A quick look at a monthly P&L statement will tell you something is off.
Food costs are high, labor is out of control, controllables are off the charts. However, for many restaurateurs month after month goes by and the numbers refuse to budge, dragging down the bottom line and putting the business at risk. So, why are well intentioned, seasoned operators unable to solve these clear business challenges?
After many years working with restaurateurs on a wide variety of operational issues, I have come to the conclusion that the biggest challenges in the restaurant business often have little to do with the team’s knowledge, desire or technical abilities. The big issues that really trip up restaurants of all kinds are often caused by one thing: EGO!
The restaurant business is the home to big personalities, big talents and big egos. While a strong sense of self is an important survival tool, unchecked egos can create blind spots and profit-killing sacred cows that business owners must overcome for their restaurant to succeed. Nowhere is this truer than in the restaurant industry. Whether it is an owner who insists on setting the dining room with expensive bone China, the GM who builds a wine list filled with Grand Cru Burgundies, or the chef who refuses to serve anything but Israeli Foie Gras at lunch, profit-killing ego landmines manifest in a wide variety of destructive ways. And they can prove extremely difficult to solve.
The reason that these issues are so challenging is that they stem from our past success. Restaurant owners, chefs and managers are very often the byproduct of other thriving businesses and come to a new operation with clearly formed beliefs as to what made them successful. Their past training and skill set becomes a part of their professional identity. A part of their ego.
Problems arise, however, when these leaders cannot modify their core beliefs to the demands of a new business or job opportunity. Take, for example, a new restaurant owner who has made her/his money in the tech industry. Many of the business skills that they have acquired – from marketing, to communication, to cost controls – would be disastrous if applied directly to the restaurant industry. Unfortunately, in many cases their ego is so tied to past success that they are unable to even consider their approach isn’t working for their new business.
Another contributing factor specific to the hospitality business is ‘industry programming.’ Most of the top-tier restaurants, culinary schools and hotels spend an enormous amount of effort training their people to think and act in a very specific way. These organizations ‘program’ their staff with cult-like repetition, hammering into them their keys to success, service standards and operating requirements so that any deviation becomes unthinkable. Their leaders are quickly molded into cogs in the machine and any errant behavior is trained out of them. While this is a great formula for success for those organizations, hiring someone who has come up through their ranks can be extremely problematic. The reason is these leaders have because so indoctrinated in that operating model that it becomes the bedrock of how they define themselves as professionals. It becomes so much a part of their identity that they become blind to other ways of doing business and unable to see how those standards appropriate to a three-star restaurant, would bankrupt a neighborhood cafe. This kind of egotism is rampant in the hospitality industry and causes all kinds of havoc in fledgling businesses.
Ego is a double-edged sword. A healthy ego can give us the confidence and energy to face the world, but left unchecked ego can blind us and sabotage our career, relationships and business. As business author Ryan Holiday writes, “Ego is the enemy of what you want and what you have: Of mastering a craft. Of real creative insight. Of working well with others. Of building loyalty and support… It repulses advantages and opportunities. It’s a magnet for enemies and errors… Ego is at the root of almost every conceivable problem and obstacle.”
Understanding the role ego plays many of the problems that face the restaurant industry is a first step in solving some of our most difficult challenges.
Jay Coldren is president of Coldren Hospitality: a restaurant consulting company based in Washington, DC. Additional reading: Ryan Holiday, Ego is the Enemy.