Planning is Dead: A Restaurant Case Study

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.

  1.  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
  2. 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
  3. 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?
  4. 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
  5. 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
  6. 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.

Engineer Success Up Front-Include HR

By Jeri T Denniston, Chief Marketing Strategist, Denner Group International   10/4/2011

Takeaways: It’s important to include HR in the planning process to engineer success up front. Doing so makes it possible for them to address the people issues when it comes time to implement the key strategies. Many HR professionals have to learn to be strategic thinkers. They are trained to be tactical and thought of only as need in the tactical implementation process.

Frequently when organizations work on their strategic plan, they forget to include Human Resources (HR) early in the process. Why is this?

Perhaps it’s because HR is considered unimportant until it’s time to implement the plan. The challenge with that is if they haven’t been involved up front during the planning creation, there may be some critical issues that weren’t addressed early on that now need to be considered.Book Author 2

Another reason may be that HR people generally aren’t or haven’t been strategic thinkers. A friend and colleague, Timi Gleason, wrote a book about how to be a strategic thinker, called Coach as Strategic Partner: a Survival Guide for Leaders and Their HR Business Partners.

In it she shares her personal stories of learning to be a strategic thinker in a Fortune 200 company when she was thrust into a position as the head of HR – with no background or training in that field.

Apparently, this has been a common theme among many HR professionals who have found themselves in that position not through pre-planned training, but by accident. Thus, learning to think at a higher and broader level did not come naturally to many who were focused on the daily tasks of learning the HR function. This may be why at the executive level in many organizations, HR is not considered a member of the planning team, but rather part of the implementation team later on.

This needs to change

HR must be present at the table early on to represent the employees who will actually “do” the implementation of the plan. This is part of “engineering success up front” by including every detail up front of how the plan will be communicated and executed when the time comes. The organization may find it needs to make changes in facilities and workplace environments, for example, that only the HR executive would think about.

In her book, Timi mentions, “A big mistake that we make as leaders and strategic partners is when we don’t share the end game with our employees and colleagues. In our own inability to articulate our vision and needs, we expect smart people to be able to read our minds, and most of the time they can’t. It is in this exact moment that we have the opportunity to help each other. “

That is what’s happening when HR is left out of the loop at the onset of the planning process.
To order her book click here.

What is Strategic Management?

By Eric A Denniston, Managing Director, Denner Group International 2-20-2013

Takeaways: Strategic management encompasses planning, culture change, operational flexibility, stakeholder involvement, and periodic future environmental scans. Planning and change are two key roles of every leader.

Strategic Management encompasses several areas in managing and leading an organization. Planning certainly is part of the process. Without a well developed strategic plan to act as a road map of where you’re headed, you’re just shooting in the dark hoping one of the shots will hit the mark. And the plan must start with a future vision, mission and values. These will provide a compass for identifying the future direction of the organization, the organizational culture you want to create, and an understanding by Antique Compass - a key to strategic managementyour employees, stakeholders and customers of what you do and why you’re in business.

So you’ve created a 3-year or 5-year strategic plan. Are you done until the time rolls around to dust it off and update it three years from now? Hardly! The plan is a living document. Every year you update the plan and add another year. That way you are continuously working on your strategic plan while you work on the day-to-day activities that need to get done to move the business forward.

Your 2010- 2013 plan you create this year becomes your 2011-2014 next year and so on. Then you have every division and department in the organization create 1-year business plans that support the 3-year strategic plan. We call this the Parallel Involvement Process, for which there are many tools. Each division’s goals and objectives are the same ones identified in the strategic plan, but the actions and initiatives they are accountable for will be different from department to department. That way you ensure that each department and everyone within the department is doing their part to ensure the strategic plan is implemented.

But strategic management doesn’t stop there. It also includes attention to your people. After all, it’s the people in the organization who make it work. Involving them in the planning and implementation is critical to ensuring you have buy-in and stay-in for your planning process. Each person’s performance review should be tied directly to how he or she contributes to achieving the objectives and values identified in the strategic plan. This also helps you create the kind of culture you want in the organization.

Ultimately, strategic management is about change…creating and leading organization-wide change. This needs to be accomplished in a successful manner so everyone understands how they contribute to implementing the change. As a leader, two of your key responsibilities are planning and change. Understanding how to lead and manage the change process, and what structures and processes to put in place to ensure a successful implementation, are all part of strategic management.

Strategy Execution is Key to Success

By Jeri T Denniston, Chief Marketing Strategist, Denner Group International 2-20-2013

Takeaways: The area where most companies fall short is in strategy execution by not tying individual performance to the key strategies they need to implement. Y-Change provides an organization-wide tool to track projects and strategies across the enterprise, including individual performance.

We’ve heard it time and again – the area where most companies fall short is in strategy execution. They spend countless hours up front planning and engaging their staff in providing solutions and getting their input on the key strategies. But then when they begin to implement them, they usually fall short of plan. Why?

Many companies do a lot of things right. They dig deep to find what’s working and what’s not. They involve their key stakeholders both within and outside the organization. They ask for and integrate feedback into the plan. They streamline processes, create new structures to improve communications and work flow. Yet, the old habits still creep in and it’s back to business as usual.

A June 2008 Harvard Business Review article by Gary L. Neilson, Karla L. Martin, and Elizabeth Powers of Booz & Company, shares the case of “a global consumer packaged-goods company that lurched down the reorganization path in the early 1990s.” It’s a perfect example of where many firms fall short on the execution side. They overlook the key ingredient – the people in the organization who have to execute the strategies.

Tie annual reviews to strategy execution

By not tying individual performance to the key strategies, the company found that their people weren’t being held accountable for executing the strategies well and effectively. People do what you “inspect” not what you “expect”, as our former mentor Stephen Haines liked to say. In addition to creating the right structures and providing people with adequate resources to do their work, it is critical to tie their annual reviews and the rewards system to the key strategies you want everyone to focus on. Without that, they will naturally revert to doing the work that generates the rewards. It’s human nature.

Y-Change Cascade of Planning and Implementationg
Cascade of Planning

A key tool for managing strategy execution at all levels is Y-Change. This online software tool tracks all the strategies and key actions at every level in an organization, along with accountabilities and project deadlines. It’s even possible to tie in each individual’s performance review plan to the high level organizational strategies so you can see the chain and interrelationships from the lowest level all the way up to the CEO’s office. This powerful tool is used by many organizations of all sizes and in any industry because it is fully customizable to the needs of the organization.

If you would like to see a free demo, click here.