Restaurants manage and deal with change daily – from menu changes to bringing on new employees. There’s also the constant struggle to ensure your labor meets the demands of your guests.
And now, it turns out, restaurants – along with businesses across industries – must confront changes in the workplace itself. “While the world’s workplace has been going through extraordinary historical change, the practice of management has fallen behind how people work, live, and want to experience their lives,” say Gallup’s CEO, Jim Clifton, and chief workplace scientist, Jim Harter, in their book It’s the Manager.
The one factor restaurants and other businesses consistently undervalue, or overlook, is the primary importance of front-line managers in steering employees through change. Clifton and Harter note that Gallup finds 70 percent of a team’s engagement is determined solely by the manager.
I’d add that there is no more important place that a manager plays a crucial role than right inside every one of your restaurants. Not only do they manage change, they determine the labor. They hire, train, develop, and engage your customer facing team members. They create a consistent or not so consistent guest experience. And most importantly, they are the key to driving strong EBITDA.
If of your 5,000 managers, 30 percent are great, 20 percent lousy, and 50 percent “just there” – which Gallup finds are about the U.S. national averages of employee engagement – the big lever for restaurants to manage change and improve performance is to double the 30 percent to 60 percent and cut the 20 percent to single digits. When you build great managers, ones who can maximize the potential of every team member, you have delivered on the global will of employees everywhere: to have a great job and a great life.
As Gallup has discovered, the workplace has undergone six major changes, mostly driven by the attitudes and desires of millennial employees. All of them are directly tied to, and impacted by, the role of the front-line manager:
- Team members don’t just work for a paycheck anymore – they want a job with purpose. Which means investing in what your culture actually is.
- Team members are no longer pursuing job satisfaction – they are pursuing development.
- Team members don’t want annual reviews – they want ongoing conversations and “check-ins” with their supervisors.
- Team members no longer want command-and-control, top-down bosses – they want coaches.
- Team members don’t want a manager who fixates on their weaknesses but who develops their strengths.
- For team members today, their job isn’t just a job – it’s their life.
To make this more specific to just the restaurant industry, you can’t meet these new workplace demands, or manage any change that your business confronts, without engaged managers. In a recent General Manager Connect study conducted by Gallup and TDn2K, in 2019, we found that only 36 percent of GM’s were engaged, 49 percent not engaged, and 15 percent actively disengaged in their jobs.
The results were benchmarked against the Gallup overall database and they indicated that this group of general managers’ (which were across various brands) engagement level is at the 28th percentile. To add perspective, management turnover in is in the double digits and restaurants don’t seem to be doing much to help retain managers.
The effect this has on your team members is tremendous and has a direct impact on your individual team members’ engagement and their retention. As we know, managers in restaurants are really focused on executing – they thrive on being operationally excellent and activating on what has been asked of them in an SOP. As employee demands of their jobs and the future of work change, organizations have to focus on creating an SOP for managers and multi-unit managers to be able to engage themselves and their teams in their roles.
A Gallup restaurant client has been working on engagement of their teams, managers, and multi-unit managers for the past few years and in a recent business impact analysis, Gallup found the following:
- When general managers are engaged and able to engage their teams and therefore engage their guests, they increase net sales on average by 9 percent and decrease hourly turnover by 17 percent.
- When we compared those same engaged restaurants to their local market, we learned that they outperform the market on:
- Total Sales by 1.3 percent. (Note: their non-engaged counterparts are underperforming the market by 1.2 percent.)
- When a restaurant has a talented general manager and an engaged restaurant they can create 2.5 percent more net sales and have 13 percent less hourly turnover.
What does this all mean to you? To the restaurant world generally?
Unless you start hiring and developing great front-line managers, any type of change you want to create will fail. This means the new menu rollouts, the shift to 3PD, the creation of customer experience all live or die on the ability of managers at the local level to excite, motivate, and engage their teams towards the same common goals and initiatives. Managers hold the key to your ability to beat the market and win in this ever changing battle of how we consume food. They also hold the key to managing the changing motivations and desires of the workforce. Simply put: It’s the manager.