Lower your turnover - love your employees

Nation's Restaurant News, June 3, 1991 by Jack Hayes

If you don't care about your restaurant, then don't worry about how you treat your employees.

But if you want to halt turnover, cut food cost, build sales and increase profits, you have to love your people to death.

That was the message delivered here by Keith Dunn, president of Asheville, N.C.-based McGuffey's Restaurants, Inc., a chain of seven dinner houses that gross more than $3 million each and operate with just 38-percent turnover.

"We're always being told the customer is No. 1. But in our company, the employee comes first," Dunn declared.

Occasionally labeled a rebel and a dreamer, Dunn addressed a jam-packed operator seminar at the 72nd Restaurant, Hotel-Motel Show here, challenging peers to give a little more trust, honesty, praise and recognition to their restaurant employees. The returns, he promised, will be mighty.

"If you want your staff to serve the customer, then you have to be willing to serve the staff," said Dunn, who will speak at NRN's Multi-Unit Foodservice Operators conference in Atlanta this October.

Dunn, a veteran of TGI Friday's, Steak & Ale and Bennigan's, makes his managers look for qualities rather than flaws in the staff. He claims the one thing you can't give too much of is praise.

"I was fired by two of the biggest chains in America [for trying positive things, he claims]. Now I want to change the industry," said Dunn, who won the 1990 Showcase award from the Positive Employee Practices Institute, the first recognition ever for a restaurant.

"No matter what the question," said Dunn, "at McGuffey's the answer will always be yes."

McGuffey's has no dishwashers or busboys. Once, a McGuffey's cook bought a Big Mac for an unhappy child of a patron. Another time a manager turned his car over to a patron who had locked his keys and was late for an appointment. And then there's the story about the free car wash for lunch customers on Mondays.

"The car wash thing was a manager's idea because of a nearby construction site that was spilling a lot of dust," Dunn explained. "After several weeks Monday lunch sales were up 88 percent -- and every other day, 20 percent," he said.

Dunn gives every McGuffey's employee health and dental insurance -- and a business card -- after three months on the job. Employees are then trusted to give away desserts and appetizers to McGuffey's customers.

"Two percent of the people will burn you no matter what," Dunn said. "We manage for the 98 percent that you can trust. We don't lock the liquor, and our food cost is still only 31 percent."

Dunn's philosophy is adapted from popular motivation-training techniques. But Dunn subscribes to a "team" approach rather than merely rewarding individuals. In fact, he calls contests a mistake if they "demotivate" everyone but the winner.

"We set high goals, and if we hit them, everybody wins," he said. "That way we have people helping each other." Not only are negative attitudes gone, but thieves don't last long at McGuffey's either, he claims.

One of the most prized employee possessions is an $18 McGuffey's watch that is presented after three years of service. An "ABCD" shirt -- which stands for "above and beyond the call of duty" -- is given out quarterly to a single super-performer. And for five years of service, staffers get leather McGuffey's jackets.

Two days a year Dunn turns his restaurants over to the employees completely -- for which he suffers a slight rise in food cost but gains tenfold in staff enthusiasm and loyalty, he said.

"You've got to be fearless; you've got to be able to let go," said Dunn, who lets his demonstrative bartenders juggle drink glasses -- and occasionally break them -- because it entertains customers and drives sales.

"We turned a cook loose in the front of the house, and soon he's going to be one of our regional vice presidents," he said. To prove a point, he brought 15 staffers to Chicago and introduced them to thunderous applause here with the statement: "The best managers in this industry are in the audience with you today."

Driving home his empowerment message, Dunn concluded: "Look for those 100 little things that can make you different; that's how we get to sell chicken fingers for $10 a plate."