Regional Innovation and the “Known Quantity” Dilemma

Inspired by an Open Letter written to Town Board (TB) members of New Castle, New York: New Castle doesn’t deserve “good” it deserves “great”, I was reminded of the “Known Quantity” attitude. This letter was written by my friend and classmate from undergraduate Hotel School at Cornell University, Peter Chase ’89, and his wife, Erin of BPC World  You can find the text of the letter below as published in NewCastleNOW.org. 

Newcastle is a town of around 18K people in Westchester County, New York. Chappaqua is a “hamlet” of Newcastle and has a train station. Many ride the train into Manhattan for work, so its basically a commuter town.

 

Chappaqua Train Station in New Castle, New York.

Chappaqua Train Station in New Castle, New York.

Chappaqua is a great place for families and has a fair population of Wall Street’s bankers living there that enjoy a “small town” walkable downtown area. You can get a better feel for the town and community through this video below:

SAGA OF the KNOWN QUANTITY

The long and short of the story is that Peter and his wife submitted a proposal for an innovative restaurant in the town’s train station.  You can see the presentation and the town board meeting below:

 

 

Peter has a successful track record of operating innovative restaurants. When they did not win the bid, after some pushing they were told that the winner won because

“she is a known quantity and no one knows who Erin and Peter Chase are.”

Appalled by the criteria of “Known Quantity” Peter was motivated to write the letter, as he should, which was then published. It it he explains

“…to answer the question of who we are, we have been in the hospitality industry since 1989, just the hospitality industry – it’s what we do.  We have been involved in creating, opening and operating more than 40 restaurants and bars in New York, Los Angeles, San Diego, San Francisco, Las Vegas, Miami, Atlantic City, London, and Montreal.  We both attended Cornell University’s School of Hotel Administration.  We are currently re-concepting the entire public space of two hotels, and operate in food and beverage in 5 hotels internationally.  Oh, and we just happen to live here in Chappaqua.  Most of this can be found out quite easily by watching our presentation or just taking a few minutes to look at our website.”

Knowing Pete now for 29 years as I do, I can assure you that the town of Chappaqua missed out on something great for its downtown and its train station. Below  you will see the video presentation to the town on the 24th of February, 2014.

 

Presentation to Town Board of Chappaqua by Peter and Erin Chase

 

WHY KQA SUCKS

The Known Quantity Attitude (KQA) is a deterrent to innovation in a region. Essentially, it is an aversion to outsiders, and a resistance to change. It is anti-entrepreneurial and anti-innovation and anti-progress. Its pervasive in many towns, cities and regions. In short, it sucks.

KQA is used by its purveyors as an excuse to keep the status quo, reward their friends or their friend’s friends, and avoid upsetting the apple carts in their known worlds. It’s also a great excuse not to do research, the homework, the due diligence necessary. Perhaps that saying “The devil you know….” has brainwashed too many.

Linguistically the term is interesting as well. The first word, “known” is more obvious and relates familiarity of course. The second is telling, however. “Quantity” of what? I have interpreted this to mean “quantity of risk”.  Folks, ideas or things we don’t know are perceived to carry more risk than those we do know. So quintessentially, KQA is about risk. OK, Clouser,  you say, we know that, who cares?  So some people are risk averse, who cares?

As an entrepreneur, and an academic, I have experienced both in both regional and entrepreneurial settings. Victoria, British Columbia (Vancouver Island) has a pervasive KQA.  In fact, it was from my another classmate, this one from the MBA ’99 at the Johnson School of Cornell University, Geoffrey Archer of Royal Roads University’s Eric C. Douglas Centre for Entrepreneurial Studies that I first heard this term.  Universities often have KQAs as well, and this is why they have built in systems to make sure that people cycle in and out from other universities and regions at the research level. On reason why universities won’t hire their own PhDs on the tenure track, for instance; and why tenure is so difficult to get int he first place. However, despite these mechanisms, universities still have a high degree of KQA. I experienced this during my PhD research phase at the University of Edinburgh, for instance.

Since KQA sucks, organizations, including governments, have to guard against it and constantly monitor the airwaves for it. Why? Because its at the very heart of of the status quo, of certainty, which is the antithesis to creativity, innovation and progress.

KQA quelches good ideas, entrepreneurial energy, and ultimately innovation and thus value. But what can be done about it?

Here are but a few bullet points that can be used to shoot KQA in the head in region, organization and government:

  • Welcoming Outsiders
  • Fresh Blood
  • Liberal Immigration Policy
  • Research
  • Analysis
  • Education
  • Transparency
  • Respect for Data
  • Analysis of data
  • Open minds and hearts
  • Sharing Knowledge
  • Humbleness
  • Exploration
  • Risk-reward analysis
  • Taking Risks
  • Flexible policies
  • Big Data
  • Collaborations (especially Triple Helix-types between the triad of government, universities and industry)
  • Embracing entrepreneurship, innovation and creativity

 

Most regions are subject to KQA, and this is one reason why innovation is so concentrated in certain regions. In my experience, probably not surprisingly, Silicon Valley has the least quantity of KQA. Edinburgh is getting there but still has a bit in the cogs. Pittsburgh, plenty of KQA.

RESOURCE-BASED VIEW of KQA

Some understanding of KQA is needed here as it usually is correlated to a lack of resources. KQA people think KQA preserves resources. Anti-KQA people understand that it does more harm and good by retarding the growth of these resources in the region or organization. In fact, KQA is the reason for the minimal resource pile in the first place.

 

STATUS QUO FINDS COMFORT IN KQA BUT IT COMES WITH HIGH OPPORTUNITY COSTS

“Known Quanity” is a dilemma for while it is a comfortable and easy fallback for the status quo and those with power and resources, it ultimately retards progression and economic development.  The opportunity cost of KQA is high. The lack of innovation and progression in region or organization harms others whose lives would have been made better without the KQA. “Known Quantity” is doublespeak for “Current Stagnation” so beware when you hear this term bandied about.  Those who use it assume a certain , albeit odd, privilege. They are on the inside and you are not, despite the fact that many of them are funded by taxpayer contributions in their government or university roles.

Those who recognize and thwart KQA end up making real organizational or regional change and thus are feared. For example, I can remember one university administrator who purposely brought in a business development person for a commercialisation role from the outside — so far as outside the country as well. This person was talented and experience and challenged the status quo. That is exactly what she wanted. While not comfortable for some, this person delivered results and made great strides for change which set the platform for further innovation (and, funding, which of course the university was thankful for.)

Unfortunately, things didn’t work out so well for my fraternity brother Peter and his wife Erin at the train station in Chappaqua. However, being entrepreneurs, they will keep trying.  I hope he eventually upsets the apple cart there in the town’s center and can catalyze the anti-KQA movement. From a conversation I had more than 10 years ago in a marketing professor’s office about entrepreneurs I am reminded:

“The entrepreneurs I know, they try and fail, and learn and try again. They keep trying and trying and trying until they make something work”

-Professor Emeritus Peter Renaghan, Cornell University School of Hotel Adminstration

 

WHAT ABOUT YOU AND KQA?

What about your town, region or organization?  Please comment on KQA. Provide any examples. Answer the question

“Well, what can we do about it”

————-

Letter as posted on NewCastleNOW.org on 19 May 2014:

Open Letter to TB members: New Castle doesn’t deserve “good”—it deserves “great”

Applicants for train station lease gravely disappointed in the process and final decision
Monday, May 19, 2014
by Peter and Erin Chase

Dear Mr. Greenstein & Town Board:

Our family moved to Chappaqua because we fell in love with the small town feel and sense of a strong community.  We immediately knew we wanted to open a small restaurant and be a part of this community.  For almost a year we have been working with a local broker trying to find a space to lease.  In February we were made aware, by our broker, that the train station was possibly available, as negotiations were breaking down on the lease.We quickly put together a proposal and presented it to the board along with Carla Gambescia on March 11, 2014 .  The following week we attended the other two presentations from Leslie Lampert and Gerry Petraglia.  All presentations were done prior to the RFP being issued and on March 20th we were given the RFP with a deadline to submit it by March 28th.  We then waited to hear.

After waiting two weeks we reached out to Mr. Brodsky and were informed that indeed the town had made a decision, but due to negotiations he was not at liberty to tell us who was chosen.  Yesterday, we were made aware of the fact that Leslie Lampert was chosen.  We spoke to Mr. Brodsky today and he did confirm that they were negotiating a lease with her as “she is a known quantity and no one knows who Erin and Peter Chase are.”  If this is the test for new businesses coming into our town, we will have a difficult time attracting new and unique businesses.  After all, people come to our town to experience something new and different, not something they already know.

So, to answer the question of who we are, we have been in the hospitality industry since 1989, just the hospitality industry – it’s what we do.  We have been involved in creating, opening and operating more than 40 restaurants and bars in New York, Los Angeles, San Diego, San Francisco, Las Vegas, Miami, Atlantic City, London, and Montreal.  We both attended Cornell University’s School of Hotel Administration.  We are currently re-concepting the entire public space of two hotels, and operate in food and beverage in 5 hotels internationally.  Oh, and we just happen to live here in Chappaqua.  Most of this can be found out quite easily by watching our presentation or just taking a few minutes to look at our website.

Businesses have been closing downtown, one being a restaurant.  One complaint we keep hearing over and over again is that the town is having a difficult time drawing non-residents to its downtown core.  Leslie’s Ladle of Love and Café of Love are just a 10 minute drive away from the train station. How do we expect this to draw people to our town? The original is offered one town over, and the parking is easier. How is this helping our town?

Watching Leslie’s presentation to the board is even further proof that what she will be offering is not unique.  She mentions that she will close at 8pm.  Shouldn’t we expect our restaurants be open a little later? Our town is becoming a ghost town at night, it needs energy. Robert Greenstein to Leslie “What is the name of the place going to be?” Leslie’s response “I don’t know.” Robert Greenstein to Leslie “I like the idea of Chappaqua having something original.”  We agree with you Mr. Greenstein, Chappaqua needs something original. Do we really need another place that offers soup and ice cream that is in direct competition with our existing small businesses? Our town needs a unique offering, and it doesn’t deserve good, it deserves great.

We were committed to investing several hundreds of thousand dollars into the train station and as per Leslie’s presentation she “will do nothing to the station” as she likes to “drive the car before I buy it” – does our town really need someone to test out the train station or would we prefer someone with a long term committed investment?  Furthermore, we were prepared to pay market rent, significantly greater than the prior RFP.

As residents we are gravely disappointed in this entire process and the final decision that was made.  We do not think this will help our town grow.  The train station is the epicenter of our town and should have a unique offering to help draw more people.  In our opinion, the exact opposite decision was made.

Sincerely,

Peter and Erin Chase

———–

About  Peter Chase from BPC World  http://www.thebpcworld.com/


peter chase


For as long as he can remember, Peter Chase has been obsessed with the social intercourse between a host and his guests- the practiced art of hospitality. At a young age, Peter began his career as a summer apprentice on Cape Cod working for Chef Carl Johnson at the Coonamessett Inn. It was there, doing everything from weeding the herb garden to making lobster bisque, that he got his first taste for restaurants. Years later, having held every job imaginable in a restaurant, he graduated from the famed Cornell School of Hotel Administration and accepted one of only eight highly coveted positions with Four Seasons Hotels. Initially he worked at Truffles, one of North America’s most revered restaurants, before moving to Chicago to assist with the opening of the group’s first Five Star/Five Diamond property, the Four Seasons Chicago. After two years and the creation of two worldclass restaurants Peter sought out a new platform for his talents assisting with the creation of Roberto Ruggeri’s second restaurant in the United States, Bice Chicago, which remains one of the city’s landmark institutions. Following Bice, Peter’s reputation for fresh concepts and effective execution secured him a spot with Pino Luongo in the development of Coco Pazzo. For the next three years, he worked hand-in-hand with Luongo in the creation of three other high-end restaurants, including Mad 61at Barney’s and Amacord before moving to the group’s flagship property, Le Madri in New York City.

At twenty-seven, when others his age were just getting used to the idea of full time work, Peter joined forces with Chef Mark Strausman to create their own restaurant, Campagna. Peter’s brilliant management catapulted the restaurant to the forefront of New York City’s dining scene where it saw more headlines and A-list celebrities than one could count. Dubbed “media central” by New York Magazine, it was the catalyst that inspired the revival of both the Flatiron district and the Gramercy Park neighborhood.

Campagna afforded Peter a platform from which to flourish. Over the next several years he consulted in the creation of several restaurants and launched BASH, an event planning company for prominent clients socializing globally. In 1998, Peter worked with Hakan Swahn and Marcus Sammuelson, developing a division of their three-star restaurant Aquavit in Minneapolis. Later he accepted a position as the Director of Operations for the group.

In 2000, after the exodus of Rande Gerber, Ian Schrager sought out Peter to manage and develop bars at each of his hotels. In his new capacity as Vice President of Bars, he oversaw fourteen bars in nine hotels, spanning New York, London, Miami, Los Angeles, and San Francisco, and the creation of several new ones. After his extraordinary success with Ian Schrager Hotels and with Ian’s full support, in 2002 Peter founded bpc short for ” by Peter Chase”, a company whose primary interests are developing and managing creative hospitality concepts. To date, choice creations and clients include the overnight sensation Skybar Miami Beach, the nightlife altering Wunderbar at the W Montreal, as well as, MGM Grand Casinos (MGM, Mandalay Bay, Luxor, Borgata) in Las Vegas, Detroit and Atlantic City, Caesars Palace, Planet Hollywood, Garden of Ono, and the W San Diego. Most recently, Peter, together with his partners in Collective Hospitality, conceptualized and opened Millesime at the Carlton hotel in New York City to rave reviews.

Peter excels in every possible hospitality medium and continues to evolve his art. With accolades aplenty, it is easy to see why Peter is considered by those in the industry to be a rare talent and a heavyweight of international stature. He is a concept specialist, a consummate professional and a true host in every sense of the word.

 

About Erin Chase

 

erin chase


Erin began her career, after graduating from the Cornell School of Hotel Administration, in development with Ian Schrager Hotels working as an Analyst on ground-breaking projects including the Hudson, Clift and Miramar Hotels. In 2001, just after September 11th, Erin followed then Chief Finacial Officer for Ian Schrager Hotels to Kerzner International Hotels where her work as a Feasibility Analyst included Atlantis in the Bahamas and the burgeoning One & Only brand. After two years with Kerzner, Erin made her way back to New York, joining the Weitzman Group where she worked on commercial and residential projects throughout the United States.

In 2005, Erin rejoined Kerzner International, this time based in New York City, as a Senior Feasibility Analyst focusing on a 1,000-room hotel expansion in the Bahamas as and a Singapore resort and casino bid. Having completed both projects, Erin left Kerzner to join forces with Peter at bpc and to further seal the relationship the two were wed on August 20th of that same year.

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