As those of you who keep up with Pizzaiola Flatbread 'n Stuffed Rigatoni-related feuds between activist hedge funds and Italian-American chain restaurants know,
some 19 months back, Starboard Value made a bold claim: that the Olive Garden was good but it had the potential to be great. The firm released a 294 page presentation detailing how the OG could make the jump, with tips on everything from salting the pasta water to pumping the brakes on the free breadsticks. The specificity of the advice surprised some, but if anyone was laboring under the assumption that it came from a bunch of suits who didn't know their bucatini from their cavatelli, or what it's like to juggle two 8-tops on a night the line cook is dishing serious 'tude, think again!
After Starboard Value took over the board of Darden Restaurants Inc., the hedge fund wanted its newly minted directors to have a feel for the business. So it put them to work. Every board member worked a night in a restaurant, said Starboard Chief Executive Officer Jeff Smith, who also is Darden’s chairman. Smith said he waited on tables and served food in the kitchen. “It was not undercover -- everyone knew,” Smith said in an interview on Bloomberg Television’s “Market Makers” with Stephanie Ruhle and Erik Schatzker. “It was an amazing experience. We felt we could not make the decisions without knowing what was happening in the restaurants.”
Obviously this should be the new standard for hedge fund managers demanding change of companies. Before another Sony, Dan Loeb will work the craft services table on a summer blockbuster shoot; Carl Icahn will don a teal tee-shirt and jump behind a genius bar to troubleshoot your Mac. It's too late now, but things might've turned out differently if Bill Ackman had spent a couple weeks asking Barnes & Noble customers if they wanted to save 20% today by becoming a member.