Senior Leadership Succession Planning Within the Restaurant Industry – A Monumental Concern
By David Mansbach , Managing Director
Let's start by revisiting an excerpt from a piece I wrote in the "Restaurant Finance Monitor":
My comments above are certainly not profound, and many readers agreed that I was stating the obvious; if restaurant companies are serious about the long-term health of their organization and the restaurant industry at large, we must pivot and make succession planning and leadership development a priority. Here is the problem – the excerpt above was written in August of 2012; over the past five years the keepers of the castle (board members, private equity groups, company Founders and executive recruiters) have not heeded this simple piece of advice. Even worse, this disease has spread to other categories such as fast casual and polished casual. As a senior-level executive recruiter specializing within the hospitality industry I can state with certainty that the quality and quantity of executive talent within the chain restaurant industry is running on empty, and outside of very few outliers, restaurant companies are ill-equipped in an industry that is going through unprecedented change.
Moving forward, succession planning and leadership development program initiatives are an absolute necessity rather than a "nice to have;" board members, private equity groups, company founders and executive recruiters need to stop pretending and do their jobs; talent management initiatives must take precedence over predictable "band aid" strategies such as menu reimaging, refranchising and financial engineering. Even if decision makers continue to accept the idea of bouncing senior management from one company to another or to put it more bluntly, hire industry retreads, that window is closing because most of this pool of candidates are in the twilight of their career.
Creative destruction, the process that something new brings about the demise of whatever existed before, is happening in every aspect of our lives. Think about it… Netflix started out more than 17 years ago as predominately a DVD subscription service at the time Blockbuster Video was their competition – some younger people reading this may not even know what Blockbuster Video is. Netflix recognized it desperately needed to pivot and take advantage of the rapidly evolving mobile technology market and ever-improving internet speeds to become one of the largest video distribution networks on the planet, with a current market cap of more than $55 billion. There are too many other similar business success stories to intuitively conclude that the restaurant industry must import fresh thinking into the industry and through that inertia create succession planning and leadership development programs that keep our industry relevant, exciting and engaging.