Real cases reveal the rise of enterprises through management equity incentives

The case of this article is about how the fragrant pot era, which comes from the hot mountain city of Chongqing and is almost unknown in the capital, rose in the national market. Its founder relied on the precise positioning of the blank market and at the same time Innovating the management system of catering, daring to give out its shares, and quickly rebounding after experiencing the bottom several times.

The following is an oral statement from Zhao Guo, the founder of Xiangguo Era:

I had just graduated in 2003 and had been in class for about seven months. When I was working in sales, my performance was good, but I felt a little arrogant. I decided to quit because I couldn't stand the office politics. Before I officially decided to start a catering business, I had been idle for about a month. I had been thinking about weighing my future life. I felt that I had more free time to start a business. Moreover, the most popular industry in Chongqing is hotpot. Moreover, these catering companies are expanding across the country and have the opportunity to rely on chain stores. To get bigger, I decided to enter the catering industry.

I conducted a survey on hot pot and Chinese food practitioners in Chongqing. It turned out that at that time, there were a lot of restaurants, but not many were really doing well. However, taking advantage of the big wave of Chongqing hot pot, there are still many good things done to expand the brand effect across the country. At that time, Chongqing's catering crowd: one type was those who came to the city to work and were a little smarter. The other category is some laid-off workers. Of course, there is another category, those who are knowledge-based and have accumulated huge wealth in this industry. After some analysis, I feel that since I majored in marketing, I should still have certain advantages. After that, through my research, I invented "Griddle Pot" and "Incense Pot".

It was around March 2004, when the first wave of bird flu came. Since the main dish of our Xiangguo is poultry, our new store suffered a huge impact. So I started to find a way out and think of a way. Often when you start to resolve to solve a problem, all problems cease to be problems.

In order to overcome the dangerous situation at that time, we used several effective methods:

First, we realized the horizontal development of products and improved our product line. Since there is avian influenza at this time, we should avoid poultry products and weaken their proportion in horizontal development. We develop products such as rabbit, fish, and pig trotters. But just because a product is developed doesn’t mean customers will come. The guests only remember that your chicken is better, but they don’t agree with it and don’t know how your other items are. So this approach did not immediately turn the situation around.

At this time, promotion and activities are very important. It should be said that we are relatively outstanding and effective in these aspects. There was no money at the time, so we printed 10,000 to 20,000 advertising pages on white paper that cost one or two cents a piece. But no one wants you if you go out to the streets to post it. Then I will organize our staff to clean the buildings one by one. In 2004, Chongqing's economy was not very developed. At that time, most of the buildings built in the 1990s did not have elevators. We organized employees to come to the door, and then we began to sweep the building, running from upstairs to downstairs, and placed a Our own flyers were later placed on every door handle in the community. It turns out that this works very well because the loss rate is much lower.

In addition, we also need to establish our own image and tell potential customers that we are serious about safety and are a responsible store. So what should I do? I thought of a way. We will insist on military training and running on the streets in the morning and afternoon every day, adding our corporate slogan and slogans. Through running two kilometers every day, we convey a corporate image of the overall brand. It should be said that the dynamic effect of these promotions is quite good, plus we sweep buildings, run, and spread information. Finally, the customer was brought back again.

The situation improved greatly in April of that year, and it was completely detonated after May Day. At that time, our store was not big enough, with only twenty tables, and many people lined up to eat. When there were not enough seats, we bought plastic benches and yellow sail tables to use as extra seats. Interestingly, whenever the city management came, the guests would pick up the benches and carry the tables on their backs to the streets and alleys to hide from the city management. , this detail proves our customers’ recognition of us.

After it became popular, I wanted to open a second store, so I naturally opened a second store. Because I chose the right time, almost every store would be very popular. Coupled with the strong promotion of Chongqing food media, Many diners go to food programs to make recommendations and become more and more famous. At that time, there were still many users going to portal communities such as Tianya, communities, and forums to post and write experience reports. Gradually spread this information. Later, an information-providing newspaper in Chongqing recommended us as a column, and we were completely blown away in an instant.

In the next two years, I opened eighteen stores at once, but from 2006 to 2009, the growth rate was not large and remained at about ten stores. I could no longer grow. We have also tried airborne troops and introduced learning and training, but few have really seen results. It can be said that I encountered the second hurdle.

At that time, I encountered several headaches in management: First, employees’ execution ability was relatively low: they basically relied on the boss to supervise, execute, and implement, and the overall combat capability was greatly affected.

And this greatly affects profitability. My analysis is that the reason is: I basically followed up the first two stores myself. We provide employees with on-site solutions, basic training, and step-by-step guidance. Later, it is basically the manager who does these things. In this way, the quality and ability of the overall staff are greatly reduced, and the customer experience and satisfaction are also reduced. In addition, we make a unified decision When decisions are implemented at the operational level and grassroots employees execute them, efficiency is low.

Another reason is that the early corporate culture was the boss culture, and the boss’s charm and execution ability were passed down and implemented in the store. After I opened more stores, I basically implemented the store manager responsibility system. However, there may be problems with the store manager’s ability level, expansion speed, etc. Without systematic training or cultural influence, many nodes or ideological things cannot be consistent with mine. There will be problems in the process of inheritance. There are many problems. As a result, because the company is running too fast, the cultural atmosphere of the company is not effectively formed and passed on, and there are gaps. During this long period of confusion, I also made some thoughts and attempts, such as looking for airborne troops, but many of them left and I couldn't integrate. As a result, during this long period of wandering, I paid a heavy price, and many of the stores I opened were closed.

Faced with such a dilemma and situation, I made a series of changes in the management system:

The first method is to transfer shares to employees: The initial management implementation of our single store Store manager responsibility system. This is what everyone often calls equity incentives. The store manager has worked in the company for a long time. After we became very familiar with his work, management, basic product evaluation process and other processes, we then allowed him to hold shares in the process. Only when you make him feel that he is doing things for himself will he have a more responsible attitude. At the same time, we attracted outstanding employees at the grassroots and middle levels, and also transferred the shares of the store to them and obtained the shares of the store. They spend money to buy shares, and the shareholding amount varies according to their position, and the maximum proportion does not exceed 10%. As long as the execution effect is good and they can get a lot of dividends when the company's performance is good, these will be immediate. But at first, many people were still resistant, questioning whether they would be cheated, so they were reluctant to pay. So we designed a gameplay similar to options. For example, if a position is subscribed for 5%, the rich company will give the money first. The company that has no money will put this part of the dividend in a pool exclusive to him. When the dividend is enough for the equity, The equity is yours, and it turns out that this demonstration effect is very meaningful. After the ownership change was completed, employees' work attitudes and mental states changed greatly, and their work enthusiasm was suddenly activated.

Secondly, we have adopted our own contracting responsibility system in order to completely improve service standards. For example, five or eight tables are reported to you in each person's service area. As long as you complete the basic tasks, the extra will be part of the performance, and this is your own income. It is equivalent to everyone having their own private land and responsibility field. As long as you serve customers well, your income will be high. I want this kind of employees to make money.

As a result, when we finished implementing this thing, everyone’s ideas and ways of living were suddenly opened up. Taking advantage of this opportunity, we began to write standards and specifications. Specify what should be done and what results should be achieved.

At that time, the company completed the formulation and basic implementation of a standardized process. It can be said that the implementation of our system and model is relatively smooth, and there are basically no problems. After completing the model of converting shares and converting employment into entrepreneurship. Employees took the initiative to buy gloves, masks, etc., and proactively thought and implemented many things to give customers a safer and cleaner impression. Of course, after a long time, there will be some weakness, but through the power of soft culture and role models, the overall implantation and introduction, the effect is not bad. Generally speaking, the change of ownership has brought many benefits to the growth of the company.

Of course, there is a third step in this change, which is standardization from the bottom up: after the model change, we formulated manuals for service, marketing, technology, financial management, etc. We have established an entire standardized process and standardized operations. Later, it was continuously extended, and everything from site selection to decoration to training process to early opening, feedback, and comprehensive adjustments were all standardized. The execution is pretty good. Many catering companies often learn from or find experts and masters, working from top to bottom. From the perspective of managers, they consider how to do things and what effects they can achieve. But we are doing the opposite. We have already entered the training state when we set the standards, and everyone must participate in the standard-setting process. Employees can write about what they usually do, how they do it, and what the results are, and they can write it in a very popular way. The management will follow up with the positions, processes, and responsibilities of each position. Then we summarized it in a more written language and made it into a ppt. Our formation of this norm is equivalent to everyone participating in it. Employees have already been trained while it was being formulated. Every month we will consolidate the standardized process and conduct another assessment.

After these major changes, we now have close to 200 stores across the country (part of them are franchise stores). Sales reached approximately more than 600 million. This proves that our series of changes are successful.

The catering industry is a zero-threshold Red Sea market. When you see the various signboards changing like a lantern on the catering floors of various shopping malls, you know how difficult it is to survive here. This case called the Griddle Era is a successful case of creating a new category in the catering industry, and it is also a successful case of a flanking war.

First of all, it created a new category. The author wrote in another review of catering companies that "differentiated survival" is the only way of survival for all companies, not one of them. Traditional hotpots come with soup, while dry pots don’t have soup. This sharp opposition is differentiated enough to attract curiosity and trigger trial consumption, and then through free word-of-mouth spread, it brings a wave of diners, so why? It became very popular without much promotion? After accumulating to a certain stage, a dry pot restaurant that I have never heard of becomes popular. It is more topical than a traditional hot pot restaurant and can attract the attention of the media (the media always loves the new and hates the old, and prefers to report on new and unique topics). This in turn brings free public relations to a larger scale and attracts a larger wave of diners.

Secondly, choose a good source market. Chongqing people are fond of spicy food and have strong tastes, which is well-known throughout the country. Companies starting here have no worries about survival. Chongqing people’s taste for spicy food makes them definitely suitable for dry pot dishes, and they have high authority and persuasiveness in evaluating such dishes; at the same time, Chongqing, as the only municipality directly under the Central Government in Southwest China, is a It is a high-potential market, and its consumption habits are demonstrative and influential to the consumer groups in the southwest region. It is conducive to spreading and expanding brand awareness, and it serves as a good dissemination and pavement for its entry into other cities in the region.

Finally, a regional focus strategy was implemented. The regional focus strategy firstly makes it possible for enterprises to utilize the existing brand potential, making the brand reputation naturally spread from the source market to surrounding areas like running water, with low cost and good effect; secondly, it narrows the enterprise management radius and reduces the operational management cost. costs and risks. These two points are crucial for start-up companies.

Although this case only talks about catering companies, the basic methods and principles of flanking warfare it embodies are actually applicable to all companies. Of course, creating new categories requires entrepreneurs’ intuition and courage, and sometimes involves a gamble. But successful companies are the pioneers of new categories, such as McDonald's and Real Kung Fu.

All entrepreneurs who want to achieve brilliant success need to think about how to launch a flanking war; and in business history, all flanking battles require the creation of new categories.

Let’s go back and talk about the second hurdle that companies encounter. This is a problem faced by most catering companies. In the start-up stage, most entrepreneurs do everything themselves and do not pay attention to team and system building. After problems arose as the scale expanded, it was discovered that the team was not trained and the system was not perfected. New stores in the later stages will certainly not receive the same investment of energy and resources from entrepreneurs, which will inevitably cause the new stores to face difficulties. Entrepreneurs should not expect company employees to be as smart, hard-working, factory-oriented, and idealistic as entrepreneurs; a more realistic situation is that "this is just a job", so entrepreneurs need to establish a management system and Process, as long as our employees can complete tasks according to standard actions, we can achieve success with a high probability. Of course, if the incentive mechanism can be used appropriately to give employees more motivation to work, it is possible to achieve better business performance.