Monday, March 31, 2008

1908 Championship Season:

The World Champion Chicago Cubs begin their one hundredth defense of their 1908 Championship. Their first 99 attempts at the defense has been less than stellar, however this is the year. Hope after all springs eternal!

Play Ball!

Saturday, March 29, 2008

Earth Hour

"On March 29, 2008 at 8 p.m., join millions of people around the world in making a statement about climate change by turning off your lights for Earth Hour, an event created by the World Wildlife Fund.

Earth Hour was created by WWF in Sydney, Australia in 2007, and in one year has grown from an event in one city to a global movement. In 2008, millions of people, businesses, governments and civic organizations in nearly 200 cities around the globe will turn out for Earth Hour."

How is your restaurant participating? Are you having specials, extra candles, low light or lights out in the dining room? How are you getting your guests involved? Earth Hour offers an opportunity, are you seizing the day or rather the Earth Hour?

Friday, March 28, 2008

Write the Deal:

The common response when an entrepreneur is embroiled in a contract dispute is, “they wrote that into the deal”. They being the other party to the negotiation and they being the one who wrote the contract.

David O. Stewart book “The Summer of 1787” details how after six weeks of deliberating the convention delegates needed to take a break. The delegates empowered “The Committee of the Detail”, five members from among their number to write down all the principles which had been discussed and extend those resolutions into a genuine plan of government. For eleven days, while the majority of the delegates were relieved of the cares of their responsibility, the committee under the leadership of John Rutledge fashioned what would become The Constitution of the United States of America. Upon reconvening many of the delegates scarcely recognized draft document of the constitution. “The Committee of the Detail” had written the deal.

In lease, purchase or merger negotiations the one who writes the deal has a vast advantage. There are many variables that come into play. Two of the more blaring variables are anchoring and exhaustion.

Anchoring is the concept that the first to set the price sets the tone of the negotiations. If the ask price is $100.00, it is unlikely that a $1.00 bid will be attempted. Anchoring sets the floor and theoretically the ceiling.

Exhaustion is the concept whereby the writer of the deal puts in so many clauses that at some point the other party becomes exhausted. Their effort to remove all the extraneous minutiae becomes overwhelming and they agree to the deal as is.

Write the Deal!

Wednesday, March 26, 2008

Deal Heat:

“In three words I can sum up everything I’ve learned about life. It goes on.” - Robert Frost

Have you ever been to an auction and all of a sudden it seems that the bidding is ridiculous given the item up for bid. That is “deal heat”. When you are involved in a negotiation and you “just have to have it”, you will make some of the worse decisions in your life. There is no space that you can’t walk away from. There is no deal that is so absolutely essential to your future that you should grossly over pay to acquire it. Prepare, evaluate, analyze and prepare again.

“Deal heat” turns the sharpest, shrewdest and wisest people in the room into blithering idiots. You can’t prevent “deal heat”, you can only hope to recognize it and chill.

Monday, March 24, 2008

Variable Pricing:

Seth Godin’s post “The bad table” poses two questions;

1) Who is the marketing genius who gave a bad table to one of the most popular authors on the planet?

2) Variable pricing in restaurants?

No #1 is answered by Seth, “Which means you need to figure out how to improve your lesser offerings. Maybe the table in the worst location comes with a special menu or a special wine list or even a visit from the chef. Maybe the worst table, for some people, becomes the best table because of the way you treat people when they sit there...

Treat different people differently. But don't treat anyone worse.”

No # 2 we shall explore. Two strangers walk into your restaurant. The look alike, they dress alike, they smile alike, they could be twins. One is seated at table 101, the other is seated at table 490. A totally random pairing, no bias whatsoever, those were the only two tables open in the restaurant.

Table # 101. The best table in the place. Panoramic views of the harbor and skyline, the server Jane is the most gregarious customer centric employee on your staff. Price of Filet Mignon $40.00

Table # 490. Panoramic view of the bathrooms, exit doors and other patrons with better exterior views, the server Bob has received numerous write ups for poor performance, the word smile is foreign to him and he neglected his hygiene this morning. Price of Filet Mignon $40.00

Both these guests paid $40.00, both had vastly different experiences. Variable pricing occurs daily with out any intervention by the restaurateur. If you were one of those guests, how would you feel?

Treat different people differently. But don't treat anyone worse.” Seth Godin

Friday, March 21, 2008

The Starbucks Solution:

It was a high counsel that I once heard given to a young person, - "Always do what you are afraid to do." Emerson

Grind coffee beans in the store, loyalty cards,, Clover Brewing machines.

Fairly unimaginative initiatives from an organization that elevated the standard for word of mouth advertising. The problems are clearly much deeper.

Thursday, March 20, 2008


Today at 5:48UTC is the Vernal Equinox

Happy Spring!

Changing Habits:

Karlene Lukovitz’s article, “Restaurants face Changing Habits, as well as Recession” discusses recession and trends.

“ While dinner traffic held up during previous recessions, the number of restaurant diners was in decline before the economy headed south. Restaurant breakfasts and snacks are increasing, but it's difficult to grow in the face of lost main-meal revenue.

There is much greater competition now from ready-to-eat, frozen and other meals available in supermarkets.

…Understand what drives consumer behavior and how they manage their costs when they visit a restaurant, and look for new ways to offer value and make the restaurant experience as pleasant as possible, says Riggs.

"In the current environment, there are more restaurant companies going after fewer dollars. To drive traffic, they're going to have to establish a competitive point of difference in terms of a value proposition," she notes.

And given that many majors are already competing head to head with pricing tactics like price/value menus, they may need to look at how to add food quality/variety and service differentiators into the price/value relationship, she adds. “

More than ever growth is dependent on creating customer advocacy!

The tourists are coming:

The financial press reports daily about the decreasing value of the greenback (US dollar) against every other major currency in the world. The economic development of a lower dollar translates into a worldwide incentive to visit the United States this year because prices relative to their home currency are inexpensive.

Is your restaurant ready for the torrent of foreign visitors coming to enjoy your culinary delights?

The Randomness of Creative Energy:

“Persistence isn't using the same tactics over and over. That's just annoying.

Persistence is having the same goal over and over.” Seth Godin

Why are some areas exciting, uplifting, energizing while other are dreary, demoralizing and dull? My theory is that large regional malls have an actual marketing plan. Mall operators have a sense of the type of mall they want be and then actively trying to find tenants that fit that demographic. The result is usually positive because they control all the variable elements. A casual dining tenant is needed in space (B1), not a dollar store. Large malls have the advantage being able to construct the puzzle from scratch and fill in all the pieces.

Smaller strip malls and city blocks have a diametrically opposite problem. There is an outdoor mall close to my home where the landlord has devoted absolutely no energy toward developing a cohesive business plan for the site. My estimation is that if the tenant can pay the rent, even if they can not fog a mirror, the landlord is willing to slot them into the next available space. The problem becomes more complicated in a downtown area or city commercial block where multiple landlords have their own financial considerations to deal with and do not care about the whole of the area. Local business councils have tried to influence tenant decisions however their reach is very limited. Tenant decisions are very critical to whether an area has creative energy.

Social Proof is so pervasive and necessary that a restaurateur must consider that element in the location discussion. I have previously related the story, “that there are two restaurants next to each other, both empty. The first person walks up sees that both restaurants are empty and chooses to enter the one on right. The second person walks up and sees that there is no one in the restaurant on the left and one person in the restaurant on the right. That person chooses to enter the restaurant on the right because of social proof. Before long there are 100 people in the restaurant the right and nada, zip, no one in the restaurant on the left.” People want to be where other people are.

If the location of your restaurant is surrounded by a preponderance of unoccupied or uninviting locations, you are not increasing your odds of success. The social proof theory would argue that you are judged by the energy about you. The essence of this discussion is “that you are known by the company you keep.” Conversely your restaurant might be the catalyst for creative energy flowing into an area.

Tuesday, March 18, 2008

Fading slice of Americana:

Peter Berger’s NY Times article highlights the fading of the Greek Diner as a mainstay in the American culinary experience.

“…like many others in the business, foresees the end of a chapter in American restaurant history — the ownership of a large share of diners by Greek immigrants. The son and daughter he put through college have become Wall Street traders and are not interested in the long workdays and hurried vacations his job entails. Meanwhile, the immigration pipeline from Greece that peaked between the 1950s and 1970 has dried up as Greece has prospered. Mr. Karkambasis’ current staff of 23 hails mostly from South America.

All that is not to mention what Peter Makrias, publisher-editor of a magazine for the Greek-American food industry, says are the two most insidious forces wiping such diners off the map — the banks and chain drugstores that are buying up those enviable roadside locations and the competition from franchise restaurants.”

As ubiquitous as the corner tap in a bygone era, Greek Diners provided a sense of community, a meeting place where the owner knew everyone who walked in. Greek Diners specialized in creating customer advocacy long before the practice had a name.

Sunday, March 16, 2008

Shutter a Dream:

Mary Ellen and I walked up to a café in a Southeastern Wisconsin Harbor Town looking to have lazy lunch on a brisk Saturday afternoon. The café was this picturesque quaint eating establishment that had opened about eighteen months ago. The owner was affable, friendly, outgoing and gregarious. The café offered a variety of hot and cold panini and pastry. The offerings were always delicious and the coffee was always hot. The kind of place this former industrial mecca transforming into a tourist harbor town on the shores of Lake Michigan really needs to support.

On the Ides of March we were greeted by a sign on the café door that the struggle had exacted its toll. The receipts were not sufficient to cover the expenses so the grand experiment was abandoned long before its completion. The sign actually said “thank you for supporting us, the café is closed. good bye!” Saddened and disheartened we felt empathy for the proprietors. We understand the pain of having to shutter a dream and relegate the hopes into the dustbin of memory.

Gratuity will be added based on our discretion:

The menu had the words “Gratuity will be added based on our discretion or on parties of six or more”, and I thought “yuk”. I suspect it was meant as a joke, however this was my first visit and I did not take it that way.

Tips (To Insure Proper Service) is voluntary when last I heard. Give a server a 15% tip and they look at you with disdain because they were expecting 20%. A tip is not automatic, to often servers forget that they need to render services for that addition to their low base wage. Being a rude, inattentive, disinterested order taker does not constitute rendering services. The reverse is also true however not as often in my observations. A server can provide exceptional service and the customer will neglect to tip. That leaves a horrible feeling in the servers psyche.

The words at the bottom of the menu struck me because this was the first time I’ve seen the words memorialized in print. The menu wording no doubt violates a host of fair pricing legislation. Beyond that however it does not endear itself to me.

What do you think?

Saturday, March 15, 2008

Are you making your employees miserable?

Patrick Lencioni’s business fable “The Three Signs of a Miserable Job” asks the question “are you making your employees miserable?”

The fable follows the travails of Brian Bailey as he discovers the three signs and how a manager’s true calling is to make those who report to him happier. The three main causes of misery are “lack of irrelevance, immeasurement and anonymity.”

Irrelevance:” Determine whose life is touched by an employee’s work

Immeasurement:” We need to keep score at work. No one enjoys a game with no scoring system.

Anonymity:” People want recognition for their existence.

The best lines in the book are “no one gets up in the morning to go to work; they get up in the morning to live their lives. Work tasks are part of that life”... “You should not have to be some one else at work.”

The book is excellent at providing ideas and helping you develop the one competitive advantage you really have!

Are you making your employees miserable?

Friday, March 14, 2008

Adjusting the menu:

“Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.” –Margaret Mead

Juliet Chung’s WSJ article illustrates how the run up in the cost of goods is compelling restaurateur’s to adjust their menu offerings.

High oil prices and a world-wide thirst for ethanol have triggered a run-up in corn, feed and transportation costs that is driving up food prices. Restaurant owners last year saw wholesale price increases of 7.4%, the biggest jump in nearly three decades, according to estimates by the National Restaurant Association. Consumer food prices went up 4% in 2007, according to the federal government.

The weak dollar is hammering restaurants that buy such imports as French cheese, Italian olive oil and European wines. Add to that, belt-tightening by customers caught in the slowing economy.

Value = Price + Quality + Quantity + Service, is the value formula. Creative menu ideas are one of the solutions. Smaller portion availability is another way to maintain the current menu without changing the essence of the experience. No one ever found their way to greatness by slashing costs. There is a great deal of pressure from CFO’s telling you to find ways to make up your lost margin caused by the higher cost of goods. As true as that is, the one over riding imperative has to be to enhance the customer experience. When the customer experience falters no amount of cost cutting will avail you.

Thursday, March 13, 2008


Scott Young’s post offers advice on how to calibrate your to-do list. Too often we sabotage our own efforts by not knowing when to stop.

“Calibrating your schedule has two parts:

  1. Picking the right size of workload so you don’t feel overwhelmed.
  2. Developing trust in your system so soft deadlines replace hard deadlines.”

Jason Fried’s post reminds us that we really work in bursts and that is how we should structure our to-do’s.

“Bottom line: Shatter big projects into little pieces. Finish and launch one piece at a time. Introduce value now. Over time you can recombine these pieces into the one big feature you had planned. Working on, finishing, and launching one little piece at a time will help you stay motivated because you’re always working on something new. Your best work is in the bursts, not in the tails.”

Wednesday, March 12, 2008

Markets in Everything:

Sarah Kershaw’s NY Times article highlights a problem that technology has wrought.

“We’re selling dinner; we don’t sell the opportunity to have dinner,” Mr. Bastianich said. “It goes against the grain of everything we do.”

Restaurateurs in the city say they are flummoxed and incensed by a growing marketplace for online reservations. It has been about two years since another service, PrimeTime Tables, began selling access to the most sought reservations in New York.”

Restaurant owners fumed then, saying PrimeTime Tables threw a wrench into their carefully guarded reservation systems and lent to their culture of hospitality the odor of street corner ticket scalping…

The buyer and the seller of a TableXchange reservation are instructed not to change the name on the reservation and the buyer is told not to reveal to anyone at the restaurant how he or she got it. So Mr. Bastianich would have had no way of knowing whether the person who confirmed the reservation had sold it to somebody else.”

It is disconcerting to imagine that brokers are the ones making reservations to your restaurant every day and then reselling that reservation to their clients. What other aspects of your restaurant's operation can be repackaged by an enterprising broker?

Monday, March 10, 2008


Scott Ginsberg’s post “10 Ways to Reverse Momentum” offers some very good strategies to diffuse a challenging situation. #6 is quoted below, check them all out here

6. You must be having a really bad day. Unexpected and empathetic. Demonstrates concern, especially with an irate customer. Also, this phrase assures that you don’t take ownership of the other person’s problem. This ultimately allows them to cool off and approach their situation in a calm, collected manner.

Scott advises to respond rather then reacting.

Sunday, March 9, 2008

The Shortest Day!

I live in the winter wonderland that is Chicago. Today we “spring ahead”, switching to daylight savings time which has the effect of creating a 23 hour day, the shortest day of the year. Residents of this city are hoping the time change is heralding the arrival of spring. The winter has been long and cold. Winter lasts three months on the calendar however because of the continual onslaught of snow storms this season, the time seemed to pass very slowly.

What is interesting about time, that most singular of human inventions is that our minds and bodies do not care about some artificial fabrication of the industrial age, they create their own internal time. Stefan Klien wrote an interesting Op Ed piece in the NY Times:

The brain’s inclination to distort time is one reason we so often feel we have too little of it. One in three Americans feels rushed all the time, according to one survey. ..

…believing time is money to lose, we perceive our shortage of time as stressful. Thus, our fight-or-flight instinct is engaged, and the regions of the brain we use to calmly and sensibly plan our time get switched off. We become fidgety, erratic and rash.

Tasks take longer. We make mistakes — which take still more time to iron out. Who among us has not been locked out of an apartment or lost a wallet when in a great hurry? The perceived lack of time becomes real: We are not stressed because we have no time, but rather, we have no time because we are stressed…

… The misguided notion that time is money actually costs us money. And it costs us time. People in industrial nations lose more years from disability and premature death due to stress-related illnesses like heart disease and depression than from other ailments. In scrambling to use time to the hilt, we wind up with less of it.

The remedy is to liberate ourselves from Franklin’s equation. Time is not money but “the element in which we exist,” as Joyce Carol Oates put it … “We are either borne along by it or drowned in it.”

How would your guests describe the time spent in your restaurant? Was it a long laborious evening or a light, lively enjoyable event in which the time passed much too quickly?

You have a lot to do today and one less hour to do it in. Enjoy the Shortest Day!

Saturday, March 8, 2008

All the world is a stage!

Undeterred by something as prosaic as a smoking ban, enterprising restaurateurs in Minnesota have turned dining out into theater. Judy Keen of USA today explains in her article;

“Bars, nightclubs and taverns are holding "theater nights" to take advantage of an exemption in the ban that allows smoking by performers in theatrical productions. In participating bars, every employee and customer is an actor, and drinking, chatting, playing pool -- and smoking -- are part of the performances. Since the first performance on Feb. 9, more than 100 bars across the state have joined the protest.”

It will not be long before the local legislature corrects the loophole. Nonetheless, the exercise is a wonderful example of taking what they give and making the most out of it.

Thursday, March 6, 2008

Shoot the Rapids:

The first week of March has a “work life balance” feel to it. We have already talked about “ebb and flow”, today let’s talk about shooting the rapids. When you find yourself whitewater rafting and you are in the middle of a rapid, there is only one way out. Keep on going.

You have to become the water. Do not try to resist. Take whatever the water gives you. Let the raft float in and out, back and forth, up and down. Try to steer clear of rocks, however do not fight the water.

There is a great song lyric by Rodney Atkins “if you are going through hell, keep on going, you might get out before the devil knows you are there”. Excellent advice while operating a restaurant or shooting the rapids.

Wednesday, March 5, 2008

Ebb and Flow:

“Of pebbles which the waves draw back, and fling,

At their return, up the high strand,

Begin, and cease, and then again begin,

With tremulous cadence slow, and bring

The eternal note of sadness in.

Sophocles long ago

Heard it on the Aegean, and it brought

Into his mind the turbid ebb and flow”

Matthew Arnold, Dover Beach

Have you ever noticed in the history books everything happens chronologically?

Empires rise and fall, armies come and go, “manifest destiny” inspires a people to explore. Our favorite fictional heroes encounter difficulties and solve their woes in the allotted time slot. Funny how your business never runs as smoothly. History melds the ebb and flows into a linear progression. Life however is non-linear!

Your restaurant is actually a continual ebb and flow of one step forward, one step forward and back again. Seth Godin’s post The forces of mediocrity” outlines the path of highest resistance.

Remarkable visions and genuine insight are always met with resistance. And when you start to make progress, your efforts are met with even more resistance.”

When you find yourself awash in the crashing waves it is helpful to remember that the cadence begins, ceases and begins again. Ebb and Flow.

A cutting edge knork:

A Washington Post article highlights cutlery through the ages and the newest combo flatware the knork:

“But in an ever more casual and fast-paced world, a new era of cutlery could be dawning. Technology and production methods have evolved so that flatware no longer has to be flat. Culture, too, is changing. Hard data are sparse, but a U.K. survey by grocery store Sainsbury's revealed that only 10 percent of 18- to 34-year-olds in Britain use a fork, knife and spoon at dinner, while 10 percent skipped cutlery entirely and ate with their hands.”

Sunday, March 2, 2008

Dear Future Customer:

I got an advertisement in the mail today addressed to Dear Future Customer.

That is a perfect mindset to address everyone you meet. Everyone has the potential to be your future customer. When you meet people with that mindset your interactions will be far different then meeting someone with whom you expect no future interaction.

Robert Thurman, the noted Buddhist philosopher contends what we as individuals will have unlimited interactions with each other and should treat every introduction and interaction as one in a long line of interactions.

Clearly we as human beings invest more energy if we believe we will have a ongoing relationship with the person we are interacting with. As entrepreneurs we must invest in ongoing relationships. Creating customer advocacy is about engaging future customers.

What have you done for your future customers today?


Fast Company’s post by Chip and Dan Heath offers a nice examination of the process of using a checklist.

“People fear checklists because they see them as dehumanizing. Maybe that's because people associate them with the exhaustive lists that let random teenagers successfully run fast-food chains. They think if something is simple enough to be broken down into discrete steps, a monkey can do it. Well, if that's true, grab a pilot's checklist, and try your luck with a 767.”

Process is critical in all businesses, especially restaurants. A menu is really a checklist to prepare dish. Checklists help to insure a consistent customer experience. Checklists are frameworks within which a process can be accomplished. There is the ability to adjust, to be creative, to surprise within the framework of a checklist. Use checklist to standardize processes, however be sure to leave room for the unexpected.