THE COST OF EMPLOYING A  POOR MANAGER

Example: A Manager of a Million Dollar Store

1)      loss in top line sales – 10% - 100,000 in sales or $30,000 in profit       (assumes a 30% flow thru on top line sales)

2)      $15,000 in lost Food Cost (assumes an average of a 1.5% miss of Ideal Food Cost)

3)      $10, 000 in lost Labor Cost (assumes a average of a 1% miss of Ideal Labor)

4)      $5,000 in general lost of other items –(i.e. – cash, controllable items like maintenance and small ware cost)

TOTAL LOSS OF PROFIT $ DUE TO A POOR MANAGER - $60,000

As food operators having the right people in place is one area where if we are wrong or we don’t make the right move to upgrade or replace a poor performer we lose more than any other area of our business.  Having the right management team in place is critical to the long term success of a business.  This holds true if you are managing a baseball team, IBM, Microsoft, or a single unit McDonalds.

There isn’t a successful company in America that got that way by not beating their competitors in the people equation.  Conversely, there are stories after stories of companies that didn’t make the right moves or didn’t hire the right people and are no longer in business or struggle mightily building their sales and profits.

The best companies in America understand that to build a successful company they must have more than “warm bodies” to fill positions.  They must have winners that are the best in their field.  People make the difference in today’s competitive market!  If you want average results hire average people.  If you want great results hire great people.

Okay, so you are committed to hiring and promoting the best.  Where do you get them?  If you are building a successful team you better look at a variety of different methods.  Promoting from within is certainly a good strategy but if it is your only one then you will be missing out on a huge inventory of talent that the market place can produce that will add value to your team.  If you are hiring from ads, the internet, job fairs and the like you are only selecting from people that are seeking you out and many of them will be someone else’s rejects or leftovers – in other words – ‘warm bodies’.  Can you imagine if you were a football coach and didn’t employ recruiting in developing your team?  You would never be the best and never get the best.

Companies that are serious about being the best hire experts that can help them find the best.  Is there a cost?  You bet!  There is also a cost of recruiting customers but we don’t blink an eye at paying 5 to 7% of sales to recruit new customers.  The higher cost comes when companies don’t hire the best and lose business because they have an average manager producing average results.  The higher cost comes when valuable customers choose your competitors over you because they had a mediocre or bad experience at your unit due to average management.  It has happened to you and it happens every minute of every day in America.

There is an old adage that says, “if you keep on doing the same things over and over you will keep getting the same results”.  Begin to break-out and begin to have a break-out year by committing to invest in strategies, tactics, and approaches to hire the very best that your market place will offer.