I’m the owner of a fast-growing restaurant business. We opened our third branch last year and we’re looking forward to having seven branches this year. That’s why we keep on hiring new workers from all sources just to fill the vacancies as demanded by each branch. Now, each branch is averaging more than 30 workers each, including the chefs, cashier, and branch head. And yet, our overhead expenses have also increased due to overtime payments made to people who are forced to work as many as 16 hours a day, which to me is impossible to do. I can’t understand what’s happening; no matter how we increase the number of workers for each branch, we still encounter excessive overtime work and other manpower-related expenses for each branch. Could you please tell us what’s wrong? — Losing It.
A frugal old woman who, instead of seeking professional help from a pest control company, called the village handyman to seek free advice on how to remove a skunk in her basement. She was told to make a trail of bread crumbs from the basement to the yard, and then wait for the skunk to follow it out of the basement. The woman complied.
The following day, the woman called again and reported that she had done as told, and now she had three happy skunks frolicking happily inside the basement.
That’s what happens when you try to solve a problem resulting in another major problem.
Your restaurant business may be earning a lot of money, but at the end the day, you have no recourse but to deduct all expenses, including necessary and unnecessary costs, visible and invisible things, for you to arrive at your net profit. Is it enough for you to continue with your business?
Reduction, if not the elimination of waste, is a fundamental, bottom-line approach to business management. Sometimes, in our desire to earn more, we make many careless decisions like putting in more workers resulting in more costs, only to discover that the measure is not part of a durable solution. And worse, it has created more problems.
Operational waste, many of which are invisible to the untrained eye, contributes not only to high costs, but delays, quality issues, poor employee morale and customer dissatisfaction, among other related problems. That’s why you’ve shifted to fire-fighting mode now without knowing of what’s hitting you.
You’ve resorted only to curing the symptoms but not the root cause or causes of the problem. If you continue doing it that way, you’ll also continue perpetuating all the issues that you’ve been encountering. Take for instance, when you consult a doctor for an ailment. You tell the doctor: “My head aches when I work until one o’clock in the morning.”
To which the doctor prescribed the obvious solution: “Then, don’t work until that time. Change your work schedule and soon, your situation will improve. In the meantime, buy and take this medicine three times a day. That’s one thousand pesos for consultation.”
Sooner or later, you’ll find that your condition persists even if you cut your work to the barest minimum. Then you’ll go to another doctor to seek a second opinion. The same thing could happen when you do the same thing in your business operations.
From what I gather from your short story, you’re probably suffering from a management blind spot. Most business owners are just like that. If they’re earning money, they keep on spending even for unnecessary things in the hope that it could be eventually recovered, until it’s too late.
Now, let’s explore at the following basic approaches for handling the situation as you’ve described:
One, conduct a manpower audit to determine the right number of workers. In addition, review the job description of all basic functions in an ordinary branch. Take stock of all standard job functions you think are necessary to operate a restaurant. Keep an eye out for duplicated functions, like the case of waiters and bus boys. It’s better to have one worker (like a waiter) doing the same job of taking orders from customers, serving them, and cleaning the tables as well.
Two, explore the idea of multi-tasking versus specialization. This is related to number one above. Further to merging the work of waiters and bus boys, you may also want to experiment with the idea of making the branch head work also as cashier, waiter, or bus boy as the need arises. There’s no need for you to embark on specialization as it breeds complacency rather than efficiency.
Three, learn from many best practices of other restaurants of your size. If not, you can also learn from major restaurants, except that benchmarking with other similar businesses, regardless of size could be a major challenge as they might not allow you to “discover” their secrets. If this is a long shot for you, then your next option is to read as many articles that you can discover about restaurant management.
Four, consult with a professional efficiency expert. Don’t rely on free advice from your “village helper” who could bring you more “skunks” or trouble in your household. You need to hire a management professional who can help you establish a system that attacks many sources of operational waste. You need to spend something to seek the advice of a professional consultant capable of implementing many time-tested solutions.
Last, do management by walking around on a regular basis. The Japanese call such an approach the Gemba Walk. Visit all your branches without establishing a firm schedule. But don’t make it look like an audit with the intention of catching people doing something wrong. Instead, talk to people, even to the dishwashers, bus boys and janitors and offer help that can make them happy and motivated, regardless of their employment status.
Therefore, whenever you plan to make changes, ranging from the way a single job is to be performed, it’s always necessary to consult with those who will be affected. Doing this will help generate workers’ acceptance of the changes, which will go a long way toward guaranteeing its successful implementation.
ELBONOMICS: A solution can be found in the same place where the problem was first created.
Anonymity is guaranteed to those who seek it.