Success, setbacks and sausage rolls

Roger Whiteside, the chief executive of Greggs, has a history of picking winners. His first job was at M&S, where he helped it invent what became Britain’s £8bn-a-year sandwich industry in the 1980s. Lean experimental teams in converted stock rooms behind the stores made egg and cress and smoked salmon sandwiches and pre-packed them for sale. Prices started at 43p. Shoppers loved them.

In 1990, although popular, he thought they could do better. He’d spoken to customers and concluded that convenience was the key. He reasoned that the sandwiches were too far out of the way, sold in M&S’s basement food halls. He persuaded bosses to clear out some of the dresses by the door and replace them with a wall of sandwiches. They couldn’t restack the shelves fast enough.

He left M&S in 2000 to join a new start-up called Ocado. Most people were laughing it out of town. Online shopping? For food? It’ll never catch on.

When he took over at Greggs in 2013 he was sure that hot dogs were the next big thing. A year later, the Newcastle-based bakery chain gave them away free on Times Square in New York and got rave reviews. It launched a full-throated marketing blitz to launch them in the UK. “Hot dogs was a rising trend in the marketplace,” Whiteside said in a speech to entrepreneurs on Tyneside. “We thought ‘It’s trendy, let’s get on it’.”

It was a disaster.

“The customer went: Pffffttt,” Whiteside said, blowing a raspberry at his audience. “They didn’t like it.”

There were two big lessons to learn and they laid the foundations for the bakery chain’s phenomenal success in the years that followed.

First, customer closeness. Never forget to focus on what customers actually want, not what you think they want. Second, you’ve got to be willing to fail if you’re going to figure out what works. “Innovation and failure are natural bedfellows,” Whiteside said. “We have to make mistakes to find out if any of this stuff works for us.”

The hot dog was a flop but staff at Greggs understood that trying new things was OK. Experimentation was encouraged. This culture helped Greggs hit on probably the most unlikely success story in the food sector. Who would have predicted that a bakery chain from the North-East would be the pioneering force behind the country’s first mainstream vegan snack: the vegan sausage roll.

On 3rd March 2020 Greggs published its annual results. Profits were up 27% to £114m. They also revealed it was selling more coffee than Starbucks and was going to focus on creating a coffee shop experience in its stores.

The same day, the UK government published its action plan for dealing with a new disease called Covid-19. By the end of the month, the UK was in lockdown.

Since then Greggs has expanded its delivery partnership with Just Eat, first agreed in January. It has switched its store rollout to drive-through sites, and launched a pilot of in-store concessions within Asda, a supermarket where footfall has been relatively steady. It wants to have its own delivery service running from 20 stores by the end of autumn.

The pandemic was not something any company could plan for. Success in responding to Covid is about looking forward, not back.

Fluxx launched research on the new world of work as Covid forced the UK into lockdown. We called it The Great Working From Home Experiment. As well as that we took some time to review what we’ve learned since we started doing what we do in 2011.

What we’ve come up with is some guiding principles we want to share. We think they can help companies make better decisions, build more resilient businesses, and keep innovating when the temptation is the step back and play it safe.

Five Principles

Customer: Ensuring you design for rapidly changing needs and create adaptability.

Skills: both leaders and employees will need new capabilities alongside enhancing existing ones.

Rituals: Rethinking key processes, meetings and ways of working to remain effective.

Environment: The design of physical spaces, the amount of them and the practical things employees will need to ensure productivity.

Social Capital: Maintaining engagement, avoiding burnout and health and wellbeing.

1. Start with the customer

Customer closeness is the key. Their lives are changing in ways they never imagined and the pace of change is staggering. Take something as straightforward as breakfast. It’s a part of everyone’s daily routine. It’s a ritual built on habit. Now almost half the UK’s adult population is working from home, according to the Office for National Statistics, up from just 9% pre-Covid.

Cereal sales have rocketed. Teapots have sold out. Kellogg’s was left with millions of unsold cereal bars, designed to eat on the go, and record demand for boxes of cereal. The UK had a Marmite shortage because pubs were closed, cutting production by breweries, and in turn the supply of the yeast extract that Marmite is made from just as demand was rising. Every single one of those things is driven by customers changing needs and behaviours.

Understanding *why* they are changing is vital to successful adaptation. Take Pathfindr, a Norwich start-up that does real-time tracking of equipment in warehouses and factories. It realised its customers couldn’t get back to work until they could figure out how to keep employees safe. So it adapted its flagship product to work for people too: alerting workers if they come within 2m of each other. A simple pivot that solves a customer problem. Helping them move forward, not get stuck looking back.

2. Skills

There are skills you can learn that can help. At Fluxx we use Design Thinking to help us understand people and problems to make sure we are solving the right problem in the first place. We use experiments to test our assumptions and then we use that evidence to help design better products and services within days, not years. In the last few months we’ve perfected the art of doing it all remotely too. It’s a method that has helped some of the world’s biggest companies turn moments of crisis into industry-defining success.

In April 2001 when the US dot com bubble had burst, Apple was barely breaking even and focusing on the Mac computer. It knew customers wanted a better way to listen to music. Their computers could hold vast collections but people wanted it in their pocket. Minidisks were cumbersome, CDs could take a lot of songs but still skipped. Walkmans offered no control. Just six months later, on 23rd October 2001, the iPod was launched in time for the Christmas shopping season. Apple sold 403 million of them.

Cordell Ratzlaff, a designer of the Mac OS X operating system at Apple, summed up the company’s use of Design Thinking: “We focused on what we thought people would need and want, and how they would interact with their computer. We made sure we got that right, and then we went and figured out how to achieve it technically.”

3. Rituals

This is about you and your team. We’ve found rituals key to maintaining two things: structure and communication. At Fluxx we introduced new rituals a few years ago: all-staff meetings on Wednesdays and Fridays. They’re informal and last 30 minutes. Since Covid they’ve been transformed from nice-to-haves to a vital tool for maintaining communication and company culture. People can update on projects, ask for help and just see each other’s faces.

We also have stand-ups with our clients, helping us maintain momentum and stay on top of issues as they appear. It sometimes takes a bit of gentle persuasion to get them started but we’ve found clients keep them going long after we’ve handed over on a project. We’ve also introduced Zoom Roulette, where anyone can end up in a virtual room with anyone else for 15 minutes twice a week. It’s been a joy to have a space to *not* talk about work. Sometimes they spark useful ideas, but that’s never the aim.

4. Environment

Humans naturally create associations with our environment that shape the way we think and work. For many people the line between home and work is gone and the screen fatigue is real. In a study of 12 people’s brain activity, Microsoft found markers associated with stress and overwork were significantly higher during video calls than they were for desk work, like writing emails. Our concentration span is shorter too; just 30 to 40 minutes over video. A ‘stress state’ begins after two hours of back-to-back virtual meetings.

For many of us, the regular commute is perhaps gone for good. The future of the office is emerging as we learn the limitations of working from home. Collaboration and spontaneity have proved difficult to replicate remotely without the right facilitation. The office of the future will have to ditch desk work in favour of spaces that allow shared work. They’ll play a crucial role in sustaining company culture too, as people spend more time at home.

5. Social Capital

Social Capital means maintaining engagement, building trust and caring for employee wellbeing. As part of our WFH experiment, a director at a big investment fund told us what was working: “We are seeing leaders admitting they are tired one day, or feeling vulnerable and don’t want their camera on. Trying to show that these behaviours are OK, they’re normal.”

If you can build trust then opportunities can emerge too. Here’s what a director at a Fintech told us: “People are working longer at home, but they’re getting a stronger work and home balance. People are starting earlier, finishing later but breaking the day up to make it more palatable for themselves. I really hope people are able to maintain that.”

It’s something every company should be investing in. Firms are learning that a strong culture, motivated people and intelligent, agile leadership can all make the road ahead feel a little less daunting. The best leaders are looking forward not back.

Ed is a Senior Consultant at Fluxx, the UK’s leading independent innovation company. This is an excerpt from our latest book which is full of real stories about navigating change and uncertainty, and what to do when you don’t know what to do. Head over to www.fluxx.uk.com/book2020 to request your copy now!