A nine-word rule for every business decision
This week, how a plucky local iced coffee beat the biggest beverage brand in the world. Whupped its ass. We’ll come back to that shortly, but first some background.
It’s nice to have a nine-word business rule that delivers the right answer in every situation. Ours may not work for you.
For us, that rule opens up clear lessons for every decision. Seared in by an intense period of frustration and pain.
We set up our place after an unpleasant few years as employees in a firm with private equity owners.
They viewed the business through a swaggering spreadsheet growth prism that viewed all staff as easily-replaceable units of production.
All systems and processes could be cut and pasted into every single location. That’s the key to scalability. At least, in theory.
We asked for some flexibility in local decisions.
The new Chairman, a famous burger chain guy, was having none of this nuance nonsense.
“It’s a GODDAMN COOKIE CUTTER!” he said, pounding the boardroom table.
We’re not big on cookies. So when we set up our own place, our rule was:
Do the opposite of whatever private equity would do.
Don’t set up a head office. Spend the money on working assets and people who work with clients instead of exec salaries. Organic growth rather than acquisitions. Managing by looking after staff and clients, rather than making people writing endless reports to feed the bureaucratic machine.
Adelaide is great
In lieu of a head office, each office pretty much runs its own ship, with local equity partners. My co-founder PK and I visit every six weeks or so.
This week, we’re going to Adelaide. Adelaide is great.
Hospitality is in Adelaide people down to the individual DNA strands. You make eye contact with a random local and they’ll invite you over to drink their wine and eat their King George Whiting.
You can tell an authentic Adelaide person, because they’ll choose Rockford wine over the higher-priced prestige labels that rich Sydney and Melbourne people like.
I come from Sydney, a night-time sharia city where every restaurant kitchen shuts at 9pm sharp, including weekends. To get a late night drink, you must run a Supermax prison gauntlet of fluoro-clad goons.
In Adelaide, you can go out for dinner late on Monday night, then find a civilised bar open till 2am. You can talk to the chefs about what’s in that sauce you liked, because Adelaide cares about food and guests.
Adelaide has all sorts of little quirks you don’t find elsewhere.
Double-cut rolls. Farmers Union. Frog cakes. All heaps good.
Though it’s become harder to find now as franchises take over, the double cut roll is an Adelaide corner sandwich bar icon.
The roll has two horizontal cuts. Normal roll filling, then more filling in a separate section upstairs, like the different cabin classes on an A380.
Washed down with the South Australian refreshment icon that is Farmers Union Iced Coffee.
Reckon you can come into SA with the biggest soft-drink brand in the world and win? Think again. At the peak of the battle, Farmers Union outsold Coca Cola by 3:1.
Adelaide is serious about its unique things. Like the adorable frog cake, invented by Adelaide’s Balfour’s Bakery in the twenties. In 2001, the South Australian National Trust added that frog cake to the National Heritage List.
Respect for cake history is a hallmark of civilisation.
I love these little eccentricities in cities. Adelaide people are often amazed when you tell them these things don’t exist elsewhere.
My proudest copywriting achievement
The proudest moment of my copywriting life came from a pro-bono job, a series of videos to promote an industry event in Adelaide. The ABC’s Annabel Crabb, another Adelaide icon, was the event’s public face.
I wrote a series of scripts for her about charming Adelaide things. It was when her show Kitchen Cabinet was huge, so we shot it in her kitchen at home. Afterward, she asked where in Adelaide I was from.
“I’m not from Adelaide,” I confessed. “But I go there a fair bit on business trips.”
It was lovely to get this honorary citizenship.
“Sydney solutions to local problems”
I could write similar stories on the unique charms of Brisbane, Hobart, Melbourne and the Hunter Valley. I love them all, but we haven’t the space and the point is the same.
Even if your business is based on proven, rigid processes, your people in other offices want you to know their location isn’t just another city. There are local issues they must deal with.
Are those issues real? Absolutely. Not always though.
But even if they’re not, those issues are real to them. Brushing them aside like Cookie Cutter CEO is disrespectful, and usually counter-productive to your business.
Lots of staff who have worked in other businesses have told me of the single largest annoyance in their working lives.
“Sydney solutions to local problems.”
You can just see those Sydney and Atlanta Coke people shouting at their Adelaide sales reps about the Farmers Union situation.
Compulsion breeds resentment
Lots of the problems come from pricing. Head office says charge large city rates. Clients in smaller cities don’t have the budget for that.
Sometimes it’s just control for its own sake. We spent an eight-figure amount on new technology last year. If we had a national purchasing manager they would decree that we buy exactly the same brands in each state. Maybe we could save 2% or something.
We don’t do that.
We let each office make their own calls on what they buy. Because we want our staff in each location to have direct input into the tools they work with every day. They all talk a lot between themselves, and they might choose what Sydney bought.
The point is to make it their choice. That feeling is worth far more than whatever purchase price we might save. I’m talking literal P&L performance, not some kind of good vibe index.
In all areas of business, compulsion breeds resentment that didn’t have to be there.
Wake up and taste the iced coffee
If you take the time to get to know the places you do business in, that’s it’s own reward. And over time, it will bring you respect in that market.
You can do business in Adelaide without knowing what Stobie poles are, or the birthplace of chicken salt, but it’s nowhere near as much fun.
Next week, Hobart and Melbourne. Call me a traditionalist but it beats the shit out of Zoom.
Wake up and taste the iced coffee, my friends.
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