Article

How to Standardize, Measure and Continually Improve Your Restaurant Through Systems Development

EDITOR'S NOTE: This is the third and final installment in our series on restaurant systems. In part one of this series, we emphasized the importance of systematizing your operations, reminding readers that not doing so subjects the independent owner and operator to wasted energy, resources and time micro-managing processes that could run just fine with prescribed controls and guidelines for staff.

Without systems, you are likely allowing operating inefficiencies to fester that rob you, your partners and family of income, and most importantly you deprive your customers of what they want most: a consistent experience every time.

BACK TO PART 1

In the second installment, we highlighted the importance of identifying the key customer requirements for your restaurant. In other words, what elements of the guest experience cause your customers to choose your restaurant over your competitors? Once identified, what processes and systems do you need to improve upon to ensure these key customer requirements are met? To have any chance of achieving excellence you must have two things: willing people and effective systems. In this issue, we focus on how standardization, measurement and continuous improvement are necessary to ensure a consistent and repeatable guest experience.

BACK TO PART 2

'There are only two ways to improve a system or process: Improve the procedure or steps within the process and/or improve the component parts used in the procedure, including the people. There is no other way.'
-- RestaurantOwner.com

'Try not. Do. Or do not. There is no try.'
-- Yoda

To begin the standardization process we must first identify and adopt systems and processes that will best help us achieve our mission, improve our culture and deliver a great guest experience. Next we need to put in place systems that measure how well we execute each of these. And finally, we need to continually improve upon them until we get to 100 percent effectiveness. Arguably, all systems either directly or indirectly affect your ability to deliver a consistent guest experience. However, in the short space of this article we have decided to focus on how we might improve upon some operational systems that most directly affect the guest experience -- in the following example, food preparation.

Case In Point: Leveraging Food Complaints In the Restaurant Systems Development Process

In the previous installment, we provided an example of some of the key business drivers for our hypothetical steak-and-seafood restaurant, the Blue Fish Grille. As a matter of review, below is an example of some customer requirements in the areas of quality, service, atmosphere and value of Blue Fish Grille, a hypothetical urban steak-and-seafood restaurant. These are what make the concept appealing to its guests, and all business activities and processes need to ultimately help deliver them with consistency and quality. What are your customers' requirements? It will depend on your concept and market. The important thing you need to know is what keeps folks returning. It will drive all of your processes and systems.

Blue Fish Grille Customer Requirements

Quality

• High-quality beef.
• Fresh seafood.
• Creative daily seafood specials.
• Impeccable preparation.

Service

• Highly responsive, not rushed.
• "Yes" attitude.
• Very personal, yet professional.
• In-depth product knowledge.
• Single-diner friendly.

Atmosphere

• Very comfortable.
• High energy.
• Hip music.

Value

• Superior experience.
• Competitive price.

Blue Fish Grille has identified two of its "quality" requirements as the promise of "fresh seafood" and "impeccable preparation." Let's assume, based on guest feedback and returns, that several complaints concerning freshness or preparation mistakes had been registered. How do we "systematize" a solution to address and fix this problem? The first step is to identify the specific basis for the complaints. Ideally, the manager or owner (if he or she is working in the restaurant) should talk to guests to gather this information, as well as provide any "comps" as appropriate.

For illustration purposes let's assume that you've discovered that the majority of grievances were about a particularly popular menu item: the Grilled Shrimp Pasta. The complaints included a number of different criticisms, such as too much or too little seasoning, small portions of shrimp, quality or freshness of the shrimp, tasted differently from last visit or overcooked pasta.

While these complaints surely varied, their common thread was problems with preparation rather than the delivery of the product. Had the complaints been service-oriented, such as long delivery times or being cold, then we might also look at some of the service systems being used. However, since most of the complaints have to do with the quality of the dish we can focus attention on the preparation steps.

You can't fix a process unless you've established what the process should be ideally. Thus, we must first identify the correct procedure for preparing the Grilled Shrimp Pasta. To do so we are going to use a five-step systems development process, introduced earlier, to help us discover the best method for preparing our shrimp pasta meal. The five steps are as follows:

Define the process. List the name of the process (e.g., order taking, cleaning ice machine, receiving deliveries, salad dressing prep, cleaning restrooms, delivering food to table).

List the standards. List the standards or specifications this process must meet (e.g., accuracy, speed portion size, cleanliness, time allowance).

Identify the inputs. List the training requirements, tools, equipment, space or materials needed (sauté station training, recipe book, specific utensils or pans, etc.).

List the steps/activities. This includes a description of the detailed steps, activities and actions required to complete the process.

Measure the results. This includes inspections, assessments, guest feedback, profit-and-loss statement, or other means for knowing "you got it right."

The most revealing aspect of completing this five-step systems development process is that you'll find problems beget problems. Consider the so-called "domino effect." In other words, problems with prior steps topple onto subsequent steps. If you don't fix issues "upstream," they can create compounded problems "downstream." The result is an outcome that is far from ideal, and can account for why different guests experienced different problems all surrounding a problem in a single process.

This point is illustrated in the graphic below. Using the five-step processes form, you can see the many different steps and requirements necessary to prepare an ideal shrimp pasta dish every time.

A closer inspection reveals several systems upon which the execution of this dish relies upon. For instance, the first specification requirement is that this dish must be prepared according to a specific recipe. This means we must have written recipes with specific steps and quantities of ingredients. Allowing the kitchen staff to deviate from the recipe -- whether intentional or not -- will certainly create inconsistency.

Oh, C'mon! We're an Independent Restaurant, Not NASA!

You might be thinking, "Our kitchen line is much too busy and fast-paced to look at the recipe book for every order." If so, we have enough experience in the restaurant trenches to appreciate the reality of that expectation. There are still systems, however, that can be adopted for the cook line to ensure proper recipe adherence without throwing the kitchen off its rhythm. One such system is the "Recipe Quick Reference" below.

The recipe quick-reference, also known as a "build chart," is a simple listing of the ingredients and amounts used in a menu item, listed in the order each ingredient is added. A quick-reference is typically displayed for each menu item prepared at a specific station and oftentimes includes a picture of the completed menu item.

The recipe quick-reference is just one of several systems for which the proper execution of the Grilled Shrimp Pasta dish depends. Looking again at the five-step chart, you'll see that the input step lists several items needed to prepare this dish. If for whatever reason the sauté cook begins his or her shift without these items then it's a pretty good bet he or she will be unable to execute the preparation according to standard.

A common practice used by many restaurant kitchen managers and chefs is to conduct a pre-shift line check for each station. The line checklist should include the utensils, food products and other station-readiness items listed in the input requirements.

Looking at the systems listing for the Grilled Shrimp Pasta, can you identify other systems that might be useful in making sure the shrimp pasta dish can be prepared according to specification? How about the order guide? An order guide is a tool listing all of the products a restaurant must have on hand to execute the menu preparation according to specs. It should list par levels and show order history for every product so that you can keep enough product on hand until the next order cycle while also keeping quantities low enough to ensure freshness and reduce waste. Notice that the input specifications call for specific portions of shrimp, sliced mushrooms, pasta seasoning and other products that need to be prepared ahead of time. Daily prep sheets are used to make sure enough of these items are prepped ahead of time and available to the cook station. Prepping product ahead of time also requires that you have a good product rotation and labeling system in place to ensure freshness and that first-in-first-out rotation is exercised.

You might be thinking, "Wow! All of this for one menu item." But the fact is the five-step development process is intended to show the many detailed aspects of a process so that they can be incorporated into the basic systems every restaurant must have to promote consistency. You are not creating a separate system for each menu item; rather, you are simply listing the inputs and specifications that need to be included within these basic systems.

The Grilled Shrimp Pasta preparation example highlights item -- not just the shrimp pasta. These include among others:

• Order guide.
• Prep list.
• Inventory counts.
• Line checklist.
• Recipe manual.
• Recipe quick-reference.
• Station diagram.
• Job descriptions.
• Training system.
• POS system.
• Product rotation and labeling system.

The Versatility of the 5-Step Improvement Process

Getting back to the problem at hand, you'll recall that our list of complaints included remarks of too much or too little seasoning, small portions of shrimp, quality or freshness of the shrimp, tasted differently from last visit and overcooked pasta. If the Blue Fish Grille incorporated all of the systems listed earlier -- and was still getting complaints -- they now have a starting point for investigating the causes. For instance, freshness could be the result of improper rotation or labeling, too much prep or excessive par levels. Seasoning complaints may be the result of improper prep of the pasta seasoning or the improper use of the correct portioning tools. Overcooked pasta may be the result of improper training or follow-up by the kitchen manager. Regardless of the complaint, the cause is more easily isolated when you have systems designed to promote consistency. If the system isn't working then the only way to improve it is to improve the steps or procedures or to change the component parts of the system -- including the people when warranted.

The five-step development process isn't limited to kitchen systems. In fact, it can be applied to all aspects of the restaurant improvement process. The following example illustrates how this process could be applied to creating a system for cleaning the restrooms during the shift. Using this form as a guide, you could easily create a restroom cleaning checklist assigned to the appropriate staff positions.

Measuring Effectiveness

An old business school adage is, "You can't manage what you don't measure." How in the world can we know we have effective systems if we don't measure the results? Better yet, how do we measure effectiveness?

In part two of the series, we spotlighted Pal's Sudden Service, a 25-unit quick-service chain in Tennessee, and K&N Management, owners of Rudy's Country Store and Bar-B-Q and Mighty Fine Burgers restaurants based in Austin, Texas. These two companies are the only restaurant-based companies to ever win the prestigious Malcom Baldrige National Quality Award for Excellence. In talking with the owners and management of these two very successful companies, one common denominator is strikingly obvious: They measure everything and they do so consistently.

Pal's boasts an extraordinary record for having fewer complaints -- by far -- than their competitors McDonald's and Wendy's. Pal's tracks all complaints throughout every unit and remarkably gets a complaint on only one in every 3,500 orders they prepare. That computes to 99.997 percent accuracy for a drive-thru-only restaurant where customers don't typically check on their order until reaching their destination.

Pal's boasts an extraordinary record for having fewer complaints -- by far -- than their competitors McDonald's and Wendy's. Pal's tracks all complaints throughout every unit and remarkably gets a complaint on only one in every 3,500 orders they prepare. That computes to 99.997 percent accuracy for a drive-thru-only restaurant where customers don't typically check on their order until reaching their destination.

One may be inclined to think, with an operation that runs that well, why bother with measuring the results when they appear to always be favorable. Their argument is simple: It is precisely because they measure that they attain the results they get.

Some of the common methods used for measuring effectiveness in restaurants include financial or statistical tracking, guest feedback, employee feedback and management observation. Measurement methods differ among the various systems. For instance, to measure the effectiveness of your inventory control systems, financial tracking of profit and loss and daily key inventory item counts are preferred methods. On the other hand, tracking and gauging guest satisfaction may best be accomplished through comment cards or surveys, online reviews or table visitations.

Financial or statistical measurement typically includes profit-and-loss reporting, weekly prime cost tracking, monitoring of check averages and customer counts, key item inventory counts and other practices for measuring effectiveness through financial results. Financial reports are particularly useful for measuring the results of cost control systems such as portion and waste control, inventory control, purchasing and receiving, labor management or prep and production systems. Guest feedback measurement methods include guest comment cards or surveys, complaint logging, employment of mystery shoppers, social media reviews or table visitations. K&N Management employs a unique mystery shopper program in which employees are recorded serving guests on video. The videos are used as coaching opportunities as well as employee recognition.

Employee feedback is also a great way for measuring effectiveness. Giving your people an opportunity to provide feedback through comment cards or open meetings allows them to have a voice and feel like their input means something. Peer reviews are a great way to measure how well employees are working together.

Pal's has an employee recognition program labeled "Caught Doing Good" in which they post on a bulletin board notes written by both managers and staff peers whenever they catch another employee doing something that aligns with their mission statement or does something exceptional to enhance the guest experience. It's much more effective than an employee of the month award because it provides for more universal recognition as opposed to possibly disgruntling an employee that perpetually falls short when they feel they deserve the award but get passed over.

Manager observation is perhaps the most essential to measuring effectiveness and use of systems. If you truly want to "raise the bar" in your restaurant, then begin by raising the accountability of your management team. As the leaders of your organization, your management team is accountable for communicating your restaurant's mission and standards to your workforce -- and then follow up to be sure those standards are being met.

Generally accepted practices for monitoring compliance include the use of checklists and inspections on a daily basis. When standards are compromised, management must immediately correct the situation and then document the event in the manager's logbook -- sometimes referred to as the red book. One of the greatest challenges to restaurant management success is the ability to communicate incidents, messages and other happenings from one shift to the next. For the last 30 or so years the tool of choice has been a standard daily diary. The "red book," as it has been commonly referred to, can be purchased at any office supply.

Alternatively, several software providers have created restaurant industry-specific versions that allow operators to record daily sales, weather and notes to each other. Online technology has spawned a host of in-the-cloud services, including scheduling and training apps, which provide online logbooks capable of storing logs and sales history in the cloud. Search online for "restaurant red book" to locate providers of these resources.

Regardless of which version you use, the manager's log provides an important resource for measuring performance and spotting opportunities for improvement.

No Pain, No Gain

Building your restaurant on systems does not have to be an all-or-nothing proposition. There are essentially four areas in your restaurant for which you have to maintain maximum efficiency and consistency to succeed (See "The Four Pillars of a Profitable Restaurant" below).

Adoption of systems in any of these areas will almost certainly improve your restaurant performance. However, to really make a difference you not only have to adopt these systems across the board, but you must both execute them and continually improve upon them if you want to achieve 100 percent effectiveness in creating the ultimate guest experience. The message: It is OK to start small; however, success is achieved by continual, daily improvement.

Pal's Sudden Service and K&N Management didn't make the leap from ordinary to extraordinary overnight. It has taken years for them to reach their respective levels of excellence. Focus on one or two systems or processes to improve upon. Change -- successful change, that is -- can take anywhere from six to 12 weeks to take root.

David McClaskey, president of Pal's Business Excellence Institute, a nonprofit organization created by Pal's to train leaders and managers from all types of business on how to improve their own organizations based on Pal's Baldrige-based performance excellence practices, suggests making changes slowly, one step at a time. "Don't try to do too many things at once or you will become your own worst enemy," McClaskey says.

He emphasizes to only do "sustainable" changes -- ones that will stick. It usually takes about 60 days to make it sustainable. He also says, "There is no way to change without pain."

PLAN-DO-CHECK-ACT

To "raise the bar" you must not only put in place effective systems, you must continually improve upon them. Engineer and statistician W. Edward Deming is attributed for introducing quality management technique to modern manufacturing, including his systems improvement cycle with the goal of eliminating defects and attaining predictable results. In summary, this improvement cycle consists of four phases: plan, do, check and act.

The planning phase is best accomplished by having your staff members create a five-step systems development plan for a system or process you want to put in place or improve upon. This is the time to discuss the expected standards, inputs and to agree upon the correct steps and activities needed to achieve the desired results.

The "do" phase is the actual implementation of the process or system and the "check" phase is where we measure progress by analyzing the results of the various measurement methods established in the planning stage.

The "act" phase is when you interpret the results to see if additional actions, processes or change is needed for improvement. If so the process is repeated by cycling back to the planning stage.

The goal of the continuous improvement cycle is to gradually increase quality in all your systems, and ultimately improve the guest experience.

THE 4 PILLARS OF A PROFITABLE RESTAURANT

Practically any restaurant system can be grouped into one or more of the following areas: operations, people management, marketing or financial reporting. If you can systemize and continually improve these areas of your restaurant, you will be in better control of your business and be able to achieve a level of operating efficiency enjoyed only by the largest and most successful chains. Throughout RestaurantOwner.com and this magazine, we attempt to help you get a better handle on managing these functional areas more efficiently and with greater consistency.

Operations. Restaurant operations encompass everything you do to serve your guests. It includes kitchen systems, dining room systems, bar systems, catering banquet- delivery and facilities maintenance. More than any other area, your operations systems will have the most effect on your guest experience.

People management. The systems you put in place for people management have a significant effect on your restaurant's culture, and ultimately the guest experience. These systems include personnel systems like hiring and recruitment, onboarding, training, employee retention and coaching systems. They also consist of management systems to help your managers become more effective leaders and better managers, including systems for labor scheduling, communication and shift management.

Marketing. Marketing systems include everything you do to attract customers to your restaurant. It incorporates a spectrum of activities beyond simple advertising or discounting and includes systems for planning and tracking, customer retention, public relations, menu, Internet marketing and marketing promotions.

Financial reporting. Financial reporting systems consist of everything you do to measure the results of your restaurant's operations, marketing and people management. They encompass much more than simple accounting, administrative tasks and profit-and-loss. They include a combination of daily, weekly and monthly reporting and measurement systems to help you evaluate the effectiveness of your other systems as well as track sales and expenses, identify potential cost-control problems and manage your restaurant more efficiently.

RESTAURANT SYSTEMS: AT-A-GLANCE OVERVIEW

OPERATIONS

• Line Checklist
• Preshift Lineup
• Prep List
• Recipe Manuals
• Recipe Reference
• Waste Tracking Log
• Order Guide
• Inventory Counts
• Preventive Maintenance Schedule
• Steps of Service Chart
• Bar Management Systems
• Manager Opening/Closing Checklists

MARKETING

• Marketing Promotions
• Marketing Plan
• Customer Database
• Guest Loyalty Program
• Donation Request Procedure
• Comment Cards
• Menu Engineering
• Menu Design
• Social Media Policy

PEOPLE

• Hiring/Orientation Checklist
• Recruiting and Selection Process
• Employee Handbook
• Training Manuals/Programs
• Job Descriptions
• Disciplinary Action Process
• Labor Scheduling
• Manager Logbook
• Weekly Manager Meeting

FINANCIAL

• Daily Sales and Labor Tracking
• Weekly Prime Cost Report
• Void Tracking Log
• Monthly Profit-and-Loss Report
• Daily Sales Report
• Uniform System of Accounts for Restaurants (USAR)
• Tip Reporting
• Ideal Cost Tracking
• Break-even Calculation