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How Applebee’s survived the recession

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Restaurant and Foodservice

Applebee’s survived the recession by creating a dialogue within its management instead of enforcing rigid operational mandates, said Wayne Vandewater, executive director of training at Applebee’s International, and Michael Norman, senior vice president at Sibson Consulting,  at this month’s HR in Hospitality Conference in Washington D.C.

The recession hit shortly after IHOP acquired Applebee’s and forged DineEquity in 2007. Applebee’s found itself in a contracting restaurant market as part of a fledgling corporation and with limited access to investment capital. Workers questioned who they should be answering to and what the new focus of the brand should be.

“We had an entire company that was waiting to be told what to do,” said Vandewater. To improve the situation, Applebee’s hired Sibson Consulting. Here are the highlights of the strategy they created:

  • Culture is the foundation of operations. One of the biggest risks that Applebee’s management took is that it made the decision to “improve the intangible, in support of the tangible,” said Norman.  A strategic initiative that starts at the top of the company will lose momentum at each level of leadership until it is all but lost on the consumer. Instead, executives should instill an innovative attitude in their directors and give them the freedom and confidence to enact their own strategic initiatives.
  • Leaders should act as discussion facilitators. Directors and regional managers get more out of talking to each other than listening to an executive deliver mission statements. The role of a leader is to structure a conversation that the participants will benefit from.  Executives should also identify the people within the company that really get the conversation and put them in positions where they can influence other employees. Peer-to-peer learning is more effective than executive-to-employee learning.
  • Don’t force people into the conversation. Applebee’s did not apply pressure on franchises to adopt the new strategy. They waited until franchises saw how other restaurants in the chain were benefiting from involving themselves in Applebee’s discussions. This created a pull within the company from Applebee’s franchises not a push from corporate leadership.
  • Executives should practice their ‘elevator’ speech. Leaders should be able to boil down points that they want to resonate with employees to a 60-second pitch. Once they’ve got that pitch perfected, they should communicate that pitch as often and as enthusiastically as possible.

Image: Applebee’s logo via