Monthly Archives: May 2020

Not Delivering At All

If it’s Friday, the topic is food here on the screed. This week, it’s the food delivery services I suspect many of you have been using to support your favorite restaurants during the time we’re supposed to stay at home. Food delivery is not a new phenomenon. I know a lot of folks, myself included, who used it before all of this when they had nothing planned or bought for dinner and couldn’t bear the thought of pulling themselves together to go out.

What’s different with these services is that they’re third parties. One of my first jobs back in the day was as a food delivery guy (before I graduated to cook) for a local pizza place. Who hasn’t ordered Chinese food and had it delivered? But I worked for the pizza place and the kid making the Chinese food delivery was generally the owner’s son from the place I frequented. These services – Grubhub, Seamless, and others – are a relatively new business. For restaurants that didn’t do a large enough takeout business to hire a delivery person, they opened up new revenue streams. Of course, they come with a cost.

First, there is a human cost. These services pay very low wages and don’t make tipping mandatory (don’t be that guy – tip well, ok?). Then they charge exorbitant, often hidden fees to the restaurants. You might have read about one restaurant owner’s experience. In March, she got 93 orders through Grubhub, totaling to $6,626 in revenue. From that, GrubHub took $1,208 in commission, a $592 delivery fee, and $230 in processing fees, totaling to over 30% of the revenue. In an industry where margins are often low double digits, that’s not sustainable.

We could continue the discussion beginning with why restaurants don’t hire their own delivery people but the point I want to make today which might just apply to your business is about using third parties, especially third parties who end up owning the customer relationship. What is to stop Grubhub from promoting another restaurant to someone who is looking at your menu? Do a search on Yelp for a specific restaurant and you’ll usually see a couple of other promoted alternatives first in the listings. I don’t know what data the restaurant sees when an order comes in via one of these services but at a minimum someone else is privy to a portion of your customer base, their preferences, addresses, etc.

You might have heard of third-party cookies. Third-party cookies are created by domains other than the one you are visiting directly, hence the name third-party. They are used for cross-site tracking, retargeting, and ad-serving. They’re what makes it possible for you to see an Amazon ad for a product you just searched Amazon for on another, unrelated website. They’re going away, in part because of privacy concerns and, I believe, in part because marketers are waking up to the fact that having someone else own data that you help to generate so that they can sell it back to you as well as to your competition is silly.

Industries outsource all the time. Generally, this is because they don’t want to deal with solving a particular problem themselves for whatever reason and it becomes easier to let someone else deal with it. That’s often shortsighted, particularly when it ends up with someone else owning the customer relationship. After all, in business, that’s probably the most important relationship you have, right?

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Filed under food, Huh?

Top Shelf

It’s Foodie Friday, and if we weren’t in the midst of a pandemic, I’d be heading to my favorite local watering hole late this afternoon to celebrate the end of another work week. Since that’s not possible at the moment with all the bars and restaurants closed, I’ll do my celebrating here. I’m not going to lie either – I generally don’t pour myself an end of day beverage only on Fridays. From what I can glean from many of my friends’ posts on social media, I’m not drinking alone either.

One of the local establishments – a high-end cocktail lounge – has been selling their house-made mixers and syrups to have some income during this time. Of course, we bought some, mostly to support them but also because if ever there was a time to upgrade the cocktail game, this would be it. The other day, we made a beverage using one of the syrups and it was delicious, so much better than our usual drink. It got me thinking about what we did differently and, as I thought about it, there was a business point as well.

First, we used a really good vodka as well as the syrup. There was a top-shelf liqueur called for and we didn’t try to get a less-expensive brand. The lemon juice was fresh too. Unlike many times, we actually measured the ingredients and put them in a shaker with lots of ice to get a proper chill. I don’t know about you, but most of the time, I’m not measuring my drink proportions. Yes, I know that a typical highball (liquor plus mixer) is supposed to be a 3 to 2 mixer to booze ratio. Once in awhile, I’m sure my concoctions achieve that but those times are probably the exception.

The business point? Only the best ingredients, better known as your team. It’s worth spending more on the best you can get. Second, measuring, better known as data. If you’re not measuring how do you know how you’re doing? How do you know what’s working? It’s not enough that the cash register rings (and worse when it doesn’t). What’s causing it to ring? Can it ring louder and more often? Measuring is how we know.

Finally, putting the best ingredients in an environment where they’ll shine – the stainless shaker filled with ice, a chilled glass – made a big difference. You need to do the same with your team. Give them the best chance to be their best. Is it harder now with people working remotely? Of course, but finding a way to build that environment is your job, isn’t it? I’ve always said that a manager’s job is to help his team to do their jobs, first and foremost.

Try this: make your usual beverage next time but get the best ingredients you can afford and measure them carefully. Freshly squeezed juice, ginger beer with real ginger, whatever. Put them in a nice, well-chilled glass. Let me know if it doesn’t taste a whole lot better, ok?

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Filed under food, Helpful Hints, Consulting

It’s Greek To Me

When I sang in the chorus in college we performed Brahms’ German Requiem. As you can deduce from the title, it’s in German. I really enjoyed singing it but I really didn’t understand much of what I was singing about since my reading comprehension of German is practically nonexistent. That didn’t stop me from singing the words, quite loudly when necessary, even if their meaning escaped me.

I see the same thing going on all the time, both in business and in life. These days, when science discussion is all around us due to the pandemic I’m fascinated by the folks who suddenly are virologists. Maybe they read a scientific paper about what’s going on or, more probably, read a link on Facebook that pointed them to something with a lot of big words. It’s nice that they read the science papers but when you have a conversation with them about it, it becomes pretty clear that they have no clue about what it means.

You can see that in business. Someone reads an article on something  – the efficacy of social media or the importance of influencers in marketing – and suddenly they’re an expert. The truth is that they don’t understand the details of the topic in a way that gives them the ability to discuss them out of context. They’ve done a great job memorizing but a lousy job in grasping meaning.

I used to tell consulting clients the truth about my knowledge base. I was a mile wide but in some areas, I was only an inch deep. It didn’t embarrass me nor should it disturb you. I think a sign of both maturity and intelligence is knowing what you don’t know and not being afraid to admit it. When a client got to the limits of my understanding I would either go broaden my understanding or I’d bring in someone more expert.

You can sing in a language that you don’t understand just as you can pronounce the words on a page if you have a pronunciation guide. That doesn’t mean a thing in business. We say something is “Greek to me” when we don’t understand it. Try and speak Greek without understanding and the minute someone asks you a question, you’re sunk. Don’t try to speak a language you don’t understand, Greek, German, virology, digital media, or otherwise. Make sense?

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Filed under Helpful Hints, Reality checks, Thinking Aloud

Having An Abundance Of Talent And Failing

Foodie Friday! I’ll caution you that there are some Top Chef spoilers ahead so if you’ve not watched last night’s Restaurant Wars episode, you might want to come back later. It’s no secret that I’m a huge fan of Top Chef and the pinnacle of every season is when the chefs divide into two teams for restaurant wars. Last night’s episode, which resulted in the elimination of one of the more talented chefs (who is also a fan-favorite) reminded me of a great business point.

As the chefs divided up into teams, it was very obvious that one team had four of the best chefs left in the competition. Several were James Beard Award winners, all have opened successful restaurants (several of them have multiple restaurants), and because this season is an All-Star competition, a few had advanced to the Top Chef finals in previous seasons. The other team had talent but if Vegas was setting a betting line on which team would win restaurant wars, there was no question which team would be the favorite.

When the smoke cleared and judgment had been rendered, the favorites lost and it wasn’t really close. The other team’s food was better executed, their service was more organized, and the menu was more inspired. All of that raises the point that talent alone isn’t the determining factor for success, which is our business point today.

What was evident watching the teams prepare their food was that the losing team was disorganized. They each knew what dishes they were making but other than the chef leading the team, none of them seemed to understand why the menu was the way it was nor how the flavors needed to complement one another. Teams that do well depend on an understanding of roles as well as tasks to avoid clashing, overlapping, or conflicting.

Chef Kevin, who was in charge of the team, designed a meal to be served family-style, with many dishes exiting the kitchen at once. While that works when you’re serving your own family, having to serve a full restaurant put an amazing amount of pressure on the kitchen, and not surprisingly, the service was incredibly slow. They needed to turn over tables in an hour but this style of service took longer and patrons were sitting for 90 minutes, which resulted in a backed-up restaurant. It’s nice to have a vision but had Kevin considered the team’s ability to execute his ambitious vision multiple times an hour, he might have altered his plan. That might have been the result of overconfidence, which often is a problem for the very talented. When you believe that you are unbeatable and that your successes will continue, you can get sloppy, lose concentration, or in the worst cases, slip into arrogance. Was there some of that last night? Just maybe.

Bad communication can often lie at the root of why talented teams fail but that seemed OK in the kitchen. However, the front of house staff wasn’t properly briefed because Kevin wasn’t thinking about that task and never told the chef whose job it was to do the briefing to stop what they were doing and get to the front of the house. It’s never enough to have a great plan. Without great execution, you’re lost.

I wouldn’t say the better team won. I’d say the team that executed better won. Their vision was more simple, their product was innovative, and most importantly, they maximized the talent they had. It’s something to think about as you’re working with your team, right?

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Filed under Consulting, food

Be Good To Yourself

I received a very disappointing email yesterday. I mean, in the scheme of the global crisis we’re facing, it’s a nit but it was disappointing nevertheless. It came from Ticketmaster letting me know that one of the shows to which I had tickets was being canceled. I’ve had several postponed already but this one was now completely off the board. Boo.

The show was Journey and the opening act was The Pretenders. Now before you comment on my musical taste being stuck somewhere in the late 1980s, let me say that I saw Journey a year or so ago (with Def Leppard) and it was a phenomenal show. I’ve not seen The Pretenders in probably close to 30 years and being able to hear them live again was a huge bonus. Maybe next summer.

It did get me thinking about a Journey song, however, that I think is a good reminder to us all these days. It’s called “Be Good To Yourself” and it starts out describing a situation many of us might be in as we’re staying home and trying to work (or find work) as best we can:

Running out of self-control
Getting close to an overload
Up against a no-win situation

Here’s the video – I picked one that features Steve Perry singing and check out Randy Jackson’s haircut!

The song reminds us to be good to ourselves. I forget to do that sometimes and maybe you do too. Maybe you put a lot of pressure on yourself to be as productive as you were before all of this. That’s crazy talk. No one should expect themselves to be superhuman and deliver the same 100% rate of output during a global pandemic and a lockdown.

We all have worries during this time. Maybe it’s a fear of getting sick. Maybe it’s even more real than that prospect because you’ve lost your job and are depleting your savings. Maybe your health insurance is ending because you’re unemployed. When we have issues that lie at the base of Maslow’s hierarchy, there is no question that we put pressure on ourselves to solve the problem. You feel overwhelmed by a lack of control. I get it and I’m not minimizing it.

But you still need to take some time each day and be good to yourself. You didn’t create this situation. You’re not to blame. That can be taking the time you now have to walk each day and clear your head. Maybe you make a list of the things you really enjoy and do one every day. Maybe you call a friend to whom you’ve not spoken in a while. The key is not to beat yourself up over the situation. Negative self-talk just digs a deeper hole.

So I’ll shut up and let you think about how you’ll be good to yourself today. OK?

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Filed under Music, Reality checks

Pivoting From Cocktails To Cleaning

Happy Foodie Friday! This week our food-themed screed takes us to the land of alcohol, a place that I have a feeling many of you have visited several times over the last few weeks as a scenic detour in your home confinement. Like many of you, part of my very limited activities over the last little bit has been the often quixotic search for hand sanitizer and toilet paper. The good news is that toilet paper seems to be much easier to find of late while sanitizer remains elusive.

There are many small distilleries near where I live which make everything from vodka to rum to moonshine (hey, it is the South!). Many of them have converted their processes over to produce hand sanitizer which is after all, alcohol-based. One place nearby is selling their sanitizer by the gallon at prices which are reasonable, thereby doing both their shareholders and our community a service. Why the shareholders? Because many of their customers, along with those of their competitors, happen to be restaurants and bars, which are closed except for carry-out. Booze sales are confined to beer and wine in the carry-out world for the most part. That’s our thinking point today.

These businesses have managed to pivot from making one in-demand product to another. This pandemic has caused many other businesses to rethink how they do things as well and to make some changes. For example, I represent a number of companies that run after-school programs. With no school (and no gatherings allowed), most of them have pivoted to providing those programs online. When things calm down, they’ll return to their old model but most indicate they’ll keep the new, online model as well since it seems to be working quite well.

Another example. Companies are cutting down on non-essential costs.  They are reallocating their budget from physical in-person processes such as travel, conventions, etc. into digital or virtual tactics. If your primary sales channel is trade shows, are you ready to pivot to some other model since consumers might be wary of large gatherings such as home shows and business buyers may not be allowed to travel to whatever conventions remain?

Has online commerce been an afterthought for your business? My guess is that many brick and mortar firms are rethinking how they approach digital. Yes, all retail sales have dropped. Consumers are restricting their purchasing to essentials, understandably. But it won’t be this way forever. As CNBC quoted one analyst,

“Major retailers who sell goods outside of apparel and furniture – two of the hardest-hit categories – will likely weather the downturn, along with many direct-to-consumer brands that were doing well before the pandemic. Instead of bulldozing the entire retail market, the pandemic is more likely to accelerate the decline of the “boring middle of retail,” such as Sears, J.C. Penney, Macy’s and Kohl’s.”

Those are companies that didn’t invest in the online space before and who can’t keep up with the big guys or the specialty online brands. They can’t pivot.

Being able to pivot is going to be critical as the new world emerges. Can you turn your booze into sanitizer without missing a beat or will you have to rip the whole business down and start over?

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Filed under food, Helpful Hints, What's Going On