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 NRN.com 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.

and

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?

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?

The value of metrics:

Tim Berry highlights the value of metrics;

It’s been a lot of years with a lot of concentration on what’s good about business planning, and how it works in a business when it works well, that I’ve realized the magic of metrics. A good business planning process generates metrics throughout the business: not just the obvious sales and cost of sales and expenses, but milestones with dates and deadlines, and tracking of metrics such as calls, presentations, programming modules, trips, key word insertions, downloads, page views, conversion rates, subscriptions, leads, and so on. For every job there’s the hope of an objective metric that people can live and work with. A good business planning process goes from the high-level general to the specific steps and then to the metrics, and tasks, and responsibilities. Make commitments.

Riddle: in the classic bacon and eggs breakfast, what’s the difference between the pig and the chicken?
Answer: the chicken’s involved, the pig is committed.

Metrics are magic. Build metrics and a planning process, and, as if by magic, you and your team members (friends, or not) are suddenly standing together looking at the metrics. The positive and negative feedback is there in the numbers. You both see them together. You both remember what the goal was, and you look together at performance.

Maintain an innovation capability:

“Everything comes to pass, nothing comes to stay”

Jeffery Phillips reminds us to look forward;

I was thinking recently about how important it is to maintain an innovation capability even in a downturn. After all, the downturn will end eventually, markets will open up and customers will want new products and services, probably different from the ones they wanted at the start of the downturn. Unless you are actively innovating in the downturn, you'll have nothing but outdated products and services to offer to customers whose preferences and attitudes have changed.

Just a whiff of coffee

The Economist.com has a post about coffee biodiesel. Now that is an idea that smells good.

Coffee is also a plant product, but once the beans are ground and used they end up being thrown away or put on gardens as compost. Narasimharao Kondamudi, Susanta Mohapatra and Manoranjan Misra of the University of Nevada at Reno have found that coffee grounds can yield by weight 10-15% of biodiesel relatively easily. Moreover, when run in an engine the fuel does not have an offensive smell—just a whiff of coffee. Some biodiesels made from used cooking-oil leave a car exhaust smelling like a fast-food joint. And after the diesel has been extracted, the coffee grounds can still be used for compost.

Separate Checks

Separate Checks is a harbinger of the Apocalypse. Christopher Borrelli's article on separate checks highlights a disturbing trend in restaurant dining

With a cautious eye on a dissolving economy, or out of simple frustration with an awkward tradition, an increasing number of Chicago diners say they are asking for separate itemized checks when they eat out with a group. Unless they are splitting dishes (and sometimes even when they are), they want to pay only for what they ordered.

Studies have shown that when diners split the check evenly, the check average is higher, now that everyone is splitting the check and paying for their own selections, the check average will trend lower.

Customer Service 101:

John Miller has an excellent book, “QBQ” about personal responsibility. The mantra of the book as it relates to restaurants is about empowering individuals not to be victims, of the need to take personal responsibility for every customer interaction, touch point, or transaction. Employers should begin every shift meeting, every training opportunity, every conversation with “What can I do…?”, or “How can I help…?”. The words “why, who, and when” have no place at the beginning of any question in your restaurant. The message of personal responsibility is elemental if you hope to have a culture of customer service.

Customer service begins first, last and always with me.

Dynamics of Personal Influence

Nicholas A. Christakis' post about the Dynamics of Personal Influence offers this:

You may have noticed how fashions in clothes or music spread through social networks. It turns out that all kinds of conditions and behaviors – including obesity, smoking, altruism, voting, and happiness – can flow through them as well.
What does all this mean for businesses? groups of customers might be strategically targeted so as to take advantage of their influence on one another.

You may only have a few customers coming through your doors, however those people influence a lot of others. Think about personal influence as a cost effective method of acquiring new customers.

Have you hugged your customer in 2009?

Frank Bruni's NYTimes insights on the New York restaurant scene is fascinating;

Battered hard already by the recession and petrified of what’s to come, restaurants are talking sweet and reaching out in ways they didn’t six or even three months ago. They’re cutting special deals, adding little perks, relaxing demands and making an extra effort to be accessible.

They’ve seldom wanted you so bad, so they’ve rarely treated you so good. If you can still afford to dine out, you’re likely finding yourself enfolded in what the restaurateur Stephen Hanson— who recently closed two Manhattan restaurants, including Fiamma — describes as a big, tight embrace.

Predicting that “the consumer will just shut down” and that 2009 would be “a very, very tough year,” Mr. Hanson told peers at a conference in Manhattan last month, “You need to hug the customer.”

Trust me: the hugging had already begun.

Patient Zero is to blame

Finally we can blame someone for this economic tsunami. Time.com has this post

The global recession has a "patient zero", a single person who set off the series of events which may lead the economy into its greatest downturn since The Great Depression and, by some estimates, push 50 million people around the world out of jobs this year, according to The International Labour Organisation.

"Patient zero" bought a house in Stockton, California, in 2003 after getting a sub prime mortgage. He defaulted on that mortgage 39 months later.

Denny's, poster child for horrible promotions:

I have no idea who approved Denny's free Grand Slam Tuesday Morning promotion, however that person should be fired. Giving away free products as one shot deal is the worst kind of promotion. It uses valuable resources with zero, zero, let me repeat that zero payback. A one time promotion plus the Super Bowl ad will do nothing to change the habits of customers. If you are not changing customers habits than you have accomplished nothing. Yes they got lots of free press today. Lots of free press today is not a sustainable business model ever.

Promotions should compliment your offerings not appear haphazard like this promotion.

Happy Groundhog Day

Six more weeks of winter it is.

The Need for Priorities:

Exactly why do you need to set priorities? The main function of an entrepreneur is resource allocation. That is taking a finite number of input variables and producing a desired result. When you do not prioritize you are wasting resources. Prioritizing enables you to direct your limited resources to their most productive use.

Spend save spend:

David Segal’s NYTimes piece chronicles a cycle of spending, saving and spending.

So if we don’t spend, we don’t recover. Fiscal health isn’t possible until money is again sloshing into cash registers, including those at this mall and every other retailer.

In other words, shopping was part of the problem and now it’s part of the cure. And once we’re cured, economists report, we really need to learn how to save, which suggests that we will need to quit shopping again.

Here is a clue, your business model needs to be independent of the personal consumption cycle.

Questions about leadership:

Bill Taylor has some interesting questions about your leadership skills

What’s one major strategic mistake you made over the last two years—and what did you learn from that mistake?

Did you see the financial meltdown approaching? If not, why not? If so, how did you prepare your company for it?

What personal sacrifices are you making to respond to the sobering realities of the economy?

What personal responsibility as a leader do you bear for not acting boldly enough, or speaking out loudly enough, to have helped avert this catastrophe?