Market View: Learning from 'The Restaurant'

How often does anyone in your company pull out the annual plan or five-year strategy and read them?

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By John L. Stanton, Contributing Editor

Have you seen the reality show "The Restaurant" on TV? It captures the behind-the-scenes action in the creation and operation of a hip New York restaurant. The drama comes in the interactions between the owner and the rest of the world. I wonder what a reality show about running a food company would be like.

There are a number of lessons to be learned from this show. One of the first things that struck me was the lip service paid to making the dining experience a delight for the customers. The owner, Rocco Di Spirito, met with employees to share his vision. All the employees embraced the vision and were excited by it, but they were unable to deliver the vision because of the policies and procedures of the restaurant.

It was a question of execution. They just couldn't deliver. The wine wasn't available, the meals weren't served hot, the wait for a table was long and no amount of smiling by the servers was going to make it a great dining experience. The ability of servers to delight only can be effective if all the ingredients are right. Failure to do the basics makes it impossible to satisfy, much less delight.

I recall a case where a food wholesaler unveiled a new strategy. It was the "new vision from new management," who apparently saw how to save the company. After revealing the plan to employees, one worker opined, "The new plan looks great but do you think we could first just get the orders to the customer on time and correct?" Great strategies are ones that can be executed.

In the TV show, the mayhem of the business exacted a high cost on the employees. The best ones left the restaurant because they felt they couldn't do the job that needed to be done. Failing to live up to your mission not only hurts sales and customers but also hurts morale. I worked for one company that repeatedly lost employees due to low morale. Most of the people who stayed didn't really care that they couldn't satisfy the customer, and this built up a norm of failing to deliver as promised. This perpetuates a business model of mediocrity at best.

The most glaring example of mismanagement in "The Restaurant" is the way the owner makes decisions. While he carefully planned the business, as soon as the first customer came in the plan was out the window. Because of intense pressure to open the restaurant, some decisions were made ad hoc, often without forethought or consideration of the plan. A lot of effort and energy was spent trying to fix mistakes. Each new decision took the restaurant more off focus.

The impact of pressure causes many people to lose focus and make poor decisions. This is what leadership is about. You don't need a great leader when everything is going great. You need a great leader when things are running amuck.

The role of the officer in the military is to keep the army doing what was planned. In the case of business, we seem to define the role of the "officer" as doing whatever he wants during battle. How often does anyone in your company pull out the annual plan or five-year strategy and read them? Is it because they have them memorized or do they think they're not relevant?

The restaurant owner's biggest problem was interacting with employees. He created petty jealousy and other problems because he made decisions without examining their impact on employees. In one case he gave a large bonus to a waitress and was surprised when the others were hurt when they got nothing. The one who got the gift was disgruntled and about to quit. The message to the staff was that complaining and threatening to quit will get you a gift, while doing a good job and solving problems will get you nothing.

One amusing touch was that the "bad guy" was the financial person who was constantly putting pressure on the owner to make a profit. At least they got that part right!

I'm not fond of "The Restaurant," but I do find it educational. It's like getting a miniature Harvard case study in your own living room. The lessons go on and on, and they apply just as well to food processors as to restaurateurs, and to any business, really.

Watching a restaurant get started and open for business makes it clear to me why most businesses fail. It makes you want to reassess your own behavior and business practices. I think we all could get insight into our businesses problems by watching another business struggle with its problems. Perhaps the only advantage of being in a larger and less public business than a restaurant is it lets us hide the mistakes more easily.

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