Lessons from a “Like Lean” Millionaire
One of my blog themes is the idea of “Like Lean” – practices that seem very much like the Lean philosophy and management system, but it's not directly inspired by Toyota or Dr. Deming. It just seems like good thinking and the ideas work.
In the lean movement, we often say it's all about culture, whether it's a factory or a hospital. Same seems to hold true in a pizza restaurant, Nick's Pizza & Pub outside of Chicago. I discovered them in an outstanding article in Inc. Magazine, (“Lessons From a Blue-Collar Millionaire“). Yes, you can become a millionaire through pizza and you can create a lot of fulfilling jobs in a great environment when you do things the “Like Lean” way.
Like many restaurants, Monday and Tuesday are usually their slowest nights, so Nick's offers half-price pizza on Mondays and half-price take out on Tuesday. The place is full and they receive positive P.R. benefit for giving discounts in an area with high unemployment. It's a form of level loading – making use of a fixed resource (the assets of the restaurant) that you'd hope is profitable given required staffing costs (or at least not losing too much money). The promotion was so popular, it overloaded their capacity though, leading to high turnaround time.
“Our promise is to have pizzas ready in 15 minutes with no mistakes,” says [owner Nick] Sarillo. “We had so many orders that the time got up to 25 minutes. Guests were getting upset. It was OK if I was here to orchestrate, but it got pretty bad if I wasn't.”
Setting the bar high on quality and turnaround time is often hard to do without a system and Sarillo learned that, implementing checklists (like I do for my podcasts and leading hospitals use when inserting central lines):
“I built a system to replace me,” Sarillo says. “I put together a checklist of things that had to be done by 4 p.m., so we could handle the volume. It took about four weeks until it could work without me. Now we're nailing it.”
The article details their checklists and laminated “ops cards,” including what lean thinkers would recognize as “visual controls” (red and green sides) that indicate what tasks have been completed.
Because of the culture that's built on respect, turnover is far lower than average for a pizza place and profit is much higher. The culture is intentionally the opposite of a “command and control” approach, as the article points out. The Nick's system is called “trust and track.” The idea of “track” might sound heavy handed, but the employees seem to love working there, so they must be doing something right. Results and measures are important, as long as they don't become heavy-handed targets and quotas (and there's no evidence of that from the article). Says one employee:
“When I come here, I really don't feel like I'm coming to work,” says server Aubrey Judson, 25. “My boyfriend doesn't understand it. I just like to be here.”
The article delves deeper into the alternatives to command-and-control:
“Managers trained in command and control think it's their responsibility to tell people what to do,” Sarillo says. “They like having that power. It gives them their sense of self-worth. But when you manage that way, people see it, and they start waiting for you to tell them what to do. You wind up with too much on your plate, and things fall through the cracks. It's not efficient or effective. We want all the team members to feel responsible for the company's success.”
There are many points in the article where Sarillo presents a trust-building alternative to command-and-control. One way of getting people to follow checklists and standardized methods is an important lesson I learned from Toyota and NUMMI – you have to explain “why” to people. That's an element of “respect for people” in the workplace.” Too many managers don't realize explaining why is important or they just flat out don't take the time to do so. From the article:
Explaining the “why” is particularly important, Sarillo says, for young employees. “Today's teens are as strong and as good as any previous generation of workers, but you need to share the ‘why' with them. The days of ‘do what I tell you' are gone. You simply won't be successful.”
The article highlights their careful hiring process (hiring the right attitudes and mindsets), how they train people (everyone, regardless of job learns to make pizzas and they have a pay-for-skills program where you make more as you learn more). They are building trust, as Sarillo says- from the article:
What Sarillo has done, on one level, is simply to treat high school students — and everyone else — like intelligent, responsible, and, above all, trustworthy human beings. “All of our systems are geared toward creating a culture of trust,” says Sarillo. “A lot of people would say trust is intangible. We've made it tangible by putting these systems in. They allow you to see whether the trust is there and whether the way people behave is promoting or undermining trust.”
So at this point, Sarillo is already my hero as a lean leader – but then he cites another of what we'd recognize as Dr. Deming's teachings. “Like Lean” and “Like Deming,” both! They don't do annual performance reviews – they do continuous coaching, giving feedback as it's needed, at the end of the shift or in the moment.
I'm really impressed with their approach at Nick's Pizza & Pub. When I was at VIBCO last week, company president Karl Wadensten talked about their “self actualized employees.” People should be able to have pride in their work, as Dr. Deming would say. Sounds like the same is true in these pizza joints. The Inc. article ends:
“People really do want to have a meaningful place to work, and that is one thing I know how to do well. So how could I not want to keep doing it for more and more people? I mean, what could be a more fulfilling life?”