Olive Garden Serves Up A New Recipe For Success

The new owners of Olive Garden restaurants took an unconventional approach when crafting their turnaround plan.

 

Last October, when activist hedge fund Starboard Value ousted the entire board of Olive Garden’s parent company, the newly installed Directors probably never imagined where their new role would take them…

Straight to the kitchen.

That’s right – the company’s new CEO, and everyone on the Board of Directors, spent a night working in an Olive Garden restaurant.  They spent time greeting guests, serving food, and yes, even preparing meals in the kitchen.

CEO Jeffrey Smith explained it like this, in an interview with Bloomberg News:  “It was an amazing experience because we felt, as board members, how are we going to make good decisions in the boardroom without really knowing what’s going on in the restaurants?”

He added that getting into the restaurants to see how things operated was “about making sure we’re giving [employees] the tools so that they can do the best job succeeding for us, for everyone.”

Kudos to Starboard for arranging this in-the-field exercise for its top leadership.

At most companies, there’s usually a huge chasm of perception between the corner office and the front-line.  Executives have views about what’s going on in the trenches, while employees have views about what’s going on in the C-suite.

Both parties’ views about the other are rarely entirely accurate.

An immersion experience, like that engineered by Starboard, helps break down the walls between these two constituencies.

Executives get an unfiltered view of what it feels like to be a customer (or an employee who serves them).  Employees, in turn, get to educate their leaders about what really matters on the front-line.  And both parties get a chance to see one another not as stereotypes (a naïve employee or a cold-hearted executive), but as real people.

The ideas that emerge from such exercises, and the trust that it cultivates, can be quite powerful.

So how has Olive Garden performed over the past year?  The company has posted four straight quarters of same-store sales growth and its stock has outperformed the S&P 500 Index by 25 percentage points.

When explaining the great results, among the changes Olive Garden executives point to are new menu items such as “breadstick sandwiches” – a creation born from the chain’s signature chewy breadsticks which accompany every meal.

Oh, and the idea for the new breadstick sandwiches, where did that come from?  An Olive Garden restaurant manager.

Just more proof that getting executives out of their offices and onto the front-line, listening to customers and staff, is a true recipe for success – in any business.

 

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Jon Picoult is Founder & Principal of Watermark Consulting, a customer experience advisory firm that helps companies impress their customers and inspire their employees.  As a consultant and keynote speaker, he has advised thousands of executives across some of the world’s foremost brands.

Contact Jon at www.watermarkconsult.net, or follow him on Twitter @JonPicoult.