Bar Rescue – Turnaround Management
I have recently discovered a TV reality show called Bar Rescue, which is now in its third season on Spike. The premise of the show is that the fantasy of being in the bar business attracts owners with little experience into this highly competitive world, where businesses fail early, and often. Because of the mismatch between fantasy and reality, many bars fail due to mismanagement and poor market strategy. Often, the owners’ intentions are good, but they simply make uninformed decisions or abdicate responsibility when the situation gets tough. They don’t understand how to stay in business once the novelty of their ownership wears off. Most of the establishments featured in the show are mere weeks away from bankruptcy – hence the need for an immediate turnaround.
In the show, Bar Consultant Jon Taffer helps turn failing bars around. In the process, he provides a great primer on turnaround management. While his style may be a bit abrasive, he does what turnaround managers should do when they enter the “Change or Die” phase. Generally, he follows these basic steps:
1. Establish a Performance Baseline: Taffer and his team of consultants spend a few days getting to know the business, the owners, the employees, the marketplace, etc. He watches live interactions via closed circuit camera feeds, sends in “secret shoppers,” and researches demographics for the local market to see how the bar is positioned. Understanding the issues is a key to making sure the changes he proposes address these issues.
2. Confront Issues Head On: Next, Taffer confronts the owners with the mismanagement, performance, staffing, and market-positioning issues the bar faces. He makes the proprietors take ownership for the issues. This process is often contentious, because the owners’ failure to act when they see an issue (or their behavior causes an issue), and often overshadows other performance issues. Common themes include:
- Owners’ putting themselves before the needs of the business
- Inappropriate owner and employee behavior
- Employee theft
- Poor employee training
- Poor sanitation
- Inefficient traffic flow pattern
- Poor branding, etc.
You may see some parallels in these issues to your situation, whether you are leading a team or are in a service execution role. In some episodes, personnel either quit or are fired when it is clear that the business will be managed more closely. Sometimes these firings come at the direction of Taffer, and against the will of the owner, who is too close to the situation to see the real issues. Taffer tries to defuse this tension by maintaining focus on managing the risk to the business. Remarkably, the conflict is rarely, if ever, personal, and I have been surprised to see some of the attitude turnarounds that take place.
3. Set a Level Starting Place: Once the smoke clears from this confrontation and the bar owner acknowledges and takes responsibility for the issues, Taffer sets some basic ground rules to make sure that everyone still involved is comfortable moving forward. This acknowledgment is a building block to implementing the kinds of changes necessary to ensure the bar can stay in business.
4. Train, Train, Train: After Taffer gets that agreement, he brings in his team of experts to help train staff and work on rebranding under the new image. Sometimes they focus on perfecting the timing skills which govern how much alcohol is poured into a drink, which if uncontrolled, can lead to lower drink yield, over-serving of guests, and reduced profits. Other times they work on drink recipes, customer service strategies, or other important attitudinal elements of delivering an excellent customer experience.
5. Stress Test: Following the training day, the bar undergoes a stress test. This test is designed to push the employees and owners to see how they respond and to identify weaknesses in the operation. Sometimes, the employees step up and make the best of it, but more often than not, the bar ends up closing early because the bartenders or kitchen can’t keep up, or there are service issues, or the enterprise lacks systems or equipment that allow it to deliver a positive guest experience. The stress test usually opens the owners’ eyes (as well as those of resistant employees) to the issues they face in reclaiming their business and becoming viable again.
6. Train, Train, Train – Again: In recovering from the stress test, both owners and employees are usually highly motivated to enact the positive change Taffer is promoting. They work hard to perfect when the experts are teaching them, or if they are not ready for perfection, at least improving in specified areas. While this is happening, the Bar Rescue team of designers brings in local construction teams to completely remake and rebrand the bar. They change lighting, traffic flow, and systems – anything and everything they deem necessary to help keep the bar open into the future. Often they change the name and brand of the bar. Sometimes this is to bury ghosts of past failures or reduce the association with negative brand equity (Such as, “When I think of your bar, cockroaches come to mind.”), and other times it is designed to capitalize on a unique market specific to the neighborhood to provide a hook to bring customers through the door.
7. Re-launch: The final step in this process is to re-launch the newly-branded bar incorporating new facility design, drinks, menu items, and owner and employee attitudes and skills. Taffer has breathed life into the entity as a business this time, where decisions are made based on securing its future, and it is up to the owners to commit to these changes and continue to refine their presence in the marketplace. As Taffer departs, each bar now has a more solid footing to build from, if the owners are strong enough to follow the path.
So how does this relate to you and your enterprise? Are you aware of the level of employee engagement in your current operation? Are employees committed to your success? Are they sabotaging the enterprise through their attitudes and actions? Are you unwittingly sabotaging your own operation?
Turnaround management is about setting an expectation for performance, modeling that performance, and working to supply systems and processes that support that success. Watching an episode of Bar Rescue or two may serve as a mirror that reflects what you may be experiencing or creating in your organization. If it resonates, see how Jon Taffer approaches resolving the issues, and apply what lessons you can to your environment, and see if that helps create a more positive future.