Restaurant Execs Rate Importance of KPIs
Hospitality Technology (HT) hosted the second meeting of the Leadership & Insights Council, sponsored by HotSchedules on July 16, 2018. Council members discussed key performance indicators (KPIs) in several areas focusing on what KPIs are critical; systems relied on for visibility into KPIs and what operators still find lacking in offerings from available solutions. When discussing specific top KPIs – including sales forecast variance, labor variance, food variance, employee turnover and voids/comps — the executives agreed that all are important, but several wished for deeper insight. The council agreed that finding alignment on what data points should be KPIs often presents difficulty. Austin Brinson, vice president of analytics, B.Good, says it can be a struggle to have all the various stakeholders agree on the goal of KPIs.
“Different people look at things in different ways,” he says. “We already have a single source of the truth, so to speak, but identifying the business logic behind and getting people consistent on it is a struggle.”
Zerrick Pearson, vice president of IT, Five Guys agrees that deciding what metrics matter most is important and that different departments use different metrics. “You have to decide what KPIs work for you, bearing in mind that metrics and business logic can change over time,” he says. “What might have been a KPI five years ago isn’t as relevant today.”
To address this, Five Guys seeks out the feedback of operations to make sure the metrics being measured are right for the brand. Five Guys creates task forces to leverage insight from franchisees to identify what is missing from KPI reports. Pearson asserts this also helps prevent operators from feeling the need to create their own reports that wind up existing in a silo. “If you don’t give people the right tools, they’ll create their own,” he warns.
Steve Barrow, vice president of IT, Noon Mediterranean says collaborating with an operations group ensures appropriate tools are being provided. “You need to avoid beating them over the head with data that they don’t use, otherwise they’ll build their own spreadsheets to capture what is meaningful to them, and you’re just wasting everyone’s time,” he says.
When asked to identify what KPIs are perhaps under-reported but valuable to operators, several emerged. Barrow notes the importance of reporting on third-party services. “Our marketing department is qualifying and quantifying scores from third parties like social media, Yelp and third -party delivery,” he says. “It takes a lot of work to extract that data and it can be difficult to quantify sometimes, but if a customer isn’t satisfied with service and they ordered through Grubhub, we need to know that.”
Pearson expressed surprise that more systems don’t offer metrics around employee satisfaction. With a tightening labor market, having an easy way at the time clock for employees to offer quick feedback could help spot problems, avoid issues and offer insight for where training or intervention is needed. James Park, CEO, acknowledges that Garbanzo Mediterranean does consider employee satisfaction a KPI and measures for that in addition to rewards program registrations.
“This is low-hanging fruit that enables us to and ensures we can continue to communicate effectively with customers and to understand what programs work,” Park says.