Episode Transcript
[00:00:01] So a few weeks back, I told you that I was changing the structure, the format of the Restaurant Strategy podcast. And it's not a huge change. It's really an evolution. As you know, we do two episodes every single week. Instead of doing an interview on Monday and a monologue style on Thursday, I'm focusing Monday's episodes on operations. I'm focusing Thursday's episodes on marketing, because pretty much everything we do falls into one of those two categories. So there will still be interviews here and there, there. But if it's more operational based, it'll go on Monday. If it's more marketing based, it'll go on Thursdays. A couple episodes ago, I said, when we were launching this new format, I we did an entire episode on sort of the foundational principles of marketing. Because if we're going to get into the weeds every single week in talking about the specifics of how we market restaurants, then we need to agree on a definition for marketing and we need to understand sort of the fundamentals. So go back a couple of weeks and watch, listen to that episode, because it's fantastic. Today we're going to do the same thing when we talk about operations, right? There's a lot of stuff we can get into the weeds about when it comes to operations, but for me, we have to get a fundamental understanding of leadership, leadership principles and management principles. Number one, we have to understand the differences between leadership and management. So today I'm going to share eight different areas where they are different to give us a really clear understanding of what leadership is and what management is and how it applies to our job as restaurant owners and operators. All of that today. On today's episode of Restaurant Strategy, there's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:02:12] Hey, everyone, thanks for tuning in. My name is Chip Close and this is Restaurant Strategy, a podcast that's dedicated to helping you build a more profitable restaurant. Each week, I leverage the 25 years that I have in the industry to help you build that more profitable and sustainable, sustainable business. I also write books, I give talks, I. I run a program called the P3 mastermind where I work with restaurant owners all over the world. If you have a busy restaurant that's been around for a while, generating a lot of revenue, but you struggle with profitability specifically, you've got to be at least at the million dollar mark, right? You're doing a million dollars in annual revenue and you've been open for at least a year. We just don't work with any new restaurants. But if that is you, right, you're doing at least a million dollars. You've been open at least a year and maybe it's much bigger than that, maybe it's much longer than that. But if you struggle with profitability, that's something we can help with. In fact, I put together this program to specifically help with that. Over 150 people currently enrolled in the program, spread across four different groups. It's an incredible community. If you want to learn more, I'm urging you to set up a call with me or someone from my team. It's 30 minutes where we can get to know each other and let's see if you are a good fit. Let's see if we can help. The way to sign up for that call is to grab time on the calendar. Go to restaurantstrategypodcast.com schedule grab some time on the calendar. We've got a bunch of blocks available during this week ahead. Grab some time. We'll have a conversation. If it's not the right fit, fine. At least we will have met and hopefully you'll come away with a little bit of insight and advice. And if you are a fit, we'll talk about what those next steps look like again. Restaurantstrategypodcast.com schedule as always, that link is in the show Notes now. Thousands of restaurants across the country use Kickfin to send instant cashless tip payouts directly to their employees bank accounts the second their shift ends. It's a really simple solution to what has become a really big problem. Because let's face it, paying out cash tips to your workers day after day, shift after shift, it can be kind of a nightmare. Tedious tip distribution takes managers away from work that actually matters. It's hard to track those payments, which leads to accounting and compliance headaches. Plus, cash tip outs create the perfect opportunity for theft. And there's never enough cash on hand to actually pay out those tips. So we know your managers are constantly having to make bank runs. Bottom line, there's never been a secure, efficient way to tip out until now. Meet Kickfin. Kickfin is an easy to use software that sends real time cashless tip payouts straight to your employees bank accounts. 24 7, 365 tipping out with Kickfin gives managers and operators hours back in their day. It makes reporting a breeze and protects your business from mistakes and theft. And guess what? Employees love it. So it becomes a really powerful recruiting tool. Best of all, restaurants can have kickfin up and running overnight. Employees can enroll in seconds, and there is no hardware, no contracts and no setup fees. Get in touch today for a personalized demo and see how restaurants and bars all over the country are tipping out with kickfining. Visit kickfin.com demo and yes, that link is also in the show notes. Okay, so today we're talking about operations. And I think the key to operations is understanding the key differences between leadership and management. Now, if you're a small business owner, if you are an independent operator, I'm guessing that there are times where you gotta wear one hat and then there are times where you gotta wear the other hat. I totally get it. So when I'm saying you have to be the leader, you're like, I also have to be the manager. I got to be the fire chief, fire putter, outer. I am marketing. I'm pr. I'm a line cook, I'm a dishwasher, I'm a busboy. I understand that. But from a. But from a foundational perspective, I think it's really important that we agree on this definition and the key points of difference between leadership and management. In fact, I've narrowed it down to eight. I think there are eight specific areas and these are really good. I hope this reshapes your mindset around leadership and around management so we can understand what your job is at what point that when you're wearing one hat, this is how you conduct yourself, and when you're wearing another hat, this is how you conduct yourself. Eight different areas where I'm going to talk about these differences. I'm going to give you eight examples, an example to go with each of those. And I think we're going to be better off when we get to the end of this and you're going to better understand how to begin the next set of conversations about improving the operation of your business. But order to do it, we have to understand leadership and we have to understand management.
[00:07:03] So the very first point, when we talk about the difference between leaders and managers, it has to do with vision versus execution. So on the leadership side, right. A leader focuses on creating and communicating a vision for the future, right? So leaders inspire, they motivate people towards long term goals, they drive them towards innovation. A leader, if nothing else, is all about providing vision. On the other hand, management, your managers should be focusing on execution, right? A manager concentrates on implementing and executing the processes needed to achieve the specific objectives. Outlined laid out by the leader. Managers handle all the day to day operations and ensure that tasks are completed effectively and, and efficiently. So two sides of that, right? Put another way, the leader says where we're going and the manager makes sure we get there, right? So if we put a bunch of people in a rowboat, they're all going to start rowing in different directions. Leader has to say stop rowing. They point to the shore and they say we're going over there. That's where we're going. And make sure that everyone dips their oars in the right. In the right place because they know where we're going, right? The manager makes sure that they row together, that they all row in the same direction, right. That they stay, that they stay focused on the task over the course of what will be a very long time to get to the shore.
[00:08:36] So a leader provides vision and a manager is required for the execution of that. And to give an example, right? So what are we talking about? So the best example, right, or a simple example here is that leadership, right? A restaurant owner might envision a new dining concept, right? So something new for the market, something a departure from what they've done. It's their job to inspire the team to embrace that brand new fresh approach.
[00:09:05] The manager though, right? And maybe it's the same owner putting on a different hat. The manager has to focus on the day to day implementation of whatever that new concept is, right? So maybe it's a new farm to table concept. So they have to focus on sourcing local ingredients, training the staff on this new menu, adjusting whatever operational procedures have to be adjusted in order order to accomplish the stated goal.
[00:09:31] So a leader is about vision, A manager is about execution, right? It just, it's most basic and that's really where, where we have to start this conversation. The first point is really about that difference. So the second way that leaders and managers are different, a leader provides inspiration and a manager creates organization or provides the organization. Let me give you, let me go a little bit deeper. So a leader, right? We know this. The best, most effective leaders out there, we think of Steve Jobs, we think of a Bill Gates, we think of, you know, any great president, politician, you know, any, any visionary, they inspire and they energize people. They foster a sense of purpose and commitment within the community, right? The community within your restaurant. Leaders often lead by example and drive change through influence. They're passionate about what they're doing and they inspire the team to acquire that same sort of passion. On the other hand, management is responsible for organizing and coordinating all of the resources, systems, structures, processes needed to actually accomplish the goal. So managers ensure that the right tools and procedures are put in place so that things can be smoothly executed, right? So again, it's a little bit of that difference between vision and execution. But to go one step further, it's about inspiration and organization put into practice. What does that look like? Right? So maybe a leader, you know, the owner of a restaurant motivates the staff by sharing stories of how their unique recipes or roles or the way that they approach things will contribute to a restaurant's success, right? They're responsible for fostering a sense of teamwork and dedication by really feeding into that sense of passion. On the other hand, a manager organizes the weekly schedule, allocates tasks between different employees, ensures that every shift runs very smoothly, that there's enough staff to handle all of the things that need to be done. Again, it's another way of putting this vision versus execution. But inspiration versus organization is incredibly, incredibly helpful. One cannot happen without the other.
[00:11:50] The third point here I want to make.
[00:11:52] Leaders are about risk taking, and a great manager is about risk management.
[00:11:59] So a leader embraces and takes calculated risks. Certainly, you know, the owner, any great owner is an entrepreneur, right? They're opening something new, they're coming up with new ideas, new concepts, new markets, a new location, a new way of doing something, right? So a leader embraces and takes calculated risks to achieve new things, to drive innovation. Risk taking is crucial in leadership, but in management, it's about risk management, right? Focusing on minimizing risks and managing stability as much as humanly possible. Managers aim to reduce uncertainties and maintain consistency across the entire operation. So even while we are forging new paths as dictated by the leader, it's the manager's job to make sure that we're mitigating our risk as much as possible, how that works in practice, right? Let's think about it, right? So the leader, right, the leader, the owner of the restaurant might decide to experiment with a new, unconventional menu item, right? That they see as having the ability to attract attention and to drive customer curiosity and interest, despite the potential risk of it maybe not being well received. You have to put things on your menu. You have to put things into play that might not work. So then the manager's job, right, Is then to monitor food costs, track inventory, manage the customer feedback, right? To minimize the potential loss, ensure that the new menu item is profitable, right? It's how it's presented, it's how it's managed as much as possible. So again, one of these key differences between leaders and managers is this idea of risk taking versus risk management.
[00:13:49] Along those same lines, the fourth point I want to make here, the fourth difference between a leader and a manager is this difference between change and stability. A great leader champions change and encourages evolution and adaptability, right? So leaders are often at the forefront of driving some sort of change, some sort of transformation with new initiatives, new ideas, new concepts, new menu items, new service flourishes. We know this. But it bears mentioning, to put this actually down on paper, a leader and a manager, one of the biggest differences is change versus stability. A leader drives is at the forefront of evolution and transformation. On the other side, then, a manager again seeks to maintain stability and efficiency as much as possible. Managers work to uphold established processes and ensure that the organization will continue to function smoothly, even while trying to change, even while trying to push the envelope. And again, an example of how we put this into practice, right? An owner might initiate a major redesign of the restaurant's interior, maybe to create a more modern or a sleek atmosphere. The goal is to be more inviting, to try to attract a new customer base or give the existing or old customer base a reason to return, right? It would be easy to just keep the dining room the way it was for 30 years, but sometimes we need a refresh and give people a reason to come back. But a manager then manages the logistics of the redesign, right? They coordinate with contractors, ensuring minimal disruption to actual business operations. They focus on staying within budget. They focus on making sure that the redesign still gives them the things that they're going to need to be able to succeed from an operational standpoint when they put that into place. So again, those are the first four points. And we've got four more points I want to make in just a second after a word from another one of our sponsors. Now, Pop Menu has reimagined the restaurant, right? They're breaking the mold of the menu, taking the kitchen doors off the hinges and serving up their most comprehensive technology solution yet. It's called Pop Menu Max. It comes with the previous ingredients that you've heard me mention on the podcast, right? Websites designed with SEO marketing tools to keep you top of mind with guests, and of course, the patented interactive menu technology. But this new recipe brings automated phone answering, third party online order aggregation, wait listing and more to the table. Pop Menu's phone answering technology, for example, has your ringing phones covered with AI. The simple questions that once used to keep your phone line tied up will now be handled by a computer without pulling a staff member from your in person hospitality. So no more missed reservations, no more asking for your hours, no more missed revenue. And that's just the beginning. You have a passion for food. Pop Menu has a passion for technology. And together it is a recipe for restaurant success. And now even more digital ingredients are in that technology pantry and Pop Menu is helping restaurants attract, engage, remarket and transact with their guests on a whole new level. Trust me, if you're a restaurant owner, you need Pop Menu to take your business to the next level. For a limited time only, get 100 bucks off your first month. Plus you get to lock in one flat unchanging monthly rate. Go to popmenu.com RestaurantStrategy to claim this offer. Again, that's $100 off your first month at P-O-P-M-E-N-U.com RestaurantStrategy and yes, that link is in the show notes.
[00:17:31] Okay, so we're talking about the, you know, operations and the, the foundational piece of talking about operations properly is to talk about the difference between leadership and management. We talked about the first four points, right? So the first four points to review are this difference, right? A leader provides vision while a manager is responsible for execution. A leader inspires while a manager focuses on organization.
[00:18:02] Third point, a leader is about risk taking. The manager is about risk management.
[00:18:08] And the last point we just talked about is that a leader is an agent of change while a manager's job is to maintain stability while that change is going on. Now, I think when we hear them, it makes sense. We're like, yeah, yeah, that's intuitive, of course.
[00:18:25] But I think there's value in taking some time, as we're doing today, to sit here and actually lay it out like this. So we say yes. So a leader's job is different than a manager's job. And maybe you do both, but you can't do both at the same time. There's times you have to put on your leader hat and there's times you got to take that off and put on your manager hat. I want to go over the four other points because these are actually really good as well. And again, I'm going to give examples for all of them. So the fifth point I want to make this difference between leadership and management has to do with people versus tasks. So a leader prioritizes relationships, building those relationships, nurturing those relationships, understanding individual motivations, and we've talked about that before, how crucial that is. The leader focuses on developing their team and nurturing their growth. So that this job, this place, can continue to support them in the ways they need to be supported. So leader focuses on the people. And a manager then focuses on tasks, emphasizing task completion, focusing on performance metrics. A manager focuses on achieving specific targets and making sure that people are hitting those targets. And they therefore manage the workflow around that.
[00:19:37] Not saying that the manager is any less focused on people, but they have different ways of approaching people. Let me give you an example, right? So a leader might invest time in mentoring and developing their staff members, offering them opportunities for growth and creating a positive work environment. That's all the job of a leader.
[00:19:55] Meanwhile, the manager focuses on task management, right? Making sure that food orders are placed correctly, that inventory is being done regularly, that service is efficient, that we're hitting the, the proper steps of service, right? That we're, that we're meeting certain standards, that we've, that we've established. It both has to do with making sure that people succeed, but one is understanding their growth and their development, fostering a certain environment. And the other one is making sure that people succeed in their day to day tasks so that they can continue to progress toward whatever vision has been set by the leader.
[00:20:34] So understanding that they're both focused on people with different sides of it. Number six, the sixth point I want to make here. Leaders provide influence, Management provides authority, right? So leader relies on influence and persuasion to guide and yes, to motivate people, right? Leadership often involves informal power and authority. Really, this is wrapped up in credibility, right? An owner is the leader. They provide vision, they inspire people, and that becomes motivational.
[00:21:09] On the other side, right? Management utilizes formal authority, literally I am the boss and positional power to direct and control all of the various tasks, right? Managers enforce rules and procedures based again on their official rule. I am the chef, I am the gm. I set the rules. It's my job to make sure this happens. So influence versus authority is really, really huge. And again, to give an example, how do we put this into.
[00:21:39] Right. A leader uses personal charisma and influence to inspire the team to adopt maybe a more customer centric attitude, right? They do that by leading by example and then encouraging exceptional service by coaching in real time. On the other hand, right? The manager uses their formal authority to enforce specific policies, right? Maybe it's adhering to hygiene standards or managing the employee review process, right?
[00:22:08] They're after the same thing, but they have two very different roles, two very different functions.
[00:22:16] Next, 1/7 point I want to make here is so, so, so important. And it took me a long Time to understand this. But a leader necessarily is big picture focused while managers are detail oriented, meaning a leader looks at the big picture, understands or sets the long term goals. They focus on strategic and overarching objectives. But then we need somebody, right, the manager to pay attention to all the details on a minute to minute, day to day basis. The specifics of running an efficient operation, right? So the leader sets the goal, sets the vision. Big picture, this is what we want to accomplish and we leave it to the manager then to make sure it's accomplished. Right. The managers handle the intricacies of all these daily tasks and problem solving to make sure that we actually get to. Right. There are building blocks required, things that we have to accomplish on a day to day basis to accomplish our monthly goals. There are things we have to accomplish every single month to, to be able to hit our annual goals. If a leader says, hey, this is really where I want to go again, the manager has to say, well, here are all the things we have to do in order to get there. I love that point. And we really have to hit it. So now again, let me give you an example, right? So let's say the owner, right? The leader develops a long term strategy to expand the restaurant into a chain. So instead we're going to go from 12 locations to 10 or 15 locations. Well, they have to focus on branding, on market positioning, on market selection. There are things that they have to, that they have to now cover, right. And they can't be bogged down with the minutia, the details. So then the manager then does have to deal with the daily operational details of managing inventory handling, handling the supplier relationships in the face of this growth, ensuring compliance. If you're moving into new markets, right. Whether that's, you know, employee regulations or health and safety, right. There are all kinds of little things that have to happen. If the owner says, as a leader says, hey, I want to go from 10 LOC2 locations to 15 locations across four different markets. When somebody has to be like, okay, well logistically how are we going to accomplish that? Literally, who's going to do the build out? Who's going to do the oversight on that build out? How are we going to do, who's going to handle supply chain, right. Do our current distributors go to those new markets? Do I have to build new relationships? How am I going to find staff in this new place? Because my current staff isn't going to drive two hours to the new market. So, okay, who's going to be responsible for that new store and who's going to do the hiring and who's going to oversee that process. There are tons of little details that have to be adhered to that if you're a big picture person, you need a detail oriented person at your right hand, right? I am a big picture thinker. I do not like dealing with the individual details. I can do it, but it takes up an inordinate amount of brain space. But my strength really is in big picture vision work. Right? That's me. I know I'm a stronger leader than I am a manager, right? Not saying I can't do management. I spent plenty of years executing, managing restaurants. But for me, for example, in my small business, I've got somebody at my right hand who excels at the minutia, at the details. And we, we're really good. One, two, punch. Okay, that's number seven, the last one, right? The eighth one. And this sort of wraps up and encapsulates so much of what we've talked so talked about so far. But leaders are change agents and managers are implementers, right? So a leader acts as a change agent agent, always pushing for new ideas, always challenging the status quo. Leaders drive progress and yes, innovation, as we've said before. But a manager then necessarily has to act as an implementer. They execute the plans and policies designed by the leaders. A manager ensures that changes are effectively integrated and operationalized. Right? We talk a lot about systems and goals. Leader's job is to set a goal. Manager's job is to set a system, put a system into place to help us hit that goal. Right? Leader's job is to say, we're at point A, this is what point B looks like. Manager's job is to say, okay, here's the system, meaning here's the repeatable set of actions. Here are all the things we're going to do to get from point A to point B. And that's crucial. There's a relationship there. So if you are one of these, you got to find the other one. If you need to be both, then you need to really understand when you're wearing each hat. And again, let me give you an example here. So perhaps the owner of a restaurant introduces a new piece of technology into the restaurant. Maybe it's a new point of sale system, maybe it's new online ordering software, maybe it's a new website, maybe it's a new cash tip out system, right? There's all kinds of advanced features. It's new, it will provide efficiency, it will improve the guest experience, but it's Complicated. Right.
[00:27:18] Doesn't mean we can't do it, we shouldn't do it, but we need the manager then to come in and oversee the implementation of that new technology. Right. Somebody's got to train the staff. Somebody has to troubleshoot, you know, issues with the program. Someone has to make sure that this new piece of software gets integrated into the restaurant and works seamlessly with all the other existing systems that are in place. Place. Right. So if you put a new cash tip out system in there, you have to understand how that works with payroll, how that works with clock in and clock out, how tips are then declared both from the employee side and how they're then distributed. All of that there, there are details in there, right? Somebody, somebody has to be focused on change. So somebody has to say, hey, we can do this better. I'm going to bring in a new piece of software to help us do it better. And then somebody's got to say, okay, great, let's make sure that we integrate it, that it gets implemented properly. Again, another great example of the differences between leaders and managers. Those are the eight points I wanted to make. And as we move forward, as we get into the weeds, talking about operations, there are things for leaders, they're going to be things for managers. There are things we're going to talk about. We're going to have to talk about both sides of these.
[00:28:32] We have to understand the key differences. We have to understand there's a time and a place for both. Again, real quick recap of these eight. Number one, it's the difference between vision and execution. A leader provides vision and a manager is focused on executing. Number two, inspiration versus organization. Right. A leader inspires through charisma and passion and a sense of purpose. And management has to organize all of that passion and charisma. Right. All of that purpose. Great. How do we actually get it done? Number three, it's the difference between risk taking and risk management. Right. A leader naturally has to push boundaries, has to go to new places, has to try new things. They are risky activities. And so somebody has to be in on the other side, managing all that risk and making sure we maintain some sort of consistency even while we're implementing new things. Number four, it's the difference between change and stability. Again, that goes hand in hand. Leaders are champions of change. They encourage evolution. But somebody needs to make sure that we maintain stability throughout, that we can maintain operational efficiencies. Number five, it's about people versus tasks. So finding people, motivating people, inspiring them, driving them, developing our people. And then management has to focus on the tasks that those people do, making sure they accomplish them well so that they can continue to develop and grow. If you can't execute the tasks in front of you well, then you're not going to be ready to take on the new set of tasks that we're going to give you with a promotion. They go hand in hand. Number six, influence versus authority, right? Obviously leaders job is to persuade and provide passion, right?
[00:30:22] They provide influence in everything they do. But a manager, manager has to be the heavy sometimes. Manager has to, has to be the boss has to say no, sometimes has to tell people what they're doing is not good enough or not, right? So leader can inspire. It's the difference between the carrot and the stick, right? A leader offers the carrot and says if you follow me, if you reach for this carrot, you will get somewhere great, eventually get a reward. But then we need somebody on the other side saying but if you don't, I'm here to provide punishment or whatever that is. Again, those go hand in hand.
[00:31:01] Number seven, a leader is big picture oriented. Therefore managers have to be detail oriented, right? Again, this has to do with setting a vision and making sure we're doing all the little things we need to do on a day to day basis to execute on that vision. And lastly, right? Leaders are change agents, managers are implementers, right? So leader pushes new ideas, challenges the status quo, drives people forward because you can't just stay still. You have to always be evolving and innovating. But somebody has to be there making sure that we're, that we're integrating things and putting things into practice as best as possible. Again, this conversation is going to be the foundation for so many of the other conversations we're going to have over the next several months. As always, I appreciate you guys taking the time to be here. One final reminder, if you got a busy restaurant, if you have restaurants been around for a while, make a lot of hungry people happy. But you struggle with profitability, then I'd love to chat with you. Set up a time to chat with me or someone from my team. Go to restaurantstrategypodcast.com schedule set up a time to chat. The call's absolutely free. There is no pressure to join us. In fact, there's plenty of times we get on the call and we realize that no, people aren't right for, but you'll come away with some action items. Say I don't think you're right for this program yet, but I would do this and this and this. And this here are some resources. This is how to go forward and then reach back out in three months or reach back out in six months. So if you are not right for the program, I promise you, you will get value from that call. And if you are right, then we'll set the. We'll set the stage for what happens next, what the next steps look like and how we can turn your restaurant around in just six months time. Again, appreciate all you guys being here. Thank you very much, and I will see you next time.
