OK, why isn't the CUDA contest working? Because you can't have a contest where a small group wins and the majority loses. It's got to be a win-win situation. The same for the bonus plan.
And the magic tricks? It may have sounded like fun to you, Keith, but it was just another thing you shoved down our throats.
Usually, Dunn would have defended his efforts. It's not the bonus or the contest, it's the people. He would have accused them of being bad workers. He would have pointed to the good eggs who were knocking themselves out. But on this particular day, driven to the point where he issued a cry for help, he just sat quietly and listened.
In doing so, he realized what had been absent all along: the voices of his employees. Voices that had been missing from all of his deliberations over restructuring the company. It was a supreme irony: Dunn had tried to superimpose an employee-oriented management style on McGuffey's without ever really consulting the employees. He threw them new-age management, just as he had thrown them dental insurance. But his basic attitude had to change. "Listening is hard," he says. "I didn't know how to do it.
"I can't say it was exactly 3:00 on a Thursday afternoon when I realized the problem. I have to hear the same thing five different times before my ego allows it to sink in. I don't give up easily. But you hear something in enough places, you get the message."
Now, Dunn wasn't afraid to try different approaches. His employees would tell him what they needed, and they would tell him what wasn't working. Dunn set up an associate board, a group consisting of two cooks, two servers, and a bartender from each restaurant, which would meet with the owners once a month and serve as a sounding board.
At first, he invited managers, an unfortunate mistake. Employees who spoke out against their managers would find themselves with the worst schedules or with stern warnings. It got dangerous. "Two of our managers almost choked the living daylights out of their associate board members," recalls Dunn.
Based on an employee suggestion, McGuffey's also started employee focus groups so that every employee meets with an owner at least once every six months. Dunn begins each focus group with a written test covering the company goals, the 10 ABCs, and the managers' goals for the year. Now, he can count on more than 90% of the managers scoring perfectly and 80% of employees acing the test.
But not all of McGuffey's problems were solved once Dunn started listening. "We still don't listen enough," he says. The company's Service Excellence program, a pay-for-knowledge compensation plan, is so complex that employees are trying to simplify it. Only about half the employees took any interest in last year's special contest, which rewarded the employee who knew the most guests by name. It was too long term, too focused on an individual winner, they complained. Employees are now helping design a better contest.
Dunn has taken some painful knocks learning the limits of his new approach. Last year, for instance, many employees offered ideas on how to design the Charlotte McGuffey's. As a result Dunn let their finest bartender work with the equipment supplier to design the bar. Once finished the partners simply gave plans a cursory once-over. It was an expensive mistake; the bar's design turned out to have many drawbacks. "We'll always have a bar that could have been better," Dunn says with a sigh.
That fiasco hasn't stopped him from exploring the outer ranges of employee participation. An experiment in which the owners allowed employees to run the restaurants for two days, for example, has grown into the self-managing restaurant in Asheville (see "A Self-Managing Restaurant," below).
"The employee input is phenomenal, but it's only one part of the triangle," says Dunn, who now tries never to miss an orientation session. "An employee might design a great bar for a bartender. But he doesn't have to think about guests. Or profitability."
In 1987 Dunn opened his third McGuffey's in Greenville, S.C., and the entire company hauled in profits of nearly $170,000 on sales of more than $5 million. Turnover halved to 110%. Last year, with the addition of a Charlotte McGuffey's, the company posted about $6.5 million in sales, with profits of about $230,000. A 3.5% profit margin is hardly extraordinary, but with turnover now below 60% -- roughly one-quarter the industry average -- Dunn expects margins to creep up to at least 5% on sales of more than $10 million in 1989. "We're in this for the long term," says Dunn.
So, it seems, are many employees. "You feel like you're a person here," says Geri O'Brien, a hostess in Charlotte who helped design the hostess stand. "You feel like you have input," says Morales, the bartender. Last year Morales convinced Dunn to tear out a booth in Charlotte and plant a baby ficus in its place -- like the magic ficus back in Asheville. What it all boils down to, says waitress Wanda Light, is that "most restaurants don't make that much of an effort to see to it that their employees have a good time."
Like at McGuffey's on dress-up days, for example, when all the employees don Hawaiian garb or pretend it's New Year's Eve. Recently workers in one restaurant dressed up as employees of other restaurants. If you had walked in, you would have seen uniforms from Bennigan's. Shoney's. Dunn had even planned to wear his TGI Fridays polo shirt.
"It's a big joke, because we're nothing like them," says Dunn. "Everybody knows that now."
A SELF-MANAGING RESTAURANT
Employees help run McGuffey's on an experimental basis
It started with Employee Days. Keith Dunn, president of McGuffey's Restaurants Inc., had been reading books by Tom Peters and others encouraging companies to adopt an organizational structure in which workers are on top, with middle managers acting as facilitators. Last year Dunn decided to experiment by letting employees run the restaurants -- planning the menu and drink specials, handling scheduling, choosing uniforms -- for two days every six months.
Employee Days have boosted morale and have "
