How to Survive a Double Whammy? Keep the Faith

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P.G. Wodehouse once wrote, “You can’t make an omelet unless you break a few eggs,”   and in order to get to a sound economy, we first have to go through transformative times. “We needed to get here,” said Zane Tankel, owner of 34 Applebee’s on the East Coast, including the one we were sitting in at Restoration Plaza, on Harriet Ross Tubman Avenue, aka Fulton Street, the heart of Bedford-Stuyvesant, where all the workers called him Zane.  “I’m a student of the economy,” said the Wharton School of Business graduate. Toxic mortgages are only Phase 1, according to Tankel.  “Phase 2 will be when the good mortgages begin to respond to rising unemployment”, which he predicts will be about 11%-12% nationally.
“And we needed to get here,” says Tankel, speaking of a consumption-driven system that had become unsustainable.  “The consumer in America had too much choice” with the only difference between products being brand names,  contends Tankel.  But with brand names clamoring for attention, retailers were forced to carry large inventories, across too many brands and “inventory is money sitting in a box”, he says.
Tankel’s comments were born out in a just-released report by the NFIB survey on small businesses.  “Small business owners continued to liquidate inventories. A net negative
27 percent of all owners reported gains in inventory stocks (more firms cut stocks than added to them, seasonally adjusted), unchanged from April and May which posted record lows. Inventories have been reduced at a record pace, continuing 25 months of negative readings in a row. It is hard to believe there is anything left on the shelves.”
For those looking for a quick turnaround, quick being a year, there will only be  disappointment he says.  “An upturn is always triggered by the consumer, but with the high unemployment, there’s no one to buy.  Retail sales are still struggling.” Tankel says that “this system will be going through a resetting process” as a new reality takes hold.
“For retailers, that means closing unprofitable stores, stocking less and hiring fewer stock clerks.”  This, in turn, cascades down through all of the industries and job descriptions  that are interconnected in varying degrees.  Whether it’s fewer truckloads, fewer dockworkers or fewer patrons at the highway diner, there will “simply be less of everything” and we’re gong to have to ride it out.
As Tankel says, “All of these changes are happening underneath”, and that’s the problem the Obama Administration is working with.  “I know some of the real players, Obama’s right-hand people” who are tasked with managing the economy, he says. “Most of the Geithner team projections dealt with the most optimistic turnaround in the economy.  “We’re going to have to do another trillion in” as a stimulus, he says.  “I said about a year ago that we’re not coming out of this soon.”
And of course, mixed in with all of this, is that across all businesses, particularly small businesses that hold the bulk of the national hiring, there is the increased use of technology as a means of production, consolidate professions and job slots into computer programs and longer nights.
Tankel insists he is not a “doomsayer” but an optimist who is also a realist.  “In a best-case scenario, we’ll bump along on the bottom like we are now for maybe another year or so.”
That Zane is an optimist cannot be denied, because he is putting his money on the table, opening three restaurants at the very moment the nation is going through this economic storm.  “It helps to be a little crazy,” he says by way of explanation.  “I’m by nature a risk-taker,” not a surprising statement from someone who has climbed Mt. Everest on an  expedition without Sherpas, they call it traveling light.   “I’m not driven by money but by excellence.  This is an opportunity to get some great sites at strategic pricing.  We’re going to Jamaica Avenue in Queens where the rents a year ago were literally double what they are now.  So if I can get in at half-price, I have to do it.  If unemployment goes to 15%, that means 85% are working.  I like those odds.  That’s how I do it and that’s what I tell our people.  Right now with unemployment at 9.5%, that means 90.5% percent of people are working.  We can’t be down or depressed about that.  Ninety percent of the people we need to put in our restaurants can come there.  “It’s all about the attitude. Maybe if you see me driving a delivery truck in a few years, you’ll know I guessed wrong.”
Carl, a manager, was leaving and stopped at the table and Tankel asked about his daughter. After Carl left Zane said, “He’s a single father, I saw him shopping at Atlantic Terminal with his daughter and we had lunch.”  Actually, Carl was only one of a succession of hellos and hugs as employees stopped by and were greeted by name.  Zane takes pride in knowing the names of almost 4,000 employees.  “I work at it and I know how important it is to them,” said Zane, noting that as he said to them at the initial training sessions with employees, “I know if you’re happy, the guest will be happy.  I know if you’re unhappy, the guest will be unhappy.”
Helping with morale is the prospect of a career with the company, moving from server into management.    Doshia King (See sidebar) is the young woman from Bed-Stuy to go into our management program.
Asked about Applebee’s reputation for giving formerly incarcerated people a fair chance at being hired, Zane says he’s had good experiences “and that’s why I continue to reach out.  Do we win every time? No.”
We suggested that most people see “formerly incarcerated” on a resume and it’s the kiss of death.  “We don’t do it that way.  People are able to pay a price and move on. When we opened this restaurant, more than half were formerly incarcerated.”
What is most surprising about that is the level of competition faced in the initial hiring.  “We interviewed several thousand people for what wound up to be seventy jobs,” and as he told them at that first meeting, they had not just been hired, but rather selected.  He reminded them that they were special.
We asked Zane why he came into Bedford-Stuyvesant with unemployment so high.
“There has always been a high unemployment rate in Bed Stuy, we knew that coming in.  we weren’t strangers here. I spent more time in Bed-Stuy than any site we had.  Most people were running from Bed-Stuy.  I would come here at all hours and watch the traffic flows and the people and found that most folks were pretty nice.  99% of the people are families just want what every other people do.  And you don’t turn your back on a neighborhood because of a bad 1%.   We felt this could be a paradigm for Bed-Stuy.  I tell people if they want to see a really well run restaurant, go to Bed-Stuy.
“Look, there’s about 150,000 people in Bed-Stuy, and if 50% are unemployed that mean 75,000 are employed.  That’s more than enough for us.  We can only seat 200.
I did not do this philanthropically on the one hand, but on the other hand I thought it was good give and take. Service a community, make money, without ripping people off.
Zane acknowledged that business has fallen off with the construction going on and a shroud-like netting over the entrance. “Look, when this Restoration Plaza gets finished, it’s going to be so “out of sight, it’s going to be worth the wait.  It’s going to be over the top.  We wanted to have a jazz combo on the terrace, but we’ll do it next year.  Nothing comes without sacrifice so we’re sacrificing now.  We just have to grin and bear it.”

Sidebar:

On A Career Path- Doshia King

Doshia attended Ebenezer Preparatory School and Boys and Girls High School during the Mickens era.  She says,   “Frank Mickens was the most incredible educator I’ve ever come in contact with.  He always wanted not only his students to succeed  but the Black and Hispanic community.  He was a father figure to a lot of people.”  She attended Medgar Evers College for 2 years then got her Bachelor’s in Hospitality Management from New York College of Technology where she had the opportunity to intern at Disney World to complete her degree.  “I got hired in 2006 and started as a server for about three months, then moved to bartending for about a year-and-a-half.  Then I became a Neighborhood Expert, someone who trains new people and then moved on to supervisor.”    She then moved to the “back of the house,” where she cooked, broiled and prepared food for the plate. After 8 weeks in the MIT, (Managers-in-Training), Doshia is an official manager in Astoria. And will be the service manager of a restaurant opening in the Bronx. “I’ve been with the company for 3 ½ years and I guess my progression has been fast.  I want to be a general manager of a store and eventually perhaps an area manager in years to come.”
Asked what she liked most about the company, Doshia replied, “They appreciate the work you do.”

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