Lessons from San Juan: What I Learned About Consulting on Vacation

With a long weekend and a new baby due in March, my wife and I decided to cash in some of the airline miles and hotel points from my Big-4 years and take a mid-winter getaway to Puerto Rico. 

 

Before I get into my consulting takeaways, let me say: this was a great vacation. We stayed at La Concha on Condado beach in San Juan (A Marriott property, for any of my consulting friends looking to burn some points). I can’t say enough good things about the property and location: it’s a great blend of stylish and family-friendly, close enough to local restaurants so you don’t need to eat at the hotel, and has a great beach and pool area. San Juan itself is a vibrant city full of great food, music and people. We will be back.

It was also new: my wife and I don’t take many beach vacations and this was our first beach “resort” experience, our first time in Puerto Rico and our first time on a fly-away vacation with our 2.5-year old (he has flown a number of times, but not for a vacation). I love to see how unfamiliar places operate and this was no exception.

The three principles I found most interesting were:

  1. Owning Problems in the Beach Economy
  2. Not-so-Cutthroat Competition in the Bar Economy
  3. The Danger of Crowdsourced Information

Lesson 1: Ownership In The Beach Economy (aka Own Your clients' Problems)

Take ownership of your Clients' Problems and your Clients will take care of you.

On our first morning we ate waffles. A tanned gentlemen pushed two shopping carts – one empty, one filled with well-used boogie boards – down the sidewalk past the park where we were sitting. He appeared on the beach a short time afterwards, his empty cart now filled with fresh coconuts. He was the coconut guy. He walked to every chair on the beach selling fresh coconut water for $5. For each sale he would take his machete, chop off one side to make a flat bottom and then chop the other side to a point with a small hole through which he would put a straw.

Afterwards, he sat in the shade with his shopping carts, chatting with the hotel’s beach attendants, renting out boogie boards, and occasionally walking around the beach with a coconut or two in one hand looking for follow-up sales and newcomers. Every beach I've been to has a beach economy– the lemon ice cart, the necklace and hat sales merchant, the hair-braider, etc., so in that sense this wasn't particularly notable.

He was also the unofficial lifeguard. The beaches and the pools did not have lifeguards. Signs said the surf was rough and you swam “at your own risk,” but there wasn't any official person to save your life if you experienced aquatic issues. Apparently, our coconut guy decided since this was his part of the beach, he would fill this role. When people swam too close to the jetty or too far out, he blew a whistle and asked them to swim down shore. He asked people to stop boogie boarding or surfing in dense crowds. Most notably he feverishly grabbed a board and swam out to help a distressed swimmer twice during our few days there. There didn't appear to be a financial reason to do this – certainly none of us beach-goers would have thought he was responsible for our safety and I did not see him ask for or receive any tips for this work. It seemed like he decided it was his beach and so he was going to take care of it.

Over several days, several other people walked down to our end of the beach selling fresh coconuts. Invariably, they would walk down with four or five in their hands and leave with the same number. It was as if everyone at “our” beach tacitly agreed that we had “our” coconut guy and that was who we would buy from. 

Coconut guy established his market, made relationships with the influencers (the hotel’s beach attendants), and took ownership of the non-hotel operations of the beach. He made sure that he attended to us, his clientele, and in return we purchased coconuts exclusively from him.

Lesson 2: Competition is Over-rated (aka A Rising Tide Raises All Boats)

Make decisions for your business first. If other parties benefit along with you – even if it’s your competitors – then all the better.

On our third night we decided to go into town. One of the bellhops at our hotel (during a conversation that was another example of La Concha’s excellent service) directed us towards an area with a number of bars and restaurants the locals enjoy called La Placita. The restaurant he suggested had a 2.5 hour wait – ironically both affirming his recommendation and guaranteeing we would not be dining there – so we found another restaurant with strong local reviews and put in our names for the more reasonable half-hour wait, during which we stood in the street with a number of San Juan residents and watched a live band at one of the bars. 

Let me pause here and describe this area. The center was the farmers market. Although the market was closed, there were walk-up bars on each of the four corners of the building, all with long lines. On the plaza surrounding the market were hundreds of residents socializing and drinking and then on the streets that intersected with the plaza were probably 15-20 restaurants and bars, nearly all of which offered outdoor dining. The band we watched was the only live band in the area. The bar who hired them, Taberna Los Vazquez, placed them inside the building, but since all of the walls were open basically anyone in the area could listen.

Our 2.5 year-old loves live music. He probably thought dinner was a break from watching the band rather than the other way around. As we stood on the street listening, we got to talking with a number of people around us. Person after person said this was the best place to come watch live music “for free” in San Juan. The crowd became denser as the evening wore on and by the time we returned after our wonderful dinner (Asere– highly recommended, get the ropa vieja), the street was dozens of people deep with an audience.

Ok, sounds like a pretty cool place to visit. So what? The people in Taberna were there for the music. But most of the band’s audience was drinking something they purchased elsewhere. That isn't to mention the hundreds of people sitting outside at other restaurants eating and drinking and listening to the music. Well over half of the people enjoying the band had no direct financial impact on the people who were paying them.

In many cities, you walk through restaurant and bar districts and see enclosed places with bandstands and, sometimes, cover charges. At these venues, the owners do everything they can to fully capture the benefit of the live entertainment and keep it for themselves. Taberna Los Vazquez took a different approach. Live music was an important part of the atmosphere of La Placita. This atmosphere brought thousands of people to the area. It didn't matter the other businesses in the area were reaping the benefits of their band. That bar created much of the atmosphere that they also benefited from. So what if they were not the sole beneficiaries of the music?

Ruthless competition – particularly competition built on exclusion – is dramatically over-rated. It reminds me of years ago when I was working with Dunkin’ Donuts. One of their senior franchise territory managers told me that when a Starbucks goes in next to a Dunkin’ Donuts, the Dunkin’ business actually increases. I think we spend a lot of time worrying about what the other guys are doing, how they are going to compete with us, and how we can take their market share. We tend to jealously guard our information and intellectual property. While there are cases where this may be appropriate, in no way should it be the default. We need to understand what is right for our business, our people, and our customers. If other parties benefit as well, then all the better. 

Lesson 3: The Limits of Crowdsourcing (aka Beware of Benchmarks)

Just because a restaurant has great Yelp reviews DOESN'T mean it’s the best restaurant for you. Transfer this concept everywhere. Apply liberally.

Write here...

Our hotel was in a tourist area. It was one of many resorts on this stretch of Avenue Alcevido and counted among its neighbors a CVS, Walgreens and Ben & Jerry’s. As a result, Yelp was actively used for the restaurants in the area. Many of them had great reviews. These included the two Italian restaurants, two of the three burger restaurants, the Ben and Jerry’s and three “American-style” places.

But we were in Puerto Rico – home of, presumably, the best Puerto Rican food on the planet. We weren’t interested in eating Italian food – we can get plenty of that at home. So we asked for recommendations from locals and found many of the popular native restaurants just didn't have as many reviews. We ended up eating a lot of really good food (including a Cuban restaurant, in fairness)

The lesson here: before following your peers to the crowded middle, make sure you place it in your own context. We wanted to eat mostly Puerto Rican food. Someone else may have wanted seafood or burgers or Pina Coladas and they would have made different decisions. It didn’t mean we should ignore the reviews altogether, but we had to understand how they related to our goals – and this required reading some of the reviews and discerning the point of the view of the authors.

This re-affirms one of the cardinal sins of management consulting: beware of benchmarks. They can be instructive but they are overused and overemphasized. Nobody but you can know whether or not setting goals based on industry benchmarks or finding an implementation partner based on analyst reports makes sense for your business. Accepting that benchmarks matter because they exist, let alone accepting they are accurate because of the company that did the research, will lead you on an efficient and unrewarding march to the middle. 

Think your average close cycle is too long because the benchmarks say they are? Ok, so look closely at your sales and marketing operations. But that doesn’t mean they are inappropriately high. Maybe you build deeper relationships with your customers. Maybe half of the companies included in that benchmark manage revenue quarter-to-quarter so they accept deeper discounts to get faster sales but you manage your revenue stream on a longer-term basis and keep your discounts low. Unless you are a commodity product in a perfectly competitive market the benchmarks available to you contain innumerable nuances in the data and, therefore, should only be cautiously factored into your decisions. Otherwise you’ll be eating pretty good Chicken Parmesan with a beautiful view of the Caribbean Sea.

Stephen Ronan

Ronan Consulting Group, 06907

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