Teams—Not Money—Make the World Go Round

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The strength of the team is each individual member. The strength of each member is the team.

—Phil Jackson, Coach, Chicago Bulls 

Everyone knows what a team is. As in the definition of a carpool lane, a team traditionally refers to two or more individuals who work together toward a common goal. Every team has a leader (or a driver, in the carpool analogy) who sets clear-cut goals, precise processes of achieving them, and a method whereby all team members can communicate with each other (or at least make their grievances known to team leaders).

That’s the conventional definition of a team. Outstanding teams differ from this standard in one important way: They always perform exceptionally well in terms of the three things that customers want—quality, efficiency and price. In fact, these three pillars of customer satisfaction—let’s call them QEP for short—cannot be delivered without superior teamwork.

Superior teams understand and consistently provide quality, efficiency and price by behaving differently from traditional teams in one fundamental way: They are always focused on pleasing the customer rather than the team leader or someone else who does not understand the importance of customer satisfaction in meeting the goals of a business. 

In the restaurant business, members of outstanding teams collaborate to provide customers quality and efficiency. And although quality and price are inextricably linked—as they should be—price is an issue that is usually decided by team leaders, whether they are restaurant owners or managers or both.

What’s the Price?

The two biggest costs in a restaurant are labor and food. Many managers and owners have a reasonably good idea about their labor costs. But a lot of them are not familiar with the concept of food costs. 

Effective managers—and smart owners—know down to the last cent exactly what it costs to prepare every item on the menu. Yet it’s surprising how many managers and owners are essentially clueless about food costs. Ask a typical manager or owner what his percentage of food cost is compared to total sales and he will likely will pick a number, such as, say, 38. Ask him if that’s good or bad and he might say something to the effect that the restaurant’s food cost percentage has always been 38. But that’s not what the question asked. The question was: Is it good or bad? And to answer it you have to know what you’re measuring food cost against.

Every restaurant owner and manager should have a clear idea of his actual and ideal food cost. The actual food cost can range anywhere from 30% to 40% of sales. But the ideal food cost measures what you might call the perfect price of food—perfect from the point of view of both the customer and the owner. And even then food cost and profit are always part of a bigger picture still, that of the EBITDA. This acronym stands for “Earnings Before Interest, Taxes, Depreciation and Amortization.” We will devote an entire chapter to this later because it’s a very important number to know by heart, especially later as you grow and would like to possibly sell your company one day or bring in investors and grow exponentially. The one number they will really want to know is the EBITDA. There are many different ways of increasing this number, the magic number you will need to focus on. And the entire team, in fact, needs to focus on this number. 

This brings us to the role of restaurant managers. Ask yourself what your managers know and what they don’t know. Get a clear sense of their responsibilities, scope and functions. In some restaurants, managers perform a lot of administrative work or function as accountants. There’s nothing wrong with that—if you don’t care how your restaurant is operating. 

A manager needs to be on the restaurant floor as much as he needs to be. He can’t spend time in the office paying bills and also watch what his team his doing in the restaurant—how the food is being prepared, and whether or not customers are getting the best product and service possible. It’s a manager’s job to make sure that products come into the store. But it’s not a manager’s job to receive calls from vendors, or place calls for any number of nickel-and-dime things, or make sure that invoices are paid. Those are accountants’ jobs. Managers are already faced with the serious responsibilities of checking inventory coming in and make sure that the owner isn’t being overcharged, making sure employees take breaks and do so on time, reducing overtime pay as much as possible, and taking care of most disciplinary matters with employees. They usually have their hands full.  

The challenge for managers who are freed up from administrative or accounting work is that now that they have more time, what are they doing with it? In many cases, that’s a process of uncovering, discovering and discarding those things that don’t work. Some managers have never been taught certain aspects of restaurant management. Many managers don’t know how to interview potential employees.

Managers ought to be familiar with issues revolving around hiring, employee relations, training, terminating, coaching, and team building. Managers should know how to effectively delegate tasks. There are a lot of different ways to get things done—but not all the methods are equally effective or desirable. The managers who haven’t had the right training or experience tend to be the ones who are curt and hardcore taskmasters. But the “my way or the highway” approach only goes so far—under certain circumstances. Usually, subordinates rebel against it.

“Once employees feel challenged, invigorated and productive, their efforts will naturally translate into profit and growth for the organization.” Ricardo Semler

A good manager holds employees accountable for a host of tasks, including organization, product holding, restaurant cleanliness, personal appearance and guest relations. Fast food restaurants usually cannot afford to have employees interact with guests because of the sheer pace of the business. But at more upscale restaurants such as Zankou, interacting with guests is perfectly possible, not to mention a crucial part of customer satisfaction. Such restaurants are also able to pay employees better and tend to have a lower employee turnover.

‘Turbulence’ in the Workforce

The workforce in America and much of the world has never been as historically unique as it is today. Gone are the days when people sought careers. Today’s workers seek opportunities. It’s no longer a case of workers asking employers, “What can I do for you?” Instead, we live in times in which workers, especially those from the most recent generations, have an expectation that would have given Henry Ford a heart attack. It’s as if they’re asking their employers, “What can you do for me?”

Before understanding the causes behind this dramatic change, it’s important to note that as many as four generations represent today’s workforce. Sociologists and labor experts refer to them as Traditionalists, Baby Boomers, Gen Exers and Millennials. Let’s take a brief look at each generation and what it means in terms of the workplace.

Traditionalists, born before World War II, are known to have a strong work ethic. They are loyal, respectful of authority, and conservative with their finances and lifestyle. 

Born between 1945 and 1960, Baby Boomers are the largest generation in history. Like the generation preceding them, boomers tend to respect hierarchy but at the same time believe that anything is possible. They are inherently competitive, materialistic, independent minded and favor consensus-based decision-making. 

Generation X members are born between 1961 and 1981, during a period of heightened and unprecedented globalization. The children of often-divorced two-career parents, they are wary of corporate structures and are more inclined to cultivate relationships in collaborative work environments. Although flexible by nature and driven by job satisfaction, this is the first generation to favor a balance between work and life.

Also known as members of Generation Y, millennials are born between 1982 and 1997 and are the second-largest work group next to baby boomers. These are people who have grown up with technology in virtually every aspect of their lives. Many of them have never seen a telephone with wires and can’t imagine going on a cross-country road trip without GPS. Raised by helicopter parents in an atmosphere rich with praise, they are the products of the ongoing self-esteem movement. From smiley faces for good work at school to summer camps that cost thousands of dollars, there’s a reward for just about every millennial effort. Like Gen Exers, millennials favor team collaboration and a balanced life, replete with rewards, recognition and constant feedback.

Harnessing Generational and Cultural Diversity

Entrepreneurs and managers have much to gain from understanding the diverse backgrounds and talents of these workforce groups and their expectations of the marketplace. By being creative, management teams can hope to not only expand on the available pool of candidates instead of falling victim to stereotypes, they can also match personalities with jobs.

Research shows that teams that are diverse in terms of gender, age, personality, education, experience and functional expertise tend to perform more effectively than teams that are homogenous. And the reason for that is somewhat counterintuitive: Diversity promotes conflict, which fosters creativity, which eventually results in improved decision-making.

No discussion about employees is complete without the issue of ethnic, racial and national diversity—at least in the United States, where the civil rights and women’s movements of the 1960s have forever changed the workforce landscape. Just about every large organization has goals, initiatives and training devoted to increasing diversity.

The best evidence on the issue of cultural diversity suggests that it tends to interfere with team processes—at least in the short term. Teams that are culturally heterogeneous appear to have some trouble in learning to work together and solve problems. The good news? Problems among team members tend to disappear in about three months as they learn how to resolve their disagreements and different approaches to problem solving.

How important is diversity for the restaurant industry? From a purely practical point of view, it makes sense to have a restaurant staff that is at least as ethnically and racially diverse as the restaurant’s customers. It is also important to have bilingual cashiers and cooks in the greater Los Angeles area. In our business, we have many Persian, Armenian, Arabic, and Spanish speaking customers. It would make sense, then, that employees that speak any of these 4 languages in addition to English are a huge added bonus to the team, particularly when things go sour and speaking to a customer in their language and dialect can offer quick help.

Hiring the Best Employees

Probably the most important thing to remember when hiring employees is that there are many federal and state laws regarding what you can and cannot ask while interviewing them. Basically, you wouldn’t want to ask closed-ended questions that limit the responses of a potential employee. An example of a closed-ended question is, “You don’t mind cleaning the bathroom, do you?” Such a “leading” question immediately suggests to the interviewee that you want him to clean the bathroom at work—and that therefore he’d better answer in the affirmative if he wants the job. By contrast, an open-ended question would be: “Around home, do you have any chores?”

Asking closed-ended questions could result in discrimination lawsuits. Some questions are plainly off-limit. For example, you can’t ask a person’s age or date of birth (although you can ask if they’re over 18 years of age, which is the minimum age for full-time hires). Nor can you ask their gender—if they are married or if they have children. You can’t even ask if they have a car to get to work. On the face of it, that sounds like a logical question. But here’s how it should be phrased to avoid legal trouble: “Do you have a reliable means of transportation to get to work?” 

It’s always a good idea to create an employee handbook that potential employees can read before their interview. Then they can be asked if they have a problem with any of the contents. 

How to Tell a Good Hire From a Bad One

Besides requiring potential employees to undergo a (criminal) background check, it’s almost impossible to interview people and say with any great degree of certainty what kind of person they are—whether they’re ethical, hardworking, team players etc. That’s because most interviewers are not professionals—they can ask questions until the cows come home and not be any wiser about the results. The only way to be reasonably certain about people’s personalities is through psychological evaluation done by professional psychologists. 

A psychological evaluation of potential employees usually entails nothing more than a written multiple-choice personality or psychometric test. These tests are usually de rigueur for management-level employees but they can also be given to entry-level employees. And the good news is that these tests can be outsourced: A restaurant owner can make arrangements with a professional testing company to give the tests to potential employees.

Entrepreneurs who have a tighter budget and can’t afford professional testing companies can take advantage of a variety of psychometric tests that are available online entirely free of cost. These tests screen for everything from business aptitude to personal integrity. One example of a company that offers customized as well as general psychological testing online is PsychPress (www.psychpress.com.au), based in Australia. Psychology Today, the respected longtime American magazine, also offers an array of free aptitude tests (www.psychologytoday.com/tests). 

Interviewing Tips

  • Know who you are talking to: Let’s say someone walks into your restaurant and asks for a job. Have them fill out an application form before you talk to them. Then ask them if they have a resume. 
  • Ask open-ended questions—and let the applicant talk: Remember, an applicant doesn’t care what you sound like. But you do care what an applicant sounds like. Besides, the more you open your mouth the higher the likelihood that you’ll say something you might later regret, especially in court. 
  • Observe the applicant’s mannerisms: Some applicants, especially if they’re young and inexperienced, are bound to be nervous in an interview setting. You should expect this—and while you should try to put such applicants at ease you should also watch them closely. Are they making eye contact? Are they fidgeting too much with their hands? Are their hands out of view, under the table? (If so, their palms might be sweaty and they don’t want you to see them wiping off the sweat.) Do they stall when you ask them a question? (That’s not necessarily a bad thing, given that some people pause to think before they respond, but then again the applicant might be trying to figure out how to lie.)

Tips For Motivating Employees

“If you want to build a ship, don’t drum up people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” Those words, by the French writer, adventurer and entrepreneur Antoine de Saint-Exupéry are probably the best advice on the fertile subject of motivation. It makes much more sense to subtly encourage an attitude in employees that makes them more engaged, efficient and effective at work than to demand that they become paragons of customer service. And the best way to do that is by personally setting the right example.

In other words, talk like you walk and walk like you talk. You can’t tell people to do one thing and then do another. For example, you can’t say you really value employees and then yell at them for doing something wrong an hour later. Remember, words wring hollow if they aren’t backed up by action. Generals lead their troops. Good leaders don’t ask their subordinates to do something they themselves wouldn’t do. If you want to be a great example of hard work, show up early at your restaurant and often be the last to leave. We’re not suggesting you have to do this every single day, but nothing shows employees how much an owner cares about their business as much as personal care and attention does. And when you do show up don’t mess round, wasting time fidgeting around with your cell phone or reading the newspaper or books. This is not the place for leisurely study, this is the jungle-like work environment of a restaurant. Come with your A-game on, dressed sharp, well-rested, and ready for action. You can always give a short, positive 5-10 minute motivational speech before any kind of big day like those that contain huge catering orders. This will hype up your team and yourself as well. They can then foster the energy to get through the difficult day with flying colors. 

However we all know—instinctively if not through experience—that not everyone is motivated by the same thing. Yet there is no dearth of organizations that routinely offer financial incentives to employees—as if money truly makes everyone in the world go round. The truth is that the world is full of people who do what they do because it’s important for them to do it. Money is not their prime motivator. These tend to be the kind of people who metaphorically beat themselves up if they do anything wrong at work—even if what they did really wasn’t a big deal.

Research over the decades clearly suggests that money rarely if ever improves employee performance or satisfaction in the long run. If anything, financial incentives tend to have the opposite effect—and they are effective largely in situations where employees perform repetitive tasks, such as in manufacturing lines or commodity services. 

Financial rewards don’t work for the simple reason that they are a form of payment for past performance. While such rewards might make employees feel worthy and committed to the organization—in anticipation of future rewards—the net effect on employees’ productivity and efficiency rarely increases.

So what motivates people to do their best individually and as a team? Instead of offering financial rewards, recognizing the good work of employees—through sincere verbal compliments or other methods—is by far the greatest motivator of sustained team performance. The difference between these two strategies is especially stark in the restaurant business. We all know that waiters in more upscale restaurants make a substantial amount of money through tips. Yet if you ask the owners of some of the finest restaurants about the weakest link in their business many will point to waiters. Not for nothing are waiters in many cities such as New York and Los Angeles deridingly referred to as actors who can count. Waiting on tables is not a way of life for them but a necessary expedient.

Once you know what motivates people, figure out how to use it appropriately. Remember, motivation is a balance between expectation and reward. Never behave in a manner that sets up false expectations among employees. And try not to get employees into the habit of expecting rewards—because when they don’t get those rewards for whatever reason they will be disappointed. For example, don’t offer them free pizza or donuts on a weekly basis. Instead, give it to them when they do an outstanding job—or when you feel like it.

At the end of the day, it’s important to recognize that teamwork is not everyone’s cup of tea. Many people—not just loners and narcissists—just aren’t cut out to be team players. Fortunately for talent hunters, there are three tried and tested qualities of team members.

Open and honest communication appears to be the first quality, followed by the ability to confront differences and resolve conflicts. The final quality of a team player is the capacity to sacrifice or sublimate personal goals for the good of the team—challenging as this is for some people.

 

References:

 

 “Super Teams: Using the Principles of Respect to Unleash Explosive Business Performance,” by Paul L. Marciano and Clinton Wingrove, McGraw Hill Education, 2014.

“The Talent Selection and Onboarding Pocket Took Kit: How to Find, Hire and Develop the Best of the Best,” by Erika Lamont and Anne Bruce, McGraw Hill Education, 2014. 

“Generational Differences in the Workplace: Personal Values, Behaviors, and Popular Beliefs,” by J.W. Gibson, R.A. Greenwood and E.F. Murphy Jr., Journal of Diversity Management (Third Quarter 2009).

“Cultural Diversity’s Impact on Interaction Processes and Performance: Comparing Homogenous and Diverse Task Groups,” by W.E. Watson, K. Kumar, and L.K. Michaelsen, Academy of Management Journal (June 1993).

“What Makes a Good Team Player? Personality and Team Effectiveness,” by J.E. Diskell, G.F. Goodwin, E. Salas, and P.G. O’Shea, Group Dynamics: Theory, Research, and Practice (December 2006)

Photo credit: Ajay Singh

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