Chef José Andrés shows us new business model innovation where everyone wins
Happy New Year, and here's looking forward to a year of Flow! Along with Henry King, innovation and transformation at Salesforce and my colleague and co-author, I am grateful for everyone who has read our articles, liked our tweets, and attended my presentations and keynotes this past year. We wanted to start the new year by highlighting one of the stories from 2020 that has inspired us, a model of flow, and in particular a model of its keystone principle, Holistic Success.
"There is symbiosis at every single level of living things, and you cannot compete in a zero-sum game with creatures upon whom your existence depends." -- Richard Powers
Recently, a wonderful story by Rob Mandelbaum about Chef Jose Andres and World Central Kitchen (WCK) revealed a beautiful example of new business model innovation which best speaks to holistic success as a key business principle.
Chef Andres has long been a hero of ours and was one of the earliest guests on Salesforce's "Leading Through Change" video series that was part of the company's efforts to keep us all connected - to the company, our communities, and each other -- during the pandemic. Mandelbaum's piece focused on WCK's response to the pandemic, an initiative it called Restaurants for the People, and what really grabbed our attention was the following description:
Chef Jose Andres, founder of the World Central Kitchen (WCK) is reinventing how to scale value by leveraging existing ecosystems where everyone can win.
"With Restaurants for the People, WCK has transformed itself from a merely effective relief organization into something more resembling an upstart tech company—it's developed a fairly radical, scalable program not just for getting hot food to people who need it but also for keeping the money spent on food aid in the affected communities by using their small businesses. Paying a restaurant to make an individual meal typically costs about $10, about two to three times more than having volunteers cook it in bulk in an arena commissary, but the extra money keeps restaurant workers employed, and when they spend their paychecks they keep other people at work."
In this single paragraph highlighting WCK's innovation, Mandelbaum succinctly described the difference between a traditional approach to relief-at-scale and a contemporary approach that demonstrates the effectiveness of the Flow principles that we have introduced and described over the last year.
Given the challenges that COVID-19 has imposed on us, especially on our disadvantaged communities, our traditional relief mindset would tell us that we need to feed as many people as possible for as little as possible. To put it bluntly, our priorities would be producing high volumes at a low=unit cost. And, in that regard, our default model for relief is essentially the same as the traditional model for production at scale across just about all for-profit industries.
José Andrés, co-founder of World Central Kitchen, is using food to empower communities in Haiti, Brazil, Puerto Rico, and the US.
When we think of scale, we think of efficiencies, of standardization, of using the most cost-effective raw materials possible and the most cost-effective workforce possible, meaning the fewest number of people being the most productive at the lowest hourly rate possible, making the maximum amount of "stuff."
While this may sound overly simplistic, this is in fact how many if not most organizations grow. It's how CEOs think and talk. "Do More with Less" being just the most recent way of making the same demand for lowering the cost side of the margin equation. Applied to food relief, that translates to using volunteers (cheap labor) to cook in bulk (the mass production of "precooked, heavily processed meals") in an arena commissary (factory) to make as much as possible for as little as possible. The processing is centralized and then the final product is shipped out to the remote areas in need of relief.
But what Chef Andres has shown us is that there is another model for providing relief which scales differently, with greater flexibility and adaptability, one which can supplement the traditional model in some cases and perhaps even replace it in others. In this model, the organization gives up centralized command and control and gives up high volume at low cost, and instead looks to the members of the ecosystem and to a broader cost and value model that supports multiple members of that ecosystem, not just the target population in immediate need.
8️⃣1️⃣5️⃣ 𝓶𝓲𝓵𝓵𝓲𝓸𝓷That's how many people in the world suffer from chronic undernourishment.
— Salesforce (@salesforce) August 2, 2020
Together we can make a difference and end hunger. Fill up your plate with hope with @WCKitchen's @chefjoseandres on #LeadingThroughChange: https://t.co/CbfHP6Zqr9 pic.twitter.com/DjE9iVTByL
Meal production is decentralized and distributed, marshaling community-based resources, namely local restaurants, with their existing infrastructures built specifically to serve and feed the local community. Production can be scaled up and, crucially, scaled-down as needed without significant cost or effort, simply by inviting more restaurants, their teams, and their equipment into the initiative. This minimizes or negates the need for investment In centralized infrastructure, built for exceptional and, ideally, rare circumstances.
And, even more importantly, this new model engages more people and creates a virtuous cycle where everyone who is part of it becomes part of the value flow. In the old model, the service provider takes a linear, direct approach to problem-solving -- people are hungry, we will feed them - that is set up and runs parallel to existing solutions instead of exploiting them. In the new ecosystem model, more people are connected and enjoy reciprocal benefits:
- WCK itself as the service provider benefits from knowing people will get hot, good quality meals, from being able to scale without having to invest in infrastructure and without having to supervise and control any of the meal production processes.
- Restaurant owners benefit from being able to keep their businesses going, their staff working and paid. According to Mandelbaum, $135 million has gone from donors, via WCK, to restaurants.
- Restaurant workers benefit from getting paid to do what they're good at and being able to serve community members in need. They are enabled to support themselves and their families and to spend money on other services that they value and therefore keep other people employed as well.
- Donors benefit from knowing that their contributions not only provide nutritious and delicious food to those in need but also supports local businesses and workers. As the article points out, WCK started the initiative with $10M but was "buoyed by a surge of donations, much of it in small contributions" totaling about $150 million.
- Volunteers no longer engage at the point of production, where cooking skills are most valuable but rather at the point of exchange of the meals to the hungry, where human empathy and compassion are the most important skills.
- The hungry benefit from the emotional and psychological comfort and pleasure that comes from a well-cooked, quality meal, not just having their functional needs satisfied.
Apart, not alone. How can use existing ecosystems to scale value and improve the welfare of the underserved communities? Chef Jose has the answer.
We call this a model of holistic success. It's a non-zero-sum game and has hints of what Robin Wall Kimmerer calls the Gift Economy, which is based on the principles of gratitude and reciprocity. At its most actionable, holistic success for companies comes from putting the success of their employees, their customers, their ecosystem partners, and their communities ahead of their own financial success.
As we previously noted in our article on Orchestration, our colleague Tiffani Bova has demonstrated the direct link between employee engagement, customer engagement, and growth. Similarly, we have also shown that companies that focus on the success of their business ecosystems are rewarded in turn by those ecosystems. And according to a 2019 study by Deloitte, "Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction".
The future company is relatively flat, comprising a number of distributed, autonomous resources, human, digital and hybrid, that are guided by an explicit orchestration function.
— Vala Afshar (@ValaAfshar) November 30, 2020
To achieve this model, integration capabilities will be a key requirement. https://t.co/X7EuncosLN pic.twitter.com/s3eUIZuL6Z
Other lessons companies can learn from Restaurants for the People include locating underutilized resources and finding ways to make them parts of innovative solutions. Where WCK found local restaurants, Uber found people's private cars and Airbnb found people's homes. Many years ago SETI found spare processing cycles on people's PCs.
Today, schools go almost completely unused in the evenings and at the weekends. Nearly all retail outlets are closed for 12 hours out of every 24. How can the infrastructure of Amazon and Walmart be better utilized to improve society? Disadvantaged communities are themselves not only under-served but are also underutilized. And as we have suggested above, business partners and other members of the ecosystem are often underutilized as well from an innovation perspective. And every time that underutilized resources are engaged in a commercial or non-profit venture, value flows more broadly and more people can share in that venture's success.
I believe your next company is designed like a @SpaceX Starship. https://t.co/QgKJea9GId pic.twitter.com/THTpYnj7Gw
— Vala Afshar (@ValaAfshar) October 18, 2020
Holistic success can and should be a defining principle not just for innovative humanitarian organizations like World Central Kitchen but for all companies who want to be successful in the emerging new normal.
WCK knows already that the "Restaurants for the People" model will not work in all situations. It has responded to other crises where local restaurants were themselves knocked out, meaning that something more akin to the traditional "commissary" needed to be set up. But this adaptability is a key to sustained innovation and growth.
Success comes not from depending on a particular innovative solution that worked in the past but rather from depending on the spirit of situational awareness and timely responsiveness that generated the solution in the first place. And even greater success comes from designing for the success of others in the ecosystem, knowing that the greater the resilience of the ecosystem the greater the resilience of the individual members of it.
"When we try to pick out anything by itself, we find it hitched to everything else in the Universe." -- John Muir.
This article was co-authored by Henry King, a business innovation and transformation strategy leader at Salesforce. Henry King is an innovation and transformation leader at Salesforce and author of Flow Design, a new design paradigm for organizations and experiences based on the principles of movement and connections. King is a former CIO with 30 years of consulting and executive experience, both in the US and internationally, with expertise in innovation, design thinking, and information technology. King also teaches innovation and design topics at the School of the Art Institute of Chicago and the Institute of Design.