Many people, including entrepreneurs, are frightened or intimidated by change.
Not me. I love change. In fact, I love to say, “Change, change, change.”
Change gives every one of us the opportunity to improve, to reinvent ourselves, and to correct past mistakes. And, if you don’t change, then change some more, the paddle I mentioned at the beginning of this book is going to find your ass.
And fast.
Think back to the prior chapter that discussed the importance of being a great teacher. The reason it’s vital to be teaching all the time is that you want the people around you to change and grow. You want them to improve, to get better at their jobs, and to think faster and more creatively on their feet.
LISTEN!
The simple fact of the matter is that change occurs constantly, whether you like it or not. You can either learn to anticipate change and put you and your business in a better position to react with greater agility, or you can ignore and deny change.
And, like I mentioned at the beginning of this chapter, that can lead to one nasty paddling. Just ask companies like Xerox, Kodak, and Blockbuster—iconic names that chose to ignore the change that was all around them. The paddle certainly found them.
The presence and importance of change is something I preach constantly. It’s critical that you’re always looking for ways to change your business, because industries are constantly being disrupted, and trends are constantly changing everything around us. If you’re not looking for ways to get ahead of the curve with new cutting-edge products or services, you can fall behind all too easily. So, instead of looking up and finding you’re behind the curve, get out in front of it whenever you can.
Coca-Cola is a good example. Once a company that produced a soft drink, they’ve changed to incorporate all sorts of different drinks and products, not to mention the design and look of those products. Could they have survived if they had stuck to that one type of drink? Probably, but their capacity to change has allowed the company to excel.
Coca-Cola’s example also points out the importance of anticipating change. The company realized their market was changing in all sorts of ways, and they were ready with products to greet that change.
“By anticipating change, you don’t just change with the times—you change the times themselves.”
My businesses change constantly, be it their menu items, staff uniforms, music that’s played, or layout and feel. When I acquired Morton’s The Steakhouse in 2011, although they’d been a popular place for steaks since their first restaurant in 1978, by the time I bought the concept, they had seventy-plus steakhouses failing to do one critical thing: change, change, change.
One of the most world-renowned steakhouse brands out there still looked and felt like it did thirty years before. Red leather banquettes, dark mahogany wood everywhere, maître d’s with bowties in tuxedoes, no music, and even a food cart they rolled out to every table to show off their raw steaks at the beginning of service. The brand needed to attract a broader customer base.
By 2011, the likes of Del Frisco’s, Mastro’s, STK, and other high-end steakhouses had passed Morton’s by on look, feel, and vibe. So what did I do? Change, change, change. I gave them an entirely new interior design, installed modern furniture, updated the uniforms (killing the bowties and tuxedoes), turned down the lights, turned on the music, and expanded the menu. And what happened? I grew the customer base and did more business. The same people who knew and loved the brand kept coming, and I introduced Morton’s to an entirely new generation of customers who used to think that Morton’s was where their grandparents ate on their wedding anniversary.
How can you anticipate change? To quote the title of my book—“Shut up and listen!”
LISTEN!
Pay attention to changes in society, such as greater interest in healthy, farm-to-table foods. Understand your customer base. What do they value right now? Pay attention to technology trends and innovations. Which ones do you expect will boost the value and appeal of your business? Talk to your customers. Talk to your employees—the greater the variety of people you speak with, the broader and more accurate the picture of change you can anticipate and react to.
Failing to beat change to the punch puts change in the position of dictating terms to you, rather than the other way around. And like I always say, if you sit on your hands, you’re going to go out of business.
Here’s an example that shows the importance of being open to change. The Supreme Court recently allowed states to implement various sorts of legalized sports gambling. As you probably know, a good portion of my overall business operation has to do with gambling, such as gaming tables, slot machines, and the like.
On one hand, we could choose to hunker down and stick with what we already have in place, hoping that legalized sports gambling doesn’t detract from the gambling we already have. On the other hand, we could embrace this type of change as a fresh avenue of opportunity, and that’s exactly what we have done.
During a CNBC interview about the topic, I summed it up this way: “We all have to evolve.”
That’s an ideal summary of my approach to change. It’s going to happen, so put yourself and your business in a position to make the most of it.
Every business deals with change on an ongoing basis. In the restaurant business, it’s everything from making the music a little bit louder to incorporating communal tables to adding dishes like avocado toast and shishito peppers that reflect how people want to eat today.
That raises an obvious question: When is change good, and when is it better to keep doing what you’ve been doing? The answer is easy: test. If you’ve watched Billion Dollar Buyer, almost every episode has at least one instance where we put a small company’s product up against competitors. Then, using everyone from real customers to others who work for me, we ask them to be honest. What’s better and why?
That emphasis on going to your customers to evaluate change is critical. For one thing, you’re going to get honest feedback. Just as important, you’re listening to the people who may or may not buy your product—not listening to yourself or the people with whom you work. And, as I said in an earlier chapter, that’s one of the best ways to cater to the masses. Offer them what they want.
Two final bits of advice. When I test products against other products, I require an 80 percent result to justify any sort of change. For instance, if we’re testing a new salad dressing with ten participants, a minimum of eight out of ten of those folks need to say they prefer the new dressing for us to even consider a switch. That high level of approval gives greater certainty to any decision that’s made. It helps identify change that truly makes sense.
The second bit of advice is, if change involves eliminating something, never cut anything that’s going to affect your customer.
Earlier I discussed how you can grow your business by cutting expenses. That’s a proven strategy, but don’t worsen the customer experience in the process.
For instance, if you operate a restaurant, automatically putting bread on a table can cost a surprising amount of money. Instead, ask if they want bread. That’s not lessening the customer experience—rather, it’s refining it by letting the customer decide. There’s cost cutting involved, but not at the expense of the customer experience.
By the same token, a company that switches to smaller, more cost-efficient delivery vehicles isn’t impacting customers. They’re still going to receive the same product, just in a different manner. If the product arrives on schedule and is followed up with helpful customer support, nothing about what the customer sees changes.
How else do you best react to and leverage change? One proven strategy is to put people in the right positions in your company, where they can make the most of their skills and other attributes to use change to your advantage.
This relates to a critical issue I discussed earlier in the book. Any successful business requires a balance of experience and skills—you need a numbers guy, you need a creative guy, that sort of balance. That balance is essential when a problem or issue crops up where a certain kind of knowledge is necessary for a solution—the kind of problem or issue that reflects some sort of change. With the right kind of balance, there is already someone in place to make a good decision.
Balance is vital when confronting change. Change brings opportunity, but it can also bring uncertainty, instability, and even chaos. Having the right people in positions that make the best use of their skills can be the difference between taking your business to the next level as a result of the change or struggling because change overwhelmed you.
Think back to the story I shared about banks closing left and right throughout Texas in the 1980s. As someone with significant financial commitments with many of those institutions, it would have been possible for my business to go under as quickly as many of those banks.
But it didn’t happen. That’s because I reacted to that sweeping change with the goal of using it to my advantage rather than suffering and struggling like so many others. The change was occurring, whether I liked it or not. As it turned out, I was able to like it! Further, change that brought disaster to so many others proved a valuable education for me. I learned not only the essential value of always having cash on hand but also the need to look past the chaos of change to identify opportunities others were too freaked out to notice.
The ability to lead and the obstacles that change brings go hand in hand. I like to say that you could have the greatest product or the greatest anything, but it all comes down to the people who are working with that product. No product or service is so unique or so amazing that it can be successful in and of itself. It takes people to make that happen.
You have great companies today that have failed because of the people who were running them. You also have companies that are extremely successful because of the people who are running them. And if you switched the people around, the business that used to be successful might be out of business. Meanwhile, the ones who struggled may be doing great. It all comes down to putting the right people in place, one of the greatest challenges that any leader faces.
There are many ways to evaluate people to help you select the right people for the right jobs. I’ve found that no matter the specifics of the situation, there’s a rule of thumb you can’t go wrong with: hire people who are stronger than you, and don’t be intimidated by them.
This touches on a business issue that leaders have been wrestling with forever. Every business leader wants to hire the most talented people available. Even though that may look like an obvious thing to do, it can also mean hiring someone who, over time, is so damn talented that they end up taking your job from you. That can be threatening.
“One of the things about being a good leader is hiring people who are stronger than you, and if you hire people who are stronger than you, they’ll never take your job. They’ll help you keep your job.”
My advice: relax and choose the best people you possibly can. They’ll help you keep your job by performing to the best of their abilities in their own jobs. They may require less hands-on guidance, freeing you up to pay attention to other things. Thinking on their feet and making quick decisions may come naturally to them.
Great leaders are comfortable with the very best people around them because they know that the most talented people are those best equipped to anticipate and make the most of the change that’s constantly occurring.
But don’t make hiring smarter people a crutch, a situation where you can leave them to do all the heavy lifting, so you can look good. It’s critical to maintain your work ethic—otherwise that smarter person might, in fact, take your job. And, if that happens, you have no one to blame but yourself.
Be sure to rely on your experience when taking steps to hire the most talented people possible. That’s because someone, however smart or skilled, may not have the same level of experience as you. Not only can that valuable experience help keep you secure in your job, the combination of your hands-on savvy with another’s great potential can make for a powerful team.
It’s also essential to differentiate between meaningful change and fads. Fads tend to stick out as the short-term craze that they are—they have little in the way of genuine usefulness. For instance, Angry Birds may have been all the rage for a while, but that fad migrated as quickly as it came. Gluten-free food, on the other hand, has scientific reason behind it. People feel better eating that way. That’s no fad.
Another misstep I see among business leaders, particularly younger entrepreneurs, is a tendency to overreact. I’ve been around long enough to know that the best decision is sometimes no decision at all. Always work toward having all the information you need to make the right decision, but if you don’t have that kind of information, no decision is the best kind of decision—or, by the same token, the issue at hand is simply going to go away on its own.
Let me give you an example. Recently, Texas passed a law that anybody can carry a gun. Without getting into the politics of it, many businesses were struggling with how they should react to the new law. If they didn’t agree with the new regulations, should they put up signs in all of their businesses saying that customers can’t bring guns into their establishments? How could they communicate with customers if they agreed with the new law? What if they were somewhere in the middle, neither entirely in support or opposition?
In this instance, it was far better for us to do nothing. We reasoned it was much smarter to see how hot this topic remained and to let it play itself out. Why alienate any of our customers—no matter their politics—when the issue would likely cool down and resolve itself?
Which is exactly what it did.
Things have a way of working out on their own, and it’s valuable for business owners and entrepreneurs to recognize that and give the situation ample time to develop.
It boils down to a simple rule about leadership and change: don’t overthink things. That’s not to say you shouldn’t know your numbers inside and out, or that you shouldn’t do the most complete due diligence you can. But don’t go overboard. Don’t make an issue needlessly complicated by overthinking it.
Call it the 95:5 rule, call it the good old KISS principle (Keep It Simple, Stupid), but don’t needlessly waste your energy on issues that don’t warrant it. And that can include change—the one certainty about business that we can accept with the same level of certainty.
TILMAN’S TARGETS
• Change, change, change.
• A great leader accepts change.
• Don’t be afraid to hire people who are smarter or more talented than you.
• Sometimes the best decision is no decision at all.
• Don’t overthink. Allow things to play out.