December 2005

Want employees to be your best business developers? Forget lunch
I love this story, so I'm going to share it with you.

Have you ever been to an Outback Steakhouse? I think I was there once quite a few years ago (surprisingly, it's been around for closing on two decades now), and I don't remember wanting to run right back or anything.

But today the chain is one of the most popular in America--a fact that's hard to argue when you look at their outstanding growth rate. Twenty point one percent (20.1%) growth in sales last year and 15.9% in number of employees--those are extraordinary figures even for a hot young company, let alone an old-timer of 17 years.

How in the heck do they do it? Is it the best steak you've ever eaten? Some would say so. Is it the best value for dollar in the market? Depends on your taste in food. The folks at Harvard Business Review were just as curious as you and I might be, so in a recent issue they featured a long inteview with the founder, former CEO and current chairman of the Tampa, Florida-based corporation.

We write a lot in this newsletter about leadership, good management practices, and good internal customer (employee) relations. The Outback story is a classic example of good management that hearkens back to the early days of America. Back when everybody could become a star. All you had to do was work hard, pay your dues, and with a little cash, a little luck and a lot of sweat, you could own a successful business and maybe get rich enough to call your own shots--and even relax on vacation once in a while while still collecting revenue.

Well, that's the way it still is with Outback. Managers are made, not hired in. People start in the kitchen, or the reservations desk, or wherever, and they cycle through nearly every job in the place--until they've earned the right to talk about being the boss. Outback deliberately plans to give every single employee an opportunity to grow. And it all started with the original four owners sitting down--once they'd reached store number 20--to define their core values.

True, they all agreed people came first, but they also realized that "people" meant several different constitutencies: suppliers, partners (the men and women who ran the restaurants and the regional operations), customers, employees, and the community. And while that's true for almost all businesses, here's where Outback stepped a little off the beaten path: they decided that no one group was more important than any other--not even the customers. "We figured," they said, "if all the other groups were served to their satisfaction, inevitably the customers would be, too."

Satisfied employees ranking right up there with happy customers? Well, good internal customer service isn't revolutionary, but it takes planning and dedication to make it work. The next step at Outback was to develop a constitution--stuff like "kindness before results" and "quality before cost"--and then left it to the individual managers to decide how far to implement its principles.

Turned out, when they measured ROI, the stores that followed the constitution most closely outscored the others by dramatic amounts in every category, including revenues realized. So the "nice-to-believe" became the "smart-to-live-by" principles of Outback.

Oh, yeah. And they don't serve lunch because it wears the staff out to serve two shifts--and who wants a worn-out waitperson at your table for dinner?

A neat little story of how the good guys in business really do win. I hope you enjoyed it as much as I did.

Sincerely,
Barbara

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