The Great 2018 Chicken Shortage
Blog Post › A Culture that Fuels Our Strategy
So, what happens when a fried chicken fast-food chain runs out of chicken? Well, it shuts down…
The seemingly paradoxical scenario has left over 600 branches of KFC all over the UK closed: its main ingredient, chicken, had not made it from the depot to the individual franchises.
In a well-known pattern, angry customers took it to social media to assess, discuss and deliberate on the situation with KFC’s response not long behind. So what happened and how did KFC react? There are some precious business lessons to be learned from this incident.
Recently, KFC switched from long-term supplier Bidvest to DHL to deliver its chicken throughout the UK. The move was justified by DHL’s focus on innovation, technology, and economies of scale. DHL, part of the Deutsche Post Group, uses a single distribution centre as opposed to Bidvest three-centre model. In addition, KFC does not rely on frozen chicken, but on fresh products; the conditions and regulations for the transportation of fresh poultry are much stricter than frozen to prevent the spreading of food-borne diseases. The complexity of the delivery coupled with the new partner left KFC branches chicken-less. Different from many other parts of the business such as marketing with the colorful logos and catchy slogans, supply chain is something that is transparent to consumers until it does not work. Hiccups in the supply chain rarely reach the scale and impact of the KFC chicken shortage: they are usually identified and solved before they happen. What this incident shows is that partners and the supply chain are vital for the health of the business. Creating powerful relationships with the partners that make sure your customers get what they came to you for is an integral part of your business model, as much as putting the Colonel on the bucket to show it is KFC.
There are numerous ways to act or react to a business mistake. The hyper-connected era we live in now made it impossible to hide it, hoping it will be forgotten simply doesn’t work.; it will be forgotten but in a couple of weeks. Another option is “playing the blame game” and discarding accountability. “It wasn’t our fault,” “We have nothing to do with it,” etc. are routinely repeated by companies faced with trouble.
The least damaging way to handle hiccups or breakdowns is through accountability and responsibility. After all, owning up to one’s actions and inactions is one of the traits of great leaders. Breakdowns are part of businesses, and the bigger game you play the higher chance they will happen. When they do, own up to them, explain the facts of the matter, and apologize profusely and sincerely. Customers will respect you more–you may even increase loyalty–than if you deny responsibility and hide.
KFC seems to be taking the accountability route. It published a Twitter Q&A in which they explain the facts without blaming the distribution partner DHL. It is facing and going in on the jokes and along with the typical British humour taking responsibility for what happened, guaranteeing that it will pay salary during the closed hours and promises it will never happen again. Finally, it bought a full-page ad in the Sun and Metro, two UK dailies, with a “We’re Sorry” caption and an empty bowl of chicken with an anagram of KFC reading FCK, a sign they have realized the mistakes they have made. And consumers are taking notice.
— Phillip Schofield (@Schofe) February 23, 2018