APL Accounting News March 2016
How much can we learn from a fast food chain?
I’m sure at this point you are thinking that we are going to draw some wisdom from McDonalds yet again, and give you the ‘do you want fries with that?’ advice, but no, there is something we can learn from a fast food chain that you have probably never heard of before, a fast food chain in Tennessee USA called ‘Pal’s’ with just over 1000 employees.
It’s not about upselling, it’s about staff recruitment, training and maintaining high staff retention.
An industry where the pool of recruitment represents a very difficult demographic of under 20 year olds who can be notoriously difficult to manage, tend to work part-time and lack service /business savvy.
An industry where the task at hand can possibly be classed as rather unrewarding and repetitive.
An industry where there is very tight margins and large competitors …
Yet Pal’s still has a lot to offer and outguns the competition in many ways.
They are fanatical about speed and accuracy! They only offer a drive through service and average 18 seconds at the drive-up window and 12 seconds at the order receiving window – 4 times faster than any of its competitors.
At a speed factor of 4 times faster, you could expect more error, yet this fast food chain only makes 1 mistake in every 3600 orders! That’s 10 times better than average.
A 4 times speed improvement at 10 times accuracy does not happen by accident, and the CEO of the company compares their recruitment and training process to that of a professional athlete. Taking this approach suddenly makes sense:
We all know that very few people could run a sub 2-and-a-half hour marathon, even if all the best training was offered. Genetic factors determine whether or not your body can handle the stress of the training without injury and further factors such as genetic flexibility, body type, conformation and lung capacity will determine whether you can achieve this and unfortunately less than 10% of the population will fit these criteria.
Secondly, if you are fortunate enough to have the genetics of a marathon runner, you will not achieve a sub 2:30 marathon without adequate training. All the genetics in the world will not get you through the race if you don’t keep yourself in shape.
It is in exactly this order that companies like Pal’s look at their recruitment. The best companies hire for attitude and ability (the genetic material) and train for skill (once you have an athlete then you have a chance of training them without injury). If you don’t have the right person to start with they will not meet your required expectations.
Over the years. Pal’s has developed a recruitment process that includes a 60 point test to try and isolate the correct attitude for potential recruits. Time has probably allowed them to fine tune this process so that it yields predictable results.
Once the correct employees are identified, they get 120 hours of training before they are allowed to work on their own! 120 hours to process orders at a fast food restaurant! Sounds like a lot of repetition, but how much repetition does our professional marathon runner need to do to win the Olympics, how many steps, how many repeats around the same track? So it starts to make sense, regardless of how easy a task may seem, to execute it flawlessly requires a lot of time and training.
We also need to make sure that once the athlete is in good shape, they stay that way. Winning one marathon does not get you to the Olympics – you need to perform consistently and win again and again. For this reason, Pal’s continues training and all employees are subjected to random pop quizzes 2-3 times a month. Failure to pass these results in more training.
Quoted from the CEO: “People go out of calibration just like machines go out of calibration, so we are always training, always teaching, always coaching. If you want people to succeed, you have to be willing to teach them.”
So there certainly is a lot for the veterinary industry to learn from this.
How many veterinary businesses have a formalised recruitment process that tries to isolate for talent rather than skill – we know so many that simply recruit the wrong person who could never possibly succeed.
Secondly, how many veterinary businesses offer sufficient training to their staff and continued ‘re-calibration’. To do this, regular communication and meetings are required and regular feedback about performance is essential.
We have seen high profitability achieved in some veterinary businesses where systemisation of standards of care, team education (meetings and communication) and team buy in with these standards of care (recruitment of people with the correct attitude) has had very positive results.
The pack changes
Zack is a dog who is a couch potato and has an unusual life experience. His owners who were once exciting vets have now become boring accountants. They used to bring him into the exciting vet practice every day, now they bring him into a boring accounting office every day. This gives him a unique dog’s eye view on both professions.
Pictured above: It’s possible to powernap in public too!
Sadly, one of our senior accountants, Peta will be leaving the APL pack this month. I know you will miss her as will the rest of the pack, but I will miss my daily apple cores!
A sad truth about any business pack is that there will always be some change, and we all know that change cannot be prevented. The best tactic is to adapt to it as efficiently and effectively as possible.
In the last newsletter I mentioned automations. Here is another example where automation helps, allowing a business to cope with fluctuations in staff numbers. This important aspect is SYSTEMISATION – having documentation and software tools in place that allow for consistent delivery of work and making sure that the rest of the team know what needs to be done to produce the same standard of work.
The applicability of this can also easily be explained in the context of a veterinary consultation using a case of otitis externa – which is one of our favourite examples, so let’s have a look at this:
Clinic A has a senior vet leave. The week before leaving he saw a case of otitis externa and advised a re-check 14 days later. The new vet that is introduced is also experienced, so the practice owner assumes that they know what they are doing and cuts them loose onto their client base from day one – no training required. When the client returns, they see the new vet, who simply looks at the ear, tells the client everything is OK and sends them off with a repeat consult fee. The client is left wondering why the first vet said that there would be a repeat sample and the new vet did not do it. They are also then left wondering why on earth they had to come back at all and why they paid a repeat consult fee.
Clinic B also has one of their experienced vets leave. However, this practice has introduced a standard of care which deals with otitis externa. This standard of care is well documented in a ‘practice manual’ that is kept online. One of the criteria when onboarding a new vet regardless of their experience is that before they start to work, they need to have a working knowledge of the practice manual. This manual deals with all sorts of things from how to deal with otitis externa to what sort of worming medications are recommended and at what age. So when the patient with otitis externa returns, they see the new vet, but the advice offered is consistent – a repeat swab is collected, the microscope slide is demonstrated to the owner on an ipad and then a repeat consult fee AND cytology fee is charged. The client feels well serviced, after all, if two different vets said exactly the same thing, then it must be right. They are happy to pay the additional fee for the repeat visit and the cytology sample.
Just like in the fast food chain above, no team member is exempt from training, regardless of their experience. An experienced vet may know all that is required about veterinary medicine, but how can you expect them to just know how YOUR business runs without teaching them.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. In particular, please note that ‘Zack’ is a dog and does not have opposable thumbs so has to type with his nose.