April 02, 2019

Your Business Strategy Impacts Everything

Burt Lohoff-Gaida

Burt Lohoff-Gaida
Founder and CEO iLumunate LLC/

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We arrived in time for our 6:30 dinner reservation. The place was packed. Maybe others had also received the e-mail special that offered two entrées for the price of one. This was a pretty up-scaled restaurant so I was confident we would have an enjoyable evening.

We checked in with the hostess and were irritated to hear: “Sorry, we’re running a bit behind today. It will be about a 30-minute wait. If you’d like to have dinner at the bar, you’re welcome to sit there.”  I looked toward the bar and saw about twenty people sitting there; no chairs were available. My wife and I looked at each other as if to say: “I guess we’ll wait for our table. What other choice do we have?” I surveyed the faces of the other patrons who were cramped together waiting for a table. Sullen was the word that came to mind.

From where I was standing I could see into the kitchen. A glass partition separated it from the bar. There was a lot of activity with waiters anxiously waiting for their orders.

All of a sudden I saw a couple push back from the bar, exposing two empty high-top chairs. I nudged my spouse: “let’s grab those before someone else does!”  Mission accomplished, we were one step closer to our two for one special. I would have preferred a table but I thought it might be interesting to watch the workings of a busy restaurant kitchen while enjoying my dinner.

It took a couple of minutes before our waiter/bartender brought us menus and asked what we’d like to drink.  I could tell Kelly was a bit stressed out so I asked: “Is this a typical Friday night or did some of the cooks call in sick today?” Kelly was a friendly, mid-twenty something who replied: “The weekends are always like this… crazy chaotic,” before hustling off to tap a beer.

After a few minutes we were ready to order but Kelly was nowhere in sight. Finally he appeared and I flagged him down. “Kelly, can we get our order in?” I asked.  After writing everything down he took our ticket into the kitchen. 

I didn’t check my watch but it must have been 15 minutes before we received our soups. They were tasty but lukewarm. Was it worth sending back to get them heated up?  My spouse agreed: no, let’s not make a fuss. We might have to wait even longer.

I was honest with Kelly when he returned to pick up the soup bowls: “The soup was good but not hot enough.” He asked if he could get us another serving and we smiled and said it won’t be necessary. 

During the next 20 minutes Kelly returned four or five times to apologize for not having our meals. We started having a conversation with him about how the restaurant was being operated.  My spouse pointed out that there was a lot of take-out activity especially from folks with Grubhub and Postmates bags. Kelly confirmed that the food delivery services and people picking up their take-out orders made up a good portion of the restaurant’s overall business. Kelly stated: “This puts an extra burden on the kitchen and slows down the orders for the customers in the restaurant.”  I replied: “It’s a little bit like when the airlines overbook their flights. They know that they can’t accommodated every ticket holder and will need to bump some travelers off of the flight.” 

“Putting this type of strain on the kitchen will lead to lower customer satisfaction.” I said.  My spouse asked Kelly: “Which customers do you think are more important for the restaurant, the ones eating here or the ones getting their food delivered to their home?”  Kelly replied: “Personally, I think the people who come to eat at our restaurant are more important and should get the best service.” 

“So why doesn’t the restaurant put the breaks on take-out orders when it’s really busy?” I asked. Kelly responded: “Corporate wouldn’t allow that; they want to make as much money as possible.” “And what about your General Manager? Couldn’t he put a hold on pick-up orders between say 7 and 9 pm?” I asked.  Kelly’s reply came quickly: “He’d loose his job for sure.” 

Clearly the restaurant’s strategy wasn’t working. The kitchen was overloaded and couldn’t get the meals out in a timely fashion to neither the sit-down customers nor those waiting for their Grubhub delivery. They might be able to add a few more cooks to handle the orders but the kitchen was already cramped. 

Kelly came to us and the others at the bar several times throughout the evening to apologize for having to wait.  Even though I was the customer and experiencing poor service, I felt sad for Kelly. He couldn’t serve his customers well because the restaurant’s strategy wasn’t working.  When I got the check I saw that the one entrée was in fact deducted from the bill. I would have rather paid for the second meal and had a better dining experience. In the end I didn’t want to penalize Kelly for the faults of his company. I added the second entrée to the bill and calculated a 25% tip.  I won’t be visiting this restaurant anytime soon.

If I were the owner of this restaurant group, here are a few questions that I would ask myself when thinking through our company’s business strategy:

·     Has new innovation such as Uber and Grubhub changed our marketplace?

·     Who is our customer and who should we focus on: customers that come and eat at our restaurants or those that order take-out food?

·     What do we want our dining experience to be?  Do we want to have a high-level dining experience or are we more interested in selling food to as many customers as possible?

·     Should I offer 2-for-1 specials on weekend nights or rather during the week when traffic is slower?

·     Would it be better to limit a take-out-option to certain weekdays or not offer take-out at certain times during the evening?

·     Should our take-out menu offer a limited selection of meals?

·     Do I need to expand the size of my kitchen and hire more cooks to meet the demand of sit-down customers and those who are ordering take-out?

Clearly this restaurant needs to re-think its current business strategy and make the necessary changes that will keep it in business.

Comments? You can contact me directly via my AdvisoryCloud Public Profile.

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