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Creating a Culture of Quality

EDITOR'S NOTE: This is the second of a three-part series on how to implement better systems to improve your guest experience and operating results.

Last month, we explained why without systems you are likely allowing operating inefficiencies to fester that rob you, your partners and family of income. We also reviewed what types of systems you need to recoup lost time and lost income that could be devoted to building and promoting the brand, enjoying the fruits of your labor and improving compensation and benefits for your staff that reduces turnover and creates a dedicated workforce. Now we discuss the crucial role culture plays in virtually every aspect of your restaurant including the ongoing use and effectiveness of your systems.

BACK TO PART 1

The road to improving your restaurant processes begins with what many people believe is the most important ingredient and driver of success in any organization: culture. Pal's Sudden Service is a 25-location QSR (quick-service restaurant) chain that boasts an average annual sales volume of more than $1,500 per square foot. Pal's was awarded the prestigious Malcolm Baldrige National Quality Award in 2001, and at the time was the only restaurant company to ever receive it. The Malcolm Baldrige National Quality Award is the highest honor bestowed by the U.S. Department of Commerce on any business. It recognizes excellent approaches and business results.

Pal's has identified key business drivers that directly tie their mission statement to specific factors in the restaurant that they must excel at to carry out their mission statement objectives.

A positive culture will create better job experiences than those in a negative culture. Positive cultures are characterized by attitudes and behavior, such as optimism, engagement, teamwork and respect.

David McClaskey, president of Pal's Business Excellence Institute, says, "The biggest driving force in our (Pal's Sudden Service) restaurants is our culture." All Baldrige winners must agree to share their secrets to success with other businesses. Thus, Pal's Business Excellence Institute (BEl) was born from that commitment.

Culture has been defined as the set of shared attitudes, values, goals and practices that characterize an organization. We've written about culture before. (See "Why Culture Is a Major Driver of Business Success and Ways to Improve It In Your Restaurant".) We've defined business culture as how people in an organization, as a group, tend to think, feel and act while they're on the job.

What we have deemed the "Restaurant Improvement Process" begins with a focus on culture because organizational improvement requires change that will affect every employee to some degree. Change creates challenges in companies with outstanding cultures. In organizations with a negative culture, trying to put in place meaningful change can be next to impossible.

Culture plays a major role in the employment experience you're able to give your people. A positive culture will create better job experiences than those in a negative culture. Positive culture is characterized by attitudes and behavior such as optimism, engagement, teamwork and respect. Conversely, when the culture is negative, people become more prone to being petty, self-centered, insecure and guarded. Not the attitudes normally associated with welcoming and embracing change.

A positive culture greases the skids for change and improvement because employees who enjoy their jobs and the people they work with will be more flexible, open-minded and accepting. When faced with changes to their jobs or workplace, they likely will be cooperative and even want to be involved in the process. People in a strong culture tend to respond this way because their relationship with their company is based on trust and they are more secure in knowing that things will probably work out for the better.

How Culture Influences Everything In Your Business

Many business leaders believe that creating and sustaining the right culture is the No. 1 job of the owner or CEO in every business, whether it's a small restaurant or a major corporation. Without the right culture in place in a business of any size, it's easy for people to get distracted into unproductive attitudes and behavior.

Culture also affects the level of friendliness, hospitality and care your employees bring to the table or counter when serving your guests. Indifferent people tend to deliver indifferent service, and research by the American Society for Quality found that nearly 70 percent of people who had stopped doing business with a certain company had done so because of a perceived attitude of indifference on the part of an employee.

Every part of your restaurant is affected by your culture because your people control the activities and outcomes in every aspect of your operation. Think about it: Every minute your restaurant is open your employees perform the activities that directly and materially affect all of these aspects. Like bees in the process of producing honey, your staff imprints its attitudes and expectations on every touch point in the process of producing your guest experience.

Your restaurant's results depend on the performance of your people and your staff's performance is driven by the quality of your culture. If you realize your business needs better systems, we urge you to take a step back and evaluate your culture first. Make sure your culture is strong enough that your people will accept and hopefully embrace the process and not resist it.

Gauging Your Culture

We encourage you to get a sense of the type of culture that exists in your restaurant by reflecting on how your employees would likely respond to the following questions.

• At work, do you have the opportunity to do what you do best every day?
• In the last seven days, have you received recognition or praise for doing good work?
• Does your supervisor, or someone at work, seem to care about you as a person?
• At work, do your opinions seem to count?
• Does the mission/purpose of your company make you feel your job is important?
• Are your fellow employees committed to doing quality work?

The above questions are part of a formal survey developed by the Gallup Organization to measure employee engagement. It's part of a feedback system for employers to identify and measure elements of worker engagement that are most tied to sales growth, productivity and customer loyalty. We believe these questions can also provide an appropriate barometer to informally evaluate a restaurant's culture as well.

Before Enacting Change

If you sense your culture is on the weak side, we wouldn't recommend proceeding right away with a serious systems improvement agenda. Step back and work on improving your culture first. Creating a stronger culture, one that will respond well to some disruption in the status quo, is essential and will make all the difference in the world.

To give you some encouragement, the potential financial return for elevating your restaurant's culture can be extraordinary. We know a very successful entrepreneur who has bought and sold numerous small- to medium-sized businesses over a long and prosperous career. Some of the small businesses he has owned include car washes, collision shops, dry cleaners as well as other basic and common enterprises. Whenever he purchases a new business, for the first six to nine months he does nothing but work on the culture. That's it. He does nothing to prices, products, marketing, systems or processes within the business. He may tweak something if it's clearly causing unnecessary problems, but his primary objective in those first few months is to create a more positive and productive culture for his employees.

By focusing exclusively on culture, he claims that the lowest amount of profit improvement he's seen in any company over the past 30 years is 50 percent and it's often much more. Improving the culture also fosters better employee and customer relationships, which is the foundation of success in any business.

Lesson: Begin the restaurant improvement process by first evaluating and, if necessary, improving your culture. The odds of successfully putting in place new systems and processes in a weak culture are very low.

Essential Elements for Building a Strong Culture

Here are some common practices of companies with a strong culture that supports their success. Even if you perceive a healthy culture in your organization, see how well you're doing in these areas. Even if you're good, you can always be better.

Live by and constantly communicate an inspiring mission. A mission statement is a concise declaration of your company's primary aim or objective. What you set out to accomplish every day. An effective mission is one that guides your decision-making and motivates and rallies your team around a clear, meaningful and engaging purpose.

As noted earlier, Pal's Sudden Service is a 25-location QSR chain that boasts an average annual sales volume of more than $1,500 per square foot. Their mission statement is short, to the point and focused entirely on the customer: "To delight our customers in a way that creates loyalty." It is short, simple, yet so powerful that they credit their mission statement as one of the top reasons for their business success and in being awarded the prestigious Malcolm Baldrige National Quality Award.

Another highly successful restaurant company that uses their mission statement effectively is the renowned Union Square Hospitality Group (USHG), founded and led by Danny Meyer, author of The New York Times best-seller, "Setting the Table."

USHG operates some of New York City's most highly acclaimed eateries. Two of their restaurants, Union Square Café and Gramercy Tavern, are consistently voted among the top five to 10 most popular restaurants in a city with more than 20,000 eating establishments. USHG is also expanding its superhigh-volume gourmet burger concept, Shake Shack, both domestically and internationally. If you're not familiar with Shake Shack, stay tuned. We suspect they'll be creating lots of buzz around the industry as they continue their rapid expansion.

In both of these organizations their philosophy and mission serve as a constant "North Star" that drives their policies, practices and ongoing decision-making. Their missions aren't just written on a plaque and hung on a wall. They are guiding principles communicated and referred to formally and informally on a regular basis and are reflected in the daily actions and attitudes of their owners and top management.

If you don't have an effective mission statement or principles that your entire staff understands and can see in action, then start the improvement process here. Based on what we've seen in these companies and other world-class restaurants, there's no better way to begin creating a better culture than deciding to stand for and work toward something that inspires teamwork, cooperation and excellence.

Communicate and enforce your rules of the game. Every organization needs rules that define how the people within the organization should function and interact. Chances are, if your culture is not what you want, your rules of the game are either not appropriate, haven't been adequately communicated or aren't enforced. (See "How to Establish Your Business's Own 'Rule of the Game'" below.)

For any organization to function properly, everyone on the team should clearly understand the following:

• What's acceptable and what's not.
• What's expected of everyone.
• How to interact with each other.
• How to hold one another accountable.

Raise your standards. What would your restaurant look like if you no longer accepted average and insisted on excellence in every part of your operation? What effect would that have on your food quality, guest experience, cleanliness, cost control, word of mouth, customer loyalty and your profitability? I'm sure you'd agree that if your restaurant achieved excellence or even started making steady progress in the execution of the tasks and activities that affect your guests and your costs, it could transform the financial results of your restaurant.

Raising your standards is not a theoretical, pie-in-the-sky statement, but something that can be managed and measured in tangible ways.

Raising your standards can take many forms and might include the following:

• Strict employee dress code and appearance standards.
• Spotless restrooms.
• Recipe cards required when preparing any recipe.
• A friendly smile, eye contact and gracious greeting to every guest.
• Food is hot when it leaves the kitchen.
• Periodic ticket time audits.
• Line checks completed prior to every shift.
• Tables bussed within 60 seconds of guest departure.
• Burnt-out bulbs or sign lights replaced the same day.
• Dining room floors kept immaculate -- no crumbs or debris.
• Handwritten thank-you notes from staff to guests.
• Employee authority to reject subpar food or beverage.
• Dish room kept orderly and uncluttered.
• No one passes a table with an empty dish without clearing it.

Communicate your standards and involve your people by asking for suggestions on how to accomplish them. But don't overwhelm. Take on no more than one or two at a time. Explain why (they must know the "why") and show how the new standards support your mission, and you're on your way to creating a new culture, a better restaurant and a more stimulating and rewarding place for your employees to work. If done right, most employees (at least the ones you want to keep) WILL respond positively to leadership that provides direction, focus and purpose in what they do.

Why aren't more restaurants performing at the level of excellence already? Many don't think it's possible or don't believe it's worth the extra effort. We believe both of these reasons are based on flawed assumptions. It is possible to raise standards and move a business from being ordinary to extraordinary and while it does require doing things differently, the results can be very well worth it.

In 2004, Austin, Texas-based K&N Management started working with Pal's BEI to raise the standards in their Rudy's Country Store and Bar-B-Q and Mighty Fine Burgers restaurants. Pal's BEI is affiliated with Pal's Sudden Service, mentioned earlier. K&N co-owner Ken Schiller said, "Our sales at Rudy's and Mighty Fine Burgers are now two-and-a-half times what they were when we started the [Pal's BEI] Institute."

Having high standards isn't just for the benefit of your guests. High standards help you attract and keep a team of the best people in your area.

People who have high personal standards want to work for a company with high standards and they prefer to work with people who share their desire to do good work. They want to be challenged and are drawn to companies that offer the opportunity to be part of something special and where their efforts will be recognized and appreciated. Good people lose enthusiasm when the bar is set too low and they intuitively know that average doesn't lead to personal growth or job satisfaction. When you have high standards, you foster a culture of excellence that customers notice and respond to by giving you loyalty in return.

When you notice more mediocrity than excellence in a business, it's because the owner, in some way, is allowing it to happen. The good news is that the owner can also change it.

A Focus ON What the Customer Wants

Most restaurants have multiple operational areas in which processes or systems could be improved. Focusing on the customer is an exercise of identifying specific high return or target-rich areas that should be given system development or enhancement priority based on what's most important to the customer.

This part of the process begins with analyzing what the customer really wants and why they return (or may be failing to return) to your restaurant. The objective is to pinpoint the key factors that most influence the quality of the guest experience (i.e., your restaurant's success). Once these factors are clearly identified and defined, the improvement process can begin by evaluating those functions, activities and processes that have the most profound effect on the guest.

Identifying Your Key Customer Requirements

Generally, consumers have at least four essential requirements when they go to a restaurant. Minimally, customers want quality, service, cleanliness and value. Depending on a restaurant's concept, target market, service style and other factors there can be many other things customers require. Depending on the concept and target customer, this could include requirements about speed of service, cuisine, fresh or processed ingredients, variety, beverage options, sourcing practices, preparation methods, authenticity, hip and cool, atmosphere, lighting, hours of operation, kid friendly and personal, caring attention.

Pal's Sudden Service expresses their customers' wants and requirements in what they call Pal's "Key Business Drivers." Pal's recognizes that they must deliver on these seven requirements consistently to achieve their mission, which is "To delight our customers in a way that creates loyalty."

Their Key Business Drivers include:

• Quality.
• Hospitality (gracious, friendly service).
• Speed.
• Accuracy.
• Cleanliness.
• Value.
• People (competent, willing staff).

Pal's intentionally aligned their key business drivers with their mission. To achieve their mission of delighting customers, they then designed their systems and processes to the degree that they just don't "satisfy" their customers' wants and requirements, but do it in such a way that it creates customer "delight" with every customer, every time.

Other restaurants will use similar terms to describe their key drivers. Quality, value and cleanliness are essential in all foodservice establishments but these terms may be defined differently. For example, all restaurants would say quality is a key driver but depending on the type of concept, target customer, price points, etc., quality could be defined in many ways. Quality might be made from scratch, fresh, locally sourced and all natural in one operation and in another, quality might not mean much more than served steaming hot in two minutes or less. For an example of specific customer requirements for a hypothetical concept, see "Customer Requirements Point-by-Point" below.)

The key in identifying and defining your key drivers is being fiercely curious, observant and objective in determining what your primary customers really want your restaurant to provide. However, don't rely totally on your personal reflection. You'd be wise to also engage in meaningful conversation and interaction with your customers to validate your opinions and findings.

It may be helpful to ask customers informally or in a focus group type of setting what brings them back to your restaurant and what would bring them back more often. Keep up with what's being said about your restaurant on social media. In fact, sites like Yelp, Urbanspoon, Zagot, TripAdvisor and similar sites are essentially 24/7 online focus groups. They can be excellent sources of learning more about what customers love about your restaurant and where it needs to improve.

Connecting Customer Requirements to Systems and Processes

The next step is connecting your customers' primary requirements to specific systems and processes that determine whether those requirements are met.

For example, in the sidebar "Customer Requirements Point-by-Point" below, Blue Fish Grille has identified two of their quality requirements as the promise of "fresh seafood" and "impeccable preparation." This means the highest care should be given to the planning and execution of systems that ensures their guest will experience these promises every time.

Let's assume that based on quest feedback and returns, several complaints concerning freshness or preparation mistakes have been registered.

In Part 3 Of This Series

In the final installment of this series, we'll explain how to evaluate and design processes and systems that can ensure consistent execution and quality results in virtually every part of the restaurant.

Read Part 3

HOW TO ESTABLISH YOUR BUSINESS'S 'RULES OF THE GAME' FOR STAFF

Here are some essential guidelines for establishing your own rules of the game:

Do the best you can. The standard and expectation is that everyone comes to work expecting to play at the top of their game, every day. Accomplishing the mission (notice how the mission ties into everything) depends on how well every task is performed; therefore every job in the restaurant is important and serves a noble purpose: the mission. Doing your best means not accepting average or doing just enough to get by. It means hitting the standard every time, no exceptions.

Do the right thing. Everyone is expected to take responsibility, be dependable and accountable. Do what you said you'd do, be on time and in the right frame of mind. When someone comes to work in a bad mood they're expected to leave that mood at the door. That's what professionals do and you're expected to act like a professional because in our restaurant you are.

When faced with a problem, don't ignore it. Own it and solve it. Don't pass on inferior work for someone else to fix. A good rule of thumb on doing the right thing might be to ask yourself whether doing this would make your mom proud.

Show people that you care. Show respect to everyone. Be generous in the use of "Please," "Thank you," "My pleasure," "I'm sorry" and "Pardon me." Let others know you're on their side and have their back. Express and demonstrate appreciation often. Think for a minute about the type of culture your restaurant would have if the majority of your staff abided by just these three principles. If the rules of the game in your restaurant are loose or nonexistent, consider beginning the process by communicating the three guidelines.

But be forewarned, merely communicating your rules won't change a thing unless you, as the leader, are willing to call it tight. Now we realize that calling it tight can be tough. It takes courage to enforce high standards consistently, every day. However, no organization or team has ever achieved excellence while tolerating mediocrity. You get what you tolerate. Calling it tight also means that your rules of the game are enforced consistently, no exceptions, no sacred cows, every single day. The rules of the game must apply to everyone in the same way.

CUSTOMER REQUIREMENTS POINT BY POINT

Here's 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 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 is you need to know 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.