In early 2015 I read the chronicled tale of a gentleman – Mr. Andrew Davis – who penned a weekly letter to Mr. Warren Buffet. Every weekend he sat at his desk with parchment and pen to write his thoughts on the newspaper industry – an area Berkshire Hathaway has invested in for some time.
In his weekly notes the author would posit his ideas and invite conversation at any time convenient to Mr. Buffett. Perhaps unsurprisingly, Mr. Buffett forwarded the letters to relevant colleagues and recommended they contact the author directly to discuss his ideas – which they did. Although it may have just been serendipitous, the author met Mr. Buffett on the set of the Today Show. After 42 straight weeks of collateral craftsmanship, Mr. Davis met his mentor (though his goal of interacting with Berkshire’s media business was reached much earlier).
This had me thinking about the restaurant industry. I wondered if, knowing the magnitude of the opportunity, chain operators could follow in the footsteps of other industries to improve their business. That is, could proven methods with well-documented results cross the chasm to a recalcitrant industry decades later?
So I set out on my own personal quest: if a man worth more than $60B would send response within weeks, executives at restaurants, who lack basic solutions and have large upsides, would certainly jump faster.
I’d seen the YUM TACO franchisee data system, worked over transaction data from many franchisees, and learned there were vast areas for improvement. I read daily about McDonald’s struggles to slim its menu, implement digital (as of this publishing they still haven’t rolled out mobile ordering), and remain relevant. I knew Starbucks was working on an adult beverage roll out and lacked actionable data for on-premise trending.
Like Mr. Davis before me, I set out on my letter writing quest.
Every week I wrote a letter to the three restaurant executives. I would share thoughts and experiences that, if used, could benefit their businesses. The real magic in everything I suggested was that it had been implemented in other industries – often decades earlier – and continued to prove its value present day. And from my knowledge of restaurant industry systems, these operators were not acting on any of the proffered topics.
After 30 weeks without a single response I abandoned my efforts. For comparison, Mr. Davis personally tells me that Mr. Buffett’s Berkshire colleagues responded within several weeks.
Why didn’t any of these three restauranteurs respond? Your guess is as good as mine. But I failed. I failed to inspire proven change in a laggardly industry. I failed to educate industry executives on common-practice methods with instant benefits. I failed to move restaurants forward.
It’s also remotely possible these restauranteurs failed their companies. They failed to listen and make requisite changes to stay competitive. They failed to act on opportunities that do right by their employees. They failed to improve returns for their shareholders.
That’s a lot of failure to go around. Will we ever know the severity of these restaurants’ inaction? Only an activist investor could prove it. But don’t expect Mr. Buffett to get involved: none of these three restaurant executives would bother to return his message.