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An Easy Way to Solve a Speed of Service Issue

Today we’re going to look at 2 drastically different ways to approach a speed of service issue:

  1. You can rely on hope, but we all know hope is not a strategy.
  2. You can use real-time data to identify and remediate issues before they affect speed of service.

Number 1 will work sometimes because, as they say, even a blind squirrel finds a nut every once in a while. But most of the time it won’t work out. So that means that most of the time prep amounts are wrong which means that someone will leave the line during the rush to prep. So that means most of the time there aren’t enough straws or lids at the drink station which means during the rush someone has to stop taking an order to grab a straw. You see where we’re going here.

This all has a negative impact on speed of service which has a compounding effect on sales. If the line is too long people may not even enter your restaurant or drive thru. Those sales are gone forever.

If they did get in line and it takes too long, they may leave, or they may stick around, but will be extremely frustrated and more than likely never return. Now you’ve spent a ton of money acquiring this customer, but they will never pay off because of a speed of service issue.

Now imagine a world everything is prepped, stocked, clean, held at the right temperature all prior to the rush. In this world customers move through process like a well oiled machine, the food tastes great, expectations are exceeded, they become repeat customers and tell their friends.

That’s number 2. When teams have all the data they need to know what needs to be done, when and how, have processes that guide them through their tasks and helps them catch and fix mistakes before they affect customers, they understand the importance of completing the tasks, then speed of service isn’t an issue.

It’s little things that normally get brushed to the side as no big deal that have real ramifications to important parts of your business such as speed of service. It all boils down to setting yourself up for success and then making it happen.

The best chains are habitually great at executing the basics. To be able to do this you need to start with this question: how are you identifying operational issues at your locations today?

We can help. Reach out.

Operations Data & Speed of Service

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, speed of service, customer service, 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. Most operators today are operating on lagging indicator data only. ie. sales, customer feedback, anecdotal information from managers. By the time you get bad customer feedback about a speed of service issue it’s too late, the damage has already been done. Plus think about how many other customers who were affected, but didn’t take the time to give feedback.

Identifying the root of speed of service issues using lagging indicator data only isn’t productive. It’s a trial and error exercise which isn’t a luxury most operators can afford. The cost to acquire a customer is simply to high to gamble on a “fix” that may not work.

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. With the invention of tablets and smart phones we now have powerful handheld devices that can be used to capture and process insane amounts of data very quickly.

The ability to provide teams with all the data they need, to be able to, perform all the tasks required to ensure they are shift ready, right in the palm of their hand exists today. You can guide teams through real-time corrective actions to ensure issues get corrected before they affect speed of service. Above store leaders can have access to all the data they need to effectively lead and coach their teams.

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.

Manage Speed of Service amid High Turnover

Speed of service is one of the most important metrics that are tracked in a restaurant. It has an immense impact on sales. If you’re doing a great job you will maximize sales for your shift. If you aren’t you are losing customers to long lines at the drive thru or register.

It doesn’t make sense to spend the money to acquire a customer just to have them turn around at the last minute and go somewhere else without making a purchase.

In this blog we’re going to focus on employee turnover and how you can still manage speed of service levels and maximize your sales.

Here is the deal:

  1. Employee Turnover has always been high, but employee tenure is the more important measure to understand. Tenure is how long our employees are staying in their jobs.
  2. Because the average employee is staying such a short amount of time we have to re-design how we onboard, train, and operate our restaurants to minimize the effects of turnover on speed of service.
  3. Having access to and using real-time operations data are a key component in reducing employee training costs as well as identifying and remediating issues before they affect speed of service.

7 Shifts, the Scheduling Company, compiled 7 Restaurant Scheduling Stats of 2017. Click on the image below to see the whole infographic. The facts were crazy but these on how long employees on average stay in a job really stood out to me as scary.

High restaurant turnover is an all-encompassing thing, I know this because I’ve lived it. When you have high turnover you don’t have time to think about anything else, you’re constantly engaged in hiring, training, and backfilling positions. All other pro-active things that you want to do for your restaurant get neglected. How can you work on that new menu or special when you have 3 open positions for tonight’s dinner rush. It’s brutal.

The reality is, you have 57 days with a server, 54 days with a cook, and 124 days with your most expensive employee, your manager. These numbers really paint a picture of what restaurant operators are facing.

Now that you see what the average tenure of an employee is; do you still think it is prudent to spend 4 or 5 days on-boarding/training a person that is only going to be around 54 days? That training time for a server/cook could equate to 10% of their entire employment period at a higher than normal hourly wage.

Here is what we have to do in the industry to minimize these effects.

Shift your Training to Focus on Employee Productivity as Fast as Possible

You have an employee that is going to stay 55 days. The difference between 3 to 5 days of initial training is significant. 3 Days of training is 5.4% of their tenure vs. 9% at 5 days. Think about the ROI jump on that employee when you get them productive quicker.

The easiest place to cut training cost is to reduce the initial onboarding and training period. You do it by:

  1. Cutting all superfluous training out of the curriculum and focus 100% on must-have job role knowledge. Ex: Cooks need to know recipes, servers need to know how to use the POS and steps of service. Get new hires into their stations contributing to sales ASAP.
  2. Systematize Everything: Anything that is repeatable has to be in a checklist or in-station Job Aid. You can’t spend a second training people how to remember to do a repeatable task. Instead, you need to teach them that there are processes available to guide them through these tasks as they are doing them and how to use these systems.
  3. Shift to More Daily Training: You have to shift training from a front-loaded multi-day activity and move the non-job role must-have items to a daily format. Pre-shift meetings for all members of the restaurant are a way to still deliver this culture and non-job specific training in a short couple of minute sessions. Repeating this training over time is very effective.
  4. Simplify as much as you can. For instance, and a lot of people have done this, put allergen, gluten, health information right on your menu. That makes it easy for customers to find out what items they can eat and reduces the amount of training you have to provide FOH employees on the menu. For the BOH, reduce as many steps as possible for prep and in your recipes. Anywhere you can find efficiency without compromising quality, you should make the change. A great example is a lot of quick-service restaurants have assembly cards in the different cooking stations, this helps with consistency but can also reduce upfront training time because there is a job aid right in their station. You have to do that because your employees aren’t around long enough to learn super complex processes.
  5. Use mobile devices to your advantage: Offer the ability to engage in training and to complete processes on a mobile device. Processes then become simple to manage as everyone is always working off of the latest version of the process. You can’t mandate that employees use their own phones, you have to provide an alternative, but you can allow them to use their devices to make your business better and their jobs easier and more convenient. Treat their devices as a force multiplier.
  6. Use real-time operations data: Ensure that team members have access to all the data they need to make sure they are shift ready at every location. This includes dynamic corrective actions and job aides for each process. Provide above store leaders with the data they need to hold teams accountable and the ability to lead and coach.

If you follow those steps you will be able to maintain your speed of service levels even in the midst of high employee turnover.

Pencil Whipped Checklists Steal Sales & Profits

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.

Shift Readiness Separates Great Restaurants from Good Enough Restaurants

We are going to do a deep dive into the concept of restaurant shift readiness. Shift readiness is making sure that your restaurant is 100% ready for each meal period from a: cleanliness, stock (FOH/BOH), food taste, freshness, and safety perspective so that you can make the most of your sales opportunity each shift in every location.

Shift readiness is one of the most expensive labor periods for every restaurant and shift readiness activities are undertaken by every restaurant in the country. Getting it right is super important from a sales and profitability perspective.

We are going to go deeper and define shift readiness as the restaurant management philosophy that it is, break it down tactically, and explain how you can achieve it.

One of our clients, Darrin White, said this the other day around Shift Readiness:

We want to be habitually brilliant at the basics. If we do…. we will blow the competition out of the water.

Philosophy:

Shift readiness is a restaurant management philosophy that understands how operations decisions affect profitability, accounts for the perishable nature of the meal period, has an absolute focus on maximizing guest satisfaction and sales on a shift-by-shift location-by-location basis.
Shift readiness is more than just a bunch of tasks that you do each day it is management philosophy that guides your decision making and prioritizes your actions to achieve operations success.

Perishable Meal Periods

The hospitality product by definition is a perishable product. There is only one January 10th, 2018 lunch ever in any single location, in the entire history of the world there will never be another.  Every day our meal periods expire, like brown lettuce, to never generate us another penny of revenue.

If you only get 1 shot at every meal period, you have to maximize your guest satisfaction, sales, and profits each shift. This is a different way of thinking, good enough just won’t cut it when you only have 1 chance to get it done. Perishability adds a level of urgency to your thinking.

Here is some quick math to illustrate how important every meal period is to your restaurant’s success.

  • There are 13 – 28-day accounting periods a year.
    • That means that for any period there are on 56 lunch and dinner meal periods.
  • Average restaurant profit margin is between 5 to 15%.
    • Most restaurants are closer to 5% but for our math, we’ll use 10%

You only have 6 meals periods a month to turn a profit. No do-overs and no second chances!

This equation assumes that all meal periods are equal, which they probably aren’t, but that is ok. The point is, that only a few meal periods a month are going to generate all of your profits for that period. 50 of the lunch and dinners are just going to pay for your costs.

Most importantly – you don’t know which 6 meal periods are going to be the profit generators. Nor are you guaranteed 6 profit generating meal periods, as a matter of fact, you only get the 6 profit generating meal periods if you crush the other 50. 

If this doesn’t create some urgency to focus all of your efforts on maximizing each shift opportunity, you are in the wrong business.

You must use this urgency, this perishability, as a motivational battle cry to your managers and your teams. Have we done enough, are we perfect, are we 100% ready? Because if we aren’t then we are going to squander this opportunity and then it’s gone forever.

Every meal period where you fail, where speed of service suffers, where your guest satisfaction is low, where the restaurant isn’t running great, can actually put you in a hole that you then have to dig out of.

Operations Decisions Affect Profitability

Operations are the running of the business, the selling and delivering of food to our customers, they are how we generate sales and profits.

How you operate, the decisions that you and your team are making every day affects your sales, costs, and profits. A lot of the time your team is making decisions that affect your profits and you don’t even know they are making them. 

This is the no-accountability trap that so many have all fallen into. We train our teams on how to do their jobs, we have checklists and procedures posted on the wall or on a clipboard in the office, but nobody is using them.

94% of restaurant managers we surveyed said that their teams weren’t following their procedures.

If you aren’t holding your team accountable for following your shift readiness procedures every single shift, then you are allowing your team to decide how to run your business and how much money you should make. Not to rub it in, but your team that isn’t compensated by restaurant profitability, that will go across the street if your business slows down,  the same team that has a 73% chance of turning over in the near future is in control of your livelihood when you don’t hold them accountable to working your way.

The profitability equation breaks down like this:

Sales – Costs (labor, food, & fixed) = profits

For this analysis, we can ignore fixed costs because a lot of that is out of the restaurant manager’s control.  We are also not going to spend a ton of time diving into controlling food and labor costs as those concepts are pretty well known.  We are going to focus most of our conversation on how operations affect sales.

Labor Costs

When we talk about labor costs in regards to shift readiness we really want to focus on making sure that the employees that you are paying for are working as efficiently and accurately as possible to achieve your shift readiness goals.

Because of the high turnover in the industry, we also want to focus on minimizing initial onboarding and training time by really focus on must know skills vs. nice to have info and to improve training productivity to get employees generating revenue faster. Check out our blog on increasing productivity here.

Food Costs

When we look at food cost specifically in regards to shift readiness we want to make sure we are practicing FIFO, proper portion control (make sure people are using the right size scoops and spoons and not just grabbing any utensils), and that we are stocking stations to PAR to keep ticket times low.

The single most important thing you can do before each meal period is to taste the food before you serve it to guests to ensure that it is delicious and safe, this will reduce comps and lower food costs.

Sales

So much of the shift readiness discussion we are going to be having is how proper shift readiness can positively affect your ability to generate sales and how poor shift readiness can hurt sales.

A restaurant is a lot like a factory, we have meal periods where we are producing goods and selling them. One of the biggest factors for success is that we maximize customer throughput, or speed of service, during the meal period.

Another way to phrase that is we want to serve as many people as we can every meal period and anything that slows down our ability to take their orders, deliver their food, and get them out of the restaurant to make room for the next guest is costing us sales and profits.

Let’s look at a couple of common examples and how poor shift readiness affects sales and customer satisfaction.

When you look at these scenarios,  you should immediately see a few patterns:
  1. Each one of these scenarios negatively affects customer satisfaction and speed of service.
  2. Every one of these issues was 100% avoidable 

These are the types of scenarios that you run into all the time in good enough restaurants but rarely see in great restaurants. None of them are horrible, no one got a finger in their chili, but they erode customer satisfaction and lower sales and profits, it’s death by 1000 cuts.

Are these kinds of scenarios playing out in your restaurants?

How to be Shift Ready Every Shift

The good news is that any restaurant can be 100% shift ready, the key is to hold your teams, at all levels, accountable to work your systems. This was very hard to do in the past but technology has jumped forward, and it is now possible to provide everyone all the data they need to do their jobs, effectively manage and coach right from their phone.

The systems you have already created, the checklists, the procedures, the training will all work and deliver the intended readiness if you can hold people accountable in real-time to using them.

There isn’t a magic bullet to being successful, it is a relentless focus on the basics, of controlling what you can control such as coaching, and inspecting what you expect that is going to deliver the results that you want.

Maximize Customer Satisfaction, Sales, and Profits

It all comes down to this. Every meal period is a new opportunity to take exceptional care of guests, generate sales and profits.  The only way you can maximize this opportunity is to be 100% ready to go before customers come into the building.

Making sure that the restaurant is clean and inviting, that you are fully stocked at every station both FOH/BOH so that when you are in the rush you never have to slow down service. Most importantly, that your food is tasty, safe, fresh, and prepared to the recipe.

If you do all these things every shift in every location and your people are friendly and happy to be there. Then your customers are going to get exactly what they expected to get and turn into repeat customers.

The best marketing you can do is deliver on your brand promise in every interaction with your customers. 

That is how you organically grow your guest satisfaction, sales and profits. Scroll up and read our case study and be blown away at how much running better operations and being shift ready can do for your business.

Conclusion

Shift readiness is a restaurant management philosophy that understands that every meal period is perishable and that you have to treat it with urgency and respect if you want to be successful, that you/your employee’s operations decisions affect customer’s satisfaction, sales, and profits.

It knows that the only way you can be a profitable restaurant is to maximize every meal period opportunity. It holds ownership responsible to implement the tools that will hold your team accountable for following your systems consistently across all your locations on a shift-by-shift basis.

Every day, in every restaurant, you and your team make a conscious decision to do get 100% shift ready for that meal period and maximize your opportunity or not.

Great restaurants are systematized operations and focus on readiness and service every shift, and good enough restaurants don’t.