The title of today’s post is a riff on the Attention Is All You Need paper that launched the popular interest in Large Language Models, the tech that undergirds ChatGPT and other Artificial Intelligence models. There’s no AI in this post (thank me later), the suggestion I’m making in the title is that in our little corner of the universe here in the hospitality industry: the intelligence for generating P&L is within the organization’s culture.
BTW and in the spirit of truths sharing: all of the words you read and pod-listen across all Good Evening Everyone episodes, this one included, are derived from impressions and thoughts in my head, nothing presented should not be construed representing policies, cultures, processes, circumstances, operators, individuals, teams, operating or shuttered venues, contractors. events, experiences, or anything else of or related to any of my present or past employers, clients, or places where I dine.
Like most industries, hospitality performs that spreadsheet exercise we all love: budgeting. Before we go there, one thing interesting to ponder is how tacit knowledge figures into a budget’s inputs. Anyone can make a number go up spreadsheet however not everyone has the wherewithal to make the ‘P’ bit of P&L a reality —because understanding.
I think of tacit knowledge as a nuanced understanding —what’s really going on here. Without truly having a feel for the subtleties within the mechanics, the things that are present though not always visible on the surface for delivering a product, it’s an ordinary spreadsheet. However by including into the spreadsheet’s functionality the hidden truths that make or break profitability our budgeting spreadsheets become useful for pointing us, the talent, towards operating processes that might need updating or replacement.
An ordinary budgeting spreadsheet just says it hurts here and here and here. A great one helps talent listen, hypothesize, test, and build. The listening part can drive further truth seeking, improving understanding of what’s driving what and, equally, what’s constraining what. We’ll talk more about constraints in future posts, today’s (hard) work is ensuring truth seeking’s threaded throughout the culture. The talent helps make great spreadsheets and great spreadsheets empower the talent.
When an organization’s culture doesn’t value developing and acquiring talent that appreciates that the many nuances driving profitability are learned and shared through everyone’s ogoing truth seeking processes —its roadmap’s going to come out a bit loopy. Loopy BTW is expensive w/r/t both time and money. Loopy introduces personal frictions, for example the blame game, voluntary and directed turnover, and brand equity deterioration.
Avoid loopy by ensuring all individuals hired into the organization each cares sufficiently to develop and share their collection of the knowledge —that they understand they’re each both teacher and learner. Each doesn’t necessarly need arrive as the ulimate expert however individuals need to be aware the culture expects them to learn nuances, and they at least need to be able to clearly communicate the nature of the variables, levers, to interviewers.
Once such expertise in the nuances is within the culture, that’s when things start to become interesting. A perhaps unobvious result is humans actually enjoy learning when it benefits them immediately, for example putting together puzzles. Remember we’re talking about budgeting here so it’s weird to use the word enjoy in that context. The roadmap to profitability happens to be just such a puzzle solving activity. Maybe someday someone will write a book explaining it’d healthier for organizations to, instead of the ‘b’ word once per year, simply operate a ‘puzzling out our truths’ process all the time because were that the program the the great talent would enjoy it more.
Let’s take a quick aside here, this whole business of making the roadmap together and embarking on the roadtrip —it also helps build trust. In a restaurant setting, there’s many individuals (most?) who are left out of the roadmapping process, and typically they’re the guest-facing ones on the roadtrip. Think about how personally difficult it might be for hourly (typically low-wage) workers and floor managers to be told day after day they must work harder to make the business profitable, as management’s barking about failing to make budget while themselves failing to enable a culture that prizes puzzle solving.
More, truly being inclusive adds immediate value to a culture and management. Everyone’s got a bit of tacit knowledge to bring to the table, this includes guest-facing workers, management sometimes forgets they may not be as in touch with what’s happening in the dining room as the staff. It’s too often the case in the hospitality industry that there’s insufficient means for healthy communication upward —from the ground to management. One of the lessons I learned long ago when running daily ops is there’s gold waiting to be mined in many dining rooms and lounges. When a culture’s too lazy just open their ears and eyes to what guests are saying and how they’re behaving, Houston there’s a problem.
Lazy and caring are polar opposites. We’ve all witnessed lazy leadership at one time or another in our careers —because it’s the dominant strain. Lazy leaders don’t bother learning, instead of pounding the truths they pound the table, oftentimes because they’re not present, mentally and often physically —and truths can feel inconvenient to those who also think the staff’s an inconvenience. This is a leading cause of unnecessary turnover, the misguided thinking being getting rid of truth seekers solves their inconvenient truths problem.
Scientific hypothesis formulation, testing, and evaluation are simply too much work for them. Nothing’s quite as toxic for an organization’s culture as hand-waving and politics; the best way to identify and avoid these types is for the culture to ensure caring is up there at the top of everyone’s hiring criteria. It’s also toxic to the P&L.
Having caring as a hiring precondition makes it easier for interviewers to discern and screen the lazy types, who BTW are just as toxic to a culture as fraudsters, the substance dependent, harassers, and all the flavors of dead weight. The lazy, without lifting a finger, taint the environment with obfuscating schemes they craft to distract all, including shaareholders, from their folly. The clues to watch for include back-room deals and promises, micromanaging to serve personal needs, busywork assignments, tirades, scapegoating, and shenanigans —you might have further ones to add more to this list so please feel free to do so. These bring everyone down in spirit and function, the operation starts collapsing under its own weight because leadership ignores a toxic-hire truth, or fails to quickly hit the secret red button.
When culture fails to host truth seeking or looses its capability to do so thanks to toxic hires that aren’t quickly remedied, there’s a high probability the caring hires commence voting with their feet. Their decision often comes down to an organization’s communication inadequacies, in hospitality particularly w/r/t staffers on the ground —because without voice there’ve only their feet for solving their problem.
When shareholders have not created a reliable means for listening, that’s an own-goal BTW, or communication’s been intentionally disconnected by rogue elements, a/k/a rugging the shareholders for fun and profit, value is destroyed. Worse, as the good talent literally or effectively checks out, this leading to organization’s ensuing inability to attract FOH and BOH at all levels. Next, operations slip into a death spiral, the duration of which determined only by the size of the remaining treasury —because investors don’t like being fooled —the best of them learn how to stop their losses.
The bottom line is truths are the what keeps everything together and humming, both within and across teams. A culture that values truths bonds and energizes talent -together. Solving the profitability puzzle together puts everyone on the ‘truth seekers’ team, a place in the cultural space that’s uniquely unfriendly to its polar opposite —politics.
It’s the same whether a restaurant or hotel, a truth seeking culture that’s by definition continuously solving for profitability is all you need. It’s always the human talent an organization starts with, attracts, and keeps, plus the tacit knowledge each teaches and learns, the nuggets of gold in guest and financial data, and the technologies they choose to leverage, that determine the P&L.
Culture changes everything, for either better or for worse. In future posts and conversations with experts and guest, and in response to your requests too, expect to find more about solving the roadmapping puzzle, lenses for viewing fixed and variable costs in high def, where and how to mine P&L gold, and of course much more about screening, interviewing, signing-on, onboarding, and training for healthy culture carrying. Oh and one more thing: it pays to get good at spotting, diagnosing and curing cultural problems before guests do so.