Looks like we disrupted our market a bit
29 August 2018
Looks like we kind of disrupted our market a bit.
A few months ago, we were totally f***ed up in Southaven. I wish I could say that we experienced an interesting management “problem” or faced a “challenge.” But in reality, we were simply screwed. Totally.
Southaven is a suburb of Memphis, Tennessee (and the location of our second American pizza shop). It’s one of the poorest American cities. Compared to Southaven, Oxford in Mississippi (where we opened our first American pizzeria) looks like heaven.
So I didn’t expect to find myself in such a bad situation: I couldn’t find enough members of the team to keep our pizza shop up and running. Even when by some miracle I managed to find somebody, they would leave after a few days. Just because they were offered 25 cents more an hour some other place.
Nobody cared about our mission, awesome product, or superb service. It was simply a question of money they could make an hour. And it’s worth mentioning that on average, we were paying as much as anybody else.
I would come to work knowing for sure that the general manager would come. Whether anybody else would show up was the big question.
We couldn’t provide service of the desired quality. I was working 80-90 hours a week. The GM was on the verge of a breakdown. I had to do something about it. So I made a radical decision. And when my friend, a Domino’s franchisee, learned about it, she predicted that I would go out of business (though not for the first time).
August is going to be the most profitable month since Dodo Pizza launched in the States. So my friend’s prediction wasn’t very accurate. However, we still have a chance of going out of business any day (hope my mom doesn’t read that).
I switched from hourly payments to salaries for the kitchen crew. Why? The biggest disadvantage of an hourly rate is that it’s very unstable for people. When you show up for work, you are okay. If you are sick, if you need to rest for a week, if your hamster died, or whatever… you have nothing. With hourly rates, it’s hard to make a living even with good tips. But face any emergency and you are screwed.
I wanted to attract people who could commit to our business and provide really cool service. So I found a solution in offering them salary + cover for sick days and two vacation weeks a year + a vacation bonus.
Almost everybody around me was saying that people would keep calling in sick, would be using me, lying and making excuses why they can’t work. The reality? We’ve brought together such an amazing team that now I have a feeling that we can move mountains together. No kidding. And labor cost decreased!
The logic here is that Americans are fine with 50-hour work weeks in restaurants. And one highly motivated person is capable of doing the workload of three inexperienced people who are constantly whining about their wage.
We now have excellent kitchen efficiency. We are among the fastest pizza units in terms of delivery time in the whole Dodo Pizza chain. And we offer our customers pretty friendly service—because the members of our team feel more relaxed. I pay them a bit more than our competitors and do it regularly, and it makes a huge difference for them.
Yes, I risk losing some money during the months when many people will fall sick, but for the rest of the year we’ll make much more—with a team of people who believe in what they are doing, and who believe that I’m doing for them everything I can. Put trust in people! (But fire assholes very quickly!) And you’ll find peace and happiness.