Tag : Ops Consistency

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The System Your Ops Team Knows It Needs but Doesn’t Want

There is a better way to run multi-unit restaurants, managing an entire chain using daily checklist software in real-time, which provides your Ops Teams with store level visibility and managerial accountability. Plus when restaurants are held accountable to following your procedures, they run better, safer and more profitable locations.

Restaurant companies spend millions of dollars and untold hours developing, training and implementing procedures so that the restaurant store teams know exactly what they need to do at every part of the day so they can make sure the restaurants are ready for guests. The food is prepared correctly and it is safe and delicious. The problem has always been, that no one at the restaurants uses the checklists or follow the systems as they are designed. See our blog on the Industry’s Dirty Little Secret.

These benefits of increased visibility and accountability are what has been missing from multi-unit operations mainly because the technology to make this easy to do just wasn’t available. Today for the first time in the restaurant industry’s history, not only is the technology affordable but it is widely available. Your operations team knows that by implementing a daily checklist system that it would be better for your customers, your stakeholders, and your bottom line, but they don’t want you to implement it.

No restaurant professional is going to argue that running better daily restaurant operations at each location would be bad for business. The time spent making sure that the food you are serving is safe and tasty is wasted, or, that having a clean well-organized restaurant would be unappealing for guests.

We all know as restauranteurs or as diners, restaurants that serve good and safe food in a clean environment, with a decent staff generate more sales and profits than their competitors. Duh!

We are currently talking to a national chain about implementing our daily checklist software at their restaurants. We are speaking with their QA team, who recognizes that they could do better as a chain at ensuring that the restaurants are clean and that the food they are serving is held at proper temps and safe for consumption. Our contact told us to tread lightly with Ops because they were a little scared of our software.

Not scared of the software itself but scared of the accountability and visibility it would bring to their department.

I was speaking with a friend who manages several hundred restaurants last year and I was telling him how our software could provide his area managers with visibility into what was happening in each of his franchise stores. Alerting them to critical food safety violations in real-time. His response was, who is going to manage all these alerts?

I was talking with one of the top pizza chains in the US and I was told that their lawyers weighed in and they didn’t want to know if their franchise stores were safe or not safe. If they knew then they could assume co-liability.

That is such a lawyer mentality. 1. People can sue you for anything. 2. If you got sick at one of their restaurants, would you only sue the mom and pop who own the store. Yeah right, you would sue the multinational corporation 1st, or more than likely, Mahler Clarke would sue both parties for you.

The mentality that it’s better not to know where we have issues at the restaurants rather than discovering where we have operational gaps and fixing those ourselves to protect our brand and customers is such a short-sighted mentality and quite frankly it’s mind-boggling to me.

The question is; why are restaurant operations teams hesitant to implement Ops Management systems, like OpsAnalitica, that could help them run better daily restaurant operations?

I think it comes down to being held truly accountable, visibilyt/perceived liability, and self-preservation at the leadership level.

Now, I want to acknowledge that running 1 or 4000 restaurants is hard. From my experience, they are both equally challenging with different problems but it takes everything you have to keep the doors open at these locations.

I also want to acknowledge that the technology that one would use to get real-time visibility and oversight at the restaurant level is fairly new, we launched in 2015. There were a few players when we started but not many. This technology really became prevalent with the invention of the tablet and smart phone.

Today, most restaurant companies have very little oversight into daily operations. Because of this, they look at the following data points to determine how well a restaurant is operating:

  1. Audits: restaurant inspections that are conducted on a quarterly basis by the field teams or by 3rd party auditing companies. These inspections are thorough but happen so infrequently that they can’t be used to change behavior or ensure that daily operations are being executed to standard.
  2. Costs: looking at controllable costs: food, labor, paper, liquor, etc. to determine manager efficacy.
  3. Customer Feedback: looking at number of complaints and compliments. This number is skewed because so few people care enough to actually leave a comment. These people are the most passionate from a good/bad perspective, that they are willing to take the time to tell you what they are experiencing, you have to look at these numbers with some skepticism. You could also lump social reputation, Yelp Scores, into this category and I would suggest that social media is easier to use than traditional customer experience programs.
  4. Health Inspections: most restuarant companies don’t do much with this data because it is hard to get. Also, health inspections are notoriously skewed up according to Google, see our last blog, and they only happen a couple of times a year.
  5. Sales: Another measure that looks at manager efficacy but really need to be looked at in comparison to other restaurants in the immediate area, including competitors. A restaurant could have incredibly high sales but still not be running all that well, look at airport restaurants, who have high volumes because of location and a trapped clientele.

Traditionally, Ops Teams have evaluated all of these measures and backed into restaurant operations scores but these measures don’t tell the full story. As a side note, when you take these traditional data points and overlay them onto the data you can get from an OpsAnalitica or any other Ops Management system, that is the holy grail. You can directly correlate how operations affect sales, costs, and customer satisfaction.

Accountability

Because of the way most restaurant companies structure their organizations and how we currently measure restaurant operations, see above, there is very little direct accountability anywhere in a traditional restaurant ops team from the restaurant level to the VP level.

Restaurant managers/franchise owners are in charge of their restaurants, and in a perfect world, they would execute to all company standards.

The restaurant’s direct supervisors, Area Directors, traditionally manage multiple units and are very rarely in each of their restaurants on a daily basis. Depending on the size of the organization they may only get to a restaurant 1 time a month or a quarter.

The Area Director level of management is corporates representation within the organization but it is a very hard job to be effective at. It goes up from there with upper levels of management getting to restaurants on even a more infrequent basis.

Today chains rely on audits for direct contact with the restaurant. Audits are only so effective, because they happen too infrequently to matter. For instance most audits ask a question about how well the restaurant is doing on completing their daily food safety and operations checklists. A lot of operators will point to these questions as an example of them doing their due dilligence on food safety and ops procedures.

There are two things wrong with these “are people following procedures” questions: 1. they aren’t worth enough points to truly affect the audit score, therefore they don’t penalize people enough for not following the daily procedures. You have procedures but have no mechanism for holding people accountable to following those procedures.

2. Audits generally happen quarterly, so they don’t meet the timely standard for providing effective feedback. If you are auditing in December, it’s impossible to hold people accountable for not following procedures in October.

Restaurant organizations lack direct managerial accountability and since they’ve never had it, they don’t perceive that they absolutely need it today. I think it goes a little deeper than that. I think they know, I knew when I was in corporate ops at Quiznos, how things are at the restaurant level and they are worried about being completely overwhelmed with new issues if they started to hold people accountable.

They see holding people accountable to following procedures at least in the short-term, could be creating a ton of new work for themselves that they don’t have today because they don’t know what they don’t know.

Staffing is also a problem because current org structures are not staffed to handle real-time management of all their restaurants. This is a fair and real concern but not an impossible one to be overcome. With our technology, one or two people could effectively manage a large organization of restaurants from corporate using our alerts and reports. Staffing shouldn’t be used as an excuse for not implementing a system that would increase sales and customer satisfaction across the organization, it is an opportunity to reorganize your current teams to be more effective.

Visibility and Perceived Liability

If you start to get real-time visibility and issues are being bubbled up to management, you have a brand and legal responsibility, due care and due diligence, to address these issues immediately and get them rectified.

I would agree that this a real legal liability to know something is wrong and not take action. As an Ops Leader, you should absolutely put into place procedures to deal with issues in real-time and work to make sure that your operations are safe. That goes back to staffing and being able to address things in a timely manner.

When in the history of the world was it a better long-term policy to ignore bad things happening within your business instead of addressing and fixing them? Never!!!!!

I think that a lot of restaurant company executives would be surprised or at least overwhelmed by the amount of daily critical infractions they would find if they had the OpsAnalitica system implemented across their restaurants. I’ve seen the data coming in and it is pretty scary.

Pretending that you don’t have issues is not the same as not having issues. Not having issues because you are proactively managing them out of your business is better.

Self-Preservation

I’m not going to harp on self-preservation for 20 paragraphs. Nobody wants to be perceived as not doing a good job. It takes strong leadership to lead substantive change into an organization and to build new skills and change procedures. It’s not easy or fun.

Conclusion

Let’s pose this question to ourselves. Would you fly on an airplane if airplanes were franchised and operated similiarly to how restaurant companies operate their restaurants? Hell No!

The comparisons between airplanes and restaurants is very relevant. A busy restaurant will serve as many people as a plane would transport on a trip. Both airlines and restaurants have massive responsibilities in ensuring the health and safety of their guests. If a restaurant or an airline doesn’t do everything they are supposed to do, the results can be catostrophic. The worse case scenario doesn’t happen all that often but does happen and it destroys lives.

If you are a restaurant executive that wouldn’t fly on a franchised plane that was operated by one of your franchisees. Then you have to ask yourself why a person should eat at one of your restaurants.

I’ve made the case that restaurant Ops Teams have been resistant to implement Ops Management systems like OpsAnalitica, because they are concerned about being held accountable for their restaurants, the potential for an increased amount of work that would cause them in the short-term, the liability that could be incurred by knowing what is happening in their restaurants if they are unable to get those issues rectified, and their own self-preservation. All of these reasons are BS.

We now have a technology that can help us run better restaurants, keep our guests safer, and increase customer satisfaction which will lead to increased sales and profits. Restaurant leaders have a fiduciary responsibility to their stakeholders to implement systems that are going to protect and grow their investments. We have a human responsibility to run better restaurants for our customers.

If you want to learn more about OpsAnalitica, click here.

High Turnover = Lower Ops Consistency

The number one issue facing restaurant operators over the last couple of year, as told to us by restauranteurs at all levels in the business, is staffing and turnover. It is so hard to find good people to work in your restaurant and to keep them for any length of time.

I’m sure you are familiar with Maslow’s Hierarchy of needs, thank you grad school.

 

Maslow’s Hierarchy of needs basically lays out a pyramid of human needs. Stating that you must fulfill the needs at the bottom of the pyramid first, food and water before you can move your way up to the top which is Self Actualization. To put it another way, you can’t become Self Actualized and achieve your dreams if you are huddled, starving, and cold, living in a damp dark cave not knowing when or if you will ever eat again and worried about being killed by an animal. Neanderthals weren’t self-actualized, they most likely spent 99% of their lives in pursuit of basic Physiological Needs. That is why there were no great works of art or literature that came from the caveman.

If there was a Maslow’s Restaurant Hierarchy of needs, then staffing would replace Physiological needs. You can’t run a restaurant without a team of people. We need good people to show up, work and take their jobs seriously. I remember when I was a restaurant manager at a large high volume P.F. Chang’s in the early 00’s. I was the floor manager and the worse part of my job was dealing with night shift call outs that took place every day. I would find myself on the phone after the lunch shift between 2 and 4 calling people to come in and cover shifts that people had called out of. Now a lot has changed with scheduling programs and that is great. It was hell.

What exacerbates the staffing problem in the restaurant industry is that we are always open. If you are a typical restaurant you are open at least 2 shifts a day 363 days a year. When you lose a person, and you don’t have anyone to back them up, customers don’t care. They want food and they want to eat it now. When you can’t find people or the people you have aren’t operating at full capacity because they are new and just out of training, it is the equivalent of your restaurant being deprived of oxygen and water. You can’t do anything else. You have to fill those shifts because the customers are coming.

One of the biggest consequences of not having a fully staffed and trained restaurant team is Restaurant Ops Consistency.

Let’s define Ops Consistency, it is the ability of the restaurant team to execute the daily operations of the restaurant to service guests.  It is running the restaurant. It is sidework, it is prep, it is making food and drinks and delivering them to guests, it is menu knowledge, providing tasty and safe food in a clean and inviting environment.

Think about going to a restaurant on the day that it opens, huge mistake. The team is new, they don’t know how to do everything yet, new employees tend to make more mistakes and they work slower,  they are green. The guest experience these teams are creating is the product of being brand new at their jobs.

Take this one step further, you could manage a restaurant that has been opened for years but if you have high turnover then you are constantly staffed with a mix of new employees and seasoned employees, in some restaurants the seasoned employees have only been there for a couple of months. The guest experience you are able to provide is going to be inconsistent and less than what an experienced team could provide. Your Ops Consistency, your guest experience, and ultimately your sales and profits will all go down.

OPERATIONS ARE WHAT THE GUEST IS PAYING US TO DO, IT IS THE CORE OF RUNNING A RESTAURANT, IT IS BASIC BLOCKING AND TACKLING. IF YOU DON’T OPERATE WELL YOU WILL GO OUT OF BUSINESS!!!

Operations consistency is probably the biggest challenge that is facing operators behind staffing and turnover and because filling shifts is the immediate fire that must be put out on a daily basis, it doesn’t get as much attention as it deserves, to the detriment to the business and the industry.

How do you make your operations more consistent in this staffing market?

Understand what your Employees are Costing You and create employee retention incentives:

How often do you give your restaurant employees raises or other incentives to stay with you? Executives in big companies get golden handcuffs, usually in the form of stock options or bonuses, to prevent them from leaving. As an industry, we have to figure out ways to create affordable golden handcuffs for our restaurant employees. If we know the average cost of hiring and training a new restaurant employee is $5,864 based on a report from the Center of Hospitality Research at Cornell University. Then we know that if we can spend less than that number and retain an employee for longer then we are winning. We have already agreed that a more veteran staff is capable of providing better customer experiences than a greener staff and that when you lower turnover it gives management more opportunity to proactively grow their business vs. focusing only on how are they going to get enough bodies to work the next shift.

Restaurant Managers need to understand the ROI for every new employee and job role:

  1. Calculate how much sales and profits an individual employee in a job role is responsible for creating per hour based off of past sales. The easiest way to do this would be to look at what a fully staffed restaurant looks like from a total hours perspective and divide that number into an average sales figure over a time period. The number you are ultimately trying to get to is how much profit per hour is an employee generating for your business, it is that number that you have to divide into your costs to determine the payback period and ROI for an employee.
  2. Then calculate your current new hire training costs, employee costs, etc. for each job role. Average out any slight pay differences.
  3. Look at what the payback period is for each employee, or how long do they have to work for you before they start to generate an actual return on your investment.

Once you have the number of hours an employee has to work before you make a dime on them, you will be able to make smarter decisions. Create incentives for them to stay longer, get rid of bad employees faster.  Every restaurant manager tracks labor cost % but very few know how many hours a new employee has to work for them to break even on that investment.

Remember that incentives don’t always have to be monetary but monetary ones will be more effective. Thanking people and buying them a drink or a meal can go a long way. If they make 100 bucks a shift with you and could make 200 a shift across the street, you probably won’t keep them.

One way to approach incentives is to create certifications or levels within their job role, tie skills acquired to pay raises, recognize longevity with raises and privileges. I will start you at $10 an hour and every 90 days that you stay with us, I will give you a $.25 raise. More senior employees get the best shifts, etc..

Be creative and know the actual cost of an employee leaving. Also, carry out exit interviews with no judgment, either over the phone or on an online survey tool. Try to understand why people are leaving so you can correct those problems. Also, if a person reports a reason for leaving that is an improper conduct issue, make sure to report it to HR to protect the company.

Invest in systems more than training:

I’ve said before, in other blogs, and I will say it again. I’m not advocating not training people. We have to train our teams to do their job functions but everything that is a repeatable daily task we should systematize.

Be Aware: The LMS companies will tell you that training is the answer to everything because they want you to buy an LMS system. In reality, training is important but paying people to remember things that are repeatable in nature is waste of time and money.

The culture systems people will tell you that high performing cultures are the most important thing and that you should buy a system that focuses on your culture. Culture has to be experienced by the team at the restaurant and provided by management not preached about.

There is that famous saying ” The beatings will continue until morale improves.” I always think about that when people talk to me about culture. I’ve worked at restaurants where we went through tons of culture training and then the management team wasn’t very good and didn’t live the culture they were preaching.

The reason historically the restaurant industry has put all of our eggs in the training basket when it came to operations consistency wasn’t because it was the most effective way to drive operations consistency it was the only thing you could really control in a multi-unit restaurant operation.

The technology didn’t exist to see what was happening in your operations or to hold your team accountable for following your procedures until the last few years. So everybody just pretended that the reason people weren’t following a procedure was that they didn’t know how to do that task. In reality, it was because they didn’t want to or didn’t remember or didn’t care about following the procedure as there was no consequence for not.

Things don’t get done in restaurants because management isn’t holding people accountable for following procedures. I’ve seen it myself, some set-up item isn’t done at the restaurant, if you walk up to the employee responsible and ask if they know how to do it, they can do it. They don’t need to be trained, they need to be reminded to do the task and held accountable for getting it done.

We as an industry have to break away from how we used to run restaurants and look at this situation critically. If you know that an average employee is only going to stay 6 months would you train them as if they are going to be with you for 10 years? Of course not. The reality is this; your employees will leave if they can make more money across the street. Stop training them on stuff that they don’t need to do their immediate job to lower your risk and cost.

Instead, invest in systems that can help employees become more productive quicker and that also increase your Ops Consistency. OpsAnalitica is Shift Readiness and Ops Consistency platform that allows you to script out the perfect shift in every location. It allows you to define what needs to be done every day from the manager to each job position so that those employees don’t have to think or remember what needs to be done.

OpsAnalitica can provide on the spot training and detailed instructions which will get employees productive quicker and ensure that all crucial tasks can be completed in a timely manner. OpsAnlitica provides you with real-time visibility into your operations so your location and above store management can see what is happening in the restaurant and take immediate action to ensure that Ops Standards are being executed and that guests are being taken care of. Most importantly it provides leadership with a feed of restaurant operations information so they can make data-driven decisions about their businesses.

This is one of the toughest restaurant labor markets in history. A combination of generational demographic changes, a strong economy, and overstepping government interference has made it harder and harder to find, train, compensate and retain good employees.  In addition to the stress of having to constantly find, hire and train new employees to keep the restaurant staffed. The second biggest consequence of this tight labor market is Operations Consistency.

Restaurants that suffer from high turnover always have a large complement of new employees who don’t have as much experience and aren’t as capable of delivering the same level of service as more experienced employees. The restaurants aren’t able to get ahead because all efforts are spent just keeping the restaurant fully staffed, leaving management little room to make the strategic decisions needed to grow their businesses.

Restaurant managers have to invest the time to create an ongoing and increasing incentive program to keep employees for longer to maximize their ROI on each employee. Restaurant companies need to invest more into systems, OpsAnalitica, that can take the guesswork out of running the restaurants for each position every shift and to focus on holding their teams accountable to following their procedures. By providing a system that can dictate what needs to be done and when, managers can get employees more productive quicker and reduce onboarding and training time, reducing those costs will increase employee ROI.

Your restaurant’s sales and profits and your strategic goals are going to suffer if you aren’t able to find, train, incentivize employees, and provide them with the systems that are going to make them better faster while ensuring that your operations consistency in every location is maintained. Ops consistency systems and retention incentives have to be your top priority for the long-term success of your restaurant.

 

 

 

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