NBOP National Board of Operations Professionals

Part four. The DecisionLesson 14 of 15

The steak

When the arithmetic says stop and the room does not want to, the argument is never really about the arithmetic.

The instrument The Steak

0:46. Captions on by default. Everything said here is also written on this page, so nothing is only in the video.

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A restaurant has a steak on the menu that loses money on every plate. The arithmetic is not in dispute. The chef will not remove it. The stated reasons arrive in a familiar order. It brings people in. It is what we are known for. Regulars expect it. Some of those are real and testable. Does it bring people in is answerable: how many tables order it, and what else do those tables order. Often the test comes back no, and it stays on the menu anyway. At that point the argument is not about economics. It is about identity, or about a person, or about a decision somebody would have to unmake in public. Every organization has a steak. Find yours, price it honestly, and then decide with your eyes open.

A restaurant has a steak on the menu that loses money on every plate. The arithmetic is not in dispute. The chef will not remove it.

The stated reasons arrive in a familiar order. It brings people in. It is what we are known for. Regulars expect it. Removing it sends a signal.

Some of those are real and testable. Does it bring people in? That is answerable: how many tables order it, and what else do those tables order. If the steak table spends more overall, the steak is a loss leader and it is doing its job, and the correct response is to say so and stop pretending it is profitable.

Often, though, the test comes back and the answer is no, and it stays on the menu anyway. At that point the argument is not about economics. It is about identity, or about a person, or about a decision somebody made once and would have to unmake in public.

That is worth naming plainly, because it is a legitimate reason to keep something and an illegitimate reason to pretend the arithmetic is unclear. An operator who says "this loses money and we are keeping it because it is who we are, and here is what it costs us annually" has made a defensible decision. An operator who keeps relitigating the numbers has not.

Every organization has a steak. Find yours, price it honestly, and then decide with your eyes open.

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