The root cause for bad performance is the same as great performance
Want to take a guess at what it is?
Habit.
Believe it or not, when you drill down into what drives breakthrough performance or creates cinder block like inflexibility, it often boils down to one thing.
Habit.
Innovative results, soaring compound annual growth rates, climbing profitability, solid customer satisfaction, and vibrant cultures within organizations, and the same personally...all of which are check marks in positive growth strategies boil down to one key thing.
Habits drive first place as much as they drive last place.
Bruce Lee once said, the truth can withstand questioning. What’s false hides under the protection of tradition. What’s false is protected by habit.
“That’s not what we do.”
“I’ve done it this way for years and it’s worked for me, so I am not changing it.”
“We can’t do that because…”
What is your habit based on? Professionally and organizationally? Personally?
Remember, it all starts with you. There is no professional without you. There is no team without your participation and so on.
Habit is based on either truth, your perception of truth or even if truth really matters to you or your organization.
All of these generate habit.
What do I mean by ‘if truth really matters’? This really is an extreme form of perception that is supported by engrained beliefs and habits. There are traditional approaches and there are some that are growth hacking strategies. These newer approaches ultimately become mainstream after first movers recognize their value early on.
You might be familiar with some company, perhaps a bank whose customer experience is terrible and whose employees seem apathetic at best. There you go. Their messages (i.e. mission statements, advertisements, etc.) are just window dressing.
Or what about the person you know who is constantly negative. Everything happens to them. Nothing is right or good enough. This is their perception of the truth and they do not realize that most of what they experience is generated by their own habits.
But let’s delve into the details of another example. One whose business growth strategy examples paint a black and white contrast of how and how not.
A well-respected restaurant chain has performed acceptably for nearly two decades. Many employees have been with this restaurant for 10 years or more. Years of service is a big deal to this chain.
COVID was a very challenging time for the chain, like it was for many. Like many other competitors, the chain was forced to make several changes to remain relevant during that tough time.
Eventually, things returned to normal. Some of the managers returned to how they had operated before COVID. Enough consumers coming through the door meant success.
These managers reverted to old habits and measured success in traditional ways. Food cost, table turns and sales. But there was an issue. Margins were slowly fading. When performance was questioned, the managers complained that the workforce was marginal and was capable of only the basics. The handful of better employees were promoted into various back of the house and front of the house roles but were often ill-equipped for leadership roles. They were good workers but not good leaders.
For this group, truth doesn’t matter. They are not willing to examine it any more than they are willing to change. Their perception is filled with numerous reasons why they can’t move beyond how they do things currently. And can’t means won’t.
There were other establishments that were part of this chain whose performance was very different.
In this other group, leaders had begun to ask themselves a couple of questions. They had formed a confederation to openly share ideas and to challenge them, as well as the truths they operated under.
Individually and collectively, they asked themselves one question over and over.
Here is that question: ‘what would be happen if we were not here?’
Or said another way, ‘what should be happening because we ARE here?’ What is it we should we expect to be achieving.
These managers looked to build new habits to replace aging ones. The first was the habit of change, or continuous improvement. The second was to truthfully answer the question ‘what should be different because we ARE here?’
They also asked themselves, is that juice worth the squeeze?
For instance, this group decided to do pre-made plated, pre-made meals but only for certain menu items that met a certain quality and experience standard. They focused on only three meals that were emerging in popularity and priced well, as well as would be as good after two days in the refrigerator as they were day of, and they created only a limited number of them. Running out was scarcity. Scarcity indicated popularity.
They advertised when they ran out, to not inconvenience their customer. Consumers appreciated this and instead ordered carry out or dined in. Numbers grew.
The other group didn’t follow with the new idea. The current model was good enough. Plus, they were too busy putting out fires to try something new which might fail.
For the managers focused on breaking existing habits, they also discovered two new metrics taken from completely different industries-tech and e-commerce which they adopted. The metrics were ROAS (Return on Ad Spend) and CAC (Customer Acquisition Cost). One of the managers learned of these metrics from a loyal customer who offered up the idea during a conversation.
In turn, they had developed a detailed breakdown of what that is and how it manifested in the product, service and experience. They linked this to their more traditional metrics and tracked performance and cause and effect carefully.
When they did what was aligned with their truth, it yielded results that were in line with goals. They linked these metrics to operational habits and habits to outcomes.
They created a new Feedback Loop.
One day a manager noticed an employee coming out of the restroom on his way back to the kitchen. It was crowded that day.
Their new truth and the linked habits allowed him to spot something completely new.
The manager approached the employee and asked if he had washed his hands.
The employee, surprised, said yes. He indicated that the restroom was full of customers and if he had not washed his hands, the restaurant’s patrons would have seen that.
The manager replied, ‘so clean hands when handling customer’s food is important no matter what?”
The employee said, “yes, of course”.
The manager, in a teaching moment said to his employee, “then we cannot pick a piece of food up off the floor that is outside the serving station with our bare hands now, can we?”
Notice the manager said “we”, not “you”. It applied to all of them.
The employee thought for a moment. Then then light bulb went on and he grinned. “No sir!” He excitedly said. “I should have asked a bus boy to clean it up and quickly, so it didn’t stay there. And he should do that with latex gloves on. Dirty is dangerous. What customers see is what they judge us on!”
The manager grinned. “Exactly! Well done, Marcus!”
The manager wasn’t focused on making sure the employee washed his hands. He expected that. Nor was he punitive. He was focused on building new habits that drove professional pride and customer experience. This was their truth.
He, along with the other managers in this group knew their most profitable advertisements were the ones that talked about the commitment to excellence, the value of the consumer’s trust and to come in and judge them on it. Return on Ad Spend on these messages was significant. The other group focused on messages of specials and value.
The manager in the new habit group also knew that 61% of new customers who had been in two times or more within six weeks (based on his loyalty rewards program and quick sign-up survey) come back 78% more often and spend 29% more than average tables. And the table turn for a more profitable customer was only 5% longer than the others. They could accept this. Was the juice of driving down the 5%-time delta worth the squeeze? No, it was not.
For these managers, new habits drove results. When these tools, tactics and behaviors were shared with other managers during the quarterly manager summits the company held, the new behaviors were met with resistance. They were not a tech firm. They were a restaurant. There were 20 reasons the other managers couldn’t evolve.
The key difference between the two groups is that one group was willing to answer the question truthfully and with purposeful intention. The ’truth’ they uncovered informed the habits they needed to change.
The managers stuck in the old process believed in compartmentalization. Don’t share too much. Don’t talk about the truth. Share your perception but in small doses.
Within the two groups of restaurants, one group chose to consistently break habits. This is the group which adopted ROAS and CAC as metrics as well as break old habits and adopt new ones, both individually and as a team.
It seems simple but simple is hard.
The group focused on change were able to overcome their doubt (their perceptions) and then put down the burdens they carried (their beliefs and fears). They did this by asking the question and locating their truth.
Does this approach work?
Yes. The managers embracing new habits maintain a CAGR (compound annual growth rate) as measured by nearly a dozen metrics is nearly double the other group. Plus, they are happier. As is their ownership group. And their customers.
So think about habit and this example. How does it apply to your life? How old and entrenched are your habits? Everything in nature is in constant change. Even you. Your all cells replace themselves over varying times. So quite literally, the person you were a decade ago no longer exists in any physical way.
If everything is constantly changing over time, except your habits, is it any surprise there is some degree of discord, dissonance or difficulty? Think of it like clinging to the lingo, behaviors and ideals of the late 1980’s or early 1990’s. Would you be out of step today? You bet.
Evolve your habits like your wardrobe. Each year, I look at my clothes and ask myself if it is worth keeping. Maybe I have not worn it. Maybe it no longer fits. Maybe it is just out of style. Toss it and try something new.