The Difference Between a Plan and a Playbook

written by Doug Radkey

You’ve likely heard that 80 percent of hospitality businesses fail within the first five years.

When you ask those in the industry the question of why there is such a high rate of failure, they reply with a fairly predictable list of factors. These tend to be location, concept or brand confusion, lack of service standards, toxic workplace culture, sub-par marketing efforts, and mismanaged funds.

Many operators who fail try to quickly blame external factors, such as the economy.

When you ask the next question—what are the other 20 percent of operators doing differently to surpass five years in business—you get one simple answer. The difference between those who drive a sustainable profit of 12, 15 or 20 percent (or more) and those who don’t boils down to one thing and one thing only: they have strategic clarity.

It’s not that the successful 20 percent did not battle challenges or the same tough economy or labor struggles. What they had was clarity, and a playbook detailing how to overcome a multitude of challenges.

So how do you achieve strategic clarity? Well, it’s much more than just writing—or filling out a template for—a business plan.

What is Strategic Clarity?

Strategic clarity is the comprehensive understanding and alignment within your hospitality business regarding its identity, direction, purpose, and the means to achieve its goals.

It involves clear communication and consensus on key aspects of the business, ensuring that everyone is working towards the same objectives. Below, the key components that define strategic clarity.

1. Understanding Who We Are

• Core Identity: This includes the mission, vision, and core values of your business. It defines what the business stands for, and its fundamental purpose.
• Strengths and Weaknesses: Recognizing the business’ strengths, weaknesses, opportunities, and threats (SWOT) aids in identifying the core competencies and areas for improvement.
• Culture: The shared beliefs and practices that characterize the business’ internal environment, and how it interacts with both staff and guest perceptions.

2. Knowing Where We are Going

• Vision: A clear and compelling picture of what the business aspires to become in the future. It serves as a guide for choosing current and future courses of action.
• Long-term Goals: Specific, measurable, achievable, relevant, and time-bound (SMART) goals that outline the desired outcomes over an extended period.
• Milestones: Intermediate targets that mark progress towards the long-term goals.

3. Understanding Why We are Doing This

• Purpose: The fundamental reason for the business’ existence beyond making a profit. It encompasses the broader impact the business aims to have on its community.
• Motivation: The driving force behind the business’ actions and strategies. This includes the values and principles that guide decision-making, as well as behavior.
• Stakeholder Alignment: Ensuring that the goals and activities of the business align with the interests and needs of its stakeholders: guests, employees, investors, and the community.

4. How We are Going to Get There

• Strategy: The overarching plan that outlines how the business will achieve its vision and long-term goals. It includes the allocation of resources and the selection of strategic initiatives.
• Tactics: The specific actions and steps that will be taken to implement the strategy. This involves detailed planning, delegation, resources, and execution.
• Performance Metrics: The criteria and tools used to measure progress and success. Key Performance Indicators (KPIs) and other metrics help track the effectiveness of strategies and tactics.
• Continuous Improvement: The process of regularly reviewing and refining strategies and tactics based on performance data and changing circumstances.

Strategic clarity is essential for the cohesive and effective functionality of your bar, restaurant, or hotel business. This leadership approach ensures that all members understand and are aligned with the business’ identity, direction, purpose, and methods.

By achieving strategic clarity, organizations can navigate challenges, seize opportunities, and build upon sustainable long-term success. What we have found over the years that attributes to long-term clarity and success is a series of playbooks.

Understanding Plans and Playbooks

Let’s first dive into the critical distinction between a plan and a playbook, and why this matters for your bar, restaurant, or hotel. Understanding and utilizing both can significantly impact your business’ ability to start strong, stabilize effectively, and ultimately position you to scale successfully.

A traditional business plan, as you may know it, is a document that outlines your goals, and the steps you will take to achieve them. It’s often the number one consideration to secure funding and to set strategic direction.

However, it is, more often than not, missing plenty of crucial information, strategies, and guidance that end up planting a false sense of security.

A playbook, on the other hand, is a more comprehensive guide filled with detailed processes, best practices, and adaptable strategies tailored to your specific operations. Within this dynamic industry, you need more than a standard business plan if you want to be successful.

In fact, you should have eight different playbooks in place to position yourself within the top echelon of this industry.

To learn about the KRG Hospitality playbooks and continue reading this article, click here.