What GM and Restaurants Have In Common

post-author
Jonathan Morse August 24, 2009

The similarities between General Motors and the Restaurant Industry are very striking. Please let me explain:

6 Reasons (in my opinion) General Motors failed?

  1. Head In The Sand-stuck to their ways and felt that they “knew best”
  2. Stubborn-Refused to adapt despite all the warning signs
  3. Failure to Launch-To much bureaucracy to make decisions in a timely manner
  4. Action vs. Momentum-Busy doing “things” that got confused with momentum which they had none
  5. Technology-Took too long to upgrade to new technology that would allow them to make different cars cheaper and more efficient
  6. Distribution-Stayed with status quo of selling to potential customers even though consumers did not like the process (how many movies and jokes need to be made about car sales people)

It took a complete failure of GM and billions of our dollars before they would even admit that they were in trouble. General Motors recently announced that they will use E-bay to sell cars. My response? Duh! Why did this take so long? (failure to launch, distribution) Is GM starting to “get it”? I hope so.

So, where do restaurants fit into this discussion? As chains report 20+% dip in sales you have to ask the question are the restaurant operators failing in the exact same manner as GM? Where is the innovation in not just food but distribution and use of technology? I go out to eat every day, and to me, it still feels like business as usual. Restaurant Operators are guilty of action vs. momentum, “if there are people in the restaurant” then we must be busy, therefore we are all set. Finally, the bureaucracy and decision by committee (which results in no decision)  is overwhelming to the point of crippling.

I have loved the restaurant industry since I was 13 year old busboy, but I get very worried when I see restaurants whistling by the graveyard. The business is much more than hot food hot and cold food cold and outstanding service. Times have changed, technology has changed, people have changed. Time to adapt or become GM.