21 Mar How to put a business under management

Having worked with dozens of hospitality companies as operational managers and business consultants, we’ve evolved a list of questions that business owners should try to answer when they want to get off the tools, expand into multiple locations, or both.

When we ask business owners what they want to get from their business, most say they want a decent lifestyle and a healthy profit. To achieve that, it must be structured a certain way.

Consider these questions to help you assess if you’re ready to take the next step with developing your business.

Do all employees participate in regular, objective 360 degree feedback?

Check in with your staff so they don’t “check out’’. When done well they reduce unnecessary staff turnover, push along staff development, foster innovation and drive effective succession planning. Importantly, they are a forum for negotiating the handover of responsibility from an owner to a senior manager so they can extract themselves from operational duties in a logical, structured way.

What is your business plan covering the next five years?

Where do you want your business to go? Without a plan it’s impossible for your staff to share a common goal, which can cause devastating productivity losses. A business without a plan is rudderless.

Is there a clear distinction between supervision and management?

A supervisor oversees the day-to-day performance of the team on shift. They are concerned with running the shift today, getting the following shift ready, and planning staffing and stock for a few weeks into the future.

A manager maintains the medium and long term success and growth of a business. A well-trained manager takes responsibility for planning up to five years into the future for: staffing needs, marketing, finance for growth, legislative changes, leadership training, succession planning, changes to technology and market trends. If a business is structured badly, managers and supervisors often get bogged, with both trying to run day-to-day operations, which leads to confusion, poor productivity and reactive management because of a lack of focus on long term goals.

Is your hierarchy as flat as possible?

If you have too many levels in your hierarchy, your staff will have to wade through too much red tape to operate effectively. In most cases, team leaders are an overhead cost because they don’t directly generate revenue for your business. By giving authority to the team members doing the work, you can keep the number of team leaders to a minimum.

How many ‘bosses’ do your staff have?

Every employee should have only one boss, so reporting lines must be clear to all. If a manager goes around a supervisor to direct a team member, confusion and resentment will follow. The test we use to see if reporting lines are clear is to ask a random member of staff: ‘Who’s your boss?’. If we don’t get a clear answer or the staff member mentions multiple ‘bosses’, we usually find other issues caused by the confusion, like low morale, high staff turnover and higher than acceptable wage costs.

Draw the distinction between ‘shift supervision’ and ‘reporting to’. When a team member reports to you, you are responsible for their training, development and ongoing performance. A shift supervisor runs the shift, but it’s possible that some of the staff on that shift report to another person.

Do all employees know exactly what their job is, and how their performance is judged?

When assessing a business we will ask a random staff member: ‘What is your job, and how does your boss decide if you are doing it well or not?’

In a well-structured business, all employees have a clearly defined Position Description that they understand and have reviewed recently.

A Position Description is the most important document in your business. It forms the basis for how staff are chosen, trained and led. A well written Position Description outlines objective standards and forces an employee to take responsibility for their own performance.

If the goal posts aren’t stationary and visible, how can anyone be expected to kick a goal?

Do all managers and supervisors have the final say on staffing for their team?

Team leaders must be given responsibility, accountability and authority for staff recruitment and training. Without such responsibility, team leaders have the ultimate excuse for their staff not performing: ‘It wasn’t me that hired them!’ or ‘I didn’t train them.’ It’s common to find business owners who won’t let their managers and supervisors handle staff recruitment because they don’t know how to train them in those skills. This also extends to the authority to performance manage, and if necessary remove underperforming staff.

How many team members are your managers and supervisors responsible for?

Each manager or supervisor should have no more than 8 subordinates. With any more than 8, effective communication, training, development and performance management is very difficult.

If you have any questions about this article or would like to know more, please get in contact.

To learn more about these topics please consider the following workshops:

• How to Choose – best practice hiring from ad to offer
• How to Train – taking your people from green to gun and beyond
• How to Lead – communication essentials for hospitality leaders