Saturday, February 28, 2009

Google never forgets

Seth has a poignant post about personal branding in the age of Google. The implications for yourself and your business are staggering. Transparency is no longer another business model, it is the only business model.

Everything you do now ends up in your permanent record. The best plan is to overload Google with a long tail of good stuff and to always act as if you're on Candid Camera, because you are.

Influence in the age of Frugality:

Susan Berfield's article interviewing Paco Underhill offers some classic nuggets,

These days, Underhill's observations take on added poignancy, to use one of his favorite words. For a while, he has been telling merchants that there are no new customers, which is his way of saying that stores must get better at persuading existing customers to purchase more. He has also noticed that people more often make decisions about what to buy when they're out shopping, not before. This gives stores an opportunity: If they can compellingly present information about merchandise—following Underhill's rules, of course—they might exert greater influence on consumers. "It's all about in-store marketing," he says. "It's making things occur to the shopper."

There are opportunities to market to your guests.

Friday, February 27, 2009

Charge them for everything:

The single most important element in the success of a business is the relationship with its customer. Perhaps no business has a worse customer relationship reputation than the airline industry. Today there is a story in the Chicago Tribune which further expands the guest service mantra so prevalent in the industry.

One thing we have looked at in the past, and are looking at again, is the possibility of maybe putting a coin slot on the toilet door, so that people might have to actually spend a pound to 'spend a penny' in future," O'Leary said, using a British euphemism for going to the bathroom.

First the extra bag charge, then the first bag charge, then the overweight charge, then the beverage charge, then the pillow charge, now the potty charge, and I am quite certain that there will be a charge for pressurized oxygen (O2) in the very near future. If you can delineate the charges certainly that will lead to lower fares for everyone. From personal experience I know that I rarely use anywhere near the amount of O2 that other passengers use. Why should I pay for their extra O2. The concept is very similar to separate checks, why split the check if we can have separate checks. Actually, why not charge people based on whether their sleeping, talking to other passengers or better yet talking to an airline rep at the gate, being generally annoying or using electrical devices. All those situations use different levels of energy and O2 which I refuse to split on my next flight.

Any restaurant that were to use the "charge them for everything" mantra of that shining customer service beacon known as the airline industry would have a very short flight indeed.

Grades never end.

When most restaurateurs leave school they swear off ever having to work for a grade. Wish it were only so. New York City is joining growing chorus of municipalities that will issue grades on the health inspections performed. The grade your restaurant receives will be on prominent display for all the world to see. And you thought taking the grades home to your parents was tough.

Thursday, February 26, 2009

Social Network Lending:

Anya Kamenetz's post provides insight into the plethora of options to finance opportunities,

Starting today, a range of next-generation financial services companies, all of whom employ technology in innovative ways, have teamed up to market some much-needed help to consumers with the Uncrunch America campaign. Like a team of of financial Superfriends, Lending Club offers personal loans through a peer-to-peer model, Virgin Money (yes, a pro-social for-profit offshoot of the Branson empire) has peer-to-peer mortgage financing, OnDeck Capital offers small business loans with a proprietary holistic scoring model, CreditKarma has credit score tools, and Geezeo offers personal finance and budgeting tools.Since the beginning of the year, UnCrunch members have lent almost $75 million to one another.

The site has an overwhelmingly grassroots, patriotic feeling and look, as though it were a stray page from or "The American people will solve the credit crisis by helping each other," it proclaims.

Wednesday, February 25, 2009

Pasta can save energy:

Harold McGee's article on "green" pasta cooking offers hope:

After some experiments, I’ve found that we can indeed make pasta in just a few cups of water and save a good deal of energy. Not that much in your kitchen or mine — just the amount needed to keep a burner on high for a few more minutes. But Americans cook something like a billion pounds of pasta a year, so those minutes could add up.

My rough figuring indicates an energy savings at the stove top of several trillion B.T.U.s. At the power plant, that would mean saving 250,000 to 500,000 barrels of oil, or $10 million to $20 million at current prices. Significant numbers, though these days they sound like small drops in a very large pot.

Tuesday, February 24, 2009

Is this the best time to start a business?

Yes, Yes, Yes, Yes and Yes.

Kelly Spors has some really good questions you should ask, such as:

Are you comfortable making decisions on the fly with no playbook?

With a new business, you're calling all the shots -- and there are a lot of decisions to be made without any guidance.

Sunday, February 22, 2009

Creating Employee Advocates:

Ben poses the question “Does customer evangelism begin with employee evangelists?” Pamela is conducting a survey to try to quantify the answer.

My answer to Ben’s question is empathetically YES! My bias as I have posted before is that “the success of a business is based entirely on the relationships that business cultivates with its customers and by extension its employees.” Your customer has a relationship with your employees before they have a relationship with your organization. Your employee is the face of your organization to your customers.

The counter argument is that an employee could perform their duties in a mechanical fashion and still create customer advocates without being an advocate themselves. This argument falls apart for the same reason that Adam Smith’s argument about self interest collapses:

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages”

Without safeguards unchecked benevolence denigrates into unbridled self interest at the expense of the customer. Employees will not put the interest of the customer first unless they are advocates for your organization and thus fully invested in the process.

Saturday, February 21, 2009

How to stay strategic:

Erika Andersen’s post on staying strategic is a welcome respite

Here’s why: difficult situations make us afraid. When we’re afraid, we tend to narrow our focus. We hunker down, mentally and emotionally, and attend to protecting ourselves; we simply try to get through the day. And, so in the eerily applicable words of FDR, it seems to me that “The only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

The alternative? Stay strategic; put aside fear. Take a deep breath and a giant step back; expand your view as opposed to contracting it. Once you do that, it’s much more likely that you’ll be able to see your current reality in a clear and balanced way, rather than through the distorting prism of fear. It’s also more likely that you’ll then have the mental bandwidth to think clearly about the future, and to envision the business or career you want to create, on the other side of this difficult passage.

Watch your language:

“Everything is perception,” Roger Dooley’s post about how to market and cater to “tightwads” cautions us to the importance of language.

Watch Your Language! One rather startling finding in the CMU research was that changing the description of an overnight shipping charge on a free DVD offer from a “$5 fee” to a “small $5 fee” increased the response rate among tightwads by 20%! This is hardly inventive copywriting and didn’t involve any fancy neuromarketing, but the mere reminder that $5 was a small amount of money had an important effect on tightwads.

Brain drain phenomenon:

“Work expands so as to fill the time allotted for its
completion." C. Northcote Parkinson

Josh Kaufman’s description of Absence Blindness has implications in the brain drain phenomenon that all businesses endure.

Absence blindness is an example of a cognitive bias, and the only semi-reliable way I’ve found to overcome it is checklisting. By thinking in advance what you want something to look like and translating that into visible reminders you can refer to while making decisions, checklists can help you remember to look for the absence of qualities in the moment.

So make a note to remind yourself to handsomely reward the low-drama manager who quietly and effectively gets things done. It may not seem like their job is particularly difficult, but you’ll miss them when they’re gone.

My bias is that the success of a business is due entirely on the relationships that business cultivates with its customers and by extension its employees. When an employee or a customer who is adept at forming relationships enters into the collective consciousness of the business, the impact is immediate. What is not quantifiable however is the dollar impact of that customer or that employee. Let’s call the relationship the “x factor.” When the “x factor” is not present at the inception, it is not missed. No one knows it is not there, however the entrepreneur has a nagging feeling that something is missing. When the “x factor” arrives, the clouds break, the sun shines brightly, the bird sings a sweet song and the business which had been plodding along suddenly becomes a hit.

Sadly when that one employee or customer leaves the sphere of the business, for whatever reason, the “x factor” leaves as well. This is where the brain drain occurs. In this context I am expanding the definition to include the collective consciousness of the business. The “x factor” leaving is never accompanied by corporate memo telling all interested parties that a change has occurred. No, the usual consequence is that the level of activity in the business dissipates like air being let out of a balloon. At first the results are not perceptible, however over time the energy in the business changes and the business financials reflect the new reality. The restaurant is no longer the “hot spot” in town and no one knows why.

There are two steps a business can take to mitigate the brain drain from the collective consciousness.

1) Knowledge management, as much as possible detail every process in your business.

2) Make customer relationships central to your business. The expectation is that if there is robust interaction between all of your employees and customers that the “x factor” will spread like a virus from the initial carrier to every member in the collective consciousness of the business. Thus when the initial carrier leaves the virus of a successful business remains and continues to thrive.

Thursday, February 19, 2009

Time to dine out Chicago

Chicago Restaurant Week 2009

Great opportunity to sample, explore and indulge in a wide array of incredible dining experiences without the nagging worry about how much will it cost.

Join in the fun and dine out Chicago.

Innovating by doing something totally different.

Bill Buxton’s article makes several salient points about unbridled pursuit.

Always be bad at something that you are passionate about.

By this, I really mean two things: always be a beginner at something, and always be in love with what you are beginning.

Why? The latter keeps a fire in your heart and soul, and the former keeps you grounded. The more expert you are in your "day job," the more important such grounding is. Additionally, the further such new beginnings are from your core expertise, the more likely it is that they will feed that expertise in some unexpected way in the future.

We live at a time where we hear repeated calls for the need for creativity and innovation. What better way to cultivate the full potential of our creativity than by sustaining the passion, curiosity, delight, energy, and enthusiasm of the beginner, coupled with the wisdom and experience of the expert?

Innovation comes from unlikely sources at times. Position yourself to be available when the muse arrives by placing yourself in situations you have not been in previously.

Tuesday, February 17, 2009

All is not lost.

Ramit Plushnick-Masti's (AP) story offers a contrasting tale amidst than the gloom and doom about us.

Small coffee shop owners are doing everything to maintain their loyal clientele and attract new customers, especially those disillusioned by Starbucks and other chain coffee shops.

Cafe owners are pulling out the stops: They're blogging; diligently selecting roasters; upgrading and changing menus frequently; chatting with customers in an effort to foster relationships; training baristas for months; and ultimately trying to provide a unique atmosphere.

Can you believe it? These entrepreneurs are creating relationships. Who knew!

Tea, where is thy sting

Julie Deardorff's article demystifies tea.

MYTH: Tea comes in many varieties. False! Only one plant gives us tea leaves—the Camellia sinensis. The differences in color and flavor among the three basic types—black, green and oolong—depend on how the leaves are processed.

Sunday, February 15, 2009

Come back soon for one of our $4.99 sandwich deals.

A national chain recently opened a deli unit in a sleepy little hamlet just outside of Chicago. Being the adventurous culinary types my wife and I ventured out to sample their fare. They had an extensive menu and an interesting cirrus atmosphere. We placed our order at the counter and wow, 2 sandwiches, 2 cups of soup and one drink $24.48.

My immediate thought was, “nice check average, how do you hope to survive.”

The order arrived and the food was good, no complaints however the check seemed high so I reviewed the receipt. The receipt was correct with the tagline “Come back soon for one of our $4.99 sandwich deals” at the bottom. Being the inquisitive type I reviewed the menu for the sandwich deal. No luck everything on the sandwich menu was 5.99 or higher. I thought maybe I was losing it. Maybe there was a sandwich board that I missed during my first pass through.

After completing our lunch we walked around the space taking a more in depth look at the sign boards and the operation in general. Clearly this was a chain with over thirty years of experience and they had already worked out a lot of the kinks. Still no $4.99 sandwich deal so I asked the greeter who was handing out menus where were the $4.99 sandwich deals? He looked at me with quizzical look in his eyes, (this is a side note, the greeter was terrible, the manager should not have had this individual greeting customers as they came in). He told me to go ask the takeout order person at the counter. As I approached the take out order counter which is separated from the regular seating area by a hanging sign board that I noticed the $4.99 sandwich deals on the hanging board visible only to the take out customers. Nice trick I thought.

I have two comments. One, the misdirection with the tagline at the bottom of the receipt was good because I could not believe lunch for two at a deli was $24.48. The misdirection clearly shifted my focus from thinking “this place is pretty pricey given the fare”, to thinking “oh I must have missed something if they have a $4.99 sandwich deal.” I went from being unhappy with them to being unhappy at myself for not noticing the hidden sandwich board. Two, if you’re going to have a $4.99 sandwich deal do not do so in stealth mode because that just leaves a bad taste with your customers.

Experiential purchases:

A report chronicled in a CEO for Cites post

I read about a new San Francisco State University study that found money can lead to greater happiness for the person possessing it and those around them, if it is used to buy experiences, not possessions.

The study by SFU assistant professor of psychology Ryan Howell, “demonstrates that experiential purchases, such as a meal out or theater tickets, result in increased well-being because they satisfy higher order needs, specifically the need for social connectedness and vitality — a feeling of being alive."

So experiences are critical to our sense of well-being.

Restaurateurs need to focus on the guest experience. Too often they focus on everything other than the experience. The guest who walks into your restaurant is not looking for food, they are searching for an experience. Ignore that sage advice at your own peril.

What to do, what to do, what to do?

To understand the secret of success you need to read Scott Ginsberg's "Just Go"

Saturday, February 14, 2009

Sustainable coffee drinking future:

Brian Merchant's article poses a valid question.

There's no way we can continue to use up 200 liters, or 52.83 gallons for every latte we order. And that's why we have to change the way we think, as this illuminating video from the World Wildlife Fund points out. There are a number of things we can do to get the ball rolling towards a more sustainable coffee drinking future—starting on the individual level. We can all forgo those takeout cups, and start bringing our own cups. We can make sure to buy only coffee that's grown sustainably.

There are limitless supplies, ingredients and processes currently utilized in a business that lend themselves to innovation reducing their carbon footprint.

Restaurant Stimulus Package:

Here is a really good marketing idea from Barry Ritholtz’s post explaining the stimulus package:

If you spend that money at Wal-Mart, all the money will go to China.
If you spend it on gasoline it will go to Hugo Chavez, the Arabs and Al Queda
If you purchase a computer it will go to Taiwan.
If you purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala (unless you buy organic).
If you buy a car it will go to Japan and Korea.
If you purchase prescription drugs it will go to India
If you purchase heroin it will go to the Taliban in Afghanistan
If you give it to a charitable cause, it will go to Nigeria.

And none of it will help the American economy. We need to keep that money here in America. You can keep the money in America by spending it at yard sales, going to a baseball game, or spend it on prostitutes, beer (domestic only), or tattoos, since those are the only businesses still in the US.

A massive domestic beer promotion seems to be the way to go here!

Friday, February 13, 2009

Good decision making keys

The most challenging part of entrepreneurship is decision making. Passion, luck or serendipity may get you in the game however the ability to make good decisions on a consistent basis moves you forward.

Erin White's article offers advice on good decision making

People need to recognize that we are biased in every single situation. There's no such thing as objectivity.

The first thing leaders should do to reduce their odds of making bad decisions is walk into an important decision situation saying, "Ok, I know that we are potentially biased in a variety of ways. Let's try to identify what those are."

Second is to avoid the "yes man" trap. You have to bring different people and different data sources to the table. You want to add a "no team" to argue against the proposal, and put some teeth behind that no team.

What the heck are you worried about?

Have you ever wonder how some restaurateurs just seem to have it while others stumble constantly? Jeffery Kluger's article sheds light on reality.

Bosses may be an overbearing breed, but more often than not, you've got to admire their business chops. Wouldn't you love to have that same sense of competence and confidence, that ability to assess tough problems and reach smart solutions on the fly? Guess what? So would they. If you have ever suspected that your boss isn't actually good enough at what he or she does to deserve the job in the first place, a new study published in the Journal of Personality and Social Psychology suggests that you might be right.

Instant Coffee

There is nothing I can add to this Chicago Tribune story that would do it justice. The only question I have is what happened to getting back to the cafe experience?

Starbucks Corp. will unveil an instant coffee as part of its attempt to turn around sluggish sales.

The company has been working on the product for more than 20 years and has a patent pending on the technology that will allow it to "absolutely replicate the taste of Starbucks coffee in an instant form,"

Thursday, February 12, 2009

Time for the old Switcharoo

Why change the decor every five years when you can do it daily. Greg Morago's article about
Switch and pop up restaurants explores an emerging trend.

there’s a small segment that has taken change to heart in ways that are dramatic and offbeat. Some might even say kooky.

Switch, a fine-dining establishment at the new Wynn Encore in Las Vegas, pulls a big switcheroo every night. The restaurant transforms itself about every half hour during dinner service: The lighting changes, music changes, and walls go up and down, creating completely new décor and atmosphere. While you’re tucking into your lobster salad, the landscape around you changes in a grand flourish.

Theatrical? Almost beyond. “It’s the difference between good theater and bad theater,” says Wynn’s in-house designer, Roger Thomas, during a recent tour of the space. “We’re creating a dialogue with the customer using scenery, music and lighting

Loan money is still out there:

It is not all gloom and doom in financing restaurant deals, Sarah Lockyer of reports;

The largest lender in the industry, GE Capital Solutions, Franchise Finance, said Tuesday it has completed a nearly $5.83 million loan to Boston Blackie’s, an eight-unit casual-dining chain based in Chicago.

The deal closed in October, GE said. While a small transaction, it is one of the first publicly announced GE-led deals in months. The financing will be used to fund regional growth and development for Boston Blackie’s.

“This deal demonstrates our commitment to providing the kind of financing that supports the restaurant industry’s continued success,” GE said in a statement.

Nutella is hazelnut nirvana

I admit it I love Nutella. Amy Scattergood’s article captures the essence of the hazelnut chocolate nirvana.

As members of Nutella's secret handshake society will tell you, it's a blend of hazelnuts and chocolate -- or rather, nuts, cocoa, sugar, skim milk, oil and a few other flavorings and emulsifiers -- that's been ground to a blissfully smooth, creamy spread. Knifed onto a slice of bread, or smeared over crepes or waffles, it's a simple snack that (as my children and the Ferrero Co., which makes the product, like to point out) is even vaguely wholesome.

Maybe it's the idea of spreadable chocolate, or maybe it's the deeply satisfying combination of chocolate and hazelnuts, but there's something about Nutella that inspires the kind of devotion usually reserved for federally banned substances.

Danger in abundance:

One of the upsides of this downturn is that the labor shortage in the restaurant industry has eased. In an article by Karen Robinson-Jacobs the following very salient points are offered.

"There are certainly pockets of shortages throughout, but it's not as big of a challenge as it has been" to hire people, said Annika Stensson, a spokeswoman with the National Restaurant Association.


What we're seeing is that recruiters are being deluged with résumés of overqualified people," said Joni Thomas Doolin, chief executive and founder of People Report, a Dallas restaurant research and consulting firm.

Doolin said that to ward off a future brain drain, restaurants need to focus as much on keeping workers as on getting quality applicants in the door.

Brain drain is an insidious and often overlooked variable in the viability of a restaurant. Your employees are your competitive advantage. (here, here, here). When an employee leaves your organization they take with them operational knowledge about your customer. For example an employee may know that the “Jones” who dine regularly prefer a certain wine or appetizer with a particular entrée or perhaps they prefer to dine by the windows during the day and in an interior booth in the evening. This may seem trivial, however to the “Jones” it is one of the key reasons that they loved the restaurant. This kind of information is internalized by the employee and never shared with anyone else unless there are processes to data mine these all important tidbits.

Brain drain is also a reason that restaurant have to continually relearn practiced calm. The people who did the little things that smoothed the evening out are no longer working here. Suddenly nothing is prepped and everyone is running around looking for salt and pepper shakers during the height of the evening rush.

Brain drain is nothing you can ever plan for completely however having processes in place for every function helps. Enjoy the abundant employee availability while you can.

Practiced staying calm:

Jonah Lehrer’s post about deliberate calm reminds me of restaurants during a rush:

This is where flight simulators enter the picture. The advantage of these realistic simulators, which have been in widespread use since the early 1980s, is that they allow pilots to practice extreme flight scenarios, such as a total loss of engine power over water. The training provides pilots with important technical skills -- they can practice flying crippled planes -- but it also teaches them something more important: how to draw on an optimal blend of reason and emotion. They learn how to ignore their fear when fear isn't useful and how to make quick, complicated decisions in the most fraught situations. Flight crews don't panic because they've practiced staying calm.

The first time your restaurant experiences heavy volume is usually a disaster. Restaurants have practice openings because the first time a new restaurant is tested there are always issues. After having gone through the rigors of a busy night the staff adjusts and deliberate calm sets in. Now how do we increase covers?

Saturday, February 7, 2009

Place your order at the kiosk:

The order taker/server at a counter near you has been or will very shortly be replaced by a kiosk. The kiosk will accept your customized order, process your payment and provide you with number to redeem your selection. The truly sad consequence of this development is that customers have the perception that this change is a major positive. Major chain “fast-food” counter servers were invisible. Their function was designed to be as unobtrusive as possible. They blended into blur of activity that processes your order. They were hidden by the blinding glare of the oppressive overhead menu.

It is amazing that reducing human interaction in a social setting such as a restaurant elicits such a positive response. Clearly there is a business opportunity here for the contrarians among you.

The humble computer chipped ordering device will continue to make inroads into the dining experience. It would not be future shock to suppose that in the not too distant future white table cloth restaurants will have a wireless tablet or perhaps an app for your iPhone where guests could peruse the menu and place their drink and food order without ever talking to a human being.

This is what progress looks like?