Article contributed by Mike Berman, COO, Day & Nite/All Service, with Tia Tassava
Overwhelming consensus response to our first two columns in this series points to a clear industrywide trend: market anxiety has now decidedly shifted from dealing with the pandemic to most effectively managing the aftermath.
In weeks 1 and 2, we covered the most critical crisis management practices to ensure your most responsible and trustworthy platform—guiding how to protect and enhance stakeholder interests in this era of unparalleled uncertainty. No less important, this platform sets the stage for most effectively taking and managing the necessary actions.
Whether it is for the already introduced steps or those to follow, after-action reviews and reporting are essential. The after-action analyses will not only demonstrate the corrective action needed in real-time but also serves as a useful catalog for managing a business moving forward. Crises require urgent focus; superb crisis management principles rely on sound business fundamentals. Current exposure and experience earned through now, along with everything gained by coming out of today’s crisis, a better leader and organization will develop obtaining new skills to be applied under more normal conditions. However, the ever-shifting nature of what more normal means and when it may occur, represents the next market anxiety frontier.
Projected dates for relaxing shelter in place mandates vary, yet planning for this next phase is the new constant. Total Food Service subscribers tell us the crisis management concepts introduced have been most helpful, but now, more concrete ideas are needed. Everyone is seeking information on how to plan for and execute at this pivotal time. Arguably, this next phase is even more sensitive and critical than the current state. Here now, proven best practices for planning and purposeful pivoting.
1. TOTAL Food Service
Restaurant staff wearing masks and gloves will be a necessary outward staple; however, it will be inadequate to ensure maximum workplace, patron, and food safety. At a minimum, the back of the house areas need the same diligence, protecting everything from storage to active equipment. Masks and gloves are disposable, maximum health and safety require permanence. Anything less than a thorough plan adopted before even a partial re-opening, will undermine efforts to attract and retain the best talent while reassuring customers.
2. Permanent Cost Management Adjustments
The traditional line-item budget for managing finances will no longer suffice. Instead, the hospitality industry must adopt more integrated costing models. Rather than budgeting dollars by function, the integrated model starts with impact, then organizes contributing functions around a hierarchy. This approach then redistributes budgeting packages around high-impact outcomes, rather than independent silos.
3. Integrated, Packaged Illustrated
Energy consumption is always a major budgetary consideration, often treated separately. HVAC and Refrigeration represent the two biggest energy drains. After all, the only items pulling energy 24 X 7, 365 days a year, are refrigerators and freezers. Separating equipment maintenance and repairs from the overall energy budget, by very definition, is not managing to impact. Reordering budgets along these lines will demand suppliers keep pace by revising service and price offerings to achieve the best objectives (shameless plug: watch this space in the coming weeks to learn about specific new impact-based maintenance and repair programs).
4. Recalculated Metrics
Capacity, utilization, and uptime served as pre-coronavirus standards. Social distancing throws old rules out the window. Pivoting to an efficiency-driven model, more similar to manufacturing than services, will alleviate many anxieties. In what promises to be a roller coaster of a managerial ride for the remainder of 2020, efficiency metrics will fit securely into an integrated cost management system allowing smarter decisions ahead of the curve. Measuring returns on every asset will be of higher value than traditional ROI, most notably for effective planning and stewardship.
5. Strategic Decisions Now
Strategy always drives tactics, yet in turmoil, too many revert to a series of purely tactical decisions. Those in the hospitality industry must recognize the importance of strategy as we enter the next phase. Having already established a responsible, trustworthy platform, all should immediately prepare to evaluate, set, and start executing on the business strategies. Success will be determined in this next crucial phase. Delays in strategy will either leave a hollow core or cause delays resulting in significant underdevelopment of the extraordinary execution needed to restore world-class reputation, employee, and patron confidence.
However real market anxiety is, we respectfully submit that anxiety has no constructive place in business. The world is fearful and anxious right now; leadership is about transforming these natural emotions into far more constructive actions. You’ve already established yourself as a leader; this column, its accompanying guidelines, ideas, and more specific recommendations, are intended to help you be at your very best at a pivotal time where all stakeholders require nothing less from you.