Probing the Limits: Variation as a Continual Improvement Tool
Imagine a system that purposefully introduces variation into key processes as a quality improvement technique. To quality professionals, the idea of encouraging variation is counter to fundamental quality improvement theory, but one food franchise company has successfully fostered product and process variation to forge a competitive advantage.
Most franchises, such as McDonald's, make strict consistency and elimination of variation a cornerstone of their business model. All McDonald's restaurants are required to maintain the same look, use the same processes and serve exactly the same food. By leveraging a known successful formula and driving out variation, they anticipate positive results.
Great Harvest Bread Co. franchises local bread baking stores and has taken a different path than most food franchising businesses. I admire Great Harvest for the innovative ways in which they approach many business issues, but their approach to driving variation into their stores was a new quality improvement concept to me.
Unlike most food franchises, Great Harvest has few requirements for its storeowners. According to a book on the company, "Bread and Butter," the only significant requirements are that local stores must display the company logo and name, buy premium wheat from approved suppliers and freshly grind the wheat daily at the store. There are no requirements on what products they serve, what recipes they use, what the store looks like or store operating procedures. Great Harvest's corporate headquarters encourages variation among the stores and in the products as a means of finding new and better ways of doing business.
This approach could lead to tremendous chaos in the business, but Great Harvest created a learning network that encourages communication and sharing among stores. As experiments with products and processes yield positive results, stores share information so they also can benefit from innovation.
Pete Wakeman, co-founder of Great Harvest, describes it this way: "Let people scatter off in all directions on a search; as soon as the best answers are found, they gain converts, who teach new converts, and soon a chaotic scattered mess gets aligned in a stampede toward a single point."
But Great Harvest does not take this unstructured approach in all aspects of the business. Part of the culture at Great Harvest is that "systems make you free," and freedom gives you time to improve and gives business owners the ability to take time away from their store.
While I find Great Harvest's contrary approach of using highly structured processes in some areas and near chaotic freedom in other areas hard to reconcile, John Kotter, a respected author on business leadership, also encourages this approach and does a good job explaining how to concurrently deploy these seemingly inconsistent approaches.
In Kotter's Harvard Business Review article, "What Leaders Really Do," he explains that optimally running a business requires ongoing destabilization to foster innovation in critical areas of a company. Destabilization often is executed by strong company leaders who experiment with new approaches, tear down existing methods and replace them with innovative, dramatically improved methods. After major improvements are achieved in an area, a process of stabilization needs to occur in which new processes have been built around the improved method so that it can operate efficiently and with little attention. Stabilization allows process improvement leaders to move on and innovate in other critical areas of the company.
While I'm a major advocate and practitioner of building systems to improve efficiency and putting business functions on "auto pilot," I'm also starting to understand that hanging on to old processes could lead to dangerous stagnation in a business that could jeopardize a company's strategic advantage. With this in mind, when examining long-standing food franchises that seem to continue with what appears to be a tired formula of consistency, it is no wonder they are struggling while Great Harvest succeeds not only financially, but also by creating a stimulating workplace.
Is it time for you to add variation to a perfectly consistent process as a means of finding a better way of getting things done? Send me an e-mail and let me know what you think.