Article
How Effective Systems Can Transform Your Restaurant (and Your Life)
EDITOR'S NOTE: This is the first of a three-part series on how to create systems to improve your operations. From now until the end of this year we will examine this topic in hopes that you can start the new year on strong footing, with a list of ways to streamline your operations and wrestle back time and money from your business to be put to productive use.
One fascinating and undeniable fact about the restaurant business is that in any segment of the business, from white tablecloth to sandwich shops, you could find people who have made millions and many more who have failed miserably in the same type of restaurant serving essentially the same type of food.
To enjoy ongoing success and for the owner to have much of a life outside the four walls of the restaurant, a restaurant must have and use effective systems.
While there are many, many factors, both tangible and intangible, that go into the making of a successful restaurant, we believe one of the most profound ingredients is the type of "systems" they choose to deploy. The processes, steps and methods a restaurant chooses to use every day have a profound effect on its customers and whether they decide to return.
The subject of restaurant systems could be approached from a variety of angles and degrees of detail and technical depth. Our goal in this first article of this three-part series is to provide you a clear sense of restaurant systems, why they can help any restaurant become more successful and how to put in place or improve basic restaurant systems in your operation.
Why Most Restaurants Struggle and Underperform
For anyone who has owned a business, particularly a restaurant, it doesn't take long to discover that one of the primary functions of an owner is to solve a seemingly never-ending parade of challenges. Think about the dreams and expectations you had when you opened your restaurant. You probably felt that you were finally beginning a journey that would provide you with what you've always wanted: the chance to control your own destiny, chart your own course, have more personal freedom and reap greater financial rewards.
If you're like most operators, however, something may have gotten in the way of achieving those dreams -- a weak economy, a shortage of good employees, new competition, government red tape, rising costs, demanding customers and more. From the time you opened the doors it may have seemed like there were forces at work trying to sabotage your plans to the point that building the type of restaurant and business of your dreams was instead turning out to be one of the most difficult endeavors you had ever attempted.
Even under the best circumstances, however, creating a successful restaurant business from scratch is one of the trickiest and risk-laden challenges there are. While better systems can reduce or eliminate many common difficulties, I want to be clear right up front that not all restaurant problems are caused by poor systems. Some restaurants are in trouble before they even open due to bad decision making or execution in the planning and start-up phase. Maladies such as poor concept, low product demand, lack of capital, bad location or a weak business model can doom a restaurant to failure before the first customer is served. This is a very important concept to grasp and is addressed later in this article.
The 3 Pillars of Business Success
A very successful businessman once told me that the way to make millions in business required doing just three things:
- Find out what they want.
- Go and get it.
- Give it to them.
In the context of the restaurant business, this means:
1. Find out what they want. Identify the unmet need or want in the marketplace that a sufficient number of target customer(s) want in food, experience, atmosphere, service style, cleanliness, speed and price.
2. Go and get it. Incorporate what the customer wants into the location, design, ambience, menu, recipes, quality and staff of the restaurant.
3. Give it to them. Using effective systems, training and processes, provide customers with the quality, service and hospitality they want, consistently, every time.
Functions 1 and 2 reflect activities and decisions that are made intentionally or by default in the planning and start-up phase. Critical mistakes made in these areas can result in fundamental defects that can be very hard, and often impossible for a restaurant to overcome.
A restaurant must offer products and provide an overall guest experience that a sufficient number of people in the local market want, at a price point that allows the operation to make an adequate profit. If this can be accomplished, then it's time to focus on Function 3, "give it to them."
"Give it to them" is about operational execution. You could say that functions 1 and 2 are entrepreneur-driven and number 3 is leadership- and systems-driven. The point is that the skills required to create and build a potentially successful restaurant are actually very different from the skills required to put in place systems and lead a team of consistently, day after day.
While better systems can and will improve the performance of any restaurant, even the most well-designed systems cannot totally make up for fundamental problems stemming from having a weak concept, a poor business model or other flaws resulting from bad strategic decisions set in place in the start-up phase.
When a restaurant gains traction in the marketplace, as evidenced by demand for its products, in a market with sufficient numbers of target customers and the business is adequately capitalized, then the cause of ongoing operational and financial challenges can likely be traced, at least in part, to ineffective systems. The good news is that problems stemming from poor systems can be fixed and the effect on the business can be dramatic both operationally as well as financially.
An Essential Skill for Restaurant Owners
From our experience, few independent restaurant owners fully understand and appreciate the immediate and ongoing effect that well-designed and effectively established systems can have on virtually every aspect of their restaurant. Many have the notion that systems are either tedious, boring or that, as an owner, they have more important things to do. They couldn't be more mistaken. As an independent restaurant owner, you must learn how to create and put in place systems or at least oversee their development or your restaurant's prospects for success will be very limited and will continually underperform and, at some point, likely fail.
HERE'S ONE WAY TO LOOK AT SYSTEMS with which almost every restaurateur can identify. A SYSTEM IS ESSENTIALLY A RECIPE. A recipe is a set of instructions, steps and ingredients designed to create a certain dish or type of food. A GOOD RECIPE, PRECISELY FOLLOWED, should result in the same-tasting soup, cake, dressing or whatever, regardless of who the cook happens to be. A system is really nothing more than a recipe for getting something done to produce a specific, predictable and predetermined result every time.
An independent restaurant owner should have a daily and ongoing focus on developing, carrying out, fine-tuning and improving their restaurant's processes and systems. It's the only way that a restaurant can consistently produce high-quality food, service and exceptional dining experiences for their guests.
People whose passion is cooking would likely be much better off financially and happier working at a restaurant, rather than owning one. That's because building a successful restaurant business requires a totally different set of skills, insights and priorities than those needed to be a chef. Just look at all the chef-turned-owner restaurants that fail.
Restaurant owners should be most passionate about building a successful business, not about cooking or food. While food is an essential and important part of every restaurant, success in the restaurant business does not depend on having great food. Restaurant success depends on being able to provide a dining experience that people want at a price they are willing to pay, consistently, again and again.
Still think that success in the restaurant business depends on having great food? Then let me ask, who has made more money in the restaurant business than anyone in history? (Hint: Golden Arches.) And the reason they have been successful is they have figured out what a sufficient number of people want and are very good at giving it to them that way, consistently, conveniently and at a price they are willing to pay.
Without the desire or ability to design and put in place systems, operators must either learn or get a partner who can fulfill that role or hire someone to do it. To enjoy ongoing success and for the owner to have much of a life outside the four walls of the restaurant, a restaurant must have and use effective systems. And referring to lifestyle, how many McDonald's franchise owners have you ever seen working in the restaurant? With effective systems in place, a restaurant can operate predictably and profitably without the owner having to be there all the time.
Look at highly successful companies in virtually any industry and you'll quickly see that all of them have achieved and maintained their success because of standardization. Standardization is a critical component in creating extraordinary experiences. You can't achieve consistency without standardization. You can't please your guests consistently without standardization. And standardization requires systems.
Back to Basics
While all good restaurant people know this instinctively, it bears repeating because often the obvious is lost in all the details and minutiae of this business. The reason your guest experience is so important is that it has a direct bearing on the two things you want and, in fact, must happen every day in your restaurant to be successful. More than anything, restaurants should be creating experiences that cause customers to 1) come back and 2) tell others about how fabulous the restaurant is. In other words, your primary goal with each guest should be to create loyalty and the most valuable type of marketing on the planet: positive, word-of-mouth advertising.
Thanks in large part to the Internet and social media, word of mouth, for better or worse, is far-reaching, impactful and can have serious consequences both good and bad to the future of your restaurant.
Consider the probable outcomes when a new customer comes into your restaurant and leaves after having either an extraordinary, good-to-average or bad experience. Obviously, after a bad experience your chance of a repeat visit is zip and while those customers may generate some word-of-mouth advertising, it's not the kind you want.
So profound are the effects of one bad experience on the prospects of repeat business that one survey showed that "86% of customers quit doing business with a company because of a bad experience." This is up from 59 percent in 2007. And while that is bad enough, the experience can also put future visits of potential new customers at risk should some screw-up make its way, in graphic detail, on one or more social media sites. (Source: Customer Experience Impact Report by Harris Interactive/RightNow)
When guests have an average or even "good" experience, they might return sometime but there's no big incentive to do so because in most markets there are lots of other "average" and even "good" dining choices available. And when it comes to word of mouth, what are the odds that many people bother to spread the word about a good or average restaurant? Slim to none.
It's only when you provide someone an extraordinary or substantially better than "good" experience that you move the odds in your favor of creating what you absolutely must have to create restaurant success, loyal guests and positive word of mouth.
What Is a System?
Effective systems are the foundational building blocks of every restaurant that is capable of creating consistent, repeatable restaurant experiences for its customers. A system is a process, procedure or series of steps or activities designed to produce a specific or standard outcome or result. An effective system is one that represents the "best known" way to create results that are constant, quantifiable and achieve the desired level of quality or type of customer experience.
Here are some examples of common activities within most restaurants. Each should be governed by a specific set or combination of processes, procedures, steps; i.e., systems to create desired outcomes or results.
Here's one way to look at systems with which almost every restaurateur can identify. A system is essentially a recipe. A recipe is a set of instructions, steps and ingredients designed to create a certain dish or type of food. A good recipe, precisely followed, should result in the same-tasting soup, cake, dressing or whatever, regardless of who the cook happens to be. A system is really nothing more than a recipe for getting something done to produce a specific, predictable and predetermined result.
The good news is that a restaurant, regardless of relative simplicity or complexity of operations, that is driven by documented procedures, standardized processes and specific outcomes, will be light years ahead in creating consistent, quality dining experiences than an operation that relies more on the abilities of one or two key people, personal preferences, generalized instructions or simply chance.
Why Great Systems Are the Key to Consistent Guest Experiences
Well-conceived and established systems will eliminate the variation and uncertainty in delivering a specific result, consistently, every time. Standardization through effective systems is the only way to have confidence that all your customers receive the same, high-quality dining experience you want them to have every time.
Effective systems also increase productivity and efficiency. They are the basis for controlling food, beverage and labor costs and improving your restaurant's financial performance.
WELL-CONCEIVED AND ESTABLISHED SYSTEMS will eliminate the variation and uncertainty in delivering a specific result, consistently, every time. STANDARDIZATION THROUGH EFFECTIVE SYSTEMS is the only way to have confidence that all your customers receive the same, high-quality dining experience you want them to have every time.
Good systems will also positively affect your employees. While some employees may resist efforts to standardize and remove employee discretion, the employees you will want to keep will likely embrace it. Good employees want to do good work and they want to work for companies that are organized and have high, clearly defined standards. They want to know exactly what's expected of them and they want to be able to meet and even exceed those expectations every day.
Only well-functioning systems will enable your restaurant to create quality, consistency and predictability that will keep your customers coming back. Systems can help you create a competitive advantage in your market and give you freedom from having to provide continuous hands-on involvement in your restaurant. When your restaurant becomes systems-dependent, it becomes a valuable asset that you can expand, sell, franchise or hire someone to run.
Restaurant owners have a choice. You can either make your restaurant dependent on yourself and maybe a few key people or make your restaurant dependent on systems. When you build systems to ensure a great guest experience, you are following the formula of virtually every successful business. McDonald's, Chipotle, Chick-fil-A and Starbucks keep guests coming back again and again because they have great systems. Their people come and go but their systems remain constant. Restaurants that rely solely on people will never reach their potential and will ultimately fail.
The Restaurant Improvement Process
The journey or process of restaurant improvement could take many forms. Based on many of the highly successful restaurants we've visited and studied, we believe the following steps, in this order, can be helpful when beginning the process of improving and therefore changing the way your restaurant operates in potentially profound and fundamental ways.
- A focus on leadership and culture.
- A focus on what the customers want.
- A focus on standardization -- processes and systems.
- A focus on measurement.
- A focus on continuous improvement.
Imagine your restaurant and your lifestyle if your restaurant could produce high-quality customer experiences day after day without your direct, ongoing involvement. It is possible and in Part 2 you'll learn how to begin the journey of creating a more systems-dependent restaurant.
