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The purpose of this report was to develop a KM strategy for Kentucky Fried Chicken (KFC). A Literature Review was conducted on the working of KFC to find the gaps in the knowledge transfer. The results indicate that there are lot of gaps in the knowledge transfer within KFC which is obstructing it to achieve its goal; to sell food in a fast, friendly environment those appeals to pride conscious, health minded consumers.
Zack's approach was used to formulate the knowledge based strategy for KFC. The report concludes that there is a minimum knowledge between the organizations which keeps KFC away from achieving its goals.
KFC Corporation is a Louisville, Kentucky based inception. It is the world's most popular chicken restaurant chain which specialises itself in the Original Recipe®, Extra Crispy®, Kentucky Grilled Chickenâ„¢ and Original Recipe Strips which includes its home-style sides like Honey BBQ Wings, and chicken sandwiches.
Every day, more than 12 million customers visit and are being served at the KFC restaurant that include 110 countries and territories around the world. It operated more than 5000 restaurants in US itself and more than 14500 outlets around the world. KFC is world famous for its Original Recipe® recipe for fried chicken. This fried chicken which is made the secret blend of 11 herbs and spices by Colonel Harlen Sanders perfected more than half century ago.
Kentucky Fried Chicken is a part of a largest restaurant company in the world with regards to system restaurants; the YUM Brand! which is spread over 35000 locations around the world.
Since its foundation, KFC has passed through many different types of organizational changes. These changes came into existence due to changes of ownership that happened since Sanders first sold KFC in 1964. In 1964 KFC was then sold to a small group of investors that were able to take the name KFC public.
Heublein Inc. took over KFC in 1971 and kept itself highly involved in the day to day operations. Heublein Inc. was then taken over by R.J. Reynolds in 1982. After these drastic changes at the ownership level it was finally taken over by Pepsi Co. Pepsi Co currently runs Taco Bell, Pizza Hut, and KFC.
By the end of 1994, KFC was operating 4,258 restaurants in 68 foreign countries. KFC is the largest chicken restaurant and the third largest quick service chain in the world. Due to market saturation in the United States, international expansion will be critical to increased profitability and growth.
To sell food in a fast, friendly environment that appeals to pride conscious, health minded consumers.
Build an organization dedicated to excellence.
Consistently deliver superior quality and value in products and services.
Maintain a commitment to innovation for continuous improvement and grow, always strive to be the leader in the market place changes.
Generate consistently superior financial returns and benefits for owners and employee.
Increase profitability through following six issues
Reduce overhead costs
Improve customer service
Faster and friendlier service
Continued high quality products
KFC Philosophy - The CHAMPS Program
KFC follows the CHAMPS method to ensure that the customer has the consistent quality experience in every restaurant, everyday and on every occasion.
C - Cleanliness
H - Hospitality
A - Accuracy
M - Maintenance of Facilities
P - Product Quality
S - Speed Service
Organizational Structure at KFC
RESTAURANT GENERAL MANAGER
(Policies & Procedures)
CUSTOMER SERVICE TEAM
(Assist customers at Service Areas)
FOOD SERVICE TEAM MEMBERS
(Cooks & Chef's)
Major Departments of KFC
TRAINING & RESEARCH
Zack's Approach is taken into consideration for the research of this paper.
In this research we are using Bottom-up approaches with the help of Zack's Approach. Literature Review is done using Secondary Resources such as Journal Articles, Thesis, and Internet.
It is apparent that the majority of the people who work at KFC, are not choosing there employment as a career option. Therefore, the workforce is constantly changing and adapting to new employees and new situations.
SWOT Analysis of KFC
Introduction to KM Gaps
What is Strategic Gap?
The company's officials must know (Company Objective) the objectives of the business and work according to the specifics to obtain its future goals. What the officials and employees have already achieved as per the objectives list is what they know (Knowledge Audit). The gap between the two mentioned Objectives and Audit is known as Strategic Gap.
In the case of KFC, the objectives are to build an organization dedicated to excellence and to consistently deliver superior quality and value products and services to its customers.
The most important objective in KFC's case is to emphasis more on the consistently generation of superior financial returns and benefits for the organization through Reduced overhead costs, Increased efficiencies, Improvement in customer service, Cleaner restaurants, Faster and friendlier service and Continued high quality products for its customers.
Knowledge Audit is the difference between what the company is doing to achieve its goals and what it's not doing to achieve its goals (i.e. the current situation of the company).
In the case of KFC as per the research done via Zack's Approach (see Fig 1.1 SWOT Analysis on KFC) it is concluded that KFC is not able to achieve its goals due to following reasons
KFC's Strategic Gap & Knowledge Gap
ISSUE I - Hygiene
The Quality assurance department at KFC is found to be not performing at its level and come under a lot of media coverage at certain times. The main objective (the 'must know' factor in Zack's approach) of this department is to look after the quality of food and service provided to its customer and also looks after the Hygiene issues. According to its CHAMPS Philosophy KFC wanted to make an exemplary image in front of its customer by following CHAMPS Program (the 'know' factor from Zack's approach), but the Hygiene (C-Cleanliness) level at KFC is yet an issue at some parts of the outlets. Like for an example, in February 2008 an outlet of KFC/Taco Bell in New York was rat infested a video was shown on the news television and internet via sties such as YouTube.
It is analyzed in this case that there is a huge Knowledge Gap in between KFC's Quality Assurance Department and the Operational Department; in spite of they knowing the objectives/goals of the business, such an instance happened.
Two outlets in Sydney, Australia were fined for not having been able to keep the hygiene levels. Inspectors found layers of grease and dirt, as well as evidence of vermin.
A proper strategy has to be developed to look after the hygiene levels at the outlets to keep it away from above scenarios to take place.
Must do: The QA Department should make sure they develop strict rules for the operational department at the outlets to follow which would lead to better look out at the hygiene issues. QA Department must instruct the operational department to follow certain standards of cleanliness like after every 15 minutes the tables should be cleaned, the floor mopped more frequently with disinfectants, storage facilities checked once in a day with regards to cleanliness issues.
Can do: What the QA Department can do in this case is, appoint QA officers to regularly visit outlets and take note of hygiene levels followed by the operational department. As well as instruct the employees at the outlets to take certain measures in keeping cleanliness.
ISSUE II - Animal Rights
KFC was blamed by People for the Ethical Treatment of Animals (PETA) a Canadian based animal rights organization let by Ingrid Newkirk. The organization is known for its aggressive media campaigns, combined with a solid base of celebrity support-Paul McCartney, Pamela Anderson, and Sarah Jessica Parker are supporters, and several supermodels have posted naked with PETA's slogan "I'd Rather Go Naked than Wear Fur". Many of its campaigns have focused on large corporations, such as KFC.
It was blames that KFC Suppliers of chicken cram birds into a huge waste filled factories, breed them and drug them to grow large so that they can't even walk, and often break their legs and wings. At the time of slaughtering the chickens throats were slit and dropped into a container of hot water; often when they are still conscious.
KFC's own animal welfare advisors have asked the concerned departments at KFC to eliminate such abuses, but KFC always refused to do so. It is also been a case that many of the advisors from KFC's QA Department resigned in frustration.
As per the Objectives/ Goals of the company it is analyzed that the KFC's objective is to be an organization dedicated to excellence and to make an exemplary image in front of its customer. Whereas, in the Issue II of Animal Rights the organization must know that if it does not take necessary measures it would loose its reputation in front of its valued customer.
KFC must know that this case is related to human sentiments and hurting human sentiments won't do them any good, instead will get people to protest and want to boycott.
KFC knows it is spoiling its image in the market due to the above reason.
Analysis of KFC's Current Infrastructure
Culture: Culture creates the context for social interaction and knowledge use and also defines relationship between individual and organizational knowledge.
To get a better understanding of the Cultural aspect of KFC's infrastructure three components of culture are taken in consideration:
Values: KFC believes in rewarding and respecting the contributions of each individual. It is open, honest and direct in its dealings with one another and committed itself to the highest standard to the personal and professional integrity at all times.
KFC encourages new and innovative ideas because these are the key to competitive growth and also rewards results and not simple efforts. It works as a team.
Norms: Norms are appropriate behaviour in the restaurant
Practices: Formal or Informal practice performed in the restaurant
KFC is analysed to be a multileveled culture which, comprises of different levels of management at different departments of KFC, like Marketing, Project, Training & Research, Quality Assurance, Finance, HRM and Operational Department.
The organizational culture of KFC is a combination of Hierarchical Culture within the managerial level and CLAN Culture in the operational level.
Hierarchical Culture is based on formal, structured, ruled based and predictability.
Whereas, CLAN Culture is based on loyalty, commitment, friendliness and team work.
Culture impacts performance
KFC uses ROS (restaurant based ordering system) technology at Operational Level of its outlets for taking in orders and informing its chefs inside the kitchen to work on the order placed this type of technology is an example of INTRANET Service that most of the fast food restaurants today use.
The ROS technology is used for cutting the time between the taking in order and informing the chef. In this case orders are taken on the counter and the computer automatically sends information to the chef's computer which is placed in the kitchen for the chefs to process the order.
KFC follows a simple yet very strong management levels at the top of the organizational structure sits the a) Area Manager who is accountable for providing coaching, leadership and operational support to KFC restaurants within a defined area. Under the area manager comes the b) Assistant Manager who is also known as the Restaurant General Manager; is responsible for creating and running an energetic and valuable work environment, which is committed to serving the best chicken at the fastest speed to its customers. Following the Assistant Manager comes the c) Trainee Manager, this person helps the day to day running of the restaurant and ensures all the operations, customer service, cash handling, marketing, purchasing, human resources, administration and training & development policies are followed in the right and appropriate way for the smooth and better functioning of the restaurant. Then comes the d) Customer Service Team Member who is responsible for working at the service area and ensuring that the quality of product, service and cleanliness is delivered to all customers at the top speed. At the end of this operational process chain comes the e) Food Service Team Members who are responsible for putting the crunch in the coating and the zing in the zinger, the cook's or the chef's. There main task is to prepare and cook the irresistible KFC chicken.
Analysis of what KFC's Infrastructure desires to accomplish
KFC wants its cultural infrastructure to be characterized as follows
Knowledge sharing happening without inhabitations such as, fear of job loss
External knowledge accepted as being the start and not the end of innovation.
Proactive attitudes to learning with staff deemed to responsible for their own learning.
Staff becomes proactive in knowledge creation and in idea submission
Staff confident that management values their ideas and reward them
KFC wants to use technology which facilitate, capture and re-use knowledge, collaboration and knowledge sharing, save time and money at managerial levels.
In terms of improvement at the operational infrastructure at KFC, it wants to develop following KM strategies
Shift from structures based on processes to systems based on people
Develop Knowledge-based structures
Organizations as value networks
Another strategy of KFC is currently working with is to improve operating efficiencies. This in turn can directly impact the operating profit of the firm. In 1989, KFC cantered on elimination of overhead costs and increased efficiency. This reorganization was in the U.S. operations and included a revision of KFC's crew training programs and operating standards. They emphasized customer service, cleaner restaurants, faster and friendlier service, and continued high-quality products. In 1992, KFC continued with another re-organization in its middle management ranks. They eliminated 250 of the 1500 management positions at corporate and gave the responsibilities to restaurant franchises and marketing managers.
The recommendations are based on the research of gaps in knowledge transfer at KFC with regards to KFC's Culture, Technology and Operations
It is recommended for the concerned staff at KFC to produce newsletters to publicise knowledge management initiatives to the lower level managers.
Provide KM practice trainings.
Encouraging skilled employees to transfer knowledge to un-skilled employees.
Offering offsite training to employees to keep their proficiency and knowledge updated
KFC should change its evaluation criteria to reflect and assess knowledge sharing competencies and accomplishments by the employees at KFC.
Introducing knowledge management Pilot Projects like expertise location system with space devoted to different communities of practice.
Deleting or censuring people who are hoarders of knowledge.
It is recommended that KFC provides its employees with adequate training and good IT platform to use tools to harness the knowledge stored in knowledge repositories to benefit themselves.
It is recommended for the Trainee Manager to ensure there is proper sharing of knowledge in between the staff working under him as he is responsible for all the operations at the outlet.
Trainee manager should develop briefing employees working under him with new rules and regulations and instructing them over cleanliness issues to avoid the Hygiene Issue Case of KFC in future.
As more and more companies sense the need of having someone in the organization who has the working knowledge of all aspects of the restaurant like public relations corporate functionality etc. KFC should employee a Chief Knowledge Officer who can look after the flow and sharing of knowledge at all levels of the restaurant is made accessible easier. It would avoid KFC to get into future controversies and criticisms like the Hygiene Issue in New York and Australia and Animal Rights Issue in Canada.
KFC should understand the importance of ethics by understanding the culture, regulatory and ecological issues in different countries.
KFC should implement a farm level audit and guidelines program which is leading the industry in the areas of poultry care and handling.