Build a High Performance Management Team
How to build a high performance management team! That is the million dollar question! Very early in my leadership career I was told something from a very wise mentor that has stuck with me. He told me that every leader must produce a return on the investment a company or business has made in them. As a general rule that investment must be at least three times whatever their salary is. Again, as a minimum they must bring in or save the company at least three times their salary.
Build a High Performance Management Team – Measure where you’re at today
Therefore, let’s start with some basic strategies that will help you determine if your management team is already performing at a high level. Add up the salaries of your management team that you are concerned with and determine if they are already producing or saving at least three times their wages. My guess is that you feel they are not or you wouldn’t be reading this information right now. My guess is that you feel they are falling way short of that. However, it is important in order to measure progress once you begin implementing, if you decide to do so, any changes.
Build a High Performance Management Team – How do I measure their current value?
As an example if you have hired a manager to run your restaurant for one hundred thousand dollars a year their presence should return you at least and combined $300K in increased sales and/or cost savings. If they are replacing a former manager that was successful are they doing as well or are you losing money somewhere. That loss could be coming from the manager not negotiating a good price on fresh produce or meat which is driving up your food cost above 30%. While stay on the subject of increase food costs is there more waste from poorly prepared meals from the Chef’s? Are the products being rotated or is there a loss due to food going bad before it can be used?
To show you what the impact is of being off on just food costs could be let’s take a look at an example. If you restaurant has weekly sales of $25K per week and there is a rise in food cost of just 4% it translates into approximately $1000 per week. That is $52K per year or half that person’s salary. On the flip side of that same equation, let’s say that the manager was able to drop your food costs by changing the menu to take advantage of some ways to use product before it outdates while not .jeopardizing quality
and you cut food costs by that same 4%. Now you just made an extra $1000 that week. I don’t know about you but $1000 is a lot of money to throw away
Build a High Performance Management Team – Measure everything and adjust constantly
High performance management teams are built from setting goals and then sticking to those goals while continually adjusting the ways in which we achieve them. To continue on the same theme of food costs let’s set our goal of reducing food costs by x amount. The high performance management team will not limit themselves by only cutting costs. They may find ways to increase the average ticket sale. They may introduce another item onto the menu that has a food cost of just 10% but adds tremendous value to the overall plate that is being served. In some cases, just changing the description or the way a fresh vegetable is served can be a perceived value. A high performing manager brings that to the table. Like all things you get what you pay for almost every time.