Where would you be if you didn’t have systems? And how good are the ones you’ve got? You know the ones I mean. Health and safety. Stock control. Disciplinary control. Garbage disposal. Customers loyalty. Staff training. Cash up and banking. Online purchasing or booking. Customer complaints. Staff incentives. Security. Marketing. Social media. Equipment maintenance. The list seems endless.
It doesn’t matter whether you are the All Blacks on defence, Scott Morrison dealing with a media frenzy, or Jose down at the local trattoria tackling stock control – without systems you’re going to be in trouble. It continues to amaze me how much money and time is spent on creating a beautiful drinking environment, or a catalog of superb wine, yet operational methods are often thought of last, or if at all.
I had the opportunity once to work in a multi-million dollar retreat and restaurant operation some years ago. No compromise on fit out, magical outlooks, a turbo till system, mind-boggling wine list, $60 plates. You could have eaten comfortably in the toilets. All the ingredients of a world-class operation. Yet there was no stock control on beverage or food, no waste control, no P+L, no budget, no marketing plan, no forward planning, almost no staff on contracts, no accounting system of any merit, and no plan for how to offer food and beverage services to the accommodation where some guests were paying up to $3,600 a night for the privilege.
How could it have been missed? Pretty easily, if you talk to realtors dealing in the sale of hospitality and liquor businesses. The ones that have systems sell for good prices; the others go for scrap. The cliche about the McDonald’s burger not being the best but having the best system of production holds true.
When we made the change from La Chinesca to Harley House Bar and Grill, we had to do it over one weekend spent creating spreadsheets, steps of service, reporting systems, weekly meeting agendas, a budget for the year, new logos, and methods of social media production. It was exhausting, but essential to put into place the protocols we needed to plan and run the business on a day-to-day nature. Four and a half years later, we know exactly where we are financially on a daily basis, what our costs are on a weekly basis, where the holes in the road and the speed bumps are in the year ahead, and have KPIs and reporting systems to deal with all unforeseen situations.
Ask yourself these questions:
- Where is your first aid kit? Is it just a box with a couple of bandages and aspirin, or is it something you can offer to a customer who has fallen and injured themselves severely?
- Does your company have a policy to deal with sexual harassment? The hospitality is well overdue for being brought into line with other industries and the days of sexual innuendo and inappropriate touching are long gone.
- Does your stock control system tell you what you should have made as well as what you did make? Are you using this facility? It’s all very well sitting on 30% cost of sale, but should you be on 27%?
- Could your staff really deal with a fire emergency? Or do you continue to use the back passage to store excess stock or excess rubbish?
- Have your staff been trained to deal with how to handle a hold-up?
- Do you have a backup if your internet system goes down?
I have to be honest, sometimes I can’t give the right answer to some of these. If you haven’t addressed these questions it’s time to wise-up. It only takes one unforeseen problem that isn’t dealt with properly to damage reputation and trading results. This could be anything from a bad online review or red wine spilt on a white dress.
Often it is difficult to step outside the business and be objective about how good an organisation you really have. This is either through lack of time or interest, and therein lies the problem. Systems aren’t terribly glamorous, they are not half as much fun as doing the cooking or pouring the drinkies. I personally love dissecting a P+L spreadsheet, but ask me to create one and you’re not going to like my answer. I use one Excel document that I’ve taken with me from venue to venue that gives me everything I need to know about the previous seven days of trading. It also took me a whole week to create, but is probably the most valuable tool I have in the whole venue.
Chefs hate doing stock control and are often allowed to get away without doing it. I call those guys cooks, not chefs. Anyone can get a great reputation with the public and critics if they put food out at 50% cost, then leave before the restaurant goes bust. Systems take time to create, implement, and maintain. No wonder that first aid kit remains empty. It’s such a chore to keep it full.
“Systems help staff by setting boundaries that can’t be crossed,” my old boss, Luke Dallow, owner of Salsa in Auckland. “They make life easier and force you to adhere to them. They also save you money by setting par levels, you can monitor your stock and purchasing and over-ordering becomes a thing of the past. Managers have to be able to wear many hats, and often staff are promoted to management without proper training or backup. A great rugby player will not necessarily make a good coach, so why should an excellent waiter make a suitable GM? Whether it’s filling in an order docket, handling a phone enquiry, or clearing a table, it should always been done the same way so that they rest of the staff can rely on the fact it’s being done properly.” Systems create a support network for even the greenest of managers or owners.
Tale a look at Chin Chin, Lucy Lui, Rice Paper Scissors, Congress, the Hanoi Hannahs. All well established, respected businesses that give a consistently excellent delivery of service. How do they do this? At Hawker Hall for example, the bar tenders do 3 food running shifts before they’re even allowed to make a drink. This helps them to understand the food menu and how table services operates. I was fascinated by the service I received in London during a recent trip at the Ledbury, one of the top 50 restaurants in the world. Not only was the service in this Michelin-starred dining room immaculate, it was also friendly and disarming and covered every base. I was asked about my dietary requirements, but also if I’d been to the restaurant before, where I was from, and how long I was staying in the city. When I asked if they could charge my phone, they bought out a beautiful battery pack rather than take it away.
When I asked the manager, Darren McHugh, if they were just being nice to me, he explained that it was part of their service to ask these questions to make the customers feel as welcome as possible, and that they kept track that each of these interactions had taken place for each table. So, not only did I have an amazing meal, I felt valued and not just another bum on seat which made the occasion so special. I go there every time I visit the city.
At a recent trip to Hanoi Hannah, even though it was crazy busy and I was in a massive hurry, the staff were still able to take the time to follow the steps of service, explain the menu to me, take note of my time restraint, offer me appropriate suggestions of fast items, and get me in and out in half an hour. No drama. No fuss. It’s just what they do. As a seasoned hospitality operator, I can tell on walking into a venue whether the shift is under control in about 15 seconds. Even the busiest places like Mr Miyagi or Rice Paper Scissors are set up to handle even the biggest tsunami of customers with grace and aplomb.
At the Hard Rock Cafe, we talked about “processing the customer like a sausage” so that each person that comes through the place gets an identical experience, the same reference points, is lead in the same direction, and has the same exposure to the memorabilia and merchandise stand. When I worked for HMC during the time when they were operating pubs in Victoria in the early 2000’s, the calendar of events for the year was created 12 months in advance at all times to give the maximum amount of time to create, prepare and implement promotional opportunities. No last minute Valentine’s Day menus or surprises. Everything had a build-up time, sales target, and a cost structure.
My recurring message is to treat your business as a business, rather than as a vocation or something you fell into because it seemed like a good idea. Just because it can be remarkably cheap to get into the market by picking up someone else’s failure for a song, it doesn’t mean you shouldn’t think with a corporate mentality. I will deal with the dangers of being over-passionate and over-bottom line focused in another article. And also the fact that just because you built it, doesn’t mean they’ll come. How many years did it take Chris Lucas to find the Sydney location for the new Chin Chin? A loooooong time.
I remember when the Horse and Trap in Mount Eden in Auckland was taken over by a guy called John Lincoln. He had a corporate background and turned a failing, grungy pub into a slick, mature drinking establishment with good food, serious coffee and a mission statement. He identified key stakeholders, created business plans, identified new markets, held weekly management meetings, and created a new attitude to service and food, and hey presto – a very professional and successful operation was created. No prior hospitality experience, just well used systems to get the best results possible.
So where do you start? For the front of house or retail area, create a staff manual. Something everyone can understand and relate to. Then walk staff through it. Personally. Give them tests to make sure they know what the address of the venue is, where the best parking is to be found, what the phone number of the venue is. The manual doesn’t have to be a book, but it does need to present a professional image to the new staff member. Look at Sand Hill Road Group. They haven’t built one of the most successful pub groups in Victoria by not focusing aggressively on the importance of hiring, training, and keeping staff engaged. I have yet to meet a staff member who doesn’t love working for the company. You have to believe in your message.
A new employee pack complete with all the relevant forms and contracts included should be standard. When completed, this goes into the staff member’s file where all relevant documents are kept regarding this employee. (One big tip here – take notes of every meeting, no matter how short, you’ve had each staff member. You won’t regret it). The manual explains the company mission statement, policies on misconduct, security, health and safety, sexual harassment, misuse of company property, etc, etc. It only when things go wrong that you realise you have left many i’s un-dotted. (Don’t leave anything to chance, and do not rush staff hiring or firing. You will regret it).
Appraisals are things I avoid, but find so interesting to take part in. Sometimes the truth hurts, especially if it is coming out of your own mouth. I realise I need to do these more often with my team, no matter how painful it may be. Or pleasurable!
Have purchasing sheets for ordering, accounting systems for waste, broken stock items and promotional activity. Information from tills and computers is worthless if its integrity cannot be trusted. Check each delivery invoice for price differences and mistakes. Human error does happen, and if not picked up on, can cost you a fortune. On a recent audit of my beverage stock, I realised I was selling a top end tequila almost at cost. Oops.
Health and safety requirements are there for a reason, and that 30-year old fire extinguisher won’t cut it with putting out a flame, or saving your insurance claim. It may mean that you have to take time out of the day-to-day operations of the business, but it will have to be done. Too many of us are working in the business, and not working on it, and each week that goes by without systems in place could be the one that kills your business.
Recently, I re-organised my weekly schedule to spend 2 days purely on operational and strategic matters. I may not even go the the venue to avoid distractions and interruptions. Once you get the work done, it will so much easier to run your business better. I now have more time to spend on the front line serving customers. Like a perfect recipe, once a procedure is created it just has to be replicated again and again, which isn’t always easy, but the hardest part is putting the system jigsaw together in the first place. Once this is completed though, the peace of mind it will give you will be well worth it in the long run.
Jonny Cortizo 