Think twice about getting those awards

The more your business gets gongs, the better it is for your business, right? Well, yes and no. It depends on what kind of accolades you're getting. In an August 2024 Strategic Management Journal study, 'Double-edged stars: Michelin stars, reactivity, and restaurant exits in New York City', Daniel B Sands of University College London gives us something to chew on. Studying the openings and closings of NYC's elite restaurants, Sands found that 'receiving a Michelin star corresponded to an increased likelihood of restaurant exit' - more than 40% of these haute cuisineholes awarded an M-star in 2005-14 shut shop by end-2019. So, what gives - or went?

Whenever you get a gong of le Michelin kind - the highest 3 stars denoting 'exceptional cuisine, worth a special journey', which sounds even 'excellenter' in italicised French: 'Une des meilleures tables, vaut le voyage' - (1) expectations go up, (2) pressures to keep up with heightened expectations rise, and (3) fiscal logic to maintain inflated pressures to keep up with heightened expectations goes bonkers. Result: crash and bang in the posh pantry. So, best to keep things 'homey' with word of mouth doing the trick. The same holds for 'star' companies with diva CEOs and surreal salaries. Don't game yourself out of the park. The ancient Greeks had a name for this: hubris, a.k.a. Lehman Brothers.