In this two part series of the OrderUp Show Tommy walks us through the rise and fall of the largest sandwich chain in the world.
He also gives his thoughts on what he would do to save the chain. He’s got experience in this area as he was involved with a very similar situation in the late 2000’s with another iconic sandwich chain out of Denver.
Give it a listen at your leisure. It has been broken in to two separate podcast episodes below.
As I have been watching the industry over the last couple of years, I’ve concluded that the big Private Equity and Venture Capital firms from Silicon Valley are trying to hoodwink the restaurant industry.
What are the five big initiatives that most large restaurant companies have been focused on in the past couple of years:
New POS Systems (Toast, Par, Oracle)
Delivery (Uber Eats, Door Dash, Grubhub, Postmates)
LMS Systems (Learning Management Systems)
Have you ever asked yourself why you have been thinking about or focusing on these initiatives? It’s because these companies have raised millions/billions of dollars across their industries and they have been marketing/selling to you in every way possible.
Here at OpsAnalitica we have never raised money, we are bootstrapped and proud of it, but we know a lot of people that have. For those of you who might not be as familiar with Venture Capital or Private Equity money, here is a crash course.
You trade equity/shares in your company for cash.
Investors are looking for Unicorns, Google was a unicorn, they give tons of money to companies to get them to grow as quickly as possible.
When a company raises 100 million dollars, they don’t always get all 100 million on day 1. They might get 33 million on day 1 and then they have promises to get the other 66 million over the next 12 to 18 months if they make their numbers.
If a company deploys the money and grows by some agreed upon metrics, they get more money. If they miss their numbers, then the investors can pull their future investments and the company runs out of cash very quickly.
These investors want you to spend as much money as you can as quickly as possible to try and generate as much growth/market share as possible.
This isn’t about responsibly spending money, they don’t want you to stretch this money out for 10 years, they want it completely spent in 18 months. Fast is the name of the game.
The belief is that you can grow market share and customer base quickly then you can figure out profitability when you are big enough.
When these guys get money, they hire the best of the best as quickly as possible. They focus on Marketing, and Sales People.
If you ever watched HBO’s Silicon Valley you see what it was like for those guys. Also, it is a hilarious show.
Over the last five years or so, the products I mentioned above, POS’s, Delivery, LMS’s, Carry Out, Mobile Apps have all been vying for a dominant share of the restaurant market. These companies have been getting acquired or raising massive amounts of capital to grow and to establish themselves as the number 1 players in their spaces.
Here is an article from 2018, The Spoon Blog, $3.5 billion invested in Food Delivery Start-ups This Year.
3.5 Billion, lets be conservative and say that 2 Billion of those dollars were deployed in selling restaurants and customers that food delivery was a must have.
Let’s talk POS Systems, look at this article from Venture Beat Toast POS raised $500 million dollars with a 2.7 Billion dollar valuation. This articles takes you through a series of other POS company capital raises that easily exceed over a billion dollars.
If you have been going to the NRA show over the last couple of years, you cannot spit without hitting a POS company.
LMS systems, aren’t as sexy as POS systems and Delivery but they have been raising money as well. Look at this article from Elearningside.com. These guys in this article have raised between 500 million and 1 billion dollars.
My point is this, that these companies have been getting billions of dollars in free money that they have been using to tell restaurant companies that they need their products to be successful.
The ROI numbers for the restaurants aren’t jiving with the marketing.
Remember, when you take 100’s of millions of dollars in investments, you can make yourself look huge, credible, and successful overnight. You can have a software platform, marketing & sales teams, conferences, ad’s on every type of media, public relations articles and interviews for your executives on TV, billboards across every city and airport, literally in a couple of weeks.
Raising money not generating revenue becomes the story, because people wouldn’t invest in your company if you weren’t growing and making real money, right? WeWork and Uber!
Because this type of investing is relatively new we sometimes forget that these companies are paper tigers, they haven’t generated their operating captial from actually being successful, organically fueling their growth through happy satisfied customers that got an ROI from their investment in their services. They are getting handed billions of dollars in cash and told to spend it.
Everyone is buying into it, every time we talk with an enterprise client they seem to have another project going around one of the aforementioned systems or platforms. Are those platforms generating an ROI?
Let’s look at the reality in the market today. As of the end of January 2020, 3 restaurant companies filed bankruptcy in the last 10 days: Bar Louie, Village Inn & Baker Square, and Krystals. All of these companies had delivery and POS systems. I would hazard to guess that they had LMS systems as well. You could call in and order food or do it online and pick it up.
These companies all bought into the hype of the marketing and sales but it wasn’t enough to save them. Why? Because it doesn’t matter if you have a great POS system and Delivery if no one wants to eat your food.
Restaurant customers care about the basics of the restaurant experience: clean restaurants, safe and delicious food, served by nice people, they care about sticky floors and tables, clean bathrooms, they care about wait times and food that doesn’t have them sitting on the can 30-minutes after they eat it.
The restaurant industry is in one of the toughest most competitive markets it has ever faced. I’ve learned from my own experience working at corporate for a large restaurant chain that when times get financially tough the first thing that goes is a focus on the basics of running great restaurants and delivery exceptional experiences.
The restaurant companies stop executing on the basics at the store and corporate level. Once you aren’t executing on the basics, then nothing else matters and nothing you do to increase revenue will work. As things get worse the leadership team starts looking for Hail Marry’s, delivery was that for a lot of chains.
Here is the reality, if nobody wants to come and eat in your restaurants because your operators aren’t delivering the Basics of good restaurant management and service, they sure as hell aren’t going to pay extra to have that horrible experience delivered to their homes. A fancy POS, better training, better mobile ordering experience, none of those are going to work either.
In this RestaurantBusinessOnline.com about Bar Louie’s bankruptcy they sited “The inconsistent brand experience coupled with increased competition and the general decline in customer traffic visiting traditional shopping locations and malls, resulted in less traffic.”
Inconsistent brand experience is code for bad operations and gross food. Delivery and mobile ordering is supposed to fix these issues of declining mall traffic because it shouldn’t matter where you are located right?
The point is that in the last five years as the labor and restaurant market has gone haywire that a lot of restaurant chains started to put all of their hopes into these highly marketed solutions to get their businesses back to profitability and lost sight of the basics of running great restaurants. That loss of focus is putting them into a hole.
One last dig at delivery as the savior of all things: in 2018 Subway inked deals with all 4 major delivery platforms, throwing 9,000 plus restaurants on delivery. It was the largest system to go on delivery at that time. Subway’s decline is staggering and reminds me of my days at Quiznos. Delivery isn’t working for them because nobody wants to go to their restaurants and they have more of them anyone else.
Here are some restaurant statistics that kind of drive home the importance of focusing on the basics of restaurant management first:
This is from the Steritech Diners Dish 2018 Customer Survey, let’s first look at basic restaurant cleanliness:
Let’s look at the impact that a foodborne illness outbreak could have:
Here are some quick delivery statistics:
Now lets look at some statistics around employee turnover from Seven Shifts. The fact is that training is important but that we have to move away from our traditional method of memorization based training to a more business process oriented approach.
The fact is that employees arent staying long enough to warrent teaching them to memorize things. This is where checklists and daily processes with a training back-up can improve employee efficiency. To learn more about how Opsanalitica can help you improve employee efficiency and business process, click here.
I know I through a lot at you in this blog. What I want you to take away from this blog post is the following:
That the delivery, pos, and LMS companies have litterally spent billions of dollars marketing and selling to you that their solutions are going to change you world.
None of those solutions will help your business if you don’t have a restaurant that is already popular and focused on the basics of great restaurant management and customer experiences.
If your restaurants are hurting financially, double down on great experiences and the basics and get those inlign first before you add new sales channels.
I’m going to leave you with one last thought around what is happening in the industry. My business partner got this in his daily email about restaurant technology.
Red Lobster is going to grow through delivery, I don’t even want to guess what that is going to taste like. Grubhub says it can’t make 3rd party delivery work.
Grubhub was supported by millions of dollars of other people’s capital.
Please, please, please return to focusing on the basics of great restaurant management, systematize your operations, put all of your emphasis on wowing your customers, and your business will grow fast and sustainably.
Then when you are just crushing it, all these technologies will take you to the next level.
We at OpsAnalitica can help you rock the basics of running your restaurants and improve your business processes.
We are constantly talking to restaurant leaders about procedures, checklists, food safety etc.. One of the issues that is commonly raised by these managers is that they are struggling to get their people to do what they are supposed to do. This happens more than you can believe and I literally can’t understand it. Restaurant companies cannot get their employees to follow their procedures.
Some of this can be attributed to how your systems are set-up. Paper is useless for holding people accountable.
From a sales perspective, this is great news for us, because our system drives accountability and visibility into daily operations. When people adopt our platform they can see, right from their phones, what is getting done and what isn’t.
If I’m completely honest with myself, I used to put the bulk of the blame on the employees for not following procedures. I just thought they were being lazy, some of that is true, but what I’ve come to realize is, this issue is a FAILURE OF LEADERSHIP!
Leaders control what they can control, they prioritize tasks, they implement systems, they follow-up in a timely manner, provide feedback, and ultimately they hold their manager’s accountable.
We were recently talking with one of our clients who has been on the platform several times, I will talk about that more below, and he can’t get his people to use it. He gets on the phone with us and he is frustrated. We are going through all the things we can do to get his people to use the platform more and then he says it. “They are just so busy, I don’t want to add more to their plates.”
He is the reason that his people don’t use the platform. He is the reason that his restaurants aren’t hitting their goals, or are as clean as they should be, delivering the customer experiences he wants.
It’s his failure of leadership, failure to hold his team accountable to following their procedures is why they aren’t doing what they are supposed to be doing. All the issues that he purchased our platform for, are not getting addressed because he isn’t holding his team accountable to fixing them.
So now when I hear people telling me their restaurants are struggling because of xyz. It is a huge red flag for me, I stop listening to all the symptoms they are discussing and try to figure out which leader is the disease.
This leads me to the second thing I want to discuss in this blog. People leaving OpsAnalitica only to come back 6 months to a year later.
Recently people who started with OpsAnalitica who left have been coming back and some of those people have left again. It is the craziest thing. Here is what is happening.
Management determines that they have operational issues that could be solved by putting a system and some checklists in place.
They research the market and end up choosing OpsAnalitica to solve this issue.
They get set-up and launch the platform but they can’t change their employees behavior to take advantage of the software.
Basically after 5 to 6 months they get tired of being reminded every day that they have zero control over their employees actions, our system is very good at telling you what isn’t getting done, they decide to shut down the service.
Wait 5 or 6 months and then go back to number 1. Management determines that they still haven’t solved their operational problems.
Because our software runs really well, we provide great customer service, and our pricing is fair; the customer comes back on the platform.
As I’m writing this blog, a customer that was with us for years, who left about 12 months ago, just signed back up again.
The key success factor of implementing any system in your business is that you have to change you and your teams behavior to use the system. To drill in even deeper, you have to change your leader’s behaviors first.
For those of you who are out there and you aren’t satisfied with your teams performance. I’m going to ask you to look in the mirror and make sure that your attitudes and leadership are where they are supposed to be.
If you are going to implement new systems to fix your issues and modernize your operations. Make sure to commit from the top down, use the data, hold your teams accountable to using the platforms. If you don’t do that, you will not see any ROI.
If you are not capable of implementing change throughout your business then you will go out of business. The market, competition, customer tastes, and technology are changing at a faster pace then every before. Your company has to be able to adapt to change quickly and you have to build the organizational muscles to be able to implement solutions effectively and quickly.
If you are interested in learning more about how the OpsAnalitica Platform can transform your restaurant operations. Please check us out at OpsAnalitica.com
This is one of the most robust labor markets in the last 50 years. Typically low unemployment in the overall economy is bad for the restaurant industry because of our lower base pay and how demanding restaurant jobs are. Restaurant turnover is at 100%.
I’ve been a manager who was constantly hiring and training, for months on end. We had very high FOH turnover and we were constantly interviewing, hiring, training, every week. It’ was exhausting. Plus it takes so much time that you aren’t able to get anything else done. All those little projects that you want to get done just get pushed aside when people don’t show up to work.
This labor market has been tight for the last couple of years and managers are starting to get worn down. They are so tired of being in this labor rat race that they are doing anything they can to keep employees happy even when their actions could be hurting the long-term viability of their restaurants.
We were recently working with a client of ours that has been on and off our checklist platform a couple of times over the last couple of years. He can’t get his people to use the platform and while we were talking with him he said. “These guys are so busy, I just don’t want to put any extra work on their plates.”
I want to break down that comment and thinking for you because it is super interesting.
This was from an area director responsible for running 9 burger franchise restaurants from a national chain.
By their franchise agreement they, the franchisees, are responsible for executing the chains national food safety and quality standards every day every shift. This isn’t extra Work!
We load a restaurant’s paper checklists exactly as they are on paper into our platform, there is no difference other than using a mobile device vs. a pen.
People view doing checklists on our platform as extra work but don’t view completing those same checklists on paper as extra work. That is because they know that their teams are pencil whipping and not doing their checklists on paper! Because of the limitations of paper they have plausible deniability, meaning they can’t be held responsible for not knowing that checklists didn’t get completed.
The reason his people don’t get their stuff done is because he doesn’t hold them accountable to doing it, he views food safety checklists and ops checklists as extra work not as what they are, job aids that help managers execute safely and effectively.
He doesn’t hold them accountable to using the platform because he realizes that the OpsAnalitica is very good at showing you if people are doing their checklists and that it is very good at ensuring things get done.
Instead he lets them do whatever they want and pretends they are doing what they are supposed to be doing until they get caught by the chains 3rd party inspectors.
Why doesn’t he want his team to do what they are supposed to be doing to run their restaurants the way they were designed to be run. It’s because of turnover. When a manager leaves, this area manager has to replace them. It becomes more work for him and goes back to everything that I opened this blog with. It’s exhausting.
He thinks that if he is easier on these managers that they might stay longer, which there is no proof of, and he makes that trade off at the expense of his customers satisfaction, safety, and sales.
When was the last time you went to super well run and profitable restaurant and heard about them cutting corners on their procedures or not holding their teams accountable to being the best? You haven’t. Because great operators know that systems are what drives repeatable success and they hold their teams accountable to being great.
When you don’t hold people accountable to running your systems your restaurants don’t run as well. Things get missed that directly impact customer experiences and over time it is that degradation of the customer experience that drives customers away from coming to your business.
I understand that this labor market is super tough but we as an industry have to get creative about screening, recruiting, hiring, and retaining employees. What changes has your organizations made to address these issues? Are you offering more money, retention and performance bonuses, golden handcuffs like options or other perks?
I fear that restaurants are in this very expensive endless recruiting and hiring cycle that has the secondary effect of making restaurant operations less consistent. I don’t see the industry as a whole doing anything differently then they were in 1984 when I joined the industry.
Cutting your standards to keep employees is a recipe for going out of business.
Please add a comment about any really cool things your company is doing in regards to hiring or retention or that you have heard about so I can update our readers.
If you would like to learn more about how the OpsAnalitica Platform can help you drive consistently safe and excellent operations across your restaurants and how it can be used to push behavior change in real-time, please check us out at OpsAnalitica.com
Anyone who has followed the OpsAnalitica blog knows that I worked at Quiznos right before their implosion in 08, 09. I had two jobs at Quiznos: I was the manager of the Franchise Assistance Program and then I was promoted to be the RSC Ops Leader when Franchise Assistance went away.
During my time as the Franchise Assistance Program manager, I was working with failing franchisees who wanted relief, usually financial, from Quiznos. I was not authorized to grant that relief.
That was an incredibly hard position to work in because my team and I heard heart-wrenching stories every day on how these people were losing money and their dreams of owning a successful business.
I listened to the entire episode and it is dead on. It is an interview with Matthew Haller SVP of Government Relations for the International Franchise Association and Keith Miller Director of Public Affairs for the American Association of Franchisees & Dealers.
“The Pareto principle, also known as the 80/20 rule, is a theory maintaining that 80 percent of the output from a given situation or system is determined by 20 percent of the input. … More generally, the principle can be interpreted to say that a minority of inputs results in the majority of outputs.” Read more here.
I fully believe in the Pareto Principle and I believe that it can be pretty accurately applied to all aspects of life.
I have a theory that is solely based on the Pareto Principle and my own observations from my lifetime career in the restaurant industry. It is….
That 80% of the restaurants in America are just getting by and 20% are making all the profits. The 20% group of profitable restaurants chains are constantly evolving and changing. Just because you were in it last year doesn’t mean you will be in it this year.
The restaurant industry in America is large and complex. We are constantly adding new restaurants every day, new brands, new concepts, new types of foods. It is crazy to watch how many new concepts are started every year. Yet the total unit count in the US stays pretty stagnant.
This image is from Statista.com
For every brand new Jersey Mike’s location, another sub shop goes away. That is how Jersey Mikes can have added over 1000 units in the last couple of years and yet the total number or restaurants isn’t growing like crazy.
Think about the number of restaurants that you visit every month. How many of them are just killing it? Include every restaurant, not just the new hot fine dining restaurant in your town. Think about every sub shop, fast food restaurant, delivery order you get. Are everyone of these restaurants turning a huge profit. Are the owners making a great living or are they just getting by?
I worked for P.F. Chang’s in the early 2000’s. We were one of the hottest concepts at that time. We would have a 90 minute wait on a Monday night. When was the last time your location had a 90 minute wait on a Monday Night? P.F. Chang’s isn’t as popular as it was back when I worked there but they are still a really good and profitable chain.
I joined Quiznos in 2008 they had grown from less than 1000 locations in the early 2000’s to just over 5000 locations when I arrived. Now they have 350 to 400 domestic locations. When was the last time you saw a Quiznos, not just ate there?
The franchise restaurant companies will tell you that their biggest issue is that customers can’t find a location when they want one. They have to grow to be more convenient. There are 3 empty Subways, all on the verge of death within 2 miles of my house in the North, East, and West Directions.
I’m not saying that of the 80% of the restaurants that none of them are making a profit. I’m saying that they aren’t making a ton of profits. I’m saying that they are existing but not thriving.
You can see the Pareto Principle working in other ways. 80% of the industry press is gotten by 20% of the chains. I see Sweet Green Articles all the time, there are 20 other salad concepts that you never hear about.
80% of new franchise sales are going to the 20% of the hottest franchise brands.
Whether you agree with me or not; why is this important? It’s important because you have to understand this if you aren’t in the 20% then you have to be better. You have to be great operators, systematize and control your businesses. Eek out every dollar of profit that you can from every shift. You don’t have a choice. You have to fight and control and fight some more. Your road is harder than those concepts that are currently residing in the top 20%.
When I was on the management team at the P.F. Chang’s Tyson’s Corner in 2001. We grew weekly revenue by $80,000 a week over a 12 month period. We were hot, we had people lining up to work, we had low turnover, we used to put 10 2 Tops in the hallway of the mall at lunch time and fill them. We could do no wrong. We weren’t plagued by the problems of slower restaurants because we were in the 20%.
Things that I see in restaurants that are in the 80% that need to change:
They are dirty
They are understaffed
Their quality is hit and miss
Their food is just OK
I want to suggest to the whole industry that this is one of the toughest restaurant markets that we have ever been in. With new forms of competition, new technologies disrupting our businesses, and way to many locations.
I want to suggest that we can’t operate anymore like we did 30 or 50 years ago. We need to analyze every aspect of our businesses and determine if this is still the right way to operate based on the conditions of todays market place. This is just one example.
Waiters for lunch shifts. Lunch shifts suck in most restaurants because you don’t make that much money. In most restaurants with servers all the side work is divided up by station and you have to fill each station with staff just in case you get busy.
Instead of following this the traditional model, maybe a different approach could work.
Hire two full time lunch servers that work 8 hour shift and work open to close every day. (Base this off how big your restaurant is)
These two full-time servers do all the side work in the restaurant, they set-up lunch and they do the closing side work as well.
FYI: look at how your restaurant is set-up, tables, etc. look to streamline this process and create efficiencies.
These two full-time servers should get paid a higher hourly wage and should be treated as full time employees. If your company offers benefits they should get them.
Then use gig labor for the rush. Hire and train a bunch of people who do gig jobs (Uber, Lyft, Door Dash, Task Rabbit, etc.) and bring them in from 11:30 to end of rush.
These gig labor employees, show up and serve customers during the rush and then as soon as it is done and it is time to cut labor, get them off the clock and out the door.
This is a different way of looking at staffing a shift. It could make you very successful because all the team members are winning. The full-time employees are making great money working a full work week and getting a higher wage. The gig employees are coming in for a couple of hours, working a gig, getting some cash in their pockets, living their lives on their terms and they aren’t caught doing all the stuff that people hate about serving tables. They can get in and get out.
I will say to make these kinds of changes in our businesses, which are totally doable, we have to invest in systems and analysis of our own operations. We have to be so systematized that we can plug and play people into different roles within our businesses.
Also, we have to realize that this won’t work on every position but that shouldn’t be a reason why we don’t take advantage of it where it can work.
If you are looking to systematize your restaurants, consider the OpsAnalitica Platform. Our Food Safety and Ops Management Platform can provide you with the real-time structure and learning you need to run better operations on a shift-by-shift and location-by-location basis.
Do you know what a Food Safety and Ops Management platform is? It is a platform that your field teams use to run the restaurants from a daily operations and food safety perspective. These platforms are relatively new, we have been around 5 years, so they don’t have as much name recognition as some of the other restaurant management apps.
With scheduling, training, inventory, POS software; you would instantly know what those software programs do and you would have at least seen one or more them in one of the restaurants you have worked at.
With Food Safety and Ops Management software you aren’t really sure what that means. Please allow me to explain how our software will help make it easier to run your restaurants and I will try to present some common use cases as well to punctuate my points.
Let’s start with Food Safety as that is the brand killer.
Our clients are using our platform every shift in every restaurant to ensure that the basic food safety checks are getting completed. That means:
Temping hot and cold hold food on the line
Sanitizer PPM concentration checks
Dishwasher Rinse/PPM checks
No Cross Contamination
Proper Cooler storage
With OpsAnalitica we go beyond just recording temps and logging readings. We are a real-time training and remediation platform.
Use Case: Your team member identifies a cold hold item that is temping at 50 degrees.
The platform is going to bring that high temperature to the team members attention immediately.
We are going to guide your employee through creating an ice bath and quick chilling the product.
This could include detailed instructions or a link to a video that shows you how to prepare a proper ice bath.
This process will end with the employee taking a photograph of the food quick chilling and taking another temperature reading to ensure that the food is at the proper temperature.
All these steps are documented so you can prove that you took the proper steps and got the food to a safe temperature or discarded it.
Now your most senior and junior employee are guided through the proper steps to fix the issue and you are documenting that you took the correct actions.
The same is true for restaurant operations management. Every restaurant organizes itself around meal periods. Each meal period requires each employee to do the necessary set-up tasks for their position. Any missed item could result in an angry guest or loss of speed which impacts revenue and profits.
All of these set-up steps are important, they are like individual LEGO bricks and if one is missing your shift readiness suffers. With the OpsAnalitica Platform we create sheet to shelf dynamic checklists that conform to each location. We ensure that your teammates aren’t wasting time deciding what to answer or if it’s important and we have them focus on getting their set-up tasks completed efficiently.
Similarly to our Food Safety Checks, we can provide real-time task remediation and training to employees so that when they identify something is wrong they can also have all the information they need to fix the issue on the spot.
Use Case: Beverage station is not set-up prior to opening.
Cashier is executing a FOH readiness checklist and identifies that someone forgot to set-up the beverage station.
The Platform immediately identifies the issue to the team member.
The platform provides a list of tasks that need to be accomplished to set-up the beverage station.
This list of items comes equipped with pars for Iced Tea, Lemons, etc. and pictures of how the beverage station should be set-up.
This employee is empowered to fix the issue in real-time before it affects guests and sales.
We’ve said this a ton of times, running restaurants is hard but not complicated. Every task of running a restaurant is generally simple by itself. What makes running restaurants hard is the sheer amount of small individual tasks that goes into every part of setting-up and running a restaurant shift.
There is too much nuance and too many little things to remember to rely on a sheet of paper posted on the wall or the memory of a senior employee. There are too many details to use an inferior app that is unable to dynamically customize checklists to each location.
At the end of the day, the OpsAnalitica Food Safety and Ops Management Platform is here to help your teams keep track of the literally 1000’s of set-up tasks that need to be accomplished each shift in every location.
We are here to highlight the good that your team members do every day so that you can praise them and raise morale. When they identify an issue we want to help them solve it in real-time so that guest satisfaction isn’t affected.
Running restaurants is hard, at OpsAnalitica, we are about helping senior management make that job a little easier for their teams.
To learn more about the OpsAnalitica Platform, click here. See first hand how we help our customers and do it for a cost that is less than the Red Book.
One of the most transformative changes in the history of the restaurant industry was the invention of the POS System. Replacing the siloed cash register and giving brands real-time access to sales data did more to drive multi-unit operation expansion than any other technology. Prior to wide adoption of POS systems restaurants had only changed by a fraction since the time Jesus ate in restaurants.
The next big transformation in the restaurant industry is going to be operations management systems, like OpsAnalitica, and how the data they generate can be used to run more efficient restaurant operations with less employees.
There has been a ton of buzz around all these other types of apps or management systems: mobile ordering, delivery, inventory, and LMS’ etc.. That is because they have huge marketing and sales budgets. These systems generate efficiencies for their users and can reduce waste and time. That is what we are all battling for, to do more with less.
I don’t think anyone would say that Crunchtime with their inventory management is truly transformative. That mobile ordering is transformative, its just another form of call in ordering. I’m not saying that those technologies don’t deliver value, they do, I’m saying that they aren’t transformative, changing how you operate your entire business and the financials associated.
Ops Mgt Systems, you know them as Digital Checklist systems like OpsAnalitica, can be truly transformative to the restaurant industry. Because they, like POS Systems, provide you with real-time visibility, employee accountability, and the ability to change behavior.
I know that most of you think of these systems as just a way to replace your ineffective paper checklists with a digital version. I will admit that we have been guilty of perpetuating this stereotype as well with our marketing. We flat out compare ourselves to paper and the Red Book. If I’m honest, we shouted from the rooftops for years how OpsAnalitica could transform your businesses and that messaging fell on def ears. The restaurant industry just isn’t there yet but you will be. Data is like a drug, very addictive and once you get a taste you will want more.
All software should be implemented in a crawl, walk, run approach to ensure that it gets used and generates a ROI. If we think about OpsAnalitica in that way, your crawl period is getting off your ineffective paper checklists and getting digital checklists deployed at your restaurants. This is actually surprisingly easy with OpsAnalitica and wow’s most of our customers who are used to ineffective partners and botched roll-outs.
If you never go beyond replacing your paper checklists with digital checklists then you will be happy but in all honesty you won’t see a transformation. The transformation comes from leveraging the technology across your organization, reassessing how you operate, challenging the status quo and norms of your business, then leveraging the technology to drive increased efficiency and change.
At their root, platforms like OpsAnalitica drive behavior and facilitate human data collection. Collecting data from human process and controlling behavior across multiple locations before OpsAnalitica was nearly impossible. In that respect OpsAnalitica structures human process and provides data just like your POS does.
To truly transform the industry, companies need to move beyond just doing the normal checklists that they did on paper and managing the same way they always have but without paper. Push beyond what they know and leverage the technology to run their restaurants differently.
Here are some walk and run ideas:
Create a ROC (Restaurant Operations Center) that is managing OpsAnalitica for all restaurants simultaneously following up on critical notifications and late checklists. Having a few dedicated people driving system wide compliance and follow-up in real-time could ensure operations compliance across the chain.
Great Area Managers are hard to find. It is such a complex skill set and with patch size and time in restaurant, it is nearly impossible to be effective. Instead of paying a premium to find these Jack of all Trades multi-unit operations professionals. Wouldn’t it be easier to find cheaper specialized field team members that focus on very specific job functions: local store marketing, training, ops mgt, hiring, etc.. Leveraging a platform like OpsAnalitica to provide better visibility and accountability than an area manager ever could.
Training and On-boarding: our training and on-boarding systems are antiquated and based on employee memorization. This is the best job market in 50 years and restaurant turnover percentage is at 100%. The average tenure of an employee is around 50 days, you can’t afford to pay people to memorize how to do stuff. You need to get every set-up and breakdown checklist into OpsAnalitica and have your people follow the checklist vs. memorize how to do stuff. The great thing about using the checklists vs. memorization is that procedure changes are much easier because you simply change the checklist. Gone are the days of having to update the ops manual, print all new materials, do a road show and train all employees at an all hands meeting.
Manage data collection from the field for all your other needs, from shift logs, maintenance requests, health inspection scores, food recalls, training tests, etc.
These are just some of the use cases that could transform your business, the people who are best at figuring these use cases are you. You guys know what you need done, what you are being tasked to do and everyday we are suprised at how our clients are using the platform to make their jobs easier.
In 2009, I came up with the idea for this platform because I was the RSC Ops Leader at Quiznos and I had to find a way to report on all of our audits, we couldn’t find a software platform that was going to do what we wanted it to do, so I taught myself how to code and built my own. I built this one so you don’t have to teach yourself how to code, you can just leverage the technology to transform your business.
To truly transform your business, you can’t bend the technology to meet your current needs. You need to understand how the technology works, then look for opportunities to expand the software within your organization and use it to change how you operate. This is the number one reason why OpsAnalitica has the potential to be truly transformative, because it is so easily adapted and customized to meet the needs of our clients.
We are a human data collection and task management platform. An inventory platform is just an inventory platform and online ordering is just online ordering.
You will always need to collect data from your locations, you will always have some amount of humans working there for the foreseeable future. You need a system that can drive their behavior, collect data, provide visibility, and accountability in real-time.
I urge you to get off your paper checklists and start using OpsAnalitica. Get comfortable with the software, and then start looking for ways to change how you operate. To not continue to operate like we did in 1980, or 1880 for that matter, but to embrace what real-time visibility can do for your business. If you want to talk about your ideas, then go to OpsAnalitica.com and chat us. I would love to discuss your vision with you and how OpsAnalitica could help you fulfill those dreams.
I’ve been very blessed in all aspects of my life, one of the biggest blessings I’ve received is that I’ve traveled and I’ve stayed at some of the best hotels, resorts, and sailed on the nicest cruise ships in the world.
This last weekend, my wife got us a room at the new Gaylord of the Rockies resort. It is brand new Gaylord Hotel and Convention Center located near the Denver International Airport.
I was sitting at the pool on Memorial Day before checking out and I noticed that the music wasn’t on. The pool just didn’t feel as bubbley, if that is the right way to describe it. Then I looked down and saw a straw under my chair.
It’s the little things.
I started thinking about all the things that you have to get right to go from good to great.
There are a million quotes about the little things. About how the last 5% is what really matters in everything.
Let me be clear here, The Gaylord did an amazing job. I’m not trying to knit pick them to death. The music being on or off didn’t take away from the room, or the service, or the amazing food. It just sparked this idea.
The music not being on just made the pool feel less complete. They had music on the whole day before and had pool parties, etc.. The pool area was alive and jumping and the music added to the happy and relaxing feeling.
When you have a complete experience, it feels better, it feels right, it is memorable, it is great.
Here is the thing, we are all capable of providing a complete experience in every guest interaction. Whether you are at a McDonalds or Harrod’s in London for Tea.
We all have a brand, we have set those brand expectations through our marketing, previous guest interactions, and through our continuous operations.
People always say that the greatest thing McDonald’s has done is that you can get the same Big Mac and Fries anywhere in the world. Same is true for Coca Cola and many other brands. They have perfected consistency. I’ve never opened a brand new Coke that was flat; have you?
What is frustrating about the little things in the hospitality industry, especially for brands, is that corporate has already thought about all the little things, that is their job. They have created exhaustive training and checklists to help the locations not miss the little things. Yet they get missed constantly.
Because know one uses the checklists as they were meant to be used. Atul Gawande, author of The Checklist Manifesto lays this out in his book.
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. A” ―Atul Gawande,The Checklist Manifesto: How to Get Things Right
I get it, checklists aren’t fun or exciting. They feel beneath us in a lot of ways. Senior managers think checklists are just for training and not meant to be used at the start of every shift in every location.
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. —Atul Gawande,The Checklist Manifesto: How to Get Things Right
This is where we as an industry have to grow up. Pilots, know matter how many hours of flight time they have still use checklists for everything. There are 3 checklists to turn the plane on.
The reason why? It’s exactly what Atul Gawande stated above. The fallibility of human memory and attention, especially when it comes to mundane routine matters. That is operations management in the hospitality industry. You are getting the restaurant ready for business, you’ve done it 1000’s of times, people are constantly distracting you with questions and pulling your attention away from the task at hand. Little fires keep popping up.
Then you forget to check things because you are too distracted. Some days it’s the music and other days it’s the holding or reheat temperature on some food. Some days it’s the open sign and other days your dish machine isn’t sterilizing the dishes and you are getting people sick.
The problem is when we don’t use checklists the way they are meant to be used, we don’t know which side of the spectrum we are going to land on. We just know or should accept that we are missing things.
You are kidding yourself if you think you aren’t getting people sick. You are. Any time a person goes into a restaurant and then within minutes they are not feeling well, your food had something to do with that. Even if it didn’t really, that the person got sick from their lunch and not your dinner, in their minds it was your dinner.
We have to change how we train and operate our locations. It is imperative that we move away from the reliance on memory and experience and work on systematizing every aspect of running our restaurants to counteract the other forces that are working against us. We have to use checklists diligently as they were meant to be used in every department, every shift, by every member of the team from the GM to the server.
The whole point of this blog is this. Had the pool manager followed a readiness checklist, I’m sure, that turn the music on is on that list. I’m sure having a member of the custodial team confirm that there was no trash under the pool chairs was on that list.
Senior managers and all team members should embrace checklists as the cheat sheets, the short cuts, the work smarter not harder tools that they are. We should reward people for high levels of checklist compliance. Completing checklists diligently and on-time and coach train people who pencil whip and have low compliance. Our research has shown that high checklist compliance restaurants are better restaurants from a customer satisfaction and profitability standpoint. They are better.
We have to control what we can control. Because when we do we provide our guests with a complete experience, they will rave about us and tell their friends and that should lead them to come back again sooner. We owe this to our guests, employees, and owners.
One of the main reasons that checklists don’t get done today is because they are paper based tools. In the world of multi-unit restaurant management paper checklists are pencil whipped because management cannot hold their teams accountable in real-time to getting them done.
To really run great restaurants, you need a digital checklist platform that will give you the tools to hold your managers and employees accountable to following your procedures every shift in every location.
To learn more about how OpsAnalitica is helping restaurant operators run better restaurants, visit OpsAnalitica.com
Remember, it’s the little things. Oh, and they turned the music on later in the morning.