MRS

MRS. FIELDS SECRET INGREDIENT

THE REAL RECIPE BEHING THE PHENOMENAL GROWTH OF MRS. FIELDS COOKIES CANNOT BE FOUND IN THE DOUGH

BY TOM RICHMAN

PART OF THE LATE BUCKMINSTER Fullers genius was his capacity to transform a technology from the merely new to the truly useful by creating a new form to take advantage of its characteristics. Fullers geodesic designs, for instance, endowed plastic with practical value as a building material. His structures, if not always eye-appealing, still achieved elegance- as mathematicians use the word to connote simplicity- of function. Once, reacting to someones suggestion that a new technology be applied to an old process in a particularly awkward way, Fuller said dismissively, That would be like putting an outboard motor on skyscraper.

Introducing microcomputers with spreadsheet and word-processing software to a company originally designed around paper technology amounts to the same thing. If the form of the company doesnt change, the computer, like the outboard, is just a doodad. Faster long division and speedier typing dont move a company into the information age.

But Randy Fields has created something entirely new- a shape if not the shape, of business organizations to come. It gives top management a dimension of personal control over dispersed operations that small companies otherwise find impossible to achieve. It projects a founders vision into parts of a company that have long ago outgrown his or her ability to reach in person.

In the structure that Fields is building, computers dont just speed up old administrative management processes. They alter the process. Management, in the Fields organizational paradigm, becomes less administration and more inspiration. The management hierarchy of the company feels almost flat.

Whats the successful computer-age business going to look like in the not-very-distant future? Something like Randy Fieldss concept- which is, in a word, neat.

What makes it neat, right out of the oven, is where hes doing it. Randy Fields, age 40 is married to Debbi Fields, who turns 31 this month, and together they run Mrs. Fields Cookies, of Part City, Utah (see A Tale of Two Companies, INC., July 1984). They project that by year end, their business will comprise nearly 500 company-owned stores in 37 states selling what Debbi calls a feel-good feeling. That sounds a little hokey. A lot of her cookie talk does. Good enough never is, she likes to remind jthe people around her.

But theres nothing hokey about the 18.5% that Mrs. Fields Inc. earned on cookie sales of $87 million last year, up from $72.6 million a year earlier.

Wont the cookie craze pass? People of ten ask Debbi. I think thats very doubtful... I mean, she says, if(they are) fresh , warm, and wonderful and make you feel good, are you going to stop buying cookies?

Maybe not, but the trick for her and her husband is to see that people keep buying them from Mrs. Fields, not Davids Cookies, Blue Chip Cookies, The Original Great Chocolate Chip Cookie, or the dozens of regional and local competitors. Keeping the cookies consistently fresh, warm, and wonderful at nearly 500 retail cookie stores spread over the United States and five other countries cant be simple or easy. Worse, keeping smiles on the faces of the nearly 4,500 mostly young, store employees not toe mention keeping them productive and honest- is a bigger chore than most companies would dare to take on alone.

Most dont they franchise, which is one way to bring responsibility and accountability down to the store level in a far-flung, multi-store organization. For this, the franchisor trades off revenues and profits that would otherwise be his and a large measure of flexibility. Because its terms are defined by contract, the relationship between franchisor and franchisee is more static than dynamic, difficult to alter as the market and the business change.

Mrs. Fields Cookies, despite its size, has not franchised-persuasive evidence in itself that the Fieldes have built something unusual. Randy Fields believes that no other U.S. food retailer with so many outlets has dared to retain this degree of direct, day-to-day control of its stores. And Mrs. Fields Cookies does it with a headquarters staff of just 115 people. Thats approximately one staffer to every five stores pidding compared with other companies with far fewer stores to manage., When the company bought La Petite Boulangerie from Pepsi Co earlier this year, for instance the soft-drink giant had 53 headquarters staff people to adminster the French bakery/sandwich shop chains 119 stores. Randy needed just four weeks to cut the number of 3 people.

On paper, Mrs. Fields Cookies looks almost conventional. In action, however, because of the way information flows between levels, it feels almost flat.

On paper, between Richard Lui running the Pier 39 Mrs. Fields in San Francisco and Debbi herself in Park City, there are several apparently traditional layers of hierarchy: an area sales manager, a district sales manager, a regional director of operations, a vice-president of operations. In practice, though, Debbi is as handy to Lui and to every other store manager as the telephone and personal computer in the back room of his store.

On a typical morning at Pier 39, Lui unlocks the store, calls up the Day Planner program on his Tandy computer, plugs in todays sales projection (based on year earlier sales adjusted for growth). and answers a couple of questions the program puts to him. What day of the week is it? What type of day: normal day, sale day, school day, holiday, other?

Say, for instance, its Tuesday, a school day. The computer goes back to the Pier 39 stores hour-by-hour, product by product performance on the last three school day. Tuesdays, Based on what you did then, the Day Planner tells him, heres what you I have to do today, hour by hour, product by product, to meet your sales projection. It tells him how many customers hell need each hour and how much hell have to sell them. Him how many batches of cookie dough hell have to mix and when to mix them to meet the demand and to minimize leftovers. He could make these estimates himself if he wanted to take the time. The computer makes them for him.

Each hour, as the day progresses, Lui keeps the computer informed of his progress. Currently he enters the numbers manually, but new cash registers that automatically feed hourly data to the computer, eliminating the manual update, are already in some stores. The computer in turn revises the hourly projections and makes suggestions. The customer count is OK, it might observe, but your average check is down. Are your crew members doing enough suggestive selling? If, on the other hand, the computer indicates that the customer count is down, that may suggest the manager will want to do some sampling chum for customers up and down the pier with a tray of free cookie pieces or try something else, whatever he likes, to lure people into the store. Sometimes, if sales are just slightly down, the machines revised projections will actually exceed the original on the assumption that greater selling effort will more than compensate for the small deficit. On the other hand, the program isnt blind to reality. It recognizes a bad day and diminishes its hourly sales projections and baking estimates accordingly.

Hourly sales goals?

Well, when Debbi was running her store, she set hourly sales goals. Her managers should, too, she thinks. Rather than enforce the practice through dicta, Randy has embedded the notion in the software that each store manager relies on. Do managers find the machines suggestions intrusive? Not Lui, Its a tool for me, he says.

Several times a week, Lui talks with Debbi. Well, he doesnt exactly talk with her, but he hears from her. He makes a daily phone call to Part City to check his computerized Phone Mail messages, and as often as not theres something from Mrs. Fields herself. If shes upset about some problem Lui hears her sounding upset. If its something shes breathlessly exuberant about which is more often the case, he gets earful of that, too. Whether the news good or bad, how much better to hear from the boss herself than to get a memo in the mail nest week.

By the same token, if Lui has something to say to Debbi, he uses the computer. Its night there, handy, He calls up the Form Mail program, types his message, and the next morning its on Debbi desk. She promises an answer, from her or her staff, within 48 hours. On the morning I spend with her, among the dozen or so messages she got was one from the crew at a Berkey Calif. Store making their case for higher wages there and another from the manager of a store in Brookline. Mass, which has been struggling recently Weve finally gotten ourselves squared away, was the gist of the note, so please come visit (Last year Debbi logged around 350,000 commercial air miles visiting stores).

Here are some other things Luis computer can do for him.

Help him schedule crew. He plugs his daily sales projection for two weeks hence into a scheduling program that incorporates as its standards the times Debbi herself takes to perform the mixing, dropping, and baking chores. The program gives him back its best guess of how many people with which skill levels hell need during which hours. A process that done manually consumed almost an hour now takes just a fraction of that time.

Help him interview crew applicants. He calls up his interview program, seats the applicant at the keyboard, and has him or her answer a series of questions. Based on the answers given by past hires, the machine suggests to Lui which candidates will succeed or fail. Its still his choice. And any applicant, before a hire, will still get and audition-something to see how he or she performs in public. Maybe Lui will send the hopeful out on a sampling mission.

Help with personnel administration, Say he hires the applicant. He informs the machine, which generates a personnel folder and a payroll entry in Park City, and a few months later comes back to remind Lui that he hasnt submitted the initial evaluation (also by computer), which is now slightly past due. It administers the written part of the skills test and updates the records with the results. The entire Mrs. Fields personnel manual will soon be on the computer so that 500 store managers wont forget to delete old pages and insert revised ones every time a change is made.

Help with maintenance. A mixer isnt working, so the manager punches up the repair program on the computer. It asks him some questions, such as: is the plug in the wall? If the questions dont prompt a fix, the computer sends a repair request to Park City telling the staff there with machine is broken its maintenance history and which vendor to call. It sends a copy of the work order back to the store. When the work gets done, the store signs off by computer and the vendors bill gets paid.

Thats a lot of technology applied to something as basic as a cookie store, but Randy had two objectives in mind.

He wanted to keep his wife in frequent, personal, two-way contact with hundreds of managers whose stores she couldnt possibility visit often enough. The people who work in the stores, says Debbi, are my customers. Staying in touch with them is the most important thing I can do.

Its no accident, even if Lui ins t consciously aware of why he does what he does, that he runs his store just about the same way that Debbi ran her first one years ago.