Olive Garden as Illustrative Case

[prog_expat]

An article in Salon reveals what's really behind that weird presentation from hedge fund Starboard Value about how to "fix" Olive Garden.

Comments

[mikeyxw]

Looking through the plan that BDJ referred to really shows how off-base Salon is. Most of the changes are about overcooked pasta, endless breadsticks which are being refilled just because the last batch was cold, and a menu for an Italian restaurant that includes tapas and burgers doesn't exactly fit the moving cash from one pile to another. Check out slide 10 for the full list. This seems to be exactly the kind of thing a large investor should be doing and is about as far away from shuffling money from one pile to another as you can get. Take the following quote for example: "According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots." WTF?!? Did Salon miss this? Almost all of this deck, including the parts about recommendations for new board members, are about creating a better guest experience and reducing waste.

This is unfortunately pretty much a trend for Salon, the article seems to have very little to do with what is actually happening but is more a reflection of the bias of the authors. Yeah, there are some recommendations about how to handle real-estate, such as moving it to a separate division in Darden to be managed independently of the restaurant, but this isn't exactly the kind of thing that a large investor should ignore.

[mikeyxw]

BTW, the line "According to Darden management, Darden decided to stop salting the water to get an extended warranty on their pots" referred to the water they use to cook their pasta in. Again, WTF?