All Change for Breakfast

All Change for Breakfast

Americans love eating breakfast out, as evidenced by the plentiful breakfast restaurants. Whether chains or independents, there are over 9,000 businesses and 180,000 employees in total. Transforming the relatively intimate experience of breaking fast into a shared transactional experience is an American phenomenon. There is even a market segment for breakfast restaurants – the A.M. eatery segment – which is worth $11.1bn. While some analysts predict that the market will grow by 9.8% in 2022, they are less optimistic about growth beyond 2022.

Eating out, following the restrictions of the pandemic, may drive the 2022 growth just as inflation starting to bite may explain the post 2022 forecasts. The A.M. eatery segment is clearly very competitive and established chains are highly active in maintaining their appeal. For some, like Denny’s, this means hiring a new CEO and President, Kelli Valade, and acquiring a thriving chain in Florida – Keke’s Breakfast Cafe – for $82.5m.

A strategy of acquisition, as in this example of a chain that attracts millennials and Gen Z breakfasters and has price points around 20% higher than Denny’s, is compelling.

The challenge for newly hired CEOs, like Valade, is managing acquisitions of companies in the same segment, but with potentially quite different cultures and, at the same time, becoming immersed in the parent company. They have to hit the ground running and gather as much information as they can at a speed determined by quarterly results. Not only do they have to gain a good understanding of the needs and concerns of the stakeholders, they have to keep abreast of what the competition is doing.

For example, Dilip Rao, in his Fast Company article, points to the risks of not making an impact on elements important to consumers and employees, especially Gen Z, such as corporate responsibility and culture. He indicates that 71% of American consumers actively want to buy from companies committed to corporate responsibility. This is described as the impact infrastructure.

“Companies that publicly commit to helping underserved communities, contributing to specific causes (like fighting hunger, renaturing, reducing carbon footprints and pledging water positivity) or allocating resources to philanthropic endeavors will win passionate and loyal customers which, in turn, will drive sustained revenue growth.”

A good example, in the A.M. eatery segment, of a company with an impact infrastructure is Snooze, which supports local communities and makes impressive claims on sustainability.

The challenge for CEOs, in the A.M. eatery or any food service segment, is keeping people on board with required or desired changes whether to manage acquisitions or to create an impact infrastructure. In restaurant chains, employees, customers and leaders are distributed across a wide geographical area (thousands of miles in the case of America), and it is not always possible to observe people nor to communicate with them face to face. However, it is clear that constant monitoring and adjustment of transformation is necessary to keep changes on track and receive timely feedback.

How Tensense Can Help

Tensense has been helping organisations manage the effects of change and transformation programs for many years. Grounded in the science of Sensemaking, Tensense provides an early warning system for Leaders that surfaces unforeseen issues and gets the program back on track.

This is done by harnessing the instinct of the workforce, who see what is happening on the ground, and asking them how they feel the organisation is performing. This innovative diagnostic has been instrumental in helping large and small organisations successfully navigate change and transformation – allowing leaders to ‘read the room’ if you will.

This extra perspective can, figuratively, help leaders to see around corners and so be a game changer, because transformations will be disruptive, even if their goals are positive for the company. But don’t forget, despite the current intensity of change, disruption can, for those agile, forward-thinking organisations, turn out to be transformational.

Photo by Maria Bortolotto