The restaurant industry is about two guitar licks away from composing a blues song for the ages. Good times done left us, a virus is a-knockin’ on the porch door, and government types aren’t always acting neighborly. Surely there has to be a smashed pickup or a runaway spouse somewhere in this mess.
What will really elevate it to “Free Bird” notoriety is an effect the industry won’t feel for a considerable while, and almost certainly not until the pandemic has ended. It’s the sort of hangover we’ve seen after every five-alarm crisis for the business in the last 40 years, and chances are it’ll be worse this time around. Years after 9/11, the Great Recession or even the slowdown of the late ‘80s, chain restaurant operators should have been commemorating every day with a smiley face as their businesses grew. Instead, many found their expansion impeded by a dearth of leadership candidates to steer and support the growth.
During cataclysmic times, the industry understandably hits the brakes on development. Why add empty seats to an inventory already underused?
But without that development, talented frontline employees have fewer opportunities to advance into management jobs. Unit managers have a slimmer chance of advancing to multi-unit and divisional posts. And the home office staff usually has little need to expand, so hiring for the corporate team slows to a creep. The whole upward mobility route—the industry’s traditional course for molding leaders—gets clogged.
That’s if the ambitious and talented even stick around. In the past, the restaurant business has lost frustrated up-and-comers to greener businesses promising more opportunity and less risk of another downturn, such as the technology industry and its offshoots.
Instead of drawing off a bench of eager and experience-hardened talents who could step readily into the game, chain execs often found themselves promoting too quickly. Some even slowed new openings to make sure they had reliable personnel in place.
Depending on what estimate you believe, the restaurant industry has already lost anywhere from 24,000 to 35,000 establishments to the coronavirus pandemic. On Tuesday, Shake Shack generated headlines with the revelation that it had opened four stores during the second quarter.
The industry’s leadership farm system has effectively shut down. So what’s an operator to do about developing talent for tomorrow?
We’d recommend cutting eyeholes in a newspaper and sneakily observing the likes of Darden Restaurants, Texas Roadhouse, Brinker International and Bloomin’ Brands. They caught their share of backhands from the pandemic, but the walops weren’t as debilitating as they were for many competitors. Not coincidentally, each stood out for what they did for employees after the world was beset by an attacker straight out of a sci-fi tale.
"We believe that we can get back to 2% to 3% unit growth pretty quickly," Darden CEO Gene Lee told investors at the end of June.
The actions may not earn them sainthood, but the support and show of heart may have helped them retain the people who could blossom into leaders when normal returns.
We’ll hold up our lighters to hear that song.