Dining Out on a Reputation

Whether your business involves medical devices, automobiles, professional services or fine dining, one core rule applies. If your front-line people – those who interact with customers – are out of synch with your vision of the business, then trouble is brewing.

The thought occurred to me recently while I was out dining with friends at a fine restaurant. No matter what you’re buying, if the prices are steep, then your expectations justly are, too. And our hosts’ expectations that night were not met, for reasons too complex and numerous to go into here.

Complaints were voiced and the manager spoken to. But the bottom line is, neither our hosts nor any of their guests are likely to return. It’s also likely that they and we will not speak well of this establishment to friends.

That kind of experience tends to discourage repeat business. People go once and don't come back. These customers’ dissatisfaction is usually shared with others via word-of-mouth, but rarely with the restaurant owner. So when the restaurant sees an increasing number of empty seats night after night and eventually goes out of business, the owner wonders why.

On the flip side, visit a pricey restaurant that’s thriving, where it’s difficult to get a reservation, and you’ll likely also see the owner in the dining room, visiting with patrons to determine their satisfaction with the food and service. He/she will observe the pace in the kitchen while making sure dishes are being prepared to the restaurant’s standards, and assure that the servers are attentive, responsive and courteous.

The owner sees each meal served as an extension of him/herself and is dissatisfied with anything that falls short because it is a poor reflection on him/her. Over time, with repeat business and positive word-of-mouth, the restaurant thrives, building a loyal clientele and a strong reputation for good food, a pleasant ambience and superb service.

But beware the restaurant that dines out on its reputation without consistent, ongoing vigilance to assure that its reputation stays earned. In a people-intensive business like a restaurant that takes its eye off the ball, the flaws are soon on display for all to see, especially for the customers.

While the same truths apply to any business with employees, it’s often not so readily apparent to the owner/manager of a larger enterprise.

For instance, a national sales organization with a couple dozen field sales people scattered around the country is a different proposition altogether than a single restaurant where the person in charge can get real time, first-hand insights into what’s working and what isn’t.

Twenty-four different people without day-to-day contact with the organization or a guiding vision can soon become mavericks, each operating independently with their own unique sense of what the company stands for. Pretty soon, the company stands for little or nothing.

It also applies to franchise retail businesses built on a founding vision of someone like John Mackey of Whole Foods, Howard Schultz of Starbucks, or the late Sam Walton of Wal-Mart. Larger businesses like these have thrived because of the ability of their owners/founders to communicate their vision effectively and consistently to employees and managers as the business expanded and opened new franchises.

To Sam Walton (and the founders of other such organizations), vision was what he saw that Wal-Mart could become if he and his people tended to the drivers of that vision.

Last year, I read a comment made by a Wal-Mart board member. When the board deadlocks on a difficult decision, he said, the fallback position is often to ask, “What would Sam do?” (This is in spite of the fact that Walton has been dead for 17 years.) It is a standard question that most managers and employees also ask to reconnect to that foundation of Sam Walton’s vision. In that way and others, Wal-Mart has successfully maintained its focus on its founder’s personal imprint.

Conversely, a large business with an international footprint can coast for a long time on the inertia of a reputation it built over decades. Consider, for example, General Motors, which has been on a path toward failure for at least 10 years – some would argue longer. The ultimate failure of an organization like GM is far slower than a single restaurant or small business. But the causes and effect are the same.

As a business, you’re on the road to failure if you take your eye off the ball, dining out on your reputation without constantly refreshing and reinforcing it by keeping your people engaged in the business’ core vision.