Retail and restaurant leaders are looking for new ways to fuel and sustain business growth. Cost pressures and changing consumer expectations require brands to evolve and modernize quickly to deliver the digital and in-store experiences that will help them keep up with the competition.
Many companies pursue innovation opportunities in what are most often seen as the revenue-generating areas of their businesses. This approach is evident in the rise of retail tech investments and increased customization and personalization options predicted for this year.
But the growth that retail and restaurant leaders want will require more than digital or menu modernization alone — it will require operational excellence.
Defining Operational Excellence
In a recent Point-B sponsored Retail Dive Webcast, Point B Consumer & Retail experts and Teresa Hegdahl, VP Global Phygital Strategy & Innovation at Pizza Hut, defined operational excellence within a store or restaurant as the ability to consistently deliver a great customer experience and support team members in delivering that experience. The path to operational excellence is unique and shaped by each company's strategy and priorities.
At its core, operations should be viewed as a value driver, not a cost center of your business. Pursuing operational excellence drives outcomes that most restaurant and retail leaders in this environment are eager to achieve:
- Increased transactions
- Increased order value
- Cost reduction
- Core process improvements
- Reduced BOH churn
- Brand experience consistency
- Customer loyalty growth
- Customer lifetime value
- Talent retention & development
Our OpEx Framework
Retailers and restaurants will all have their own nuanced definitions of what operational excellence looks like. However, each needs a standard, comprehensive approach to addressing the key success factors that enable operational excellence at scale. At Point B, we use the ACT framework which stands for Accountability, Culture, and Tools & Technology. Working together in tandem, each piece of the framework functions like 1 of 3 legs on a stool – missing 1 component could prevent a company from fully realizing the operational excellence gains that they are seeking.
Accountability starts with defining success metrics and establishing governance frameworks to drive your OpEx strategy.
- It’s important to align on success metrics – both quantitative and qualitative – before beginning OpEx initiatives. Are you looking to reduce the cost to serve customers so that as your volume increases, you don’t need to rely on new hires alone? Or are you looking to improve the customer experience and increase repeat customers?
- A robust governance framework will ensure your organization prioritizes its investments appropriately and sets up a mechanism to measure, adjust, and sustain improvements over time. How might a governance strategy ensure alignment and define expected outcomes across your OpEx initiatives?
Culture recognizes the value of leaders owning the vision and setting the OpEx strategy within their organization.
- Leaders aiming for impact must connect the dots of change with their workforce. Employees need to hear their leaders talking about the value of operational excellence, see them thoughtfully engaging questions, and feel a sense of partnership in solving problems. How are leaders in your organization championing change alongside employees?
- On the flip side, employees need to be comfortable and embrace continuous change. Operational Excellence is not a 1-year strategy or a project with a start and end date. It’s a way of working that anticipates changes in daily workflows to account for changing technology and customer needs. Employees aren’t surprised by change; they naturally expect it. Does your organization have the change management and communication strategy needed to engage and mobilize employees fully?
Tools & Technology will bring your OpEx initiatives to life for employees and customers.
- Having the right technology, systems, and data structure in place will enable your company to serve customers, deliver value at scale, and exceed customer expectations. Technology won’t solve every problem or address every challenge, but it can be a critical part of your overall OpEx strategy. Begin the brainstorming process by clearly defining your objectives. Are you looking to eliminate manual steps through process automation? Or streamline and strengthen decision-making through data & analytics capabilities?
- From a tooling perspective, if you’re going to ask employees to drive operational excellence, you need to provide best practices, templates, and toolkits to help them get started. These resources allow teams to understand and analyze data, solve problems, prioritize improvements, and collectively measure results over time. What framework would your organization implement to ensure employees feel set up for success with the right training?
We’ve partnered with retail and restaurant brands across all stages of their journey toward operational excellence. From a global quick-service restaurant facing back-of-house operational disruptions to a $29 billion retailer and manufacturer looking to optimize its supply chain, our team helps leaders find the right starting point for their business.
Next Steps for Your OpEx Strategy
Apply this framework to a problem your organization is facing. Maybe it’s back-of-house restaurant capacity constraints or long wait times at your retail storefronts. Whatever the challenge, the more clearly you define it, the easier it will be to overcome.
Once you’ve identified the issue, take time to understand it. Go to your store and walk the workflow through, see what your data tells you, and listen to your employees who live and breathe the process every day. As you observe and develop solutions, make sure you have a method for prioritizing next steps based on costs and benefits.
From there, share the problem with other leaders and get their buy-in on your vision for OpEx growth. Facilitating leadership alignment and advocacy will generate momentum and excitement within your organization and help to build the business case for current – and future – investments in operational excellence.
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