Inspiring Your Work Teams

September 30th, 2016

You may direct and manage your operation, but it’s the line employees who deliver the quality and service you envision for your members and their guests.  Without an effort to inspire extraordinary performance from this critical staff, they will respond like many other hourly employees in other industries – just going through the motions without dedication or passion, doing what they have to do to get by and collect their paychecks.

This may be enough for a lot of jobs, but it doesn’t cut it in an industry whose very name implies warm, friendly, hospitable service. 

Recognizing as everyone should that such service flows from dedicated and passionate leaders, what are some practical things you should be doing to engage and inspire your work teams.

By consistently doing the above in all your dealings with staff, you build trust, establish meaningful relationships, and inspire your people with your daily engagement and example.  The impact on the quality and service your team provides will be astounding.  This then is the heart of Service-Based Leadership and when done consistently throughout the club, it will take your operation to a whole new level.

On the other hand, here are the Enemies of Effective Leadership.  Read the list and consider where your club stands.

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!

A Roadmap to Successful Club Benchmarking

June 28th, 2016

In late June of 2012 I participated in a panel discussion on benchmarking at the Hospitality Finance and Technology conference in Baltimore.  My fellow panelist was Russ Conde of Club Benchmarking.  Some weeks after the conference I received a sheet summarizing attendees’ reviews of the session.  While mostly positive, one of the attendees said that the discussion covered a lot of benchmarking concepts, but was short on the specifics of how to benchmark.

As I have written in Twelve Reasons I Benchmark, there are a number of reasons to benchmark your club’s operations.  One important reason is to compare your club’s performance to that of the wider industry – and Mr. Conde’s Club Benchmarking service does just that in a simple, automated way via the Internet while providing standardized benchmarks industry-wide.  The CB analysis tools and reports support strategic versus tactical thinking in the boardroom.  A study of data from more than 1,200 clubs currently in the CB system has revealed a number of Key Performance Indicators with direct impact to the bottom line and confirmed the existence of a common private club business model now known as the “Available Cash Model.”  I cannot commend Mr. Conde and his partner Ray Cronin enough for this invaluable service to the industry.

But just as there is value in benchmarking your operation externally, there are valid reasons to benchmark your performance internally – that is within each department and the club as a whole.  Having provided this context, let me now provide some of the key specifics on how to benchmark.

First, for those wishing to compare their performance to other clubs and graphically visualize how their operation relates to the industry’s common business model, it couldn’t be any easier – simply visit the Club Benchmarking website and sign up for their service.

Second, for those who want to set up an internal program of benchmarking, here’s a discussion of some of the challenges and pitfalls, as well as information on where to get the necessary benchmarking instructions and spreadsheets to do it:

  • Let me start by saying that every day there are literally hundreds of data points generated in club operations.  The real benefit of benchmarking, though, is in tracking data over time.  The number of meals served in the club dining room on a particular Friday night doesn’t signify very much; it is simply an occurrence.  But if that number is part of a declining trend in Friday night dining, it is certainly a cause for concern.  Without the effort to track trends and compare them to historical performance, there is no way to manage for either quality or performance.
  • It is essential that the club’s General Manager buys into the value of benchmarking and fully supports the effort.  Without his or her backing, it will be far more challenging to implement club-wide benchmarking.  That doesn’t mean that individual department heads cannot benchmark within their departments and be successful, but it does limit the overall value of benchmarking to the club.
  • It is helpful to have a point person for the project – and I suggest the club controller.  This does not mean that the burden of benchmarking falls on the controller’s shoulders – as each department’s benchmarks must be the responsibility of the department head.  But it is helpful to have a person knowledgeable about accounting and the use of MS-Excel to help guide and assist less knowledgeable department heads through the process.

Having said this I also want to stress that the controller’s office is the logical place for the preparations of several key reports (some sort of Weekly Revenue Report, see HRI Form 203 for an example, and a Pay Period Summary Report, HRI Form 229) that will facilitate data availability club-wide, as well as the consolidation of key benchmarks from all departments into the Executive Metrics Report which I have advocated as a useful enhancement to the monthly financial reporting package.

But even in the absence of such reports from the accounting office, a conscientious department head, recognizing that she is the person fully responsible for her department’s performance, can with a little effort get the necessary data to benchmark.  For example, revenue information can usually be accessed from point of sale reports and payroll data is available from the accounting office or payroll service – both merely take a little initiative to get the desired information.

  • Depending on the club’s pace of operations and individual department heads’ workloads, it may make more sense to start small with one or two departments whose managers are “numbers” people and who relish the idea of a deeper empirical understanding of their business operations.  The enthusiasm and resultant success from these early adopters or “pathfinders” will serve as an invaluable inspiration and guide for others.  An alternative would be to implement one significant form of benchmarking club-wide – say benchmarking payroll costs across all departments.  In time, the value of this will lead to a desire for more robust benchmarking of other areas of club operations.
  • While every club can set their priorities for data to benchmark, here are some suggested priorities and the reasoning behind them:

Profit and Loss Statement (as part of the Executive Metrics Report) – low hanging fruit, easy to access data from P&Ls, requires only monthly data entry.

Payroll Cost – largest cost in operations, potentially yielding greatest opportunity for improvement and savings; makes future budgeting far easier; most effective when employees are paid on a bi-weekly basis (read Why Our Workweek and Pay Cycle? to understand why).

Departmental Revenues – by day of week, week by week, monthly, and annually; easy to access data, historical record can improve staff scheduling, makes future budgeting far easier.

Food and Beverage – probably the most effort and time-intensive if done thoroughly (tracking sales of beer, wine, alcohol, appetizers, desserts, specialty drinks, etc.), but provides critical feedback on any efforts to improve the average check; data can also help with managing inventory levels of alcoholic beverages.

Inventory and Accounts Receivable – low hanging fruit, easy to access data in accounting office, helps monitor and correct inventory volatility, requires only monthly data entry.

Retail – can dramatically improve performance when coupled with other retail disciplines.

Utilities – low hanging fruit, data comes from monthly utility bills, once-monthly data entry for electricity, water & sewer, and gas; helpful in spotting and investigating usage and billing anomalies.

Individual Departments – prepared by department heads, makes them more knowledgeable about operations (enhancing their authority and influence), analysis of benchmarks leads to improved performance.

  • All the resources to begin internal benchmarking at your club can be found on the Club Resources International website.  Simply purchase the 153-page Club Benchmarking Resources for $99 at the Marketplace store.  It contains the background information, the basics of benchmarking, departmental benchmarking instructions, and samples of benchmarking spreadsheets.  Each departmental instruction gives a list of benchmarks to track and sources of data, as well as specific instructions on how to use the spreadsheets and a sample spreadsheet for both year-to-date and year-to-year tracking.

A number of benchmarking spreadsheets are available on the Club Resources International website and can be downloaded at no charge.  After downloading and reviewing the benchmarking material, managers can customize the spreadsheets* for their operations, and begin collecting and recording the necessary data.  If key data has never been tracked before, patterns will emerge pretty quickly as benchmarking progresses, though the longer the data is tracked, the more valuable the benchmarks will be as operating standards.

  • My experience with benchmarking over the years is that it usually takes several months of close focus and review to successfully set up; thereafter ongoing benchmarking becomes part of the club’s routine.
  • Some department heads may need training and handholding during implementation, particularly if they are not familiar with computers or spreadsheet software, but once up to speed, they fully appreciate the value of monitoring the underlying details of their operations.
  • An important discipline that fully exploits the benefits of benchmarking is to make a formal review of departmental benchmarks part of the ongoing monthly review of financial statements with each department head.  When combined with the Tools to Beat Budget program and an examination of progress toward the goals of the department head’s annual work plan, benchmarking becomes a particularly effective means of driving progress and performance club-wide.
  • All departmental benchmarks are then summarized on a monthly basis using the spreadsheets and a copy forwarded to the controller for the next and final step in the benchmarking program.
  • The club controller completes the Executive Metrics Report using selected benchmarks from the departmental spreadsheets and submits it to all stakeholders as part of the club’s financial reporting package.  One controller who presented the EMR to the club’s finance committee reported that a particularly influential member said he was “thrilled” to see such underlying performance data and looked forward to reviewing it on an ongoing basis.

Benchmarking is an essential business discipline that yields significant benefits to club operators.  As H. James Harrington author, engineer, entrepreneur, and consultant in performance improvement, said “If you can’t measure something, you can’t understand it.  If you can’t understand it, you can’t control it.  If you can’t control it, you can’t improve it.”

*Individual clubs will undoubtedly want to customize the Excel spreadsheets for their range of departments and scope of operations.  While spreadsheets are “protected” to prevent inadvertent write-over of cell formulas, the protection is not password-protected, allowing individual clubs to modify the spreadsheets as necessary.

If you have any questions or want more information about any aspect of benchmarking, contact us at info@clubresourcesinternational.com.

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!

 

Onboarding Managers – An Often Overlooked Best Practice

May 30th, 2016

A long-recognized best practice is to develop an onboarding plan for your operation’s new hires.  The purpose of such a plan is to ensure that new employees are welcomed to the enterprise, receive the appropriate orientation and introductions, and are indoctrinated into the organizational culture, as well as receiving a basic review of enterprise information, employee benefits, operating policies, and work rules.  When the onboarding process is formalized and consistent, all employees have an appreciation for the story of the organization, an awareness of their job requirements, and a common understanding of expectations for their conduct and performance.

While there is no denying the benefits of a thorough onboarding process for line employees, it is even more critical that the enterprise put a similar effort into onboarding newly-hired managers and supervisors.  Regardless of education, work history, and experience, these individuals act as agents of the enterprise and set the standard for everything their employees do.  With so much riding on their leadership and example, ensuring they convey consistent direction and standards to their employees cannot be left to chance.

My optimum onboarding process for managers and supervisors includes the following:

  • The same onboarding process as line employees receive so that they hear and understand what line employees are told.
  • A copy of the Employee Handbook provided for the same reason.
  • A thorough indoctrination in organizational values, presented by the General Manager for maximum impact and effect.
  • Leadership guidance from the General Manager to ensure that all managers have a common understanding of service-based leadership and their critical role in communicating with and motivating employees.
  • A copy of a Managers Handbook, written specifically to spell out expectations for those who direct the line employees with emphasis on employment law, legal and liability issues, work rules, fiscal responsibilities, safety and security, as well as an in-depth discussion of counseling, conduct, discipline, and performance requirements.
  • A detailed review of job description and performance expectations by immediate supervisor
  • A copy of the operation’s Strategic and Annual Plans so they understand its direction and trajectory.
  • In concert with immediate supervisor, the development of an individual work plan with first year reviews at 30, 90, and 180-days.  Early engagement, counseling, and intervention as necessary are critical to the long-term performance and success of any newly hired manager.
  • Introduction to and review of personnel and accounting standards, policies, and procedures by Human Resources Manager and Controller, respectively.
  • Introductions to key management staff.
  • For managers of private club, presentation to board and key committee members.
  • A first-year reading list of management and leadership books to include Jim Collins’ Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, John Maxwell’s Developing the Leader Within You, and Stephen Covey’s The 7 Habits of Highly Effective People.  To be most effective, these books and other periodically assigned reading material should be discussed on an ongoing basis at weekly staff meetings.
  • Office or work space set up, fully prepared, and waiting for the new hire.  Minimum support requirements include a personal computer or laptop, cell phone or PDA, a list of key phone numbers, a listing of department heads and managers with land line and cell numbers, security codes for work areas, and a set of keys for all necessary spaces.
  • After several weeks the General Manager will set up a one-on-one meeting with the new hire to see how he or she is settling in, to answer any questions, and to once again reinforce basic leadership concerns, organizational values, and enterprise goals.

While this level of effort to onboard management staff seems like a lot of work for something that may only happen a couple of times a year with normal turnover, the potential repercussions of not providing consistent information and expectations to new managers and supervisors and continuing to reinforce it on a regular basis can have a significant and long-term impact on the quality of the operation.

While there are many important and valuable HR best practices, I don’t believe there is any as important as establishing the basis for how your organization runs with those who must lead employees.  The time and effort put into individually developing your management staff and forging them into a team with a common understanding of purpose and means is the single most critical driver of an enterprise’s success, yet how often is it overlooked in the ongoing press of daily operations?

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!

Q.E.D. Managerial Malpractice

May 23rd, 2016

Fifty years ago this fall in my freshman year at college I was enrolled in my first course in calculus.  Every day in class we were drilled in solving problems and were required to “recite” our solutions to assigned problems at the blackboard in front of the rest of the class.  By drill and repetition our final step in every recitation was to write Q.E.D followed by the double underlined solution.

This may seem like an arcane ritual, but as we were told Q.E.D. stood for the Latin phrase Quod erat Demonstratum, which as Wikipedia states, means “which is what had to be proven” — an abbreviated phrase traditionally placed at the end of a mathematical proof or philosophical argument indicating the completion of the proof.

Though my college and calculus days are long behind me, I cannot help but use this traditional formulation to explicate the most basic problem we face in club management and how to overcome it.  If you agree with the postulated statements, they then should logically lead to the demonstrated resolution.  So, in the words of a number of very successful individuals who’ve given much thought to the matter, here’s the argument:

“The quality of leadership, more than any other single factor, determines the success or failure of an organization.”

Fred Fiedler & Martin Chemers, authors of Improving Leadership Effectiveness

“The most dangerous leadership myth is that leaders are born – that there is a genetic factor to leadership.  This myth asserts that people simply either have certain charismatic qualities or not.  That’s nonsense; in fact, the opposite is true.  Leaders are made rather than born.”

Warren Bennis, scholar, organizational consultant and author, widely regarded as a pioneer of the contemporary field of Leadership studies

“Before you are a leader, success is all about growing yourself.  When you become a leader, success is all about growing others.”

                Jack Welch, former chairman and CEO of General Electric

 “Coaching isn’t an addition to a leader’s job; it’s an integral part of it.”

George S. Odiorne, business school professor and dean, consultant, corporate manager and author of 300 articles and 26 books

“The single biggest way to impact an organization is to focus on leadership development. There is almost no limit to the potential of an organization that recruits good people, raises them up as leaders and continually develops them.”

John Maxwell, author, speaker, and pastor who has written many books, primarily focusing on leadership

Q.E.D. “Not investing in leadership development is the equivalent of organizational malpractice.

Quint Studer, businessman, philanthropist, author of Hardwiring Excellence

When put this bluntly, no self-respecting club manager wants to be accused of managerial malpractice, so here are some cost-effective solutions to this lack of investment – in actuality the cost is more an investment in time, but the rewards are extraordinary to both individuals and the club.

  • Make development of leadership and management discipline skills part of each department head’s annual plan for improvement, insisting they do the same for their subordinate managers.  Review development progress during annual performance reviews.
  • Use the Bully Pulpit to “preach” both an enthusiasm and commitment to self-development among subordinate managers.
  • Use Leadership on the Line and The Workbook to teach and model a consistent, Service-Based Leadership style throughout the club.  The basic lessons in these books are the perfect introduction to what should become a lifetime of leadership development.
  • Commit to building a leadership and management disciplines library of reading material.  Routinely assign books, articles, and white papers to be read by some or all.  Encourage subordinates to lead discussions on relevant topics.  Articles, white papers, and infographics can be downloaded at no cost from the HRI website.
  • Use staff meetings for brief on-the-go discussions of leadership and management disciplines.  A wide variety of On the Go Training books are available for purchase on the HRI website store.
  • Use the Monthly Review of Operating Statements meetings with each department head to review and discuss leadership development.
  • Set a strong example of the leadership/mentoring/coaching paradigm for all managers to emulate.
  • Continue to maintain a focus on leadership development over the long haul.  Such self-development is a lifelong enterprise and helps the individual as well as the club.

Yes, this all requires effort, organization, and work for small standalone operations, but keep in mind that clubs that engage in a formal program of leadership development experience significant benefits, ranging from improved initiative and engagement among managers, to enhanced performance resulting from the club-wide impact of consistent service-based leadership, as well as to pride in belonging to a high-performing operation known for quality and excellence.

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!

Could It Be Any Easier?

May 16th, 2016

Well, yes it certainly could!

It’s club management of which I speak – and we all know it’s a challenging and often difficult profession with a complex set of realities to negotiate on a day in, day out basis.

In the interest of preserving your personal life and sanity, it’s important to search out and implement plans and programs to make your job easier and more fulfilling while at the same time providing your various constituencies – the Board, the club’s membership, management team, and employees – with the implied promise you made when accepting the position of General Manager.

So what was that promise?  Meeting the highest expectations of all constituencies.

  • For the Board – doing all you’re capable of to meet and exceed their agenda to make their club great while making them look good.
  • For the membership – getting to know them well enough to understand and exceed their collective expectations for quality, service, programming, and enjoyment of their club.
  • For your management team – providing them with the leadership, direction, and coaching to enhance their sense of purpose, professional skill set, and personal satisfaction from participating in a well-managed and high performing operation.
  • For the club’s employees – providing them with more than just a paycheck by engaging them as partners in your quest for remarkable quality and service.

When viewed in this light, the undertaking of managing a private club is a mighty tall order regardless of the club’s state of affairs, made all the more challenging by the standalone nature of most clubs.

Some might argue that they made no such promise to the club’s stakeholders, yet that’s exactly what one does in presenting themselves as a club management professional who has the wide-ranging talents and skills to operate a private club no matter the extent of amenities and membership price point.

To repeat myself – could it be any easier?  The simple answer is yes, it could, but only when you operate your club as a franchise – a well-organized and efficient enterprise where everyone knows what’s expected of them and effortlessly executes the daily routines.

In speaking of franchises, Michael E. Gerber, author of the bestselling E-Myth Revisited, says,

“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 quality and service is delivered sets it apart from all others.

While the effort to establish such a “franchised” operation is not insignificant, the major benefit of such an approach is that much of the day-to-day functioning of the enterprise takes place routinely, allowing management to focus on strategic issues, guiding the deliberations and direction of the Board, and providing extraordinary levels of personalized service and programming to the membership.  To summarize:

  • When the basics of an operation are routine, everyone’s focus becomes the extraordinary in all areas of the operation – in quality, service, and programming.
  • When you’re able to combine consistently excellent quality and service with extraordinary and compelling programs, activities, and events, you will maximize your member’s enjoyment and use of their club; and this ongoing support will ensure the club’s viability and future.

But this cannot and will not happen so long as the entire staff from General Manager to line employees is enmeshed in the “make-it-up-as-you-go” turbulence of daily operations.  Most, if not all, managers would have to admit there’s nothing easy about this operational model – which unfortunately is the reality in far too many clubs.  But until there is a commitment to organize and operate your club like a franchise, this will continue to be your reality.

No one would say that the effort to franchise your operation is simple or easy to implement, but the effort itself yields so many benefits for all constituencies that it’s an effort that must be made.  And it will certainly bring both light and an improved level of ease at the end of the tunnel.

Here is some additional reading that will illuminate the issue and the effort:

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!

A Compelling Case for a Food and Beverage Controller

May 10th, 2016

Food service is an enterprise awash in variables, yet the end product – quality food and service – is the result of consistency of ingredients, preparation, and service, as well as the consistent application of a wide variety of operational disciplines that result in meeting or exceeding expected performance.

In manufacturing operations every effort is made to reduce the variability of materials and manufacturing processes to ensure the uniform quality of the finished product.

Food service is a manufacturing process with the added complexity of the all-important member service component.  Making it even more challenging is the fact that the manufacturing process (food production) is laden with almost limitless variables such as many perishable ingredients with a number of quality variables such taste, texture, smell, color, and freshness; a complex mix and measure of ingredients in each menu and beverage item; differences in cooking techniques and time of preparation; and the skills and training of the production staff.

Add to this the many issues in food delivery, service, and member interface – timing and temperature; the experience, skills, training, confidence, and personalities of the service staff; the scheduling of necessary staffing levels; the hourly, daily, weekly, and seasonal ebbs and flows of dining traffic; the impact of weather and other dining and entertainment options for members; and other innumerable external variables.

Since all of this variety and uncertainty is an inherent part of the food service landscape, managers must possess a deep understanding of the most significant variables and make informed judgments regarding their impact on daily operations.  Only by doing this conscientiously on an ongoing basis can managers have any hope of meeting expectations of quality, service, and performance, not to mention their personal sanity.

What makes this especially challenging is the sheer volume of moving parts that must be monitored and managed in a people- and detail-intensive business.  In the ongoing rush of operational requirements what often gets short-changed by busy managers is the ongoing tracking and analysis of the variables that underlie and impact operational performance.

A solution to this all-too common problem is to employ a food and beverage controller (or analyst) who is tasked with monitoring and reporting a number of key measures and processes to ensure the efficiency of operations.

Tasks

So what exactly can an F&B controller do to help the busy F&B Director?  Here’s a short list of things that can help any operation:

  • Prepare daily and per meal period benchmarks of items sold and revenues for each sales category (entrees, salads, appetizers, desserts, specialty drinks, wine by the glass, bottles of wine, cordials, beers, and spirits); compute the average sale by category; summarize these by day of week, weekly, monthly, year-to-date, and annually.

The benefit of providing and analyzing this detail is that it informs decision-making not only for the ordering of stock, but for menu engineering, increasing average checks by suggestive selling, monitoring margins, keeping everyone on track to meet budget by quickly identifying causes of revenue shortfalls, and providing the raw data for improved budgeting.

  • Benchmark hours worked and pay cost by pay category (regular hours, overtime, holiday, vacation, and sick/emergency, etc.) and position (a la carte server, catering server, bartender, cocktail wait, etc.).  Summarize these by pay period, monthly, year-to-date, and annually.

The benefit of this is that it helps managers understand their payroll cost and take effective action to stay on budget, while providing the raw data for improved budgeting of this largest operational expense.

  • Prepare weekly forecasts of business levels by day of week and meal period.  Provide these to F&B managers.  These forecasts are based on past history of traffic by day of week and weekly throughout the year and information of upcoming internal and external factors that influence patronage.  This information should be provided several weeks in advance, allowing managers time to schedule most efficiently to meet expected dining demand.
  • Conduct monthly analysis of sales mix, identifying sales of high/low volume and high/low margin menu items to better understand and formulate menu mix and pricing decisions.  Provide this analysis to F&B managers.
  • Conduct weekly inventories of key F&B stocks (alcoholic beverages, meats, seafood, poultry, dairy, produce, and other high cost and/or perishable items.  As much as possible compare stocks consumed with sales.  Such attention to the flow of stocks through your enterprise will identify inventory discrepancies in a timely manner, help pinpoint causes, and reduce incidence of pilferage.  Provide inventories with sales/usage analysis to F&B Director and Chef.
  • Assist in conducting end of month inventories of all F&B stocks and any necessary investigation of discrepancies.
  • Benchmark food, beverage, and pay cost percentages monthly, year-to-date, and annually.  Provide monthly report to F&B Director and Chef.  This clear presentation of cost data in a single report allows “at-a-glance” recognition of out of line expenses.

While some general managers might feel that the F&B controller position should be part of the club controller or CFO’s staff, I believe that best results will be obtained if this position reports directly to the F&B Director.  This assignment clearly establishes the role of the F&B controller as support staff for F&B management to help the department operate more intelligently and efficiently.  All concerned should also understand that this assignment in the F&B department does not in any way preclude a close liaison and working relationship with the club controller’s office.

Benefits

  • This arrangement provides for consistent monitoring of key underlying variables in the revenue and cost structure of the F&B operation.  All too often this key data is left un-mined and unexamined by busy departmental managers.
  • Departmental managers, freed from the time-consuming detail of data tracking, can spend more time on far more productive and important matters – member relationship management, devising creative and exciting menus and events, leading and motivating staff, training, planning and execution, meeting or exceeding budgets, and continual process improvement.
  • Benchmarking revenues and costs will make it far easier to produce more accurate budgets for future periods.
  • Reduce food cost through more frequent and closer monitoring of inventories and stock consumption.

Costs

  • Increased labor and benefit costs of adding a new position.  Depending on the size of the operation, this may or may not be a full time position.  A candidate to fill the position does not need to be an accountant, just dependable, showing initiative, knowing his or her way around a spreadsheet, and be a “numbers person.”
  • Administrative cost of supporting the position, including work space, phone, computer, calculator, etc.

Your Call

If Steve Argo’s results reported in Lower Food Cost with Weekly Inventories are anywhere near the norm, you can add this new position and still improve your net income.  Even if food cost savings only covered the cost of the F&B controller, the other benefits listed above would make the position well-advised.

Bottom Line

A properly designed food cost control plan with a dedicated F&B controller can yield significant bottom line results by providing a better understanding of the underlying variables impacting the operation, while allowing busy F&B managers a greater focus on other issues and opportunities to better organize and improve departmental 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!

The Club Membership Director and Member Relationship Management Program

May 2nd, 2016

A typical club Mission Statement says that the club must “exceed the expectations” of members.  But how can employees exceed expectations if they don’t know what those expectations are?  A more realistic Mission Statement would be to “understand and exceed the expectations” of members.

This need to understand the changing expectations of members requires that management continually “take the pulse” of the membership by any means available.  This includes intensive personal contacts, management calling programs, membership meetings, various member or advisory boards, surveys, comment cards, analysis of members’ club usage and spending habits, as well as ongoing feedback from employees about the receptivity of members to the club’s offerings and individual member preferences.

Not only must this information be obtained, but it must be processed and analyzed.  Only then can management and employees effectively exceed the expectations of the club’s membership.  This process of understanding members’ expectations is achieved by building strong member relationships.  In essence what is being attempted is to build and institutionalize a system that will replicate the personalized service that was the hallmark of the best “Mom & Pop” operations of old.  Such service was based upon the trust and accumulated knowledge of years of day-to-day interaction with customers.

To ensure that the strongest member relationships are built and maintained, it is necessary to place as much focus on member relations as on other critical areas of the club’s operations.  This can be done by expanding the membership sales position to that of a Director of Membership Sales and Relationships – a single director who oversees all areas of member relations.

Over the years I have often heard that the role of “selling” memberships is so critical that membership directors cannot be burdened with extraneous duties – they must focus solely on the challenge and disciplines of selling.  While recognizing the importance of the sales effort, I would argue for a broader interpretation of successful selling.

In any community there is no greater or more effective sales pitch than the recommendation of satisfied club members.  After all, they move freely and interact frequently with just the demographic any club seeks – the successful and affluent members of the community.  Despite a club’s comprehensive marketing plan and the focused execution of that plan by a competent membership director, the reputation and word of mouth endorsement of your club will sway far more prospects than any amount of cold calling and repeated sales contacts.

Recognizing the paramount importance of the club experience in attracting new members, I expect the membership director to be just as involved in the club’s efforts to provide value and service as the rest of the management team.  In addition to working prospects and signing up new members, I want the membership director to create and implement a robust member relationship management program.

To encompass these larger responsibilities I would add the following duties to the Membership Director’s position description:

  • Develop a Member Relationship Management Plan describing all steps the club will take to foster stronger relationships with members.
  • Establish and maintain the Member Profiles database.
  • Create and conduct specific training for the club’s management and staff to include Member Focus training to describe the club’s absolute commitment to member service and satisfaction, as well as Club Etiquette training for all employees.
  • Analyze members’ club use data to better understand members’ wants and needs.
  • Benchmark, analyze, and report the top and bottom 20% spenders at the club on a monthly basis.
  • Create and implement a Rewards Program for top 20% spenders.  Develop and implement plans to encourage more use of the club by the bottom 20%.
  • Regularly distribute Member Profile information to staff to help foster enhanced personalized service to members.
  • Manage and prepare routine General Manager’s member correspondence for Birthday Wishes, Recognition of Honors and Awards, Anniversary Recognition, Thanking Members for Club Service and Patronage, etc.
  • Chair Member Relationship Committee of key club department heads which meets monthly to discuss and resolve member relationship and service issues while continually improving the details of the Member Relationship Management Program

The member relationship management program is designed to foster more meaningful relationships with all club members, but this can only be accomplished thoroughly and efficiently when well-planned and implemented by a single responsible individual – the club’s Director of Member Sales and Relationship.

A final thought:  Given that all club revenues come from members, shouldn’t as much effort be placed on encouraging their use of the club as any other discipline of club management?

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 Wisdom of Good to Great

April 25th, 2016

I have repeatedly advocated reading Jim Collins’ extraordinary book, Good to Great: Why Some Companies Make the Leap  . . . and Others Don’t, as a must read for hospitality managers, particularly those in standalone operations who suffer from limited resources and no economies of scale.  The book is of special importance to such properties because they have neither the time nor resources to waste on the flavor-of-the-month business strategies to discover the driving formulas of success.

Over the years I have discussed the book’s empirical findings with business leaders and managers from a number of different industries and I find the same level of interest and praise for the work of Collins and his research team.  In yet another effort to stimulate the interest of hospitality managers, I offer the following sampling of quotes from the book.

  • In speaking of  business “coherence,” a term from physics that describes the magnifying effect of one factor upon another, Collins says, “Each piece of the system reinforces the other parts of the system to form an integrated whole that is much more powerful than the sum of its parts.  It is only through consistency over time, through multiple generations, that you get maximum results.”
  • Talking about “core values,” he says, “The point is not what core values you have, but that you have core values at all, that you know what they are, that you build them explicitly into the organization, and that you preserve them over time.”
  • A student once asked Collins why he should try to build a great company; wasn’t success enough?  Collins answer was, “I believe that it is no harder to build something great than to build something good.  It might be statistically more rare to reach greatness, but it does not require more suffering than perpetuating mediocrity.”
  • In discussing the importance of the right people, he offered three simple truths:
  1. “If you begin with ‘who’ rather than ‘what,’ you can more easily adapt to a changing world.”
  2. “If you have the right people on the bus, the problem of how to motivate and manage people largely goes away.”
  3. “If you have the wrong people, it doesn’t matter whether you discover the right direction, you still won’t have a great company.  Great vision without great people is irrelevant.”
  • “In a good-to-great transformation, people are not your most important asset.  The right people are.”
  • “Rigor in a good-to-great company applies first at the top, focused on those who hold the largest burden of responsibility.”
  • “When you know you need to make a people change, act.”
  1. “The moment you feel the need to tightly manage someone, you’ve made a hiring mistake.  The best people don’t need to be tightly managed.  Guided, taught, led – yes. But not tightly managed.”
  2. “Letting the wrong people hang around is unfair to all the right people.”
  3. “If we’re honest with ourselves, the reason we wait too long often has less to do with concern for that person and more to do with our own convenience.”
  • Talking about charismatic leaders, Collins said, “Throughout the study, we found comparison companies where the top leader led with such force or instilled such fear that people worried more about the leader – what he would say, what he would think, what he would do – than they worried about external reality and what it could to do the company.”
  • Avoiding the pitfalls of charismatic leadership, “Yes, leadership is about vision.  But leadership is equally about creating a climate where the truth is heard and the brutal facts are confronted.  There’s a huge difference between the opportunity to ‘have your say’ and the opportunity to be heard.  The good-to-great leaders understood this distinction, creating a culture wherein people had a tremendous opportunity to be heard and, ultimately, for the truth to be heard.”
  • On three intersecting circles of the Hedgehog Concept, “For the comparison companies, the exact same world that had become so simple and clear to the good-to-great companies remained complex and shrouded in the mist.  Why?  For two reasons.  First, the comparison companies never asked the right questions, the questions prompted by the three circles.  Second, they set their goals and strategies more from bravado than from understanding.”
  • Exploring a culture of discipline, “[Georg Rathman] understood that the purpose of bureaucracy is to compensate for incompetence and lack of discipline – a problem that largely goes away if you have the right people in the first place.  Most companies build their bureaucratic rules to manage a small percentage of wrong people on the bus, which in turn drives away the right people on the bus, which then increase the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth.”
  • Freedom and responsibility within the framework of a highly developed system.  “The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility with the framework of that system.  They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people.”
  •  “Technology alone cannot sustain great results.”
  • “Mediocrity results first and foremost from management failures, not technological failure.”
  • The flywheel effect.  “Good to great comes about by a cumulative process – step by step, action by action, decision by decision, turn by turn of the flywheel – that adds up to sustained and spectacular results.”
  • “Much of the answer to the question of “good to great” lies in the discipline to do whatever it takes to become the best within carefully selected arenas and then to seek continual improvement from there.  It’s really just that simple.”

Do yourself a favor and get a copy of this extraordinary book.  Read it, study it, figure out how to go about applying its guidance in your organization.  Properly understood and implemented, you’ll find yourself in the midst of an extraordinary enterprise.

As one leader of a top-tier club said, “Thank you for turning me onto Good to Great – I have been listening to it on my ipod and it is fantastic!”

The book is Good to Great – Why Some Companies Make the Leap . . . and Others Don’t, Harper Business, New York, NY, 2001.

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!

Controlling Your Beverage Cart Losses

April 18th, 2016

Quick fixes usually do not address the underlying causes of problems.  By examining, improving, and documenting the process, you can establish underlying systems that will routinely handle situations.  When the bulk of situations in a business are handled routinely, more time is available for customer service and paying attention to details.

Attempt to follow the 80-20 rule.  If you have established routine system procedures for your operation, you are able to devote 80% of your efforts to 20% of the operation – the most critical details.  Look at how one recurring problem was solved with the development of an efficient system.

Joanne is the beverage manager in a high-end country club.  One of her responsibilities is the beverage cart service provided on the golf course.  The challenge presented by this service is a lack of inventory control over readily consumable and easily pilfered snack items.  Predictably, the club has ongoing problems.  After continually suspecting employees and worrying about unidentified losses, Joanne designed a system of checks and balances.

The beverage cart attendant is required to draw inventory from the golf course snack bar.  The snack bar attendant completes the inventory issue sheet and notes all issues as well as turn-ins at the end of the day.  The beverage cart attendant keeps track of sales on an inventory sold sheet.  Both forms are turned in to Joanne daily, giving her an easy way to compare both sales and inventory consumption.

The system is not foolproof, is subject to daily counting errors, and can be overcome by collusion among employees.  But for the most part, it works well and gives Joanne a routine tool to monitor beverage cart sales.  Systems don’t have to be complex or highly sophisticated; they just have to work.

Excerpted from Leadership on the Line:  A Guide for Front Line Supervisors, Business Owners and Emerging Leaders, Clarity Publications, 2006

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!

Empowerment – Providing Frequent Feedback

April 11th, 2016

“Provide frequent feedback so that people know how they are doing. Sometimes, the purpose of feedback is reward and recognition. People deserve your constructive feedback, too, so they can continue to develop their knowledge and skills.”

                                                                                                                                                Susan M. Heathfield

Guidance to Leaders

Hospitality enterprises need to ensure that leaders provide frequent feedback by making such feedback part of their Organizational Values and Culture.

“(Employees) have a need and the right to know how their performance is contributing to the achievement of  . . . goals.  Continuous feedback is essential.”

“Recognition is important to all of us.  If we have the authority to correct, we also have the responsibility to praise.  We cannot have one without the other.”

                                                                                                                                                Principles of Employee Relations

“Unless you make a concerted effort to provide employees proper direction, feedback, and ongoing growth opportunities, delegating may alienate them.  In other words, don’t use them.  You need to put effort into their growth and make it worthwhile for them as well as for you.”

                                                                                                                                                Leadership on the Line, p. 53

“There are seldom opportunities for dramatic heroism in most businesses.  However, there are the daily, dedicated efforts of employees faced with monotonous routine, difficult situations inherent in customer service, and detail, detail, detail.  Employees should be recognized for the quiet, unprepossessing heroism that this involves.  Simply put, do not forget to thank your employees for the good things they do every day – it probably outweighs the bad 50 to 1.”

                                                                                                                                                Leadership on the Line, p. 59

“Once goals have been established, constantly reiterate them and provide feedback to employees regarding their efforts to achieve them.  Most people want to participate in a larger effort and know how their daily efforts are contributing.”

                                                                                                                                                Leadership on the Line, p. 64

Providing Feedback

When you turn your empowered employees loose to make their contribution to the team’s goals, you must continually monitor what they are doing and provide meaningful feedback so they know how they’re doing.

Like a sailor continually monitoring the sea and wind while trimming his sails and adjusting the rudder to most efficiently sail a course, the leader must monitor the team’s efforts and tell them what they are doing right and how they might improve performance.  This frequent feedback accomplishes two important things:

  1. t validates and reinforces what the team is doing right, and
  2. It modifies and enhances those things that could be improved.

The bottom line is that feedback will give them confidence in what they are doing and this confidence will promote even more empowered behaviors.

Excepted from The Power of Employee Empowerment, 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!