In my 27 years with RainmakerThinking, I’ve been able to experience firsthand what it’s like working in a wide range of industries. One of the most challenging and demanding is the restaurant industry. And each of those restaurants—no matter how big or small—is responsible for the livelihoods of so many people.
We have been living through the COVID-19 pandemic now for several months, and the restaurant industry has been especially hard hit. That’s true whether you’re looking at fast food, mom ‘n pop businesses, or huge international chains. Navigating the challenges of shutdowns, shifting health and safety protocols, and supporting large networks of staff at the same time has been no small task. Yet, restaurants have proven themselves to be some of the most agile and adaptable businesses impacted by the pandemic.
I had the pleasure of chatting a few months ago with Ray Blanchette, current CEO of TGI Friday’s and former CEO of Ruby Tuesday and Au Bon Pain. Needless to say, Ray is a restaurant industry veteran. But he has never encountered a challenge quite like COVID-19.
“We’ve dealt with epidemics, because we’re a global business. We saw SARS first come on the scene in the early 2000s, and it sort of stayed in Asia and was never a big influence. We’ve never seen a situation that’s truly pandemic. It has impacted the entire world, all at once. I mean, we watched our revenue drop by 80% over night.”
That 80% drop in revenue didn’t just affect Ray and senior executives at the top, either. It impacted 60,000 people worldwide who operate under the Friday’s umbrella. It could have been easy to focus on merely “saving the business.” But Ray was concerned with establishing a safety net for those 60,000 people from the start.
“We met as an executive team every single day, seven days a week, reacting to information as it was coming available and devising strategies to save the company. But I said very early on, if we save this company, but fail any of our team members in the process, we have failed as an executive team. You can’t call that a victory.”
The weight of responsibility was, and continues to be, huge. As Ray put it, “If we make the wrong decision, we could put team members and guests in harm’s way. We could literally get people sick if we don’t make smart decisions.”
One of the earliest decisions was to cancel TGI Friday’s annual international leadership seminar in the first week of March. In hindsight, bringing people into Nashville, TN from all over the world (and then back out again) would have been catastrophic in terms of spreading disease. But at the time, it wasn’t an easy decision to make.
“When I was making that decision I was thinking, ‘Am I being rash?’ But then you sort of let your value system take over and you go, ‘Wait a minute. If one person gets sick as the result of this business meeting, could I live with that decision?’ And the answer is obviously no.”
A guiding value system—a true north—is something Ray knew he had to establish with his executive team from day one.
“We created guiding principles from day one. It took us a couple days to build them out, but day one we said we need to set a framework for decision making. We’re gonna put team member and guest safety as number one, we can’t make decisions that put people at risk. We literally just spelled it out, I think there were seven or eight guiding principles. And that became the matrix that executives could now feel free to make decisions within.”
Establishing that decision making matrix was crucial in an unpredictable crisis environment. No one wants to create long-term problems from a short-term solution. But at the same time, it has been critical for Ray and his team to make decisions quickly and boldly. As he said, “If we fail, we have to fail fast. Everything we do has to be fast, but not rash.”
Ray also knew from day one Friday’s needed to find a way to support its employees, at every level, all around the globe. Losing restaurants was more than just a financial consideration—the jobs those restaurants create are important.
“Immigrants use our industry now to break the cycle of poverty for their families. They get their kids educated. As first-generation immigrants, they break the cycle of poverty for their families forever. And then if you think about the businesses that we have around the globe, I mean the jobs that we create in developing countries literally are changing people’s lives. So to have that ripped away overnight is terrifying. It’s like, how are we going to take care of all these people?”
One of the ways Friday’s has taken care of its people is by creating a safety net for those most at-risk employees who wouldn’t otherwise have access to one. The safety net is prioritized for those in dire need, such as those who are on the brink of eviction from their apartments. And beyond simply providing that resource as a link on their website, Friday’s has leveraged the relationships general managers have with their teams to keep in touch with real people and help identify those who would benefit from the program.
One of the main ways Friday’s has been able to halve its initial 80% loss down to 40% is by transitioning out of dining rooms and into a hybrid strategy of takeout and delivery options. Those growth layers, as Ray puts it, were found by managers passionate about saving their restaurants and the jobs that are tied to them.
“[Indispensables] come in all shapes and sizes. They wear any number of titles. From your SVP of Purchasing to the kitchen manager in Watchung, New Jersey. [We] added curbside pickup and delivery and all these ways in which we could compete. And it was those managers letting their natural curiosity help drive them through this process. They were so focused on doing work they were proud of to save this company, to save their restaurant, to save those jobs. I mean, if you couldn’t get fired up by that, I don’t know what would fire you up.”
The key similarity between these leaders—from all levels of the company—is their authentic passion and optimism.
“It was believable when they would tell [me] what they were gonna do to keep their restaurant viable, to get team members back to work. It was believable to me as the CEO. So, I know it was believable to the folks who were reporting to them. They didn’t ask anybody to do something they weren’t willing to do themselves. They were empathetic through this process.”
That type of authentic, unifying leadership isn’t easy to find. Too often, managers become disengaged with their people and begin making decisions based on dehumanized metrics or weekly reports. In times of uncertainty and upheaval, those types of decisions are often based in fear. In Ray’s mind, fear is a poor motivator.
“I’ve said for years, I’ve never seen a positive result in business from a negative influence. Fear is a short-term motivator. You might be able to prop up a result for a period of time, managing through fear, but it never lasts.”