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Casual-Dining's Biggest Mistake

September 22, 2009

   Last month, Food Arts published an essay that every restaurant executive ought to read carefully. Written by culinary consultant Patrick McDonnell, it suggests that what separates struggling casual-dining chains from their betters is innovation. Granted, that’s not news; new ideas put to good use typically define success in any business. What McDonnell is saying, and what makes his argument cogent, is that successful restaurant companies don’t stifle innovation by measuring what doesn’t really matter. In short, they act like restaurants.

Case in point: CEO Bob Hartnett is a turn-around expert who took Houlihan’s out of bankruptcy in less than three years and turned it into one of the most dynamic restaurant companies in the country. His investment partners don’t insist on layers of business school grads to run his business, and in this climate you won’t hear him talk about value menus, two for ones, or cutting overhead by attrition. Instead, he talks about innovation, food quality, culinary focus, and building better interactive communication with his customers.

   Other managements, however, handle things differently. They engage in sophisticated bean counting and market research. Consider Chili’s:

Everything was on target until [Todd] Diener was promoted to the COO position in charge of all Brinker concepts and Wilson Craft came in to run Chili’s as its president. Craft’s apparent Wall Street-wooing strategy? Initiate a two-prong approach by "augmenting" culinary innovation with an intricate and lengthy consumer research and concept testing process. It made good reading on Wall Street–the classical disciplined managed development keeping creative efforts on a precise vector. The marketing and consumer research group mushroomed to 40 people. Culinary innovation?

   Well, let’s just say all that vector-keeping failed to wow guests. 
   McDonnell’s piece shouldn’t be missed by anyone with an interest in seeing full-service chains improve their lot by behaving like restaurants.

Posted by David Farkas on September 22, 2009 | Comments (10)

September 29, 2009
In response to: Casual-Dining's Biggest Mistake
Dave commented:

Carol's point is well illustrated by a recent Chili's TV commercial that shows bored office workers playing musical chairs, then cuts to food shots; weak copy suggests that said dishes relieve boredom. What has one to do with the other?


September 28, 2009
In response to: Casual-Dining's Biggest Mistake
Carol commented:

Chili’s has a “marketing tool kid” it’s a kin to childhood diary. When sales slip, so do Brinker marketers into the diary of legacy tactics most of which are dated, unfocused, dreary as a winters eve. Consumer are fresh and forward thinking. Food marketing has become a specialty area, not suited for recycled ideas or pseudo market positioning.


September 28, 2009
In response to: Casual-Dining's Biggest Mistake
RD commented:

I don't see that reliance on a degree in hiring as the root problem. I believe that as restaurant groups mature they begin to look for marketers from consumer package goods companies rather than restaurant companies. CPG marketing is about lower prices, copying competitor success and endless research. In addition, marketers run CPG companies. Operators are only there to deliver products. It's not a partnership. As I look at Chili's, it's this lack of balance between ops and marketing that was and continues to be the problem.


September 27, 2009
In response to: Casual-Dining's Biggest Mistake
Del commented:

To address two subjects here, Innovation for innovation's sake is not always the answer..perhaps only a "buz" word. Are we talking product or process innovation? Our innovations can tend to get out of hand or rather ahead of the want or need they are intended to serve. Cautious sensitivity to the market and customer are absolutely necessary before innovation can proceed otherwise the cart usually goes before the horse and the grand initiative is but money down the drain and yesterday's news. As for the second topic, obtaining a degree for what the degree may gain one is as King Solomon would say in Ecclesiasies, Vanity of vanities, ...chasing the wind. It's what you learn in the process and what one does with that knowledge that can make the difference.


September 24, 2009
In response to: Casual-Dining's Biggest Mistake
kk commented:

Sorry "noapoligiesMBA" I didn't mean the degreed were unqualified. It's just been my experience that unless they have the operations background in addition to the degree they are out of touch with the customer and how and why things work. Wasn't it the Edsel that was doomed because by the time management had digested and evaluated all the data the market (and technology) had changed?


September 24, 2009
In response to: Casual-Dining's Biggest Mistake
nc commented:

Good juxtaposition of approachs, David. The best approach for most restaurant companies is probably a blend. Houlihans is lucky to have a great visionary like Bob H, but most companies dont have this. So you need a way to get laser-focused on the consumer. Craft perhaps had the right idea, but went too far. In short, I think you need a small team of smart players that combine: vision, a willingness to put their ideas out there and take risk, and a sense of urgency. Good piece. Thanks.


September 24, 2009
In response to: Casual-Dining's Biggest Mistake
Pett commented:

Thank you! I would now go on this blog every day! Pett


September 23, 2009
In response to: Casual-Dining's Biggest Mistake
noapologiesMBA commented:

Not sure I agree with the notion that a degree makes you unqualified to be creative in the real world. How about we celebrate the restaurateurs who have a thorough understanding of the customer and operations...degreed or not. (MBA's included.)


September 23, 2009
In response to: Casual-Dining's Biggest Mistake
kk commented:

Beware the management that puts all their faith in diplomas and degrees. They tend not live in the real world and their teaching is the "latest and greatest" process taken from classes and books with no orginality. They have no clue on how an operation runs, why it works, and why it fails. However, celebrate and promote the person who works their way up and has a thorough understanding of the customer and their operations. Degreed or not, they are the ones who make an organization successful.


September 23, 2009
In response to: Casual-Dining's Biggest Mistake
Steve J commented:

Justification and rationalization for new products and or market position rarely leads to success. When category managers replace innovation& merchandizing departments’ poor results are to follow. One glaring example is Starbucks. Three years after category managers squeezed every dime out of the consumer Wall Street was happy but the consumer defected. A balance between IQ & EQ must be maintained in the Restaurant industry.

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