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What HR can learn from the incredible digital transformation of Domino's

BY -

Phil Strazzulla

July 15, 2021

You may be aware that Domino's Pizza has undergone a re-birth in the last 10 years. It's a company that was in a stagnant, low innovation sector who's stock price hadn't moved in years.

However, the business started heavily investing in technology a little over 10 years ago.  This led to a lot of changes.  Most notably, the stock price has outperformed even the likes of Amazon, Google, and Facebook by a very wide margin!

Line graph showing Domino's extreme growth compared to big tech companies

And, this growth has continued throughout the pandemic where an already digital first business was able to take market share during a time of turmoil.

Domino's stock price trend from 2004 to 2021

If you'd invested $100 into Domino's stock in January 2010, you'd now have $4,201, not bad!

There are many case studies online about how Domino's did what they did and how it impacted their business.  However, I'd like to talk about the lessons specific to HR and HR Tech:

Digital Transformation Drives Efficiency

The obvious upside in implementing technology into your process is to make it more efficient.

  • Interview scheduling software can decrease the time your team spends on scheduling my over 90%.
  • Switching from spreadsheets to an ATS, or a horrible ATS to a good ATS can save you time, money, and drive lots of business value by decreasing time to fill
  • AI sourcing, performance management, employee recognition and a whole lot more can simplify your operations and drive ROI

Domino's saw similar types of cost savings and productivity gains when they implemented the right technology.

My guess is that this was the original base case for making the investment: if we invest $X into new tech, Y will change, and therefore we can capture $Z which will make it worth the investment.

However, I think there are a lot of non-obvious benefits that came with this transformation, the kind of benefits that lead to a 4,000% increase in stock price!

Transparency leads to value

Have you ever learned about the process behind a product and gotten a deeper appreciation for all the work that went into it?  Maybe it was the time it took to make a good bottle of wine, the creativity of a piece of art, or the engineering of a car.

It turns out, when consumers learn about how something is made, they have much higher satisfaction rates, and are willing to pay more for it.  They are also able to better understand the inevitable hiccups when something goes wrong.

Domino's pizza tracker

Domino's is famous for their pizza tracker.  Customers know when to expect their order, and more importantly know all the work that went into their pizza along with some of the names behind it.

They found this led to higher customer satisfaction, more word of mouth, and the ability to increase prices.

There are many potential analogues here for HR teams, but the most poignant is to create transparency with internal stakeholders who are constantly pulling your team in so many directions.

It's not uncommon for people to lament "my HR team can't hire the right people / build the right culture / answer my questions / etc."

What most employees and managers fail to understand is that HR teams are drastically under resourced because they are viewed as cost centers.  Lack of resources means you can only make so many pizzas at a time.

Last week I ran into an HR pro that created a Trello board with all HR's priorities so that the rest of the organization can see everything his team is working on.

This helps collect feedback on what to prioritize - and also shows the rest of the organization everything that's being put into recruiting/culture so that they can appreciate the end product that much more.

Interestingly, this strategy of transparency around process has been used by municipalities (posting pictures of fixing potholes on an Instagram account), consumer brands, and many other businesses to great success.

Better technology means better feedback

Domino's asks customers how they liked the pizza after it arrives.  This means they can get better at what they do.

What they also found out was that a customer saying "this was really tasty!" is an amazing motivator for their workforce.

HR teams are now collecting more feedback from candidates, and the entire company.

Going a step further, the next time you implement a large project (new ATS, employee engagement tech, etc), ask for feedback from your key stakeholders on how this went and what the results were.

You'll get better for the next big project, and the people who put in the hours to get it done might just get some satisfaction out of this feedback.

Digital means agile

The last part of this story has played out recently.  While so many businesses struggled to adapt during COVID, those who were digital native were able to take market share.

This of course is also what happened in the People arena.  Video interviewing, virtual career fairs, remote-enabled onboarding, global payroll and more were key technologies that many of the best HR teams had adopted over time.

In addition, companies that had invested heavily into technology had already created the right process to find and buy software where needed.  This drastically decreased time to value when the world changed, while those who hadn't developed the skills to buy tech struggled to evolve in time.

Overall, the Domino's story is a fascinating one for any business nerd, and especially those in HR.  Like any good story, it's backed up by a world of data, namely a stock price appreciation that would give Warren Buffett FOMO!

If you buy HR Tech and want to be a part of our community, you can learn more here.

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