Businesses that would have been healthy were it not for the pandemic are closing their doors for the last time on a daily basis. In the United States, in the restaurant industry alone, more than 110,000 have shuttered since March 2020. That’s over 350 every day! Some closures have been avoided, at the least for now, by ownership changing hands. Which isn’t to say the challenges disappear. They must be confronted by the new folks in charge.
One such situation that hits close to home recently occurred. It got me asking, how could lean thinking be used to increase the likelihood of a successful turnaround?
A New Course for Legal Sea Foods
Lean thinking always starts with the customer, defining needs and wants and problems to solve. In December, Bostonians learned that a family-owned local institution, Legal Sea Foods, had been purchased by the PPX Hospitality Group. For those who don’t know, Legal Sea Foods’ website describes it as “a fish company in the restaurant business.” Over the course of 70 years, per an article about the sale in The Boston Globe, the Berkowitz family grew the business to 33 restaurants, mostly located along the Eastern Seaboard of the United States, 3,500 employees, and more than $200 million in annual revenue.
Then the pandemic. Like all “non-essential” businesses, the springtime lockdown forced all Legal Sea Foods restaurants to close. By the announcement of the sale in December, 18 had reopened but only partially; 9 were waiting to reopen, hopefully soon; and 6 locations had permanently closed. For Legal Sea Foods’ guests, it’s a bummer, one of many inconveniences going into the new year. For the company’s employees, however, it’s tragic.
As a regular customer and someone who knows many people working for the company, I hope PPX can successfully restart the business. (Full disclosure: Legal Sea Foods was an LEI Co-Learning Partner for several years in the 2010s. I supported the company as a lean coach, discovering a lot about how lean thinking applies to the restaurant business. Presently, however, there is not a commercial relationship between the two organizations.)
The questions are, how will PPX approach the challenges confronting the business and the industry at large? Will they have new, dare I say fresh, ideas for a business? (The company’s motto, after all, is “If it isn’t fresh, it isn’t legal.”) Assuming PPX has enough capital to help Legal Sea Foods outlast the pandemic, what will they do in the meantime to make the company as strong as it was before, if not stronger?
Where to begin?
Lean thinking always starts with the customer, defining needs and wants and problems to solve. I imagine PPX is getting to know theirs: Who are they? How do they behave at Legal Sea Foods and elsewhere? Why?
Simple questions, hard to answer. Especially now, given changes wrought by the pandemic and the ongoing state of flux and uncertainty. Though vaccinations are being administered, it’ll take many months, probably most of 2021, for the United States to achieve “herd immunity,” when normal (enough) behaviors can safely return.
Just thinking about the customer I’m most familiar with – myself – how I act as a retail consumer has changed considerably and, in some ways, keeps changing. Overall, I’m spending less. The fewer dollars I do spend are going to a different mix of businesses than before.
I used to spend a lot of money running around. But today, businesses like gas stations, airlines, and Dunkin’ (!) get almost no money from me. On the other hand, I still need household goods (probably more so than before), clothing (you know, comfortable pants with elastic waistlines), sustenance (food and beverages – make ‘em adult, please!), and information. I’m reading more than ever. I buy virtually all of these products online for direct-to-home delivery. Books are the exception. I used Amazon early on in the pandemic. But for the last few months, I’ve been frequenting two local bookstores (shout out to The Book Rack in Arlington, MA, and Book Ends in neighboring Winchester).
Why these changed behaviors? To begin, obviously, I don’t go anywhere. The last time I boarded a plane was in 2019. Whereas a few years ago, I took off more than once a week! For personal and household needs, shopping in-store takes too much time, involving too many interactions. Personally, it’s too risky. When it comes to prepared meals, I have to factor in the consumption process too.
Books are different. Buying from a local bookseller allows me to get my hands on a book almost immediately (assuming they’re in stock, which can be an issue, but one I’m usually okay with). The capability to repurpose and then to redesign and retool is critically important.
It also means I’m supporting the local economy, which benefits my neighbors. Plus, when I pick up my book, I can spend a few minutes browsing the table with “local favorites” and scanning to see if any new handwritten cards have been posted with trusted staff recommendations. In other words, I can have a safe (i.e., quick) and enjoyable, and maybe even serendipitous, experience that connects me to the community and provides a small dose of normalcy.
According to the shopkeepers at The Book Rack and Book Ends, business is booming. If those businesses are any indication, the decade-long trend of growth for independent bookstores (over 50% per the American Booksellers Association) has been unabated by the pandemic. Harvard Business School Professor Ryan Raffaelli, who has a working paper titled “Reinventing Retail: The Novel Resurgence of Independent Bookstores,” attributes this trend to the “three Cs:” convenience, curation, and community.
Consider the 3C Framework
As PPX gets to know Legal Sea Foods’ customers and their contexts, I think the insight of the 3Cs framework as a way to develop and/or define the retail experience could be helpful. Trying it out …
- Convenience – Ordering online, or in some other way at a distance from potential covid COVID carriers, seems necessary for the foreseeable future, as does giving options for delivery and pick-up with little-to-no-contact. For example, I can order tacos from Jose’s Torta Mexicana in Arlington’s town center for fee-based home delivery in about 30 minutes or free contactless pick-up in half the time.
- Curation – This has always been a strength for Legal Sea Foods, from the seafood and wine to their wonderful service staff. To me, all of it, along with beautifully designed and well-kept dining rooms, adds up to a quintessential New England dining experience. (As a Midwesterner who’s finally settling into Boston after living here for seven years, I appreciate the sense of local place embodied by many Legal Sea Foods restaurants. In fact, Legal Sea Foods is a popular stop for visitors from out of town.) An interesting question is, how can a New England food experience be created outside of a restaurant setting? Can it be packaged up and sent into someone’s home?
- Community – Ask a longtime Bostonian about Legal Sea Foods, and I guarantee they’ll mention the original, albeit long-ago closed restaurant in Inman Square, Cambridge, MA. They’ll talk about the small menu, simple preparation, and seating in the form of picnic tables. Whereas Greater Boston’s dozens of small towns all have community bookstores, not all of them have community-inspired Legal Sea Foods restaurants. Could a roaming food truck address that opportunity?
I’d add a fourth C: consistency. As a guest at Legal Sea Foods, I’m always impressed by the execution of their attention to detail. The restaurant comes to life when you enter the front door and are greeted cheerfully by a host. When you’re delivered to your table, its presentation is immaculately conceived. Throughout the experience, food, drinks, and dining ware flow to and from the table seamlessly. As for the food and drinks themselves, presentation and taste rarely fails to impress. The achievement is remarkable, time and time and time again. I wonder: is this same detailed execution being achieved throughout the takeout, delivery, and home consumption processes?
The capability to repurpose and then to redesign and retool is critically important. For businesses and industries where demand has been rendered moot, it may not be enough. (In these cases, you need a 5th C – Cash!) But for others that are suffering, possibly, probably, yours, I hope you have enough Cash and the built-in capability to learn what’s needed for a successful turnaround.
Along the way, if you’re so inclined, please be in touch. I’d love to how you’re using lean thinking to increase the odds.