Monthly Archives : April 2016

How to Implement Management by Checklist with follow-up in your Restaurants

Pilot flying with checklistManagement by checklist is exactly what you think it is; it is the art of managing your restaurants by using short, focused checklists to ensure that the most important operational details aren’t missed on a shift-by-shift restaurant-by-restaurant basis.  The practice is modeled after airplane pilots and their use of checklists.

Checklists work, plain and simple.  We recently surveyed over 100 restaurant owners and managers.  We asked the question; do you think that you could save money and serve safer food if you used checklists?  They all said yes, 100% yes.

There is a great book out about checklists, The Checklist Manifesto; the book discusses how checklists are driving better operations and protecting professionals from failures across multiple industries.  Here are some quotes from the Checklist Manifesto, by Atul Gawande

Here, then, is our situation at the start of the twenty-first century: We have accumulated stupendous know-how. We have put it in the hands of some of the most highly trained, highly skilled, and hardworking people in our society. And, with it, they have indeed accomplished extraordinary things. Nonetheless, that know-how is often unmanageable. Avoidable failures are common and persistent, not to mention demoralizing and frustrating, across many fields—from medicine to finance, business to government. And the reason is increasingly evident: the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably. Knowledge has both saved us and burdened us.

In a complex environment, experts are up against two main difficulties. The first is the fallibility of human memory and attention, especially when it comes to mundane, routine matters that are easily over-looked under the strain of more pressing events.

Faulty memory and distraction are a particular danger in what engineers call all-or-none processes: whether running to the store to buy ingredients for a cake, preparing an airplane for takeoff, or evaluating a sick person in the hospital, if you miss just one key thing, you might as well not have made the effort at all.

Good checklists, on the other hand are precise. They are efficient, to the point, and easy to use even in the most difficult situations. They do not try to spell out everything–a checklist cannot fly a plane. Instead, they provide reminders of only the most critical and important steps–the ones that even the highly skilled professional using them could miss. Good checklists are, above all, practical.

First there was the recipe – the most basic checklist of all.  Every dish had one.  The recipes were typed out, put in clear plastic sleeves, and placed at each station.  Adams was religious about her staff’s using them.  Even for her, she said, “following the recipe is essential to making food of consistent quality oover time.”

If you have been working in restaurants, especially chain restaurants, then you know all about checklists.  The restaurant industry has simultaneously embraced and turned our backs on checklists.  When a typical employee or manager gets trained to work in a restaurant, especially at a training restaurant, a large part of their training is checklists.  Op’s manuals are full of checklists.  Checklists help boost productivity because they take away the guesswork from running the restaurant.  We’ve seen huge managerial productivity gains when new managers are given checklists and systems to follow during their training period. They are able to be effective faster and they learn quicker.

Then once our training is done and the manager gets to their home restaurant, we stop using them or even worse, we allow our teams to pencil whip them.  We recently asked restaurant managers and owners how many of them thought their teams were doing their checklists accurately? 94% of them thought their teams were pencil whipping.

Pencil whipping a checklist is worse than not doing it at all for several reasons.

  1. Checklists help drive better operations; better operations lead to great guest experiences, great guest experiences lead to sales increases of 5 to 9%.  Pencil Whipped checklists don’t do any of these things!!!
  2. You see a completed checklist, and you believe that the checklist is accurate, and you base decisions off of it.  Ex:  All of our temperatures are safe, so I don’t have to take any corrective action.
  3. You are paying someone to lie to you on paper when you knowingly allow them to pencil whip.
  4. If you are doing temp logs and line checks, it is this safety documentation that you will use to prove to the health department and the insurance company that you have systems in place, if you ever get someone sick.  If they talk to your employees, and they will, and determine that your checklists are not accurate y0u are personally incurring a ton of liability, and there is a good chance that your insurance carrier won’t pay out any claims.

There are two types of checklists that you should be employing in your restaurant and they have different benefits:

  • Safety Checklists:
    • Temperature Logs:  logging all cold and hot hold temperatures several times a day to ensure safety
    • Sanitation Checks:  checking sanitizer buckets, dishwashers, chemical concentrations, cross contamination, unsafe food handling processes, proper labeling and storage
    • Line Checks:  temping, tasting, checking labels, portion controls, and safety
  • Management Checklists:
    • Manager flight plans:  manager daily tasks that need to be completed
    • Opening/Closing Procedures: making sure restaurant is ready
    • FOH/BOH readiness checks:

Safety checklists ensure that you are operating safely and should prevent any critical violations on health inspections.  Conducting daily safety checks are our biggest moral responsibility to our guests and the most important thing we can do from a brand protection standpoint.  Temp logs and sanitation checks aren’t sexy but they are so important.  Line checks, especially when you are tasting food items do have a positive effect on profitability, they allow you to catch your own mistakes before your guests do and reduce food comps.  We have seen our clients reduce food costs by 1/2 to 2% based on the type of restaurant.

Management checklists drive better operations on a restaurant-by-restaurant shift-by-shift basis.  They protect managers from memory failures especially when they are putting out fires.  They make it easier for junior managers to learn faster and reduce training time.  Restaurants that use management checklists to focus managers on what is most important create better guest experiences and drive sales increases.

Here are some steps to creating a Management by checklist system.  1st you build the checklists, you should have safety and management checklists.  Once that is completed you can implement the follow-up system.

  1. Break down your restaurants day into smaller parts:
    1. Opening
    2. Prep
    3. 1st Service
    4. Mid Shift
    5. 2nd Service
    6. Closing
  2. Break down each of those time periods into the responsibilities for the front and back of the house teams.
    1. Prep cooks
    2. Kitchen Readiness
    3. Server stations
    4. Dining Room
    5. Manager/Kitchen Manager
  3. You can either detail every item that needs to get done to set-up an area or you can group like items together.  In my opinion, because of the turnover in the restaurant industry, I would go with every item checklists for line employees and more summarized checklists for managers and senior personnel.  This way your checklists can be used as a continuous training tool and as a checklist.  Here are some examples of the different types of questions:
    1. Every Item:
      1. Grab prep list and review.
      2. Set -up 3 compartment sink, put 1 cap full of soap in sink 1, push sanitizer button for sink…
    2. Summary:
      1. Confirm that server station is set-up and ready for service.
      2. Make sure dining room tables are set and all condiments are put out.
  4. Prioritize the most important areas of your business and start there.
    1. Shorter is better; you don’t win any prizes for having unnecessarily long checklists.  Just the most important items and nothing more.
    2. Don’t be so focused on getting the checklists perfect before releasing them to the team; you will never know until people use them.
    3. Start by putting everything you can think of down and then remove items that you don’t need over time.
    4. It is better to have something that is good than to wait to have something that is slightly better.
    5. Checklists are iterative in nature and will evolve over time and as you business changes.
  5. The most important part of Management by Checklist is the follow-up.
    1. There is a pencil whipping problem in our industry.
    2. Paper checklists Suck
    3. Paper checklists don’t provide you with any accountability: you don’t know when they were started and when they were finished.  You may not know who did them.  They are incredibly easy to pencil whip.
    4. You need to use a system to complete your checklists that will allow you to hold your team accountable and provide you with the visibility to effortlessly follow-up with team members.  Click here to see how the OpsAnalitica Inspector can do those things.
  6. Start slow with a couple of checklists and then add more over time.
    1. Realize that doing checklists correctly can take time so staff accordingly and give people extra time so they aren’t rushed.
    2. Explain the “Why” behind doing checklists and ensure your team knows that these checklists are tools for them and you.
    3. Make sure they don’t think that you are punishing them or think that they aren’t doing a good job.
      1. A pilot that is 60 years old with tens of thousands of flying hours uses checklists to start the engines on a plane, every time.  Your line cook can use one to determine that they are prepped and safe for the shift.
  7. Staff push-back
    1. You are going to get a little push back from your team.
      1. You are asking them to do more work
      2. You are holding them more accountable to doing things correctly
      3. You are asking them to change
    2. You have to do what is right for the restaurant and running safer and better operations is always right.  If your team can’t see that, then they may not be the right team for you.
    3. Heaven forbid something bad happens at one of your restaurants, your team is going to leave and go to work for a competitor , and you are going to be left dealing with the devastating fallout.  Do the right thing for yourself and your business.

What are the benefits of managing by checklist with follow-up:

  • More consistent operations
    • One of the most frustrating aspects of managing restaurants is that the restaurant runs great for one manager and runs ok for another manager.
    • Inconsistent operations are Russian Roulette for your guests; they come in on a Friday when the A team is working and have a great experience, and they come in for a Sunday lunch and are disappointed.
  • Better Operations
    • Focusing your team on the most important aspects of running a great restaurant every shift will improve restaurant operations.
    • Completing the checklists helps you catch your mistakes before your guests do, this will lower food comps.
    • Better operations increase sales.
  • Great management tool
    • On a day when everything is calm and going to plan the checklist may feel redundant or like a waste of time, but they aren’t because they drive consistency of management, and they remind managers of what they have to do.
      • People like to do certain things and don’t like to do others.  Each manager thinks some things are more important than others based on their upbringing, personal experience, and pet peeves.
      • If everyone opens the restaurant slightly different or pays more attention to one thing or another than you get inconsistent operations and your team doesn’t know what to focus on.
    • The idea behind checklists is that you check the items off on the list, but you should be looking at everything else.
    • You have to change your team’s minds about checklists, don’t look at them as a burden but be happy that you don’t have to work from memory, you can free your mind, and use the checklist to guide your actions.  It will make you a happier and more creative manager.  A checklist is like adding extra RAM to your brain.
  • Faster training and onboarding
    • When you have a checklist management system in place, it is much easier to onboard and train new team members.
    • They can work autonomously faster because they are following the same checklists that you use every day.
  • Systemizing your restaurant allows you to grow faster and to repeat your success in more locations.
    • So many managers and owners want to grow to that second location, but they have a hard time because they have never systematized their businesses.
    • Because of that they have a hard time recreating the success of their first location at their second location, and as their time and attention move to the new location, the first location starts to have issues.
    • If you want to grow to multiple locations you have to invest in systems first.

The disconnect in the industry is this, 100% of restaurant managers and owners believe that checklists will help them run better restaurants.  88% of those same owners used paper checklists.  94% of them believed that their teams weren’t completing them accurately.  The issues is paper checklists suck at holding people accountable.  You don’t know when they started or finished their checklist.  You don’t even know who really completed them.

Follow-up is the key to a management by checklist system and running better operations.  Being able to see that a checklist was completed on time before service started and then to be able to quickly determine what the issues were and address them is how you ensure checklists are getting done and that you are running safe operations.    If you aren’t in the restaurant, you can’t see that the checklist was even completed or get a look at any of the data on the checklist.  You need to use a system like OpsAnalitica to effortlessly conduct checklist follow-up and drive pencil whipping out of your operations.

Ultimately, great restaurant operations are the only way to sustainably grow your business.  Management by Checklist with follow-up can and will play a huge part in driving those better operations.  We can help you with the follow-up piece, to watch our OpsAnalitica demo video click here.

Diagnosing Falling or Stagnant Sales

Falling Sales Image

Too many restaurant operators mistake marketing problems for operations problems.  They look at falling or stagnant sales, and they think I’ve got to increase marketing spend to get my sales back up.  How do you know if your falling sales are a marketing problem or operations problem?  Here are a couple of questions you can ask yourself to help you determine the cause.

  • Have I recently changed my marketing spend?
  • Have I recently changed how I’m marketing?
  • How are my online reviews? Are they getting better or worse?
  • Have I recently increased my prices?
  • Is there a new competitor in your area that is affecting your business?
    • Be careful in just blaming competition, it is very rare that a competitor can put you out of business overnight; people want to blame outside forces vs. taking responsibility for their issues.
    • Having said that if a newer better mall or dining area opens up and you are in the old one, that can be an issue, and you may need to consider moving, opening a second location, or asking for some rent relief.
    • If it is a competitor, then you have to focus on beating them in the marketplace with service and value.
  • Have you recently lost a key team member?
  • Are my comps going up?
  • Are my complaints going up?
  • Does your food taste as good as it did six months ago?
  • Am I experiencing higher than normal staff turnover?
  • What was your most recent health inspection score; was it higher or lower than your previous score?

If you have made major changes to your marketing program, that may be the cause of your sales stagnation.  If you have recently stopped couponing or changed/stopped advertising then you may truly have a marketing problem.  The easiest solution, if you made a change, is to go back to the old way of doing things if that was working for you.

If you can’t go back to what was working before than solving a marketing problem takes patience, and it takes a plan.  Don’t just spend money to spend money that doesn’t work.  You may need to make a change in your marketing channel, change in ad’s, or an increase in marketing spend.  You should always be looking for an ROI in every dollar that you spend on marketing.  In theory, marketing should pay for itself so increasing effective marketing spend should pay for itself with sales increases.

If you have determined that your issue isn’t marketing, then you may have an operations problem.  Operations problems are good and bad.  The good part of an operations problems is that running better operations are completely within your control.  The bad part of operations problems is that fixing them can be hard and take patience and consistency.

The first thing you need to do is figure out who or what is the cause of your issues.  In restaurant’s most of your operations problems come from a team member(s) who is either doing something wrong or who has a bad attitude.  It’s not like there is a restaurant machine and it can go on the fritz, we are a people business, and almost everything that we do involves people.

If it’s a training issue, that is easy to fix with a little training.  If it’s a people issue, those are harder to deal with quickly.  I’m not an hr expert, but I can tell you this.  You need to decisively, and legally, deal with any people issues quickly.  One bad team member can wreck an entire operation, they are like little cancers and must be dealt with swiftly and decisively.  Start a 3 step process of coaching them up, if they resist or don’t change, then they need to go before they do more damage to your business.

Every bad guest review on Yelp can cost your restaurant 30, potential customers.  In my experience, I have coached several employees back from the brink but the 80/20 rule is in full effect and for every two employees that I coached up, eight employees ended up firing themselves.  There is something about people when they make up their mind, and either consciously or unconsciously they fire themselves.

Ultimately when you identify that you have an operational problem, you need to get back to basics and fix it as quickly as possible.  Once it is fixed, it can be a long slog to get back to growing sales.  It goes back to being an experience by experience battle.  Every good experience earns you back a little goodwill, and every bad one erodes it.

One of the best ways to drive operational consistency is to put in systems and hold your team accountable to following them every shift.  Management by checklists with follow-up is one of the fastest, cheapest, and easiest systems to implement.  Checklists drive consistency shift-to-shift and better operations.

To see a list of the checklists that every restaurant should be doing, I invite you to check out this other blog post.

If you are interested in seeing OpsAnalitica in action, click here to watch a recorded demo video.

The Only Way to Sustainably Grow Your Restaurant’s Sales is through Better Operations

Screenshot 2016-04-12 14.52.05

It’s time to return to basics and focus on what works for long-term sustainable sales growth, which is better operations.  Nobody wants to hear better operations because they are either delusional about the current state of their operations, or they don’t want to put in the hard work and discipline of focusing on running better operations.

Nothing that you will do, no new system (delivery or take out), no new technology like a better POS or better website, is going to do more for your business than having delicious food, in clean well-managed restaurants, with great customer service.  NOTHING!!!!  If you didn’t want to be an operator and focus on being excellent, then this isn’t the business for you.

I was the dining room floor manager of a busy restaurant in 2001 we added $80,000 a week to revenue over a ten month period.  That is right 80K a week, not a month, and we didn’t spend an extra dollar in marketing nor did we add any new sales channel.  You know how we did it:

  • Moved the servers from 5 tables to 4 table stations- which all the servers hated at first.
  • We started using checklists to ensure that we were ready in the FOH for each shift, this included pre-shift meetings with the team.
  • We actively managed the dining room each shift focusing on service and turning tables.

You see we had latent demand that before we focused on operations we weren’t getting because our service was slow and quite frankly not that good.  When we made the sections smaller, brought in more servers, invested in training those servers on the menu, customer service, upselling, etc.  They had more time to do a better job servicing guests.  When we focused each shift on making sure that the restaurant and the team were ready, it was easier to wow guests.  I’m not telling you anything that you don’t already know; better operations, focusing on the little things, and providing an excellent experience is your best marketing initiative and the quickest way to grow sales.

Here is some information that provides more evidence to the better operations theory:

  • A 1-star increase on Yelp leads to 5 to 9% revenue increase.  Entrepreneur.com
  • One negative review on Yelp can cost you, 30 customers.  Entrepreneur.com
  • An A grade in your window, for those restaurants that have to contend with health inspection letter grades, can lead to a 5.7% bump in sales.  (Based on California Sales Tax Data for LA County)
  • Only 16% of Yelp reviews are fraudulent so don’t assume that every bad review you have is just a competitor out to get you – respond quickly and appropriately.  Entrepreneur.com
  • According to a recent study by AlixPartners, a global business consulting firm, “28 percent of diners surveyed say they would never eat at a chain affected by a food-safety outbreak, regardless of the geographic location of the outbreak.”  Tennessean
  • Olive Garden same-store sales are up 6.8%. This is what their CEO had to say:

“We’re just running better restaurants today,” Lee said during the company’s earnings call Tuesday. “I don’t think we should discount the importance of ensuring we’re properly staffed, our teams are properly motivated, simplifying the operation, reducing the size of the menu, processes and procedures.  NRN

“One of the things we’re focused on now is trying to keep things simple,” Lee said. “Simple is hard. Doing simple things every day is really hard. That’s what’s given us the biggest lift at Olive Garden. We’re not relying on promotional activity to drive business.”  NRN

Look at your experience in restaurants. The restaurants that serve delicious food with great service that are clean and well managed on average are much busier than their competitors who fall down in any of those areas.

There are so many outside factors affecting your restaurants every day, from minimum wages, weather, street construction, commodity prices, competition, shifting dining trends, government regulations, cook shortages, and social media to name few.  It can feel overwhelming.  How do you manage all of those outside factors and run your restaurant?  The answer is to control what you can control and react as best you can to outside forces.

If you know that you aren’t doing all that you could be doing in your business to run better operations, make a plan and start focusing 100% on your most critical issues and check them off the list one at a time.  

The quickest and most effective way to run better operations is also one of the easiest systems to implement:  checklists with follow-up.  Checklists focus your managers on those most important items each shift that have to be done to operate at your best.  They are self-documenting and easy to use.  By executing checklists every day in the same order, they build a routine and drive consistency shift to shift.  Checklists work, we asked 107 restaurant managers and owners recently if they thought that managing by checklist would help them run safer and better operating restaurants, and 107 of them said yes.

Most restaurants today have checklists in place, but they are conducted on paper, paper checklists make it impossible to hold your team accountable.  We recently conducted a survey and 94% of restaurant owners, and managers believed that their teams weren’t completing their checklists accurately.  94% of paper checklists are being pencil whipped and therefore the restaurant isn’t getting any of the benefits of safer and better operations because people aren’t conducting the checklist.

The key to getting the benefits of your checklists is to use a system like OpsAnalitica that can hold your managers accountable and make pencil whipping a thing of the past.  By simply moving your checklists to a tablet we can track start and end times, duration, and make the data available on any device from anywhere.  You will always know if your team is doing what they are supposed to be doing.

Better operations can increase your sales anywhere from 5 to 9%.  Checklists can play a major part in running better operations on a shift basis.  It is consistent daily execution that will yield the highest returns and generate those positive reviews and word of mouth recommendations that will grow sales organically and in a sustainable manner.

I invite you to check out OpsAnalitica by clicking here.  To see a list of the checklists that every restaurant should be doing, I invite you to check out this other blog post.

If you are interested in seeing OpsAnalitica in action click here to watch a recorded demo video.

The Value of Operations Data at Your Fingertips

Operations data are the data points that are generated every meal period in a restaurant that directly affect sales and profitability.  Let’s break it down:

  • Marketing activities remind your customers that you still exist. 
  • People come in to eat at your restaurant. 
  • You serve them food (operations)
  • They pay and leave either happy or sad, eager to share their experience with their friends or trash you on Yelp. 
Your restaurant’s operations: the food, service, speed, perceived value, cleanliness, and safety standards all determine how your guests will feel when they walk out of your establishment. 

Remember we are restaurant operators and operations are our business. Operations data points are the measurement of our operations. Until this time in the restaurant industry it has been next to impossible to capture, organize, and analyze operations data for even a single restaurant location never mind a national chain.

There are two main reasons for this, the first is that we aren’t a completely automated business. We are predominantly a human business where people, not automated machines are the means of production. Number two the technology didn’t exist or it was too expensive to capture the data.

With the invention of tablets and smart phones we now have powerful handheld devices that can be used to capture operations data. A smartphone used every day to consistently capture operations data can feed a data analysis initiative that can drive down waste and increase profitability.

In the spirit of ops data and running better operations we are giving away our ebook, SMART Inspections, Drive Big Data. Click here to get it delivered to your inbox.

I will leave you with this thought. As technology becomes more prevalent in the industry, the companies that can identify, test, and implement new solutions more quickly will have a distinct competitive advantage in the marketplace.