The center-cut solution.

Abstract

Timothy Firnstahl owns five successful restaurants in Seattle, but he recently came very close to owning none. In the early 1990s, he found himself, like so many restauranteurs, facing rising costs, inefficient management, and a recession. Confronting financial annihilation, Firnstahl had to act quickly: since he had no peripherals to trim, he cut off the head of his company. Remarkably, it worked. Firnstahl's problem was his new and innovative restaurant, Sharps Fresh Roasting. The heart of the Sharps concept was a unique long-roasting technique that made lean, inexpensive meats taste as juicy and delicious as fattier, expensive cuts. The process also lent itself to faster service and lower labor costs. But it wasn't working. Sharps wasn't breaking even, and his other restaurants couldn't make up the difference. He needed a solution fast. Firnstahl got his answer from Mikhail Gorbachev: slash the centralized command and liberate the company. In doing so, he would also transfer virtually all power and responsibility to his line managers. And after five months of intensive study and planning, he accomplished what he set out to do. He fired most of his corporate staff, empowered his restaurant managers with "100% Power and Responsibility," and, finally, undertook a massive promotion campaign. A year later, Sharps Fresh Roasting is the gold mine Firnstahl always believed it could be. He's done away with bureaucracy and turned business around in a down market. All this because his managers are managing themselves.