Lessons from a “Like Lean” Millionaire
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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?”
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This story reminds me a little of Pike Place Fish in Seattle. They took a job that is perceived as undesirable and made it rewarding and fun. Isn’t that what we’re all after, whether we use Lean methods or something else? Good stuff.
Well I got 2 things immediately coming to mind:
(1) Toyota: Almost at the end, he says in the original article “Don’t grow when you’re not ready…”
They should have asked him ;-)
(2) When the employees say “it’s fun to go to work”…I think that’s a flow experience, then, right (-> Csikszentmihalyi)
Nick Sarillo is putting into practice a greater principle than Lean or Dr. Deming taught he is in fact reaching back a lot farther. He is doing unto others as he would have done unto himself. If you want people you can trust (point 1) to do their jobs you have to give them the tools (2) to do their job and then let them actually do it (3). By creating an atmosphere that employees know that as long as they do their part and try the owner will not come down on them, instead if they make a mistake he helps them out right away (4), but if they do well they will be rewarded instantly(5 and 6).
1. Before employees trust you, you have to trust them until they prove themselves untrustworthy. You hold people accountable for their actions instead of trying to control their actions.
2. To help them do their jobs he has given them tools to use. Proper training, checklists, work instructions, and supportive feedback.
3. You have to get out of their way and let them do the job, which means they will make mistakes especially at the start.
4. When they do you step into support them and help them through it, they get stronger and smarter constantly, and so after awhile they no longer need you, instead they can help the new staff, which means you can grow your business.
5. Reward people for what they can do instead of the job you give them. It does up your cost some, but it shows that you care about people. In this day and age do you think that everyone does not find out what you are doing? Yes some customers maybe there for the cheaper meal, but some are there also because he has shown he cares about more than just a profit. By the way I know of a lot of places that have never made the same promotions work.
6. Loyal employees, and a loyal owner will overtime breed very loyal customers, and that is a competitive advantage that will build your bank account even in tough times.
Nick Sarillo is being careful to look for people that want a chance, but he shows them respect and trust, which develops them into an even better person. He has designed an organization that puts developing people on a par with making money. His reward is that his business’s potential for growth is unlimited, as he develops the people to expand and improve his operation.
He has learned the two business lessons most owners never get, it is not about money it is about people and you will only get from people what you give them.
We need to remember that our employees are consumers, and they interact with other consumers, and the fastest way to build or teardown a reputation is by how you treat them. The word on any business always did get around quickly, and today it seems to do so at the speed of light.
If you want people to trust and respect you and give their best, you have to respect them, trust them and give them your best.
Nick has built his business on these two lessons.
One of the lines I could really relate to here is the continuous coaching. I worked for several companies which were ‘Lean’ but for unknown reasons failed to understand that respect was the foundation to having all of it work.
It’s rather shocking when on your yearly review the first line out of your boss’ mouth is “your’re a hard worker, but you are at times out of alignment with the teams goals.” These were words uttered by my first boss… and my response was. “It would have been nice had you told me what those goals were.”
.-= George Rathbun ´s last blog ..Lean Idea Management: Balancing the idea assembly line. =-.
Mark this was a great story. Thanks for sharing. Sometimes when you are not looking for best practices they have a way appearing in the least likely places. This is one of the aspects I enjoy about lean thinking. Checklists, coaching, explaining, and engaging – all good stuff. I think the key in this story though is the desire to improve or Leadership with the right attitude. These always go further than almost any other trait in human nature. You get a real sense that they understand respect for people well. Lots of really good lessons to learn here.
Love the “Like Lean” concept and this story! Also great to see how they make trust tangible. Thanks for sharing, Mark!
I’m amused reading the article.
It contrasts “teach and track” to “command and control” by saying “kind of like the Navy Seals and the National Guard”, a good enough analogy. Then it says “both approaches can work.”
Somehow, I’m thinkin’ I’d rather be the guy with the Navy Seals working for me.
I have it lined up, tenatively, to meet Nick Sarillo at one of his locations Monday afternoon. Stay tuned for a future Podcast!
I never fully blogged about meeting Nick and seeing his pizzeria with him. It seems like a very special culture there, a place where employees are respected, trained, given responsibility and systems to make things happen. It’s not “lean” in a formal sense, but very much like lean and the Toyota Production System. I was very impressed.
[…] I met Nick Sarillo and he toured me through one of his restaurants outside of Chicago (here is my earlier post about Nick’s Pizza & Pub). I’ll write more about this in the future, but the beauty of Nick’s success is that […]
[…] so we can change it. It’s not a rule of nature that says you MUST do annual reviews. Nick Sarillo, who I wrote about here and recently visited, doesn’t do […]
An interesting turn of events — a couple of turns — for Nick’s:
[…] seen similar red/green indicators in use when I visited Nick’s Pizza & Pub in Illinois. These visual prompts are like simple checklists to help ensure that daily tasks get […]
Nick Sarillo’s book is finally coming out this year:
A Slice of the Pie: How to Build a Big Little Business
(amazon affiliate link)
I’m doing a podcast interview with Nick tomorrow about his upcoming book…
[…] a Big Little Business. I had a chance to meet Nick and visit one of his restaurants in 2010 after I blogged about an Inc. magazine article about their culture and their approach to […]
En… Good read.
Can be summarised in few words – When people are in the stage of “Happiness and Full expression” at what they do, magic happens and stay longer.