About 4 years ago

08/28/2015 - Only The Lonely…

By:  Joe Kefauver

It’s an interesting time in the political universe of entry-level employment. Relative to other industries, there has always been a certain amount of cohesion within the retail and restaurant world when it comes to managing the political aspects of basic business model issues like wages and benefits.

Restaurant companies, in particular, have traditionally competed on price, product and performance – but not on business model. Who can serve the tastiest meal at a price that appeals to consumers while delivering superior service in a comfortable atmosphere? These have been the areas where companies compete.  That completion has been, rightfully, ruthless.

Conversely, when it comes to defending bottom lines or industry reputation, there have been very few points of distinction between brands.  And, the leading government affairs voices within the industry have worked closely to collectively address those threats.

Over the past few years, though, we have seen a significant escalation in the willingness of various political sectors to openly attack individual brands in a coordinated strategy of creating mistrust between a given company and its employees, customers, shareholders and the general public. As a result, those individual brands have been, understandably, forced to go it alone far more than they ever have in the past and pursue a course of action that is less collective and less centered on industry cohesion.

One such example is the recent announcement by McDonald’s to increase its wage floor in company-owned stores and enact a paid leave policy for its employees. Five years ago, it would have been far less likely that an individual brand would step out on these issues in such a public way.

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Five years later (And with tens of millions of dollars worth of mud thrown at their brand) the company had to pivot to try to drive a different narrative around the company. While the ramifications to the rest of the industry were certainly somewhere in the conversation, it was – rightfully – very far down the list, assuming it was even on the list. A few years ago, that would have likely been different.

Knowing that the industry is strongest when it acts collectively, its political opponents have openly pursued a strategy that exploits long-standing riffs and fault lines in the hope of isolating industry segments and, in a perfect world for them, even brands. Watch any nature documentary and you will see that, to be successful, predators need to separate prey from the herd. A lion grabs the gazelle on the periphery of the bunch. Similarly, opponents are successfully working to drive wedges between brands and trying to pit major players in the industry against one another.  They are doing this by exploiting the tip vs non-tipped issue, big vs. small, franchisees vs. franchisors, and QSR vs table service.

These actions diminish the ability of industry trade associations to successfully navigate priorities among its members, decreasing the effectiveness of our collective model of issue management. As those political opponents see more success in their “separating the herd” strategy — Individual brands are going to have to get used to fighting more and more fights on their own without their big brother trade association watching their back.