“Culture eats strategy for breakfast.” Peter Drucker
Since starting my career in hospitality I have owned or partially owned twelve restaurants, one coffee shop franchise and a boutique hotel. In setting up each place I focused on the usual elements of a good operation. Time was spent on looking at customer access and service flows. A unique ambience was always critical. Then came hiring of staff and the overall planning process. Things like “standardized recipes” were developed. A management team was put together and taught the division of key responsibilities: a) Marketing and Promotion; b) Operational Systems and Practices; c) Management of People and Development; d) Physical Plant and Maintenance; and, e) Accounting and Controls. We followed the industry accepted techniques for sales and day-to-day operations - the “nuts and bolts” of any business. Everyone does them and none of them will significantly separate you from your competitors. However, at each operation my main goal was to create a strong and unique “service-centered” culture. My method in all operations was to continually emphasize a set of four personal goals – it essentially became an employee job description. I presented these goals to staff as a form of a management theory known as “Management by Objectives” (MBO). This theory entails laying out clear objectives for a staff member, getting them to understand and agree to them, and then committing themselves to their fulfillment. MBO is more complicated than just outlined but my approach was a radical distillation of its basic principles. It was a strategy to develop culture.
During every staff orientation period, and at every staff meeting (held quarterly), I would outline the Four Goals and use examples of what they meant in practical terms. Here’s an example of things I’d say in a meeting setting: First, I’d ask for someone/anyone to name one of the Four Goals. Then I’d write them out on a blackboard and elaborate on each one (as defined in our Handbook). The Four Goals are as follows:
Strive to be the Friendliest restaurant in our market place. (If staff were rude or inattentive to a customer, or even another staff member , then they failed this goal). This was the most important goal…an upbeat staff member can smooth over many service and product hiccups.
Offer the guest Good Value. (This could be a game meat burger for $20, twice the price of our competitor’s beef burger, but a healthier and higher quality product. If a staff member delivered a poorly presented plate of food to a table then they and the kitchen staff failed – note: our service staff have the authority to reject any plate prepared by the kitchen and ask for it to be redone).
Act Professionally with guests and fellow staff members. (Everyone must act as if they are “on stage”, be in uniform, “performing” for our guests. No one can inflict their poor attitude or bad mood on other staff – something we call “skunking” – because it disrupts an upbeat service flow which is an operational failure).
Keep our premises Clean and Well-Maintained. In today’s market place, with well-seasoned consumers, it is imperative to keep your premises in good shape. (My favourite example of a failure of this goal was when a staff member walked into work and ignored some garbage on the front step. Anytime I saw litter on the floor in a public area, fingerprints on windows, or ripped paper towels in the washroom sink I’d get frustrated… one clear lesson I have learned over the years about separating the top restaurants from the poor ones was this paradoxical fact: the best restaurants consistently do things that a 12-year old child could do; it’s not rocket science! Just a constant attention to details. I’m appalled when I walk into a restaurant with an untidy entrance… and don’t even ask me what I think of dirty washrooms… just get me out of there!).
New hires are carefully explained the full implications of the Four Goals. After their orientation they are asked to sign a Commitment Form that has the goals written out – this form is then brought out during any problematic incidents or during performance reviews. The staff member is then reminded of their signed commitment to our Four Goals and reminded that we have a “no fire” policy at my company. No fire? What? That’s right - we do not fire any one, but we will let people know when they have quit – this happens when they fail to achieve one or more of the Four Goals on three occasions (we call this “three strikes and you’re out”). Going back to my example of a staff member ignoring garbage on the front stop on their way into work – when I see someone stepping over the garbage, versus picking it up, I walk over to them and ask them “when did you decide to leave the restaurant? Don’t you realize that by failing to strive towards any one of our Four Goals, that you’re sending a clear message to me: you’re saying, by your actions, I don’t want to work here anymore”.
I love our “no fire” policy because it allows me to treat people like adults. I’ve never been comfortable with an autocratic management style. Let people make their own decisions – if they don’t align with the company’s strategies and values then please leave. This overall approach dovetails nicely with my treatment of managers as well. I like to have a “hands-off” approach to their activities and responsibilities – in other words, I give them enough rope to hang themselves. This allows them lots of freedom and the opportunity to make mistakes which is one of the best teachers for a person’s development.
Other than the Four Goals, our overlapping cornerstone is the tag line for my company, The Neighbourhood Group of Companies (NGC). This four-word tag line encapsulates every facet of my vision for a great hospitality company - it is: ”By Neighbours, For Neighbours”. This simple tag line defines our buy-local purchasing policy, our staff development efforts, our friendly corporate character, our commitment to our community, our responsibility to investors and other stakeholders, and, of course, our efforts to minimize our environmental footprint. By Neighbours, For Neighbours says it all. It reminds me of the beautifully succinct Nordstrom Policy Manual (this is it in its entirety):
Welcome to Nordstrom
We’re glad to have you with our company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.
Please feel free to ask your department manager, store manager, or divisional general manager any question at any time.
I’m sure there’s a lot more to their system but their “Policy Manual” is exquisite. I imagine a lot of their emphasis, as is ours, is on “catching” staff members providing outstanding service and rewarding them with compliments or monetary bonuses.
Frances Frei and Anna Morriss, in their book “Uncommon Service: How to Win by Putting Customers at the Core of your Business”, write that “Culture guides discretionary behaviour and it picks up where employee handbooks leave off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling bosses about new ideas….” They state that a strong service-oriented culture actually becomes a competitive weapon! The great value to an organization is best summed up by the authors statement, “Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.”
The Wooly Pub
My Wooly Pub has been running for almost 30 years. It has developed a very powerful culture and exceeded my expectations, in terms of customer satisfaction and profitability, time and again. Over the years we’ve developed a unique and special sort of culture. As one example, the service staff have always shared gratuities among each other and with the kitchen. The staff recently voted to increase the kitchen’s share of tips so they all reach a “living wage”. We’ve created our own language (or glossary) for the division of labour – most restaurants divide staff into “front of the house” and “back of the house” (which I always found as a negative description) but we have “service staff” and “heart of the house” descriptors. The Four Goals are ingrained in our team members. As a result, we have customers, “guests” in our lingo, who feel like they belong to our pub family… and, more than all my marketing efforts, their advocacy for The Wooly has given the business its longevity. Our mission “By Neighbours, For Neighbours” has a strong whiff of authenticity and realization at this operation. Our other tag line, and extremely accurate characterization of the pub, is “Guelph’s Great Meeting Place”. This definition was something earned over the years thanks to team members who live and breathe our Four Goals while embracing NGC’s vision.
If anyone ever asks me the advantage of a strong culture I usually point to the history of The Wooly Pub. It has become somewhat of an institution on Guelph. A few years back, before he became our current Member of Parliament, a customer, while sitting on The Wooly front porch, described the experience as “sitting on Guelph’s front porch” – because everyone comes to The Wooly!
The amazing benefits of this strong culture is happier employees, better service, staff contributions to innovative ideas, greater focus on team-work, and maybe most importantly, the creation of a very welcoming, hard to describe environment – that “je ne sais quoi” one finds in the best restaurants. An atmosphere which I believe customers pick up on through a kind of mysterious osmosis. Even most of our hires are made by staff members – there has been many a time when we have a rare opening for a new wait position and a team member will say, “I know just the right person who’s working over at ‘X’ restaurant but he/she is dying to work at The Wooly”.
I’ve found that a strong and positive culture both breeds and attracts like-minded people…people who are the right people for your business because they admire your values and are aligned with your vision. I often brag that The Wooly has a life of its own… with very little oversight it’s a remarkably cohesive operation. It continues to attract the best people – guests and staff alike. Perhaps the teaching of Epictetus offers some clues to The Wooly’s durability and mystique. In his instruction “Be careful About the Company You Keep” there is an insight into what the secret might be in developing strong cultures. In this piece Epictetus is advising someone, “be careful about associating with the wrong people” – but if you read his thoughts on the subject in reverse, that is, look at the positive effects of keeping the right company then there is a valuable lesson, or truism, buried in his words as to why good cultures often endure (and why enlightened leadership traits, and the hiring process, are such important parts of a service business): “Be careful whom you associate with. It is human to imitate the habits of those with whom we interact. We inadvertently adopt their interests, their opinions, their values, and their habit of interpreting events.”