Keeping Your Restaurant and Organization Relevant
In today’s competitive restaurant world, a restaurant organization’s entire approach to customer needs must take into account many factors. Often, when restaurant owners are faced with closing a business, the story they tell is about their inability to resolve competitive issues and create a sustainable business. They may say closing a restaurant was a long time in coming, but the realization came far too late. In hindsight, most of them can see that various competing interests were out of alignment for some time, and what they had created was unsustainable.
No one sets out to create a restaurant that won’t last for a significant period of time, but it happens all too frequently. This is mainly due to the business owners and restaurant managers unaware of key employment and staffing issues, as well as the competitive environment. Sometimes their decision-making is not the best.
The values of today’s workforce, in an era of full employment, is increasingly out of sync with mainstream assumptions of what constitutes “good business.” It becomes increasingly difficult to separate business decisions from values and ethics. So, it’s time to challenge those business assumptions and the conventional wisdom of what produces sustainable business practices, and determine whether or not you are creating a sustainable organization.
Here are some things to consider:
A sustainable organization begins with thinking about several groups of stakeholders in your restaurant organization’s success. These include owners, customers, employees and suppliers. There is interdependence among these groups, and when acknowledged and encouraged, it can benefit everyone and create greater value throughout the organization. With this perspective, owners are concerned with how their management decisions impact the overall welfare of their staff and suppliers. They try to minimize undesirable trade-offs when conflicts arise. They are committed to prompt and fair dispute resolution, whether the dispute is internal or external, and are quick to recognize team effort and contributions.
Economic success for restaurants is sustainable when value is created not just for the ownership but also throughout the organization. This must include individual locations, the people doing the work, entities supplying the food and then value for customers. To be sustainable, a restaurant organization must look not just at revenue growth, or even profits to define their success, but understand how their profits and growth are aligned with the values they espouse, and the management decisions that impact their employees and customers.
A sustainable organization creates engaged employees who see their personal success tied to the success of the business. Employees see fair compensation, a safe workplace, opportunities to learn and grow, job advancement, financial incentives and the feeling of being appreciated. They want to feel something larger than themselves and be ambassadors of their organization’s mission and values.
In a sustainable organization, communications are consistent, accessible and set clear expectations for how the restaurant will operate and how all employees and diners should be treated. There should be effective two-way communication channels and regular check-in sessions. These can be feedback loops between the front line and the back office that holds everyone accountable to the expectations of work processes, values and purpose.
A sustainable organization is transparent about its culture and values and has visible and clear messaging, both internally and externally. Transparency is especially critical in the #MeToo era where customers and employees are concerned with cultures of respect and empowerment in restaurants. By saying “This is what we do here, this is the culture we’re creating,” restaurants send a message about what is important. Being visible means there is messaging about the culture on posters in the workplace, menu boards and even on printed menus. Employees, suppliers and customers are then engaged and can hold the organization accountable.
It can be difficult for managers to always strike the right balance when they are face competing demands. It’s important to create support systems where the people practices, financial and management systems, and work processes all are in alignment and organized around supporting good decision-making and creating value. It is important to provide metrics that provide feedback on how the organization is performing against the key criteria critical to maintaining a sustainable organization.
Issues like excessive employee turnover, wage disputes, sexual harassment and management malfeasance are threats to the sustainability of a restaurant organization. As a result, they should not be treated in a transactional manner, or as separate issues unrelated to each other. They should not be ignored. Instead, they should be seen as connected to continuing the overall performance of the organization and to a healthy culture. A sustainable restaurant organization relies upon a network of trusted resources to provide expertise to assist owners, managers and employees in difficult circumstances and is committed to resolving unhealthy situations swiftly, and equitably.
Creating a sustainable organization involves adopting a mindset and designing a set of business practices that support your mission and create value throughout the organization. Similar to the way environmental sustainability has become a mindset for protecting and preserving the natural environment, organizational sustainability is a mindset for enhancing the lives of your people and customers while benefiting your business bottom line and returning value to ownership. The solution to almost every challenge facing today’s restaurant owners and managers starts with a mindset of creating a sustainable organization.
Lisa Meyer is consultant to businesses in the area of leadership, marketing and organization development, to help define each business’ strategic purpose. She also sits on the board of Alerus, a regional bank based in the Twin Cities.
Dennis Monroe is managing shareholder of Monroe Moxness Berg, a law firm focusing on tax and transactional matters for multi-unit businesses.