CEOs Speak: Setting Direction and Bringing Your Concept to Life|
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Experience is the best teacher. The next best thing is to learn from those who’ve done it. The October 3 Restauranteur Summit at Ponce City Market brought together an exciting panel of leaders whose life and business experience spans an array of restaurant business models, from franchised to independent, from fast casual to fine dining.
Drawing on decades in the industry, panelists shared advice for weathering economic cycles, managing financial challenges, creating a sustainable culture, leveraging technology for good, and adapting to ever-changing consumer and employee expectations.
Panelists included Charles Watson, chief executive officer at Tropical Smoothie Café; Cindy LeBlanc, chairman and CEO of Brewed to Serve Restaurant Group Inc.; David Danowitz, chief executive officer of Farm Burger; and George McKerrow, chief executive officer of Ted’s Montana Grill. Steve Gibson, founder and CEO of Talent Served, moderated the discussion.
Proceeds from the Restauranteur Summit benefited the Giving Kitchen, an Atlanta-based nonprofit that provides emergency assistance to food service workers through financial support and a network of community resources. Michelle Stumpe, a Giving Kitchen board member and partner with the law firm Taylor English, and Naomi Green, development and partnerships director for Giving Kitchen, spoke about their efforts to provide stability for some of the most hard-working and vulnerable members of Georgia’s hospitality community: food service workers.
State of the Industry
The panel discussion kicked-off with a state of the industry and economy. Katie Jones, director of Advocacy and Finance for the Georgia Restaurant Association (GRA), provided a brief round-up of legislative issues affecting the restaurant industry, including new federal guidelines regarding overtime compensation and a proposed Georgia Power rate hike under consideration by the Georgia Public Service Commission. The GRA is asking Georgia Power and state regulators to consider the potential impact a rate increase would have on the restaurant industry, which employs around 488,000 Georgians.
Charles Hurt, managing director, Investment Banking at Fifth Third Securities, provided context for the panel Q&A by delivering a brief economic update. Hurt described the overall economic situation as strong, but noted: “it definitely appears the economy is slowing down.”
According to Hurt, employment trends, gas prices and home sales bode well for restaurant traffic. But consumer sentiment fell in August, only to rise again in September, indicating “anxiety around the future,” he said. “Consumers are probably onto something.”
Rather than fixating on dire economic headlines, Hurt urged attendees to focus on what they can control within their own four walls, providing an apt segue to the panel discussion.
Getting Down to Business
Billed as a conversation on “setting direction, anticipating the future and creating it,” panelists started by sharing his or her journey to the C-suite and how they have come to view the role of CEO.
Each had a very different path: Watson described how he “grew up in the restaurant industry” serving and bartending, then attending and graduating from Cornell University’s School of Hotel Administration. Danowitz started as a fry cook in college, noting “This is one of the few businesses where you can go from the dish pit to the board room.” Cindy came to the restaurant industry later in life following a career in corporate finance and real estate. And McKerrow, one of Atlanta’s most notable serial restaurant entrepreneurs, bussed tables as a kid.
Asked to describe what a successful CEO looks like, humility and courage were recurring themes. “In today’s environment, the risk is much riskier,” quipped McKerrow, who has undertaken more than his fair share of risky endeavors.
What’s at risk for restauranteurs today? Panelists cited shrinking margins, historically tight labor markets, and fast-evolving consumer preferences among the top challenges facing today’s foodservice leaders.
“Choices for nourishment are more abundant than ever before, whether it’s prepared foods at the grocery store, drone deliveries or a box at your front door,” McKerrow added.
Tech and the next generation of leaders
Throughout the discussion — whether referring to P&L reviews, technology or labor management — panelists often returned to the importance of mentoring the next generation of business leaders.
Danowitz, in particular, encouraged attendees to recognize that every good leader has others to thank for their success. “My career became successful when I allowed myself to be mentored,” he added. Today he’s the mentor.
Cultivating a pipeline of capable leaders means taking the time to “teach, coach and share,” advised McKerrow. LeBlanc echoed the importance of translating financial data from percentages to dollars so that employees not accustomed to dealing with financial data can understand the real implications of “the numbers.”
How has technology changed the business of running a restaurant? It has certainly changed the way consumers interact with food service providers, from delivery services to mobile ordering. It’s also changed the way business is conducted behind the scenes, mostly to the benefit and sometimes to the detriment of decision makers.
“With the advent of point of sale data, you’ve got young people who can print out a bunch of numbers but they don’t’ really understand what they’re looking at,” said McKerrow. “We need to be teaching our people how to interpret the numbers.”
To that end, Le Blanc encouraged attendees to share key stats from POS systems and daily P&Ls, but also train staff to interpret what the numbers mean for performance and operations.
Practical advice for anticipating the future and creating it
Successful leaders are often admired for their instincts, but these panelists also displayed a consistent, pragmatic regard for key metrics. From daily P&Ls to cash-on-hand to maintaining a healthy respect for EBITDA, each shared their preferences and philosophies regarding managing to the numbers.
LeBlanc likes to “look at cash in the bank almost every day” and the balance sheet every period, but adds “If you’re looking at a daily P&L, you always know if you’re making money.”
In a large franchise-based business, the objective measure of success for franchisees and franchisors is unit performance, said Watson, but success is ultimately the results of mutual respect, two-way communication, and a constant focus on people, product and profit.
Asked about his favorite KPIs, McKerrow definitely keeps an eye on cash flow, but he adds, “It really comes down to guest counts. How many people chose to spend their hard-earned money here?”
About The Restaurateur Summit
The Restaurateur Summit is a gathering of accomplished restaurant leaders brought together to inspire one another, share best practices, avoid mistakes, and advance the industry we love.
The Summit was founded by Tommy Lee, Aprio; Steve Gibson, Talent Served; Michele Stumpe, Taylor English; David Adams, CertiPay and Matt Mallory of the Mallory Agency. This year’s sponsors were Fifth Third Bank, Restaurant 365. The Giving Kitchen and the Georgia Restaurant Association.
The next Restaurateur Summit is planned for March 2020.