Scott Barnett & Associates Blog
Technology, Hiring & Falling
on your Face
on your Face
January 23, 2023
Technology has always played a role in the restaurant business but that has increased exponentially in the last 40 years - and all the more so in the last three. From the first useful POS system introduced in the early 1980s, technology's influence has grown and is accelerating.
From managing purchasing to theft control to payroll and beyond, technology has been a game changer. The benefits have been powerful and, in many ways, dramatically changed the business - usually for better, but that depends on how it is harnessed.
From managing purchasing to theft control to payroll and beyond, technology has been a game changer. The benefits have been powerful and, in many ways, dramatically changed the business - usually for better, but that depends on how it is harnessed.
Manual Use vs. Profitability
In my first restaurant job as a cook during college, I worked in a steakhouse using a manually written ticket system. The servers carried their own "bank." The tickets and cash or credit card receipts were turned in to the manager/owner at the end of the shift. She then manually entered each server's drop on a sheet (sometimes in pencil).
What could possibly go wrong?
Although technology can significantly reduce errors in manual processes and increase efficiencies, restaurants have historically been slow adaptors. The move to POS was a perfect example.
Why? Because nobody wanted it.
With a POS system, the servers couldn't steal as much and the owners couldn't skim as much. Everybody could still do some "grocery shopping" in the restaurant's walk-in but even that would be reduced with improved inventory controls. For many private owners, it became a cost-benefit analysis. Do the better controls outweigh the reduced skim?
In the end, tech won out as it almost always does. Today, we have extraordinary tools to help us manage our restaurants. Nobody is willing to go back to time cards, give up our theoretical food costs, or forget about geo-targeting and our seamless interfaces (when they work). A restaurant company in this world has endless discussions about the tech stack and worries incessantly about whether the credit card processor is the real controller of their loyalty program.
What could possibly go wrong?
Although technology can significantly reduce errors in manual processes and increase efficiencies, restaurants have historically been slow adaptors. The move to POS was a perfect example.
Why? Because nobody wanted it.
With a POS system, the servers couldn't steal as much and the owners couldn't skim as much. Everybody could still do some "grocery shopping" in the restaurant's walk-in but even that would be reduced with improved inventory controls. For many private owners, it became a cost-benefit analysis. Do the better controls outweigh the reduced skim?
In the end, tech won out as it almost always does. Today, we have extraordinary tools to help us manage our restaurants. Nobody is willing to go back to time cards, give up our theoretical food costs, or forget about geo-targeting and our seamless interfaces (when they work). A restaurant company in this world has endless discussions about the tech stack and worries incessantly about whether the credit card processor is the real controller of their loyalty program.
Smartly Seizing Technology Opportunities
A few years ago I got involved in the purchase of a small regional chain by a private equity firm in the Southeastern U.S. and I became the CEO of that chain for a couple of years. I had made a point of not just remaining knowledgeable about technology but rather seeking out as much information about it as I could. It was clearly going to be critical for profitability and a lack of understanding as a leader would be a deal breaker.
Because the chain had been technophobic, the opportunities were everywhere. They had an old POS system, no back office, still used a time clock and had no metrics vis-a-vis their marketing. It was starting at square one.
I have been involved with purchasing decisions about POS systems and back office software for most of my career and I have learned a few things about tech:
1. Nothing is "good enough" for very long.
There are only two types of hardware in the restaurant world. The first is "not yet on the market" and the second is "obsolete." Once you have bought a POS system, there is inevitably a new model or an upgrade placed in front of you that "you should probably buy" if you want to be on top of the latest.
2. Nothing is truly turn-key.
No matter what you are buying, the system is always labeled "very user friendly." They will claim that even a monkey could run it. Maybe, but you eventually have to hire someone with expertise to oversee it. They lie!
3. Think smart technology growth and implementation but be careful.
Technology improvements can cause you to throw the baby out with the bathwater. Rush headlong into a developing technology or tech-based model and gaps in your company's new protocols can become glaringly obvious and create headache-inducing bottlenecks. So think smart growth and implementation.
Here's what I mean…
In that same chain, we had one big industry advantage. The Gulf Coast of the U.S. was experiencing a terrible labor shortage and it was particularly acute in the kitchen. So acute that we were starting cooks at $16-$17 per hour in 2017.
Because the chain had been technophobic, the opportunities were everywhere. They had an old POS system, no back office, still used a time clock and had no metrics vis-a-vis their marketing. It was starting at square one.
I have been involved with purchasing decisions about POS systems and back office software for most of my career and I have learned a few things about tech:
1. Nothing is "good enough" for very long.
There are only two types of hardware in the restaurant world. The first is "not yet on the market" and the second is "obsolete." Once you have bought a POS system, there is inevitably a new model or an upgrade placed in front of you that "you should probably buy" if you want to be on top of the latest.
2. Nothing is truly turn-key.
No matter what you are buying, the system is always labeled "very user friendly." They will claim that even a monkey could run it. Maybe, but you eventually have to hire someone with expertise to oversee it. They lie!
3. Think smart technology growth and implementation but be careful.
Technology improvements can cause you to throw the baby out with the bathwater. Rush headlong into a developing technology or tech-based model and gaps in your company's new protocols can become glaringly obvious and create headache-inducing bottlenecks. So think smart growth and implementation.
Here's what I mean…
In that same chain, we had one big industry advantage. The Gulf Coast of the U.S. was experiencing a terrible labor shortage and it was particularly acute in the kitchen. So acute that we were starting cooks at $16-$17 per hour in 2017.
To get ahead of this problem, we doubled down on tech savviness. We moved the whole hiring process online, including applications, on-boarding, etc.
While we could boast having state-of-the-art HR, there emerged one major problem. I only learned of it when I happened to be in one of the restaurants one afternoon and a guy seeking a job as a cook walked in the door. As I watched, the manager told him to fill out the application on the website. He replied that he only had a flip phone and the manager told him to borrow a friend's smartphone.
This restaurant was doing around 400 meals a day and had only three cooks on staff at the time. We needed reliable, qualified cooks now! When I intervened and asked the manager to give this person an application, I learned that we had none; it was all done online.
Obviously, I personally interviewed and hired the cook. There were hard copy applications in all restaurants the next day, but I was struck. How had this happened?
Well, we wanted to be paperless and cutting edge. It was a hassle to hand enter hard copy applications. And if we were really going to handle payroll/HR/training with one or two people, the process had to be streamlined.
This restaurant was doing around 400 meals a day and had only three cooks on staff at the time. We needed reliable, qualified cooks now! When I intervened and asked the manager to give this person an application, I learned that we had none; it was all done online.
Obviously, I personally interviewed and hired the cook. There were hard copy applications in all restaurants the next day, but I was struck. How had this happened?
Well, we wanted to be paperless and cutting edge. It was a hassle to hand enter hard copy applications. And if we were really going to handle payroll/HR/training with one or two people, the process had to be streamlined.
I quickly saw that while our strategy to rely on technology to quickly hire and onboard staff with limited HR personnel was sound, we neglected the gap between digital and analog, if you will, and essentially let the tech tail wag the entire company dog.
Minimizing the Inevitable Tech Mistakes
The reality is that even the most digitally-sophisticated restaurant leader will make mistakes when it comes to technology. As the saying goes, "You can tell the pioneers. They are the ones with arrows in their backs."
But you can reduce the frequency and severity of tech-related mistakes. Talk with your team, get input on new technologies and processes, and be smart with implementation. If you need it, work with an outside consultant to minimize potential risks of technology adoption and to maximize those lucrative tech benefits.
But you can reduce the frequency and severity of tech-related mistakes. Talk with your team, get input on new technologies and processes, and be smart with implementation. If you need it, work with an outside consultant to minimize potential risks of technology adoption and to maximize those lucrative tech benefits.
