Gordon Ramsay is one of the most famous chefs in the world, and rightly so. While his new reality shows focus on new chefs under pressure, his best lessons for the restaurant owner come from his earlier “Kitchen Nightmares” series. Here he worked with real restaurant owners who had troubled businesses. Every restaurant had different problems, but one issue came out over and over again… stick to your core competency! If your background is in Brazilian Barbecue, don’t’ also have a long pasta menu and French pastries. If your “signature dish” is not distinctive, then don’t have a menu with hundreds of items. If you do boast of a great signature dish, then never ever let Mr. Ramsay find out that it’s based on a canned, frozen or packed food product. Every kitchen has a limit to how many dishes it can make well. And so too does every firm have a limit to how many services it can (and should) produce itself. The question is, "Which do you manage yourself and which do you have someone else do for you?"
In episode after episode you see a failing restaurant, with empty tables every night, where the owner extols their extensive and “beloved” menu. Ramsey usually ask the owner if it is practical or even possible to produce so many menu items every night. The answer is always, “Of course we can do it. Besides the customers LOVE each and every item. And we enjoy hand crafting every item.” Ramsay tastes the food himself (awful), ask the kitchen staff what they think (awful), and asks if the wait staff has had feedback from the patrons (awful). When the owner is confronted with this information, the response is either, “I thought they loved it (but I still don’t want to change),” or "Well what do you expect? Don’t you know how hard it is to serve an extensive menu?” Next Ramsay finds that some items aren't even homemade (prepared sauces, frozen entrees, etc.). That’s when we get Ramsay’s signature advice: Find out what you do well, make use of local advantages (fresh fruits, vegetables, fish and livestock), and always make sure you can do it at a cost that won't put you out of business.
That’s good advice for just about any company. Focus on your core competencies! Don’t try to be everything to everybody. As part of your outsourcing process you may find that there are functions that you perform that should just be stopped, rather than outsourced. Make use of local advantages. New York is one of the most expensive labor markets in the U.S., but it also has some of the most skilled knowledge workers in the world… how does your outsourcing program leverage advantages? And always, always keep your eye on costs. That doesn’t mean that you should run the cheapest service, but your service does need to deliver VALUE!
Take a look at some of the best restaurants in the world. They make entrees that the nouveaux riche drool over and deserts that make grown men weep. They have the talent to bake, sauté, and deglaze their way to culinary perfection. Yet, many choose to outsource the baking of bread and other items. It’s not a matter of cost. Many lower cost dining establishments bake their own breads. And their customers are loyal to their fresh bread, breadsticks and other baked goods. It’s a matter of individual choice. Still, when you’re in a high-price restaurant take a look at the menu and you may see, “Breads made by… Eli’s, or Balthazar, or Bouley Bakery.” Sometimes outsourcing works so well that top tier restaurants even advertise their outsourcing choice.
Every firm that is preparing to run its first outsourcing program worries that they will ruin their secret sauce. It’s a legitimate concern. But an equally legitimate concern is how well you’re handling all the other dishes in your kitchen. If we could each get a chance to speak with Gordon Ramsay, he would tell us, “Commit to a menu that you know how to do, and do well.” And that may be the best recipe for success for all of us!