Mrs Fields’ Cookies Analysis

General Overview

A detailed analysis of the case study presented by the Harvard Business School has been done.

All the issues that faced the Fields initially as they were just about to start out and all the issues they currently face have been well documented in the case study. Mrs. Fields Cookies was founded in 1977 as a single cookie store and grew to 600 stores within a decade. The company appealed to customers through warm cookies, friendly service, and reasonable prices. Debbi Fields had created the business. Randy Fields devised a corporate structure fit to be wed to an information system. At Mrs. Fields Cookies Information System pioneered by the vision of the MIS director Paul Quinn enabled Mrs.

Fields Cookies to have “Networked Organization Structure”. The organization structure was designed to be flat but at the same time, there was a hierarchy (reporting chain). This IT-enabled network facilitated the Mrs. Fields Cookies in a way that every morning at 6:00 Utah time, a computer in Park City would know of every purchase made at more than 500 stores in five countries on four continents. The strategic goal of having an Information System was to put as much decision making and intelligence into the store level PC as is necessary to free the manager to do things that uniquely people do.

Practical Implementation of the Information System in Mrs. Fields Cookies

Debbi Fields started her own business of selling homemade cookies and devised a corporate structure that was apt for using information systems. The company was started in 1977 with the first store in Palo Alto, California. And by 1988, Debbi as the President of Mrs. Fields’ Inc. had employed a staff of 8000 people with 140 staff positions at the Park City head office. With the MIS system in place, the computer in the head office would keep records of all the purchases made at the 500 stores across the 25 states and 5 countries on 4 continents.

But ‘The point wasn’t to make money, the point was to bake great cookies’. In spite of such a vast set up, Debbi made it a point to give her customers the personal touch. Mrs. Fields’ Cookies came in 14 varieties and also moved into brownies and muffins followed by an expansion into candies and ice cream. All baked products were sold within the 2 hours after production and the rest were discarded. She had close control over this, and also on the other intricacies such as store designs, etc. She also kept a close look over the finances of the company and the managers and staff of her organization.

The hierarchy of the organization can be shown as follows: Debbi Six District Managers Six store Managers managed by each District Manager Debbi also managed a store so that she was up to date with what was happening in the stores. She was very particular about the reporting structure. There were daily reports that had to be maintained. She used to print out nearly 300 pages of reports daily, and each of the district managers had to print out 50 pages of reports daily. Further, there was one controller in the Park City head office who she would consult to discuss the differences in accounts across the stores.

She also offered monthly bonuses to her store managers if they were able to meet the monthly sales forecasts and was quite generous in the amounts offered for the same. Thus there MIS also kept a record of all the sales across the years and made a yearly trend analysis for each store separately. The District Sales Manager then made the appropriate forecasts for how little or how many additional sales (by volume) could be made at the stores. Further, Debbi appointed a Vice President of Operations who reported to her directly about the management of the store controllers daily.

Each of these store controllers (with 35 to 75 stores) reported to the Vice President daily, with computer reports that summarized daily sales. Further, the computer reports summarized the product type for each store, usual conditions, problems cash underages and overages, and trends. It also contacted field managers for clarification if any. Thus we see that Debbi kept a very close look, even though at the aggregate level, on the actions in each of the stores. It was more important for store managers to sell cookies than to maintain paperwork. The MIS structure was in place and was used to keep records across the stores uniformly.

Enough decision making and intelligence were put in the computers in each of the stores. The manager was expected to concentrate on the customers and sell. She had appointed Paul Quinn as the director of MIS, and he reported directly to Debbi’s husband, Randy Fields. Debbi also had a very approachable and free environment in the organization. Anyone was free to come and enquire with respect to system developments. She believed that a system was justified on the basis of a cost-benefit analysis on three criteria:

1. Potential payback
2. Drive sales
3. Strategic importance.

Information Systems was used extensively in Debbi’s business. Randy encouraged all employees to think beyond the usual function of the system. He believed that they shouldn’t be limited to what they think the computer must do. This helped in automating many of the actions and reducing costs for the organization. Thus, they were able to expand without employing more staff. Further, the employee’s initiatives gave rise to an expert system. The management information system was quite sophisticated, as all financial performance at the individual store levels were tracked and analyzed.

It provided a comprehensive scheduling of activities, marketing support and hourly sales projections for each of the stores. There was a menu in place with the detailed daily planning through complex mathematical modeling through which the manager’s work was largely reduced to just inputting the types of cookies to be made on a particular day, and the resulting mix of ingredients would be displayed. The computer would store the daily sales and inventory information also and would provide comments and recommendations. It was also easier for the headquarters to keep track of the activities through this system.

From sales and inventory information stored in the computer, the information system computed projections, and prepared or generated orders for supplies. A single corporate database tracked sales in each store and produce reports that are reviewed daily. Headquarters thus learn immediately when a store is not meeting its objectives and is able to respond quickly. The most efficient way to communicate for managers is through email, but they also daily called their phone mailbox in Park City for audio messages. Thus the managers did not simply read memos from the president but often personally heard her voice.

The Information System helped Debbi maintain a personal involvement with each store manager. “Even if she isn’t there, she’s there” in the standards built into scheduling program, in the hourly goals, in the sampling and suggestive selling, on the phone. The technology has ‘leveraged’ Debbi’s ability to project her influence into more stores than she could ever reach effectively without it. The information system in place was also used to help employ people. As the District managers would conduct interviews, they could input their findings into the system to be able to compare to the previous applicants in order to find the best “Mrs.

Fields’ kind of People”. There was a personnel database that maintained the answers to questions by the new applicants and also of existing employees. However, the manager could override the system recommendation regarding which applicant to hire. With further diversification in stores, the organization moved to employing a ‘combination store approach’. But through this approach too, information systems still played a fairly significant role on two levels- that of control at various levels and that of better and easier decision making through availability of correct and precise information.

Potential for Supporting Enterprise Growth

The phenomenal growth of Mrs. Fields would not have been possible had it not been for the use of technology in generating an Information System under the guidance of Paul Quinn. The integrated Information System helped streamline the interdependent processes of various departments that form the backbone of most companies such as the Financial department, Sales department, Systems department and the Operations department. Thus in many ways, the Fields had succeeded in marrying various departments with the help of an MIS that was superior to that of most peers at the time.

Their model was one of the first ERP Systems to emerge on the global scene. In this case study, when Mrs. Field started her second store, she found out there are a number of new issues she had to deal with. By establishing and implementing MIS she resolved all of these issues. Size Does Matter: The size and complexity of an organization will have a direct impact on the kind of Information System required. When Mrs. Fields’ Cookies was an organization with one store, they didn’t find the necessity of MIS. As the organization started growing in size and complexity they began to realize the importance of Information Systems.

Information System helped them in dealing with all the functions required for day-day applications among the many other advantages listed later.

• Organization : As an organization expands, the need for a well-defined structure arises. A direct consequence is the emergence of hierarchy which is not always suited to the needs of an organization. Many a time hierarchy may not be in tune with the overlying principles and cultures of an organization. This can reduce the output of the organization. Employees had titles and responsibilities, but there was no official organization chart. Communication took place between people as needed, irrespective of their title or position. Also there was a lesser need for staffing as most of the paperwork was taken care of by the built-in MIS. They needed employees mostly for the purpose of carrying out sales. This helped the company reduce expenditure on salaries.
• Operations: In Mrs. Fields’ company MIS tracked the financial performances of each company-owned outlet and provided comprehensive scheduling of activities within stores, including marketing support, hourly sales projections, and even candidate interviewing for prospective employees.

In each store, the personal computer had applications like

• Form Mail: Form Mail was used mainly to brief messages between managers and staff. This helped in connecting all the managers to the headquarters and thus motivated them to keep working, reminding them that they were very important to the company.
• Day Planner: This was the first application a store manager used each morning. It produced an updated schedule for the day based on minimum sales target, the day of the week, and type of day. This helps the store manager in taking decisions like how many cookies to be baked per hour and what the projected sales per hour will be. This helped the manager by giving him more time in selling than doing paperwork. Also it helped them in reduce the wastage of cookies as they change the number of cookies to be produced on hourly basis.
• Labour Schedule: When the requirements for a specific day were entered, the required number of staff to run a store would be generated by the system. This helped in utilizing the staff in an optimum manner. Whenever fewer staff are required, they could use the extra staff for promotional purposes thus reducing the expenditure on promotions.
• Skills tests: This computer-based tests helped the employee in improving his/her set of skills. This is transmitted to the corporate offices thus giving a chance for the employee to project his skills and be considered for raises and promotions. This system helped in giving raises and promotions to the people with the required skill set. Also it helped improve the standards of the employees.
• Time Clock: This application enabled employees to punch in and out using Tandy computers. It maintained an automatic time card which recorded the time in and out of the employees and thus recording the working hours.

Using this, the company paid the employees. This system ensures that employees come in time to the store. Also since the payment is done on the time the employee worked, the company would be saving a lot of revenue. The store controllers reviewed daily computerized reports summarizing sales overall and by-product for each store. They monitored unusual conditions, problems, and trends, as well as cash underages and overages, and contacted field managers for explanations. By knowing the details daily they are able to prepare themselves for exceptional conditions also.

In this way they started learning daily and this enabled them to keep improvising.

Implementation Issues Regarding Parts of the Information Systems

Information Systems and People

“The less hierarchy, the better…that with hierarchy, the larger an organization, the more managers turn to managing people and less to managing key business processes.” Information systems are the glue between people and computers. Both the social and business environments are in a continual, some might say chaotic, state of change while computer hardware continues to double its performance about every 18 months.

This presents a major challenge for information system developers. User-friendly is an old one, but one which has come to take on a multitude of meanings. However, in today’s context, we might well take a user-friendly system to be one where the technology fits the user’s cognitive models of the activity in hand. The functionalist viewpoint, which attempts to freeze and inhibit such change, has failed systems developers on numerous occasions. Responding to, and building on, change in the social environment is still a significant research issue for information systems specialists who need to be able to create living information systems.? Alshawi, Elliman and Paul et al. ) The effectiveness of an information system is a product of the interaction between organizational goals and practices with the design of technology to meet them. Tacit practices and values, that is, things organizations and people do but take for granted and thus do not articulate, tend not to be elicited in standard system development methods. Development processes contain their own tacit and explicit practices which must often be adapted to incorporate organizational realities.

Information Systems & People focuses on a deeper treatment of this context so that system development is in fact strategic, appropriate, flexible, and supports human activity. It is evident from the case study of Mrs. Fields Cookies, the role of people within an organization cannot be discounted. Since a system is put in place by the people themselves within the purview of an organization and its objectives. The Information System can function efficiently only when there is a definite protocol that the members within the organization strictly adhere to.

There is an interdependence of business environments, organizational culture, business processes, business strategy, and the development of information systems. Hence People as an organization and the integrated Information Systems influence each other. Information systems are built by managers to serve the interests of the business firm. At the same time, the organization must be aware of and open to the influences of information systems to benefit from new technologies. To deliver genuine benefits, information systems must be built with a clear understanding of the organization in which they will be used.

Any Information System to be incorporated into a firm will have to take into consideration the following:

1. Business Processes and Routines
2. Organizational Politics
3. Organizational Culture
4. Organizational Environment
5. Organizational Structure

In Mrs. Fields’ Cookies Case-Study, the Fields’ management philosophy shines through. It was a breakaway philosophy at the time as tradition demanded that in any organization, authority had to be delegated. However Mrs. Fields was averse to this notion. She believed in immersing herself whole-heartedly into her work while at the same, actively involving her employees in the process.

Actually her interactions with the employees were one of the main reasons for her success. Her camaraderie with her work-force was the base on which she built her empire. Debbie Fields had no formal business school training but she had sharp business acumen. She seemed to take decisions with her heart more than anything else- something that is a strict no-no in the business world. She relied on her principles and values in business. Her decisions were mainly guided by her instinct which was on the right track most of the time.

Debbie Fields believed in treating her employees like customers believing that in the process, the employees would feel more inclusive in the sharing of the spoils. Hence, the feel-good factor which the case so often speaks of was first transferred to the employees who in turn, transferred it to their customers. The simple joy of freshly baked cookies was transferred down the value chain. To make the customers feel important, you need to make the service staff feel wanted. Also, Debbie Fields was against the idea of franchising her outlets as they went against er principles of not working for profit. She regarded each store as an extension of her Palo Alto store- which was her original baby. Another key point that played a vital part in The Fields’ success story was the way in which they dealt with zeroing in on an organizational structure or lack of a traditional one. Randy vouched for keeping a small staff as he was of the opinion that a small staff resulted in employees solving business problems rather than managing layers of people and that smaller groups of people made decisions faster and better.

The Fields believed in less hierarchy especially in large organizations where the managers always seemed to deviate from their objectives- that of managing key business processes instead of people. Reducing the hierarchy within an organization effectively makes the structure flatter. The flatter the organization structure, the lesser the number of intermediaries through which there is a flow or dissemination of information and feedback. This resulted in a lesser delegation of authority and an equalization of the posts held by most people with similar job profiles within the company. This made the managers more approachable.

Also the controllers reported directly to the head. This resulted in effective flow of communication. However, the information that is generated in this structure, is almost always primary in nature. Managing this information can be a big problem. And this is where Information Systems come in. Hence, the case study is a perfect example of the integration of Information Systems within a large organization. It is interesting to note here that the Fields’ organizational structure was a prelude to the notion of cross-functional teams that would soon be on the lips of every management guru.

The Fields’ encouraged an active involvement and participation of employees which few organizations really practiced at the time. Hence, we can safely conclude that their management philosophy was well ahead of its time.

Information Systems and Procedure

A clear, concise, and well-written set of information system (IS) policies, procedures, and control documentation is a strategic link between the company’s vision and its day-to-day operations. These documents are critical to an organization because they ensure that IS employees understand their assigned responsibilities and enable the smooth functioning of computer operations to function without constant management intervention. Policies reflect your company’s goals and specify how you intend to operate your business by establishing guidelines for your staff. Users are provided with a detailed and easily understood plan of action required to carry out or implement a policy. (J. H. Cohn Consultancy.) The procedure is a defined set of instructions aimed at describing how to proceed in achieving a pre-defined milestone/target. Systems have a collection of predefined procedures related to each other in a sequenced logical manner in order to collectively achieve the desired results.

The system procedures in all kinds of environments are subject to internal controls and checks that are necessary to ensure the effectiveness of the same. In the case-study- Mrs. Fields’ Cookies, it is evident that procedure played an important role in the company’s operations. There was a clear set of instructions for everyone within the organization no matter what position they occupied within the framework. From the corporate level to the store manager, everyone was aware of what was expected of them.

To have a set, well-oiled procedural protocol in place, it is necessary to have a fixed set of objectives. The Fields’ made a conscious effort to clearly define their targets to the employees so as to facilitate the efficient functioning of the company’s machinery. Right from the launch of their first store in Palo Alto, The Fields’ grappled with sales target daily. The motivation was one of their keystones in operations and getting the best out of everyone. Store managers were offered incentives that were commensurate with their performance and position within the company.

The procedure was well documented in the Information System and was well applied by the controllers and managers. Information Systems played a vital role in the collection of data related to processes be it the financial performance, the performance of employees at various levels, the data required for even an ordinary store manager to decide how many batches of cookies that needed to be baked on an day-to-day basis and so on. The basic purpose behind setting up systems and procedures is to make available information when required.

But when procedures are organized in a logical manner to form systems, the value of information as an output of a system enhances. When technology is added to the system, the scope of a system changes to include hardware, software, and designs linked together in accordance with the procedures contained in that system to give a purposeful architecture. It is necessary to develop, review, and continuously revise Information System policies and procedures to meet best business practices, regulatory requirements, and controls as well as realize corporate objectives.

Examples of IS areas that should be addressed include, but are but not limited to:

• Information security
• System development and acquisition
• Change management
• Data backup, recovery, storage, and backup retention
• Disaster recovery
• Incident management
• Vendor management integration and appropriate cross-referencing of different procedures within an organization are important for the established Information System to be effective.

A systematic procedure set in place helps streamline processes and facilitates the speedy achievement of the firm’s objectives.

Procedures are not standardized of course. The procedures of MIS within various firms vary as per the firms’ organizational structures, objectives, and work cultures. These are affected at the macro-level by the type of industry. A framework that allows an organization to gain perspective on the field of information systems can prove to be a powerful means of providing focus and improving the efficiency of information systems. A subsequent lack of this perspective can prevent full appreciation of the variety of organizational uses for computers.

The Fields had that system in place. Their information system effectively tracked the financial performance of every company-owned outlet as mentioned earlier, provided comprehensive scheduling of activities within each store, included market support, hourly sales projections, and even candidate interviewing for prospective employees. An efficient Information System in place leads to better decision-making. Better decision-making in turn, empowered the firm to plan the sensible allocation of resources in tasks related to Information Systems.

The Information system also helped in making hiring decisions helping the manager in narrowing the field of applicants to those who possessed attributes or qualities that the company valued so much. Computers conducted interactive sessions with promising candidates whose profiles were then compared by the computers with the profiles of the existing employees. A personal database was maintained for this purpose. All these factors enhanced the productivity of the firm. The increase in productivity had a profound positive influence on the behavior within an organization.

Information Systems and Devices

Mrs. Fields’ standard personal computer configuration was a Tandy 1000 (an MS-DOS system with 8086-based CPU) with one floppy disk drive, a 20-megabyte hard disk, and an internal 1200 bps modem used for communication with the Utah data center. Tandy computers were chosen with Tandy, but most managers simply contacted the nearest Radio Shack if they had problems. The software was the responsibility of the Micro Systems manager in Park City. The data center in Park City utilizes three IBM Systems 38s, each equipped with six 9335 hard disks.

As they were chosen for their database strengths, the System 38s were dedicated, to sales systems, one to financial systems, and one to application development. With all significant corporate data residing in one database, disaster planning was of critical importance. The company had experienced several system failures, and had a simple disaster plan: if one of the Systems 38s failed, one of the remaining two would back it up for critical functions. Store PCs that had not transmitted their daily work would store the information locally and transmit later.

If data had already been transmitted, but the nightly backup tapes had not been run, the information would be lost. Such problems hadn’t occurred, though there had been recoverable disk failures.

Information Systems and Software

By 1990, a considerable percentage of Randy’s time was devoted to his outside business, the Fields Software Group-later renamed the Park City Group, to “disassociate itself from cookies” (Fox, 1993, p. 74)-which focussed on selling his trademark software to other retail companies. In 1992, Randy left the company, leaving Debbi in complete control. In 1993, lenders forced Mrs.

Fields’ Cookies to go private, then to provide them with 79% of the company’s stock in exchange for writing off $94 million in debt. Debbi Fields was also required to step down as president and CEO (Pogrebin, 1993). Nowhere was the insensitivity to environmental scanning at Mrs. Fields as evident as in the LPB acquisition. Within 8 months of acquiring the unprofitable chain, the software had been designed to manage the units, terminals had been installed, LPB headquarters had been downsized from 64 to 4, and unit managers who resisted taking direction from the computer were “weeded out” (O’Brien, 1990, p. 146).

Only after all these actions had been accomplished did the Fields consider sending senior managers out to run the new units for a few months, so they could get a feel for them (Walton, 1989). Choosing such a sequence of activities, with unstructured observation at the tail rather than the head, virtually guaranteed no significant changes to the company’s theory-in-use would be realized as a result. Executives and senior managers will be less insulated from operations because executive information systems will help them get the information they need to monitor, coordinate, and control their businesses.

Rather than waiting for the analysts and middle managers to prepare reports at the end of a prolonged reporting period, executives will have immediate access to information. Software will help do the analysis and present it in a useable format. With such immediate feedback, managers will be able to adjust their strategy and tactics as circumstances evolve rather than at fixed time intervals. Efforts have also been made to greatly increase the amount and richness of bidirectional information flow.

Information System and Database

At Mrs. Fields Cookies, it faced the problem of training and motivating relatively inexperienced store managers to use the standards and procedures Mrs. Debbi Fields developed when she operated her first store in California. Mrs. Fields Cookies used information systems as part of its approach to these issues. Years of experimentation and development work created a unique information system that minimizes paperwork and permits headquarters to monitor and control day-to-day operations at each store.

While this part of the system makes data collection and repetitive decision making as routine and automatic as possible, another part provides a more human touch. It permits Debbi Fields to send voice and text messages to store managers to discuss problems or pass on the news. It also permits store managers to request help from headquarters. After many years of gradual evolution, the software in the system has been generalized and is being sold under the name Paperless Management to other businesses that need to manage numerous retail outlets. Despite the company’s expansion problems, the case illustrates how information systems can be integrated into a company’s approach for performing and controlling internal operations.

• Information systems play a key role in running the stores efficiently.
• Standardized methods for repetitive operational decisions allow employees to focus on customers.
• Data processing related to repetitive decisions absorbs energy best applied elsewhere.

The emphasis of technology is on performing tasks that cannot be accomplished manually, rather than on automating those decision-making tasks already being performed by humans.

Examples of such uses of information technology include the sophisticated database tracking system used to ensure complete records of customer problems and resolutions are maintained and the sophisticated automated tools provided to developers for producing detailed problem reports, helping Microsoft personnel in the quick and accurate diagnosis of the problems (and, at the same time, alerting them to possible bugs in their own products).

Debbi’s Dilemma: Had the Fields Lost Control?

Clearly, Mrs. Fields’ had never lost control of her organization and its different components thanks to the excellent information system in place. The accurate information daily helped in making prompt and accurate decisions to improve the sales daily. It made the employees more efficient and also allowed them to concentrate on the customers and let the computer handle the paperwork and accounts. The stronghold on information systems and the organizations’ overall ambition to expand on the information systems through internal idea generation made the system all the more extensive. Many more activities were automated.

Employees were encouraged to think beyond the usual system functions and suggest system development. But now, all they needed was the efficient allocation of work and the effective implementation of targets. Further, their information systems could also incorporate market research and consumer research specifically directed to large scale expansion. Was the information system still a cornucopia? What is needed now? With expansion and growth, the amount and variety of information are bound to increase. The Fields’ Information System that was a cornucopia was no longer a problem of plenty.

Diverse information is valued only up to a point. The best recourse would be to continue what they have been doing in the past to deal with expansion and growth- modify and expand the technology used in Information Systems. The MIS Director, Paul Quinn had remarked that there was more information than people could act on. Hence along with the modification and installation of new software and technology, another course of action could be increasing the staff or employee strength in the necessary strategic positions to deal with the excess influx of information.

It is important to note that the growth can affect the organizational structure- the structure expands laterally due to the predominantly flat hierarchy. Expansion in this direction leads to an increase in the amount of unprocessed, primary information. This in turn can increase the load on the Information Systems in place. Hence, some control has to be implemented by the top-management with respect to these underlying issues.