Improving Multi Unit Operations An Intro

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IMPROVING PERFORMANCE IN MULTI-UNIT OPERATIONS:

An Introduction to Lawrence Appell & Associates

LAWRENCE APPELLPRESIDENT

LAWRENCE APPELL & ASSOCIATES

Lawrence Appell & Associates

About Us Lawrence Appell & Associates is a performance improvement consultancy for

multi-unit, direct-to-consumer service businesses. The firm’s capability is the result of 35 years of experience in franchised and

company-owned multi-unit operations across a range of industries for companies as large as $110MM and as small as $1MM.

Clients of the firm can expect clear guidance to: Increase revenues Increase volume Increase revenues per location Reduce expenses as % of revenue Increase variable margin Increase contribution margin per location Increase employee retention and satisfaction

Lawrence Appell & Associates2

Target Audience


Organizations, or regions/divisions of larger organizations, with five

to 500 geographically dispersed units performing the same service

for an identified consumer audience

Annual revenues >$2 million

>50 Employees

An identified or perceived need to reverse negative trends or an

opportunity to grow through new unit count or by increasing

volume/profits per unit

Open-Minded leadership team

Services Provided


Outsourced Chief Strategy Officer

Appell Operating System (AOS) Implementation

Operational Studies

One-Off Projects

About Lawrence Appell Lawrence Appell is a domestic and international consultant to multi-unit, direct-to-consumer service

businesses. He provides operational guidance for turnarounds, growth businesses, and start‑ups in the for-profit education/training, health, well-being and fitness and restaurant industries. Mr. Appell is often referred to as the CEO’s Trusted Strategy Advisor due to his unique combination of skills and experience. Among his areas of expertise are operations management, business planning and analysis, new service development, team leadership, performance management, process and productivity improvement, and budgeting and forecasting. In his management career he led large geographically dispersed company-owned and franchised operations to grow revenue, profit and customer satisfaction.

Mr. Appell is the founder and President of Lawrence Appell & Associates (LAA); a consultancy that provides business improvement solutions to operational challenges for multi-unit, small to mid-sized businesses (>$2MM in revenues) around the globe. Outside the U.S. he has worked extensively throughout Europe and Asia.

Prior to founding LAA, Mr. Appell held senior management positions for major franchised and non-franchised brands such as Weight Watchers, Pritikin, Sylvan Learning Centers, La Petite Academy and Mathnasium.

Over the course of his management career Mr. Appell created and served as President of Westlake Management Co, LLC, a boutique investment firm which owned and operated both franchised and self-owned businesses. Holdings included Jamba Juice (two locations in Los Angeles), Mydashi Japanese restaurants (three locations in the San Francisco bay area), Pangea Wraps (Los Angeles) and Nic’s (a fine dining restaurant in Beverly Hills).

Mr. Appell serves on the board of directors for InterSchola, LLC. (www.interschola.com). InterSchola manages on-line auctions for school districts in the U.S. who wish to retire surplus assets at the end of their financial life cycle. InterSchola returns a portion of each auction to the school district’s general fund.

Mr. Appell has a B.A in Psychology from the City University of New York and a M.S. in Counselor Education from St. John’s University (NY). He resides in Scottsdale, Arizona and can be reached at 818.219.4993.


Sample Career Achievements

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For a For-Profit Education Company:

•Developed and implemented a strategic plan to reverse a three year revenue decline. Reduced the

number of declining properties from 65% of portfolio to 40% in nine months. Increased EBITDA 65%.

•Completed a customer segmentation analysis leading to new program, promotional and pricing. Increased

revenue per customer by 3-4% per year. Increased variable profit per classroom 15%.

•Increased sales conversion rates from prospects to tours to 41% from 35% in two years and increased

overall conversion rates from prospects to enrollments by 35%.

For a Start-Up Health Club Concept:

•Negotiated leases at below market rates for 12,000 square foot facilities, designed space plans, managed

construction and purchased equipment while maintaining the business plan budget and timetable.

Designed work processes, recruited and trained professional and administrative staff.

For a Major Weight Loss Company:

•Developed and implemented a long‑range strategic plan to improve company operations. Revenue

increased from $55 to $100MM; Operating Income increased from $16 to $23MM.

•Established and implemented a strategy to manage growth via leased and sub‑leased locations. Total

number of locations grew by 350 in four years from 1,100 to 1,400 (450,000 square feet leased). Increased

average revenue per location by 62%.


Sample Client Descriptions

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Serve as Chief Strategy Officer and provide project services for a chain of

dental offices seeking to expand throughout the Southwest.

Serve as Chief Strategy Officer services for an on-line auction seller of surplus

merchandise for school districts that has returned $10MM in funds.

Serve as Chief Strategy Officer for a trade newspaper seeking to expand

beyond the southeast via franchising

Serve as Chief Strategy Officer for a chain of pre-schools in Chennai, India

seeking to expand throughout India via franchising.

Serve as Chief Strategy Officer for a multi-unit franchisee of a national for-

profit education tutoring service.


Our Process (How We See and Think About Organizations)


Strategic Foundations Operational Imperatives

Desired Outcomes+ =

Examples of the Process in Use


Sample Strategic Foundations Statements


VISION STATEMENTUsing the best information available at any point in time and good judgment borne of personal maturity and professional experience; we, the management and associates of the Division, will make decisions every day regarding the early childhood education and childcare needs of our enrolled families and operate our schools at levels of operational excellence that create customer defined levels of satisfaction and perceived value for money while achieving ever increasing levels of utilization; market penetration and profit.

VALUES STATEMENT1- The customer comes first in everything we do

2- We all stand in line to serve the customer, if you’re not serving the paying customer you are serving a colleague (aka internal customer) who does.

3- We are motivated by a desire to improve the customers quality of life

4- We are honest

5- We work hard

6- We learn from our collective experience and use that experience to continuously improve the delivery of our service at higher margins.

7- We have fun

8- We are goal oriented

9- We do what we say we are going to do (results count)

10- We communicate and coordinate within the division and beyond

STRATEGY1.Develop the best team2.Take back the neighborhood3.WOW our customers4.Find a better way

MISSIONTo be recognized as the leading provider of pre-school services in the United States by 2014

The Customer Imperative


• Understanding Consumer Needs and Wants

• Quality/Profitability Tradeoffs

• The Service Environment

• Designing Customer Interface Points

• Service Provider Standards

• Service Provider Training

• Customer Perception of Value

• Customer Willingness to Recommend to Others

• Unit Economics

Sample Customer Satisfaction Survey Questions


The People Imperative


• Job Descriptions

• The Organization Chart today and as it will look in the future

• Managing the dilemma to have the right people in the right place with the right skills at the right time

• Designing an organization specific reward and compensation program

The Process Imperative


• How we do what we do in such a way that we can say this is the XYZ Company Way

• Recognizing that everyone serves a customer- either internal or external

Sample Process Map


PC reviews file for tutor, sched prefs

PC consults tutor list to select tutor

for the subject who is a good fit

More than one tutor on pgm?

Yes

PC makes effort to balance the tutors

with each other

Tutor reponse?

DeclinesNone w/in a

few days

PC follows up with tutor

Tutor reponse?

None

PC offers to another tutor, may need to rush farm

Subject status auto-changes to

“Tutor Intro”

By the intiate farm date, PC offers the subject to the tutor through IvyNet,

emails tutor

Tutor accepts

TUTOR FARMING PROCESS

The Data Imperative

The Balanced Scorecard- A Data Management System for the 21st Century To Drive Decision Making

The Customer Leg or Perspective

The Financial Leg or Perspective

The Internal Business Process Leg or Perspective

The Knowledge, Education and Growth Leg or

PerspectiveLawrence Appell & Associates16

Sample Section of a Balanced Scorecard Across Multiple Units


Indexing Metrics Across Units to Identify Areas of Improvement Opportunity


Outlier Identification


Sample Local Unit Improvement Initiatives


Goal Action Plan

1Decrease parent complaints down to 50% by the

end of FY-07

Work together w/ management team and communicate to parents changes and policies, and enforce them . Parent events monthly.

Communication to parents through news letters and flyers, parent conferences, AD/ Asst to be available during drop off

2 Increase Audit scores by 2nd Qtr FY-07

Audit training to take place for all management team, along with third party training. Financial binders to be 100% weekly.

Management to meet weekly to go over reports and discuss plans and goals. Deposits to be done daily

3Decrease hrs/ FTE by .30/FTE by the end of FY-

07

All O/T to be approved by DM. All flash counts taken daily, attendance printed 4x a day and trued up in Admin. Class

combined when possible. LMT used weekly. Cap off cluster of classrooms to whole number.Staff agencies only to be used with

prior DM approval

4Decrease staff turnover from 64% to 48%, by the

end of FY-07

Make sure trainer is training all new staff w/ new 3 day preservice program. Staff appreciation and coaching. Use weekly

communication logs. Monthly staff training and meetings. Staff surveys 2x a yr.

5Increase conversion rate of tours to enrolled from

20.6% to 45% by the end of FY-07

Go over sales training w/ entire management team monthly, have weekly meetings, phone shop e/o. Use take back the neighbor

hood binder, and build report w/ caller

Services Provided: Chief Strategy Officer (CSO)


A CSO's role is to continuously examine the company as a whole and to provide guidance to the CEO on critical business questions like: Should we be developing a new service or improving an existing service? When should we move into a new market? What companies should we consider acquiring? What is the best location for our service? What are our competitors doing? Why is one region performing better than another? What is the proper role of technology in our business? Should we franchise?

The CSO must deeply understand what makes the company successful and how it will continue to be successful in the future. Then they must translate that knowledge into the ability to judge specific activities the company is undertaking, and ensure all of those activities are helping the company be successful. The key factor and the major value-add of the CSO is the ability to help the CEO ensure that decisions are in alignment with company strategy.

CSOs must be experts at working with people, because they will need to build alliances in order to get all the information they need, yet they must also ask hard questions and require that people make changes that help the company. He or she must be able to sort through and analyze a great deal of detailed information in light of a big-picture view of the business.

Outsourced Chief Strategy Officer (CSO)


The outsourced CSO is the CEO’s trusted strategy advisor and is “on-call” for the CEO.

Like the company’s attorney or accountant the outsourced CSO is knowledgeable about the company and can assist the CEO as needed.

Unlike the company attorney or accountant the CSO is not billing by the hour but is retained.

The outsourced CSO must become familiar with existing business plans and updated regularly on key performance reports including P&L’s and scorecards.

The outsourced CSO and the CEO have a set time to formally meet each month.

Meetings take place in person, on the phone or on Skype.

Services Provided: The Appell Operating System™


The Appell Operating System is a management process that engages the

leader/owner of the enterprise and his/her senior management team to achieve

a high level of functioning such that the enterprise is best aligned with and

serves the needs of the customer.

AOS is a multi-month process that requires a level of commitment

The outcomes of the AOS process are a high-functioning senior management

team that is capable of achieving target levels of revenue, profit, employee and

customer satisfaction.

The AOS Implementation Process


The Role of the AOS Consultant


Other Services Offered


Operational Studies

From franchise feasibility studies to organizational diagnosis studies

One-Off Projects

Shorter term, well-defined projects

Contact Information


Office: 480.659.5143

Cell: 818.219.4993

E-mail: [email protected]

Documents

Improving Multi Unit Operations An Intro