The Restaurant Biz Blog

What Does It Take To Keep The Best Employees Engaged?

As the economy begins to improve and diners open their minds to eating out, a popular restaurant segment with a high potential for growth is fast-casual. Categorizing this segment was first done by Technomic Information Services. The created term "fast casual restaurants" describe restaurants with the following classifications:

 

• Limited-service or self-service format
• Average check between $8 and $15
• Made-to-order food with more complex flavors than fast food restaurants
• Upscale or highly developed decor

Some might argue this is the perfect combination of features to drive any hungry diner to a plate. But there's more: great employees.

Although not as intimate as fine dining establishments, the fast-casual segment does owe some of its history to the "diner" culture. Sure, much different than a diner, but with an ambience that encourages a come-back-ness, like a favorite diner, the fast casual restaurant must engage diners and that means a great experience. Now, guess what your first line of guest interaction is? Your employees. We just read a great article by FastCasual.com in which Bob Phibbs, an author and retail expert, said with the exception of a few brands, fast casual restaurants have stopped hiring the kinds of employees who become actively engaged in improving the guest experience. Really? Why? 

“In fast casual, we have stopped rewarding the expressives and the drivers and have given all the power to the amiables and analytics,” he said. “They have hired people who have shut down and repeat the corporate line.” And yet, good customer service from the employee standpoint, “is about finding the right balance,” of employee personalities. “Customer service is the one thing that isn’t a money issue,” Phibbs said. “Expressives far outweigh that robotic, menial, employee typically associated with the high turnover rate that we have.”

So perhaps it starts with knowing your employees? And that starts at the hiring process and continues all the way through employee development. WyckWyre, by far one of the most effective web-based tools to post job descriptions, sort through the right employees and communicate with potential candidates, can help any restaurant begin the hiring process. Effective communication about your needs is critical and WyckWyre will allow you to do this at the front of the hiring process. Next, employee development.

First, what are your expectations and how do you encourage and train? Have you listed them? Do you communicate them? Presenting (or setting) your expectations is most important. By using a digital log book, managers will be able to "talk to" the most important expecations that you have. Secondly, email them (or have them written out)! Nothing is more important than the written word, here you'll want to document your expectations. Finally, find trainable moments. If you see something you'd like to encourage like a smiley face or expressive personality then identify it! Communication is the key to training and management, use as many opportunities as possible to present your requirements as possible!

What We Are Reading This Week...

Is there something to reading the latest news on a Monday morning? Sitting back with a cup of coffee and your trusty Google Reader seems to set us in the mood for the work week. Great data comes not from just our application, but from others as well... Here are a few that piqued our interest...

What does it take to be a successful enterprise? Well, after reading about Panera Bread's top-100 fastest-growing enterprises perhaps you should ask them. Panera is one of only two restaurant concepts to make the 2010 list. Read more here...

The fast casual restaurant category accounted for estimated sales of $23 billion in 2010, up nearly 30 percent since 2006. According to the article, "restaurants in this market claim to combine the quality of family casual with the convenience of fast food. At $6–$12 per ticket, pricing falls between fast food and casual dining. Fast casual restaurants distinguish themselves from fast food through their modified table service, higher food quality, greater attention to healthful foods, and, in some cases, availability of beer and wine." Read more here...

Ever heard of a pop-up restaurant? You sit and served only what the chef prepares, but is this another trend or fad? Read more here...

We'll keep the list going... But if you find something of note or interesting to share, post a comment.

Ever Heard: We Don't Know, What We Don't Know?

We don't know what we don't know? Wonder what that actually means? Ask someone on the street as we did and you'll get several answers:

• Kevin, restaurant owner: it means you don't know where the "whats" are, as in "what if"
• John, college student: it means you can't know, because you don't know
• Travis, electrician: reminds me of working on historical buildings where I seem to never know what to know

In our minds, it means you don't know about the upcoming, upcoming. You were not as prepared as you could've been; or, not for that one little "thing". Likely, impossible to understand, report, gather intelligence on everything in advance, but what you know now often helps you to know then.

That's why doctors recommend a yearly check up, so they can help you know more about your health. Car lube/oil change establishments, make sure you're on a schedule so they can know your car. In the restaurant and retail industry, we must do the same: know more, by knowing often. The question is what should we monitor; so we, um, know at all.

To start, it is all about accurate and quality financial (labor and inventory) data. As restaurant operators, we MUST do two things well: get food in, and get it out. So the most important aspects of our business must be monitored closely. Below are few reporting and accounting best practices from RestaurantOwner.com, a great resource by the way.

• Daily recording of sales and receipts
• Detailed cost-recording of purchase invoices
• Weekly food and labor cost reporting
• Counting and computing inventory on a weekly (or monthly) basis
• Tracking key inventory item usage on a daily (or weekly) basis
• Managing time and attendance and accounting for labor expenses 
• Having a monthly financial profit and loss statement
• And more... But we can help you there... 

Interestingly, of this list there are three that really drove success to operators.

• Monthly financial profit and loss statement...
  • 73% of operators that received monthly financial statements reported being profitable.
  • Only 49% of (resturant survey) respondents that received just quarterly or annual statements were profitable. 
• Weekly food and labor cost reporting... 
  • 75% of operators that received weekly food and labor costs were profitable.
  • Only 60% of respondents that didn't get weekly reports were profitable.
• Counting and computing inventory on a weekly or monthly basis...
  • 72% of operators that do an inventory at least monthly were profitable.
  • Only 58% of operators that don't compute inventory values are profitable.

The bottom line is limiting, through the use of great data, that ever-present phrase, post disaster, or: we didn't know what we didn't know...

Is HR The Next Hot Topic In Restaurant Software And Services?

As restauranteurs we have to do two things very well: find great product and serve it. Both of these tasks involve human interaction and that means managment duties, fortunately or unfortunately. Thankfully we have web-based support mechanisms like inventory management tools and labor scheduling functionality. The features of theses solutions create a lot of effeciencies, true. We get help configuring our businesses so we are notified when schedules are not consistent with our sales goals or if inventory is low. And although we are serviced by these tools, again thankfully, one question that digs deep into both of these matters is the human side... How do we know we are working with the right people?

Now, if someone had a perfect answer to finding the BEST vendor or MOST MOTIVATED employee then no one would ever be fired. Alas, there are solutions gaining ground to solving this ever persistent challenge. Yet, the challenge remains...

Two studies, one from academia and the other from professional management consultants, tallied up the "human resources" concerns in and about the restaurant industry.

In the study "Job Satisfaction, Life Satisfaction and Turnover Intent of Food Service Managers," Professor Richard Ghiselli of Purdue University's Hospitality Tourism and Management Department discovered working conditions impacted restaurant manager to the breaking point. Ghiselli uncoverd an exodus. By the time many restaurant managers reach their forties, they have probably left the industry.

And...

According to the 2005 Datassential Operator Survey, when “decoding the profit and loss puzzle for your restaurant customers, it’s important to keep in mind that labor is nearly as large an expense as the food itself.” In fact, hiring and retention has replaced food prices as the top worry for restauranteurs”, says Hudson Riehle, Senior Researcher at the National Restaurant Association.

Lastly, in the popular Fohboh.com blog, the situation is summarized very well. Imagine the following case:

Number of restaurants in chain: 100 restaurants
Average employees per restaurant: 75
Total employees (operating): 7,500
Turnover rate: 100%
New employees: 7,500
Cost per new employee: $2,500
Total potential cost annually: $18,750,000
Total cost per restaurant: $187,500
Projected sales per restaurant: $2.8mm
Estimated cost per restaurant: 6.7%
Cost per 1% of turnover: $187,500

So what's the answer? Like we started with, use web-based tools and stay tuned for enhancements to the WhenToManage suites of services. Secondly, take time to read these great posts by management experts in the restaurant industry. They talk not just about the technology side, but emotional part of our brains...

Are You Listening To Your Data?

Over the past 30 or so years, the concept of Data Management consisted of getting data in and not much more. Now, through technical evolutions, getting data in wasn't so much the problem and Data Management evolved into Information Management or what data should we look at. Yet, another computing change altered the course of the data stream and Information Management evolved into Knowledge Management or now that we can look at the data, what do we improve. So the shift was dramatic: data in = no problem; data review = got that done; data listening = what the heck does that mean? Well, it means just about everything to a business looking to improve their operations.

Knowledge management is probably an understatement. Perhaps the better way to say it is try-surviving-without-it management. Visualize the following situations:

• A long-time restaurant owner wants to launch a new variant of his famous burgers. To do this he has to know past successes in order to know the best time to launch the campaign.
• The VP of Marketing of a large chain has a feeling that something is wrong with his latest promotion and needs to review the latest sales figures. 
• A restaurant manager is overscheduling and losing money each day on labor costs as a percentage of sales. She needs to research previous labor schedules. 

Situations like these are common, and without listening to your data, impossible to understand/improve/move forward. The data is the lifeline of any business whether one wants to arrive at a marketing decision or fine-tune a product launch. So what's the importance of listening to your data? Well, maybe that's not the right question. Instead, you should ask yourself what's not important about listening...

Merely analyzing data isn't sufficient from the point of view of making a decision. It is more than that; just like listening is more than the act of hearing. Consider it this way, when you listen to your data, knowledge is gained because the data is the supporting mechanism (data + analysis + engaging = listening). Listening to your data can offer the following benefits:

• Breaking a macro picture into a micro one to fine tune your preconceptions.
• Acquire meaningful insights and basing critical path objectives on real information.
• Turn passionate operators into better business people through the use of information when they want it, how they want it and where they want it.

We fully support the concept that knowledge should be managed and include discussions about processes that facilitate the use of information to influence decision making. Said another way, we help business listen to their data...

RESTAURANT EMPLOYEES EMBRACE ONLINE SCHEDULING SOLUTION

WhenToManage uncovers communication trend: web-based scheduling application fosters increased collaboration and productivity in the restaurant industry

WhenToManage, the leader in real-time, online reporting and integrated point of sale (POS) business analytics solutions for retailers and restaurants, released the results of a nation-wide user survey proving the critical value of online labor scheduling. Operators, faced with multiple employee scheduling demands, using the web-based communications and scheduling technology, can now more effectively optimize employee-to-management information sharing through a fundamental improvement to the labor scheduling process.

The 2010 Survey of WhenToManage Online Employee Scheduling Users, a national web-based survey of over 700 online restaurant employees conducted throughout June and July, found that 90% experienced improved communications to the point where they would highly recommend the application to employers. Over 70% of respondents stated the seamless communications, enabled by the application, increased productivity through improved workforce collaboration. The survey findings highlight new thinking about personnel management in the restaurant and retail industry. The data posits that increasing employee engagement through seamless and interactive scheduling technology makes for more productive employees and efficient scheduling procedures.

“We were very pleased at the overall survey results. The fact that 90% of employees would recommend WhenToManage to future employers says volumes about our tools. Many of them commented saying that it ‘totally opened up communication,’” said Jeff Schacher, CEO of WhenToManage. “We discovered that many of our employee users ended up being the power-users of our technology. They are one of the driving forces behind adoption at their restaurant. Frankly, because WhenToManage is so easy to use, we believe it will reduce the headache of employee management now and in the future. Some personnel matters will go away leaving more time for essential management duties resulting in happier employees to boot!” said Schacher.

Employees using the application can review their schedules and manage availability requests from either the internet, email or mobile text messages. Using secure log in functionality, employees interact with the system by requesting days off, set preferred shifts, update availability and swap shifts with other employees. Employee requests are then sent back to the store manager for approval. “With employees having less time to accomplish more, the online scheduling application addresses key productivity challenges by opening up communications and encourages employees to work together. This key development keeps the entire operation running smoothly.” Said Schacher.

Demanding Customers - How Does a Server Cope?

Have you noticed that the average customer has become a bit more demanding? A couple of weeks ago we went out to eat and the table next to us was one of those demanding customers, I felt so bad for their server.

To start off with, they ask if the kid's meal comes with drink, of course the parents were drinking the soda, not the water they ordered and must have had 6 refills during their meal. Every time the server delivered a course they would always ask the server to bring something. They didn't ask for this all at once, when the server would bring them what they first asked for then they would say, "Can you please bring some more butter". The poor server would make 2 to 3 additional trips every time they visited their table.

The general public is wary of the economy and what it means for the future and discretionary spending has been replaced by saving. So, when the unique opportunity presents itself to enjoy a meal outside the home, patrons want their experience to be well worth the money they are deciding to spend. I'm sure the tips are smaller as well.

Demands, like the customer I described made, may at times seem a little outrageous. And, with this increase in demands, it can often really affect an employee's morale as they are striving harder for increased customer satisfaction. Managers have to be really careful to protect the interests of the customer and the employees. This is not always easy, but you can accomplish both by first focusing on the needs of the employee. Their improved outlook on work will increase the likelihood of continued focus on customer satisfaction, which in turn, keeps the customers coming back.

Here are a few suggestions:

• Recognition: Build a system whereby your patrons have the opportunity to recognize an employee for a job well done. This is often accomplished with feedback cards. Recognition from management is always good, but when hearing directly from the customers, you know exactly how they felt about the experience.
• Give praise: One of the easiest and best things you can do for an employee is to recognize their contributions to the team.
• Rewards: This doesn't have to be big we are talking about an extra shift off, a free meal, or an employee-of-the-month, the reward for a job well done is appreciated and remembered.
• Vent Sessions: Some individuals find that the greatest release of the associated pressure is to vent to others about the experiences. Give your employees a place where they can do this but make sure its facilitated to it remains a venting session and not a customer bashing session. They can let out their frustration, identify with others who had similar situations, and learn how others handled it.

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Interested in learning about how we can help you manage your food costs? Join us for a demo of our inventory system.

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Recipe Costing for Profit

In a previous blog post, I wrote an overview on recipe costing, since this is so important we are going to expand on this further.

When you ask a restaurant owner/chef about recipe costing, the usual answers are: "We don't have time to do that" or "By the time we get done it won't be accurate any more" or "How will that help, we're doing okay". All of these responses beg the questions: has the potential, ideal or theoretical cost been established? What is it? What method was used to determine the projected cost?

Proper recipe costing is a somewhat tedious and time-consuming task; however, when compared with the potential dollars lost through undetected high food cost, it is time and money well spent. Large restaurant operations frequently prepare budgets without thorough research into the various components that constitute the overall food cost.

Before attempting to cost out recipes, it is necessary to run yield tests not only on the center-of-the-plate items, i.e., meat, fish and poultry, but also the vegetables, starches, sauces and garnishes. It is important to note that when doing butcher tests and fish tests, not only is the net cost of product of interest, but so is the time necessary to do the preparation.

This is especially true if the chef or the sous chef or some other highly trained, highly paid individual is doing the butchering. That person's time, while not part of the food cost calculation, is part of the labor cost, and one must ask if that is the best use of time and talent. It is appropriate at that time to study the total cost of doing the butchering in-house vs. buying portion-controlled products, taking into consideration the ability to use the byproducts, quality control issues, consistency of yield and net cost of the plated product.

The time spent cutting meat, fish and poultry also has a direct relationship to the sales abstracts when preparing production charts for the kitchen staff to maximize utilization of labor hours. Too often, operators take shortcuts by attempting to cost recipes using the gross cost of ingredients, resulting in artificially low costs - and then wonder why they cannot achieve their cost objectives.

Costs must also be included for tabletop gratis items such as bread, butter, relish trays or any other complimentary items included with a given meal period function. Random checking of plated items must be done to determine if the production staff is adhering to established portion guidelines.

ESSENTIAL ELEMENTS - Key information needed for recipe costing:

• Date recipe was costed
• Meal period
• Recipe name
• Last update
• Yield
• Portion size
• Cost per portion
• Profit per portion
• Suggested selling price
• Food cost percentage at suggested selling price
• Ingredient description
• Purchase price
• Per unit
• Recipe unit of measure
• Cost per unit of measure
• Extended ingredient cost
• Total recipe cost
• Suggested selling price to achieve specific food cost goals, i.e., 25 percent, 30 percent, 35 percent
• Plating instructions
• Garnishes

Once each recipe is properly costed; a review of the sales is needed to determine how the mix of sales will affect the overall theoretical cost. Then each recipe's cost and selling price are entered into a spreadsheet, the only ongoing task is to enter the mix of sales for the period under review to determine the food cost potential for that period. This period can be by day-part, by day, by week or by month.

Any time the cost of recipe ingredients changes radically, recipes are added or deleted from the menu, special pricing is offered to clients or there is any other factor that could change the relationship among recipe costs, revenue and sales mix, you should calculate a new theoretical cost. You must remember that this "ideal" cost assumes there is no waste, over portioning, pilferage, spilled food, employee consumption of food, etc. In reality this does not exist in day-to-day operations; however, well-run operations frequently can maintain costs within one or two percentage points of potential through diligent cost-control systems.

Without the knowledge gained through recipe costing and the subsequent application of those individual costs to the sales mix to determine what costs should be. It would be nice to say that recipe costing would solve all the problems; however, it is only one piece of the puzzle, an important one, that constitutes the total picture of any well-run food and beverage operation.

Before any management team can determine what it wants its food costs to be in the future, it must determine what they are today and then decide the most prudent approach to achieving its food cost goal. At the same time it must continue to provide guests with perceived value for their catering dollar. Recipe costing is a necessary first step to that end.

There are also many inventory software solutions on the market today that can help automate this process and give you accurate and timely inventory costing reports.

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Interested in learning about how we can help you manage your food costs? Join us for a demo of our inventory system.

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Re: Why Are Restaurant Operators Such a Hard Sell?

I just read Michael Atkinson's post on Fohboh.com called "Why Are Restaurant Operators Such a Hard Sell?" He was talking about how resistant restaurant operators are to adopt new technology and processes.

That really got me thinking about the very question he asked. Why is it that way? I have a theory, let me know what you think.

The Management Mind Life Cycle

• Stage 1: Party Time - a new restaurant opens or a new general manager comes in to an existing restaurant and they are energetic and ambitious to grow their business. They throw money and time at different ideas to get people in the door and drive revenue (managing costs often isn't even worried about until later). 

• Stage 2: Party's Over, Now What? - the party can last a week, a month, or a year. But when it's over it's over. Staring  at an empty restaurant, the operator looks back at their success and says, "I either have to spend more time and money doing what I was doing or I need to try something new."

• Stage 3: Rinse and Repeat and Repeat - owners and managers will try and try new things in an effort to repeat their previous success. (for some science behind this behavior look at "schedules of reinforcement" - I know I'm a geek)
  
  After each failure they become more and more cynical of trying new things and eventually they just resist any kind of change because the last 10 things they've tried haven't had any benefit.

The Big Secret
Well it's not that big, and it's not that secret, but the secret is MEASURABLE ROI!!! The only way to know the return on your investment is to measure the effectiveness of your investment. Of course people get burned out and defeated trying to repeat prior success if they don't really know why they were successful. Maybe the money spent the first month didn't actually bring anyone in the door, but it was the fact that their nearest competitor was closed for renovation. Imagine how empowering it would be to know why something is working or not working. It makes business decisions so much easier.

So I think the only way to really attack the problem of the resistant operator is to educate them or re-educate them on ROI. With all the new web-based software companies, an operator can try a new solution for very little investment of time or money and quickly see if it solves their problem or not. 

I am hopeful that these sluggish restaurant operators can be re-energized and empowered with a few chats on ways to follow their money out the door and ways to watch if it comes back in.

 

What Makes a Restaurant Manager Great?

A great restaurant manager is a good communicator and a good supervisor. They have the ability to understand and anticipate the patron's wishes before they've been expressed. The manager will also have a good sense of smell and taste so that she may be able to tell if everything is right with the dishes coming out of the kitchens.

A manager has the overall responsibility of making sure the restaurant is operating as efficiently as possible and at a profit. All aspects of restaurant activities are the manager's responsibility. In most small restaurant settings, the manager is also the owner and handles the business end of the operation. The manager takes care of advertising, hiring staff, ordering food and supplies, and does the accounting. In other words, the restaurant manager is in charge of the smooth running of the restaurant. They may also greet guests, seat them, serve as cashier, and even cook when need be. While the chef or kitchen manager is responsible for food preparation and the back of the house, the restaurant manager directs and coordinates the efforts of the rest of the staff or the front of house. The restaurant manager must have a thorough knowledge of the food service inside and out. The Manager is also responsible for all the equipment used from lighting, to ventilation, to ovens, to cooking utensils. He needs to know the cost for installations, and maintenance of such equipment, all that besides accounting, banking methods, budgeting, and credit.

Tips for a good restaurant manager

1. Communications: Implement the use of a log book and restaurant communication book. It can be as inexpensive as a spiral notebook, or as elaborate as giant diary. This can be a valuable tool for communicating, and data collection to be reviewed at a later date.
   
   Managers may not work together due to days off, and scheduling. Log books create a means to stay on the same page, keep on track, review goals, and implementation steps to reach them.
   
   Do not use this book as a place to place blame and point fingers but as a tool to proactively resolve issues. Communication is key to building trust, and in team building. Make it a practice to build up you team with positive feedback, and clear expectations.
   
   
2. Be proactive! Before your shift begins, sit down and plan your day. What are the tasks of the day? What employees are on the schedule and what times are they expected to work? What food orders need to be placed? Are there any catering orders to plan for? What time is the plumber coming to repair the sink? You will be amazed at how many things you can accomplish. Make it a habit. This is a sure way to increase your productivity.
   
   
3. Lead by example: Conduct regular shift meetings with the staff. This is to review expectations and communicate upcoming changes that may be occurring. This is a daily opportunity to remind the staff of the standards, and arm them with the information to help them to perform better. Expect all the managers to do the same. They can be as brief as a 3 minute meeting. Review the daily specials, its an opportunity chance for the staff to understand your priorities and standards.
   
   Jack Welch was the master at leading by example. "He had great energy, sparked others, had incredible competitive spirit, and had a record of execution that was second to none. This is a key of the Welch phenomenon. Had he been lacking in any of these traits, he would not have commanded such acclaim." He was GE's number one cheerleader and called himself "the advertising manager of our company." He had the zeal and the optimism and a lexicon of a winning football coach: "exciting", "remarkable", "staggering", "incredible". These are the words Welch employed to describe one of the most powerful enterprises in the world.
   
   As W. James McNerney Jr., head of GE Aircraft Engines, noted: "The excitement comes from within him and is extremely contagious. He's a tremendous motivator. He's excited and he gets you excited and you're always moving forward. He keeps it simple. The differentiator between GE and many other companies is that there are more people moving in the same direction and with the same enthusiasm. Jack might like this on his tombstone. 'I wasn't smarter that anyone else, but I helped 270,000 people make me look smarter than most.' "
   
   While we cannot all be Jack Welch, we can learn from him and apply his teaching to any company and to any job. Remember, to spark others to perform, you must lead by example.

Sometimes the complexity of the operation can be daunting, and managers can lose themselves, get sidetracked easily, and be in a reactive mode in the managing their business. This lack of focus can cause chaos, which is very bad for the business.

Its always easy to find fault so make sure to positively reinforce good behaviors to build morale. Always look for what your staff is doing right! It is important to point out errors your staff is making, but the way you teach is by positive feedback, consist training, and policy enforcement. If you are proactive, communicate well, and continually train your staff to expectations, you will soon reap the rewards and enjoy a very efficient restaurant that you will take pride in!

 

 

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