Location Intelligence: We Need Smarter People, Not Smarter Locations

September 28, 2011

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Ray Kroc once said, “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent.” McDonald’s Hamburger University graduates about 5,000 people per year.

Benjamin Franklin said, “If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest.”

Training is recognized as essential in many areas of chain store operations. The National Restaurant Association (NRA) conducted its one millionth training class last month. The NRA has been running its ServSafe Food Safety, ServSafe Alcohol, ProStart curriculum, ManageFirst and other programs for the last 25 years.

But what about training in real estate planning and site selection? I’ve been working with the nation’s top retailers, restaurants and service companies for nearly 20 years, and I haven’t seen a lot of formal training. There are a lot of very good people doing some very good things, but most of them figured it out on their own or learned by watching others on the job. Many have obtained college degrees in geography or other technical disciplines, but the nuts and bolts of GIS, database management, statistics and field research have come to them by way of self-study, personal passion and the good fortune of finding a skilled mentor with enough time to spend with them.

The real estate game is getting tougher all the time. Most markets are overbuilt with chain stores and the consumer isn’t going to pull us out of the soft economy this time. The Internet has changed the recipe for the customer experience to include e-commerce, co-branding and social media so that “bricks and mortar” is not the only option for growing sales.

Site evaluation is still based on demographics, site characteristics, retail synergy and competition. However, a “shotgun” approach to building out a store network is no longer acceptable because the cost of mistakes can’t be hidden in a pile of profits from successful development. The pile just isn’t big enough anymore.

The talent is available and the people who can deliver profitable chain stores in the years to come are ready for action. They simply need to learn the new game, be outfitted with the new tools, and be directed by inspired executives who promote teamwork and discipline (sounds like a pitch from the U.S. Marines!).

What exactly is the new game? What are the new tools? What does teamwork and discipline look like going forward? How will everyone gain the required knowledge and learn the new methods of doing things in the form of classroom, e-learning, simulation and on-the-job training?

I have some ideas based on my work with companies who have been successfully adapting to the “more with less” and “omnichannel” trends for years. Better yet, here is some preliminary information from inside reports about the state of training for analysts based on several different types of chain store operators: apparel retailer, casual dining restaurant, shopping center developer, and a quick serve restaurant.


  • The most common method of training new employees is “on the job training.”
  • Most software-specific training is provided by third-party vendors.
  • In one case, there is a well-developed intranet portal with process documentation, historical trends, and other resources that employees can access on-demand for initial training and ongoing learning as new material is posted.
  • As analysts have become more proficient in the use of GIS (geographic information systems) and other tools, companies are hiring people with hard skills and training is focused on the specifics of the business and procedures.
  • There is very little structured training regarding decision making processes or standards for evaluation of sites.
  • Most analysts perform their jobs with a high degree of autonomy in their methods and investment committees use their own criteria for final evaluation of sites (often very informal and deal-specific).

Based on this preliminary assessment, there is a lot of room for improvement in the industry. The “low hanging fruit” that will deliver the greatest value with minimal effort and expense would include:

  1. Creation of a Web-based repository of key documents, report formats and guidelines for market planning and site evaluation for use in training new employees and as a reference for more experienced people. Many companies have an “intranet” in place and also have these documents available (even electronically). Publishing these documents would not be a major effort.
  2. Development and documentation of a decision making process that clearly outlines the players, required documents and flow of information so that the participants understand what is expected and can schedule their time and priorities accordingly.
  3. Establishment of “mentor” relationships between experienced and newer team members to create clear accountability for knowledge transfer and the opportunity for “informal learning” to occur in the normal course of business. This will overcome the problem of mentors feeling that it’s “not in their job description” to spend time sharing their knowledge and experience with less experienced people. Conversely, it will make less experienced people feel more comfortable approaching senior team members without worrying about wasting their time or appearing incompetent.

I think Ray Kroc and Ben Franklin would approve of this effort. We spend a lot of money on talent; it makes sense to get the most out of that investment.


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