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A Word of Warning

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Why do so many companies that are doing well think they need to make changes to be better?

There was a burgeoning Southern California chain that started out 30 years ago and had developed its unique concept and a terrific internal culture of hospitality.  I started going to one of their locations 15 years ago and loved the whole concept.

About three years ago I started playing golf very near one of their locations, and every week, after our round, I brought my foursome there for lunch and, of course, to watch a variety of sporting events on their large-screen televisions.  The chain had grown to become a force in the regional market and the original owners had sold out to an investment group long ago.  For a restaurant company, the stock was doing quite well, and the staff and management were very happy in their positions.  It was a great place to go and have fun and eat some decent food.

Meanwhile, another larger, better known chain was undergoing a management change, and one of its executives became available when he was passed over for promotion.  The investment group thought that by bringing in this “new blood,” they would reap the rewards of his experience with a larger operation.

Over the past several months, I have witnessed the demise of the atmosphere that so many of us loved.  The original managers who grew with the company have become disenchanted and the service staff now behaves like automatons.

A few weeks ago, our group returned to have lunch after golf, and as we entered, the familiar bartender looked at us, gave us a scripted greeting, and proceeded to offer us things he knew we didn’t like and never cared to order.  When I joked to him about whether this was “the new direction,” he told me a bartender had been fired the day before for greeting a regular not using the approved language -- even though that customer had been coming there for over a year.

The location is no longer as busy as it was and sales have dropped substantially.  Another chain has been searching for locations close to this one, and has been hiring its original staff and taking away its customers in droves.

Why do I tell this tale of woe?  Because the restaurant industry is so fragile.  This great concept took decades to build.  Its internal culture had been developed and finely tuned to reflect the sense of joy  the original owners had in serving the public.  And as long as the organization grew from within and the culture remained ingrained in the decision-making, the company grew and prospered.

Sadly, the investors did not understand what made the company what it was, and chose to bring in someone with the misguided notion that where he came from had been better, so now he would compete directly with his old company, by trying to turn the culture of this one into that one.  I recognized the scripts and the new uniforms and the attitude immediately.  While I had sometimes frequented and enjoyed the larger, old company, the smaller one had something unique to offer.  They had been different in design, atmosphere, menu offerings, and clientele.

It is an executive’s responsibility to understand the culture he or she oversees.  There are opportunities in the market for a range of experiences, but not all concepts must have the same organizational culture to succeed.  Change is not always for the better.  It is critical to maintain the carefully nurtured concept that brought success and hopefully build on it without destroying it.

I used to love taking clients and friends to one of my favorite establishments.  Now when I take them to this chain, it’s not to show them how to do it right -- but to tell this cautionary tale.