Written by: Paul LaRue, The UPwards Leader
Over a decade ago a restaurant company had a change in executive leadership, with the former founder and CEO stepping down into partial retirement.
The new CEO vowed to take the company into a new direction, and promptly stepped on the accelerator. He implemented weekly initiatives, operational overhauls, off-hours conference calls, and a myriad of new strategies that were totally foreign to the managers in the field.
Beyond that, his vision for the company was taking the concept into a different direction in order to “modernize” the brand.
As these changes were being implemented, the new CEO took his leadership team around to tour all the restaurant locations. This included the former CEO who was on in an advisory capacity.
When they arrived at our location (with a lot of pomp) I asked the former CEO how he was doing in the transition. He quietly pulled me aside and said, “I retired to take it easy; I’ve never worked so hard in my entire life, and I worked hard to get this company on the map”. He also indicated to me that the managers and employees were feeling the same, and that something needed to change quickly or else the company was going to struggle.
Fast forward about 6 years later – the company had a mass exodus of managers leave (headhunters found the company to be ripe for recruiting), new restaurants with a modern design and lots of capital investment to build had shuttered their doors, and the company filed for bankruptcy. As of today, the organization has less than half of it’s locations from that time period, and is struggling to seek relevance in today’s marketplace still.
The overall reason for the poor performance? The company had a vision to transform their brand, but moved way too fast ahead of what they had for people resources and failed to connect their plans with what the employee base could understand and execute.
The leadership team determined to go after these changes, but failed to recognize that with already busy staff throughout the company, that the extra work and learning needed would have to require something more than just an “open the box and plug it in” strategy.
What also was a big miss was the new CEO gave weekly voice mail messages (calling them “hospitality chats”) on Sunday evenings. These were ill-timed for one as most general managers were off on Sunday’s (and could only access the calls from a work phone). But these calls were more of a theoretical motivator rather than giving the nuts-and-bolts of what needed to be done.
Also, the new leadership failed to bring everyone into cultural alignment. The managers came away with varying understanding of the new brand, the term hospitality, and how to implement the new steps into play. This created an inconsistent customer experience from unit to unit. Coupled with the fact that the manager’s struggled to find time to execute these initiatives properly, these factors led to a sharp performance and revenue decline.
Finally, the new CEO abused the Jim Collin’s term from Good to Great of “on the bus or of the bus” meaning (in his words publicly across the company) that if managers can’t execute these new steps we’ll just move on with new people. This sent a level of resentment to the managers and drove them to seek better opportunities elsewhere.
The lessons learned from this situation is to make sure that your strategy to grow and strengthen your market presence and brand meet the following criteria:
- Understand the pace of your people and bring them along accordingly.
- Make sure your newest employee and your most senior executive can be on the same page vision-wise.
- Don’t think the new systems will ferret out “weak links” as you may lose good people who would otherwise be your champions with the right training and support.
- Don’t alienate your core customer because you have a vision of something new and shiny. If at all possible, incrementally integrate these new initiatives, or consider a separate brand or segment to capture that new audience.
- Stay connected with your culture and make sure you understand the pulse of your people.
- As a new leader to an organization, your core first step is to build a team around your before you build a following.
Great leaders can know to build a solid understanding and team before making sweeping changes. Getting too far ahead of your people will result in collapse and failure every time.