We had a call from a customer the other day asking if our programs can generate reports that don’t include costing information. We get a few calls like that every month and I nearly always ask them why they want these reports. The usual reason is that the customer doesn’t want their kitchen staff to see what the ingredients cost.
As it turns out, there’s no practical problem as we have plenty of reports that will give them what they want, but the most recent call got me thinking. We have a number of customers who have the exact opposite attitude, and thinking back to conversations with them over the years, and what I recall of the figures I’ve seen in their recipe databases, I can say with a fair degree of certainty, that chefs who are more open with their data in the kitchen generally make more money than the more secretive types. A colossal generalization, I know, and while I’m not in a position to publish it, I have seen the data to back that statement up.
Granted, I’m not a chef, but from 20 years of talking about this stuff with chefs almost every day, the ones who seem to be doing the best don’t jealously guard their information. In fact, they go out of their way to make sure the entire kitchen brigade is informed on how they, as a group, are performing financially.
Here’s a cast study:
We have a customer here in Australia. Let’s call him Dave (no real names). Dave has our software installed on a couple of computers in the kitchen. One for him, one on his sous chef’s laptop, plus there’s a desktop computer stashed in the corner of the kitchen that everyone can access.
BTW: I spoke to Dave before writing this post and he’s fine with me writing about how he runs his kitchen.
Dave, like me, is getting on a bit, and as an old-school chef, he doesn’t have the sharpest keyboard skills, so what he does is delegate the Resort data-entry work by spreading it around his entire brigade.
The apprentices are responsible for entering the latest ingredient costs into the program each week. There are three of them, and Dave doesn’t care who does the data entry, he leaves it up to the them to sort it out amongst themselves. All Chef tells them is that a week’s invoices need to be entered into the Resort program by Friday night at the latest and they then (in a small, but significant act of team-building) decide who is going to enter this weeks’ ingredient costs.
Likewise, each week’s sales figures are entered into the program’s menus (for menu engineering purposes) and Dave leaves it to the rest of the brigade to make sure this is done by Sunday night at the latest (a bit more subliminal team-building).
Dave actively encourages each chef to develop recipes to complement their menu and it’s up to the chef to enter his new recipe into the software. They only have one rule: Before a new recipe is even discussed or considered for the menu, the chef who developed the recipe must have it costed and it must be profitable. Then it’s time to test cook and discuss and revise.
So, when Monday morning rolls around, Dave knows that his Resort database has all of last week’s ingredient costs and sales data already entered. Dave prints off a copy of the product profit report, product price exception report and a menu engineering report for each member of the brigade. They have a 15 minute meeting first thing Monday morning to discuss the previous weeks’ performance. Everybody in the brigade from apprentice to chef gets a copy of these reports and they all have input in the discussion on how to improve their performance. They talk about recipes that have fallen out of profit (due to fluctuating ingredient costs) and what do about them. They also discuss the best and worst performing dishes on the menu and what, if anything, they can do help make the under-selling (but highly profitable) menu items more appealing to customers.
Now, to some chefs reading this, this might all sounds a bit touchy-feely, but it’s not like Dave has his brigade sitting around a camp-fire singing Kumbaya. It’s all done in the interests of generating cold hard numbers so that they can maintain and improve their bottom-line. Dave has been running his kitchen like this for 15 years that I know of, and he gets fantastic results – I know, I’ve seen his costs & sales figures.
He does all this for a number of reasons. Here are the ones that I can remember.
- Profit. Relentlessly review and revise how the business operates on a weekly basis to monitor its profitability. There’s never a question of compromising quality of product, but if a menu item isn’t profitable, it’s off the menu. Simple as that.
- Team cohesion. There’s no ‘them and us’ in Dave’s kitchen. They are all part of a team and as such he feels that it’s important that they are all privy to how the team is performing.
- Information Ownership. By delegating data entry, in particular to the apprentices, they take a sense of ownership of the data and take care in its entry and checking its validity.
- Minimizing wastage. The chefs and apprentices are aware of what ingredients cost and the effect of those costs on the bottom-line of the business, and they tend to take a bit more care with handling those ingredients.
- Professional development. Dave feels that his apprentices and junior chefs are the executive chefs of tomorrow and he wants then to be immersed in the day-to-day running of a kitchen from ordering ingredients to selling finished products. That way, they are aware that there’s much more to being a professional chef than being able to dice carrots uniformly.
Dave isn’t worried about secrecy or staff taking costing data to a future employer. It’s a competitive business and everyone is has a pretty good idea of what their nearest competitor’s operating costs are anyway, so nobody is really learning anything valuable. Seriously, what does it really matter if one of his competitors finds out how much Dave is paying for his beef?
So, that one example of how opening things up information to the staff can improve the bottom-line of a business.
I know a lot of chefs reading this will have trouble coping with the thought of releasing control. After all, the sorts of people who become executive chefs tend to be control-freaks, but I’ve seen over the years that the chefs who can let go of information tend to be glad that they did.
I'd love to hear what other chefs think of this approach.
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