Foodpreneurs take note: Google is best consumed with a pinch of salt…..and a side of discretion

D-day

“I don’t care how long this takes, but no one leaves the boardroom until I sign a decision”, declared the Chairman with an air of authority and a hint of melodrama.

Seated around the massive oak wood table was the Dubai based hospitality group’s A-team, an impressive group of professionals representing 130 years of combined experience, and probably a king’s ransom in combined payroll.

In contention was a new generation enterprise management system, meant to turbo-charge the 1400 employee, 63 unit restaurant operator’s march to the future. Months of collective toil and research had led to this moment of reckoning.

Presentations were made one last time, I’s dotted, T’s crossed and thoughts aligned. I was there at the Chairman’s behest, supposedly as the credible outsider and group-think antidote, ready to offer my two cents with dispassionate objectivity.

As consensus began to emerge by afternoon, a sense of self-congratulatory zeal began to permeate the air. We were all but there, and crucially, the Chairman was on board.

Taking “well done team” from him as a tick on the final box, the committee head wasted little time in pulling out a memo (he had one for every eventuality). Placing it in front of the Chairman, he smiled, “autograph please”.

Analysis paralysis

The decision was financially significant and strategically critical, so the burden of the signature wasn’t lost on the Chairman. Months of intense diligence by his top talent and his own direct involvement had made it as close to water-tight as one could get though. Moreover, he had already announced that it must be locked in today.

But then…..in what was clearly a compulsive than premeditated move, instead of a pen, he reached out for his i-pad.

An uneasy silence followed, punctuated only by the distinctive sound of the Chairman’s increasingly frantic browsing gestures. What could he possibly need to be looking up at this point?!

With each passing minute, one could almost see seeds of hesitancy taking root in the Chairman’s head. Every conceivable doubt had already been addressed many times over, and yet, the burden of owning the decision was proving unbearable.

Then, after an eternity of being oblivious to our presence, he slowly raised his head, and with a vain attempt at nonchalance, muttered, “Umm, I probably need some more days, I….good job by the way……but…..its just uhh…..yeah, I need a few more days”. Then, carefully avoiding eye contact, he made a hasty exit.

The room stared in disbelief. I was simply mortified!!

The last I heard, the project was shelved. The ensuing downward spiral in morale and its very tangible ripple effects in the organization make for a compelling story. But I digress.

The Google curse

By the looks of it, we had just witnessed the mighty repository of the world’s information usurp months of meticulous work, and recklessly undermine a room of dedicated professionals.

What really happened, however, was the Chairman falling prey to what I call the Google curse — the perpetual, insatiable and endemic need to validate one’s own thoughts and ideas on the web, no matter how well grounded they might already be.

Ironically, this inability to draw a line and use one’s discretion invariably gives rise to confusion and indecision — the very things being desperately avoided in the first place.

Food business and the worldwide web

Although perceptions may vary from cash cow to debt trap, fact is that Food and Beverage remains a business with extraordinary aspirational value — probably because we can all relate to it in some shape or form. And now, the internet has lowered psychological entry barriers too, by offering everything that there is to know at the click of a mouse. At least that’s the impression.

Always eager to please, the mighty cyberspace genie serves up an abundance of information on demand with remarkable efficiency. Still, without human discernment, processing and diligent execution, the barrage of facts and figures can quickly turn into an overwhelming assault on the senses, which is more likely to impair, than facilitate decision making.

Targeting optimal results from research

They say that first we shape our tools and then our tools shape us. The internet, probably the greatest tool ever invented, has shaped us in a profound way, turning knowledge into a commodity and us, into voracious and increasingly indiscriminate consumers.

Research in the real world usually has two types of objectives. One is largely for secondary consumption, e.g., a mid-level manager needing to impress his boss, or a consultant justifying his fees with a big fat submission (that statistically, is more likely to gather dust on the clients desk than not).

The other is when time and money on the line are yours, and the stakes are sky high.

The first type of research is for appearances, where generic is usually dressed just enough to pass off as bespoke, but the second type could be the singular difference between success and failure. This is the only one worth addressing.

Here are a few examples of areas in the food business, on which an inordinate amount of time is spent researching online. With the benefit of streamlining however, one can better differentiate the forest from the trees (by far the greatest challenge of the information era):

1. Financial feasibilities: This one’s a biggie, to the point that new business and feasibility are normally mentioned in the same sentence. Besides endless pages of subjective micro detail, Google search usually brings up diverse samples of p&ls, break evens, cash flows, payroll details, roi’s and balance sheets in a variety of formats.

The deluge of numbers is usually enough to swim in, and ever so often, to drown in.

Tip: Despite the detail, these spreadsheets usually just pay lip service to where the revenue comes from.

X meals at a Y average check is not a sales projection, but wishful reverse engineering of an often dubious target figure.

Real numbers emanate from painstaking surveys, competitor analysis, demographic knowledge and coherent strategic thinking. So devote 90% of your effort to plausible revenue targets — the be all and end all of the business. Everything else is a fairly straightforward derivative. Skim on the revenue part however, and the rest won’t be worth the paper its printed on.

2. Menu: The ubiquity of gorgeous pictures and recipes on the net convey the impression that endless menu options for your outlet are just a click or food channel view away. In reality, numerous variables like cost, captive markets, kitchen planning, culinary talent, SOP’s, theme etc. come into play.

Tip: Spend the most time intensely engaging and researching local vendors, their support services and credit/delivery terms. This impacts quality, pricing, inventory levels, cash flow and consistency. Get this one right and even though the rest might not be a cakewalk, it’ll be a much smoother journey.

3. Recruitment: In-depth job descriptions & specifications, operational structures, interview questions and sample tests are available for every conceivable position in a restaurant organization. Simply put, there’s just too much to look for…..and its exhausting.

Tip: Hire for empathy. You may have heard this before, but it doesn’t matter unless you give it single minded focus. Success in any role hinges on our ability to effectively relate to others and putting ourselves in their shoes, be it staff, guests, managers, vendors or marketeers. Start with formal or self-devised tests that measure EQ (emotional quotient) and I assure you that those who excel here will excel in the food business. Technical proficiency? The high EQ people are highly trainable too, and willing to learn whatever is required to be a productive team member.

4. Customer service: We could literally write an encyclopedia on what constitutes good customer service. Patience, charisma, compassion, proactiveness, instinct, skill, communication, product knowledge, thinking on one’s feet are just some of the essentials. That’s a lot of expectation from a single individual and no wonder restaurants often fall short.

Tip: Forget about what pleases restaurant customers, just research human happiness.

That’s right, invest your time in finding out what makes people happy….what floats their boat if you will.

That’s not to say that people won’t have different preferences in particular areas, but its essentially the same things that make us all happy. Intricately weave your findings into your service philosophy, and I guarantee you happy for life customers.

5. Restaurant marketing — The preeminence of social media in restaurant marketing is a universally observed and accepted reality. To be at the top of your social media game would be a no-brainer and yet, despite acknowledging the phenomenon and its impact, far too many operators aren’t quite up to scratch.

Tip: Facebook, Twitter, Instagram, Foursquare, Pinterest, Zomato and the likes mean nothing without a coherent, consistent and creative approach to these platforms. So rather than getting too ambitious about dazzling your customers upfront (it will eventually happen), first look for individuals who can execute efficiently and cost effectively — because an idea is only as good as its execution.

My bet would be on young, net savvy, worldly wise, highly motivated fresh college graduates, full time on the payroll. Compare that to a ‘charge by the hour’ marketing agency and without question, the youngsters will give you a far more robust and productive social media engagement, and undoubtedly, a better ROI.

6. Location — Location counts for the top 3 factors in opening a food service outlet. The problem, however, is that location still isn’t an exact science, with even the best and biggest brands periodically faltering in this area and closing down stores. Rent, demographics, foot and vehicular traffic, trade area, visibility, competitors etc. will be some of the determinants, with intangibles like gut instinct also needing to be accounted for.

Tip: No matter how potentially lucrative a location may appear, as far as possible, plan it and market it as a destination, i.e., imagine that the restaurant was in the middle of nowhere — what strategy would you adopt? Weird as it may sound, this approach can only augment the potential business of your restaurant, even if its in Times Square!

7. Pricing; Industry standards, costs, demand, competitors, customer profile, type of operation etc. are few of the factors that determine the price point of a menu.

Tip: Focus more on contribution margins than food cost. Eg. if a burger sold for Dh. 35 costs Dh. 10, the food cost is 28.5% and contribution margin is Dh.25. A steak that’s sold for Dh.65 might cost Dh.25, which makes the food cost 38.5%, but a contribution margin of Dh.40.

Bottom line — whereas a food cost of 28 to 35% is desirable, remember that restaurants earn in Dirhams and not percentages.

You’d also do well to remember

  • Don’t believe everything on the net. Our propensity to attach instant credibility to the printed word harks back to the pre-internet days, when anything in print was considered a definitive source of information. With anyone free to type out content now, that reverence is no longer relevant.
  • Paid SEO or Search Engine Optimization often determines what you view in the first few pages of search. However, whereas favourable SEO results might have a direct correlation with money spent, they are not necessarily an indicator of quality content.
  • The Food & Beverage sector is evolving at a rapid pace. So by virtue of new technologies, changing trends and emerging demographic realities, information valid at the time of posting could be redundant by the time its read.
  • Pages are ranked according to popularity and not substance, and even though some types of information is being mass-consumed, it doesn’t automatically imply substance.

Conclusion

The vast resources of the world wide web have transformed our lives unlike anything else in the history of mankind. However, original, unencumbered thought, emanating from the thinking mind, will always remain an infinitely more potent and creative force.

So as a Food Entrepreneur, never cede your power to what popular opinion on the net dictates. It might be a pervasive reality that’s impossible to ignore, but daring to follow your internal convictions without having to seek reassurance from Google at every turn, may yet be the surest way to authenticity and success.

Sanjay Duggal

Food & Beverage Investment Advisor, Abu Dhabi, UAE