Restaurants that offer innovative new menus often gain an early advantage. Ethnic themes, creative cooking styles, use of uncommon ingredients or unique dish offerings can create interest in markets lacking similar options. These operations are able to differentiate themselves and establish a unique position in the minds of patrons.
As awareness and excitement grows, these firms also attract copycat competitors. Menus cannot be patented, and are offered no protection from imitators. Soon, existing rivals begin to adopt menu aspects, and new similar concepts begin to emerge. What made the restaurant distinctive eventually becomes common and operators lose advantage.
First mover
Those operators that are first to enter a new market, or those that have a captive audience, gain an immediate advantage in the absence of competition. This situation is typical of restaurants that are first into developing communities, those that negotiate exclusivity into their lease agreements, remote operations or contract caterers offered the master rights to provide service within a property.
Due to these protections there is little pressure on businesses to provide superior quality and service. Consumers have few other options and accept lower value. Over time though, communities grow and new competitors enter the market in unprotected areas. The original restaurant has done little to foster customer loyalty and then wonders why those customers flock to the new competition.
Exclusive contracts expire and existing operators may need to justify their renewal, or pay a premium to outbid other vendors. They may not even be considered if there have been complaints about their performance. They can lose a significant client, or higher costs may reduce margins making it even more challenging to provide value.
Sustaining advantage
An organization achieves competitive advantage when it is able to deliver more value than competitors within their area. Too often, management’s focus is on this end result, not on the process of getting there. The cost of this myopic perspective is short-lived success that becomes difficult to maintain.
Firms wishing to hold on to their competitive advantage must concentrate on the quality of their operations. Every foodservice operation does essentially the same thing, but it is how they go about it that sets them apart. Operational activities define how a company achieves its objectives.
Quality operations don’t focus on the final products or service, rather they concentrate on developing quality practices, standards and behaviours. Restaurants that want to prioritize the means instead of the ends need to shift attention from traditional practices for foodservice managers. It isn’t easy to make these changes, and it requires a commitment to doing a lot of little things right, but the benefits are developing people, products and processes that delight guests. More importantly, this creates positive momentum that yields prolonged results.
Quality culture
The first step of any quality program is to establish an organization-wide commitment to achieving quality goals. This promise must be led from the top but requires the involvement and support of all employees. Quality is a team effort with the customer being the focal point. Identifying opportunities to exceed guest expectations by making continuous improvements will create loyalty and a level of performance that competitors cannot match.
Management must set high standards and work with their teams to implement processes that become normal routine. Over time, these quality standards will be ingrained as part of the organization’s culture, becoming just the way things are done.
Standardized procedures
Providing consistent performance is key for fostering consumer confidence and reducing risk. Regardless of who is working, what day of the week it is or what the conditions are, customers need to know what to expect from their dining experience and believe that they are going to receive it. Reliability is a measure of service quality.
If there is a right way and a wrong way to do something, there should be a formal standard for it. From making coffee to resolving a guest complaint, employees need procedures to guide them. Restaurants can use various ways to record and communicate these processes such as employee manuals, policies and standard operating procedures.
The focus is not just on what needs to be done, but rather on how to do it the correct way every time and what the desired outcomes will be. When team members understand why they are being asked to carry out their duties in a particular way, they see the benefit to the customer and can transfer their knowledge to other areas of work, allowing them to take more initiative.
Restaurants can promote consistency by using failsafe ways to make it easier for employee to do their job properly, or reduce the chance of them making a mistake. Some of the simple tools for promoting standardization include :
- Checklists – Opening and closing duties, cleaning lists, secondary or side duties, and event set-up.
- Food and beverage recipes – Keep these up-to-date including ingredients, quantities, simple to follow instructions, plating guides, images and product information.
- Portioning – Scales to ensure consistent meat portion, baggies to pre-portion shredded cheese, scoops that pick-up a standard portion of fries and measured pour spouts for liquor.
- Scripts – Detailed or general instructions for welcoming guests, suggestion selling or answering frequently asked questions.
- Steps of service – Instructions for each point of contact front line staff have with customers, to ensure thorough and consistent service.
Training and development
Once the necessary procedures and policies have been established, employees may need help navigating the rules. Even for experienced employees, the learning curve can be steep when asked to deliver the restaurant’s newly established standards. Professional and thorough training programs also signal to the employee their importance, as well as the organization’s commitment towards their success.
Employees who perform well and feel they are helping the organization achieve their goals are more satisfied and likely to stay with the company longer. Lower turnover promotes consistency and a greater return on the training investment. Ongoing training for staff can enhance skills, promote continuous improvement and increase operational quality.
More importantly, top performing teams provide superior service, foster stronger guest relationships and support each other’s efforts. Their superior execution will be difficult for competitors to copy.
Control systems
Traditionally, management decision-making relied on instinct, past practices and perceived industry norms – sometimes resulting in inconsistent or inferior decisions. Quality businesses need control systems like setting targets for performance, monitoring activities, collecting information, analyzing results and taking corrective action where necessary. This enhanced level of information allows managers to base decisions on facts and verifiable data rather than gut instinct or past perceptions.
Restaurants should establish procedures for all critical functions and activities to make sure they meet performance standards. First, they must come up with performance targets such as employee knowledge and skill level, theoretical food costs based on recipe costs and forecasted sales mix, labour budgets based on anticipated sales volumes, and scores on service audits. Once they have established targets, restaurants need to monitor activities and provide early feedback of any performance problems. Reflecting on the previous examples, these could include :
- Training checklists to be completed and signed off by the trainee and trainer at the completion of each shift;
- Food purchase tracking and inventories;
- Daily labour variances against actual sales; or
- Key metrics to be included in the service audit.
Using this information, managers can monitor the operation’s performance to ensure they are progressing towards their stated targets. Tracking key activities reminds all employees of their importance in achieving operational quality and focuses their effort on achieving the desired outcomes. At the conclusion of each activity cycle, managers should measure results against targets and verify that the employee achieved an acceptable score at the end of their training. They should also analyze food and beverage cost variances, taking into consideration actual sales, waste and product price changes. Managers can determine weekly labour costs with daily breakdowns to help identify and explain discrepancies. When the restaurant is constantly tracking, there should be no major surprises at the end of a reporting period because any small problems will have been identified and corrected before they escalate into larger issues.
Effective use of control systems will not completely prevent problems, but they will help reduce the likelihood of weak performance. Owners can promote and recognize positive behaviours, which lead to effective operations. Managers can also efficiently allocate resources, helping to bring performance in line with competitive strategic objectives.
Over the long term, these efforts can ensure that operational activities achieve superior performance levels to provide value to customers. The restaurant will develop a reputation of service and quality excellence that distinguishes it in the marketplace. This mix is difficult for competitors to copy because they happen behind the scenes and require an organizational mindset committed to superior performance.
Operational quality is about doing all the little things well. It requires tenacity, stamina and an unwavering focus on the guest. It may not seem as exciting as opening a new location, closing a big property deal or creating a new concept, but achieving competitive advantage through operational excellence is sustainable – truly work that redefines sexy.
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About the author
David Swanston is a hospitality and foodservice consultant, principal of Focused Industry Training Seminars and is an instructor at major Canadian university business schools. Since 1997 he has helped a wide variety of organizations develop and launch new concepts, turn around troubled operations and improve efficiency. To learn more about how he can help you improve your sales, profits and performance, contact Swanston directly at 905.331.6115, [email protected] or [email protected].
