You will notice that on the lower end of the spectrum, the leveraged parameters are possible changes in the processes and procedures, which typically have a lower cost of implementation, sometimes no cost at all. On the next echelon, we get into adding equipment platforms and perhaps some work station changes that require actual capital outlay. Either of the prior retrofits may require the deployment of additional labor. The last, more complicated level may involve physical plant changes, including working on walls, hoods, etc., which carry a high cost.
Of course the KOP scenarios can be as many as make sense, and are not restricted to the three shown in my hypothetical example. In addition to starting the evolution and improvement of the brand from a physical perspective, taking this approach may also provide the necessary funding for the subsequent phases.
Let’s consider an example where customer service improves by changing some processes, procedures and people deployment. For a quick service concept, this may mean an improvement in window time, resulting in processing more cars and higher sales. Similarly for a full service concept, it may mean faster table turns provide the ability to serve more meals in the peak dinner period thus driving more sales. The gain in sales can provide the cash to invest in the next KOP level and so on.
So you see it does not have to be an all or nothing proposition when improving efficiencies. You can implement the new prototype’s changes over time in a retrofit situation. As we have outlined, when done right, the initial lower cost (KOP) phases can provide the necessary funding for the subsequent ones, resulting in an increase in efficiency for the full system, instead of just having a new prototype that delivers a higher level of customer experience than the existing locations.
This is the best way to ensure the system delivers at the highest level of efficiency, resulting in optimum profits and customer hospitality for the concept that fuels brand growth, the ultimate growth of a thriving brand.