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The other day I was in a restaurant and saw a sign advertising "Sliders Fridays." From what I gathered, they offered a deep discount on tiny hamburgers, called sliders, on Friday nights. The interesting thing about this discovery is that I own the restaurant and it's the first I knew of it. (Stacey's at Waterford: www.eatatstaceys.com)

I don't just own the restaurant. I also manage it, although I use that term loosely. I've taken the concept of hands-off management to the next level. Most of the time I have no idea what the staff is up to. They organize customer events, execute marketing ideas, hire and fire, change the menu, and pretty much anything else they want. I only get involved if there is a largish expense that needs to be approved. I see the financials daily, by e-mail, but I'm mostly about the bottom line.

As a well-known critic of managers, I painted a big red bulls eye on my back when I started managing the restaurant. For the first year I was involved in the details somewhat, but primarily to establish an operating culture. I wanted to give them lots of flexibility to try new things, and even more freedom to fail. And I wanted them to feel like it was their own business.

I'm lucky because I have exceptional managers, with lots of experience, who appreciate the freedom they are getting. I think freedom partly compensates for the fact that restaurant pay isn't the best. It's a luxury not having your boss breathing down your neck. Apparently something is working because the restaurant quality is better than it has ever been, and January revenues were slightly up from last year despite the tanking economy. I'd love to take credit for that, but lately all I do is eat there.

The principles I tried to establish with the staff early on, that seemed to have stuck, include these:
  1. Have fun. Loosen up.
  2. Try something new. Often. Keep whatever works.
  3. No penalty for a new idea failing. Trying is the thing.
  4. Employees are more important than customers.
  5. Stop asking Scott for approval. Just do it.
  6. Managers get to see the financials.
  7. Being a jerk to coworkers is grounds for termination.
  8. Do whatever seems smart and fair to make customers happy.
  9. Watch the competition closely and borrow their best ideas.

It probably helps that the staff realizes that getting another job these days is a dicey proposition, and they all want to make sure the restaurant stays in business. When someone doesn't pull their weight, the staff weeds them out on their own, either directly or indirectly.

It's a fascinating exercise. Obviously it only works if you have the right people in key positions. But so far, so good.

 
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Mar 11, 2009
i like #4 (Employees are more important than customers.) the best. if you don't treat your employees well they won't be having fun and neither will the customers.

the only thing i would add is that all employees know the finances. not down to the penny, but the general sales, profits and expenses. in my experience employees that are that dedicated and like where they are like to know if they are making a difference.
 
 
Mar 10, 2009
I admire your humility and patience more than your business skill. Because of that, I want to eat at your restaurant someday.
 
 
-1 Rank Up Rank Down
Mar 10, 2009
Just one more thing Scott,

Do you get the time to read "all" the commnets you get on you blog?
 
 
+2 Rank Up Rank Down
Mar 10, 2009
Hi Scott,

""When someone doesn't pull their weight, the staff weeds them out on their own, either directly or indirectly. ""

I absolutely agree !!! Theres no better way to weed out non performers!!!

Superb blog Scott!!!

Wish all bosses were like you!!

Cheers,

Alok
 
 
+1 Rank Up Rank Down
Mar 10, 2009
Management style seems sound, food sounds great, i think you just gave me a reason to visit USA, i'm from Australia and was planning on seeing Europe in depth and missing out on USA but your menu looks so good I think i'll have to drop in.
 
 
Mar 10, 2009
@ all the people commenting about restaurant managing style, startups, etc.:

You can run a small business with almost any style and have it be successful. When everyone knows everyone there's no way to hide in the system, run out your tenure, etc. When a company becomes publicly traded and, especially, followed by a major brokerage house, the temptation to play accounting games, stock option games, and myriad other games invariably follows, in many cases in direct relation to the company's size. This is related to human nature and is an invariable flaw of the incentives of the market system and capitalism, rather than being caused by any specific flaw in securities laws or other regulative failures.

I am speaking in general terms and many companies will not follow these average principles. A deleveraging market puts pressure on debt obligations and many companies will fail. In the post mortem many fingers will be pointed and villains created, usually by the same people who cheered on the way up. But the real reason for failure is the simple manifestation of the business cycle rather than any great conspiracy or fatal errors. If it was always smooth sailing, they wouldn't call it "the business cycle."

It can useful at times like these not to lose sight of the forest because of excessive analysis of individual trees.
 
 
Mar 10, 2009
Nice post, like your style.
What you describe works very well in certain situations... I hadn't thought of restaurants but it's true that small IT startups can thrive in this sort of environment. Things could easily go wrong if the *wrong* people were in the key spots, but it sounds like you've got it sorted, there.

@Phantom II:
Why should somebody's business management style dictate their opinions on governance of the state/country they live in? I don't see how you can draw the "do as I say, not as I do" conclusion just because the guy has a hands-off management approach.
Oh... Atlas Shrugged. Don't bother replying, I can guess the usual preachings already.
 
 
Mar 10, 2009
Scott - your blog actually got recommended at ChuWe.com this week in response to a question about good restaurant management. This post confirms why.

@ daveywest, the researcher was Jim Collins and the book is many years old now. I'd suggest some of the businesses profiled stopped doing well what made them great, as opposed to things like 'great culture' leading to their downturn.
 
 
Mar 10, 2009
Hey Scott, looking at your rules, I notice there are exactly 9. Just how much temptation did you resist to add one more to make a nice round 10? I suspect there are a lot of rules in existence that are there to bulk up the number to a "sensible" sounding number. Especially if otherwise the number of rules is 13 or some other number people avoid.
 
 
Mar 10, 2009
Interesting.
- Employees are to directly and indirectly weed out co-workers they don't like.
combined with
- Being a jerk to co-worker gets you fired.

Requiring everyone to actively participate making workplace relations worse and then firing them for it. That sounds like something Catbert would come up with, only more evil. I mean how else do you expect employees to "indirectly" weed each other out.

I know you didn't mean it works like that, but how would you know how it actually works. You just explained how you manage from ivory tower.
 
 
Mar 10, 2009
Haha. Great read and I think some great advice. Number 4 is wonderful I think because the reality is, if it is true, then employees will do their best to make customers happy. Plus if there are no employees well then there's no one to serve customers. It's circular, yin-yang-ish.

Scott, I don't know if it would fit with your restaurant, but you might want to check out http://www.sellmoremeals.com/ or let your managers know about and see if it would fit with them. I could see it working with the Sliders Friday campaign.
 
 
Mar 10, 2009
A business researcher came to many of the same conclusions a few years back. He published a book, "Good To Great" about the results. He focused on 11 companies that were outperforming the stock market, including Fannie Mae and Circuit City.

Obviously, a "great" corporate culture is not an indicator of long term viability.
 
 
Mar 10, 2009
#10 should be "don't eat your profits!"
 
 
-3 Rank Up Rank Down
Mar 10, 2009
Employees are more important than customers?

Was this a Typo? Without customers there are no employees.

Personally; I like to frequent places where I'm treated as the most important person. Too often these days employees treat you as if you exist to fill their need for a job.
 
 
+6 Rank Up Rank Down
Mar 10, 2009
Wow. You made an advertisement for Stacey's sound like a lesson in management. Nicely done!
 
 
+5 Rank Up Rank Down
Mar 10, 2009
I don't log in often to say anything 'cause the sign in thing is obnoxious but sometimes something has to be said. Phantom II, shut up and get a less stupid name.

I've been a pretty constant reader of this site and I believe Scott has said that he is socially liberal and economically libertarine. If your mad because he seems to have supported Obama then your an idiot. Obama is just another corporate shill but considering Scott is socially liberal, he was a better choice then the Republican alternative. And yes, Ron Paul would have been better but this time around there wasn't going to be nearly enough momentum to give him a chance.

With any luck, by the time the next election comes around then the internet blitz will give enough support for a viable third party candidate. Or a bloody revolution with decapitations and martial law. Whichever comes first.
 
 
+1 Rank Up Rank Down
Mar 10, 2009
If I'm ever out that way I'm going to come in for lunch and order the chicken panini sandwich. Sounds good.
 
 
Mar 10, 2009
Gee, Scott, it sort of sounds like a great idea for government. But oh, wait, don't you believe in the necessity of central planning and micromanaging our every action? We're all too stupid to govern ourselves, aren't we? Or is this a case of, "Do as I say, not as I do?"

And, if government is so great, then why do state and federal workers need unions to protect them from the abuses of. . . government? Gee, makes you think, doesn't it?

Maybe you should turn over management of your restaurant to our enlightened state legislature, or to our Gubernator. I'm sure they know much better than you how to run it. They sure have done a bang-up job with the state budget, haven't they? If they ran your restaurant the same way, you would see nothing but red ink in your P&L, but your unionized employees would have the highest wages of any restaurant workers in the nation. Not to mention that they could retire at age 50 with a 90% pension, like California's public service employees. Plus, your menu would be determined by the state, and would contain nothing but tofu and non-trans-fat foods. And your taxes would be off the charts. But, as Joe Biden said, you have to do your patriotic duty and pay pay pay, right?

So tell me, Scott, are you becoming less of a Keynsian and more of a Freedmanian, when it's your own money on the line? And, have you ever read "Atlas Shrugged?" Didn't think so.

 
 
Mar 10, 2009
Have you ever considered managing a bank? I think you've got the right management style. Except for the part about looking at financials.
 
 
Mar 10, 2009
Mayo with Pastrami? WTF?

And Bruschetta Chicken? Bruschetta is toasted bread.

Do you have Elbonian cooks?
 
 
 
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