Seven Ways to Be Ready When the Upturn Comes

“I made two mistakes this year. The first was opening a brand-new restaurant. The second was opening it in a fireproof building.” –comedian Jim Buelt

There’s a popular story that motivational speakers like to tell: Two hikers are on a backcountry trail in Montana. They stop for a rest and a drink of water. Hearing a rustling in the bushes below them, they crane for a better view and see two little bear cubs nipping, playing and rolling over each other near the stream at the bottom of the draw. They watch the cubs for awhile, bemused. One of the men hears a crackling above the trail and wheels around. As he scans the hillside, he suddenly freezes in terror and jabs his buddy in the ribs. “Look up there; do you see that in the woods?” he rasps. “It’s the mama grizzly bear, and we just walked between her and her cubs. What are we going to do?” Before either man has time to react, the mama rears back on her hind legs, roars, and charges downhill at breakneck speed toward the hikers. The terrified guy who spotted her stands motionless and panic-stricken. His companion is a flurry of activity; he quickly tears off his hiking boots, digs into his backpack, pulls out a pair of tennis shoes, and quickly laces them up. His buddy is stunned. “There’s no way you’re going to outrun that mama grizzly!” he cries. “I don’t have to outrun her,” his companion calls over his shoulder as he sprints down the trail. “I only have to outrun you!”

The moral of the story is clear: think ahead and stay ahead of the competition, and let circumstances beyond your control affect the slow-to-react and unprepared. The mama grizzly may be an appropriate parable for the economy we’re weathering and the action we need to take. What are you doing in today’s recession to be ready for tomorrow’s upturn?

Not that we’re out of the woods by any measure. Grocery prices are falling and restaurant prices rising. Technomic recently reported that in the last three years 21,425 units have closed in the U.S. restaurant industry. And 84% of those were full-service operations. That reflects the worst three-year contraction in foodservice history. Some 8 million-plus people are unemployed today that weren’t a year ago and that has affected commuter traffic and breakfast business. And what of the retail economy and its effect on diners? Publicly, retailers are committed to toughing out the holidays to try to salvage a bad year, but what happens in first quarter 2010 if consumers don’t respond with robust spending during these final six weeks of 2009? I shudder to think of its impact on foodservice relative to consumer confidence, employment and discretionary spending. So we have a choice: either whistle past the graveyard and hope you’re not next or stiffen your resolve and begin now to enact smart strategies to insure you’re running when the upturn comes. Here are a few lessons in leadership to help you get ready to pounce.

  1. What do you want to be famous for? Harvard professor Michael Porter argues that a company doesn’t really have a winning marketing strategy if it does the same things as its competitors, only a little better. A company has a robust strategy when it has strong points of difference from competitor’s strategies. Consider now the epidemic of sameness our industry offers its diners, especially in the casual theme segment. “It’s not enough to be pretty good at everything,” said keynote speaker Bill Taylor at the recent MUFSO confab in Dallas. “You have to be really good at something. What are you the ‘most of’ to your customers?” If you’re unsure what the answer is, Taylor suggests asking the question: “If you went out of business tomorrow, would anyone really miss you and why?” Give more “why” now.
  2. Action is great. Unless it’s the wrong action. Assess your systems and processes in key result areas like costs, throughput, service, hiring, training, and marketing. Know which actions within each system still truly serve to move you forward and which ones may are no longer effective. (The ability to change requires an ability to learn, and also unlearn.) Determine which changes you’ve made in the downturn that deserve to be permanent and which ones need to be retired or reconsidered when the upturn comes.
  3. Big ideas, small practices. We have to think differently about other industries—like retail–that we’d never consider as competitors before. We compete against them for both our labor pool customers’ disposable income, why not for their ideas too? Seek out and apply their best practices. Gradual, deliberate progress is the daily goal to make it to the upturn intact. “There is no ‘magic’ in magic,” said Walt Disney, “it’s all in the details.”
  4. Make hiring the biggest decision. Many operators and managers believe that all employees are the same and that they don’t mind who they work with. But the thing is, they aren’t and they do. You can’t go wrong hiring right and you can’t go right hiring wrong. Be picky about who let on your team. I know I say that every month in this column, but repetition is the mother of all learning. Which reminds me…
  5. Train more, train better, train all. Recent industry research reveals that foodservice chains have cut training budgets (meetings, materials or personnel) an average of 19.5% in the last twelve months. Getting through a recession by dumbing-down your franchisees and hourly teams is like improving automobile mileage by not putting gas in your car. Don’t let what you don’t know limit what you can be.
  6. Clean everything twice. Now clean it again. You always sell more in a clean restaurant. Counters, tabletops, bars, and to-go areas need to be spotless now more than ever. And QSR operators should take a good look at their pass-through windows in the drive-through lanes. Steam-clean and stainless steel polish anyone? The pass-through window is the countertop of drive-through business and eye-level with every customer in their car.
  7. Don’t play it safe. When a market shrinks, smart operators actively steal market share. Weak leaders become risk-adverse and motionless, like the first hiker. That behavior may soothe accountants but complacency doesn’t inspire customers, team members, or communities. Don’t be reckless, but look for opportunities to improve (and outrun the bear) where competitors are frozen in sameness, inertia, and indecision. And always invest in a more robust, consistent and quality customer experience. Customers have long memories and they’ll be there in the upturn for the companies that tried hardest in the downturn to respect, refresh and renew their experience with your brand.

Copyright 2010.