TOH

Strategic Thinking for Tomorrow’s Restaurant Business Operators Today

We can disagree about when things started to go wrong, but the one thing we can all agree on is that the way you perceive and think about your business, needs to change if you are to either start, or continue to build success long term. The days of “you build it and they will come” have gone – if they were ever really here to begin with (another debate for later).

What is necessary now in operating a food service business today is the need to think, plan and act more strategically than you ever have before. To ask more complex questions and find deeper, more long term answers than you have probably ever done or felt the need to do.

So based on this notion and the work I have been doing with my most successful clients through this economic tumult, I would like to propose some areas with which to start.

1. Realize that you have to think long term continually and not short term constantly. You have to begin to take a long hard look at your business and determine if there are parts of it you need to let go. Is your catering business really giving you’re the ROI you need or was it just something that you thought could compliment your dine-in success but really hasn’t? Do you really need to hire a GM in order for you to focus enough on having the conversations and doing the work necessary to drive your future success? Is it time to get some help with your marketing or to fine tune your concept to help guests (and yourself) really understand who you are (in your guests perception not yours) and what it is you need to offer (versus what you want)? And to whom you need to offer it? Do you have that business plan (marketing plan?) that helps guide you on a daily basis or is it just something gathering dust on the shelf? Are you just flying by the seat of your pants, reacting to things that happen to you?
2. Prepare to do battle. People’s fears over the economy and for some, the realistic need to cut back on spending isn’t going to subside tomorrow. What do you need to do today, tomorrow and the next day, to not just deal with it but to take advantage of it by reconfiguring your business to succeed in spite of it? How can you decrease your breakeven point instead of just cutting costs on a shift-by-shift basis as you encounter things you can do without? How do you configure your service and pricing models to add value to the guest experience in a more creative and innovative way that guest’s respond positively to, without further decreasing margins or diluting your brand? How can you heal the damage already done so that it doesn’t become a weak spot moving forward? What hiring, retention and coaching processes need to be begun, changed or done away with entirely in order to be able to change your culture as deep and fast as necessary in order to achieve long term success?
3. Start to look at what your market will look like in 6 months – a year – two years from now. How will you fit into it? Will you? What do you need to do now to make sure you succeed in such a market? Are you keeping track of trends? How can you get better at it? Can you improve your networking with the right business minds in your community and market to be able to pick up on unmet needs or opportunities that you need to take advantage of? If you were to open your restaurant 6-12 months from now, would it be the same one you have now? What would you change? Why? Why not now? Will your competitors be the same or will you encounter others? Do you have a plan to constantly and holistically reevaluate your business in order to keep ahead of everyone else? What do you need to do to take the next step and become the trend setter yourself?
4. Develop your game plan now. Stop looking at labor, food, rent and training as costs and start to look at them as investments in your success. Measure them as diligently as you do your financial returns and scrutinize not their need but their effectiveness and begin to demand more accountability out of yourself and your staff in reaching your goals. Create a marketing plan that allows you to be able to measure results more efficiently and effectively and that creates the seamlessness and momentum, necessary to make 2+2=5, or 6, or even 7. What can you attack structurally, that can yield you better returns? Shouldn’t you revisit that lease to make sure it reflects true market rents given the economy and occupancy rates today? Can you afford to still pay prices from years ago? Have you kept up with demographic shifts in your market? Do you need to move your business to better reflect your proximity to your target market? Do you need to revamp your pricing, menu, production or service processes to be able to add more value to the guest experience you offer?
5. Be more calculating in your risk taking, but don’t become risk averse. Are you making smart purchases that reflect true market pricing or are you still paying for someone else’s mistakes? Are you renegotiating your vendor agreements to take advantage of lower prices?  Are you rebidding those agreements? When is the last time you reengineered your menu? Is now the time to open that next location in order to consolidate and expand your marketshare? Or to take advantage of your competitors misfortune? Are you capitalizing on your past success by leveraging your credit levels and terms? Is there any investment you can make to leverage your knowledge of your market or your streamlined operations and gain market share external to your existing business? Is it time to open that BBQ business to capture an altogether different market than your upscale full service venue?
6. Prepare yourself to change with your change. Are you keeping up on industry trends and best practices? Are you devoting enough time to growing yourself in order to be the best you can be in order to help those around you be the best they can be? Are you investing in your “A” players enough so that they continue to see you as the only place they would ever want to be? Are you trimming the “C” and “D” level talent form your ranks in order to improve not only your operations but your effectiveness as a leader? Are you raising standards instead of lowering them? Have you purged your business of any “just getting by” or “just surviving” thinking and actions? Or are you continuing to subsidize million dollar mediocrities?

Simply reacting to your circumstances may have allowed you to keep up so far. This isn’t true anymore. The competition on the other side of this purging will be fierce; any decision to maintain the status quo will only end in disaster for you and your business. Be proactive by developing your strategic thinking skills and put them into action to help you build a better business and a better life for yourself. You deserve it.

If you are going through this change and need help, give me a call.

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Finding Great Talent

Finding great talent is itself a great talent. And over the course of working with literally hundreds of clients in the past year, it became very clear to me that I had realized an even greater need to help operators find great talent. So I have launched a new service at RCS to do just that - Find Great Talent!

We don’t charge a % of the first year’s salary on top of already way too high fees for too few results that usually wind up leaving for some reason anyway.

We leverage our connections with hundreds of operators around the country to find the best “A” level talent to be found anywhere - for you!

So the next time you need a position filled and get a sick feeling in yoru stomach as you ponder the start of “the hiring process” again. Stop and give us a call.

You can check out this program here. Or if you’re ready to get started go here.

Merry Christmas!

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Roy W. MacNaughton

My friend Roy MacNaughton passed away suddenly over the weekend. Roy truly was “Really Cool People”. He has been my grounding force since we became friends years ago. We wrote together, talked together, laughed together, argued together and generally shared our lives, both offline and online. I am a better person for having met and befriended Roy.

I will of course miss his wit, intellect and selfless, contrarian nature - all of which are in short supply these days. But most of all I will miss his friendship.

My prayers and thoughts are with his family.

If you knew Roy and wish to leave a comment for his family and friends, please do so here on his blog.

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New FMLA Rules

10 Important Revisions

The Department of Labor has released final regulations covering the Family and Medical Leave Act (FMLA) and addressing new military family leave entitlements for employees.

The department says that many of the revisions were designed to clarify the requirements that the FMLA imposes on both employees and employers and to improve the communication between employers and employees.

Here are summaries of some of the significant revisions included in the final rules.

Serious Health Condition: While the rule retains the six individual definitions of “serious health condition,” it adds guidance on some regulatory matters. First, it clarifies that if an employee is taking leave involving more than three consecutive calendar days of incapacity plus two visits to a healthcare provider, the two visits must occur within 30 days of the period of incapacity. Second, it defines “periodic visits to a healthcare provider” for chronic serious health conditions as at least two visits to a healthcare provider per year.

Intermittent Leave: The final rule clarifies that employees who take intermittent FMLA leave have a statutory obligation to make a “reasonable effort” to schedule such leave so as not to disrupt unduly the employer’s operations.

Employee Notice: The final rule states that when an employee becomes aware of a need for FMLA leave less than 30 days in advance, it should be practicable for the employee to provide notice of the need for leave either the same day or the next business day. When the need for leave is not foreseeable, an employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances.

Gaps in Service: The final rule adds a new paragraph that addresses the requirement that employees are eligible to take FMLA leave only if they have been employed by the employer for at least 12 months and have at least 1,250 hours of service in the 12-month period preceding the leave. The final rule states that, although the 12 months of employment need not be consecutive, employment prior to a continuous break in service of seven years or more need not be counted.

Light Duty: Under the final rule, time spent in “light duty” work does not count against an employee’s FMLA leave entitlement, and the employee’s right to job restoration is held in abeyance during the light duty period. If an employee is voluntarily doing light duty work, he or she is not on FMLA leave.

Perfect Attendance Awards: The final rule changes how perfect attendance awards are treated to allow employers to deny a “perfect attendance” award to an employee who does not have perfect attendance because he or she took FMLA leave–but only if the employer treats employees taking non-FMLA leave in an identical way.

Medical Certification: In the final rule, the department adopted a change that allows employers to contact the employee’s healthcare provider directly. An employer may contact the employee’s healthcare provider for two purposes only: clarification and authentication of the medical certification. The employer may request no additional information beyond that included in the certification form

In response to privacy concerns expressed by employees, the department added a requirement to the final rule that specifies the employer’s representative contacting the employee’s healthcare provider must be a human resource professional, a leave administrator, or a management official, but in no case may it be the employee’s direct supervisor.

The revision also specifies that the employee is not required to permit his or her healthcare provider to communicate with the employer. However, if the employee denies the employer permission and doesn’t otherwise clarify an unclear certification, the employer may deny the designation of FMLA leave. However, prior to making any contact with the healthcare provider, the employer must first provide the employee an opportunity to resolve any deficiencies in the certification.

Fitness for Duty Certification: The final regulation also clarifies that employers may require a fitness-for-duty certification to address an employee’s ability to perform essential job functions. However, if the employer does have such a requirement, the employer must provide the employee with a list of those essential job functions no later than the “designation notice” and specify in the designation notice that the fitness-for-duty certification must address the employee’s ability to perform those essential functions.

Military Caregiver Leave: Implements the requirement to expand FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 workweeks of leave in a 12-month period.

Leave for Qualifying Exigencies for Families of National Guard and Reserves: The law allows families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave to manage their affairs–”qualifying exigencies.” The rule defines “qualifying exigencies” as: (1) short-notice deployment (2) military events and related activities (3) childcare and school activities (4) financial and legal arrangements (5) counseling (6) rest and recuperation (7) post-deployment activities and (8) additional activities where the employer and employee agree to the leave.

The final regulations are scheduled to be published in the November 17, 2008, edition of the Federal Register and will become effective 60 days from that date. The final rule also contains revised forms for employers.

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What Is The Hardest Thing For You About Managing People?

RainmakerThinking reports the latest update of its ongoing qualitative survey of leaders, managers, and supervisors in answer to the question, “What is the hardest thing for you about managing people?”.

In the last twelve months, RainmakerThinking has received responses from 2,017 leaders, managers, and supervisors.

Following are the top 4 unique responses:

(1) Not enough time; too many people to manage in available time; balancing managerial responsibilities with non-managerial tasks.

(2) Too much red tape, bureaucracy, rules, regulations, and paperwork.

(3) Not enough support from “my boss” or administration; not enough resources, authority, or training in supervisory basics.

(4) Conflicts caused by personalities and personal issues.

What do you think?

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Full Speed Ahead!

I’ve not posted to the blog in a while because it’s been nuts around here and I needed to concentrate on several new clients and several new projects including the “Building Better Restaurants” book and the new website.

Well the projects are mostly behind us now and we can now devote more time to getting some more thoughts and ideas posted - and trust me I wish i had had more time and two more hands to write about some of the issues I’ve been experiencing and reading about elsewhere. So buckle up and get ready. I’m not wasting any more time

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Building Better Restaurants - the Book

Finally, the book that has been in the works for years is finally about to become a physical reality!

This wire bound manual contains all the ideas, strategies and tactics necessary for any operator to take a good restaurant (or even a bad one if it’s not too far gone!) and turn it into a great one! continue

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The RCS MasterMind Group

“A” level talent wants to hang out with other “A” level talent. And so it goes with operators. Successful operators want to hang out with other successful operators. The success ideas, camaraderie, conversations that take place, etc are worth their weight in gold!

I have been asked for years now to create a mastermind group for successful operators and I have not done so because of the inherent problems with logistically giving it the attention it would demand from me. I have now been convinced that the time is right to create just such a group and so we have inaugurated the group today and here are the details. continue

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More On How Coaching Can Help You

Getting a little help from those who’ve been there before can come in handy. Now there’s evidence that, in addition to the weary worker receiving the tips, coaching is a boost to the whole company. Coaching used to carry a stigma because it was more frequently directed at problem employees. continue

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On How To Kill Your Margins And Your Brand

Jack Shipley just wrote to me about a Wall Street Journal article wherein they write about Cold Stone Creamery’s woes with franchisees citing the company’s BOGO coupons as one of the factors that undermined their margins. You can read the article here.

Another good lesson on why focusing on value, and not price, is your only successful option if you want long-term success.

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