Saturday, November 10, 2007

Ramsey's Way

I've become a big fan of Chef Ramsey and his shows. On both Hell's Kitchen and Ramsey's Kitchen Nightmares (both the British and US versions) he unapologetically forces people to acknowledge their mistakes, ignorance and inefficiencies and deal with them. A knee jerk reaction might be to view his style as cold-hearted, mean and vulgar. On closer inspection I see him more as the "Mary Poppins" of the restaurant business. He comes into an establishment, assesses the problems and develops a unique plan of attack to quickly remedy them based on the personalities of the people he's working with.

Many of the situations display common mistakes that are prevalent in business in general, not just the dining industry. Here are a few to be aware of.

Too many items on the menu:

In the interest of trying to appeal to the widest audience possible, many business owners wind up offering more choices of products and services than they can possibly execute on well. Not only does an over sized product offering make it tough to execute, it makes marketing harder and less effective. For example, a mortgage broker may choose to offer reverse mortgages, traditional mortgages, refinancing, first time buyers programs and a host of others. The aim may be to create a "one stop shopping" image. The reality is you create an image of a broker that specializes in nothing and no one program stands out in your marketing. There's also the training aspect. How can you expect your employees to have in depth knowledge of hundreds or thousands of products? If you want to stand out from your competition you have to be more than a commodities broker, whether it be in retail or professional services. Play on your strengths. Figure out what you do well and get even better at it.

Clinging to Bad Ideas:

Another mistake Ramsey often comes across that's common to business in general is falling in love with your own ideas to the extent that you don't listen to what the market is telling you. Another great business mentor, Bruce Williams often advised "Never fall in love with something that can't love you back". Reality is not emotional. No matter how great you think your product or idea is, if the market's not buying it, let it go. Trying out new ideas is a good thing, but you have to compare the way it played out in your head with the way it plays out in reality. Don't let the failure of one idea stop you from trying out others, but don't cling to an approach that's not working because you believe it "should" work. Believe your own eyes.

Fully Trained Employees:

Owners and managers often make the mistake of believing that once an employee completes the training period or program, they can now leave them on "auto pilot". Training never ends. Not for your employees, not for you. The marketplace is dynamic, which means it's always changing. Employees, managers and owners need to remain constantly engaged and observant. Talk to each other. Share ideas, methods and observations with your people every chance you get. Reinforce good practice and behavior. Never stop learning. Never stop teaching.

Passive Equals Nice:

Another business blunder is to equate being a nice guy or a good boss with being disconnected or passive. Allowing substandard performance, avoiding criticism and confrontation is not "nice". You don't promote self-improvement by condoning incompetence. You may avoid confrontation, but you are not doing yourself or your employees any favors by allowing them to continue in their incompetence or mediocrity. Be in charge. Be the captain. Be the coach. If you find you have an employee or two that can't deal with striving to excel or at least improve, cut them loose. Be a leader, not a babysitter.

Poor Communication:

Every aspect of your business is connected to every other aspect of your business. To execute well, the right hand has to know what the left hand is doing. Put systems in place to ensure the smooth flow of an order from first contact with the customer to product or service delivery and on to service, support and feedback after the transaction. Facilitate and require effective communication between employees and departments. If someone needs a particular bit of information, make sure they know where to get and how to ask for it. Whether it be verbal or digital, an effective communication network is crucial to operational efficiency.

Letting Mistakes "Out of the Kitchen":

You don't save money in the long term by hoping your customer wont notice or wont complain about your mistakes. Every product that leaves your "kitchen" has your name attached to it. The value of your brand is directly linked to every item you sell. If the product or service is substandard "Put it in the bin". Bite the bullet. Take the loss. Start over and send it out right. Consider it an advertising and training expense and money well spent.

Lower Quality Equals Lower Standards:

Not everyone can afford the very best. There is a legitimate market for lower quality, less expensive fare. For example I may choose to buy a plastic watch rather than a sterling silver watch due to budget concerns. However, I still expect the watch to work. I may choose to order the hamburger rather than the prime rib, but I still want a great hamburger. If your product mix includes items for the budget conscious or lower income buyer, offer the very best in the price range. If you're a producer, remember, lower cost raw materials doesn't mean less attention to detail on your part. Every customer is a valuable customer regardless of the ticket total. Treat them all with the respect you'd want to be treated with. Give them the value they deserve. Earn your money.

Perhaps the most refreshing thing about Ramsey's shows and a few like it is the fact that they display methods of achieving business success in a totally transparent manner. There's no "tricking" the customer into anything. It's all about honestly creating value by focusing on what you're offering and delivering on your promise. Given enough time, anyone can make a great meal at home for a lot less than they can buy it in a restaurant. They don't want to or they wouldn't have come to your place. They're counting on you to make the effort, put in the time, monitor the quality and do the hard work. That's how to create value and wealth and be proud of it.

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