By Matt Rolfe
For many foodservice operators and owners, 2019 brought more challenge and change to their options than ever before. A simple Google search about the health of our industry yields dozens of articles referencing the restaurant apocalypse. In times of extreme flux, some operators and leaders adapt and change, while others do their best to hold on and ride the wave – which, in today’s market conditions, can be extremely risky. Here, I provide you with a framework to reflect on foodservice trends from the last year, and identify goals and patterns that, when acted upon, will allow you to move your business forward in 2020.
There is a saying that what got us here won’t get us where we want to go, and I could not agree more: Whether you are a single operation or a multisite national chain, the fact is that you cannot make the all changes your business requires to grow and thrive happen on your own. We need to create clarity in the direction of our goals and focus on designing a plan in 2020 that is focused on results, not activity – on strategy execution, not just strategy creation. “Strategy execution” might sound complex, but for most leaders reading this article, it’s the most impactful exercise you can do for yourself, your people and your operation this year.
But before we get into that, let’s reflect a little on 2019.
Reflecting back on 2019 foodservice trends
Last year brought some massive change to our industry, and while we could not predict the significance of these changes, we were able to see it coming based on the patterns that were emerging in 2018. Competition continues to increase in every major market; costs continue to rise across the board; there is an extreme talent shortage when it comes to leadership and staff; and then there’s the rise of third-party delivery services such as Uber Eats, Skip the Dishes and Door Dash. These companies have the potential for the same impact Groupon had on so many other product and service providers in the very recent past – or they could be the catalyst for change your business needs today.
Let’s break down these trends from 2019.
Third-party delivery: Before we get started on this topic, let’s be clear that the growth of third-party delivery is still on the rise, and I doubt it has come close to hitting its peak. Uber owner Travis Kalanick raised $400-million to invest in his “ghost kitchen” concept, and others are sure to follow, driving further innovation and change within this space. If many operators in 2018 were still deciding whether to play in this space or not, 2019 saw the bulk of the industry dive right in, signing on with one or several third-party delivery partners. This is a hot topic for industry leaders across the globe, and one that’s being closely watched – and through that observation, it’s become clear that the success patterns for those thriving with the addition of third-party delivery to their business are influenced more by execution mindsets applied to several areas of the planning and execution process rather than a singular focus on the new technology itself.
Everything begins and ends with intention: Successful operators know precisely what their intention in the third-party-delivery space is, in addition to why and how consistent execution of that strategy brings them that success. Most operators jumped on board the trend because they felt they had to. Those using third-party delivery to create a sustainable revenue stream, however, were clear on what menu items to offer, how to upsell those items, the importance of packaging, how to incentivize customers to return and order delivery again and how to use the platform to drive people back into restaurants.
Exercise: Strategy execution
Can you answer all the questions below, and, more importantly, are your managers and/or staff aware of your strategy?
- What menu items are you offering?
- How do you ‘upsell’ or increase ‘cart’ size?
- Does your packaging allow you to achieve your quality standards when being delivered?
- What are offering guests to entice them to order from you again?
- How are you enticing guests to visit your location(s)?
Approach to labour cost: In 2017, a national restaurant association surveyed its members and found that, based on the continued increases in wages, 98 per cent of operators planned on decreasing their labour coverage, while 99 per cent planned on increasing their menu prices. To be clear: Many operators planned on charging more for what was bound to lead to a diminished guest experience. Putting these words on paper is hard, and I’m sure many readers won’t believe the stats, but what I learned through 2018 – and what was clearly evident in 2019 – is that there are two competing beliefs when it comes to the critical topic of labour cost.
Belief #1: To maintain profit, we must cut labour costs. Insome cases, cutting labour costs is the right decision. But in my experience, this rarely drives the results you want, as the ability to properly serve your guests has a direct impact on guest satisfaction, cheque averages and return guest frequencies. We learned that, in most cases in 2019, reducing staff coverage led to managers covering staff responsibilities in the front and back of house, and cheque averages declined along with guest-satisfaction scores. The underlining effect of reducing coverage was a burnt-out staff led by managers who were no longer acting solely as managers – which led in turn to higher turnover rates as employees left to seek other opportunities.
Belief #2: Many operators have taken the opposite approach, and rather than cut labour, they have done the math and determined what days, and parts of days, of the week that increasing labour would allow them to deliver their desired guest experience, achieve their guest cheque average while allowing themselves or their leaders to lead the business rather than continuously operate in the business.
Can you answer all the questions below, and, more importantly, are your managers and/or staff aware of your strategy?
- Have you defined your desired guest experience in a simple and clear way?
- Do you have the processes and tools to measure your guest experience?
- Could your staff share your desired guest experience with me if I picked up the phone and called them today?
- Most importantly: Do your staff know why it is important to consistently deliver your ideal experience to every guest?
Winning the fight for quality leadership: It is clear, based on the number of new locations that have opened and rising competition in every market, that there is a shortage of leaders to effectively operate these locations – and you can’t do it all yourself. It is unsustainable for a single-outlet operator to be at their location during all operating hours; for a multisite operator, no matter how great your concept is, your vision cannot be executed without strong leaders who believe in and support the consistent execution of that vision. It hurts me to say, but hundreds of operations will close this year – not because they didn’t have a great concept, location, menu or financial management, but because the people leading the employees were not doing so in a way that created a consistent experience for their managers and staff.
- Do you have a strategy to attract leaders to come and work for your operation? (Hint: Your attraction strategy cannot be based on compensation only.)
- What is your promise to leaders who commit to joining your team? Aside from compensation, what experience, recognition and/or opportunity for growth will they receive for investing their time into your vision?
One of the biggest patterns emerging in 2019 is that top performing operations have to attract, retain and develop their leadership teams to support their operations. Strategy focused on people development has been part of almost every other industry but hospitality. To retain, engage and inspire your people, investing in their development is no longer an option. You either have a strategy and commit to it, or your leaders over time will leave and find someone else who will support their growth.
How to reflect on your results
Here are some simple exercises that you can go through on your own – or, ideally, with your partners and/or team – to review your 2019 and provide you with clarity on where to focus to ensure you achieve the results you are after in the 2020.
Where are you winning? Identify three areas in which your team was able to win in 2019. These can be big wins, but over huge shifts, I recommend identifying the three things that you did consistently that led to great staff, guest and financial results.
What’s working vs. what’s not: Identify five things that are currently working for the team and operation along with five things that are not. Rank them in order of impact and then commit to a plan to do more of your top thing that is currently working, along with a plan to remove or reduce the activity that is not.
Looking forward in 2020, and beyond
Every year will present its own patterns and come with significant change. My hope for you is to have a process in place to ensure your business has a clear, focused direction, supported by behaviours that will deliver you, your leaders, your managers and your staff the results you desire and deserve. Whether your decide to double down on third-party delivery as a solution, engage your entire team in a cheque-average strategy that ensures enough staff coverage to deliver every guest a great experience or commit to a people-development strategy that allows you to attract, retain and develop the people needed to support the growth of your operation, the exercise outlined below will help you create the clarity you need and that your managers and staff deserve.
How do you win in 2020?
I encourage all operators to have a clear and grounded definition on how you and your team wins in 2020. What goal, once achieved, will allow you to celebrate with your team? Too often, the definition of success is connected only to revenue, profit and cost of goods. One of these might be your main goal for 2020, but if it is, you must be able to tell your team why achieving that goal is so important to the business.
Exercise: How We Win
- Create a 1-2 sentence statement that clearly describes how your team wins in 2020.
- Create a single-sentence statement on why achieving this goal is so important to the business.
- Create a single-sentence statement on why achieving this goal is so important to your guest.
- Create a single-sentence statement on why achieving this goal is so important to your managers and staff.
Share your goal and ‘why’ statement with everyone on your team.
Three critical drivers of success: To achieve your goals, there are certain things your team must do to drive their focus and their results toward those goals. These are often activities that fall outside your managers’ core day-to-day operational responsibilities. Some of my clients have had focuses such as:
- Updating and executing our new manager- and staff-attraction strategy
- Implementing a celebration and recognition strategy
- Dominating third-party delivery within our competitive set
Whatever your goals, I encourage you to identify the three critical drivers – or consistent focuses and/or activities – that will help you achieve them. For each driver, you need to be clear on what the end goal is, assign one person to be accountable for that goal and confirm who will be responsible to help the leader stay accountable for achieving the goal. Keep it simple, and then discuss your progress in each of your weekly meetings.
Identify and clarify job responsibilities: Every time I ask an owner if their managers and staff know what is expected of them, the answer is yes. Every time I ask managers and staff if they know what is expected of them, the answer is hardly ever strongly affirmative. I encourage you to make sure managers and staff are 100-per-cent clear on what you expect of them each day, week and/or month to be successful in their positions. To help you communicate your expectations, I recommend following the steps below.
- For each manager position, identify the top 3-5 outcomes you expect from them each week.
- Rank your list of 3-5 in order of priority.
- For each item on the list, identify the ideal number of hours you feel they should spend on each priority each week. Note: Completing these 3-5 outcomes should not take more than 8-13 hours a week.
- Book a meeting to share your list with your managers and ask for their feedback.
The key to achieving results for any leader or team is focused energy in the direction of their goals. This exercise is not only important, but it often is the linchpin for a leader and, ultimately, the team in achieving their goals this year. Whatever your takeaway is from this article, remember this: Book 60 minutes to reflect on 2019 and to think deeply about where you want to go in 2020. Many of the exercises in this article will help you work through this process. If you’d like clarification regarding any of what I’ve covered here, or if you’d like help working through your reflection process, feel free to contact me for further information to help ensure that you and your team achieve the results you deserve in 2020.