business plan

Trade offs: One problem and a thousand justifications:

Alfredo has been appointed as the manager of a restaurantwhose results economic and financial at the end of 2011 were not as expected. Its appointment is given by the experience it has in the sector. When making a Insights Regarding the situation, he realizes that the income and customers accounted for were high compared to the competition, However the restaurant did not comply with the projected income plan, showing overdrafts in some items of expenses.

In such a situation, he decides to call a meeting with the members of the Board of Directors to carry out a Insights of what happened and project the income and expense budget for the next period. Once all the summoned are present, the new gerente He begins the meeting explaining the causes that motivated him to carry out the meeting and proceeds to ask a question to which, as if it were a death sentence, the team members react instinctively: Why were income plans not met and expenses overdrawn?, obtaining responses such as:

  • The menu is aged.
  • Prices are high compared to the competition.
  • Customers have changed.
  • Suppliers have increased the price of products.
  • Inexperienced staff have been recruited.
  • Experience staff is unmotivated.
  • Many promotions have been made with discounts to attract customers.
  • Smoking has been prohibited inside the restaurant.
  • Kitchen firepower is less than demand.
  • The use of office supplies is abused.
  • Not all supplies are available for the service.
  • The furniture is old and worn.
  • The company demands an increase in revenue plans of 5% compared to the previous year without taking into account the changes that are taking place.

And so, so as not to let it slumber, an endless number of justifications.

Alfredo remains silent reasoning each of these arguments, and in the midst of a firefight between the members of the team, he asks for silence and makes his intervention.
I will tell you, in my opinion - it begins - why we are doing a Insights of this type. These words generate total silence in the meeting room; and I will present - he continues - the cause of all our problems. - All team members intersect glances blaming each other.
First off, I'll start by telling you that meetings are not the space to bring problems without solutions. Many situations have arisen that could be solved during the year of operations, but in essence, the main cause of this breach is communication and strategic disintegration. According to the reports of the different departments, I have been able to appreciate that each one has worked diligently to achieve the objectives of their departments, but they have not worked as a team, which has not allowed us to look to the sides to be able to fulfill those of the company.
The previous example shows us one of the fundamental causes for which a company fails and that are seldom taken into consideration. Many management teams focus their attention on establishing policies that lead to obtaining benefits and, above all, to containing costs and, on that line, they center their Insights evaluating, many times, the management of the different departments individually and not collectively.
Likewise, when a problem arises in one area, the responsibility for solving it lies with the area itself, although another has the capacity to do so, leaving the mercy of the management of a team what others can also contribute to solve.
These practices do not allow entrepreneurs to be able to identify communication failures between the different departments, failures that occur due to wanting to meet the objectives that have been set departmentally and that, as inheritance, are also aimed at contributing to obtaining higher income and lower costs.
When many companies define their strategies, some do it on the basis of results and others focus on the achievement of objectives. Generally the departmental objectives come to constitute extracts of the objectives of the company. The directorates of the different departments seek to reduce costs in the first instance, sacrificing other departments, often without realizing it, or income is programmed for concepts that do not take into account the particularities of the other areas involved.
For example:
  • The department Accounting. When projecting the budget, it does not take into account the different states of nature that may arise in the business, and this document is based on historical bases, which, although they are an important source of information, are not in themselves a determining element.
  • The commercial department projects services without evaluating the carrying capacity or the workforce qualified for it.
  • El Chef and Maître del restaurant They plan or plan the incorporation of new dishes or services that demand special raw materials without evaluating the storage capacity, preservation and prices of the merchandise or the availability of material resources to be able to put them into practice.
  • The area logistics (warehouses and transportation) is projected in order to minimize inventory levels, scheduling the departure of products with a certain degree of aging and projecting purchases in correspondence with minimum stocks or non-existent stocks, which theoretically is an excellent idea, but practically Sometimes it becomes a serious concern for the productive areas (kitchen - bar) and services (living room - commercial), which by their nature require finding solutions to the sudden exhaustion of certain main raw materials and the response to a current demand.
However, the major conflicts that can be seen most frequently occur between the trio services (Kitchen - Living room) - commercial - finance, given that they are the three fundamental areas of the gastronomic company where the management, organization and control capacity of the same is evidenced, from linking the contributions of the secondary areas such as maintenance, hygiene, quality, among others.

Trade offs in restaurants?

The term Trade Offs (weighting or value exchange commitment) in English-speaking articles, has its origin in the theories developed for the decision making, fundamentally those associated with the optimization of resources and refers to the presence of conflicts to be solved based on multicriteria analysis, whose origins date back to the XNUMXs.
However, its use is wide and not everyone translates or uses it in the same way. Some link it to the calculation of costs, while others associate it to the rivalry that must be present between the different departments or functions of the company to achieve its objectives. But to be neutral I aim to approach it from both perspectives (Costs and Conflicts) given the particularities of gastronomic activity.
Our sector is constantly in conflict; conflict that originates with the customer when deciding where and when to eat and how much they are willing to pay; conflicts that also generate fashions and force companies to adopt positions that respond to these demands. This reason forces entrepreneurs to work in a permanent environment of competition, where in order to survive they depend on their strategic capacity, which will allow them to identify what minimum level of service they must achieve in order to remain in the market and what is the level of service. which will provide you with a competitive advantage.
The mere fact of establishing a strategy it is not enough to be able to counteract the effects of these changes and the competition, but for it to have an optimal effect, it must find solutions to the different inter-departmental conflicts that arise within the organization, such as those exposed at the beginning of the present, which I summarize as follows and that they are what originate the so-called Trade offs or contradictions between functions:
  1. Each department strives for the highest allocation of financial resources.
  2. The cost indices set for a point of sale or service area are discordant for others.
  3. Performance standards (income, expenses) are established for the different departments that, to achieve this, may jeopardize compliance with the selected strategy (commercial, butcher's, warehouses, etc.).
  4. Each department has a different perception of which is the most efficient service for the company.
I must make it clear that this type of conflict will always be present in any organization, but the fundamental role of the administrator of restaurants it is to minimize these contradictions.
Something interesting
Did you know that a conflict, depending on how it is perceived, can represent a opportunity for the company? Well look yes because:
  • When conflicts arise we are obliged to look for alternatives that we had not previously considered.
  • It forces us to review the methods used to define the organization's strategy and the functions of the departments, because it alerts us that something is not marchdo correctly or as expected and we must rectify it.
  • It forces the organization and its members to demand more of themselves and this leads to growth as a company and as a staff
  • Stimulates creativity
  • It shows us capacities that we did not exploit before

Trade offs in restaurants. How to reach an agreement?

Something has become clear: when interdepartmental conflicts exist, if solutions are not sought, the fulfillment of the organization's objectives and with it the effectiveness of the strategy are jeopardized. The integration process begins with the collective analysis of the results obtained in a certain period of operations. This analysis will allow each area involved to identify the flaws, but it will also allow it to establish alliances with other departments to mitigate them.
In this sense, and here I emphasize that it is my opinion and I take responsibility when exposing it, I consider that for it to be successful and each department contribute what is expected, but also do not intensify individuality, but rather that collective interests take precedence over individuals, the restaurant administrator must:
  • Not distinguishing important roles individually to departments or areas, but rather that your discourse is collective, making each department see the degree of involvement it has in the results of other departments. (Commercial - gastronomy - commercial- finance - gastronomy - commercial)
  • Focus all actions and strategic that they be adopted in the short, medium or long term in a purely economic sense. (expected benefits, projected costs)
  • Evaluate the alternatives to control the results in strategic periods of time(high and low season, holidays, etc.).
  • Educate the heads of departments through training, workshops or on-the-job training in activities that are not related to their functions but that will allow them to have an understanding of how the others work. (For example, accounting staff may receive theoretical training on food processing)
  • Communicate the organization's strategy to all its employees. (will make them feel responsible for the results)
  • Relax to change. (Amend the strategy whenever the changes that occur in the environment warrant it).
  • Create an economic culture. (Don't just emphasize income and expenses, let each department and its workers see the meaning of each weight that is generated in the company).
  • Don't just grow. (Success is short-lived if opportunities are not seized and weaknesses are mitigated.)
  • Evaluate results differently (The failure of one department may be due to the effect of actions taken by another department)
  • Avoid giving guidance informally, by sight, or orally (document your strategy and ideas)
  • Write general procedures, define processes, implement systems of management, but do not mechanize (At the end of the day we are not perfect and better ways can always emerge to do what is written without altering the quality of service and customer satisfaction)
  • Keep your customers informed about changes that may occur (clients are lost if they do not know the reasons for certain changes: temporary closure for example)
  • Keep the restaurant concept above any modification or need to change.
  • Don't underestimate the competition even if you feel like you have the power.
  • Treat everyone the same way. (If family members work in your restaurant, they are employees, therefore they contribute or hinder the achievement of the objectives).
  • Don't marry a management in particular. apply those that are necessary and compatible with your business (Multi-criteria analysis offers a deeper insight into reality)
  • Every weight counts.
Likewise, it turns out essential (so that these can be smoothed conflicts) organize and manage all the information generated within the restaurant and thus be able to evaluate each alternative solution decision and, above all, work to promote communication and consultation between apartments. If one is wrong, the other will feel responsible for it, in addition to stimulating the ego of the people who get involved when they resultados they are positive, because they feel that they are part of them.
Finally, dear reader, I think that my greatest contribution is in telling you that your greatest strength is at your side: your colleagues. Value each one of the actions, advice, ideas, suggestions that they bring you, the permanent link with those who make our business stay and grow every day is the best solution to any adversity that the market, crisis and life can give us. present.
And I close with a metaphor that I leave for you to interpret as you best consider: lThe chain of a bicycle can be disassembled, that has a solution, you will reassemble it even if it is smeared with grease, but the link of a chain can be broken and you will have to walk to reach your destination.
I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
trade offs
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