Staying at the top

Why do some hospitality business reach the top? Why is it rare for one to stay there for very long? This article seeks to provide some of the answers.

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How many restaurants can you name that have stayed at the top for more than five years? I’d be willing to bet that you could only name a small number of high quality stayers out of the tens of thousands of restaurants spread all around the country.

Why is this? What do you have to do to stay on top for more than a short time? In the process of trying to answer these questions for a friend it struck me that might make a good subject for this column.

During the course of my business I see the same pattern repeat itself. Someone will start or buy a restaurant or eatery and slave to make it popular. They’ll work huge hours, drive the floor or the kitchen with a zealous passion, spend all their precious spare time looking at similar businesses, read everything they can to advance the cause and generally live and breathe food, beverage, service and decor.

If they do it right, grovel to the right people and are very lucky, one day they might pick up an award, a hat or glowing media review from one of the gurus (who’s recently been transferred from court reporting). All of a sudden they may find themselves ‘hot’, and the public and other industry professionals come crowding in like gastronomic lemmings.

This is the beginning of a thrilling, dangerous time. All of a sudden they’ve got a busier business than they’d ever imagined, they’re making lots of money, and they’re seeing their name in the newspapers enough to give them a Messiah complex. Sound good so far? Too right. The business is working that well they lose the motivation to keep developing it. They simply hang on for the ride and bask in the accolades.

A bit down the track, maybe in eighteen months or two years time they start to feel burnt out from the long hours and the constant pressure of the public. They haven’t been out and about for a while either — they haven’t had the time. Fashion is moving away from them and their arrogance and their tiredness won’t let them realise it. To make matters worse, they lose their attention to detail and they put their prices up.

At this point, they go one of two ways. If they have good sense they may decide to recruit key staff who can take the burden away from them. Here their media induced arrogance can cause more problems: ‘How could anyone do it as well as me? I’m a living legend.’ This often leads to unmerciful haunting of new staff and a spate of rapid staff turnover.

Other owners just drop their bundle and let go entirely, fleeing their business as soon as new staff commence, desperate for well earned break. The new staff are unlikely to want to put in the same hours or commitment as the owner, especially considering what they get paid, so the business suffers and value for money goes out the door. Standards fall but the public take some time to realise. By the time trade declines it’s often too late.

A small percentage of owners manage to get their business structured properly and end up with a profitable concern, run by a manager. This gives the owner plenty of time to get out and about and mingle with the glitterati — which in turn leads to more glowing publicity and a dangerous reinforcement of personal invincibility.

It’s at about this point that the owner ought to recognise that they no longer personally run the business — their senior staff run the operations of the business, while they handle public relations, finance, etc — together they form a successful team. The key staff who can run the operation are very valuable and are probably destined to run their own businesses.

If the owner doesn’t recognise the value of their senior staff at this point and give them a share of the action, the key staff will probably quit — after all, why should they stay while the owner takes all the loot and all the glory when they figure they can do it for themselves? If they quit they can create a monster problem within the business. Who will run it now? Often the owner is not willing (or able) to step down from a comfortable public existence and resume the gruelling hands-on role, nor are they in touch enough with current operating procedures to properly train a new manager.

This is where I see a lot of owners lose the plot. They stop seeing the dirt in the corners; they cease to work at developing and keeping their businesses contemporary; they put unsuitable people in charge and the internal standards of the business wind slowly down over a period of time; their concept becomes dated, prices climb and the majority of the public drift off somewhere else.

Surprisingly, the decline can pass quite unnoticed, especially if the owner is tracking total income rather than customer numbers as the primary means of gauging business growth. Each successive price rise will mask a fall in patronage and it’s only when the house is half empty will the penny drop for some people.

The few who can get to the top and stay there have my utmost admiration — they are very interesting people, and they seem to all share some things in common: they don’t let the publicity go to their heads, they remain focused on their goals, they are very well organised, they never let go completely, and they get out and about regularly.

It’s very tough at the top — that’s why so few stay there for long.

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