Explain how VUCA can affect a business situation and a recommended solution.
Write a 4-page academic paper in which you describe a business situation, apply a critical thinking framework to the situation, and recommend evidence-based solutions to the situation. Explain how the concepts of VUCA (volatility, uncertainty, complexity, and ambiguity) could affect both the situation and the solution.
introduction
How Panera Solved Its ‘Mosh Pit’ Problem Publication info: Dow Jones Institutional News ; New York [New York]02 June 2017.
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FULL TEXT
Long lines at lunch should make restaurant chains happy. But not at Panera Bread Co.
Seven years ago, customers at the popular sandwich-and-soup chain had to wait in line for up to eight minutes to
place an order. Then they had to stand in what Chief Executive Ron Shaich called a “mosh pit” of people waiting for
their food. Ten percent of the time, the orders were wrong, the company said.
The St. Louis-based chain of more than 2,000 restaurants realized it had to rethink its service model — and found
online ordering was the answer.
It took more than six years to get the process right, testing the patience of store managers, company management
and Wall Street analysts — and even attracting an activist shareholder.
Today, online orders make up more than a quarter of its company-owned restaurant sales, and the average time
customers spend waiting in line to order food has shrunk to one minute. Panera is widely cited by analysts as one
of the most technologically savvy, best-performing chains in the industry.
European investment fund JAB Holding Co. in April offered a 20% premium to take Panera private, in a deal that
will keep Mr. Shaich at the helm of the fast-casual chain. The transaction is expected to close in the third quarter.
In 2010, as he started the overhaul of Panera’s ordering process, Mr. Shaich drew on his own frustration as a
customer.
“By the time I’d get there, find a parking space, go in and wait for the food, it’s 30 minutes. I’d just as soon go to my
fridge and look for leftovers,” he recalled thinking.
At the time, Mr. Shaich had retired as CEO but was still the company’s chairman. He tapped Blaine Hurst, a former
Papa John’s International Inc. executive, to help with the overhaul.
Mr. Shaich eventually returned as CEO in 2012, and the chain opened a prototype Panera in Braintree, Mass., to
test all elements of “Panera 2.0”: self-order kiosks, delivery, digital ordering and a new practice of bringing food to
customers’ tables.
Messrs. Shaich and Hurst spent about 100 hours a week in that Braintree cafe observing what would work.
Easing the ordering bottleneck by taking orders online, instead of at the counter, wasn’t enough: The kitchen had to
be able to handle the volume. Allowing customers to place orders themselves led to more customization, but also
more staff mistakes. The company revamped the way employees process orders in an effort to minimize errors by
simplifying the kitchen display systems.
“It was literally hundreds of these little things that we did,” said Mr. Hurst, who became company president last
year after holding several other executive positions with Panera.
Other restaurant chains are going through similar struggles as they try to adapt their business models to the way
consumers want to order and receive their food. Starbucks Corp. has suffered growing pains as customers have
migrated to its mobile order and pay app, shifting the congestion that used to occur at the counter to an area in the
cafes where the mobile orders are handed off.
Starbucks is currently working on ways to solve the bottleneck, including texting customers when their orders are
ready.
By Julie Jargon
Many other chains, such as McDonald’s Corp., are just now starting to roll out mobile ordering and delivery.
Panera began rolling out its rapid pickup system nationwide in 2014. But the results didn’t come overnight. In the
fourth quarter of 2014, the chain reported that per-share profit had fallen 7%, in part because of the investment in
technology, and warned that earnings growth would be flat or negative in 2015.
New York investment firm Luxor Capital Group LP took a roughly 4% stake in Panera in 2015 and encouraged the
restaurant chain to cut costs and take on debt to buy back more shares. Noah Elbogen, an investment analyst at
Luxor at the time, said the firm believed that digital ordering and delivery were the right things to do, but pushed
the company to find other cost-cutting to help offset the investment in technology, which he pegs at well over
$100 million. Panera wouldn’t disclose the cost of the upgrades.
“I took three years of flat earnings and a lot of heat as we made these bets,” Mr. Shaich said. While he agreed to
buy back shares and cut costs unrelated to the technology effort, Mr. Shaich told employees to press ahead.
Panera turned the corner last year as digital orders and delivery gained traction. In the first quarter of 2016, it
posted its best traffic and same-store sales growth in four years, outperforming the industry by 6.5 percentage
points — the widest margin it had ever recorded.
The company continued to post strong growth throughout 2016, raising its full-year earnings per share guidance
each quarter. It ended the year with earnings per share up 7% and same-store sales up 4.2% versus the prior year,
far outpacing the industry.
Catherine Rhinehart, of Kingsport, Tenn., says Panera’s online ordering has been a “life-saver.”
“It saves me from standing in line and taking half my lunch hour to get the food,” said the 68-year-old marketer,
who remembers the time when the lines inside Panera were long.
Mr. Elbogen, now chief executive of Misada Capital Group LLC, a New Jersey-based investment manager, said he
wasn’t surprised by Panera’s success. He recalls seeing lines out the door at Panera, which convinced him that
demand wasn’t the company’s problem, but rather its ability to handle it. By implementing digital ordering, he said,
“They were really solving a problem.”
Write to Julie Jargon at julie.jargon@wsj.com
(END)
June 02, 2017 05:30 ET (09:30 GMT) DETAILS
Subject: Customers; Restaurants; Securities buybacks; Fast food industry; Earnings per
share; Cost reduction; Financial performance
Business indexing term: Subject: Customers Restaurants Securities buybacks Fast food industry Earnings
per share Cost reduction Financial performance; Corporation: Starbucks Corp;
Industry: 72251 : Restaurants and Other Eating Places
Company / organization: Name: Panera Bread Co; NAICS: 533110, 722513; Name: Papa Johns International
Inc; NAICS: 533110, 722513; Name: Starbucks Corp; NAICS: 722515
Classification: 72251: Restaurants and Other Eating Places
Publication title: Dow Jones Institutional New s; New York
Publication year: 2017
LINKS Linking Service
Database copyright 2021 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest
Publication date: Jun 2, 2017
Publisher: Dow Jones &Company Inc
Place of publication: New York
Country of publication: United States, New York
Publication subject: Business And Economics
Source type: Wire Feeds
Language of publication: English
Document type: News
ProQuest document ID: 1905075667
Document URL: http://library.capella.edu/login?qurl=https%3A%2F%2Fwww.proquest.com%2Fwire-
feeds%2Fhow-panera-solved-mosh-pit-problem%2Fdocview%2F1905075667%2Fse-
2%3Faccountid%3D27965
Copyright: Copyright Dow Jones &Company Inc Jun 2, 2017
Last updated: 2021-01-09
Database: ProQuest Central
- How Panera Solved Its ‘Mosh Pit’ Problem
This portfolio work project will give you practice with academic writing expectations, while still being work relevant. Many organizations have relationships with professional associations and contribute written articles regularly to newsletters and other publications. In addition, some organizations expect leaders to participate in conferences and seminars, where written work must be submitted using an academic style.
While you are playing the role of a new leader in an organization, remember that you are also writing a paper that will be evaluated by an instructor. Thus, you want to make it easy for the instructor to clearly see that you have demonstrated the outcomes of the assessment. Do not make your instructor search for information; guide them to it. How? By double checking the scoring guide and ensuring that you have clearly demonstrated each of these competencies at what you believe is the Distinguished level.
Read the following and think about how Panera used critical thinking and an understanding of VUCA to solve their mosh pit problem. Pay attention to Kallet’s critical thinking framework in particular.
- Jargon, J. (2017, June 2). How Panera solved its mosh pit problem. The Wall Street Journal.
- Kallet, M. (2014). Think smarter: Critical thinking to improve problem-solving and decision-making skills. Hoboken, NJ: Wiley & Sons.
Then, find another company with a problem they need to fix. You may use NASA, BP, or United Airlines, all of whom have had numerous high-profile problems to solve in recent years, if you wish. Or, you may choose a company that you know has an issue. If you are unsure who to use, try searching “Companies with customer service problems” online and you will get a lot of ideas, though your problem does not have to be about customer service.
In an APA-formatted paper:
- Summarize the problem you researched. Then, apply Kallet’s critical thinking framework to describe how the leadership of this company should think through the problem to create a solution. Finally, give at least one evidence-based solution—either that you came up with through your research or that you read the company is going to or did employ. Next, describe what VUCA considerations the leadership must keep in mind as they implement this solution.
- Work on being concise but thorough, keeping academically formatted paper to no more than four double-spaced pages.
- Be sure your paper includes, and is organized, as follows:
- Introduction: Write an introduction that tells the reader what to expect of this paper (1 paragraph). It would be most effective to include a brief mention that leaders at Panera Bread effectively used an understanding of critical thinking and VUCA to solve their mosh pit problem, and that this paper applies a similar framework to solving whatever problem in the organization you chose. Choose an organization with a problem you can research.
- Problem: Describe the problem that you will be solving for another company, describing the situation (1–3 paragraphs).
- Thinking Critically: Apply the framework for critical thinking as outlined by Michael Kallet in the Think Smarter e-book to the problem you identified to describe an evidence-based recommendation for this company to improve. You can create your own unique recommendation, or show how critical thinking applied to a solution that someone else came up with already or applied, which you read about in your research (1–3 paragraphs).
- Applying VUCA: Explain how VUCA could affect both the situation and your recommendation, and any important considerations for management in implementing the recommended solution (1–2 paragraphs).
- Conclusion: Write a conclusion that wraps up and summarizes your document (1 paragraph). The Capella Writing Center, linked in the MBA Program Resources under Writing Skills, has good information on how to write an effective conclusion.
- References: Include at least two APA-formatted citations in your paper.
Deliverable
Write a 2–4-page academic paper following APA style and formatting. Refer to the writing resources in the MBA Program Resources in the courseroom navigation panel, especially paying attention to the MBA Academic and Professional Document Guidelines, under Writing Skills. Note that an academic APA style paper must include sub-headings as well as complete citations and references, and is also expected to be double-spaced.
Evaluation
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies through corresponding scoring guide criteria:
- Competency 2: Apply leadership strengths and behaviors to workplace situations.
- Apply a critical thinking framework to a business situation.
- Explain how VUCA can affect a business situation and a recommended solution.
- Competency 3: Recommend evidence-based strategies for leading and collaborating in complex environments.
- Recommend an evidence-based solution to a business situation.
- Competency 4: Communicate effectively through academic and professional writing.
- Provide an overview of a business situation.
- Develop text using organization, structure, and transitions that demonstrate understanding of the relationship between the main topic and subtopics.
- Integrate appropriate use of scholarly sources, evidence, and citation style.
- Convey clear meaning in text through sound grammar, usage, word choice, and mechanics.
Faculty will use the scoring guide to review your deliverable as if they were your boss. Review the scoring guide prior to developing and submitting your assessment.
ePortfolio
This portfolio work project demonstrates your competency in applying knowledge and skills required of an MBA learner in the workplace. Include this in your personal ePortfolio. See MBA Program Resources for more information on ePortfolio.
