When we do nothing, the situation is often worse than performing any other action.
By Bill Scott
Google published an article last week that I will recap just a little bit, because it resonates like a bell on a different issue I have struggled with for 16 years regarding “Computer Assisted Ordering” in convenience stores. The article I am talking about is one regarding the slow advancement of driverless cars.
The Trolley Problem, if you are not familiar with the term, refers to a situation in which taking no action would result in the deaths of one group of individuals, and taking any other action would result in the deaths of others.
The example John Battelle (the author) gives, is a situation in which you are driving down the road and a group of children step off the curb directly in front of your car. Taking no action would certainly kill the kids, but swerving into oncoming traffic would most likely kill you and your passengers. I think most of us would choose the latter, but whether we would or wouldn’t is not the crux of the issue.
In the convenience channel, retailers are faced with critical decisions every day, and most of us are too busy, and have insufficient information to make the right decision every time. So what do we do? We do what everyone else does… nothing. And when we do nothing, the situation is often worse than performing any other action. Our assumptions are the driving force that decides the results no matter how deeply we explore our options.
Going back to the article, the author redirected our attention to the driverless car where the car manufacturer, whose primary concern would be for their customers’ own safety, would be charged with making the decision for them. Would the car manufacturer choose to kill the children to cause lesser damage to the car and its occupants? After all, who would buy a car that was programmed to kill them in certain situations? Wise or unwise, I think most humans would want to reserve the responsibility of making those decisions for themselves.
Reading the article made me recall the time when I was making a sales call to one convenience store business in 1993, where my prospect employed over 30 office workers, working day-in and day-out, to process the paperwork from 120 stores. I had proven that one of my own customers, through the utilization of my software, could process the same types of paperwork for 63 stores using only one employee.
I was able to prove that if he acquired my system, he would be faced with another decision. One of laying off some 27 office employees, and using those savings to add at least six more locations before he needed to employ a third employee in the office. His passion for being fair with his employees may have been ‘the right thing to do’, but it was far from being the logical choice.
As certain as I was that none of my competitors had the programs I had created, I was never able to find out exactly why the company decided on a different software solution that insured he would continue to operate in the same old way, costing him more, and leaving him in a strategic, critical disadvantage against his competitors.
Looking back 23 years, I could never understand how any logical person would choose as he did. One thing I have learned over the years of working with this industry is that most retailers will embrace change that is less disruptive, regardless of the logical outcome.
I think John Battelle hit the nail squarely on the head when he said:
“…we’d prefer our technology to be free of annoying social complexities. We’re extremely good at imagining a world where a particular innovation has won the day, but we’re also pretty talented at ignoring the messy transitions necessary to actually get there.”
The idea of letting go, is terrifying to a most people. Humans don’t work like driverless cars, and if we run our businesses strictly on assumptions, we will ultimately fail, unless we reevaluate our assumptions on a continuing basis… and who does that?
When someone comes up with an undeniable killer idea they often fail, not because of their lack of intelligence; they fail, because they are pretty talented at ‘ignoring the messy transitions necessary to actually get there.’
It takes time to bring a new idea to fruition, and many people lose out because they become impatient, cynical, dread becoming a victim of criticism, and feel they may appear dumb in the eyes of their peers and their employees. It’s much safer to hang back and wait and see what happens, allowing others to rake in the lion’s share of the advantages. “We’re getting there,” they often say, but they are only ‘getting there’ too late, often by force and not by choice.
The idea of embracing Computer Assisted Ordering goes back to the late 70s, and we have had four decades to test it, improve it, and go through the process to prove beyond any shadow of a doubt that it is the way of the future; not because it is possible, but because we will not be able to run our convenience stores without it.
Regarding the question of Computer Assisted Ordering, very small businesses and very large businesses are much more comfortable with the idea than are companies that would benefit from it the most. Large businesses, because they have boards of directors and investors who care more about profits, and smaller operators because they do not know that “Computer Assisted Ordering cannot possibly work.” They will be the first adopters. The reason Charles Lindberg was the first aviator to fly across the Atlantic was because he was too naïve to know, “It could not be done.” Not knowing what we do not know has been responsible for most of the amazing technologies we take for granted today.
When I look at the industry as it is today, and imagine what it will become tomorrow, I get excited. I can see Mom & Pops, and medium sized retailers all across America who will take advantage of advancements of recent changes in technology that seemed out of reach only a few, short years ago. Computer Assisted Ordering will open the door for new entrepreneurs, heretofore lacking the funds to invest in large stores and mountains of inventory to get into the business. To work for themselves and build larger sustainable companies, to leave behind something of value to their children and their grandchildren that will last long into the future.
Computer assisted ordering is an inevitable extension of supply chain management, and sadly, some believe it will never work in the convenience store channel, because the chain is not only badly broken; it has never really existed at all.
In the beginning, convenience retailers gave up accountability of their inventory to their suppliers, and their suppliers accepted that responsibility to gain their business. Suppliers accepted their responsibility to keep the stores full, but never considered they would be expected to literally manage the stores’ inventories for their retailers. So, suppliers have become very proficient at doing their part; and retailers, finding their storerooms and coolers stacked to the ceiling while lacking the tools to know what is selling and what is just occupying valuable space, unable to manage overstock and out-of-stocks, and not being able to price their inventory for their specific clientele.
If products do not sell, well that’s okay, because they’ve got lots of other stuff that will sell; but, the truth is, with only 30% of the products in stores now producing profits, the other 70% is nothing more than filler to make the stores look full, and even that is an unfortunate myth.
Logic dictates the perfect solution is as plain as the nose on your face. Stop buying stuff you can’t sell, and replace it with stuff you can sell. How you go about doing that, will determine your future in the convenience store business.