Talent Acquisition and Management:

Marc Andreessen post on hiring and management of executives is worth the read.

“Being a startup executive is not an easy job. The rewards are substantial -- the ability to contribute directly to the startups's success; the latitude to build and run an organization according to her own theories and principles; and a meaningful equity stake that can lead to personal financial independence if the startup succeeds -- but the responsibilities are demanding and intense.”

I have written before on the need to let go and bring in people whose behavior patterns fit well into your organization. Marc’s post is very clear about the steps required to evaluate the process of Talent Acquisition and Management!

Not Invented Here:

One of the strangest concepts to grapple is the concept on Not Invented Here. Restaurateurs as a group tend to be self-reliant, very self confident and actively seeking new ideas. The paradox is that the comfortable level is much higher when they discovered the idea. If the idea comes from an unsolicited source, the barriers tend to go up. This reaction is no doubt a defense mechanism homed by natural selection to help the species survive. “beware of anyone bearing gifts” .

Though it may be prudent to look at such ideas with some skepticism, exploring the idea further on your own is a much more productive exercise. It is OK to use the unsolicited wisdom of others. It is not OK to dismiss an idea out of hand simply because it was Not Invented Here!

Crash Kits:

The storms that the ravaged the Midwest and caused extensive power outages bring to mind the need to have backup plans. Systemic power failures can shut down a business and the only real preparedness is adequate insurance coverage. Short-term one or two hour power failures can happen anytime and there are steps you can take to mitigate the effects. If you use a computerized Point of Sale system you should have a crash kit, handy.

The crash kit should be kept in a specific location and consists of the following:

1) Old manual credit card imprinter to make swipes of the card for reentry later, old credit card slips.

2) Flashlight with fresh batteries, an old manual register, manual checks, pens and candles.

Essentially everything you need to create and cash out a check before the advent of Point of Sale systems.

Power failures can happen at anytime, sometimes they happen at 8:00pm on a busy Saturday night, since you do not know the duration of the failure, at first you may choose to ride it out, keep everything moving along. Probably not seat anyone new, however do the best you can to get the current diners their meals.

If the duration exceeds the time that the emergency lights go dim then it is time for plan B. Comp everyone’s meal that is currently in the restaurant and make a candlelight party out of the evening. Initially people respond with camaraderie to a shared experience such as a power failure. Yes, the evening receipts are gone, however the amount of good will you will accrue is priceless. The hallmark of a great restaurateur is the ability to fabricate a memorable guest experience out of ambiguous circumstances.

When disaster beckons be prepared with Crash Kits!

Friction:

Movement only occurs if there is friction. The simple act of walking requires friction between the bottom of your shoes and the ground you are on. Think walking on ice, the coefficient of friction between the ice and your shoes is very small, the two materials slide against each other, hence no traction, no forward movement.

Restaurateurs tend to have a comfortable level with friction because it allows growth. One does not want to slide against other forces, rather one wants to engage, learn and grow. The engagement with countering forces enables strengths to be developed. The process builds on itself, strength begets strength.

Steven Aitchison post “Being More Couragious” illustrates the movement against resistance concept very well.

“In everybody’s lives, we all build up strength by resisting something. Think about it for a moment. If you want to build up your body strength, you fight against weights to make your muscles bigger and stronger. If you want to be aerobically fit, you fight against machines to make your lungs stronger. If you want to become smarter you fight yourself to study and study some more.”

…”To be more courageous put yourself in more courageous situations.

To be able to stand up for yourself more put yourself in situations where you will have to stand up for yourself more. This way you build up a resistance to the stress you may feel in these situations.

To be a better speaker, put yourself in situations where you will have to speak more”.

Restaurateurs are always resisting against trends, entrenched bureaucracy, and “we have always done it that way” mentality. This attitude spurs growth. When you are confronting the daily grind, it helps to remember that the challenges are making you stronger. Yes, heat in the kitchen is a byproduct of that Friction!

Letting Go:

The most difficult aspect of being an entrepreneur is letting go, delegating tasks to others. The entrepreneur has nurtured the idea from inception, to concept, through the rigors of selling the idea to investors, struggling with build out, opening and finally moving the enterprise toward profitability. Each step is a learning process whether it’s the first location or the fifth. The struggle has given the entrepreneur a sense for the nuances of what works for the concept and what does not. This “sixth sense” can at times create an insular perspective, one that does not allow for creative thinking by others for the concept. This of course is a recipe for stagnation.

Specialization of labor comes into play here. The concept is growing, flourishing, and developing. Handling all the tasks yourself has created stress because you are starting to spread yourself very thin. You are spending inordinate amounts of time on tasks that clearly are not providing the most benefit to the restaurant. You have reached the proverbial fork in the road. Now is the time to start delegating.

Delegating for most early stage entrepreneurs is very painful. I can categorically state that you will become much more comfortable with delegating as you go on and move to other entrepreneur projects, however you will not believe me. This is your baby, your dream, your restaurant and you are not letting go. Letting go involves Maslow’s hierarchy of needs because everyone needs to feel important and valuable. Entrepreneurs identify themselves with their projects because they put so much of themselves into it. Letting go creates feelings that you are no longer relevant. The restaurant does not need you any more, your expendable. What will you do with your time? Fear grips the entrepreneur because they are use to making a hundred decisions a day. If they let go no one will come to them and ask for their opinion. Their linear world becomes non-linear very quickly.

The only way to grow and grow you must is by the leap of the faith known as Letting Go!

Commitment and Consistency:

Robert Cialdini’s book “Influence, The Psychology of Persuasion”” offers a great primer on commitment and consistency. This book is a must read, it is that good.

Once a customer makes a commitment, all the actions that follow must be consistent with that commitment…A car dealer will sell a strip down car, once the purchaser has committed to the purchase it is very easy to sell accessories for that vehicle. A bettor at a race track is much more confident in their bets after they have made them.

This factor has vast implications in creating customer advocacy. Once the customer has decided that your restaurant is worth committing to, the opportunity to market to this individual and have this individual market your restaurant for you grows exponentially.

Seth Godin’s blog on “Loss v Gain” captures the concept very well, once you commit to something, it is yours and its worth much more than you would have paid originally.

Mirror Mirror:

Paco Underhill’s wonderful book “Why We Buy”, lists mirrors as a way to slow people down and maybe get them to notice your café or restaurant. The reason that mirrors work is two fold, 1) human brain is genetically wired to notice motion. This feature enables survival on the savannahs of Africa. If you can notice motion from a distant, you can access whether lunch is walking toward you or a predator looking to you for their next meal. This early warning mechanism allows you to make a fight or flight decision when the danger is still reasonably far away. 2) Human beings like to look at themselves, because it is a friendly face.

Mirrors in your restaurant enhance the experience by providing friendly faces looking back at your guest and also creates the illusion of a lot of activity which also creates positive feelings in your guests. The place seems livelier and a lot more populated when you strategically place mirrors throughout your restaurant.

Always a good design element…mirror mirror.

Reciprocation:

Robert Cialdini’s book “Influence, The Psychology of Persuasion” expounds on the concept of Reciprocation. This book is a must read for anyone starting any business that involves customer interaction.

“For the first time in evolutionary history, one individual could give away a variety of resources without actually giving it away. The result was the lowering of natural inhibitions against transactions that must be began...trade became possible, bringing immense benefit to societies.”

Tasting, free samples, giveaways, and customer appreciation days create an obligation on the part of the receiver to reciprocate. Even though the receiver did not seek out a gift, favor or free sample, having consumed it, the obligation is created for the receiver to make a purchase, sometime a very large purchase relative to the free sample given. Offer someone a free coffee and they will feel obligated to purchase a bagel, muffin or even an entire lunch.

The reason this tactic works so well is that human beings hate being indebted. They are much more comfortable with a clean slate. If you buy someone a dessert with their meal, they will return that much quicker to buy something to erase that sense of indebtedness about the free dessert. Buy someone a drink and they will feel like they have have to make additional purchases or tell someone about your place. The sense of indebtedness is very real and the effects are very tangible.

Restaurateurs use free samples to create awareness for their product, they receive the added benefit of creating an obligation on the part of the guest to reciprocate.

What's in a Name?

Everything, your guests will react very positively to you when you use their name.

The sweetest word in the language is someone’s name. Guests in your restaurant get a huge charge out of feeling special. The quickest, easiest and most cost effective way to make your guest feel special is to use their name. Establishments spend obscene amounts of marketing dollars to create an atmosphere that encourages customer advocacy and forget one that is free. The return on investment for using a guest’s name is infinite. It costs nothing to discover their name and nothing to use it. It will increase sales faster than any “up sell” strategy in the marketplace.

There is one danger to using a name, it must be sincere. When your at a bank and the teller says “thank you Mr. Provenzano” at the conclusion of the transaction, that's a lie. The interaction is fake and alienates rather than connects. Train your staff and yourself to use people names as often and in as many situations as is appropriate, however do it with sincerity.

There is magic in a person’s name, use it!

"Chance favors the Prepared Mind" Pasteur

Marc Andreesen wrote a wonderful piece on the four faces of luck in his blog.

“Luck is something that every successful entrepreneur will tell you plays a huge role in the difference between success and failure. Many of those successful entrepreneurs will only admit this under duress, though, because if luck does indeed play such a huge role, then that seriously dents the image of the successful entrepreneur as an omniscient business genius.”

Chance I is completely impersonal; you can't influence it.

Chance II favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore.

Chance III favors those who have a sufficient background of sound knowledge plus special abilities in observing, remembering, recalling, and quickly forming significant new associations.

Chance IV favors those with distinctive, if not eccentric hobbies, personal lifestyles, and motor behaviors.

Entrepreneurs understand this instinctively, however their mindset does not allow for the possibility that their future can be determined by anything other than their efforts.

Good Enough:

Seth Godin and Tim Berry have both commented in recent posts about when to put a product or service in the marketplace. Do you wait until all the elements are perfect and the stars are aligned or do you forge ahead with a product or service that is good enough! Wait a minute, you are saying to yourself, my restaurant has my name on it, I am not putting anything out there that is just good enough. I will only serve my guests products and services that are exceptional, nothing else.

Examine that for a moment. If you wait until the right ingredients, the right silverware, dinnerware, or the perfect napkin, the dish might never make it onto the menu.

If all business waited for perfection, nothing would ever happen. The world is operating quiet nicely within parameters of good enough. Being willing to put forth the effort is the key….the old adage about not being afraid to take a swing because that is the only way to hit a home run. Understand, of course that every swing will not be a home run.

Keep your eye on the prize, but reach out nonetheless!

The King of Rock and Roll:

The blogsphere is alive today with all things “Elvis”. Let’s talk about the King.

The reason people still hold him in reverence is because he took people where they had never been before. He was the explorer opening up new horizons with his music. Elvis had help in those early years that forever change the landscape of our culture.

Gary North wrote an interesting examination of the entrepreneurship behind the “Elivs” Brand.

“Phillips is laughed at as the man who sold Elvis' contract.
But he probably could not have provided the setting Elvis needed
to become an icon within a year.

Parker is hated by the fans because he got 25%, then 50%, of
Elvis' income. But he brought Elvis to the attention of his
audience. He gave Elvis the venue that made Elvis into an icon.
There was no indication that Elvis would escape the junior high
school circuit until Parker took over his schedule in June, 1955.

It is not good enough to have raw talent. You need access
to an audience. The entrepreneur brings talent and market
together for the sake of profit.”

The entrepreneur is the one who can see what is not there. Howard Schultz didn’t create Starbucks, he saw the opportunity and built upon it! Ray Kroc didn’t start McDonalds, he was a milk shake machine salesman, and the McDonalds restaurant bought more milk shake mixers than anybody. These two individuals envisioned what Col. Parker saw and they bet their futures on that possibility. That is the essence of entrepreneurship!

“From Moscow, London or Memphis, Elvis Presley is still the King of Rock and Roll”

Long Live the King!

Critical Mass:

Critical Mass is the most legendary character in restaurant mythology. Every successful, hip, fashionable, trendy restaurant has been visited by Critical Mass. Most of the non successful endeavors have been shunned by its magical presence. Critical Mass slips in unannounced, sprinkles their magic dust and moves on. No one has ever seen Critical Mass, only the lasting effects of their visit are discernible.

One day the restaurant is plodding along with a few guests enjoying your offerings, the next there is a line out the door and that line never stops. The restaurant is unaware of any specific event that triggers the awareness, however it is unmistakably there. There are times when a restaurant critic’s review will trigger an influx of guests, however the paradox is that the same reviewer’s positive review of your establishment can produce hardly a blip. Critical Mass has not visited yet. Critical Mass can be a child, octogenarian, business man in a thousand dollar suit, a parent with stroller, a tourist on holiday, an antique you buy for the restaurant, the critic’s review, or the shopkeeper next door.

Theorist will tell you that any event is the result of many small incremental events (Law of Accumulation) or the “Hundredth Monkey Effect”. The effort you had been putting forth in building your restaurant and doing all the “right things” bore fruit. The paradox again is that you can do the exact same things, put in even more effort and still the tables sit idle. There is in restaurant mythology Critical Mass, when the right person, event or inanimate object walks in, at the prescribed time to alter your reality. Luck it is said is the meeting of opportunity with preparedness.

All of life is non-linear so be ready. Critical Mass will visit your restaurant, the problem is that you do not know when. Consistency is the key, do not alter your scheduled hours because business is slow, if you say you are open until 10pm do not close at 9pm. If you offer a signature item on your menu do not skip a day because you were unable to go to the store to purchase the ingredients. Critical Mass will visit once and only once, to borrow a line from “The Prophet”, “if it finds you worthy, it will guide your course.”

Here’s hoping you are visited today by Critical Mass.

Peformance Clauses:

Walking along the beach, my wife and I happened upon an entrepreneur who is creating a restaurant out of a historic beach house, in need of some renovation. As she outlined the details of her dream, she mentioned her concern about performance clause language in her lease negotiations. Performance clauses are instituted to protect the landlord, in her case the municipality from non- performance by tenants.

The clause generally requires a certain dollar level of sales volume be maintained, that a certain percentage of revenue be reinvested into the establishment in the form of capital improvements, or that a certain level of quality or staffing be maintained. The underlying reasoning for the landlord’s concern is that if a certain standard is not achieved and surpassed, the enterprise will flounder and reflect badly on the landlord, both conceptually and financially. The landlord is trying to mitigate financial loss as well as avoiding any legal entanglements. This is a legitimate business concern and you as a tenant must address that issue.

The dangers for the tenant are twofold: 1) in any startup there times when the sales volume or other standard used in the lease is trending slowly, ever so slowly upward, the entrepreneur will tend to have more patience than the landlord. 2) The second danger is that if the management for the landlord changes and the new administration has a different vision for the proper utilization of that space.

In your lease negotiation, you must be brutally honest with yourself in this regard, because landlords will utilize performance clauses to terminate a lease, if they are not comfortable with the performance or direction of your restaurant. Be very certain that you can meet or exceed any performance clauses that are written into the lease.

Ode to Perception:

Roger Dooley asks in his post, “would wine thought to be from California taste better than wine from North Dakota, even if it was poured from the same bottle?” So much of the restaurant experience is about perception and expectation.

Communication:

Seth Godin's post on Communication reminds us all that the most frustrating part is not knowing. Our guests will endure much if we communicate honestly and timely.

Summer Beverages:

The recent issue of AMEX Market Brief listed preferences for flavored beverages consumers have during the summer months:

“Consumers expect more from your beverage offerings in the warmer months. During this time of year consumers tend to be more active and more likely to be looking for beverages while on the go. There are more occasions when they need “thirst quenchers.”

The most popular flavor by category are listed below.

Strawberry-51%

Mango-33%

Banana-31%

Peach-22%

Smoothies

Green-41%

Lemon-33%

Rasberry-29%

Peach-28%

IcedTea

Top Flavor Preferences

By Beverage Type

Juices

Orange-37%

Apple-32%

Strawberry-22%

Cranberry-22%

SoftDrinks

Cherry-25%

Strawberry-22%

Orange-19%

Vanilla-16%

There is always a reason to offer promotions on a limited basis to spice up your options and to test market new menu items.

Stress Straw:

“the straw that broke the camel's back” is the oft quoted phrase to describe when the accumulation of factors is sufficient to cause action. In the normal course of life there are events that occur that are totally insignificant, minor annoyances along the path. However, when the perfect storm of these little insignificant events rises to the level of the final straw, the pressure becomes unbearable and action occurs.

Human beings are instinctive creatures under stress. We respond because evolution has equip us with a vast arsenal of survival mechanisms which are fine in the jungle, however leave much to be desired in the workplace or the home. The only advantage that we have is the prefrontal cortex, the reasoning portion of the brain. When circumstances overwhelm our reasoning and we are about to lose it, envision the “Stress Straw”. Focus on that last straw about to break the camel’s back are realize it is an accumulation and not the event that caused the problem.

Breathe! Relax!, you are now free to roam about your restaurant.

Replicating:

The viability of any scientific finding is the ability to replicate the results independently. If the methodology is not reproducible the results are suspect. Reading books and blogs to garner new ideas is valuable, however the specific recommendations might not apply to your business.

Brian McCann authored Managerial Economics and offered these comments in his blog,

” First, you can't really learn anything about what causes success unless you study both successes and failures.”…“Now that everyone knows about it, no advantage is possible. Competitive advantage flows from having something that competitors can't easily duplicate - you're not likely to find these on the shelves of your local bookstore.”

The statement “successful café’s sell hazelnut coffee” would lead most people to deduce that if you want your cafe to be successful you must sell hazelnut coffee. McCann makes two points: First, though it works for someone else in a particular situation, it may not work for you. Second, once everyone copies it, the process does not offer a competitive advantage.

Your restaurant must continue to differentiate and innovate. There is a constant need to experiment with new ideas whether or not they worked for others. Look at each suggestion with a fresh open attitude and do not dismiss anything out of hand. Weighing factors helps determine whether the idea has merit to your situation.

It is very confusing reading a variety of literature, because all manner of direction is espoused in multiple paths. The essence of entrepreneurship is the continual balancing that is required for motion. The analogy of riding a bicycle fits well here. Starting a business requires a lot of balance shifting from left to right and back to left until an equilibrium is achieved for a brief instance until the next pedal and the process of shifting weights begins anew.

Specialization of Labor:

Specialization of Labor is the key to your productivity and happiness.

Entrepreneurs as a group have this notion that they can do everything themselves. It is possible that one or two can, the rest however need help, “that’s OK”. The biggest contribution to the expansion of business, standard of living in the world, and the historical march from the agrarian societies of ten thousand years ago to the present is the concept of specialization of labor.

What is it? You are a wiz with a spatula, however, the Quickbooks software on your computer is foreign. Aromatic scents waffle through your kitchen, however your electrical skills max out a turning on the kitchen wall switch for the light. You get the idea, you will not be able to master everything, culinary skills, marketing, management, accounting, legal issues, infrastructure issues etc.

Jim Collins in the book “Good To Great” ascribes to the notion that “you must get the right people on the bus “, to accomplish your goals. Bringing people in that enhance your restaurant and lead it to greatness is the magic of specialization. By specializing people are able to do what they want with passion. Passion makes people more productive. Yes, you could learn that Quickbooks software, however will that create customer advocacy, by utilizing your time in the best possible fashion? No, you would be much better off hiring someone to do the things that currently you do not have a skill set in. Focus your energy on the areas where you have passion. This helps to create customer advocacy.

Specialization of Labor is a powerful concept, use it everyday.

Toxicity:

Seth Godin posts on toxic employees and bosses reminds everyone, how relationships affect our work and personal lives.

Toxic bosses make the job unbearable. They create an environment where it is impossible to grow and flourish. The customer experience suffers because the staff expends vast amounts of energy avoiding contact with the toxic boss.

Toxic employees influence the energy level of the other members to spiral downward. They bring their bias and unhappiness into the group dynamic and derail your efforts to create a cohesive customer centric team.

The wisdom of an earlier post was to “Hire Behavior” should be the guiding principle in adding staff and managers. If you’re the entrepreneur toxic boss, close up now because you are only forestalling the inevitable.

Hire Behavior:

The primary responsibility of Human Resources, Talent Acquisition, Personnel, people management or whatever fancy title your department has, is to match the person, to the culture of the company. The most important aspect of creating customer advocacy is having people who can execute your vision. The common criteria, "if they can fog a mirror" is responsible for many negative issues within a restaurant. The correct way to hire is to determine the behavioral aspects of someone who is successful at the position and simply hire individuals with those behavioral characteristics. A vast majority of functions in a restaurant can be taught, while only a few aspects of the behavioral traits in a restaurant can be learned.

Therefore hire behavior.

Non Linear:

Tom Peters’ blog today addresses the need to be gentle on yourself because the world in non-linear.

“But if history is any guide, there will indeed be "outlier" events that confound the current process. We digressed to Nassim Nicholas Taleb's "black swans" [The Black Swan], my favorite digression these days. Ever so much of where we are at a given time, personally or organizationally, is determined by the tiniest set of "black swans"—outlier events not imagined, or even imaginable, until they have become history.

So, "the word" for the day (any day! Every day!): non-linear.

Life is non-linear.
Progress, if indeed there be progress, is non-linear.

A very, very few black swans will break you—or make you. The "trick," then, is to be more or less prepared for the unpreparable”

You can plan, analyze, synchronize, and make allowance for every probable circumstance, and yet stuff happens!

Never lose sight of the fact that the universe is expanding at an accelerating rate and no one can explain this! Do not worry about things you can't control

Entrepreneurs by definition are comfortable with ambiguity. If not comfortable, they have a much higher tolerance.

“Life is Non-Linear!”

Summer:

It’s August, most of the northern hemisphere is on vacation except restaurateurs.

Long exhausting days are the norm. Restaurateurs love their work so it is a lot of fun to work fifteen hour days, seven days a week. The convention is in town, were short staffed, we booked this big party, till we get to a certain daily revenue, minimize costs, and my personal favorite “If I do not do it”, all valid reasons why we work and work and work.

The body and mind need Sabbath (rest). Your effectiveness, usefulness and judgment drop precipitously the longer you go without rest. Going on a week long vacation is out of the question for an overstressed, overworked struggling restaurateur, however day a off or shudder thought the thought, two days off in a row is doable. Create a habit today, to take one day off a week minimum. The viability of your enterprise requires that your cognitive abilities be sharp. You will not recognize opportunity or diagnosis area’s that need improvement if you are habitually exhausted. Long hours have an uncanny ability to narrow your focus (tunnel vision). Long uninterrupted hours will have you searching for trees in the midst of a forest. Companies now routinely require their employees to take their vacation time, no exceptions. The employees who rest, are more productive, have higher sociability ratings, more positive than those who consume themselves with work.

Today is August 1…take the day off! Make it a weekly habit