By Jeri T & Eric A Denniston, Denner Group International 3/24/2013
A Case Study about how lack of planning creates unintended consequences
Takeaways: Planning is critical to ensuring your objectives are realized. Lack of planning can cause unintended consequences that affect your outcomes and leave you with less than satisfactory results.
Imagine you own a Mexican restaurant in an area where there are a few other similar restaurants. You position your restaurant as having authentic food from Central Mexico, rather than the typical Tex-Mex fare that so many US Mexican restaurants offer.
As the owner of a Mexican restaurant you know there are certain times of the year customers expect you to offer something special, whether it’s a special food items or entertainment or special promotions. This requires planning. If you don’t plan in advance, you can be caught facing those nasty unintended consequences, such as the entertainment not showing up on time, or not enough customers coming in the door because you forgot to promote the occasion or you didn’t promote it properly.
Take Cinco de Mayo as an example. Like it or not, if you own a Mexican restaurant in the US, patrons expect you to do something special. Most people in the US think this is Mexico’s Independence Day, but in reality, Cinco de Mayo commemorates Mexico’s victory over the French in the Battle of Puebla. Nevertheless, it has become a “party” day in the US, much like St. Patrick’s Day.
So what should you do as a restaurant owner? You might bring in a Mariachi band. You might bring in Baile Folklórico dancers. You might offer special Mexican beers at special prices. You could offer specials on pitchers of Margaritas. You might offer a special dish, such as Pollo en Pipian Verde (Chicken in Green Pumpkin Seed sauce) or a Chicken Mole, which you normally don’t serve. But if you don’t start your planning far enough in advance, you won’t be prepared. Here are some of the steps you might need to take.
- Determine what you want to achieve for this day.
- Increase your liquor sales by xxx dollars
- Increase the food served by xxx dollars
- Get new customers to try the restaurant for the first time
- Determine what success looks like
- The dollar volume of liquor sales over your normal daily sales volume
- The dollar volume of food sales over your normal daily sales volume
- Introduce 50 new customers to the restaurant
- Evaluate your current situation
- Number of servers on staff
- Number of additional servers you might need
- Your chef’s ability to make the specialized dishes
- Your stock of beers and other liquors – is it sufficient?
- Your food supplies – do you need to order more?
- Where to get the entertainment
- How much will it cost?
- Do you have to pay travel expenses?
- When will they perform, for how long?
- Determine your advertising budget
- Is it sufficient?
- Do you need to consider radio, flyers, billboards, online promotion?
- Your customers – how can you engage them in bringing in new customers
- Identify the actions you need to take by when to ensure you achieve your objectives
- When to start your promotions and where
- How to engage your customers – special offers
- Contacting the potential entertainers – how far in advance, what kind of commitments
- Backup plans if the first choice entertainers can’t make it
- Where to find additional servers
- Do you need to advertise?
- Can your current wait staff handle the extra load
- Incentive pay for longer hours?
- Getting commitments from your food suppliers to lock in prices and orders (they probably are serving your competition, too!)
- Training your chef if necessary or hiring a special chef just for the day
- Scope out your competition to see what they are planning
- Check the papers, the radio, the billboards
- Visit their restaurants to see what they’re promoting
- Ask your customers if they eat at other Mexican restaurants and what they like best about them, as well as what they don’t like
- Ask your suppliers what they’ve heard about what your competition is planning
So when do you start thinking about this and then writing it down?
It depends on how far in advance you need to make the first commitment. If the entertainers are the key and require 3 months lead time, then that’s your start date. If they require 6 months lead time, then that’s your start date. Your vendors/suppliers will need advance notice as well. Find out from them by when you need to make those commitments. Your advertising / promotional choices will also determine how far in advance you need to start planning. If you intend to insert flyers in chamber newsletters, you need to create those a month in advance.
If you don’t write it down, something is bound to fall through the cracks. You’ll forget to get a back-up for the entertainers who suddenly can’t make it because of car trouble. A server you were counting on comes down sick and can’t be there. The radio spots you were planning on can’t run because the stations are totally booked and have no air time available, or the only time they have available is between 2 am and 5 am when your prime customers aren’t listening.
These are some of the unintended consequences that can occur when you don’t plan far enough in advance to consider possible consequences and set contingency plans in place. Planning does not have to be onerous. But it is a critical step to ensure you achieve your desired outcomes. And you need to have a schedule to continually check the progress on each action to make sure everything is on track.
So don’t let planning die! Learn some of the tricks of the trade. Get help from experts. Devote the time. Spend the money. Train yourself, train others in your business, and build the skills for planning in your organization. Most importantly, set schedules to review and update plans to keep the documents alive and out of the credenza.
And remember these four steps, which you take in order then circle around and repeat them again and again: LEAD – THINK – PLAN – ACT. There must be a reason that the Association for Strategic Planning has that as their motto.