In-N-Out Burger's six secrets for out-and-out success

On the heels of mounting cynicism generated by Wall Street bailouts and the perception that corporate leaders are gaming the system to make a profit, at least one American company is proving that businesses can survive and even thrive while sticking to traditional values.

In-N-Out Burger, the iconic West Coast hamburger chain frequented by celebrities, is not slashing jobs or making major cutbacks during this recession. In fact, the regional chain, which has 232 locations in California, Arizona, Nevada and Utah, took in an estimated $420 million in revenues in 2008, and claims per-store sales of about $1.94 million. So how is this mom-and-pop burger joint pumping out per-store sales numbers that are better than Burger King and a host of other competitors?

BusinessWeek writer Stacy Perman has penned a book (In-N-Out Burger: A Behind the Counter Look at the Fast-Food Chain That Breaks All the Rules) that chronicles how In-N-Out Burger founders Esther and Harry Snyder built the foundation for a business that has performed well since it debuted in 1948. Here are the six principles she says have made In-N-Out Berger an out-and-out success:

Keep a Relentless Focus on Quality -- Perman says that the Snyders were "micro-managers" from the beginning, insisting on only using the highest quality beef, produce and other ingredients at their stores.

"Harry would go to the meat purveyors, and stand over the butcher's shoulder to make sure that he got the meat that he paid for," she says, adding, "In the 60s, at a time when the fast food industry had turned to using frozen beef patties and French fries, [Harry] began hiring butchers so that he could maintain the quality of his beef. His own butchers would prepare the beef patties, and that continues to this day, but on a much larger scale."

Listen to Your Customers -- One of the company's mottos is "Our customer is everything." Applying that belief led to the company policy of preparing burgers just the way customers asked for them. Some of the customer favorites became popular and were eventually adopted as the restaurant chain's "secret menu." By listening to their customers, In-N-Out created menu choices other stores couldn't duplicate.

"So now you have three or four generations of people who grew up on In-and-Out Burger who have this very special relation ship to the chain," says Perman. "It's very authentic -- you can't buy that. It's very organic and they've been very careful never to commercialize that."

Treat Employees Well -- The Snyders always held their employees in high esteem, paying them higher wages than competitors and calling them associates to make them feel more connected to the franchise.

"They believed in sharing their success with their employees," says Perman, noting that In-N-Out associates make $10 an hour working part-time and starting store managers make $100,000, plus bonuses tied to store performance. The company benefits package is also generous. Such treatment engenders loyalty from workers.

"They have the lowest turnover rate in the fast food industry, which is notorious for turnover," says Perman. "They say that the average manager's tenure is 14 years, but they have managers who have been there 30 or 40 years."

Keep Things Simple and Consistent -- Another of Harry Snyder's mottos was, "Keep it real simple, do one thing and do it the best you can." That theme runs throughout the business.

"People get cynical about changes at different companies, but they always know that In-N-Out doesn't change," says Perman. "In and out stands for something and they've stuck to it and their customers really see that."

Expand Slowly and Only Under the Right Conditions – In-N-Out has strict guidelines that limit the growth of stores, but ensure each store's success.

"They don't open a store outside of a 500-mile radius of the commissaries where they get their fresh beef patties, their buns and other products because they want to maintain freshness," says Perman. "They make deliveries daily or near daily."

She also points out that, "They never open a new store unless they have management strength in place. They have very rigorous training procedures."

Define Your Own Level of Success – In corporate America, where success is sometimes defined as rapid growth at any cost, In-N-Out has, as the title suggests, made its own rules.

"If the customers and the employees were happy and they were making the best product they could, they were successful," she says, "and they have maintained that philosophy."

Source: Dailyfinance.com

Adding Value in Modern Business

Adding value in Modern Business is not necessary means adding high cost in our side. In fact, many companies has implemented low budget-high impact strategy. Let's say Shell Petroleum, their price are relatively higher than Pertamina. But they proved themselves as a tough competitor of Pertamina which statisticly has more experience and strong brand image in Indonesia.

When you fill up your fuel in Shell, you can ask them to clean up your mirror. It's simple thing, but it added an important value through it. Many customers are choosing their gas station because of this simple stuff. In this case, gas is the main product and in my opinion, its product value are exactly the same (or maybe a little better?)between Pertamina and Shell.

Another example, Wal-Green, one of the best convenient store in US that has more than 3000 stores around North America. Most of their stuff are relatively higher in price compared by its competitor. But they keep growing and growing in market share, profit, and amount of new stores opened every year. While I was work there few years back, I realized that one of their strength is company culture (besides its strategic location). In Walgreen, employees HAVE TO treat customers as best as they can! They need to greet each customers, offer an assistance, pick up the phone at third ring at most, and so on.

It's all a simple stuff that doesn't cost a penny! But it has a positive impact, it can build relationship between shoppers and employees, and indeed it strengthen their loyalty to the store. In general, Wal-Green store are small to medium sizes, which means it's much easier for them to show hospitality to their customers rather than big stores such as Wal-Mart. This way, they can both reap a good margin and win customer loyalty.

Business Essential Element: IQ, EQ, and SQ

To be succeed in business, IQ and EQ are definitely an essential element. IQ contained knowledge, problem-solving skill, and technical skill whereas EQ talked about emotion, self-control, mentality, and character. Generally speaking, IQ is much easier to be seen by others rather than EQ. However, high quality people with great IQ are not necessary to be succeed or maximized their potential in business area. Business is about making a good relation with others.

EQ can be seen mostly in difficult situation, that's why people with higher EQ have a higher chances to be success. EQ are talking about how a person can understand himself and others. He is able to understand and manage his own emotion so that he can manage and motivate others.

In his book, New Wave Marketing, Hermawan Kartajaya explained that the most essential element to be succeed is SQ (Spiritual Quality). It's not only talking about religion; it's talking about values of life. SQ is talking about deep meaning of life, purpose of life, and highest motivation of human being.

As a highest creation, human have an ability to change his situation, add value to his community, and everlasting creativity to make this world a better living. When IQ is talking about "What I think" and EQ is talking about "What I feel", SQ is talking about "What I am." In this unpredictable situation, only those with great SQ are able to survive and conquer his field!