What is replacing the restaurant chains?

The Bob Pritchard Column 

Casual dining restaurants such as TGI Fridays, Ruby Tuesday, Olive Garden, Outback Steak House and Applebee's are facing sales slumps and restaurant closures, as casual-dining chains have struggled to attract customers and increase sales.

 

The sit-down restaurants' struggles can be blamed on millennials who are more attracted than Generation X, Baby Boomers and the Silent Generation to cooking at home, ordering delivery from restaurants, and eating quickly in fast-casual or quick-serve restaurants.  There are now many, many options that people are using to replace chains.

 

Many of these options involve cooking at home. Grocery chains are increasingly competing with restaurants, thanks to lower prices, pre prepared meals, free pick-up and delivery and new technology.   Meal-delivery kits like Blue Apron are taking the market by storm.  They are focused on getting millennials on subscription plans to persuade them to stay in and cook a certain number of days a week.

 

Convenience is also a factor, both when it comes to delivery and speed of service. Casual-dining chains are still playing catch-up regarding delivery yet the only part of casual dining that's growing right now is the off-premise side.

 

Cheesecake Factory is expanding delivery to half of its 194 US locations through DoorDash, a third-party service. TGI Fridays, Chili's, and Maggiano's Little Italy are all now on Grubhub, and Buffalo Wild Wings and Red Robin are testing the service. Outback Steakhouse is using third-party services while it builds one of its own.

 

While delivery is a very compelling option, it isn't a simple service for restaurants to add. Customers generally spend less when ordering delivery than they would when eating at casual-dining chains, most of which rely on alcohol orders to drive sales. In-house delivery means added complexities, paying drivers, and additional insurance costs. Using a third party could mean losing control over the food's quality.

 

More convenient chains have also attracted millennial customers away from casual-dining options. The growth of fast-casual chains such as Chipotle and Panera have made a significant impact. These chains offer lower prices to millennial customers, who are less enthused about spending more money just for the experience of sitting in a booth at a casual-dining joint.

 

The fast-casual industry grew by 550% from 1999 to 2014. By 2020, the fast-casual market in the US is expected to reach $66.9 billion. They have more of a healthy perception and quicker service times.   The bottom line is that casual-dining brands just aren't cool anymore. 

 

The alternatives are creating buzz and excitement.

 

The Automation of the fast food industry

The Bob Pritchard Column 

A secretive robotics startup has raised a new round of venture funding as part of its quest to replace humans with robots in the kitchens of fast-food restaurants. Momentum Machines secured  $18 million in funding to develop its robot that can make 400 made-to-order hamburgers in an hour. It's fully autonomous, meaning the machine can slice toppings, grill a patty, and assemble and bag a burger without any help from humans. A personalizable variety of fresh produce, seasonings, and sauces will be available for each burger.

The company bills itself as the next Industrial Revolution, is on a mission to replace human labor. The founder Alexandros Vardakostas says  “Our device isn’t meant to make employees more efficient it’s meant to completely obliterate them.”

 

The company has been working on its first retail location since June of last year although there is still no scheduled opening date for the flagship in San Francisco's South of Market neighborhood.

 

In 2015, futuristic food-chain Eatsa opened in downtown San Francisco. The vegetarian restaurant, which specializes in quinoa bowls, automates the ordering and pick-up process. It's since expanded to New York and Washington, DC.  In San Francisco, robots also run food deliveries for Yelp's Eat24 and pour coffee at Cafe X.   Zume Pizza enlists a team of 3 robots named Pepe, Marta, and Bruno to make pizzas without any humans.  Big fast food chains such as McDonald’s have been using self service kiosks for 2 years, and as Carl’s Jr. CEO Andy Puzder says "Robots are always polite, they always upsell, they never take a vacation." 

 

These changes, along with other evidence that AI could displace huge swaths of workers, have prompted the consideration of a "robot tax" to help offset the economic devastation a robotic workforce might bring.

 

It is estimated that robots put the low-wage food service industry which is one of the US’s biggest job sources, and its 513.000 fast food cooks in jeopardy.

 

But will the burgers taste as good … most likely.  Will they be cheaper … unlikely.

PIONEERS OF INNOVATION AND CREATIVITY

Have just been invited to be part of this conversation in Silicon Valley? 

Who would like to be a fly on the wall? 

Sunrise invites you to step inside the cutting-edge world of A.I.—tomorrow—Tuesday, June 13th, 2017, from 1:00pm to 8:30pm at the Quadrus Conference Center in Menlo Park.

Join the most innovative A.I. companies and smartest A.I. venture investors on the planet at the Silicon Valley AI Summit 2017 for an intimate gathering of networking and deal-making. See below for the complete list of speakers.

I will be personally doing a fireside chat with one of the Valley's bright new VCs, Nicholas Davidov, Cofounder of Cherry Labs and Gagarin Capital—whose portfolio company, MSQRD, was just acquired by Facebook, and his other company, a photo-editing app called Prisma is one of the hottest new apps on the market.

There is no other high-powered, insider event in Silicon Valley that brings together the top private companies, thought leaders and venture capitalists focused on the forefront of artificial intelligence.

PARTICIPANTS

Matthew Zeiler, Founder & CEO, Clarifai

Aaref Hilaly, Partner, Sequoia Capital

Nicholas Davidov, Cofounder of Cherry Labs and Gagarin Capital

Tony Perkins, founder and editor, Alchemist

Andy Byrne, CEO, Clari

Peter Lee, CEO, RapidMiner

Upal Basu, Managing Director, Nokia Growth Partners

Dr. Qirong Ho, Co-Founder, Petuum

Adam Taisch, Co-Founder, Sight Machine

Michal Wroczynski, CEO & Co-Founder, Fido A.I

Ben Narasin, Partner, Canvas Ventures

Dr. Eitan Sharon, Founder & CEO, mode.ai

Lauren Kolodny, Principal, Aspect Ventures

Kanav Hasija, Co-Founder, InnovAccer

Ajay Sudan, Partner, Lightspeed

Dennis Mortensen, Founder & CEO, x.ai

Rama Sekhar, Partner, Norwest Venture Partners

Vidur Apparao, CTO, Agari

Michael Ludden, Director of Product, IBM Watson Developer Labs & AR/VR Labs

Nikhil R. Jain, CEO & Co-Founder, ObEN

Oussama Khatib, Director, Artificial Intelligence Lab, Stanford University

Ravi Viswanathan, General Partner, NEA

Gaurav Tewari, Managing Director, Citi Ventures

Dharmesh Thakker, General Partner, Battery Ventures

WHEN

Tuesday June 13, 2017

1:00PM to 8:00PM

WHERE

Quadrus Conference Center

2400 Sand Hill Road

Menlo Park, CA 94025

Are accountants at risk of becoming redundant?

 

When the Centre for the Economic Development of Australia (CEDA) wrote a report titled Australia’s Future Workforce?, it was pointing that chilling question mark at you.

IBM has a computer, Watson, that can diagnose your medical condition. It’s already read two million pages of medical textbooks and 25,000 training cases. Associated Press has robots writing sports reports and finance updates. You might have read one in your newspaper without knowing. It’s not just guys on the production line who are losing their jobs to robots and algorithms.

 It’s you.

“By the 2030s there is a high probability that occupations such as accountants, estate agents and even economists will not exist or will be significantly depleted,” says CEDA’s report.

How high? When it comes to accountants, 94 per cent, according to Australia’s Future Workforce?. Distance to 2030? 13 years. How old are your children?

A couple of dozen lines of computer code couldn’t do my job, you want to think. But how many clients you would have if the ATO weren’t doing your marketing for you? Today, businesses need accountants because tax is complicated and, let’s be honest, a little frightening. We’ve liked it that way. But as the ATO gets better at milking raw data from employers, banks and government agencies and churning it into tax data, the need for small businesses to lodge BAS or a tax return is vaporising. When your compliance work goes, what will be left?

Lots.

Compliance will lose all its value, but accountants can still sell considerable value. They can help their clients run their businesses, especially startups—newborn businesses that need wise hands to guide them as they take their first breaths. But there’s a catch. 

The business advice needs to come from people who know how to run a business, not just count its profits and losses.

 It’s not going to be easy money. And it’s going to require some recalibration of the accountant mindset. It’s beyond putting numbers in boxes, and it’s about counselling educated risk (you provide the educated part). The conservative accountant is a generalisation, but there’s a reason accountancy practices haven’t set the BRW Fast 100 on fire.

To take your place as trusted advisor to tomorrow’s businesses, there are three things every accountant needs to do this year:

Accept that change is needed. If you’ve snorted at the suggestion that the computers are coming for your job, you need to think deeper than the fear. Even if you don’t think a computer could ever do your job, it couldn’t hurt to get better at adding value as well as guiding compliance, could it? One suggestion might be to stop emailing your clients to alert them to every change in the law. They want context and advice, not a legal education. Don’t show them the law, show them the money.

Upskill. A horrible word, but call it what you want. You need to be equipped to give business advice, which means eating your own dog food. Take the IPA’s excellent business courses. Apply the lessons to your own business. Look at what you need to change, change it and show others how to do the same.

Look for 2017 on the label. It’s laughable to think that it’s okay in 2017 to be managing clients with the same tools you were using 10 years ago. If you’re still doing something in 2017 that you were doing in 2000, you need to have a hard look at it. Is that a Nokia in your pocket? No, so why are you still managing your clients with Outlook? In just the last couple of months of 2016, we picked up $200,000 in work from clients who came to use because their accountants weren’t replying to emails. That’s why my team responds quickly. And I know they do because we have software that measures response times. You can use technology to help you run a better business, or you can wait till technology replaces your business.

Your new clients are out there waiting for you. They’re waiting for a business advisor who can talk to them in plain, simple English. They’re not looking for someone to talk to them in the language of balance sheets. They’ve had that, and now they can have it in the cloud. They’re looking for someone who can say, “Hey, if you cut down the time your customers take to pay by just five days, you’d put another $20,000 a month in your bank account.”

The practices that thrive in the next five years will be the ones who can give context and advice that clients see moving the bottom line. Let the computers put the numbers in the boxes. Your job is much more exciting.

Written by

Simon AllsopSmall Business Accounting Specialist.

Interesting stats

Thanks to Acuity

 

We cannot write about the Future of Work

 The vocabulary to describe the beyond the future of work does not exist yet. 

Abstract words we are currently using in attempt to imagine this foreign landscape include  “unprecedented”, “technological transformation” and “adaptability”.  

Employees have to unlearn their native language surrounding what it means to have their own job, profession and career. They need to relearn how to be resilient, adaptable and open to change.

 

In the past, the predictable timeline began with education, transitioned smoothly to career, concluding in retirement. 

Today, instead of learning to work, we have to work to learn. How else can the average professional worker of this generation experience 17 different jobs across 5 different industries or survive multiple paradigm shifts?

 

Instead of associating our identity with our job, our company, our education, we begin to think of ourselves in a whole new way. 

To conceptualize a job as the skills it requires, rather then the title at hand, is the mindset in which to strive. Employees are empowered to view themselves as a partner as they realize the profound value in a portable skillset and an ability to learn from the tools as well as with them.

 

While the human species is getting smarter and more efficient, the individual has the same cognitive capacity and bandwidth. The individual will need to shift toward utilizing the emotional and imaginative faculty of critical thinking and problem solving as machines replace every possible aspect of manual tasks. To access our cognitive bandwidth is to employ automated technology that will replace non-creative tasks. There is a misconception that high level jobs are safe from automation and low level jobs are at risk.

 

As degrees don’t guarantee jobs, we enter a renaissance period of learning, which values learning agility and mindset as what is needed are highly skilled people who can solve ambiguous and complex problems with creativity and collaboration. 

Spongelike learning and wisdom and knowing have now converged   

  

The domain of the elite is making ones passion productive, which can be done by being open to every industry, as we carve the line between ‘what is human work’ and ‘what is machine work’.  Human work will involve innovative entrepreneurial problem solving. Soft skills. The ability to help others. 

 

Platforms are more valuable then products as they aim first to create value then deliver supply to a market. Thus, to move out of scalable production to scalable learning is a step toward employee empowerment. Employees  will be viewed as partners with the freedom to explore the entire spectrum of industries.

 

Concepts Gleaned 

1. Reinventing the notion of a firm – alternate value creation not product division. Create value rather then deliver products and services to a market. Supply chains.
2. Moving out of scalable production to scalable learning 

 

 

 

TED TALKS to watch 

·      the unbicycle - how to unlearn 

·      the importance of why - Simon senior 

·      utopia for realists

·      cognitive bandwidth – creatively contribute (school model to create value)

·      work to learn. 

 ​

Beyond the Future of Work is Learning #FOW

 

Three trends are conspiring to make 2017 a year of higher job insecurity and higher odds of individual economic ruin. First, jobs everywhere now require more analytical, social, and emotional skills than ever before. In the 1930s, "shovel ready" jobs were literally that: give a person a shovel and put them to work. Today, even jobs that don't require college educations require a much higher level of skill. Roads aren't built by a crew of shovelers; they require skilled equipment operators. 

Second, the gig economy is a brittle one. While some prefer the flexibility, for too many it's a way to pile on even more hours in a struggle to make ends meet. That exacts a physical and psychological toll. And it often comes without health care, vacation, and other benefits, which buffer individuals from the random bad stuff that happens in life. 

Third, the rise of artificial intelligence will reduce the need for people in many roles, ranging from driving services to customer support to finance. That's the baseline. That's already underway.

But there's a scenario where it gets much worse. The US educational system isn't geared to address the analytical, social, and emotional skill gap. It’s a system that was designed for a different age: a time when memorizing facts was the right preparation for jobs that were often highly structured and repetitive, at companies that faced far less competitive pressure and both chose to and could more easily afford to offer lifetime employment, pensions, and even a holiday turkey for every family.

The gig economy could also get worse. As it grows, average worker income will drop because not only will an increasing supply of more gig workers (who often come to gig work for lack of alternatives) drive down the average labor rate, but the companies coordinating the work will seek to extract more profit.

And artificial intelligence will be here faster than anyone expects. 10 years ago there was no iPhone, let alone self-driving cars, let alone an Alexa device that lets you do all your shopping from home by talking to it. It's an odd moment to realize that 70 years of science fiction -- Star Trek's communicators, Knight Rider's autonomous car, and Asimov's all-knowing, voice-operated Multivac -- happened in the last decade. It's hard to imagine how much further technology will go in the next 10 years.

Put all this together, and we'll see a growing gap between workers' skills and employers' needs, an increase in job and wage insecurity, and a potentially rapid elimination of even the service jobs (driver, restaurant server, broker, etc.) that we thought were safe. And it will come far faster than we expect.

All this leaves one feeling like Woody Allen, when he said, 

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." 

But there might be a third way. A difficult, nose-to-the-grindstone, un-sexy, non-heroic path. It will require three enormous, ponderous communities to work together. The educational system needs to become more focused on analytical, social, and emotional skills. I don't mean spending 100% of teaching time on these areas. But hypothetically, even going from 8% of time spent on these areas to 10% would be a 25% increase. And if resume writing and interviewing practice became standard, that wouldn't hurt either. 

Employers too need to invest in this kind of training. The workforce doesn't today have all the right skills in all the right places. That's why unemployment hovers around 5% but millions of people are facing stagnant or declining wages. 

Employers also need to hire differently, and get better at assessing potential, instead of writing someone off because they don't have the right experience. 

Finally, the government needs to encourage this. It should provide incentives for employers to take bets on people and make longer-term investments, and support and reward non-profit educational institutions that experiment with and implement new curricula. 

That's the path out. And there's no glory in it. Just a steady, relentless, vital, necessary slog. But otherwise the future is going to increasingly be one of workers who won and workers who lost. Today we're at Woody Allen's crossroads. Unless ... 

=============================

"Warning to All" image copyright Isaac Asimov (1956) from his short story "The Last Question"

Written by

Laszlo BockCEO and co-founder of Humu. Former SVP of People Operations at Google. Author of "Work Rules!". Advisor. Dad.