Saturday, January 29, 2011

A Pragmatic Solution

Regarding to the Tucson tragedy, some of the politicians and the talk show hosts were wasting their time and their energy. playing the "blame" game, instead of developing a pragmatic solution. We assessed some of their proposed solutions as idealistic and non-practical. Whenever there is rhetoric, the original problem is rarely solved.

In uncertain times, the demand of protection and justice happens. The question is: can the public receive a solution that works for the majority of the masses?

We at Compass360 Consulting prefer to build and launch pragmatic strategic solutions that meet the needs of the client and the confines of the "Big Tangible Picture." Sometimes the projected clients do not understand the benefits of strategic pragmatism. That is another story.

What is a Pragmatic Solution
These days, a pragmatic solution is based on the outcome of a strategic process that combines one or more of the following influences: political influences; economic influences; social influences; technological influences; and a few other strategic influences. The attributes of a pragmatic solution usually are: tangible, attainable and relevant. Whether someone can afford to implement this type of solution is a different story.

A Pragmatic Solution for Worst Case Scenario
Here is an interesting solution from Dr. Bill Wattenberg of KGO AM 810 Radio fame that could be used as a possible safeguard for public celebrities against emotionally-challenged people with excessive motives and extreme measures. The distinctiveness of his solution is the cost effectiveness.

Here is an email sent to KGO management following the discussion about bullet proof clipboards on the Ronn Owens show KGO radio on 4-17-07:

Below are two pictures of the simple bullet proof transparent clipboard that I designed at the request of the former CHP commissioner Spike Helmick. It was tested at the CHP Academy in about 2002 as I remember. At the end of to this email is a link to the official 2002 report to CHP Commissioner Helmick.

CHP Officers shot at this clipboard at 10 ft. with all big handguns. The 40 S&W is one of the most powerful in use today -- muzzle energy like a 357 Magnum. Only a small portion of the bullet penetrated the 1/4 inch clipboard, as you can see. The part that passed through would not normally be lethal. The 9mm and 38 were stopped completely. I thought it would take at least 1/2 inch to do this. That was one pleasant surprise.

You will note that the bullets all dug a crater in the plastic and then bounced back. This was the other pleasant surprise. At close range, the shooter can be sprayed by the bullets he shots at the clipboard. I develop another layered form of plastic clipboard that enhances this "bounce back" feature to confuse the shooter. It is much more expensive and is confidential at the present time.

Anyone can buy one of these at Tap Plastics. Make sure it is Polycarbonate, not normal Lucite used in most so-called bullet proof glass barriers. The best thickness is 3/8 inch if you can get it. The 3/8 will stop that 40S&W. What you see here is only 1/4 inch thick. It does the job. 1/2 inch is nice and super safe, but heavy. the 3/8 feels good in the hand and on the lap as a general purpose clipboard. that is what I carry with me on planes ( and so do many others). It is a great writing board on my lap. It fits nicely in the laptop computer case or in a backpack. It looks perfectly innocent. It is a real close quarters weapon if used in the right way, as well as a bullet shield.

All police officers should be using one of these every time they approach a driver or suspect at close quarters. It protects their head and neck that are not protected by their body armor. but it that's time for something to be accepted. They did not accept body armor for over fifteen years. A young CHP Lt. whom I worked with on the terrorist truck stopping experiments in 2001 to 2003 was shot in the face and killed two years ago when he made a routine traffic stop near Sacramento. The killer shot him in the face when he approached the car. The Lt. would be alive if he had been holding this simple bullet proof clipboard between his face and the driver. The bullet impact would have slammed the clipboard back in his face, but he would not have been seriously injured.

As bizarre as it sounds today, if a group of students had these in hand, they would have a much better chance of surviving a random shooter at close range, and they could even charge the shooter with some safety.

The news media around the country that covered our many anti-terrorism experiments at the CHP academy after 9/11 has suddenly remembered this bullet proof clipboard. Many heard me describe it on the Ronn Owens show on KGO Radio yesterday. It is a shame that it takes something like the Virginia massacre to bring attention to a simple solution for some of the violence today. At the very least, our police officers should have these. A lot of worried parents might want the same. ---Bill Wattenburg

Is the Solution Pragmatic and Practical?
Building this solution is simple. Our research tells us that a 10 by 15 inch clipboard with a quarter inch thickness, made from clear Polycarbonate plastic, costs somewhere between the $20-$30 range. It fits into any briefcase or any reasonably-sized backpack and the weight is minimum.

We believed that it is possible to carry this implement as a defensive shield against some of the various lower caliber projectiles. Whether prominent public celebrities are willing to carry this clipboard, every hour of the day, is a different story

Our experience tells us that the connection between projected outcome and the price of a pragmatic solution usually vary. The past performance of a solution does not guarantee the same results. In some instances, the situation could be different.

The Compass Rule for Executing a Strategic Solution:
The execution of any solution (with the right strategic process) is the first step toward strategic success.

In uncertain times, the smart decision makers usually focus their time and their effort on building a pragmatic strategic solution that meets the requirements of their current challenge. He or she knows that it must be relevant, attainable and tangible. They are realized that it is a stop gap solution not a long term answer.

Could your current understanding of the "Big Tangible Picture" of your grand setting enables you to strategizes and execute a pragmatic solution that is effective for your competitive terrain?

Idealistically, a pragmatic solution creates a limited state of strategic effectiveness.

In a later post, we will focus on the topic of defining the criteria of a pragmatic solution.

Sunday, January 23, 2011

The Importance of Timing (The Attribute of Strategic Power)

The Essence of Strategic Power

Strategic Power is the outcome that originates from one's own comprehension and the execution of the following strategic attributes of surprise, momentum and timing. When someone has strategic power, he or she can time his action to the seasonal cycles of their competitive terrain and the competitors within it. (We will discuss this intricate process in one of our future books.)

"The Sage takes his signs from the movements of Heaven and Earth; who knows its principles. He accords with the Tao of yin and yang, serves the movement of the sun and the moon and follows their seasonal activity. He follows their cycles of fullness and emptiness day and night, taken them as his constant. All things have life and death in accord with the forms of Heaven and Earth. Thus it is said that if one fights before understanding the situation, even if he is more numerous, he will certainly be defeated. ...
One who excels at warfare will await events in the situation without making any movement. When he sees he can be victorious, he will arise; if he sees he cannot be victorious, he will desist. Thus it is said that he does not have any fear, he does desist. Thus, it is said that one fights before seeing the situation, even if he is not vacillate. Of the many harms that can beset an army, vacillation is the greatest. Of disasters that can befall an army, none surpasses doubt."
- Jiang Tai Gong (Dr. Sawyer's translation of the Six Secret Teachings)

Click here on the state of Steve Jobs.

More information on this story can be found at San Jose Mercury and The NY Times. Click here for Apple's latest stock price.

An associate sent us the following note, "Even in announcing his medical leave, Jobs was smart enough to make the announcement on a day when the market was closed, and the day before Apple would announce an increase of 78% in their earnings. ..."

Our View
Steve Jobs timed his actions with ease by assessing big tangible picture.  He comprehended the configuration of the market terrain in terms of the various levels and the various seasonal cycles.

Smart decision makers usually possess a strong understanding of the connections between the macro and micro timing cycles within their competitive terrain. This view of the big tangible picture usually reduces the "doubt" factor while enabling them to focus on the timing of their decision points. This understanding also enables one to create and drive events before the opposition is awake.

At this level of global competition, there is no such thing as coincidences. ... Get well, Steve! Your ideas and your products rock.

Click here for another example of strategic power.

To achieve strategic power, one must do the following:
  • Assess the big tangible picture;
  • Position themselves in a position of strategic power; and
  • Influence the necessary components with strategic power.

When one has strategic power, he or she can prevail over the competition. ... Do you have the strategic power to prevail?

Sunday, January 16, 2011

Understanding the Competition

Bill Belichick is one of the best "strategic" coaches.  He knows how to identify a competitor's strategic deficit  and their various tactical weaknesses.

In the past, he has told the news media that he was a reader of the Sunzi's Art of War (AoW) classic. (Whether the trivia can help him win a relevant game is a different story.)

By being well-prepared, Belichick rarely errs in his game decisions. He always plays the percentages. Occasionally, he calls a gadget play in order to surprise his opponent.

Strategically, the superior strategist always believed that the success of the play is usually based on the execution not the decision.

One similar Art of War exploit is his indirect involvement of the 2007's Spygate event.

This past Sunday, he discovered the NY Jets was their opponent for today's game. The press asked him about his view on the Jets.

Following is an excerpt of his Sunday news conference:

Q: What stands out to you as different about the Jets from what you saw when you played them Dec. 6?

BB: They’re pretty much the same team. Obviously, they didn’t have a good night that night. But, they do a good job running the ball. They’ve got big play receivers and tight ends. They do what they do on defense – a lot of man coverage and they’re pretty physical on the front line. [They're] very good in the kicking game. Good return game – that was a big play for them last night on the kickoff return after the Indianapolis field goal. They’re a solid team. Their record reflects that. I don’t think they’re a whole lot different than really what they’ve been all year. They do a lot of things well.

Q: You mentioned familiarity. Is it hard for teams at this time of the year to change anything or does the familiarity really come into play?

BB: You’ve had 16, 17 games, whatever it is, not counting preseason and another 100 and some practices, so I think everybody probably has got a lot of options in their playbook or in their system. It’s a question of what you want to do, what you feel like is best to choose from and the inflections that you have – how you match up and how you want to play against the team that you’re up against. I’m sure they have a lot of options at this point.

Q: When a team is coming off that kind of emotion and experience in that game and you all have had the bye week, is there any concern about them being able to take that momentum into this week having had that game while you all had the bye?

BB: I think the most important thing is the week of preparation and how the teams prepare on Sunday. I think that’s what it really comes down to. I don’t think what happened last week or in some game in December or some game in September or some game in October, I don’t think that’s going to have too much bearing on it. I think what happens between now and kickoff and how the teams perform once the game starts, I think that’s what will decide the winner.

Q: Have you seen a growth for Mark Sanchez from the beginning part of the season through the middle to where he was last night and how he’s able to be effective?

BB: I thought he did a good job last night. [He] made some clutch plays that they needed to make there at the end of the game. He’s obviously a good quarterback; he’s led them to the playoffs two years in a row.

Q: Last week, Rex Ryan said he thinks that you help Tom Brady with studying and game preparation more than what Peyton Manning gets in Indianapolis. What do you think about that statement?

BB: I really don’t think a whole lot about stuff like that. I just try to coach our team. I think you have to ask Rex or somebody else about that, whoever said it, whatever the context was, I don’t know. I’m worried about getting our team ready.

/// As usual, he preferred to talk about his own team rather than the opponent.

Some of our clients have asked us about how do we think Bill Belichick assessed this week's competition.

Our usual response was: "At this moment of the competition, each principal has a video library of each and every play. They almost know what are the usual tendencies. The focal point is to  to know and anticipate the decision making process for the current circumstance. ..."

Defining the Strategic Power (Shi)
Strategic Power (Shi) is an advantageous circumstance that an AoW strategist uses against their opposition. It begins by knowing the opposition in terms of their strategic foundation.

Understanding the Tactical Imbalance of Strategic Power (Quan)
Step 1: Know the injury factor
The objective of each football strategist is to know who is injured (on both sides) and what is the quality of each injury. The quantity of injuries occasionally determines the quality and quantity of the strategic options.

Step 2: Know the decision habits of the play callers and the players
Another key point is to know the tendencies of the opposing play caller and the positional players in terms of various decision making scenarios (strategic situations, various tactical situations, adjustments etc.) ...

Step 3: Know the state of the terrain and the performance state of your competitors at the day of the competition.
By combining data from each of the earlier steps, one begins to understand who has the superior strategic power.

In terms of the tactical side of the strategic game, the successful strategist usually focuses on the deployment of formations and the relative strength of each competitor in each tactical situation.  During the game, he is searching for a slew of situational matchups that would give his team the advantage. 

This is how the "real" professionals play the strategy game. ... It is this simple. ...

Theoretically, one gets the big tangible picture by filtering the reality and the illusions of the competition and the terrain. Then he or she can exploit the weaknesses and strengths of the overall situation.

Whether Belichick's team wins, we will not find out until Sunday evening.

An update on 01.16.11
The New York Jets toppled The New England Patriots, 28-21. Regardless of the injuries and the poor execution, the outcome is what counts.

Ruminations from the Compass Desk
Implementing the AoW principles as a strategic direction, can be challenging for some people. Choosing the right tactics and being able to execute them on time and on target are some of the other difficult challenges that a game strategist usually encounters.

Tuesday, January 11, 2011

It is the Execution of the Process That Usually Prevails


We have seen many idealists and motivation speakers (preachers) who offered irrelevant advice to people by throwing quotes and general principles during their waking moment. They figured that it will generate inspiration and creativity. Once the positive energy starts, everything will be ok. These so-called idealists also believed that simple strategic principles (laced with some fairy tale stories) are always effective in our complex world. It is easy for them to talk the game especially when they rarely have their skin vested in any risky venture. Whenever there is success, these preachers take credit for it. However, it is usually their invisible project team who grinds through the details in a semi-dark back room.

We believe that knowing the general principles, the specific principles and a relevant process is the first step. Then applying it properly is the key to competitive success

In real life, most people are not that fortunate. They do not have the right support team, the resources, the right drive and/or the right strategic process to achieve the next economic level.. In most cases, they have no realization of the extremity behind the risk. After one or two setbacks, these amateurs surrender to the inevitable and return to their own settings, realizing that it was not meant to be.

In the mind of these idealistic preachers believed that a list of principles and their faith in their spirit will carry them to the "Promise Land." Yeah, sure. ...

A checklist of quotes or principles only works in a predictable setting. In most cases, it usually fails when the naive amateurs have no tangible comprehension of the risk and the uncertainty that are involved with the situation. They could be consciously unpredictable in how they deal with certain situations and possess no experience of strategic achievements or an emotional support system to fall back on. We will touch the depthness of that specific topic at a later post.

Once the illusion of hypes and faded hopes vanishes, one sees that the successful people are those who knows how to implement and execute . These implementers are usually willing to grind out the process of doing it regardless of the predictability state. Because they understand the tangibility of their goal, the strategic settings that support it and the quality of the possibility.

Compass Execution
In our case, we have always believed in the act of knowing the big tangible picture before making a strategic move. It starts by collecting evidence-driven statistics and the relevant facts. We also believe in the proper execution of a results-driven process. What do you believe in?

"90% of strategies fail due to poor execution. ..." - Harvard Business School research

We also believed that the origin of most execution problems begins with the poor understanding of the following three points:
  • the "assessment of one's competitive terrain (marketplace)";
  • the "positioning of oneself through the planning and preparation" process by choosing the right strategic methodology and the people who can operate within it; and
  • the "influencing of the terrain and the competition" within it by properly executing the strategic process.
Regardless of the economics and logistics, the competitor cannot properly plan and execute when he or she does not understand themselves, their market terrain and beyond. What do you think?

Rumination from the Compass Desk
In summary, one has to know the grand questions before concluding with the tangible answer. It begins by knowing the big tangible picture. So, do you know if your big picture connects with the big tangible picture of your settings.

For what it is worth, Auburn defeated Oregon 22 to 19 for the BCS title this past Monday. The presumption is that the Oregon football team's application of the Art of War principles failed. The lesson is that the proper execution of the process that supports one's principles, usually prevails at the end of the game.

Compass Rule
Principles-supported process with properly planned protocols  usually raises the probability of winning. 

Saturday, January 8, 2011

Lessons from the Life of Zhang Liang (1)

Zhang Liang is one of our favorite examples of professional strategists who failed early and made successful comebacks. He resided between the final period of the Qin dynasty (221 to 206 BCE ) and the earlier years of the Han dynasty (206 BCE to 220 CE).

Three of his many strategic trademarks were:
  • Strategizing the threads of multiple operations into one Big Tangible Picture;
  • Controlling any strategic operation from many thousands miles away; and
  • Gaining cooperation and collaboration from a diversity of principals
Birth and origin of Zhang Liang
Zhang was born in Chengfu (present-day Chengfu Town, Bozhou, Anhui). He descended from an aristocrat family in the Hán state of the Warring States Period. His grandfather served three generations of the Hán rulers as chancellor while his father served two generations. Zhang missed the opportunity to inherit his family's legacy as the Hán state was annexed by the Qin state in 230 BC as part of Qin's wars of unification.

Assassination attempt on Qin Shi Huang

To avenge the fall of his native state, Zhang dedicated his efforts to hire assassins to kill Qin Shi Huang. He spent his entire family fortune and failed to give his deceased younger brother a proper funeral. He managed to find a man with great physical strength to help him, and had an iron hammer weighing 120 ancient catties (roughly 67 lbs. or 30 kg) forged for the strongman. In 218 BC, Zhang heard that Qin Shi Huang was going to Yangwu County (present-day eastern Yuanyang County, Henan) as part of his inspection tour, and was due to pass by Bolangsha during the journey.
Zhang and the strongman lay in ambush at Bolangsha and waited for the emperor's convoy to approach. Zhang saw that all the carriages that passed by were pulled by four horses[1] and believed that the most decorated one in the middle was the emperor's carriage. The strongman hurled the hammer towards it and the heavy projectile crushed the carriage, killing its occupant. Zhang fled from the scene during the ensuing chaos. Qin Shi Huang was actually not in that carriage and survived the assassination attempt, after which he issued an order for the arrest of Zhang. Zhang eluded the dragnet for ten days by using fake identities and became a fugitive.
Reflection Points
The two lessons that one can learned from Zhang Liang's misfortune are:
  • Zhang Liang should have possessed better intelligence before making a strategic decision;.
  • Zhang Liang should have carefully monitored this event from a safe remote site.
After extensively study of the Six Secret Teachings essay and other strategic classics, Zhang Liang learned the importance of the big tangible picture (btp) and later became the principal strategic advisor for Liu Bang, the future emperor of the Han Dynasty.

Zhang Liang continuously made quality strategic decisions and was an excellent collaborator with the other strategic advisors of Liu Bang. He always credited the people who presented valid ideas to the court of Liu Bang.

We will talk more about the life of Zhang Liang and the Six Secret Teachings in future posts.

The Foundation of Our Compass AE Process

The Grandness of a Grand Objective Sometimes Determines the Comprehensiveness of the Risk.
  • The scope of an objective usually determines the amount of difficulty and the extremity of the risk that a strategist would encounter.
The Completeness of the Information Determines the Risk and the Uncertainty of the Executed Intent.
  • The quantity of quality information determines the quantity of risk and uncertainty.
The Quality of Information Determines the Quality of the Strategic Decision
  • Regardless of the strategic venture, a good strategist should always maintain absolute control of the entire operation by constantly checking and reviewing the validity of the intelligence before deciding on any strategic moves. The smart strategist should never presume anything.
Those three grand points are some essential points behind our Compass AE process. We will present a specific test case that encompasses those three mentioned points in our future book.

Have you ever thought that your interpretation of quality information could be the reason behind the current state of your business?

Copyright: 2011 © Compass360 Consulting Group (C360)
Copying, posting and reproduction in any form (without prior consent) is an infringement of copyright.

Wednesday, January 5, 2011

Compass Trend (2): More on Automated Restaurant Service

Coke is referring these machines as the soda fountain of the future. Automation creates convenience, less human labor and possible more profit. Some of these machines have eight-flavor soda fountains, and offers a "wow" 106 brands of soda, from Vanilla Coke to Minute Maid Strawberry Lemonade.

Click here to see the machine in action.

Monday, January 3, 2011

The Dao of Compass360 Consulting Group (1)

copyright (c) 2010-2011

Many years ago, someone asked us why are we in the business of strategy consulting? Our response was that we enjoyed the pleasure of helping people solve their problems.

Through our competitive analysis process, we can help you with the following:
  • Identifying the profit opportunities;
  • Determining the timing points;
  • Filtering the reality from the illusions; and
  • Analyzing the reliability of the data with what-if situations,
Modus Operandi
We assessed the big tangible picture of the client by applying the principles from the Art of War and other Chinese strategic classics as the guidelines.

By evaluating the competitive data regarding to the suppliers, the customers, the competitors, and the allies, we can pinpoint potential profit opportunities.

Our focus are on the following categories of data:
  • the intelligence;
  • the economics;
  • the logistics; and
  • the history of strategic decisions;
We then positioned them by assisting them in their planning and preparation with our Compass AE process. Finally, we guided them toward the influencing of their target through the implementation of their plan. During the implementation stage, we are constantly assessing the situation and re-positioning some minor parts of the client's plan and team toward the completion stage.

Some people have asked us whether is it possible to be effective in such complex world. We tell them the same message, "understanding the tangibility of the big picture is the first step. ..."

More to Come.

Sunday, January 2, 2011

Compass Trend (1): Automated Restaurant Service

Kura, a chain in Japan, relies on small staffs and lots of automation, like sushi-making robots.

As stated in an earlier post, robotic-driven service is the future

Alpha Points:

  • In China and Japan, the automatic food service is incrementally becoming the norm.
  • It has been rumored that the various national fast food vendors are on the verge of building this automated service in the United States soon.
  • This service is specifically designed for serving the masses
  • Lower food costs
  • Lower human labor costs.
  • Customers will be satisfied with lower costs and a greater rate of efficiency
  • People who prefer human contacts.

  • There will always be minor machinery breakdowns.
  • Giving the employees a maximum of 24 to 36 hrs work per week, will not create any bond of loyalty.
  • Companies can hire less people at weekly shifts of 24-36 hrs per week.
  • Statistics have shown that the achievement of high efficiency means higher profits.
  • When a relevant cost efficiency standard starts in Japan, we expected this service to be the norm in the western economy.
  • In order to secure lower food costs, the masses will accept this practice of automated service.
  • We also expected that the human to human customer service to be catered to those who are willing to pay for it.
  • Effective Service + Customer Satisfaction = Success
  • There is a strong possibility of more unemployment for the lower working class in the urban areas.
  • The divide between the masses and the elite is magnified again
(This post was updated on 01.03.11)


December 30, 2010
For Sushi Chain, Conveyor Belts Carry Profit

SAYAMA, Japan — The Kura “revolving sushi” restaurant chain has no Michelin stars, but it has succeeded where many of Japan’s more celebrated eateries fall short: turning a profit in a punishing economy.

Efficiency is paramount at Kura: absent are the traditional sushi chefs and their painstaking attention to detail. In their place are sushi-making robots and an emphasis on efficiency.

Absent, too, are flocks of waiters. They have been largely replaced by conveyors belts that carry sushi to diners and remote managers who monitor Kura’s 262 restaurants from three control centers across Japan. (“We see gaps of over a meter between your sushi plates — please fix,” a manager said recently by telephone to a Kura restaurant 10 miles away.)

Absent, too, are the exorbitant prices of conventional sushi restaurants. At a Kura, a sushi plate goes for 100 yen, or about $1.22.

Such measures are helping Kura stay afloat even though the country’s once-profligate diners have tightened their belts in response to two decades of little economic growth and stagnant wages.

Many other restaurants and dining businesses in Japan have not fared so well. After peaking at 29.7 trillion yen in 1997, the country’s restaurant sector has shrunk almost every year as a weak economy has driven businesses into price wars — or worse, sent them belly-up. In 2009, restaurant revenue, including from fast-food stores, fell 2.3 percent, to 23.9 trillion yen —20 percent below the peak, according to the Foodservice Industry Research Institute, a research firm in Tokyo.

Bankruptcies have been rampant: in 2009, 674 dining businesses with liabilities of over 10 million yen went under, the highest number in the last five years, according to Teikoku Data Bank, a credit research company.

In November 2009, Soho’s Hospitality, the company behind celebrity restaurants like Nobu and Roy’s, filed for bankruptcy. Roy’s is now run by another company, while Nobu’s chef, Nobu Matsuhisa, has opened a new restaurant elsewhere in Tokyo with Robert De Niro.

Along with other low-cost restaurant chains, Kura has bucked the dining-out slump with low prices and a dogged pursuit of efficiency. In the company’s most recent fiscal year, which ended on Oct. 31, net profit jumped 20 percent from the same period a year earlier, to 2.8 billion yen.

In the last two months alone, Kura has added seven stores.

“If you look at the restaurant business, consumers are still holding back because of employment fears and falling incomes, and there’s no signs that will change,” said Kunihiko Tanaka, Kura’s chief executive, who opened Kura’s first sushi restaurant in 1995. “Amid these worsening conditions, our company feels that consumer sentiment matches, or is even a tail wind” to the Kura business, he told shareholders earlier this year.

The travails of Japan’s restaurant industry, and the changes in Japanese dining habits, may be among most visible manifestations of how Japan’s “bubble economy” excesses in the 1980s have given way to frugal times since the bubble burst in 1990.

With wages weak — average annual private sector pay has fallen 12 percent in the last decade, to 4.05 million yen, or about $49,300, in 2009 — the Japanese now spend less on eating out. An average single-person household spent 163,000 yen on dining in 2009, 27 percent less than in 2000, according to detailed budget surveys compiled by the Ministry of Internal Affairs.

In a survey by Citizen Holdings, the watchmaker, of 400 men in their 20s to 50s, the average time spent at cafes and restaurants plunged from 7 hours and 52 minutes a week in 1990 to 2 hours and 25 minutes in 2010.

An aging population is also depressing restaurant sales. More than one-fifth of Japan’s population is already over 65, and surveys indicate that older people tend to eat out less. The population is also shrinking, reducing the restaurants’ potential customer base.

Meanwhile, Japanese companies have cut back sharply on their entertainment expenses, further hurting restaurant sales. Total corporate spending on dining and entertainment has halved from a peak of 9.5 trillion yen in 1991 to 4.8 trillion yen in 2008, according to data from the National Tax Agency.

“The restaurant industry here is so linked to the state of the economy, and that’s why we’re seeing this decline,” said Munenori Hotta, a food service industry expert at Miyagi University in Japan. “In this climate, even top restaurants are having to moderate their prices to keep attracting customers,” he said.

Japan’s dining-out boom had its roots in the 1970s and 1980s, as incomes grew and rural populations flocked to big cities. So-called family restaurants brought cheap, Western-style food to the masses flourished in that era. So did American fast-food chains, which were considered novel at the time. Kentucky Fried Chicken opened its first restaurant here in 1970, followed by McDonald’s in 1971.

At the other end of the price range, a new generation of wealthy Japanese savored imported French wines at lavish restaurants. By 1986, there were 503,088 restaurants across Japan, according to records from the Internal Affairs Ministry. That was nearly double the number from 15 years earlier — and was more restaurants than now operate in the United States, which has more than twice the population of Japan.

After the bubble burst in 1990, new low-cost restaurant chains that offered pizzas for as little as 400 yen, or $4.86, started to spread across Japan, and restaurateurs spoke with alarm of ready-made, convenience-store meals that were siphoning off sales.

In the depths of the slump, in 1995, Mr. Tanaka started a company based on serving quality sushi on the cheap.

His idea of using conveyor belts to offer diners a steady stream of sushi on small plates was not a new one; an Osaka-based entrepreneur invented such a system in the late 1950s. But Mr. Tanaka set out to undercut his rivals with deft automation, an investment in information technology, some creativity and an almost extreme devotion to cost-efficiency. In Japan, where labor costs are high, that meant running his restaurants with as few workers as possible.

Instead of placing supervisors at each restaurant, Kura set up central control centers with video links to the stores. At these centers, a small group of managers watch for everything from wayward tuna slices to outdated posters on restaurant walls.

Each Kura store is also highly automated. Diners use a touch panel to order soup and other side dishes, which are delivered to tables on special express conveyor belts. In the kitchen, a robot busily makes the rice morsels for a server to top with cuts of fish that have been shipped from a central processing plant, where workers are trained to slice tuna and mackerel accurately down to the gram.

Diners are asked to slide finished plates into a tableside bay, where they are automatically counted to calculate the bill, doused in cleaning fluid and flushed back to the kitchen on a stream of water. Matrix codes on the backs of plates keep track of how long a sushi portion has been circulating on conveyor belts; a small robotic arm disposes of any that have been out too long.

Kura spends 10 million yen to fit each new restaurant with the latest automation systems, an investment it says pays off in labor cost savings. In all, just six servers and a minimal kitchen staff can service a restaurant seating 196 people, said a company spokesman, Takeshi Hattori.

“Its not just about efficiency,” Mr. Hattori said. “Diners love it too. For example, women say they like clearing finished plates right away, so others can’t see how much they’ve eaten.”
/// The Big Picture: Effective Service + Customer Satisfaction = Success

Traditional sushi chefs have not fared so well, however. While the overall market for belt-conveyor sushi restaurants jumped 42 percent, to 428 billion yen, in 2009 compared with 2003, higher-end sushi restaurants are on the decline, according to Fuji-Keizai, a market research firm.

“It’s such a bargain at 100 yen,” said Toshiyuki Arai, a delivery company worker dining at a Kura restaurant with his sister and her 3-year-old son. “A real sushi restaurant?” he said. “I hardly go anymore.”

Robot waiters in China are steeled for service
A restaurant going for a futuristic vibe and satisfied customers opts for robot service staff. Patrons are pleased.

By Ken The,
Associated Press
December 25, 2010

Reporting from Jinan, China
Service with a smile also comes with an electronic voice at the Dalu Robot restaurant, where the hotpot meals are not as famous yet as the staff who never lose their patience and never take tips.

The restaurant, which opened this month in Jinan, in northern Shandong province, is touted as China's first robot hotpot eatery, where robots resembling Star Wars droids circle the room carrying trays of food in a conveyor belt-like system.

More than a dozen robots serve as entertainers, servers, greeters and receptionists. Each robot has a motion sensor that tells it to stop when someone is in its path so customers can reach for dishes they want.

The service industry in China has not always kept up with the country's rapid economic growth, and can be quite basic in some restaurants. Patrons at the Dalu restaurant were full of praise for the robots. ...

"Humans can be temperamental or impatient, but they don't feel tired, they just keep working and moving round and round the restaurant all night," Li said.

"I hope this new concept shows that China is forward-thinking and innovative," Zhang said.
... He also said that he hopes to roll out 30 robots — which cost $6,000 each — in the coming months and eventually develop robots with human-like qualities that serve customers at their tables and can walk up and down the stairs.

/// We are anticipating China to manufacture these robots and other automated service machines with better cost efficiency than the rest of the world.

Associated Press writer Chi-Chi Zhang in Beijing contributed to this report
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Since last year, we expected to see some of the national brand fast food franchises to start the process of pushing automated service into the urban areas quite soon. We expected the labor costs to be quite low and the number of unemployed food service specialists to rise.Regardless of the anticipated benefits and consequences, this service will be coming to your neighborhood. It is only a matter of time.

One of the prevailing rules of the information economy is the importance of creating an efficient service that is near cost-effective on the first run.

Another rule is that almost everyone has access to the same core of general information. The driven implementers are those who can make the first move to start the strategic momentum. Proper implementation determines the success.Some entrepreneurs begin by viewing the big tangible picture and then asking the following questions:
  • What are the current state of my targeted market terrain?
  • What are the prevailing variables?
  • How long will it last?
There are more questions, we will touch on those questions later.When the economic state of a terrain changes, the smart people and their technology tools evolve. The costs will slightly drop and the profits rise. The "thrivers" are those who evolve. That is the Compass rule of capitalism.If you are interested in knowing more about our strategic consulting services, drop us a note at