30 August 2018
Radical transparency: the essence of Dodo Pizza
When people get to know Dodo Pizza, one thing often boggles their minds: our commitment to the idea of radical transparency. Dodo’s dedication to openness manifests in many ways, and here are just a few examples:
- While many other franchise chains keep their units’ sales secret (so you won’t even know how much another partner around the corner is making), we encourage benchmarking and make the monthly sales of all of our pizzerias public.
- Our corporate chain publishes its P&Ls (by regions in Russia: Moscow, Syktyvkar, Saint-Peterburg), as well as our franchise devision; all of the data are accumulated in our monthly financial report.
- We broadcast our weekly company meetings on YouTube (there is also an archive of our meetings in English).
- Every kitchen in the chain is equipped with a webcam; a few examples:
- Our customers can ask for a tour of any Dodo kitchen and see for themselves how we store our food.
- Our mystery shoppers check the quality of our pizza shops’ service twice a week; based on the results, we give each pizza shop a score and create the quality ranking of our chain. This ranking is also public.
- Many franchisees want to book certain regions for themselves. This can be done only after winning a tender for the region in question. These tenders are open for everybody. The rules are transparent.
- Every summer, we hold our managers and partners meetup, where we publicly commit to five goals for the next 12 months; we also report on our progress with the five goals from the previous meetup.
- Fyodor Ovchinnikov, Dodo Pizza founder and CEO, is probably one of the most prolific business bloggers. Almost every day, he shares company news.
Of course, Dodo Pizza isn’t alone in its efforts to build its business on the principle of openness and transparency.
Corporate transparency examples
- Buffer allows anyone to see its employees’ salaries (so you can study a spreadsheet and learn that Alfred from marketing makes $86,000 a year, while Jouel, the founder, earns $265,315).
- Patagonia provides transparency for its supply chain.
- Moz publishes a very elaborate annual review (though the company isn’t obliged to do that).
- And of course, there is Ray Dalio, who has built his investment firm, Bridgewater Associates, on the idea of radical transparency.
Management pundits extol transparency since the rise of the web (which kind of foists transparency on companies and governments anyway, whether they like it or not). A book called The Naked Corporation: How the Age of Transparency Will Revolutionize Business was published as far back as 2003.
But our team has come to the same principles not because we read this book—or any other. It happened naturally. Every step we were making was dictated simply by the needs of our business.
Why we started building an open company
Webcams? The very first Dodo Pizza was opened in Syktyvkar. Folks there weren’t used to delivery and felt leery about it. So launching a live web feed from the kitchen was a way to win their trust.
Public sales? Since day one, Fyodor Ovchinnikov, the Dodo Pizza founder, dreamt of building first a national, then a global franchise. The question was how to woo his first partners while having just one small pizzeria. Making its sales public helped a bit.
Open ranking? In the beginning, Dodo Pizza units were scattered across the country. The question of quality control seemed pretty acute. Making the results of mystery shoppers’ inspections public was a radical but effective measure to ensure quality.
After a few years, having taken these and other steps, we found ourselves one of the world’s most transparent companies in the food service business (on top of being one of the world’s fastest-growing pizza chains).
Openness has become one of the mainstays of our brand. Now, when we see an opportunity to make an internal process open to the public or our big community, we seize it. For example, one of our five key projects for 2018/2019 is an open pizza shops ranking that will be based on customer feedback coming through our mobile app.
Let’s face it: the topic remains controversial. Some experts cast doubt on the effectiveness of total transparency. They say there could be too much transparency—especially for established companies. It can produce a corrosive effect on the team’s morale.
Today, some people resort to building walls as a measure against problems. We believe the world needs even more openness. And for a business, going down the transparency path totally pays off.
Benefits of transparency for business (as we see them)
Motivation. When you make your goals public, you provide your team with a good injection of motivation. Everybody watches, so failure isn’t an option.
Decency. When your processes are there in the open for anyone to scrutinize, it incites to you do everything by the book, which in the long run, makes your business more secure.
Improvement. Corporate transparency provides your business with a never-ending stream of feedback—from your customers, employees, partners, and society in general. Criticism incites constant improvement, which is the only way to perfection.
Trust. Radical transparency wins you trust. And trust is the most valuable resource. We’re growing fast because many people trust us and become our colleagues, partners, or investors.
For us, openness isn’t just a marketing rattle we employ to get attention. We’re committed to it personally and are going to push our business even further in the direction of radical transparency, no matter how big our chain becomes.
Actually, there will be some new developments in this area pretty soon. Subscribe to our Monday newsletter below, and I’ll keep you posted.