Change is in the Air

March 11, 2020 - the day the World Health Organization declared COVID-19 a global pandemic. It was one day after I returned home from a speaking engagement in New York City with my wife Jennifer. It was 7 days before Manhattan’s Jacob K. Javits Center, the host of the International Restaurant & Foodservice Show that we had just attended, was turned into a make-shift hospital. While there were warnings leading up to that date, no one could possibly know just how drastically life was about to change.

There is no hiding it – life comes at you fast.

The twelve months leading up to March 2020 were one of the ‘best’ on record for the bar, restaurant, and hospitality industry in terms of revenue generated. The twelve months prior were one of the ‘best’ on record for KRG Hospitality Inc., the company I founded back in 2009. We were coming off an enormous 2019 year. We had some incredible and exciting concepts in the pipeline throughout North America. We were working on some inspiring educational programs. I was intended to speak at eighteen different trade shows in 2020 – I made it to two.

And then it all changed. The world around us changed. The food & beverage industry changed. The hospitality industry changed.

The world’s economy was shut down almost overnight. While the ripple effects of the global pandemic have been felt across all industries, this industry, in particular, has been among the hardest hit. The pandemic confronted the hospitality industry with an unprecedented challenge. Strategies to “flatten the curve” such as community lockdowns, social distancing, stay-at-home orders, as well as travel and mobility restrictions resulted in the temporary and often permanent closure of many hospitality businesses. The pandemic significantly decreased the demand for businesses that were allowed to continue to operate. Almost all restaurants around the world were asked to limit their operations to take-out (and delivery) only. Restrictions placed on travel and stay-at-home orders issued by federal and local authorities led to a decline in hotel occupancies and revenues. No amount of industry-driven experience will help you navigate the effects of a global pandemic – well, prior to 2020 anyway.

I was approached by many in the industry for advice, foresight, answers as to “what’s next?” but in those early stages of this pandemic it felt impossible to predict. Heck, even writing a column, article, or a book in 2020 is challenging. A majority of the discussions we are having are influenced by uncertainty and negativity. Things are still fluid and changing by the week, day, or hour in some areas and likely will be for quite some time.

The year 2020 will be studied and analyzed for many decades to come.

Studying and analyzing are two things however, I know how to do well, so I put aside the fear and I cancelled the background noise, and focused intently on this industry – where it was, where it is now, what it could be post-pandemic and I saw the silver lining.

Our global hospitality industry is facing its greatest challenge in modern day history—and also its greatest opportunity for positive change. While we needed a hard reset in this industry, obviously this is not the means for it that anyone would have wished for, but it is our reality and I have all the confidence in the world that this industry will recover. I also believe it's going to take some time. It will take longer to get back to the record setting numbers of 2019, than it took to ‘recover’ after the previous economic recession, for example.

However, I also believe this industry will not be the same as it was before. Remember back to when 9/11 happened; the airline industry and the way we moved through the airport and travel industry essentially changed.....forever. Two decades later and we are still adhering to the effects of that. Similarly, the hospitality industry will be changed forever including the way we move through a restaurant, bar, or hotel.

It’s time to build upon what was great, and eradicate the bullshit.

While revenue was at an all-time high pre-pandemic, it doesn’t mean things were perfect – or near perfect. To survive and now thrive post-pandemic, this industry must now prepare to dismantle longstanding issues, think in surprisingly new ways about the guest value and the total guest experience, and take bold, strategic action toward profit optimization.

The pandemic has forced drastic changes to how we conduct business. This new reality will force us all to do more with less. And what were projected to be trends have accelerated at lightning speed. I feel that we have actually jumped ahead of ourselves by at least a decade, with transformative change happening seemingly overnight. For myself – and perhaps for you, the pandemic has made me rethink and reconsider everything, not only in business, but everyday life.

This change, however, had already begun prior to COVID-19. Restaurant operators, for example, were already undergoing a period of change, including shifts in consumer attitudes regarding digital ordering, delivery, the use of the drive-thru, health & wellness, and on-premise experience. Pandemic-related government-mandated restrictions have accelerated many of these trends and left operators scrambling to catch up, or in many cases fighting for survival.

Change has been thrust upon all of us across much of the world, whether we like it or not, and no matter how much we all say we are open to change, failure to do so is still one of the single biggest reasons that a business will fail. Look at the history of business over the past 1-2 decades and perhaps even longer. Look at the ones that didn’t adapt to change or adapt through crisis; whether it was the terrorist attacks of 9/11, the recession of 2008/2009, or the ongoing technological advancements we see year after year. These businesses that failed to change are the ones which are no longer here today.

You must remember that you are not required to live in the past. You must be living in the moment and looking for ways to always push forward. During times of change, you must find ways to define reality and communicate. Brand recognition and reputations are either made or lost during these times. You’ve got to be both bold and decisive.

When talking adapting and even pivoting (perhaps the business word of 2020), we must remember that adapting & pivoting are actually conducive to short-term survival along with long-term resilience and growth. Pivoting is really a lateral move that creates enough value not only for your customer, but for your brand. For example, on the restaurant side, the concepts that have emerged strong are quick serve restaurants and other concepts that have pivoted and adopted multiple revenue streams such as catering, grocery/retail, meal-kits, cocktail-kits, curb-side pick-up, take-out, and delivery platforms.

Don’t fear change. Change is here!

Now, I want you to sit for a moment and compare your reaction and a child’s reaction to a loud bang of thunder. As an adult you are likely to ignore it, but a child may be worried, seeking assurance from either you or the nearest adult. Why? Because it is in our human nature to fear the unknown — confidence comes with understanding. From long experience you know that thunder is a natural sound that cannot harm you. The child however, does not yet understand it. That is why an important step toward coping with change is trying to understand it - what is happening, why, and how. That’s the position we are all in now.

You see, flexibility and a willingness to embrace change will make you a more valuable member of your restaurant, bar, or hospitality business — one who can reliably deal with many different opportunities and scenarios. You may not like all the changes that are occurring, change is not always comfortable, but you can be sure that if you resist it, you will not be successful when this is over. When you recognize the possibilities created by change, you’re more prepared to adapt, pivot, and exploit them. You will find change as not something to fear, but as something to welcome and embrace.

Embracing change is what a successful entrepreneur, hotelier, or restaurateur does.

Influencing Change

What I’ve learned from working with countless entrepreneurs and through being an entrepreneur myself is that success is a process and so is failure. Success doesn’t happen overnight and failure doesn't happen in a day. Stop...and read that slowly again. Success doesn’t happen overnight and failure doesn’t happen in a day. Failure is in-fact the accumulation of ineffective choices, for example not adapting to a changing environment, and the consequences that result from that choice. Most businesses in this industry are in a constant state of change - making minor adaptations to ensure that they cope with the changing demands of each day and week. These changes go largely unnoticed as they are a normal part of day-to-day operations.

When talking about the ‘influence of change’, we are considering large-scale, disruptive change – such as creating an off-premise food & beverage program on the fly when you only offered dine-in before. Each decision to carry out a strategy that will change an operators’ business model throughout this pandemic adds to the success process. For that process to work, it needs the following key elements: a sense of urgency, a motivated team, a clear vision, communication systems, and a sense of culture.

All intentional major change needs a sense of urgency – not panic, but a controlled, insistent urgency to move the intended change forward. Everyone in your bar, restaurant, or hospitality business must understand its importance, especially those that will be most impacted by this change. Preparing and investing your team into the urgency of this change for either survival of the business or for rapid growth is a key element towards it even getting off the ground. Once urgency is established it’s then time to motivate. Before motivation can begin however, ensure that the leadership team (notice how I didn’t say management team) at your venue is empowered to lead the desired process.

You cannot successfully implement change entirely on your own though, and you may not even be the best choice to be “the voice” of this change. I recommend that you select one voice to represent the entire team and not just a department like front-of-house or back-of-house – it is now the time to come together as a whole and not as individual parts. Pick someone from your leadership who is able to balance a sense of urgency with empathy for those who are uncomfortable with change. Pick someone who is positive and confident in how they present themselves, someone who is well respected by the team. Perhaps this is you, and perhaps not, but know that the right voice to motivate others through the process will be key to success.

It is no secret that we are living and operating through a time of uncertainty. Any required (disruptive) change to your business model or operations must be supported by a clear vision of what your business will look like after the change has been implemented. How will daily routines change? How will systems alter? How will responsibilities shift? You must create clarity, alignment, and accountability.

Establishing urgency, motivation, and a clear vision will not be possible without solid communication systems. Solid communication is the founding element of success in all aspects of life, whether it is professional or personal. Successful change depends on everyone on your team understanding the benefits of the change and imagining what your hospitality business will be capable of doing once the change has been implemented.

The leadership team should communicate the future vision of your business several times over. Assessing training needs driven by the change, and planning when and how this will be implemented also needs to be communicated. Talk to each other, ask questions, and encourage each other not only while the change is being implemented, but also after the intended change has been completed. If your team was not communicating effectively before this pandemic, it’s time to start, and it starts with you. Change comes from within.

When you look at all the ways you can change your business model, especially during a health crisis, influencing positive but disruptive change must focus on people. It’s about enforcing (or creating if you don’t already have one) a sense of culture. It is about ensuring change is thoroughly, smoothly and lastingly implemented. It starts as an urge for improvement or adaptation and requires a solid foundation of culture within your business model. This foundation needs to be nurtured on an ongoing basis, an element that still needs improvement across the board, something I’ll be diving into later in this book.

One key element to keep in mind is that as humans, we are for the most part, habit driven. Even with the clearest sense of urgency, clarity of vision, and effective communication, there will always be resistance to change – whether it is from you or a member of your team. It is how you effectively prepare your mind that will help you overcome that resistance. This clear vision and leadership can be seen evolving throughout this pandemic within venues that have found a way to not only survive – but thrive.

Through intention, focus, and massive action comes results!

Looking Forward

Even as a consulting agency we’ve had to adapt to change, adjust our business model, and remain flexible since the start of the pandemic. How? We followed the fundamental process of change. But it wasn’t easy. Just like you likely were; I was feeling fatigued, overwhelmed, and stressed. I had high levels of anxiety. There were days where I shed a few tears. There were days where I screamed and swore in the car before driving to the office. Reading story after story of a virus, plus mass-death, and business closure will do that to you – no matter how emotionally strong you are. But as a leader, I needed to remain lazar-focused on the task at hand. We had clients that needed our guidance. We had a business model that needed to adapt. I had a personal brand to uphold. By defining the sense of urgency, by motivating a team, by developing a clear vision, and by communicating these changes we were able to, as a brand, come out of this stronger and so can you.

In March and April, I formed and led a team of 15+ consultants to develop two operational playbooks that helped over 2,000 restaurants embrace change with 80+ pages of action items. I took part in over one-hundred 1-on-1 video coaching calls between March and September. We signed new start-up clients through a new business planning initiative. Finally - I was a guest on countless radio shows, podcasts, and webinars that helped replace the lost speaking engagements.

Now that I believe we all understand that change is here and that change is also influential, we can begin to change the way this industry previously operated. I decided to write this book as we currently navigate this pandemic (September 2020) to provide a platform to organize thoughts on where this industry currently stands and where it needs to go. Interestingly enough, within my previous book Bar Hacks, which was written in 2017 and released in 2018, the phrase ‘hit the reset button’ was used 7 times. Here we are in a new era just a few years later and that phrase is more important now than ever before.

So I must ask again - are you ready to hit the reset button?

If you liked Chapter One, I invite you to read the remainder of the book 'Hacking the New Normal' - Hitting the Reset Button on the Hospitality Industry that provides a spotlight on hybrid business models, real estate, profit margins, technology, guest experiences, culture, diversity, mindset and more. - Doug Radkey