Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 5

Posted in business and convergent technologies, strategy and planning by Timothy Platt on June 19, 2017

This is my fifth installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-4.)

I have been discussing virtuous and vicious cycles in businesses, as they alternatively pursue proactive and reactive approaches to change (see Part 2, Part 3 and Part 4.) And at the end of Part 4, I stated that I would more fully discuss the paths to change that these businesses would respond to and in both its evolutionary and disruptively revolutionary forms.

• This means discussing what businesses respond to, and in the specific context of this series, as they respond in patterns of decision and action, review and further decision and action that can have recurringly cyclical elements to them.
• And it means addressing how they would respond at a higher level strategic and overall operational level and not just at a day-to-day, here-and-now details level, and certainly if they do so effectively.
• In anticipation of that point, I cited agility and resiliency as organizational goals – and as buffering mechanisms against the down-sides of change.
• And I indicated that I would return to my restaurant example of Part’s 3 and 4 to add in another complicating factor there. I initially presented this case study example in negative terms, and in term of what I have come to call the “restaurant death spiral” scenario: an unfortunately real phenomenon that I have seen play out a number of times, and for its basic form in more than just restaurants. I then turned that scenario on its head and away from that initial vicious cycle pattern, to illustrate how a restaurant in precisely the same situation that launched my Part 3 vicious cycle pattern, could instead pursue a success creating virtuous cycle response (in Part 4.) My goal here is to add in a new contingency (that I add here is based on fact but that might I admit seem a bit historically dated now), that in effect stress tests that virtuous cycle approach with an unpredictable adversity. The question there, is one of exactly how robust this business has made itself as it seeks to redevelop itself through its virtuous cycle of change and improvement, and next step change and improvement. And this is where agility and resiliency enter in, as noted in the immediately preceding bullet point.

I am going to begin this overall thread of discussion with the specific case in point example of that last bullet point, and then address the first three points at least in part in terms of this example, as a means of taking my overall narrative here out of the entirely-abstract.

I suggest you’re at least briefly reviewing Parts 3 and 4, for their discussion of this restaurant example, and Part 4 in particular as I turn to consider a more positive and productive approach to restaurant turn-around and recovery. But in brief, this case study example involves a failing restaurant that turned itself around by among other things switching from easier to procure canned and otherwise processed ingredients, to a more knowledge and labor demanding local fresh and farm to table approach.

Local in-season produce and I add locally sourced eggs and dairy, meat, fish and poultry can be both better quality and more appealing to the customer for what you can do with them. And they can be less expensive for the restaurant at the same time. It is just that these locally sourced and farm-to-table fresh ingredients require a lot more knowledge of how and where to locally source, and this requires a great deal more effort and in networking to local sources and building relationships with them, and in making purchases from a much more widespread and diverse range of sources. Picking up on that last point, this means not being able to turn to one or a few wholesaler middlemen, but along with buying and being able to cook with fresher, this also means cutting out middleman businesses that can and do add to costs paid as they add in markups to cover their expenses and to bring in a profit for themselves too. I repeat the up-side of this here. Now I toss in that complication that I warned I would add to this happy, virtuous cycle success story:

• Consider the potential consequences of weather-related crop failures.

Late heavy frosts and freezes in places like the Northeast in the United States can essential destroy crops for a season that would normally be starting their growth cycles early. This year, in the Northeast, as a very specific case in point, essentially all of the trees that produce fruit with stony pits, such as peaches or nectarines were hard-hit and overall crops for a lot of growers were essentially devastated by this. Weather related losses of this and a variety of other types can hit corn or tomatoes or essentially any other produce crop. And that type of loss impacts on both the growers who can lose significantly from what should be their year’s peak income seasons, and on their customers: wholesalers and other resellers, and customers such as farm to table restaurants definitely included.

What should a restaurant such as the one of this series’ example do if they suddenly find that crop failure has really seriously impacted on a significant range of the locally sourced ingredients that they would now normally turn to and require? I answer that by raising at least a few of the first round questions that such a restaurant owner would start asking:

• As a set of questions to the farmers who are now their regular providers of produce and other ingredients for their kitchen: How severe is this loss? How much of your expected crop if any, is going to be available this year and at what price? How much of that and of what I need at my restaurant can be made available to me and my business?
• If appropriate for the type of crop failure in question and the timing involved: Can you replant and have a later harvest run, and of so when and with what delays? Some types of crops routinely offer more than just one crop per year so for them, a late frost for example, might simply mean that type of product arriving at the restaurant later than usual for a first crop, though possibly at higher per unit price then too.
• As a set of questions for consideration inside the restaurant: Should we try buying fresh for at least some ingredients that we see as more indispensible, or should we try making perhaps radical changes to our menu to stay locally farm to table? And where should we take each of these two approaches in our purchasing and menu planning considerations?
• And of course, what will this do to our restaurant’s finances, and both from having to buy rarer commodities that are more expensive now as a result, and from possible loss of customers if the menu cannot be kept as appealing to them? Consider an Italian restaurant that suddenly cannot buy fresh local tomatoes that he has been planning on for seasonal pasta sauces that absolutely require them?
• In that case, consider specific Italian tomato varietals such as Costoluto Genovese, or San Marzano. Only tomatoes of these types that are grown in Italy and in their specific areas of origin can be identified as such, in the same way that a number of wine varieties can only be called by their traditional names if they are produced in their traditional domains: their traditional growing and production regions (e.g. Chianti in one of the eight so called Chianti districts in Tuscany, Italy.) But many of these traditional varietals are also grown outside of their sites and regions of origin and sold under different names, and locally fresh.
• Should this restaurant by from more distant sources and get tomatoes that were perhaps picked earlier and greener for travel, or should they very selectively go back to canned again, for high quality canned Italian San Marzano tomatoes, for example? Note: tomatoes can be harvested and shipped green and even fully green and ripened off of the vine – but they never taste the same when they are as when they are ripened on the vine. And this can have real on any food prepared with them and its taste and quality.

If the owner of this restaurant – here imagined as an at least largely Italian one, is now really firmly committed to farm to table and away from canned anything, but the fresh tomatoes they can get from more distant sources just do not meet their quality standards, this would put them in a real quandary. Fresh tomato and basil sauce would be out of the question however this decision were resolved, at least until locally gown higher quality tomatoes could be made available again. What should be done?

I realize that people who have never worked in or with a restaurant of this type, might see this as a trivial and artifactually contrived case in point example (unless that is they are real foodies, to use a current term of choice.) But for the owners of this restaurant or ones like it, the type of challenge that I have tried to present here, can be consequential and it can strike to the heart of what they seek their restaurant: their dream to be. And decisions made and follow through actions taken lead to next round decisions and actions too.

Picking up on the third of the four bullet points that I have been focusing on here, and with my above discussion of the fourth of them in mind, building for agility and resiliency can call for making difficult decisions. And it can mean thinking through and preparing for scenarios and possibilities that would be anything but comforting, and that might even be very disturbing as sources of possible emerging challenge.

I am going to continue this discussion in a next series installment where I will start at the top of my four bullet point, to-address list and more fully consider the first three:

• This means discussing what businesses respond to, and in the specific context of this series, as they respond in patterns of decision and action, review and further decision and action that can have recurringly cyclical elements to them.
• And it means addressing how they would respond at a higher level strategic and overall operational level and not just at a day-to-day, here-and-now details level, and certainly if they do so effectively.
• In anticipation of that point, I cited agility and resiliency as organizational goals – and as buffering mechanisms against the down-sides of change.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: