Darius started out as a short order cook, then a head cook for a restaurant chain before he decided he could start his own restaurant. Darius wanted his restaurant to focus on Greek Cuisine. After saving up $100,000 of his own money and finding a few eager investors who offered an additional $200,000, Darius was in business. He leased a place that was in a busy part of his local town and opened his doors with high hopes. As a startup, Darius didn’t feel like he could afford to pay his staff much until his place was established. He advertised for positions on Craigslist; and hired 7 servers, 3 cooks, 2 hostesses, 2 busboys and two dishwashers.
When they first started, the place was new and Darius did a good job of marketing. After the newness wore off, it seemed like the work load slowed down a bit. Then it slowed down a lot. One of the younger servers told Darius that he should probably check out what his customers were saying about his restaurant on Yelp. Darius was shocked by what he read…
“The service is great, but the food was awful. I won’t come back here again!”
“The food tasted like it was made at a fast-food joint and not a Greek bistro.”
“It took an hour to get our meal. It was cold and tasted awful! I’m not coming back, nor should you.”
The overall Yelp rating for Darius’s Greek Bistro was 2 stars. There was no way that this could be. Darius had received compliments on his work as a cook in all of his previous restaurants. When he looked closer, he noticed that most of the negative comments were happening when he was not in the restaurant. He decided that he needed to stick around to see how the other cooks were preparing meals.
When he watched the other cooks, he noticed they were not following his recipes and they seemed to have an attitude problem. He noticed one of his cooks taking a smoke-break right in the middle of the dinner rush. He was furious. Here he had risked all that he had to start this restaurant; and a few lazy cooks were going to ruin his dream. He asked a few of his rouge cooks to meet with him. Darius proceeded to chew them out. He told them he was prepared to fire them, if they didn’t clean up their act.
The performance of the restaurant improved slightly after Darius had his harsh meeting with his cooks. However, he still received reports from his servers that chefs were slacking off when Darius was not around. On top of all of this, Darius’s restaurant was losing money. His investors were upset they were still giving Darius cash for his profit shortfalls on a monthly basis. This was not the picture Darius painted for his investors only a few months ago.
Jim was one of Darius’s investors. Jim was a loyal customer who knew Darius when he worked for other restaurants and knew that Darius could be an amazing restaurateur. However, he also knew that Darius had no business ownership experience. Jim asked Darius to talk with a business coach he knew… Coach Russ. Actually, Jim’s request was more of a command than a request. He informed Darius that he would not give him another penny, unless he hired Coach Russ.
Russ had an office not far from Darius’s restaurant, and he met with Darius in his office for their initial consultation. It was clear that Darius was stressed. His eyes were blood-shot and he was noticeably worn out.
After the small talk and introductions, Russ asked, “What brings you to me?”
Darius responded, “Jim told me that if I don’t seek out business coaching, he won’t give me money to continue my business.”
“Got it. Why does your business continue to need investment?”
Darius seemed a little insulted, “You’re a business coach, you should know that a startup business needs capital to get going.”
Russ smiled, “Yes, companies do require capital to start. Did you get any startup capital from your investors?”
“Yes, but it wasn’t enough.”
“How much capital did you feel you would need at this stage of your business?”
Darius now seemed a little ashamed, “I guess I underestimated how much money it would take. We should have been making a profit by now, instead of losing money.”
“What do you think is causing your losses?”
Darius was tired of pretending that his only problem was investment capital. He knew that his restaurant was failing. He shared with Russ about the terrible Yelp reviews; and his cooks that didn’t seem to take his business seriously. Russ could see that Darius was feeling the pain of his first business ownership experience. He could also see that Darius felt like there was no way out of his situation.
Russ offered, “Darius, I know that you are going through some struggles right now; but I assure you that Jim wouldn’t have invested in you, unless he saw some potential. “
Darius burst out, “I don’t know what else I can do. I’m working so hard on this business, I spend all of my time at the restaurant, because I don’t trust my cooks, or servers or anyone! Still, my customers give us bad reviews. On top of all of that, my investors are saying they want to pull the plug, if I can’t turn things around. I have no idea how you can help me.”
Russ could see that Darius needed hope, “Let’s take a deep breath and look at your restaurant business objectively. It seems like you need to make a profit in order to stay in business. In order to make a profit, you need more customers. In order to get more customers, you need better ratings on Yelp. In order to get better ratings on Yelp, you need to fix your food quality. In order to fix your food quality, you need to get your cooks to care about their work. Is all of this right?”
“Yeah! That’s right. But how can I get deadbeat cooks to care about my customers when I’m not there?”
“Let’s work on that. I want to introduce you to this concept called ‘Energy’. Energy is the general attitude that your workers will adopt based on the way you manage them.”
“Energy? I need to make a profit to pay my investors. I don’t need some odd psychology.”
Russ smiled, “You need your cooks to care about your restaurant as much as you do. Right?”
“I suppose. But what does this Energy have to do with it?”
“Let me quickly explain what I’m talking about. Energy comes in seven different levels. The higher the level, the less you ‘ll have to micro-manage your cooks; and the more responsibility they will take on their own.”
“Ok. Teach me about Energy.”
“There are seven basic levels of energy. Level 1 is Victim energy. At Level 1, your cooks will feel like customers are abusing them, you are abusing them and you will feel like you have no options but to deal with substandard work from your cooks.”
Darius was taking notes as Russ continued, “Level 2 is Conflict energy. When you chew out your cooks, you demonstrated this next level of energy threatening them if they didn’t do their job right. Level 3 is Reconciliation energy. You can reach this level by creating a system that allows you to be successful, but you’ll be coping with the problem rather than fixing it. An example may be that you increase prices to account for your inefficiencies in the kitchen to make a profit, but you still don’t fill your restaurant with satisfied customers.”
Darius interrupted, “There’s no way I could raise prices now. I doubt customers would pay more money for low quality food and service.”
“Right you are, Darius. Level 4 energy is compassion. At this level, you will have a better sense of what is going on in the lives of your employees, so that you can better help them; and in-turn, they will most likely care more about your business.”
Darius laughed, “I doubt it. I’m giving them a job. A job they are doing poorly at. They’re lucky I don’t fire them.”
“I understand your anger. Let me continue through the remaining levels. I think you’ll understand how this will work out for your collective benefit.”
Darius acknowledged,”Got it. Go ahead.”
“Level 5 energy is opportunity, or win/win. You start to connect the hopes and dreams of your employees with your hopes and dreams as a restaurateur. Your employees will win, your customers will win, and you will win. Level 6 energy is synergy. You want to create an amazing experience for your customers while also creating wealth and enjoyment for your staff. At level 6, you are thinking big-picture about your workplace culture. Level 7 energy is total awareness. If you could achieve this high level of energy, you would never have to set foot in your restaurant. Your staff would be taking ownership and running it on their own. You could then think about duplicating your restaurant’s success in another town.”
Darius looked up from his notepad, “This all sounds great. But I have no idea how I can turn my deadbeat cooks into people who care about my business.”
“You may not be able to change them; but in almost all of my client’s cases, they were able to change their personal behavior which ended up changing the work environment; which ended up creating business success.”
Darius and Russ talked for an hour. At the end of the hour, Russ gave Darius some homework for their next coaching session. Darius needed to develop seven statements that illustrated what his restaurant work environment would look like at each energy level. Russ also asked Darius to talk with his employees to get a better sense of what they needed out of their job at the restaurant.
Darius had changed by the time he came to Russ’s office for his second visit. Darius still looked a little tired, but there was a sense of hope in his demeanor.
Russ asked, “How did your homework go?”
Darius handed Russ a sheet of paper, “I did what you said about the energy levels. I’m curious, if I did it right?”
Russ read the paper…
Level 1 – If you want something done right, do it yourself
Level 2 – I constantly have to correct the work that my people do.
Level 3 – I guess my people will make mistakes. No biggy. We are doing the best we can.
Level 4 – How can I train my people to do quality work?
Level 5 – I will tie compensation to quality of work so that my employees will be positively incentivized.
Level 6 – How do I create a culture that empowers my people; and ensures that decisions are made at the lowest level possible?
Level 7 – I want to work myself out of a job completely so that my staff is on auto-pilot; and I can move on to duplicate our success.
Russ remarked, “You did an excellent job, Darius. How did you feel as you completed this list?”
Darius smiled, “I felt better as I wrote down each higher level.”
“Great! How did your second homework assignment go?”
Darius hesitated as his eyes teared up, “I was so caught up in my own drama of starting my restaurant, I was oblivious to the pain that some of my cooks were going through.”
“One of my cooks, Julio, told me his wife was leaving him. In fact, his wife told him that she wanted a divorce on the same day that I chewed him out for taking an inappropriate smoke break. Apparently, his wife had called him during our dinner rush. That’s why he took the break.”
“If you knew about Julio’s troubles, how would you have acted differently on that day?”
“I could have at least asked him why he took the smoke break during our rush hour; rather than assuming he was a lazy employee who didn’t care about my restaurant.”
“Awesome, Darius. A big part of moving up in the energy levels we talked about is letting go of judgement. The more we judge others; and the less we try to understand them, the less effective we are as leaders.”
Darius nodded in approval, “What can I do with all of this information to turn around my restaurant?”
“Great question. I’m going to ask you a question in return. You’ve gotten so good at understanding these energy levels… and you’ve told me what Level 5 looks like. How do you create a Level 5 workplace in your restaurant? And how does that help you become profitable?”
Darius smiled, “I’ve thought about this since we met last week. I think that I can tie my employee’s paycheck to our Yelp reviews. I thought I could give double credit for an employee who can turn a negative review into a positive review.”
“Excellent idea, Darius. What is the win for you?”
“If we can get these reviews turned around, we’ll get more customers. On top of that, I will have employees who are taking ownership of their actions, so I don’t have to tell them what to do all the time.”
“Great job, Darius. I think you’re on the right track. Your homework for next week will be to implement your idea. I’m curious to hear how it works.”
Darius continued to change things week by week. He learned how to delegate responsibility to his staff and give them a win that would result in a win for his restaurant. He was pleasantly surprised when he noticed that Julio wrote a response on one of the negative Yelp reviews, “I apologize for your slow service, sir. I was the cook that day, and I was going through some personal struggles. I would love to buy you a free meal, for you and your family to show you how our service and quality have improved.” The customer came back and had an enjoyable experience. They deleted their bad review and wrote a 5-star review afterward that could have been framed. The average rating on Yelp increased from 2-stars to 4.5 stars within the next three months. Over the next year, Darius’s restaurant went from losing $2,000 per month to making a profit of $12,000 per month. On top of that, Darius bragged that his staff were the best paid employees in town…. and they were worth it.
Darius’s success brought with it a few more decisions. Would he buy out his investors? or Would he seek investment to open a second restaurant? Only a year ago, he was thinking he would have to close his doors because ‘he couldn’t find good help’…. and all he needed was to shift the energy level in his restaurant.
As a business coach, I help my business owner clients change their mindset in a way that allows them the freedom and profitability they have always hoped for, but never thought possible. If you’d like to develop a successful business mindset, I urge you to sign up for the free Business Success Wheel exercise below to see how you can grow yourself as a successful business owner.
Note from the Author
My name is Jeff Schuster. I am a certified Life and Business Coach serving small business owners, corporate executives and others who want to transition from “expert” to “entrepreneur”. I have been a small business owner for most of my 30-years in the workplace. I grew an energy efficiency and renewable energy engineering and construction company from nothing to over $10-million/year and sold it in 2013. I now help other business owners make amazing progress toward their own dreams of business ownership independence and success.
As a long-time small business owner, I know how hard it is to create the business of your dreams while struggling with the financial realities of attracting prospects, converting those prospects into high-paying customers, and making money for you and your family. My biggest mistake in my past was not seeking the advice of wise counsel sooner than I did. I don’t want you to make the same mistake. I help my clients see exactly what they need to work on in their business by doing the Business Wheel Exercise. If you’d like to try it out, sign up to the right. It’s completely free.