The restaurant industry is like an escalator; you can move up or you can move down. But if you’re standing still, you’re walking backwards. Here’s my list of the seven mission-critical issues you should be focusing on now to insure a successful 2016:
Rising Wages. The combination of government mandates and union protests have all but guaranteed that this issue will be prominent in 2016 and beyond. And simply raising menu prices unilaterally is not the right response. Take a close look at all your prime cost line items and transactions and assess where strategic price increases make sense. This means assessing new ways to improve purchasing, scheduling, productivity and throughput so that the overall cost of meal production is lower. Maybe 2016 is time to re-invest in some menu merchandising training for your servers and cashiers too?
Staffing and Turnover. A shrinking labor pool is a reality in many markets, and if fewer qualified people are applying for open kitchen and front-of-the-house positions, then your twin 2016 HR priorities are clear: employee development and employee retention. The numbers don’t lie: Labor is not your primary controllable expense, turnover is. If you employ 40 people and your annual turnover rate is 50%, you’re churning 20 people per year, which dings you $40,000 in replacement costs ($2000 per employee). Assuming a 10% pre-tax profit, this means you must generate $400,000 in gross sales to pay for your annual 50% turnover costs. A 25% reduction in turnover saves $200K in sales and improves service, teamwork and productivity. What if we put the same resources we expend on fighting the $15/hr wage into employee retention instead? Read more about managing staffing and turnover challenges here.
Training and Development. If you want to build a stronger culture and climate, hold every Manager responsible for the culture and team that he or she builds. Assess talent and training gaps quarterly and re-design succession planning to be developmentally-oriented (talent) as opposed to simply replacement-oriented (tenure). 2016 is the year to re-assess how you train and orient new team members. Question every existing process. Why do we do it that way? What if we did it differently? Who does it better?
Unrelenting Data. Instead of managers chasing information, technology can now send information directly to managers. Lots of it. But filters are needed to control the volume, frequency and relevance of all that data so our managers are not drowning in information and starving for knowledge. We still manage with people and not through information.
The End of the Casual Customer. The dining public has shown more interest in the restaurant business in the last 18 months than they have in the last 18 years. Guests have expectations of foodservice operators today that far exceeds simply serving hot food hot and cold food cold. So get the Fundamentals down first: be brilliant at the basics, sharpen the saw of service and heighten hospitality in 2016. The mindful customer is the enemy of the thoughtless business.
Technology. Stay current on tech that moves your business forward and keeps your data safe. Make technology a perpetual line item on every manager meeting agenda.
Strategic clarity and relentless repeatability. Selling the team on your 2016 objectives to obtain their buy-in is the key to making measurable progress. So answer the following questions: “Does everyone on our team know and understand our goals for 2016? Do they know and understand their role in achieving those goals?” Trace recent improvements in your systems, processes, procedures or people back to both the major decisions you made and the people who drove those decisions’ success. This process creates a success roadmap-in-reverse and identifies the innovative people and scalable behaviors that can drive future success as well.
While it’s impossible to align all the uncertainties of the future into a set of certainties, these 7 mission-critical issues are a smart place to start. No one can predict the future. But together, great teams can create it.
Jim Sullivan is an operations consultant and keynote speaker at leadership conferences worldwide, including the Global Best Practices Conference presented by Black Box Intelligence (formerly TDn2K). Companies using his products and services include Walt Disney, Starbucks, Panera Bread, Applebee’s, Marriott, Coca-Cola and American Express. The 3rd Edition of his best-selling book Fundamentals has just been published. Get his free articles, apps, videos and e-newsletters at Sullivision.com and follow Jim on Twitter at @Sullivision