We did a survey and asked over 100 restaurant managers and owners a very simple question. “Do you think your teams are completing their paper checklists accurately?”
94% of those surveyed said that their teams WERE NOT completing their checklists accurately.
I used to think that the industry just didn’t care about pencil whipping. Now after five years in business I realize I was wrong. It’s not apathy, it is a lack of data and visibility into daily restaurant operations.
What is pencil whipping?
Pencil whipping, for our purposes in this blog, is defined as not using and completing a checklist accurately. Pencil whipping includes missed checklists and checklists where the employee just fills it in to get it finished without checking the items as they are supposed to.
What does pencil whipping look like?
The superficial view is the temperature log in a restaurant, hanging on a clipboard, where it is obvious that one person simply went down the list and filled it in day after day. Same pen, same color, same handwriting, the same temperature on all cold hold, and hot hold items.
We have all seen that pencil whipped checklist at some time in our career’s but most of us have never thought about the checklist’s impact on our bottom lines.
What Pencil Whipping actually looks like:
Pencil whipped checklists lead to slower speed of service and lower QSC and Customer Satisfaction scores. This is directly correlated to lower sales and profits.
How much pencil whipping is happening?
Through conversations with our clients and analysis of our own data. We believe that only 25 to 30% of paper checklists are completed accurately.
Which means that 70% of the time, paper checklists are pencil whipped or not completed accurately.
According to Yelp, the average score for all restaurants in the United States is 3.71 out of 5 or 74.2%. Restaurants in America are solid C students according to consumers.
I know that some operators discount Yelp reviews but they are statistically significant and they are the best gauge of what our customers truly think. A 1-star increase in your location‘s Yelp Score can lead to a 5 to 9% increase in sales.
Pilots are famous for using checklists. You can’t turn on a plane’s engine without a checklist. Surgeons also use checklists to make sure they don’t make a catastrophic mistake.
Would you feel safe flying on airplane or getting surgery from a doctor that was only completing their checklists 30% of the time? Why is that ok for restaurants?
The Operators Nightmare
The Operators Nightmare, is when you are doing everything you are supposed to be doing. You are training, investing in your employees, you have systematized everything you can, you have checklists/logs/documented procedures, state of the art technology, great food, and good locations.
Yet your stores feel like they could be doing better and that the day-to-day management of them is just way harder than it should be. You know that something is off but you can’t put your finger on it.
Underperformance in the restaurant industry can be directly tied to pencil whipped checklists. I know a lot of you don’t believe this, and it’s not that I’m incorrect, because I’m not. It’s because if you are using paper you have no data to the contrary and no idea how bad your pencil whipping problem really is.
Paper checklists, which are the most widely used checklist system, are never reported on. It’s simply too arduous to collect all the red books and analyze them and get any real operations data out of them.
Most restaurant executives have never seen any data that would suggest that their restaurants aren’t following their procedures and that by pencil whipping their checklists that it is costing them any money.
We did a study a couple of years ago and we found that in a QSR chicken finger franchisee that had high process compliance, the teams were doing their daily checklists accurately and on time, increased sales by 3.2%, and reduced food cost by 1.2% during that period.
How did this happen you are asking yourselves?
The restaurants ran better or more accurately ran how they were supposed to run. Issues were corrected in real-time before they had a chance to affect guest experiences. This lead to higher QSC Scores and Speed of Service times which led to an increase in sales and at the same time a reduction in comps led to an increase in profits.
Death by 1000 Cuts
The other problem with pencil whipping is that it isn’t a clear cut 1 thing you have to fix. If you have a broken sprinkler pipe, that is a singular problem which you can address and get solved.
Pencil whipping is a singular problem but the symptoms of pencil whipping are not. Pencil whipping shows up operationally as a lot of different things. Refer back to the chart above. Pencil whipping shows it’s ugly head in poor execution on things that were supposed to be handled.
There is nothing more frustrating than a customer having a bad experience at your restaurant because of something that got missed but was part of your training and managed on a checklist that was supposed to be completed before service.
Pencil Whipped Data is Worse than no Data
We have a client that recently made the above comment to us. Pencil whipped data is worse than no data at all. He believes this because he is in Ops Services and he saw the executives of his company making million-dollar decisions on garbage data.
There has always been a lack of good daily operations data in restaurant companies. Especially, large multi-unit operators. Most restaurant companies don’t even have a direct operations data feed that they can analyze.
Restaurant chain executives are forced to back into operations effectiveness at their restaurants by looking at ancillary data: sales, costs, customer satisfaction scores, and if you are lucky audits.
All of those metrics are trailing indicators of operations effectiveness or with the audit a snap shot that is out of date the next day.
Looking at falling sales, higher costs, or bad customer satisfaction scores to identify operational issues is what most of us have had to do. If you are seeing bad indicators in those data sets, it’s already too late.
The goal is not to run bad operations for a long period of time until it finally shows up in a trend line 6 months later when you have done a ton of damage to your brand and those location’s viability.
The goal is to exercise active managerial control over your operations, follow your systems, and avoid bad experiences altogether by executing your systems consistently.
The fact is that we all see the impacts of pencil whipped processes every day in our restaurants and the restaurants that we frequent as guests. We as restaurateurs speak restaurant, we see the stressed employees, the customers having bad experiences, the lost sales, increased costs, and the bad reviews.
We also know that the most successful restaurant companies not only have systems and processes but their culture manages them and holds all team members accountable for following them. Consistent execution of systems is the difference between highly profitable restaurant machines that print money and operations that struggle and barely break-even.
If you work in an organization that is still using paper to manage your operations processes and you would like to fix the biggest nagging issue in your business, please click on the chat icon in the bottom right of the screen and reach out.
I’m going to leave you with this thought.
An employee that pencil whips a checklist is stealing from you. Is there any real difference between taking 10 dollars out of the register or willfully not doing the job you are being paid to do and causing a customer to not come and spend that same 10 dollars at your restaurant? In both cases, you are out $10 dollars.
This hospitality business doesn’t have to be this hard and stressful. You have already figured out what everyone needs to be doing, you just need a better way of managing your team to ensure that they are following your SOP’s.
We have helped thousands of restaurants in 19 countries increase sales, profits, and QSC scores, we can help you.