Is your brand addicted to growth?
Growth in the restaurant industry is always top of mind for franchisees, franchisors and company-owned restaurants, and there is nothing wrong with that. Growth is fantastic for a concept. Obviously growing a concept and spreading its mission is the dream of every restaurateur. Certainly, growth has its advantages. If you're a publicly traded company your stock price is tied to your growth forecast and whether you can achieve the projected number of openings. If you have a private equity investment, there is pressure to hit the number of openings as well. So, growth is great, right? It is until it's not. The restaurant industry landscape is littered with concepts that grew too fast and expanded beyond their infrastructure, which is a recipe for disaster.
I remember when Chipotle went public in 2006, and the question to us from analysts was, "How quickly can you grow?” The answer given at the time was, "We'll grow with as many great people as we have to grow with." That was the right answer, and everyone inside the company rallied around it. There were plans in place to ensure that we had a robust succession plan to fuel the growth plans the company had. It's what allowed Chipotle to experience the rocket-ship growth that it experienced for many years.
Growth isn't wrong, but is growing the number of units the only way to keep the excitement level high for a concept both internally and externally? I do not believe it is. Any leadership team must figure out how to manage growth plans in conjunction with the succession plan and bench strength to ensure they can support the growth in terms of number of restaurants. Remember, growth shows up in many different forms.
Here are some examples:
- One of the ways growth can happen inside of a restaurant company is to embrace technology. Using technology in smart ways to improve the experience of guests is absolutely an accelerator to business growth. Whether it's the use of mobile ordering, a handheld order taker in the Drive-Thru, or a kiosk in the dining room, you can grow sales and profits without opening additional units.
- Less is more. Menu optimization and finding your niche can greatly improve throughput. We all know what it looks like when concepts try to be all things to all people. Unless you're a juggernaut in the industry where volume hides complex execution, scaling back and focusing on what you are best at is one of the best ways to simplify the process and help you grow your business.
- Only hire and keep top performers. While you are making sure you have the right number of people to fuel future growth plans, make sure that you have the right people on board. While working with a franchisee of a large QSR concept recently, we were reviewing the org chart, and while all the names were filled in, it soon became evident that the right names were not on the org chart. The goal of robust leadership development is to create a high-performance environment where top performers can reproduce themselves, which is also growth. That only happens if you have top performers developing the future leaders. Nothing keeps the team excited like seeing growth opportunities given to the right people.
When you think about growth, challenge yourself to think differently so that when you are ready to expand in the number of units, you are truly ready to embrace that challenge.
Topics: Operations Management
Bobby Shaw / Bobby has over 30 years in the restaurant business in all facets of operations, from his start at McDonald's in the grill area in 1984 to overseeing 200+ restaurants with Chipotle from 2002-2012 to leading Freebirds World Burrito's resurgence from 2013-2016 to working with the Salad and Go restaurant startup as CEO in 2017.