Fortune Magazine has a great article this week on the turnaround at Quiznos. But like most turnaround stories, it’s been marked by a few key strategic decisions–decisions which any small business can learn from.
According to the article, since Greg Brenneman took over last year, he’s made a couple of key strategic decisions for Quiznos.
- He slashed discounting.
- He simplified the menu from 29 items down to 21
- He found new suppliers for everything from meat to cookies
- He introduced a new low end product (the Sammie, a small flatbread sandwich, for $2 to compete with Subway et al.)
- He reconnected with his franchisees.
- He added online ordering
Now, I’ll freely admit, none of these ideas seems like a blow me out of the water idea. However, none of them were being done before (even though the company had a lot of bright people working for it). In other words, turnarounds don’t always require radically new ideas. Often they simply require the application of existing ideas which aren’t being implemented at that moment.
Furthermore, each one of these top level decisions has made a huge difference on the bottom line. For example, by adding online ordering (not necessarily a new idea :-), one franchisee reported that 25% of his orders now come online. The new sandwich, the Sammie, not only allows Quiznos to compete with Subway and others for price-sensitive customers, it also costs less to make, thereby increasing profits.
Cutting out discounting was key because it was training customers to only come in when they had a coupon (something Bed, Bath and Beyond should probably reconsider :-). Reducing the menu got rid of their menu "dogs" (i.e. they eliminated the eight least profitable items), which again increased their profitability (plus speed). And, of course, renegotiating their vendors reduced their costs.
In retrospect, these all seem like such obvious moves to make. But they weren’t–until someone from the outside came in, made some assessments, and then said, "Here are a few obvious things that need to change." And then executed on those changes.
So as you look at your business, what "obvious" changes do you need to make? Or when was the last time you took an entire day or two away just to think about the big picture of your business, analyze the data, and then make five or six big decisions that could radically affect your business? One of the reasons why strategy consultants like myself love to do strategy work is because we know that turnarounds usually reduce themselves down to just a handful of key decisions made at the top. Knowing which ones to make is the hard part. But when you make the right ones, there are few things more rewarding to watch.
So what do you think are the five most important changes you need to make this year in your small business that’ll have the greatest impact on your bottom line? Take it from Quiznos. A few key decisions can make all the difference!