Here’s what I imagine happens.

You decide you want to own a restaurant. You find a location and make it look pretty inside. You create a menu that you think is good. Then you open your doors with bright eyes and bushy tails and visions of a mad rush right around the corner.

Maybe it’s not quite the mad rush you were expecting, but customers come in and try the restaurant.

“The food is good,” they say with a smile.

You feel great about that. That’s how any mad rush begins, right?

But the masses don’t come. Over the next months, new people keep showing up at the restaurant to try it. Maybe even two or three turn into regulars.

In fact, Max and Martha now eat there the first Friday of every month. Aren’t they just the cutest thing ever?

“There’s something special about your pork tenderloin,” Martha tells you with her hand on your arm. Max nods and smiles.

But you look at your financials every month and, dag-nabbit, you still don’t have enough customers to get to profitability.

You decide to close on Mondays to save on labor expenses. You make the big decision and breathe a sigh of relief. But at the end of the month you look at your financials again and it still doesn’t cover the losses.

Time to consider reducing costs on the menu. The tenderloin is the highest costing item. You should remove it from the menu.

“But we can’t hurt the regulars,” you say. “Max and Martha will be so disappointed.”

So you get rid of a bunch of other menu items instead.

But, alas, there is no mad rush. There is no growth. It’s just steady traffic that falls below profitability.

Then you have a brilliant idea: Live Jazz on Thursdays!

This will work. You know it will. This will help the restaurant survive.

But it won’t. Four months later you shut down.

The Wrong Indicators

Everybody else sees the ship sinking.

You may think advertising Live Jazz on Thursdays will reinvigorate your traffic, but I can assure you that customers can sense a desperate Hail Mary when they see it.

When the band continued to play while the Titanic was sinking, do you think people said “oh look, live music! Everything must be fine”?

The answer is “no, they didn’t”. The ship was sinking. They got themselves the hell out of there.

Here’s the thing though, the restaurant owners could’ve seen the signs of stagnation far in advance. They could’ve addressed it.

Unfortunately, they were so focused on lagging indicators that they didn’t pay attention to all the signs.

In fact, here are some of the metrics that should’ve caused alarms to go off in their business leadership minds:

Most customers weren’t coming back a second time.

Most customers weren’t recommending the restaurant to their friends

There wasn’t a meaningful increase in the number of loyal customers

They weren’t implementing a feedback loop to understand how to create a better experience

All they did was look at their financials and keep slashing away.

Does that sound like you? Without the restaurant part.