Established 19 years ago, Wowprime has created 11 brands in its catering empire. The latest, 12 Sabu, a hotpot outlet, was designed to provide inexpensive (less than NT$200) meals, and is currently running 20 outlets across Taiwan.
The 12 Sabu chain represents the most radical innovation for Wowprime in recent years, because they dared abandon previously established core competitive pricing at NT$800–1000 per meal.
In a 12 Sabu outlet, the only choice is hotpot, served at a counter with customers sitting on bar chairs. With its open kitchen design, diners can enjoy their meal while being able to watch the chefs at work. The soft green decor also helps people relax.
“Because Wowprime prices generally range from medium to high, the company required a ‘new brain’ approach to create a chain of inexpensive restaurants,” says Stanley Tsao, founder and president of 12 Sabu. The ‘new brain’ meant that Wowprime had to abandon old ways of thinking and operating, including the way they looked after their customers, the ingredients for the meals, and administration methods.
Tsao says that 12 Sabu promotes its restaurants as customers’ second kitchen, an approach designed to appeal to people who don’t cook at home, rather than trying to attract larger groups of friends or colleagues as other restaurants often tend to do.
The new brain
The first thing that a new approach requires is an abandonment of conventional ways of thinking, such as providing as much service as possible. When 12 Sabu first opened, Tsao often visited the outlet to observe the situation on the spot in order to fine-tune its operation. Originally, for example, customers could choose either Chinese or regular cabbage, but Tsao found the process too complicated, so he simplified it to only one type of cabbage. He also changed the way food is served. Originally customers were served with four small hotpots, but this tended to attract groups of colleagues or friends who ended up spending a lot of time at their meal. So he used bigger hotpots to attract more families, improving the table turnover rate.
Unlike other Wowprime brand restaurants that are often equipped with a complex of three computers for orders, cashier, and staff attendance, 12 Sabu integrates the three functions into one computer in order to reduce costs, and every staff member is trained to operate the computer. Savings can be reinvested in higher-quality ingredients.
Hotpots use more vegetables than any other single ingredient, and with modern preservation techniques the company is planning to set up a preparation center that cuts all the vegetables to set volumes and quality. The prepared vegetables will then be delivered to the outlets, reducing food waste.
After two years in operation, the model has been honed into an efficient business. There are plans for expansion to at least 100 outlets by 2015, and also a scheme to move into mainland China, making 12 Sabu Wowprime’s biggest and widest-ranging brand.
Extraordinary living
With the chairman’s announcement that Wowprime was going to develop a new low-priced brand, staff were keen to break away from the old framework, practicing the company’s culture of thinking outside the box—the new brain.
“Living extraordinarily leads to extraordinary ideas,” Day says. Creativity comes from the culture of the company. Wowprime’s “300 credit” code is well known. Visiting 100 countries, tasting the food of 100 restaurants, and hiking 100 mountains over 3000 meters, are compulsory credits that outlet managers, master chefs, district managers and above have to complete during their lifetime, as well as gaining three “iron man” accreditations: hiking Yushan (Mt. Jade), swimming across Sun Moon Lake, and cycling across the island. In recent years, Wowprime has also launched annual expeditions to the base camp of Mt. Everest.
Are these activities—seemingly unrelated to business performance and professional training—really associated with innovation?
“To break away from rigid ways of thinking, one normally thinks of travel, moving to a new environment, emptying your mind and starting again,” says Wowprime vice-chairman Endy Wang. Confronting different cultures can help nurture empathy and sensitivity for other peoples, and can help overcome a critical weakness of people in the service sector—egocentrism. New experiences give rise to different thoughts and wider perspectives.
Wang says that the 2008 financial tsunami resulted in global panic, but an understanding of the rise and fall of different cultures in history gained through travel helps one to understand that the global financial crisis should be regarded as merely one episode in the history of mankind, one which will fade into memory sooner or later.
Wowprime’s aim in 2009 was to cut costs by NT$150 million, partly by providing incentives to encourage better employee performance. When the performance of an individual outlet reached a net profit of 17.5%, the employees of that outlet would receive a backdated pay rise for the previous year. Wowprime achieved all these goals by the end of 2009, at the same time enjoying a bumper year.
Diverse experiences
While Wowprime restaurant managers take their normal responsibilities very seriously, they also participate in other more unusual activities, often going out with staff to other restaurants to taste what’s on offer from the competition. They will grasp any opportunity to chat with owners or chefs to exchange opinions on brand positioning, ingredients, decor and customer service.
Hiking over 100 mountains or trying out as “iron men” are designed to enhance employees’ physical strength, and forge their qualities of patience and determination. “All the staff say that it feels like mission impossible at the commencement of the 300 credits, yet now nearly 500 people have reached the top of Yushan, and a great number have completed the task of eating at 100 restaurants,” says Wang.
The culture of thinking creatively has penetrated all aspects of Wowprime’s operation. The results can be seen in the top-level central executive committee meetings, the monthly proposals from the 200-odd outlets, the annual overseas trips, shareholders meetings, and end-of-year banquets.
“Since its establishment, Wowprime has been based on a model of collective leadership in order to avoid the dominance of one man,” says Wang. The 25 members of Wowprime’s decision-making central executive committee meet without fail at the corporation’s headquarters in Taichung every Friday. The meeting begins with three hours of speeches in the morning. They invite creative personnel from varied fields including academia, politics, medicine, science, technology, and fashion, some of whom have to be booked six months or more in advance.
At the meetings, high-level management also discusses proposals from all outlets and recommendations for improvements that have been put forward at various levels for submission to the committee.
“There are about 400 recommendations sent to the committee every month,” says the chairman. Why is the process of decision-making so complex? Wowprime wants and encourages its staff to think differently. They want them to know that the company takes their proposals seriously—and if a proposal is adopted, the employee is rewarded.
One family
Wowprime, which began as a steak house, is now a leader in Taiwan’s catering industry, with a total of 223 outlets in Taiwan and China and growth in annual revenue from an initial NT$500,000 from its first outlet to NT$9.6 billion in 2011. Attracting qualified talent with such rapid growth is no easy matter, but their turnover in personnel has remained consistently at 3%, well below the average of 10%.
“While many enterprises exploit their manpower to the limit, Wowprime places importance on people’s personal development and fulfillment,” says Wang. Business competition means personnel competition. Why do the employees of a particular company want to contribute? This must be because they feel that the company is trustworthy, like a family that will continue to care for and nurture them, and help them grow. If a company only values an employee as a set of skills rather than a person, that person in turn will work for only one reason: money. So in that situation, it is common practice for people to quit their jobs to pursue greater fortune.
The concept of “one family” is definitely not merely a set of empty words. The system is visible throughout the company in employee welfare schemes, dividends, internal business start-up programs, and medical care.
If a staff member is admitted to hospital, for example, the company will immediately launch the Medical Assistance System to get the employee out of the emergency room and into a ward. The system will also seek assurances about the competence of the person’s doctor, and if the assessment is negative, they will recommend another doctor. If the employee doesn’t have family to look after them in hospital, the company will call for colleagues to help provide care.
“If a full-time employee with at least a full year in the company unfortunately loses their ability to work, whether from a work-related or private event, the company will look after them for their lifetime,” says Wang. All costs are paid by the Steve Day Employees Safety Fund, with care also extending to family members.
“Wowprime doesn’t do these things from the perspective of the company’s interests—we simply want our people to be well looked after,” says Wang. But their altruism does gradually bring benefits for Wowprime—the company attracts good people.
Embracing The Analects
Wowprime’s management philosophy, which respects every individual and their family, stems from the Confucian idea of being kind to all people and creatures.
Day, who majored in Chinese literature at National Taiwan University, always keeps a copy of The Analects in his briefcase. At the investors’ conference, he didn’t talk much about how the company had performed, but how ideas from The Analects can help Wowprime to succeed.
Confucius’ disciple Zi Lu said, “I should like to share my carriage and horses, my clothes and furs with my friends, and to have no regrets even if they become worn.” Applying this idea, the chairman holds only 20% of Wowprime shares, with the remainder distributed among managers and staff. He donates 50% of the dividends from his shares to disadvantaged primary and junior high schools across Taiwan to provide scholarships worth NT$50 million per year, and another 30% to Wowprime’s employee emergency assistance fund (worth NT$30 million per year). In addition, 33% of the monthly net profit is allocated to rewarding the staff of that outlet the following month.
Confucius said: “In caring for the common people, be generous, and in employing their services, be just.” Wowprime aims to have the best employee welfare services in the catering industry, and to help their staff develop their careers to their best advantage.
The Analects records that when some stables caught fire, Confucius asked only whether anyone was hurt. He didn’t ask about damage to property. Wowprime’s principle of management is similar: if customers or staff members break a glass, or if someone trips over, the company’s only concern will be whether anyone is hurt.
“Wowprime’s sincere hope is to make everyone working in the catering industry feel proud of what they do,” says Day. Once many years ago when he was travelling abroad, he witnessed a customs officer at an airport standing to attention and saluting the master chef of a leading Michelin restaurant. Day was impressed, and became determined to make Wowprime worthy of that sort of respect.
Over the years, Day has seen a great transformation in Taiwan’s catering industry. Master baker Wu Pao-chun, for example, is constantly striving to perfect his skills, and was rewarded when he won the championship in the World Cup of French baking, Les Masters de la Boulangerie. And Chinese master chef Ah-Chi, who has published 60-odd cookbooks, not only teaches how to cook but also teaches his followers how to be good people, becoming an idol for the young in the process.
In terms of enhancing respect for the catering industry, Wowprime’s principle is to make its employees feel secure in their positions and let them get on with their jobs. Their management believes that desperately pursuing “figures” doesn’t guarantee profits. People-oriented management should in fact be the new model for service industries.
