6 Top Articles About Haidilao and Zhang Yong’s Success

Intrigue with Dahlan Iskan writing in jpnn.com, I search article that mention Haidilao, a successful hot pot chain restaurant, and the men behind, Zhang Yong.

And here’s my compilation, the news is already on top since 2011.

1. The interview with Zhang Yong in eeo.com.

At the beginning, we had only four tables, but later we expanded by adding a whole floor. Our restaurant had the best décor and even had air conditioning. In 1998, we opened our second store.

I don’t care about money. It’s your view of the world that decides your attitude towards money and your ties with your colleagues. You know whether you want to expand. If you’re only interested in earning money, you’re scared of risks and you break your principles as soon as quarrels break out. If you have a bigger dream, you view money as a resource for investment. That is how entrepreneurs think.

2. Slideshare pages, especially on page 10 and 11.

slideshare haidilao innovation 1

slideshare haidilao innovation 2

3. From WSJ Blogs.

“It’s not about expanding quickly,” he said, adding, “I want to understand the market.”

“Not all of these ideas were mine,” Mr. Zhang said. “If you want creativity, you have to let your workers invent and use their creations.”

But ask Mr. Zhang how others can follow in his success as one of China’s most renowned restaurant owners and he will say, “Don’t study me; learn from Steve Jobs.”

4. From Medium

Quickly we could visualize the market opportunity Hai Di Lao had created for themselves, taking a bet on service as a differentiator, and systematically backing their initial bet to evolve their value proposition from ‘great service’ to ‘great services’.

Great table service is supported by a large variety of other services offered for free, including Wi-Fi, snacks, drinks, access to games, shoe shines, manicures and massages.

Customers are frequently willing to wait for more than two hours for a table.

Traditionally, power in restaurants is held by chefs — they get to call the shots and other staff largely have to follow directives. The Hai Di Lao model largely eliminates this kitchen-centric model and devolves power to the waiters, who have full autonomy to make the decisions required to deliver the quality of experience that continues to pack the house each night.

These innovations in their business model are the real ‘secret sauce’ that has allowed their business to scale while maintaining consistency in food quality and customer experience.

Hai Di Lao radically empowers frontline employees and creates the type of emotional, family-like connection with employees that goes far beyond the contractual, transactional relationship typical of the achievement-focused archetype.

5. From Whatsonweibo.com.

Anyone working at Haidilao is thoroughly trained.

The training is provided by people who have worked at the chain for at least 3 to 5 years, who teach new workers about corporate culture and Haidilao food.

6. From HBS.org

Hai Di Lao: Service Beyond Imaginations

Hai Di Lao (in Chinese: 海底捞) is a popular hot pot restaurant chain with 130 eateries in 35 Chinese cities, and 6 branches overseas. It justifies its premium pricing with exceptional service, fresh ingredients, and an overall pleasing customer experience.

Unlike most hot pot restaurants where waiting customers don’t have seats to sit on, waiting areas at Hai Di Lao are well-decorated, and can account for 1/3 of the total space of the restaurant. It also provides WIFI, manicure/shoeshine/hand massage services, board games, and a variety of snacks and drinks, all for free!.

After an average wait time of 45min to 1 hour, diners sit by the hot pot table, and are given free full size aprons to prevent themselves from staining their clothing and protective baggies for their cell phones. From time to time, a server will perform the restaurant’s signature Olympic-style “noodle dance”, winning lots of “wows” from the patrons.

The branch managers are not evaluated on the revenues of the branch. Instead, “customer satisfaction” and “employee satisfaction” are the two main metrics that determines the management team’s compensations.

Hai Di Lao understands that loyal employees make happy customers. Therefore, it offers a highly competitive compensation packages for its best employees. The perks of working for Hai Di Lao may include free apartments, nannies, and sometimes parental subsidies. A dedicated fund was set up to help employees with personal emergencies. China’s restaurant industry observes notoriously high turnover rate. Hai Di Lao, however, has much lower turnover rate than its competitors—almost zero at the management level. Hai Di Lao’s service-centric business model will not be sustainable without a loyal employee base.

To improve the scalability of the business model and consistency in service and food quality, all the Hai Di Lao branches are directly managed, and shared a centralized of distribution network. No franchises are allowed.

All the ingredients are sourced, washed, processed based on the company protocol, and then packaged, and delivered to the individual branches based on demand forecast from each branch.

According to a branch manager, the delivery service is actually a money loser but it provides convenience to the customers, and they believe doing what makes customers happy will eventually create values for the brand.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.