"So you don't know where you went wrong. All you do is sit and wonder, 'What could I have done to make them hate me so much?' "
Keith Dunn had never thought out what it meant to manage people well. In the beginning, everything he did was a reaction against what he had experienced himself as an employee. It was a shallow commitment, one that didn't survive in the face of success and the pressures of running a growing company.
Now, he was renewing his commitment, but still he wasn't thinking about what that meant. This time, he figured, he would consult the management gurus through their books, tapes, and speeches. You want people-oriented management, he thought, fine. I'll give it to you.
He heard consultant Don Beveridge suggest that smart companies kept managers involved by tying their compensation to their performance. McGuffey's had been handing managers goals every quarter; if they hit half the goals, they pocketed half their bonus. Sound reasonable? No, preached Beveridge, you can't reward managers for a halfhearted job. It has to be all or nothing. "From now on," Dunn told his managers firmly, "there's no halfway."
Dunn also launched a contest for employees. Competition, he had read, was a good way of keeping employees motivated. So the CUDA (customer undeniably deserves attention) contest was born. At Hendersonville and Asheville, he divided the employees into six teams. The winning team would win $1,000, based on talking to customers, keeping the restaurant clean, and collecting special tokens for extra work beyond the call of duty.
Employees came in every morning, donned their colors, and dug in for battle. Within a few weeks, two teams pulled out in front. Managers also seemed revitalized. To Dunn, it seemed like they would do anything, anything, to keep their food costs down, their sales up, their profit margins in line. This was just what Tom Peters, Kenneth Blanchard, Don Beveridge, Zig Ziglar, and the others had promised.
Dunn and Laibson had spent a few months visiting 23 of the best restaurants in the Southeast. Driving for hours, they'd listen to tapes on management, stop them at key points, and ask, "Why don't we do something like this?" At night, they read management books, underlining significant passages, looking for answers.
"They were all saying that people is where it's at," says Dunn. We've got to start thinking of our people as an asset, they decided. And we've got to increase the value of that asset. Dunn was excited by the prospect of forming McGuffey's into the shape of a reverse pyramid, with employees on top. Keeping employees, he now knew, meant keeping employees involved.
But after about six months, only one store's managers seemed capable of winning those all-or-nothing bonuses. At managers' meetings and reviews, Dunn started hearing grumblings. How come your labor costs are so out of whack? he'd ask. Heck, I can't win the bonus anyway, a manager would answer, so why try? Look Keith, another would say, I haven't seen a bonus in so long I've forgotten what they look like. Some managers wanted the bonus so badly that they worked understaffed, didn't fix equipment, and ran short on supplies.
The CUDA contest similarly deteriorated into jealousy and malaise. Three teams lagged far behind after the first month or so. Within those teams people were bickering and complaining all the time. We can't win, so what's the use? The contest, Dunn couldn't help but notice, seemed to be having a reverse effect than that he had intended. "Some people were really killing themselves," he says. About 12, to be exact. The other 100-plus were utterly demoralized.
Dunn was angry. These were the same employees who, after all, had claimed he wasn't doing enough for them. But OK, he wanted to hear what they had to say. Get feedback, Tom Peters preached, find out what your employees think. Dunn announced that the owners would hold informal rap sessions once a month.
This is your time to talk, Dunn told the employees who showed up -- all three of them. That's how it was most times, with three to five employees in attendance, and the owners dragging others away from their jobs in the kitchen. Nothing was sinking in, and Dunn knew it.
Early on, Dunn and Laibson hired a consultant to help them decide the company's mission. They settled on aiming to be "the best restaurant in the Carolinas." Execute being the best, preached Tom Peters, and everything else will follow.
Then they devised the "10 ABCs of Excellence." Half of them revolved around food: it must taste great and have a pleasant plate appearance, among other things. The remaining 5 included appreciating guests by remembering their names, greeting them within one minute, and having managers in the dining room talk to every guest.
Three months after unveiling these principles, the owners gave employees and managers a written test. What's the company goal? How do we measure it? What are the 10 ABCs? Sixty percent of the managers got it right; a dismal 40% of employees knew the answers. "We felt defeated," Dunn recalls.
He even embarked on a campaign to bring the magic back -- literally. All bartenders, he announced in the new Greenville, S.C., restaurant, will be required to perform magic tricks. Catch a glass behind your back, twirl a quarter-full vodka bottle, pop a strainer before dumping it in the sink. Few bartenders even wanted to try. "When somebody is hollering for a drink," says Bruce Ladd, a bartender in Asheville, "they do not want to see a magic trick."
What could Dunn do? He launched another CUDA contest, this time issuing sweatshirts that said "It's Back" on the front, and featuring the shark from Jaws on the back; he sat with the other owners at rap sessions; he tinkered with the all-or-nothing bonus plan, simplifying the goals. Nothing seemed to take. After six months, only 70% of the managers and 50% of the workers remembered the 10 ABCs or the company goal. Desperate, Dunn stood up at a manager's meeting and asked: Do any of you have a clue as to why employees aren't showing up at the rap sessions?
An assistant manager spoke up. Well, he began, the employees are coming on their days off. Some of them have to line up baby-sitters, then come down here for two hours and not get paid for it.
