I’ve always thought working in hospitality is like getting a free MBA – but one rooted in the real world rather than theory. So it didn’t surprise me to discover a brilliant business idea in a book about the restaurant trade. In Unreasonable Hospitality: The Remarkable Power of Giving People More Than They Expect, star restaurateur Will Guidara describes his quest to take Manhattan’s Eleven Madison Park from number 50 in the San Pellegrino restaurant rankings in 2010 to the number one spot in 2017.
To check out the competition, Guidara takes a group of employees to the top restaurant on the list. Unsurprisingly, the experience is superb, and his team busily spot ideas they could copy. But Guidara isn’t interested in these. At the end of the evening, he asks them a completely different question. ‘What features of the experience were disappointing?’ They settle on two: the coffee was merely OK, and the beer drinkers received scant attention compared with the oenophiles.
(This resonates. Beer lovers are pariahs in restaurants. ‘I’d like some wine, please.’ ‘Ah, monsieur, let my colleague gently fellate you while we talk about varietals.’ ‘What beer do you have?’ ‘One on draught and two in bottles.’)
So Guidara, like a true game theorist, goes back to his own restaurant, and appoints one employee (a single-origin coffee nerd) as the ‘coffee sommelier’; a craft-beer nut in the kitchen is correspondingly made ‘beer sommelier’. Beer drinkers expecting ‘Uh, we’ve maybe got Sam Adams’ are amazed to be brought a menu of artisan beers and food pairing suggestions. It works upstream too. Craft brewers are so chuffed a top restaurant is taking beer seriously that they send endless sample cases.
On the subject of pairings, it might be good to read Guidara’s book alongside the online essay ‘Benchmarking is for Losers’ by Roger Martin. It occurs to me that Martin used the same approach as Guidara – what I call ‘reverse benchmarking’ – when he became dean of the Rotman School in Toronto, taking it from a minor provincial business school to one of global significance. He did this not by producing a feeble copy of Harvard Business School but by doing well what HBS failed to do at all.
Companies are often unhealthily fixated on their competitors in precisely the wrong way
Martin believes the overattachment to benchmarking – copying the practices of the lead group – has its origins in economic theory and the notion of trade-offs. This narrow conception of value appeals to number-crunchers, but at the cost of crowding out more creative approaches.
Benchmarking hurts businesses by forcing them to devote resources to over-served markets; and hurts customers by limiting choice and innovation. ‘Reverse benchmarking’ rewards businesses with higher differentiation, growth and profits; and rewards customers with greater choice. It also benefits the economy by creating value in new and unexpected ways. This matters: 30 per cent of growth in the UK economy comes from 3 per cent of innovative companies.
Why is ‘reverse benchmarking’ so rare? Partly because companies are often unhealthily fixated on their competitors in precisely the wrong way. But there’s also the huge number of people knowingly and unknowingly engaged in conventional benchmarking. (Benchmarks are what most management consultancies sell, after all.) It’s endemic in company silos too: most people in procurement, compliance and finance are in pursuit of frequently fatuous measures chosen for ease of comparison.
Take any really successful business and I think you’ll see the Guidara-Martin principle at work. It also helps to explain why conventional public-sector spending behaviour – the Treasury’s Green Book – brutally sacrifices innovative ideas on the altar of direct numerical comparison.
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