummer.
The other great benefit I think of that is that you get to see the concept of flow – you know you can just get into the path and you get into the groove and it just goes really really really well. And I think there’s a lot of innovation there and I’ll just sit in there and just dumbly bang it all the way there and start thinking about things while I’m doing that. That percussion – this is another place where I can start thinking and I’ll do it and I’ll think you know what this is great! I’ve got 20 minutes I could play the drums for and it’ll look I’ll only be on there for 7 minutes. Cause it’s like “ah so we’ve got all of these data if we started running these queries, I wonder what that would look like. And it said I’ll be back at work but I’ll have a completely new tangent to be creating data models about when customers come into restaurants and things like which is exactly what I want to be doing. Coming up with those interesting questions to us. Which is the next point that I wanna raise.
I believe that success in life, success in business, is all about asking the right questions. Too many people don’t ask questions. So the first thing – if you’re that restaurant that’s been running for 20 years, and you’re starting to see that gradual decline – the first question that you gonna ask subconsciously, “why are the numbers dropping?” And it’s really really easy to say “well it’s the economy”. “Why is the restaurant across the road doing better than me?” And when you ask that question, ask it honestly. Go and eat there! Find out what it is that he is doing. Is he doing better marketing? Is his prices are cheaper? Is he more expensive? What is it that’s creating that don’t you just accept that it’s just the economy. Cause even in a down economy people can still make really good money. It’s just a question on how they gonna do it. Ask the question – how could I be busier? How can I get more people in? How can I make the customers come back more? As you start your quest to become an innovator or to innovate better, faster. The things that you’re doing. So I’d go to art galleries.
Now, I never really like art galleries but I thought am gonna go to some art galleries because I don’t go to art galleries. What is it that I’m missing? And, there’s a couple of interesting stories about art galleries – we went into the New South Wales art gallery, about six months ago and there was a series of videos with Cate Blanchet it was called Manifesto. And it was very very arty which is code for – we were looking at it we we’re going. “Holy cow! This is completely off the dial.” And we had to leave so we didn’t get to see all of it. So it were about four films – I think there were seven films in this series. Then they ran for like five or seven minutes each. And we left and I remember we were talking about how wow that’s completely out there, you know. It was good to see it but that just doesn’t resonate with me at all. But there was one phrase in that – that I had just been sort of mulling over my mind ever since. And it was Cate Blanchet‘s saying, “that there is nothing new – there is no new innovation, everything is borrowed or stolen from someone else.” And I thought about that. I think that’s, we look at the ceiling of ideas and I don’t think that – it’s a cultural thing the way that people look at the way that those ideas are done.
Find inspiration for creativity and restaurant innovation
But a lot of people grab an idea and that becomes the genesis for the way that they’re gonna innovate. And that was someone that I thought of when we were watching a documentary on Massimo Bottura from Osteria Francescana, and it was very interesting listening to his story.
He said that the restaurant was a laboratory of ideas that is inspired by culture. Creativity is poetry . And creating a recipe is the combining of the ingredients, technique and memory. He’s got a dish which is very famous – The Five Ages of Parmigiano. And what he wanted to do was to create an abstract painting of the slow passage of time. Doing that with the five different aged Parmigiano cheeses.
Now, you just think about that – and you think “wow how amazing is that!” How did he get to the point where he was able to fuse art and his culinary techniques? And the interesting thing was it was his wife. And so when he met his wife – Lara Gilmore, they were – he was a chef. I think they met in the United States, yeah it was in the United States. And she was front of house – he was a chef. It was an open kitchen, so she was looking at him and he was an Italian guy and one thing led to another.
Went back to Italy – finally got together. And she could see the huge talented he had for the way that he prepared the food. And she saw a need to expand his horizons. It’s very hard to innovate if you got very very very narrow experiences. And when you expand your horizons, when you start looking at those different experiences, then you’ve got a much bigger framework from which to innovate. And I think that – that’s the salient point of a dish like the Five Ages of Parmigiano. Because that’s the combination of all that work. I think. It would be interesting to hear his take on that. On how he has been influenced by the introduction of going to art galleries experiencing art and how that’s changed his thought processes over time.
Restaurant Innovation with the Menu and Restaurant Business Innovation
So when you look at your kitchen, I think that there are probably two places that you can innovate, so the first place is in the business. The second one is the menu. Alright, then. I know a lot of people listening are gonna be thinking about the menu that’s probably the place that they need to start – look, yes and no. I think that innovative menu is incredibly attractive proposition in a restaurant. And can add huge amounts of value. But I think that there’s also huge amount of value to be had in innovating in your business model.
Now, there’s a couple of things. Let’s talk about the business model first – cause there’s a couple of interesting things that are taken from that. Now, let’s think back to what Cate Blanchet that there’s no new ideas. And let’s start thinking about how the business runs. When I was doing my MBA one of my favorite stories that I took out of that was a story about Southwest Airlines. Southwest had a very tough birth they spent a lot of time in court – years in court before they ever flew. So they were quite – they felt really privileged to have aircraft and be able to fly. And Herb Kelleher the owner of Southwest – he knew that a plane in the air was making money. A plane on the ground not so much. In fact – zero! In fact, burning money at a horrific rate. Because you gotta pay for the lease on it. And there’s always staff running around and you’re not getting a cent. It’s only from – it’s only from when you take off to when you land that you’re making money.
So, how can you – the planes spend a lot of time on the ground. How do you fix that problem – and that’s a really, really good question to ask! He looked at the other airlines, and this is the disturbing thing that he found plus someone is ten percent everyone is doing the same issue. Okay? There’s not a lot of variation within an industry. So Herb and this team – and this is where the real genius comes from, who is it that takes a horribly complex machine like an aircraft and does stuff to it – turns it around really really quickly. And so they spent a bit of time mulling over that then someone bright spark had the idea of Formula 1 pit crew. Bingo! Formula1 pit crew. Right! Let’s go on watch some Formula 1.
And so they went out into the pit and they watched and they studied and they learned how a pit crew operated. They then took the way a Formula1 pit crew works and they embedded that into the way that they turn a plane around. And I think they got famous for 20 minute turn. I think it was 20 minutes. So everyone else was taking 90 minutes – they were doing it in 20 minutes. Which meant they can get an extra flight in per day. Which made a massive difference to the profitability of the company. And you see that in things like anyone – a lot of people copy all of the local carriers they try and copy that – I think that one of the things that’s a real determinant of whether you copy that – the Southwest business model or not is when you see a pilot cleaning the cabin. It doesn’t – there is no fixed job roles in Southwest, if the cabin needs to be clean you get people to clean the cabin. Pilot ain’t going anywhere until the cabin’s clean. So if he’s done all of his piloting stuff and he’s sitting there waiting he gets out and cleans the cabin because the cabin needs to be cleaned. Same, same with loading baggage.
If there’s an issue with loading baggage and they need a couple of extra hands, pull a of load baggage. Really different culture within Southwest, really different business processes. But that has led to them being one of the most profitable airlines in the world! That innovation! And when you think about it – everyone looks at Southwest and goes “wow that’s pure genius!” And they copied it from a Formula 1 pit crew. And I think, you know that gives you the – the really interesting insight into how you can start to build a process of innovation in your restaurant.
The Business Model Canvas and how it works for Restaurant Innovation
Now one of the tools that I like to use when we’re looking at our businesses is called the Business Model Canvas. And what it does is it breaks the business down into nine different areas. So key partners, key activities, key proposition, key relationships, key customers, oh customer’s revenue, channels, key resources and costs. Now, don’t stress too much, am gonna put all of these in the show night, so that you got a list of it – I’m gonna include a picture of the Business Model Canvas.
There’s a book Business Model Generation which is a great book as well. I’ll go through them briefly here though, cause I think it’s a really way that you can start to think about the way that you build your business. Key partners is the first one – and so they’re probably gonna be your supplies. It could be – who are the local businesses in the area that you can do joint marketing with? And a lot of people just – when you’re doing Business Model Canvas work, guess we don’t have any partners. Well stop right there! Who could be your partner? Like, let’s, okay – if no one’s gonna be your partner then stop and force yourself to come up with ten ideas. This gonna be ten, this gonna be ten organization out there that you can do something with – you would like to access their database, they’d like access to your database, you know – they need food, you need customers, they’ve got produce – you know is it your suppliers, what is it that you can do with these people, how can you enrich those relationships?
One of the things that I always find is that people always look at their customers and say “you know the customers’ right, you know customers really important and you know when they’re buying something from a supplier they think that they are the customers so they should get whatever it is. What value is there back up the value chain? Could you do a meat appreciation night with a local butcher and he’ll go through all of the cuts and the way that they prepared. You know we talk about Vineyards all of the time, we talked about whiskey drinking nights all the time, have a think about those sort of things – have a think about those relationships, this is where you’re gonna start being innovative. If you’re not doing this sort of stuff, and you start doing it – that’s innovation and that’s exciting!
Key Business Activities pave the way for Restaurant Innovation
Key activities – what are the key activities that you do? And I’ll include a link to a – Harvard business review podcast when I was doing research for this, they had one on innovation. And it was really interesting. There was a guy who’s doing consulting work with McDonalds, and McDonald’s sold a lot of thick shakes and made a lot of money on thick shakes that I was super excited about thick shakes. They looked at thick shakes, they wanted to sell more so they improved the recipe. And they made it better, and the interesting thing was nothing happened to sales. These consultants sits and think “right, so we’ve made a better milk shake but it hasn’t made any difference, hmmm”. So they got a team of people in a store and I think this is an old story cause obviously if you got false data you wouldn’t be sitting there – you wouldn’t have people in the store for eight hours trying to work out when people be buying stuff. But they have people in store for eight hours and they realized that something like 80% of thick shakes was sold before 9 o’clock in the morning, hmmm… Interesting!
The next day they went back and up to 9 o’clock they counted a hundred of people – as they we’re coming out of the McDonalds, “why did you buy that?” I’m just really interested to understand and he talks about why did you buy that – what job is that gonna do? And the feedback, what they got was that they had a long drive into work and they had one hand on the steering wheel, God gave them another arm – you know they wanted something to do and they – they didn’t wanna be hungry at 10 o’clock. And so a thick shake did a really good job at that. You know you could drink it while you’re driving. It keeps you nice and full – its thick, it takes a long time to drink a thick shake. So, if you’ve got a long drive in you’ve got something that occupying you for significant portion of the day. Now, this is why people were buying the thick shake from them. So, what they did was they pre-made thick shakes, had them ready to come, people could just skip the queue just to get the think shake. Ah! Cause that was the other thing that was really interesting thing about it, they only bought the thick shake. Nothing else. Just the thick shake! Now, what was the competitor to that?
Because McDonalds thought that their competitors were you know – Wendy’s, and Burger King, it was things like a banana. And people said a banana was no good because – can you imagine trying to eat a banana while you’re trying to drive a car? You know. Almost dangerous as dangerous as checking your Facebook account while you’re driving. And it doesn’t keep you full. See you’re hungry again at 10 o’clock. So they made it easier to purchase in and out, really quick – you don’t wanna be late for work. The interesting thing and the one liner I’ve got out of this podcast, was that “the customers will often not buy what it is that you’re selling.” McDonalds was selling a thick shake – it wasn’t about the thick shake, it was something to do on the driving and it was not being feeling hungry at 10 o’clock. When they understood what it was that people were buying, they were able to innovate around that and they – I think a thick shake sales increased 9 fold or something like that, I don’t know. It was some sort of ridiculous – I was going for a run when I am – when I was listening to a podcast. It was some huge increase in sales they’re starting to ask the right questions, you know – “why do you buy that?” What is it that the customers actually buying?
Restaurant Innovation involves knowing the right questions to ask
Really interesting questions to be asking, and that goes in to the key activities – what is it that you do? I have been in the restaurants and spoken to the restaurant owner and he talks long and hard about all of the works that goes on in the kitchen to make all of the food that’s amazing, blah blah blah blah blah.. And you look around and you think – you know what not one person’s buying your food. The place if full, the place is packed, it’s rowdy, it’s noisy, they’ve got a huge area for kids, and it’s a place when you can dump your kids in relative safety and spend some time with your partner, that’s what people are buying. Listening to the restaurant owner though he didn’t understand that.
You know, I know that the local cafe near our old office they played this really loud music which are all – I always find completely amazing. We went there when our meeting room was busy. So if we had, we had only one meeting room in the old office, if someone was in that meeting room and someone came for a meeting – we had to go to the local cafe. We were buying a meeting room. Now obviously you just go there to sit there so obviously bought a couple coffees – that’s all fine and good! But they didn’t understand that we were buying an office. Cause they had really really loud music which made it hard – you kind of shouting so the other person can hear you. If they understood and we weren’t the only ones. We’re certainly not the only ones. There was a lot of people there where who were getting their coffees and having that meeting – they were buying an office as well. What are the key activities in your business? Now this was a lunch – it was in a lunch industrial estate. It was a lunch shop in an industrial estate. So there was obviously sold a lot of food but if they keep their music down a little bit – I reckon it would have a lot more business. Because they’re driving people away. Why? Because it was too noisy there. What are the key activities that you conduct? What’s the value proposition that you’ve got?
To many times people say it’s great food. If you run a take out business it’s convenient. You know. It’s the ability to have to get some food without having to clean up – without having to prepare it – without having to worry about someone to mind the kids, without having to worry about drunk driving, too many people don’t understand that! Too many people sort of struggling to come to terms with what it is that they’re actually doing in the restaurant. What their value proposition is. Some people don’t have a value proposition and I think that this is madness. This is where you should be starting around the innovation. You know we cook great Italian food – well there’s probably you know 200,000 other restaurants in the world that do that. So join the club! You’re one of 200,000 – that’s awesome! Innovate on your value proposition said that you’re one of the only one. That’s gonna be hard if you’re tackling in a global stage. Not so hard if you’re tackling a town. A lot easier to do!
Know your Customer and discover how to make restaurant innovation happen
Now, Customer Relationships – do you wanna know everything about a customer? Or is it quick service – get them in – get them fed – get them out? How is it? How is that the customer relationship? How does it define your business? How can you innovate around that? You know? Do you wanna put some light CRM into your QSR? Loyalty. Discounts. What is it that you gonna be doing in that customer relationship or are you gonna go the other way? Trying to aim to have less customer relationship. You know, less front of house staff. Now that’s an interesting way to go that impacts on costs. (Also see Secret Sauce episode 31 – How to build a Free CRM system for your Restaurant podcast)
Customers – who are your customers? Don’t tell me it’s the people in the area or people who likes pizza. You know that’s really tough to market. Cause you need to be having a much better idea of the target market that you’re after and that and the sub target markets that you’re after. I was talking to a pizza restaurant this week and he said that he doesn’t want gluten free people – they make authentic pizza bases they’re made specifically – they’re made in the kitchen – they taste a whole lot better – he actually -his point of differentiation is that he’s pro gluten. That’s it – pro gluten! And he said you know I’ve got heaps of information on why gluten’s good for you – how it makes a better pizza, that’s what we wanna do. I don’t really – gluten free opportunity is slow margins for us cause I got to buy inexpensive pizza base – my bases are a lot cheaper. (Also see Secret Sauce episode 19 – Smart Pizza Marketing with Pizza Marketing Expert Bruce Irving podcast)
He had a really clear idea of who is his customers were and that’s really important. Revenue – where do you get your revenue from? Well, you know we give people food and they pay at the end of it. Do you have you know the range of you know condiments that you’re selling? Do you have a book? Do you do cooking tools? What are the other things that you could be doing to generate revenue. You know some people lead tours, you know, Italian chefs who lead a cooking tour through Italy. Now, I don’t think I’ve, found anyone who actually makes a lot of money out of those but they get a free holiday to Italy. That’s not too shabby. Where’s the revenue coming from? And I think that, that’s an important question.
Answer the questions Who, What, When, Where and Why – The starting point of the Restaurant Innovation process.
Channels – now in the restaurant industry, we don’t talk about channels a lot. It’s really only applicable for people you know kinda like Krispy Kreme you know how their donuts they’d be a big Krispy Kreme’s somewhere and their donuts sort of end up in all sort of places, supermarkets and 7-11 and some places like that. In a lot of other industries, channel is huge – in the IT industry, there are some businesses that are channel only. So they’ll sell through resellers. Could you have resellers?
Now you know if you’re a baker then obviously, that’s a lot easier but what are the things that you can do around creating a reseller channel. It’s an interesting question – I think there’s some people who are playing with some really interesting ideas around that. The key resources, okay so what are the key resources – now we’ve talked about the key activities that you do – if you’ve got really highly trained chefs then that’s gonna be one of your key resources. If you have entry level chefs who are following tightly controlled processes – not so much.
Do you wanna change the allocation of the key resources, is that hard to find chefs, oh I know it’s really hard to find chefs. You know – how can you do more with the chefs that you’ve got? How can you do more with less chefs. How could you get more chefs? Ask these questions, how can you keep them longer? Why do the chefs leave? Oh you know because they don’t like working hard, really? Really!?! I don’t that that’s the case. You know. And I find this really interesting.
You really should have strong HR systems, do you do an exit interview? You know in our company we always do exit interview. Well nearly always, unless its untidy. But we always wanna have exit interview. And we say “look you’re leaving now, can you please help us to build a company better, we’re sad to go, what is it that’s making you leave – please speak brutally honest ” And you get a really good feedback out of that. Which helps you decrease your turn over. Now, this is just a list of – it’s a list that I want you to download it’s a list of what I want you to download the pdf – print it out, have a think about it. Talk about with the key people in your organization. And start mulling over – this is gonna create a questions for you. And that’s the start of the innovation process which is super exciting! Last one is costs, ahhh very horrific aren’t they?! Yes, this far too many costs not enough revenue.
How do you spin that in a better way? So that’s the Business Model Canvas, That’s the 10 minute fly through of the Business Model Canvas. Let me know if you’re super interested in this I can talk about this – I love this sort of stuff. It’s been fundamental part of they way that we structured our business and you know when you look at the fact that we never got customers in eight countries and you know I was talking to the team a couple of weeks ago – you know how long can it’s gonna be before we got customers in 25 countries. That’s gonna be epic!
That pace is really really picking up now. So I don’t think it’s gonna be too long. If you’re listening in one of the 8 countries that were not in please email us cause that would be awesome to get 25 a lot quicker. But the speed with which we got to 25 or to 8 sorry, a lot of it has been – I’ve got this up on my wall. I don’t work on it everyday but I think about it you know we need to increase our channel. We were about to introduce a refer a network for marketers, designers – the people who were doing the Facebook marketing you know we provide some great tools. We wanna put those tools in the hands of the people who we’re helping the restaurants and you know provide – make sure that they’re doing the best work that they can do so providing them the whole heap of resources – you know some rebates, to really build a strong channel for us. And I think that’s really important. Now that idea came out of the Business Model Canvas. What idea is gonna come out for you?
Menu Innovation is a fundamental part of Restaurant Innovation
Now, so the framework that I’m working on is the two places that you can innovate. You can innovate in your business, or you can innovate in the menu. I think menu innovation is a fascinating thing. I’ve spoken to a few chefs about this, I’ve planned on doing some more interviews with some chefs to really unpick this process. Cause I find it fascinating, you know the guys who are coming up with the really really super innovative stuff, you know, Alinea, Lume, things that just you know sort of blow your mind really play with your mind. How did they come up with that? Cause its interesting what Massimo Bottura was talking about that fusion of technique, ingredients, this is where you can get really show your innovation. How do you get to that point? And looking at menus, as often as we do – there’s a couple of things that to me have sort of come out.
One of them is that you can take two existing products and sort of meld them together. Now this is where we get Asian Fusion, whether it’s taking an ingredient and using a different technique or whether it’s taking two ingredients and sort of mashing them together, And we spoke about the meat pie hamburger , the crazy milkshakes, you we know the terrible milk shake, now that have a massive impact, that innovation is not that hard to do. You know they made great tellibles, they made great milk shakes, what would happen if you put the two together. Not rocket science! The technique to do that – everyone listening to podcast could do that. You know if you’re running a cafe, you know you should be able to innovate in some sort of way. When I was doing my research for this I found we need to ask some question there were some great answers in there as well. They were talking about the book.
The technique to do that – everyone listening to podcast could do that. You know if you’re running a cafe, you know you should be able to innovate in some sort of way. When I was doing my research for this I found we need to ask some question there were some great answers in there as well. They were talking about the book – the Flavor Thesaurus by Nikki Segnet, I’ll include the link to that as well. Allows you to go and find an ingredient and then find flavours that go with it. That could be the basis! You know, challenge yourself. And you see this a lot of time on Master Chef, you know he has five ingredients and cook something out of it. Now that is forcing the innovation process and you know I wonder what those meals really taste like and I think the interesting thing is if you do that you might say “that didn’t work but if I try that with this ingredient, then it would probably would.”
Start experimenting. Start trying to play with some other things that you do. Massimo Bottura talked about the way that he was breaking down traditional Italian cooking, it would become – I think when he was quite avant guard it would become very formula like a little bit style even. He was breaking it down and reinventing it. A couple of flak for it too he was very unpopular because it had become sort of sacred cow. It took a while for him and there was a point where he was almost gonna close the restaurant down. Because he was continuing to get bad reviews which I thought was really interesting because then one food critic came in and said “you know this is really inspirational stuff, it’s very exciting.” And then that was the influence for change.
Have something that anchors you in that inspiration process. You know – do you wanna start recreating the ten meals that you can remember from your childhood. Cause the interesting thing – now that’s interesting if you do it. What if you recreated the ten meals from my childhood? And you know one of the things that goes in favor of restaurants is that we deal with food, and food is such an important part of everyone’s life. And it gets wrapped up in the – you know, you got the smell, you’ve got the taste, the texture, all of that sort of things, but all of those sort of things get imprinted on people’s memories. And it can be quite an amazing experience when there’s something that you eat “wow this is just like my mom used to cook.”
You know this reminds me of my Na’an, you know anyone who cooks a pancake like my Na’an’s oh yeah this is epic. Just epic! Now I don’t even know if I can tell the difference between a great pancake and the one that was like Na’ans – its just a fact that reminds me of Na’an. That’s a really happy time! Is that what you wanna be doing as you try and innovate with your menu. Now the other component that you’ve got and this is the kind of thing that greater heads that they are doing. Is they’re taking something and recreating it in food. So you got a balloon and the balloon – and once again, what is the balloon mean to people? Would that remind you of your, you know birthday parties when you were a kid? So, you’ve got something there – its apple taffy, it’s fun cause you can eat it, it taste like taffy, it taste awesome and it’s got helium in there its got all those things. And amazing part of innovation. And I think he’s redone his menu. And that was the one menu item to survive for the new restaurant opening. Which would be super exciting, I’d love to try that out!
To see what new ingenious things that he’s come up with. So as far as the menu goes that’s the kind of things that you can do. You can combine techniques, you can combine ingredients, or you can recreate something in food. If you think that there’s ways of innovating that I’ve missed on that you know please let me know, cause I’d be super keen to hear about it. I am working on a big thing around menu engineering from woe to go. So from the idea through the costing, through the actually printing the menu, through the getting the front house dialed in on what they should be selling, that whole process and I think the innovation part of it is really really innovation. You know what is it that you gonna cook, how are you gonna cook it, what are the ingredients you gonna put in there. Can you substitute and ingredient that gives that’s just good as component for a cheaper price cause we just increase the profitability of that menu item. That’s exciting! How can you recreate something with cheaper ingredients. Now I just throw off that question in, that’s an interesting question. Particularly you’re not sacrificing quality.
Now I don’t even know if I can tell the difference between a great pancake and the one that was like Na’ans – its just a fact that reminds me of Na’an. That’s a really happy time! Is that what you wanna be doing as you try and innovate with your menu. Now the other component that you’ve got and this is the kind of thing that greater heads that they are doing. Is they’re taking something and recreating it in food. So you got a balloon and the balloon – and once again, what is the balloon mean to people? Would that remind you of your, you know birthday parties when you were a kid? So, you’ve got something there – its apple taffy, it’s fun cause you can eat it, it taste like taffy, it taste awesome and it’s got helium in there its got all those things. And amazing part of innovation. And I think he’s redone his menu. And that was the one menu item to survive for the new restaurant opening. Which would be super exciting, I’d love to try that out!
The “F”word – Why Failure is critical to Restaurant Innovation
Now we’ve come to the end, but there’s one final thing that I need to talk about – it’s the topic, it’s the F word, it’s the topic that people aren’t comfortable with – I think. Which is sad because the more you do it the more better you are. Am talking about failure of course. When you innovate, I think that this is one of the main reasons why a lot of people don’t innovate. I’m gonna try something new. I tried it and it doesn’t work. I have failed. Now you know we can talk about Thomas Edison said this – you know I didn’t fail you know I fail 991 ways to make a light bulb that didn’t work or whatever it was that he said around that. You need to accept – look at the end of the day, you failed you try to make a light bulb and you didn’t. You need to go on that you need to like it’s part of the journey and I wanna end of with the quote from Wolfgang Puck he said, “I’ve opened a lot of success, I’m paraphrasing here, but I’ve opened a lot of success for restaurants but I’ve learned the most from the ones that failed.”
Now I thought that’s the perfect quote, for this podcast. For this is where you gonna learn. This is where you gonna be a better chef, you gonna be better restaurant operator, you gonna be a better front of house. Better of what it is that you’re trying to do, when you try something you go through that process of thinking about a problem coming up with an idea, trying to implement a solution, and failing is like – yep that didn’t work, why didn’t it work. It didn’t work because of this this this… Okay. This is probably the better way of doing it. I think that that is a really key component of it ‘s embrace failure. We talked about it in our development team particularly when we’re coding something up I don’t want to spend three months on to realize that it’s not gonna work.
Get something up – I wanna fail quickly. Fail fast. We embrace failure. We want to fail quickly. If this is not gonna work, I want it dead today, because I don’t wanna be wasting time – time is not a resource that I have anything spare of. So that’s the big thing. You’ll learn more – from the failures that you have. So yes – go out, do something new, speak to some new people. Go and eat at some other restaurants. There’s a lot of things that you can do to really spark those innovative juices. And I think I’d be really keen to hear what sort of processes that you’re having – what are the great innovations that you’ve come up within your restaurant.
Lastly it is the most important thing that you need to do, the times – they are ever changing, and innovations is the key that you’re gonna be able to manage that. Innovate – fail – innovate again and win! That’s the big thing.
So, I will leave you with all of those thoughts, we’ve talked for an hour. I really hope that you got something out of it. You know just even if its a little thing like you know try and put your mobile phone away, try talk someone a little bit different; go and experience something different, you can synthesize into your food into your business, into your restaurant. Yeah that’s it. Go out there and have an outstanding day! Bye!