Uncertainty has always been the elephant in the room for the dining industry. Although operators can plan their menus, budget for staffing costs, and make predictions about weekly cover counts, unpredictable circumstances can throw the best laid plans into disarray. But even the most clairvoyant of psychics could not have predicted the disruption that is COVID-19. Uncertainty no longer lurks at the margins — it is front and center, demanding attention and causing operators to rethink and retool their businesses in order to survive.
Vaughn Tan, assistant professor at University College London’s School of Management, has unintentionally spent his whole career preparing for this moment by studying what makes businesses successful in the face of change. After seeing how some companies were able to innovate their ways through the 2008 global financial crisis, Tan made it his mission to research and distill their strategies to help other enterprises navigate uncertainty and build resiliency. He received his PhD from Harvard University in organizational behavior and set out to apply his knowledge as a strategic advisor with a focus on the hospitality industry. He has now spent over a decade working in food and beverage with companies like José Andrés’ ThinkFoodGroup and London’s Fat Duck Group.
With many dine-in restaurants looking at uncertain futures due to the coronavirus, Tan’s advice on how to re-open is in high demand. “I think most people that I talk to are finding it very difficult, psychologically, emotionally, and cognitively, to think about what it means to no longer be running a restaurant that is, in some ways, anything like what you were before,” says Tan. “The uncertainty of the future is undeniable and verified, and the economics of dine-in restaurants look very different.”
To help restaurants find the best way forward, Tan developed an easy-to-use business tool called the Pandemic Pivot that anyone can download free of charge. The spreadsheet helps answer questions about the economics of moving forward with reduced capacity and the potential for new revenue streams to benefit a business’ bottom line. “The goal is to be able to plug in a few numbers that you would already have on hand from your business before and to quickly see what would happen with different scenarios,” says Tan. “This is different from conventional business models, like profit and loss statements, because you can very easily experiment with thinking through other kinds of product offerings and see how much they could contribute to making a business model that works.” While you would normally need to pay a consultant or accountant to do modeling like this, Tan believes the Pandemic Pivot can help operators assess the potential viability of innovative ideas simply and cost-free.
As a best practice, Tan recommends filling out two versions of the Pandemic Pivot for your restaurant: one with a best case scenario and one with a worst case scenario. He’s seen the danger of being stuck to a sinking business model and refusing to adapt. “A chef in London told me, and I agree, that you have to put aside your pride to do whatever it takes to stay alive for as long as you need to stay alive, so that you can come out the other side and do what you originally wanted with your restaurant,” says Tan. “And if your new business model works well now, in the worst circumstances, then you can come out of this even stronger.”
You can access the Pandemic Pivot tool here. Resy offers a free weekly webinar titled “Your Restaurant Post COVID-19” that walks through how to use the Pandemic Pivot as well as other steps to take for greater resiliency. The webinar takes place every Thursday at 12:00PM EST - Register here.
Tan’s first book, The Uncertainty Mindset: Innovation Insights from the Frontiers of Food will be published by Columbia University Press this month. You can connect with him on Instagram at @vaughn.tan or Twitter at @vaughn_tan.