Celluloid Junkie has partnered with the Coca-Cola Company for a series of sponsored features highlighting what Coke does in cinemas, as well as exploring insights in retail both inside and outside the cinema industry. In this article we summarise the Retail Seminar hosted by Coca-Cola at CineEurope 2018. We are grateful to Coke for the opportunity to highlight insights in the cinema food and beverage sector.
Oliver Delaney, European Cinema Development Director at the Coca-Cola Company, took over responsibilities from Corinne Thibaut at this year’s CineEurope, fittingly leading a panel on the importance of companies having great teams. The fast-paced, confident, information rich, if cryptically headlined ‘Not All Treasure is Silver and Gold’ session proved again to be the must-attend panel for the exhibitors gathering in Barcelona. Featuring an excellent double act from Vue International’s Kam Dosanjh and Dee Vassili, as well as some gasp-inducing revelations by Satalia’s Adam West, it was a re-affirmation that Coke’s work with cinemas goes way beyond that of just supplying refreshing beverage accompaniment to the popcorn.
At a time when automation, robots, AI and ML is threatening to take over jobs in a variety of job markets, the opening video stressed that the way to exceed expectations of customers is to have quality people around you and to exceed their expectations first. It’s been 11 years since Coke last did a panel on “your greatest asset”, Oliver began, “so we thought it was overdue,” before joking with the audience that if this was 2007 they’d be in Amsterdam and he’d be Barry Jones and taking off his jacket, rolling up his sleeves “and doing the thing Barry did so well.”
“If we look at the messages that were delivered in 2007, they’re still as relevant now as they were back then. So, really, it’s your people that deliver the experience, so they are absolutely critical,” Oliver emphasized, “and that very much hasn’t changed.” But what has changed is the world that cinemas operate in, with radical transparency for brands, which can be a good thing or bad thing in terms of how consumers react. Millennial and Gen Z:ers in particular are looking for companies that do good in the world.
How HR as a function has shifted
Oliver introduced the panel by asking them each why they think that people are a company’s biggest asset. Dee Vassili, Executive Director; Group HR at Vue, played devil’s advocate and asked, “If it isn’t the people, then who is it? The product? Then who sources the product?” Same for technology and service. “All roads lead back to people,” she affirmed. Kam Dosanjh, Director of Operations at Vue pointed out that in an age when everything can be copied, people’s individuality will drive a company’s strategy and bring its culture alive. Adam West, Head of Marketing at Satalia, predicted that in the next decades technology like AI will be commoditised, “so the only thing that will differentiate organisations of the future is their ability to attract and retain talent.” Satalia should know as it has supplied full-stack AI solutions for some of the world’s best-known companies.
Dee got her talk on HR Evolution off to a great start with a classic Hollywood clip of “how HR started out in the world.”
With Dirty Harry having shared which part of the human anatomy belongs in ‘personnel’, Dee confessed that she too has been in HR for more than ten years, but “HR has come a long way since the 70s.” With websites like Glassdoor.com where employees post anonymous reviews of their workplace, “businesses can no longer hide their internal organisational culture,” and, “internal culture is now part of the brand.” She then shared two key quotes:
Some key facts Dee highlighted included:
- Digital transformation has created the need for new skills that we don’t even know yet.
- By 2020 businesses will have five generations working side-by-side.
- 75% of the workforce will be digital natives by 2025.
Stressing the need to look at both the big picture (architecture of the organisation, environment, having the right tools, aligning workforce) and the details (succession planning, preventing poaching of top talent).
“The term ‘HR’ actually does not do justice to the challenges that are associated with the changing world of work,” Dee said, “the function has become about driving business performance.”
With the wealth of customer information that companies have today, “people analytics is now creating some amazing opportunities,” so imagine what that same level of data could do for company employees. Performance and productivity could be transformed, Dee affirmed.
Adam then observed that HR has shifted from a perspective of tech, much like IT has shifted “from a support function to a primary driver of organisational success and core part of company success.” He pointed to Google SVP Laszlo Bock, who when he was appointed asked for the title of head of ‘People Operations’ rather than HR. While tech startups have often invested in style over function (think coffee and football tables), but that the effect of this fades over time, while investing in core functions makes more sense.
Oliver then highlighted that only 10% of companies integrate HR in the strategic budget and business plan. On productivity employee happiness can make staff 12% more productive and in profit it can outgrow the competition by 20%. Oliver talked about how IBM, Salesforce, Cisco and Unilever are some of the companies that have adopted a ‘People first’ strategy through technology, machine learning and data. However, there are a lot of cinema developments and technologies competing for investment priorities. This was the queue for Adam to talk about how technology can be used for investment in people ROI.
Adam acknowledged that historically it has been hard to measure the quality and quantity of an employees contribution. He then caused a few dropped jaws in the audience by explaining that Satalia does not have any managers, but that it is using data science and machine learning to understand the impact of individual employees to measure the effectiveness of each employee and across the organisation, something which he would go into more depth later.
Vue Business Case: Cinema Managers
Following a Vue clip about its ‘people agenda’, Dee asked how the company can align hundreds of people across different territories to deliver high service day in-day out. “The People Framework is truly embedded in the cinema operations model,” she explained.
Kam then outlined a challenge put by Steve Knibbs 13 years ago about how each cinema operates. They did this by going beyond traditional pairing of cinemas, comparing admissions, etc. overlaying it with profitability, assigning it a weighted score. This gave cinemas a complexity scoring. This ended up with five categories, from the biggest AA to the smallest. “It allowed us to move cinemas up and down the band; it allowed us to do a budgeting process; it allowed us to do a long-range planning; and it allowed us to give a clear direction to our people, where their cinema is at in their band.”
Dee then pointed out that it also allowed Vue to understand what ‘good’ looked like: “The assessment centre [for managers] was our way of calibrating what ‘good’ was.” This allowed her and Kam to back off and let the managers take the decisions on how to achieve that. HR then delivered all the recruitment tool-kits and assessment tools. “Creating transparent pay bands was a really good way to get our theatre managers to understand what the difference are between cinema managers working at one of our flagship sites and a cinema manager working in a more low profile and smaller cinema.“ It also created stepping stones for career and pay advancement.
Kam then summarised that “being aligned” was the “key message of today. Starting at the top with Tim [Richard’s] vision, Steve’s strategy, and me and Dee’s strategy implementation. No-one should diverge from that.” Dee then stated that traditional staff training programmes don’t work. “Learning and developments needs to be part of the fabric of how you run your cinema.” That’s what Vue has done in terms of developing a modular training network. HR has developed them, but they are embedded in the culture of operations.
She also said that “it is OK to have high staff turnover in some pockets of the business,” because it’s OK to have people come and work for you for six months, if they are brilliant for you in those six months. The framework can accommodate that type of career flexibility. Kam then stressed that having a succession plan also involved having a back-up plan, especially for critical cinema sites. High potential candidates are targeted for such sites, fast tracking them through training.
The Balanced Scorecard “is built into the company from the top to the bottom,” Kam explained, crossing people, quality and sales, stressing how interlinked these three elements are. This includes ‘mystery guest’, MPS, compliance, legal and more. “Everything is measured and has an output.” Within three years of implementing the framework, Vue managed to switch from 10% internal hires for managers to 90% and external hires fell from 80% to 20%. Stability went up and turnover went down for management positions. Quality went up 15% and operation excellence during peak time grew 8%. Removing ‘noise’ Vue also measure 6% to 7% growth in sales each year. In terms of operating profit this translated to around 16.8% growth in profit year-on-year.
The audience could not help but to be impressed by these hard numbers.) Kam then showcased the Ops Dash 2018 (“Unique to Vue…nobody else in Europe has one”, linked to finance, marketing, HR, auditing and all of Vue’s KPIs. He invited his cinema colleagues in the hall to come and talk to him about it. “We won’t give you all the secrets,” but he promised to share the background, so that more cinemas could embrace this type of tool that works. It allows Kam to pinpoint the three-four cinemas that need coaching at a click of the button. “This is the one thing in all my years that’s really changed behaviour and set us apart,” Kam affirmed. This has helped Vue grow from a 35-cinema UK-only operation to a pan-European company.
How companies are changing HR (Satalia)
Having teased the audience with facts like Satalia not having any managers, Adam West gave an overview that stunned the audience with its candor and revolutionary approach to managing people. The company has 70-80 people across Europe, mainly in London, but also everywhere from Greece to China, “because not all talent is in London.” But here comes the bit that made attendees sit up and take notice:
What’s unique about Satalia is that we are completely flat, completely de-centralised. There are no managers, no bosses, no rules, we have no KPIs, there’s no concept of the word ‘holiday’. People work on the projects they want, when they want, how they want and where they want. It’s our view that the people that are closest to the context of decision are best in a position to make that decision.
He then explained Satalia’s pay-setting process. Everyone internally makes a recommendation about their salary, the figure being transparent, then everyone else votes on whether to increase, decrease or go with that recommendation, with even interns voting on the CEO’s salary. [Audible gasps from the audience and smiles from the fellow panelists at this point.] The team then took data from all communication tools, (Slack, email, Google Docs, etc.), did a data analysis on the strength of any two employees relationship, and the weight of the vote was decided by how strong the relationship was. This also uncovered unconscious bias that females are less likely to bump up their salary than males, a bias that Satalia only discovered because all recommendations were transparent, and thus one they were able to solve.
“We have a philosophy of absolute, radical transparency,” at Satalia, Adam affirmed. This means that anyone can expense anything. However, all of those expenses are made transparent, so it is a self-policing system. Satalia built these tools “to become a smarter, faster more innovative company .” While he is not expecting everyone to embrace such radical transparency, the underlying technology – machine learning, peer-to-peer networks and natural language processing – is very applicable to other companies and they are finding external interest to these tools developed for internal use, for more data-driven decisions
Asked by Oliver where she could see herself publish the salary of herself, Kam and Tim anytime soon, Dee admitted that Vue is not there yet, but reflected on the challenge of not losing the entrepreneurial spirit from when Vue was still small. While Vue has a hierarchical structure, the company tends to work in more collaborative fashion and on a projects basis.
Oliver then shared the Coke perspective, where the CEO James Quincey, “has been on a huge innovations agenda,” a lot of which was on display at the Coke stand at Cine Europe. Coke is becoming faster at responding to what consumers want. This has led to the adoption of the AGILE framework, this includes ranking priorities in a multi-tasking environment. It gets products to the market relevant to customer needs and gets them there faster than the competition, thus getting the benefits sooner.
World of AI
Adam then gave a crash course in AI (artificial intelligence), which has become a catch-all phrase, that he sought to tease out to point to data-driven decision making. This requires three things: 1. getting data and 2. putting it through a model of the world to gain insights. He then played a clip of the challenges faced by Google Duplex AI/ML voice bot.
The third step is then to actually make the decision. This bit is actually often overlooked. He points out that there are a trillion ways to arrange 15 Pokemons. That is the challenge of arranging staff. ‘Goal adapted directive behaviour’ is how Adam defined ‘true AI’. If it cannot adapt then it is not truly intelligent, but it is hard to build such systems. An example of how things can adapt the wrong way is Microsoft’s Twitter chatbot that became ‘racist’ through interactions with Internet trolls.
Adam predicted that companies that will be successful in the future are those that invest in both technology and talent. Looking at retail he compared and contrasted Amazon (online) and Nespresso (stores): “you don’t want to be stuck in the middle of that spectrum,” and film is headed that way too. Netflix and Amazon Prime are fast, cheap and easily accessible, while on the other end you have cinemas, that use people to be a truly differentiating experience.
His advice to cinemas was, “look across your organisation and understand which parts can be automated to use that function; where are people not adding any additional value?” This includes ticketing, recommendations and scheduling systems. Secondly, invest the savings from automation in human capital; in talent that can deliver these differentiating experiences.” Here the examples were Secret Cinemas in the UK and iPic in the US.
Kam said that Vue has been investing for three years in film programming content. “All of us in this room think that we are the best film scheduler ever,” he offered, but Vue soon found out “that when the machine did it, 95% of the time it was better.” Next up was labour optimisation, which matched to film scheduling and next predicting future changes, allowing to change rotas and staff. He also pointed out that more data allowed for better decision in new investments. And lastly CRM means they know exactly how the consumers for “Mamma Mia!” will behave, when they arrive, what they buy, etc.
Oliver then summarised the key messages of the day: People are and will continue to be your most important source of competitive advantage. More and more they are an important part of your brand. Invest in people and technology will help you to measure that investment better. AI is here and applying it where people don’t matter will deliver the best cinema experience for your guests. With that he thanked his panelists.
It is not clear if any AI was used in putting the Coca-Cola panel together, but it underscored the message of having the right team and with slick use of technology (PPT and video clips ran seamlessly) it created a compelling proposition. Nobody who attended could have failed to have been persuaded about the importance of the right kind of HR to their organisation, and unlike in Dirty Harry’s days, it is a case of having A Stars rather than a**holes running it.