Why do some businesses manage to stay contemporary and fresh, while others seem to become locked in the past? I’ve been concerned with the problem of how to teach business owners and managers to stay ahead of the market for some time. A spate of distressing phone calls from troubled business owners have prompted me to write about this issue.
Your business must constantly evolve
For a business to remain healthy, it must be in a state of constant evolution. If you freeze your system, your business will stagnate and eventually die. Imagine if you had the best hospitality business in the universe and you said: ‘This is it — perfection. Don’t change anything.’ What do you think would happen? Your competition would still be innovating and they would catch up and pass you, eventually making your business a ‘dinosaur’.There are three ‘states of change’ a business can be in. They are: no change, sometimes called stagnation; unplanned or uncoordinated change, or chaos, which is just as bad as stagnation because it leads to extremely inconsistent quality and service; and planned and coordinated change which we call ‘progress’. It is part of the proper responsibility of an owner or manager to ensure that their business is progressing — by constantly evolving and moving with the times.
Human nature can block progress
Human nature often works against the need for change. We have an unfortunate tendency to cling tenaciously to behaviour patterns that have been successful for us in the past, even though they are no longer appropriate. I saw plenty of this behaviour in 1991–92 when the global recession hit here, again in 2007 with the Global Financial crisis and yet again 2020 when the COVID pandemic hit. A disturbing number of the old, established hospitality operators in my region failed to recognise that the market had rapidly changed and sat on their hands waiting for the good old days to return. They assumed that what had worked for them in the past was still valid. A lot of them went bankrupt.
We’ve also found that there is a direct relationship between a persons’ intelligence and their comfort creating and working with change. Bright people can assimilate new things quickly and welcome changes as a challenge. People who are not so bright have to work hard to learn new things and regard change as a threatening burden — to the point where they will resist or sabotage changes and subconsciously fight to keep things as they are. This has led me to set a minimum, measured intelligence level for all our management recruitment in environments where innovation is particularly important.
Listen to the youngA further problem is that our ability to innovate seems to slow as we get older. I believe that most innovation is the province of the young. I tell my management students: ‘Your job is not necessarily to innovate yourself; it is to make sure innovation occurs. Most of the valuable ideas that will advance your business will come from your staff and your customers’. A constant trickle of young, new blood into a business is a distinct advantage — provided you listen to the new people and are prepared to patiently sift the practical from the impractical ideas.
A few years ago I had a discussion with a well known chef and restaurateur, who had arrogantly asserted that he was the only one in his business who had the skills to create the menu that his restaurant was famous for. I told him I believed that his staff could relieve him of the burden of creativity if he went about it the right way. If you visit either of his restaurants today you will find that his cooks and chefs are required to submit dishes for assessment at regular intervals. The owner still maintains strict creative control, but he delegates most of the menu development to his subordinates. Some of the best ideas come from relatively junior members of staff.
I’m not putting a value judgement on pinching ideas and inferring that it is wrong, by the way. It seems to be normal, human behaviour. After all, isn’t that what fashion is? Copying someone else’s ideas like a bunch of lemmings?
Get out and see what the rest of the world is doing
If you’re gifted and can innovate yourself, that’s fantastic. You are special and you should develop your skills. The remainder of us need to develop some mechanism to stay in touch with the rest of the world and to stay ahead. This usually means getting out of your business and going around checking out your competition at regular intervals, getting a feel for what is happening and what the public are responding to at the time.
I’m surprised how many business owners don’t do this. It’s not unusual for me to strike someone who has become so involved with the demands of their own business that they have not taken the time to assess the market for some years. The top restaurateurs evaluate each other constantly — that’s one of the reasons they stay on top. Others assume their initial success will continue on into the future and bog down into stagnation and decline. Once this happens it’s usually too late to save the business.