Fostering Initiative in Your Organization

August 3rd, 2015

Do your department heads demonstrate initiative in the operation of their individual departmental “businesses” or do they sit on their hands waiting for you, the general manager, to tell them what to do?

The latter situation is detrimental to your enterprise because it:

  • Puts the burden on the GM to know what’s going on and what needs improvement at all times and in all areas of the operation,
  • Slows down any efforts toward continual process improvement as the GM’s plate becomes full and mired in operational detail,
  • Takes focus away from the strategic duties of the GM,
  • Requires the GM to have an in-depth understanding of all operational disciplines which few, if any, possess, no matter how experienced and competent,
  • Robs subordinate managers of the opportunity to exercise judgment, gain executive experience, own outcomes, grow skills for greater authority and responsibility, and experience the satisfaction of success and accomplishment – a significant driving force for most people, particularly the gifted and ambitious,
  • Demonstrates a lack of trust in subordinates,
  • Is the primary symptom of the doomed-to-fail “genius with a thousand helpers” leader – the one who feels that only he or she is capable of doing the job right and who promotes a cadre of “yes men” while driving away the most competent assistants,
  • Damages the future of the enterprise by putting all the leadership strength and decision-making in one basket, thereby creating the potential for catastrophe when he or she moves on,
  • Inevitably burns out the individual who is trying to do it all.

The intelligent alternative to these consequences is to put the responsibility and accountability for operational areas into the hands of capable subordinates who know and understand all aspects of their business specialty.  But to work effectively, the general manager must first:

  • Establish and reinforce organizational leadership and values,
  • Spell out expectations for performance,
  • Establish annual operational goals,
  • In conjunction with individual managers establish departmental goals, develop meaningful work plans, and hold them strictly accountable for results,
  • Bo open and approachable for consultation as necessary,
  • Monitor progress toward goals and work plan completion by using milestones and timelines,
  • Meet at least monthly with department heads to review progress,
  • Offer ideas and assistance through mentoring and professional development of subordinates,
  • Praise and reward wins,
  • Constructively review failures with the goal of educating and improving.

When all these things are done on a continuing basis, the performance of the entire operation is maximized, the operation shows continual improvement, and members/guests/customers are provided an ever-enhanced experience that rewards and delights their ongoing patronage.

A few caveats:  When embarking on a course of greater subordinate initiatives, experience and trust are paramount.  Therefore:

  • For those subordinates who are new or relatively unknown to the organization or who by past questionable action warrant a degree of caution, use a process of specific direction and close supervision until they’ve demonstrated the requisite skills and judgment to exercise broader initiative.
  • For those who’ve already demonstrated sound judgment, competence, and professionalism, give them a freer hand while being ever ready for consultation and brainstorming.

When mistakes happen, and rest assured that they will, use them as learning experiences and move on to the next challenge and initiative.

Summary:  Initiative is one of the primary components of sound leadership.  Hospitality enterprises operate in highly competitive environments and are too complex to allow any portion of the operation to tread water.  Continual improvement and the necessary initiative to move forward on a broad front are critical to ongoing success.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

The Necessity of Real Time Accounting

July 27th, 2015

Most every month a familiar scene takes place in many clubs.  The financial statements have been prepared and distributed to all stakeholders – the general manager, the department heads with bottom line responsibility, the finance committee, and the board.  It’s around the 15th of the month following the end of the reporting period, sometimes later, and the GM’s phone starts ringing and the questions start coming – “Why are F&B revenues down?”  “Why is Golf Course Maintenance over budget by so much?”  “Why is food cost so high?”

Sometimes there are recriminations – “You told me last month that the cost of food would come back in line this month.”  “How can we avoid assessments if we can’t meet our budget objectives?”  “After last quarter’s overages, you said we’d do a better job controlling payroll, but it didn’t happen!”

Often the general manager or department heads don’t have ready answers for what’s going on.  “We’ll have to look into it and get back to you,” seems to be a common response – certainly not one to build confidence in the club’s management team!

The usual attitude in many clubs seems to be that monitoring the financial performance of the club and all its departments is the sole responsibility of the club controller.  The fact is that all department heads with bottom line responsibility in profit or cost centers must be held accountable for the performance of their units.  In addition to their expertise in a chosen profession – food and beverage, golf, tennis, membership marketing, agronomy, aquatics, spa and fitness, and activities – department heads are expected to master the skills of running a successful business.  Further they are expected to analyze the performance of their operation on an ongoing basis, demonstrate initiative to stimulate revenues and control expenses, and take all necessary steps to meet or exceed their budgets.  This can only be done by tracking their revenues and expenses in real time.

Some department heads aren’t inclined to do this, either because they don’t relish or truly understand the numbers side of a business or feel it takes too much time from other more enjoyable tasks.  In any case, these excuses are inappropriate.  Running a business requires a commitment to the financial aspects of the operation and without knowing where the business stands financially at any given moment prohibits the possibility of corrective intervention.

A modest effort to better organize oneself and the task of collecting critical data on a daily basis along with the disciplined routine of entering this information into spreadsheets is all that’s necessary to stay current with the numbers.  Some may say that such collecting and recording of data is the proper role of computers and specialized software.  Such managers may rely on software summaries, delegate the task of tracking to an assistant, or will wait until the end of the period to bring their numbers and benchmarks up to date.  In so doing they lose the opportunity of spotting adverse trends and taking timely corrective action to ensure they meet performance expectations.

While I agree that computers make the task of organizing daily data much easier, I strongly argue for the necessity and benefit of managers “touching” their numbers every day.  Doing so ensures both a conscious and intuitive understanding of one’s business; helps spot anomalies, adverse trends, or erroneous entries; and makes a manager more attuned to the cyclical ebbs and flows of the business.

If department heads owned their individual operations and had their own money at risk, you can be sure they’d move heaven and earth, including a real time accounting of their revenues and expenses, to ensure its success.  While they don’t own their club department, they are being compensated to run it professionally and demonstrate the same proprietary interest in its successful performance.

Given the general manager’s responsibility for the club’s performance, he or she must ensure that the proper fiscal disciplines are established club-wide and that department heads have a complete understanding of and fully meet their fiscal responsibilities.  Two resources to accomplish this are Tools to Beat Budget and Basic Accounting and Financial Management for Managers.

Bottom Line:  Though each club must design the most efficient means to track departmental operating data in real time, the overall benefit of real time accounting to the club is immediate and compelling.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Placing Your Time and Energies Where Most Needed

July 20th, 2015

While club general managers have many responsibilities, there is one that is pre-eminent – member relations.  This is so because of one simple fact – if member dissatisfaction with the club grows into a groundswell of criticism or if one or more particularly influential members dislike the way things are going or form a negative opinion of the job you’re doing, it’s only a matter of time before you’ll be looking for a new job.

This may not be fair in any objective sense, but it’s the reality of our profession.  No matter the progress you are making to improve quality, service, and the bottom line, it’s the members’ perceptions that will determine your standing as the club’s GM.  So the critical skill of a successful club general manager is, first and foremost, the ability to establish and maintain a good working relationship with the club’s governing board, its various committees, and the membership at large.

At the root of this ability is an impressive skill set – the tact and nuance of a diplomat, the sociability of Mr. or Ms. Congeniality, the business acumen of an acknowledged hospitality professional, and the influence of a strong and effective leader.  To the truly gifted few (the Rob Duckett’s, Chris Conner’s, and Tim Mervosh’s of the world, to name a few of my acquaintance*), this skill set is second nature.  For the rest of us, it requires hard work, continual effort, professional self-improvement, and most of all the time, energy, and focus to make member relations Job One.

Given the many requirements of running a successful club operation, though, it is often difficult to give the proper time and attention to the demands and details of member relations.  It is for this reason that every general manager should organize his or her operation to run as effortlessly as possible through sound organization and structure; well-defined expectations; detailed standards, policies, and procedures; ongoing, consistent training of all staff; and strict accountability for departmental performance.

When this happens, the general manager has the time to focus on the many details and aspects of member relations.  In doing this, he or she can monitor the pulse and attitudes of the membership, advance the progress and understanding of important management initiatives, and deepen the relationship bond between members and management – and in the challenging world of club management, there is nothing so important.

Ed Rehkopf, Hospitality Resources International

*Rob Duckett, GM, Mountaintop Golf and Lake Club, Cashiers, NC; Chris Conner, GM/COO, Cullasaja Club, Highlands, NC; Tim Mervosh, GM/COO, Milburn Country Club, Overland Park, KS.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Franchising Your Operation

July 13th, 2015

The underlying theme of much that we have written about on the Hospitality Resources International website is the need to document all aspects of your operation.  This is especially true of standalone enterprises with limited resources and no economies of scale.  Without an effort to establish expectations, standards, and processes, you’ll be forever reacting to daily crises and addressing issues and challenges on an ad hoc basis, which inevitably results in chaotic and inconsistent operations.

Compare this to the success of franchised operations which are built upon carefully crafted and well-documented processes for all aspects of the business.  Michael E. Gerber, author of the bestselling E-Myth Revisited, goes so far as to say, “without a franchise no business can hope to succeed.  If, by a franchise, you understand that I’m talking about a proprietary way of doing business that differentiates your business from everyone else’s.  In short, the definition of a franchise is simply your unique way of doing business.”

The obvious implication for clubs is that to be successful you must define your expectations, standards, policies, procedures, and work processes and organize your club as if it were a franchise – one where how it interacts with its members and how service is delivered sets it apart from all others.

While the effort to establish such a “franchised operation” is significant, the major benefit of such an approach is that much of the day-to-day functioning of the enterprise takes place routinely, allowing senior management to focus on strategic issues, managing the deliberations and direction of the board, and providing extraordinary levels of personalized service to the membership.

To assist club managers in their efforts to document their operations, HRI has created a large number of operational resources.  Some can be downloaded at no cost, while others can be purchased at reasonable cost from the Marketplace Store.

Here’s some of the feedback we have received from satisfied clubs:

“I cannot tell you how valuable I have found the [accounting] policies and procedures manual.  I was wondering if the Personnel policies manual is also available?”

Deborah Brumitt, CPA, Controller, Hermitage Country Club

“Thank you very much – I appreciate the material as I am embarking on a new project of writing SOP’s. We a readying our club for turn-over later this year and preparing SOP’s that had never been written for my department.”

Kristina Gelb, Director of Catering, Desert Mountain Properties

“As a new club manager I was delighted to find Hospitality Resources International on the web.  I have been looking for a way to adapt and streamline existing club policies and procedures for quite some time now and HRI helped us do just that.   I love your product!!!  It is simple to use and will eliminate hours of redundant work and endless editing.”

Attila Harai, General Manager/COO, The Army and Navy Club

“As a new owner/manager in the club business I was starting to develop our operational systems.  When I came across Hospitality Resources International I was amazed at the complete system that was put together and available on their website.  After getting and implementing the entire program in our operation, it has become an invaluable resource by which we run our entire business.”

Joe Godfrey, President, Foxland Harbor Club

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Dining Service Tips

July 6th, 2015

Here are some random dining service tips:

  • Station Cleanliness.  Even if others are responsible for cleaning the dining room, double check the floor, table, and chairs to make sure they are clean for customers/guests/members.  Take action as necessary.
  • Table Settings.  Double check your tables to make sure the previous shift set the tables properly and all settings are complete, tableware wiped down, glassware clean, napkins properly folded, salt and pepper shakers wiped down and full, sugar caddy clean and stocked, and any other table detail checked.
  • High Chairs and Booster Seats.  Make sure they are clean, sanitized, and ready to go during service.  When you are seating a party is not the time to discover they’re not properly cleaned and sanitized.
  • Work as a Team.  Servers can accomplish so much more when working as a team then they can individually.  Think of your co-workers whenever you do something.  If something needs to be done, just do it, regardless of who noticed it.
  • Clean Up Spills and Clean as You Go. Spills must be cleaned up immediately as they present a slip and fall hazard.  Keep your stations clean as you go.  If you make a mess in the kitchen or pantry, clean it up.
  • Use Serving Trays.  Always use serving trays when serving cocktails and beverages.  This applies to alcoholic drinks, coffee, tea, and any other beverage where the glass or cup is not preset on the table.  When serving beverages on tables without cloths, always place a bevnap or coaster on the table first.
  • Learn Member Names or the Names of Regulars.  Check reservations so you can match names with faces.  Whenever members sign charge tickets, again reinforce your memory by matching names to faces.  Ask co-workers who a particular member or customer is if you don’t know – somebody must know!
  • Critical Information.  Never approach a table without knowing: daily specials, how they’re prepared, and prices; appetizer(s) of the day; soup(s) of the day; wines by the glass; special desserts; specialty drinks; and any other detail of the day’s offerings.  Without this information you’ll surely embarrass yourself.
  • Carry your Necessary Tools.  Always carry a pen, dup pad, daily food notes from pre-shift meeting, wine key, and a clean service cloth.   Even if your establishment is non-smoking, matches are necessary for those customers who wish to step outside for a smoke and come in handy for lighting candles and sterno.
  • Sidework.  Make sure you fully complete all necessary opening and closing sidework.  The idea is to be completely ready for any service need during the meal.  Likewise, your closing duties will prepare the dining room for the next shift and ensure the cleanliness and sanitation of the dining room and pantry.
  • Check Linen.  Make sure table linen does not have a “sour” smell.  If so, replace it and notify your supervisor.  Also ensure there is an adequate supply of clean linen to meet expected levels of business.
  • Responsible Beverage Service.  It is against the law to server underage individuals or to over-serve anyone.  Be aware of anyone who is drinking heavily.  Watch for slurred speech, inability to focus eyes, loss of motor skills, or blank expressions.  Alert management to any potential problem.
  • Condiments.  Before the meal period check any condiments that are served to tables in their original bottles to ensure bottles are clean.  If not, wipe down with a clean damp cloth.  This applies to various condiments such as ketchup, mustard, A-1 Sauce, hot sauces, etc.
  • Dishwash Station.  Do not overstack dishwash station.  It’ll just result in breakage and spills.  Try to help out if possible or make your supervisor aware of the developing problem.
  • Music. Music can be a pleasant accompaniment to any meal, but it can also be a source of irritation if played too loud or if the music is inappropriate to the crowd, the mood, or the occasion.  Most food service operations subscribe to a music service that provides a wide variety of music.  Selecting the most appropriate music for particular meal periods is an important element of establishing ambience.  Classical or contemporary jazz is often a good mix for evening meals, while lunch music can mix more popular and light or classic rock.  Regardless of selection, playing the music at an appropriate volume is of absolute importance.  Managers should establish guidelines for musical selections for each meal period.
  • Lighting.  Setting the appropriate lighting level is an important element of establishing the ambience in the dining establishment.  The lighting level will be determined by the time of day, weather outside, ambient light from the windows, the meal period, the mood you are trying to achieve, whether or not candles or votive lights are used on the tables, and any ancillary lighting such as wall sconces, etc.  Most dining areas are equipped with rheostat switches for their lights so that the lighting level can be adjusted.  Make sure to check the lights before each meal period to make sure the lighting level is appropriate to the occasion.
  • Sun Glare.  Many food service facilities have dramatic views from the dining room, sometimes overlooking the cityscape, 18th green, or maybe a lake or park.  While these views add much to the diners’ experience, they can also be a source of irritation when the bright sun shines into their eyes. So when the sun gets low, pay attention to whether or not it is shining in anyone’s eyes.  Close the blinds or drapes until the sun sets lower; then reopen them so customers can again enjoy the view.  Your consideration will be greatly appreciated.
  • Table Clearing. While it’s impossible to clear tables noiselessly, it is the hallmark of a quality establishment to clear conscientiously, taking the time and care to stack dirty dishes quietly and remove soiled flatware purposefully instead of slinging it around.  Whenever you clear a table, focus on what you’re doing and be aware of the noise you are making.  The care you take will enhance the diners’ experience.
  • 86’d Items.  When the kitchen announces a menu item as “86’d,” i.e., runs out of a particular item, servers must pass the word to other servers as quickly as possible. There is nothing more disappointing to a diner who has ordered a particular item that is no longer available.  Spreading the word allows a server to mention such items when announcing and describing featured items to a table.
  • In the Weeds.  Getting “in the weeds” can happen anytime without warning no matter how prepared you are.  While experienced servers know how to kick into overdrive and dig themselves out, it’s also important to let your supervisor and fellow servers know.  While you may think they should be able to see when you need help, don’t make this assumption.  They’re focusing on their own tasks and may not notice.  Remember that we are all part of a team – and teammates are there to help.  Usually, being in the weeds passes as quickly as it comes upon you and often all you need is a helping hand for just a few minutes.
  • Be Alert.  Always keep an eye on your tables.  You can usually tell if someone at a table needs something as they will be looking around or trying to get someone’s attention.  Check back with your tables frequently to see if everything is alright or if you may get them something else.  Be sensitive, though, to diners who are engaged in deep discussion or are enjoying a romantic evening together. They may not appreciate constant interruptions.  Always take you cue from the diners.
  • Ordering by Memory. It’s always impressive when a server takes orders by memory, though not everyone is able to do this.  Usually, a server would not have the confidence to do this until they have been working at the establishment for awhile and are thoroughly familiar with all aspects of the food and beverages offered.  If you are comfortable enough to try this, start small by doing it with tables of two.  Once your confidence is up, try it with larger tables.

Food service is a detail-intensive business.  Reminding your staff periodically of these details will help keep them foremost in their minds.

Excerpted from Food Service Management on the Go, Hospitality Resources International

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

9 Steps to Control Payroll Cost in F&B Operations

June 15th, 2015

Payroll is the largest expense in food and beverage operations.  Coincidentally food and beverage is typically the department with the largest amount of overtime and employee turnover – both of which add significant cost to the operation.

So how do conscientious F&B managers go about getting some control over that which eats up so much of their departmental income?  Here are 9 steps that will create a significant improvement in any F&B department’s payroll expense and bottom line:

1.   Organization.  A well-organized operation is more efficient in both front-of-house and back-of-house.  If the Executive Chef and Dining Room Manager ensure work spaces are well-designed and well-organized with clear cut procedures for accomplishing all tasks; if storage areas are organized and properly stocked; if the kitchen staff has production sheets assigning daily tasks; if everyone knows what to do, how to do it, and when to do it – it doesn’t take as much time to complete daily set up, food preparation, service, breakdown, and closing duties.  A few hours saved daily amounts to a lot less payroll cost on a monthly and annual basis.

A key element in organization is written standards, policies, and procedures (SPPs) spelling out in detail how and why things are done.  Not only does this put everybody on the same page when it comes to expectations and standards, but it also becomes the basis for consistent training material.

Hospitality Resources International has created a large number of F&B SPPs that are available at no cost.

2.   Training.  The logical extension of good organization is the thorough training of all employees, both front- and back-of-house.  Better trained employees are more efficient, require less direction, and complete tasks in less time.

While training can be costly in and of itself because each hour of training is an hour of payroll, Hospitality Resources International strongly advocates the use of on the go training – a concept that uses spare moments during each shift to train and reinforce expectations to staff.  Two HRI programs, Food Service Management on the Go and Service on the Go, provide the framework for much of what managers and service employees need to know.

3.   Staffing GuidesDepartmental staffing guides establish core staffing levels – that staffing necessary for year-round functioning.  Beyond the core staff are the seasonal employees brought onboard to handle business levels during busy periods.  Since seasonal staff are not usually provided with benefits, there is a cost savings when core and seasonal staff needs are identified and utilized.

4.   Benchmarking.  Unless you measure your payroll cost every pay period, you cannot understand it.  If you can’t understand it, you can’t improve it.  Detailed benchmarking of payroll hours by employee position and type of hour (regular, overtime, vacation, holiday, sick/emergency) allows managers to see exactly where hours and payroll cost originate.

By benchmarking cover counts (meals served) by meal period and day of week, week by week throughout the year, managers will have a much better understanding of weekly and seasonal business variations.  This knowledge will help with the following step.

5.   Formal Forecasting.  By using historical benchmarks, as well as a knowledge of current trends and upcoming events, managers are able to schedule staff more accurately to handle expected levels of business.  This coupled with a willingness of managers to jump in when unexpected rushes take place will minimize payroll costs while maintaining service levels.

6.   Daily Review of Dining Flow and Service.  By keeping daily notes by meal period of forecasted and actual cover counts, staffing levels, smoothness of dining flow, and an estimation of service quality provided, managers are better able to adjust staffing levels during future meal periods for optimum service while identifying any issues that need to be addressed or improved.

7.   Daily Review of Hours Worked.  By taking a few moments at the end of the shift or day to record and compare hours worked with scheduled hours, as well as to tally any overages and overtime hours, managers keep track of actual to budgeted cost on a daily basis and are able to intervene as necessary in real time to control costs.

8.   Pinpoint and Understand Overtime Hours.  By closely monitoring overtime hours, managers can better understand why it was necessary and adjust scheduling to minimize it in the future.  Without an understanding of what’s causing overtime, there is no hope of coming up with plans to address it.

9.   Workweek and Payday.  By paying employees on a bi-weekly basis and establishing a workweek that runs from Friday to Thursday, a hospitality organization will have its usually busiest days (Friday and Saturday) early in the workweek, allowing managers to modify the work schedule of any employee who might be in danger of going over 40 hours because of extra hours worked on the weekend.  If the workweek ends on Saturday or Sunday and business levels required employees to work longer shifts on those days, there is no opportunity to make adjustment before the end of the pay period, thereby increasing the chances of overtime payments.

Bi-weekly pay periods also allow the optimum benchmarking framework of comparability because each pay period always contains two weekends (Fridays and Saturdays) instead of semi-monthly or monthly pay periods where there are odd numbers of these depending on the calendar.  For more information, read the article Why our Workweek and Pay Cycle? on the Hospitality Resources International website.

There is some effort involved in implementing steps 1 through 3 above.  But these are usually one time efforts requiring only ongoing tweaking to maintain.

Steps 4 through 8 require organization to set up the tracking and evaluation mechanisms.  Using a spreadsheet program such as Microsoft Excel is the best way to go about doing this, as all the math is handled by the program.  Once set up, all the manager has to do is establish and maintain the discipline of entering each day’s numbers and assessments – which shouldn’t take more than 10 to 15 minutes.  Periodic analysis and evaluation of what the numbers are showing will allow managers to formulate ideas and take steps to reduce staffing and payroll.

If not already doing it, step 9 is a one-time change that will yield returns for the life of the operation.

The ultimate requirement to implement all 9 steps is the “will to make it happen” and discipline to do it.  The payoff is in improved financial performance.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Leadership Development – The Foundation of Personal and Professional Success

June 8th, 2015

No matter your role in the organization, no matter your area of professional expertise, if you direct employees, your primary role is that of a leader, not a manager or supervisor.

So what is the difference between a manager and a leader?  While a manager may possess a broad range of skills and abilities to manage the resources, functions, and financial viability of an organization, a leader recognizes the ultimate value of people in all activities and uses a wide array of personal characteristics to get the best from a diverse workforce.  In so many ways this human element of leadership is far more challenging than the many empirical decisions of management.  Roger Enrico, the former Chair of Pepsico, put it another way when he said,

“The soft stuff is always harder than the hard stuff.”

But what was he talking about when he said “the soft stuff”?

In short, it’s the people skills – those aptitudes and abilities used to get the best out of one’s human assets.  It encompasses all those things we talk about when discussing leadership – the relations with multiple constituencies and the highly nuanced interactions with a diverse workforce that result in motivation, morale, enthusiasm, focus, commitment, productivity, teamwork, organizational cohesiveness, and group success.

Regardless of your position in your organization, it is your leadership talents that will ultimately make the difference in the success of your endeavors and career.  As one senior hospitality executive said,

“The longer I’m in this business, the more I realize it’s all about leadership.”

So why leave it to chance.  Recognizing what Warren G. Bennis, the scholar, organizational consultant, and author said,

“The most dangerous leadership myth is that leaders are born – that there is a genetic factor to leadership. That’s nonsense; in fact, the opposite is true.  Leaders are made rather than born.”

Developing strong leadership skills and habits is an ongoing process in which you must change and adapt to your increasing levels of responsibility and the makeup of your constituencies – those who depend on you and for whom you provide leadership and service.

John Agno, corporate executive and author, noted that “Leadership development is self-development.”  So don’t expect others or circumstances to automatically transform you into an effective leader.  You must take personal responsibility for your career by familiarizing yourself with basic leadership principles and practices.  Then draw up a plan to develop and grow those skills as you progress to greater and greater levels of responsibility.

Leadership development is a lifelong pursuit.  You cannot change yourself overnight.  But the more you work at learning and demonstrating leadership, the more your constituencies will respond and the more success you will achieve.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

Seven Things I Want My Controller To Do

June 1st, 2015

As a hospitality General Manager, there are seven things I want the Controller to do beyond the normal bookkeeping, accounting, and financial reporting responsibilities.

  1. Develop written Accounting Standards, Policies and Procedures.  Fiscal responsibilities are too important to leave to chance or oral history.  Every aspect of budgeting, accounting, financial reporting, inventory, payroll, member billing, expense coding, accounts payable, etc., should be detailed in written form.
  2. Develop a written Internal Control Plan spelling out the separation of key duties, creating pre-numbered accounting forms, and creating a clear audit trail for all aspects of accounting processes.
  3. Train all department heads and managers, who play any role in the accounting processes of the operation, to ensure a common understanding of their fiscal responsibilities.  Accounting on the Go is a great tool to do this!
  4. Ensure all areas of the operation are benchmarked in detail with departmental benchmarks being reported to the Controller for inclusion in the Executive Metrics Report as part of the monthly financial reporting package.
  5. Institute the Tools to Beat Budget program whereby all managers with bottom line responsibility track their revenues and/or expenses in real time, thereby exercising greater control over their budget and financial performance.
  6. Establish a clear process for departmental budgeting and monthly review of financial performance.  Such focus on the numbers will make performance and accountability a routine discipline at the establishment.
  7. Establish a robust outreach program whereby the Controller visits each department head on a monthly basis to discuss challenges, work through issues such as late accounting submissions, and offer guidance and help.  Such ongoing collaboration builds teamwork and breaks down departmental silos and barriers to efficiency.

This array of initiatives when fully implemented and faithfully supported by the General Manager will bring the operation to a high state of efficiency and performance.  None of these initiatives are difficult in and of themselves, but they do require discipline and the necessary will to make them happen.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Guest Blog: Training on the Go – A Direct Line to Food Service Profits

May 25th, 2015

Several years ago, the Peninsula Yacht Club was selected to be the club to implement the Hospitality Resources International Training on the Go (TOG) Program. Initially, the TOG program was met with some resistance from the front of house staff.  They felt that the program was another monotonous program whereby the dining room managers preach F&B mechanics to them for what seemed like hours.  Upon the staff’s recommendation, I changed the program’s delivery and made it involve the servers and bartenders more than the dining room managers.

In this new delivery, the servers studied a pre-determined module and then they were charged with presenting it to the rest of the staff.  This was the key to making the program work.  Now, servers would become teachers and would instruct their “class” in the pre-shift meetings.  There was no way to avoid having to teach a module as we required busboys, hostesses, servers and bartenders alike to instruct a class twice a month.

At first, the restaurant staff was enthralled by the alcoholic beverage information, especially the histories of liquors and wines.  This is the easiest part to teach because the 18-24 year olds seem to have an interest in learning about alcohol.  After they taught the beverage portion, we focused on foods and specifically our restaurant’s menu.  With the help of our chef, we were able to discuss the history of our menu choices, which wines would complement which entrees, and how to sell the daily features.  After the beverage and food modules were taught, we moved on to other important issues such as the steps of service, flow of the dining room, recovery techniques, etc. In the end, 94 modules were taught over a 16-month period.  Some of the more important modules were repeated.  After completing the modules in order, we have now begun to teach them in random order and allowing the staff to choose the module they wish to teach.

Once the TOG program was instituted and the bugs were worked out, several amazing things happened in our restaurant.  The first noticeable change was in the demeanor and confidence of the front of house staff.  Almost instantly, they became more comfortable discussing foods and beverages with members and guests and with making recommendations. Their newly gained knowledge of the preparations and histories of the food and beverages helped them to become more confident in their ability to answer members’ questions.  They looked forward to being asked about the history or preparation of certain items and the social interaction that was created when these questions were asked.

The second noticeable change was that our front of house staff turnover rate declined.  Our servers enjoyed coming to work and were not as apt to move on to another restaurant opportunity.  The restaurant staff felt more a part of the club and they enjoyed getting to know members more personally through their social interaction.  The staff no longer felt they were ‘going through the motions while waiting for the next new restaurant to open in the area.’

The third and most noticeable change was in the number of appetizers, desserts, and after-dinner drinks sold during the dinner shifts.  Just by gaining knowledge of these items, servers were able to discuss daily specials, suggestively sell at every table they were working.  The increase in the a la carte average check was immediate.  The servers’ confidence created an aura of professionalism and also caused a competitive nature in the restaurant.  Personal bets were being made to see who could up-sell the most wine or desserts.  Managers started offering a complimentary dessert to the server who sold the most after-dinner drinks.  The front of house staff loved the competition and it drove our sales to levels not seen in the past.  Of course, revenues followed.

To answer the question in the title of this article; “Is the TOG program a direct line to restaurant profits?” I offer the following evidence:

At the start of implementation, the club’s restaurant was experiencing a four-year decline in a la carte business.  This decline was, at the time, blamed on the poor economy before and after September 11th and a declining membership level.  In hindsight, these were only excuses for a more prominent problem.

Although the club’s membership level was declining, the average food and beverage revenue per member was holding steady at the 5-year average and the cover counts did not show a decline either.  Therefore, members were using the restaurant at a consistent rate in 1999, 2000, and 2001 up until 9/11.  What we noticed when looking at the revenue data was that the average check per member had declined drastically.  The data told us that members were continuing to dine in the restaurant at a steady rate, but they were spending less on each visit.  Our a la carte menu prices had not fluctuated during this period, so it led me to believe that we were doing something different in the dining room or, as I found out later, we were not doing some things that we had done in the past.

The TOG program was started in October of 2001.  Almost immediately, the average check increased and the number of appetizers and desserts increased as well.  Soon after, our alcoholic beverage sales increased, especially wine by the bottle, which shot up 200%.   In 2002, the program really took off.  By the spring of 2002, the up-selling competitions had begun and revenue increases were seen in appetizers, daily specials, desserts, after-dinner drinks, wine by the bottle and wine by the glass. For the 2002 year, the average F&B revenue per member increased 15% to $62.78 per month.  The trend continued in 2003 with revenues continuing to increase in 2004.  It is without question that implementing the Training on the Go program has had and continues to have a direct positive effect of restaurant revenues at the Peninsula Yacht Club.  If you think this program could help your club, visit the Hospitality Resources International website and download the TOG program.  It is a sure fire way to increase your restaurant’s revenues.

Article written by Chris Conner, formerly General Manager, Peninsula Yacht Club

A number of Training on the Go courses are available on the HRI store.  They can be previewed here.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!

 

Performance Leadership and the Internal Consultant

May 18th, 2015

The term leadership is most often thought of in conjunction with leading people, but given the underlying definition that leadership is influence, there are other types of leadership such as “thought leadership,” “management leadership,” “best practice leadership,” and ultimately, “performance leadership.”  While most club controllers supervise (or lead) but a handful of people, it is in the later types of leadership where they have the opportunity to influence a large number of club employees as well as the success of the club.

As we discussed in last week’s email – GM’s Job One – the club’s general manager, in addition to the all-important strategic requirements of the position, has his or her hands full with the many aspects of member relations.  This, then, necessitates a strong #2 who can promote, implement, and watch over the many management disciplines and best practices that are at the heart of a well-run club.

Often clubs have an assistant manager or clubhouse manager who serves as the second in command, but this position is primarily to ensure the smooth daily functioning of club operations with a heavy focus on food and beverage, as well as activities and events.  Seldom does this person have the time or focus to press forward with organizational issues and disciplines that cross departmental lines.

So who on the club’s staff is most likely to have the necessary knowledge and experience to formulate and implement club-wide performance initiatives?

In most cases the logical choice would be the club controller, particularly if you understand that the responsibilities of this position go well beyond accounting and financial reporting.  Of all club department heads, the controller should have the greatest understanding of the disciplines that underlie business success.  Also, a controller by career choice is a “numbers” person and has daily intimate contact with the measures of financial performance.  Last, but certainly not least, the controller in most cases has the greatest in-depth knowledge and familiarity with spreadsheet software – the instrumental tool of financial analysis.

For all these reason then, the controller is the ideal person to take the lead in enhancing the club’s performance.  But how to go about it and where to start?

As with any sort of leadership, the prime actor must have the knowledge; a plan of action and priorities; the skill set to effectively communicate with, instruct, and mentor followers; various teaching aids and tools; and most importantly the authority to direct implementation – either delegated from or with the explicit support of the GM or club board.

While every club will need to establish its own plan and priorities depending on its unique circumstances, my list of requirements would include:

  • Written Accounting AND Personnel Standards, Policies, and Procedures.
  • Written Internal Control Plan, recognizing that such a plan is not a separate, specialized system within the club.  Rather, it is an integral part of each department and the club as a whole; as such, internal controls are management controls.
  • Detailed budgeting guidance and timeline to improve the accuracy and ease of budget development.
  • A Linked Policies Database on the club’s server to provide easy access to key organizational and training material for the entire management team.  Such a database also makes it far easier to keep material up to date and to notify managers of changes to policy and procedures.
  • The discipline of Monthly Review of Financial Statements with individual department heads.
  • Tools to Beat Budget or some similar method of real-time tracking of revenues and expenses.
  • In depth Benchmarking of operations by all department heads.
  • Enhanced financial reporting package to include some form of Executive Metrics Report.
  • Training of department heads in all the requirements of their fiscal responsibilities using Management Disciplines on the Go, Accounting on the Go, 101 Tips to Improve Your Club Operations,  or other similar tools and resources (not only does this improve the club’s performance, but it enhances the skill set and career prospects of department heads).
  • Ongoing outreach by the controller to department heads for the purpose of problem discovery and performance enhancement (by doing this the controller, in effect, becomes an internal business coach or consultant assisting department heads in continual improvement of their department’s organizational efficiency and performance).

Some may object to this expansion of the controller’s duties, and no doubt such a program of performance leadership will require extra effort, but after initial implementation, the improvements in organizational efficiency club-wide will reduce some aspects of the accounting office’s workload.  Not every controller will possess the skills to be an internal consultant, but others may relish the challenge and opportunity to think and work “outside the box.”

In embracing the concept of the internal consultant understand that everything does not have to be done at once.  Carefully tailored pilot programs prioritized by the Pareto Principle, taking advantage of the enthusiasm of early adopters, and utilizing the discipline of incremental progress, will get you to the ultimate goal, as Jim Collins say in Good to Great, “turn by turn of the flywheel.”

Lastly, there is also the great personal satisfaction to be gained in the role of leadership, instructing, mentoring, and “consulting” with department heads to improve their operations and performance.  Various authors have long advocated that the basis for any act of leadership is service to others.  The service of performance leadership is its own reward – for the club, its member, the management team and employees, and not least of all – the club controller.

Thanks and have a great day!

Ed Rehkopf

This weekly blog comments on and discusses the hospitality industry and its challenges. From time to time, we will feature guest bloggers – those managers and industry experts who have something of interest to say to all of us. We also welcome feedback and comment upon the blog, hoping that it will become a useful sounding board for what’s on the minds of hardworking hospitality managers throughout the country and around the world.

Hospitality Resources International – Management Resources for Hospitality Operators!