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As a restaurant owner, you are the top of your pyramid. You are a leader for the organization, for the teams that you lead. You've got to be the one with all the answers. You have to know what people are supposed to do, how they're supposed to do it, and you're responsible for telling them why it matters, that they do it that way. Right? We're talking about how to be a great leader. And the thing is, no one is born a great leader. Leadership is nurtured and it's cultivated. And today I want to share with you eight keys to being a great leader. Eight ideas, principle frameworks, things that were taught to me by great mentors, things that helped me be a better leader to the teams that I led, things that I know will help you be a better leader. All of that on today's episode of Restaurant Strategy. There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking. Hey, everyone, thanks for tuning in. My name is Chip Close, and this is Restaurant Strategy Podcast, dedicated to helping you build a more profitable restaurant. Each week we've got two new episodes. On Mondays, we focus on operations. Thursdays we focus on marketing. We sprinkle in interviews as we go along, but the whole point of these episodes is that they're short, sweet, to the point, actionable, tactical, things that you can take away and put into practice right away. I leveraged my 25 years in the industry to help you build this more profitable and sustainable business. I wrote a book. It's called the Restaurant Marketing Mindset. I travel the world giving talks and keynotes. I run a mastermind program. It's called the P3 mastermind. That is for independent restaurant owners ready to grow, right? Doing at least $1 million a year in revenue, open for at least a year, but struggling with profitability, struggling to drop a consistent, predictable 20% to the bottom line. Right now we've got over 150 people currently enrolled in the program. If you are interested in learning more about that program, if this sounds like something that you're dealing with, then the best way to get started is to set up a call with me or someone from my team. You go to Restaurant Strategy Podcast, grab some time on the calendar. We'll get to know more about you. You'll get to ask all of your questions so that you better understand the program. And we'll Talk about where we go from there. Again, RestaurantStrategyPodcast.com schedule you grab some time on the calendar. That's the best way to get started. That call is absolutely free. And yes, you'll find that link in the Show Notes. All right, so we all know managing costs is one of the most important parts of running a profitable restaurant, especially now. But between fluctuating vendor prices, waste labor, and the never ending list of tasks that demand your attention on a daily basis, it can be challenging for even the most experienced of us to manage those costs. Well, that's where Margin Edge comes in. Margin Edge is a complete restaurant management software that automatically uses data from your POS and invoices to show you your food and labor costs in real time. Don't wait until it's too late. Margin Edge gives you tools to make decisions in the moment, like a daily P and L price, alerts on key ingredients, and real time play costs, all without ever having to touch a spreadsheet. Take control of your costs, work more efficiently and be more profitable. Learn more@marginedge.com chip and yes, that link is also in the Show Notes. Okay, so now we're talking about the eight keys to being a great leader. I'm going to roll through these pretty quickly, so if you don't have a pen and paper, now might be the time to do it. Or just commit yourself to going back through this and doing it again. This is going to be an epis that I want you to share with your partners. This is what I want you to share with your managers. You guys should all be talking about this stuff together. Eight keys to being a great leader. First and foremost, we have to talk about the importance of systems and goals, right? Everything is about identifying problems and then setting a goal to solve that problem, right? So where you are now, your baseline is point A. Where you're going, your goal is point B. You have to get really clear on where you are and where you're going and then put a plan into place to get you from point A to point B. Right? Point B is your goal. Then your system is the plan to get you from point A to point B. I've said this over and over and over again. System is just a garbage corporate word that's gotten bastardized. But all a system means. System is just a repeatable set of actions. Meaning I do this and this and this to get from point A to point B. Right. I do about a thousand covers of new diners every single month and I want to increase that to 1500. Well, what am I currently doing to get a thousand? And what more could I be doing to increase that by 50%? Right? Those are clear goals, which is the key to proper goal setting. So the key to systems and goals is proper goal setting. The best way I like to think about this is a framework called the Smart Goal Framework. SMART is an acronym. S, M A R T. It stands for specific, specific, measurable, assignable, relevant, and time bound. If you make a goal specific, it is therefore measurable. And that's important so that we can say, yes, we accomplished our goal or no, we didn't, or this is how close we came to it, or this is how far we surpassed our goal. Specificity helps you to measure things. A stands for assignable, right? Assignable has a lot to do with accountability. If everyone's responsible, then no one's responsible. So you put someone in charge of a tax task, you give them the authority to make decisions, and you hold them responsible, you hold them accountable, right? Every goal we set has to be specific so that we can measure it. It has to be assignable so someone's responsible for it. So the buck has to stop somewhere. R stands for relevant, right? It has to be relevant to the success of the business. The point of the business is to generate more revenue than we spend in expenses, right? So make sure we're tracking revenue or covers or increase in revenue, not tracking, you know, followers or likes on social media. Finally, the last one is T. Time bound. Everything has a deadline, right? So we want to get from here to there. By this time, we're going to measure it so we'll know whether we achieved our goal in the time that was allotted. The great part about deadlines is when you say, hey, we want to hit this goal before this deadline. When you hit it, you just set a new goal and a new deadline. It keeps going over and over and over again. But this will give focus to every single thing you're trying to accomplish, both you and your managers, everyone who's trying to run your restaurant as efficiently and as effectively as possible. So for the first key is embracing this idea of systems and goals. Goal setting is about identifying problems and setting a target for where you want to get to. A system is just a repeatable set of actions. We're going to do the following things to accomplish the stated goal. I cannot, I cannot overstate how important it is to work with systems and goals. Number two goes right, dovetails nicely there, right? This old aphorism, this old quote, what gets measured gets managed, right? I Always say, right? This is something we heard in business school. The quality of your decisions is based on the quality of the information you have. Meaning, better data leads to better decisions. So the more correct and the more data that you have to look at to make your decision, the better your decisions are going to be. So if you want to manage something, you have to measure that thing, otherwise it ends up being fuzzy and vague. But if you want to go from here to there, let's understand what here is and let's understand where there is. I cannot. I cannot tell you how important it is to set goals, be specific, and measure it. Because in business, almost everything, almost everything can actually be boiled down to numbers, can be quantified. That's really crucial. Number three, right? The third key to being a great leader is an idea that Jim Collins wrote about in his book Good to Great. In fact, we're going to talk about a couple of his ideas that he talked about in Good to Great over the next couple of points. The first one is this idea of a level five leader, right? And he talks a lot about a level. What a level five leader is. And I'm not going to go all into that, but there's one idea that really resonated with me that I. That I try to pass along to all of my clients, all the members of the P3 mastermind. This idea of a great leader always looks in the mirror before they look out the window. Meaning if something's going wrong, the first thing we do is we look to see how that is our fault. The buck has to stop somewhere. And if you are the person, you are the top of the pyramid, the leader, the owner, the restaurant tour, then the buck has to stop with you. Now, maybe certain projects, certain areas have other people who are responsible for certain things, but you are ultimately responsible for putting that person into place. Meaning if you put a beverage manager into place and the beverage cost is way out of whack, yes, that is their responsibility. But ultimately, the buck doesn't stop there. It stops with you. So that you didn't hire the right person or give them the right frameworks or the tools to work with, or you did not provide the right oversight and support for someone who is obviously, perhaps struggling to accomplish his goals. So rather than blame the beverage director, we can have a stern, firm, direct conversation with the beverage director. But ultimately, the buck has to stop somewhere, and you have to look at it and say, okay, how is this my fault? The beauty part of it is when you embrace this, when you, when you accept responsibility for the problem, you also get to take ownership of the solution. And so when you say, how is this my fault? It becomes, okay, it's my fault in the following ways. Well, I can just fix those things, Lithium listed and take ownership of this. Right? And that, I find, is very empowering, understanding that we've got more agency than we think. So the third key to being a great leader is this idea that we always look in the mirror before we look out the window, before we look to blame somebody, before we figure out if it's somebody else's fault, we understand our culpability in the problem. Number four. The fourth key to being a great leader is another idea that Jim Collins wrote about in his book Good to Great. And if there's any one business book you're ever going to read, it's that one. It's Good to Great. It is that great. Truly. In that book, in addition to a lot of other things, he talks about something called the hedgehog concept. The hedgehog concept is you got a picture of Venn diagram, right? So three circles that overlap at certain points, right? And where we want to be is right in the middle of those three circles. If you know a Venn diagram, that's where it is. And you can Google the hedgehog concept and you can look this up. Basically, the three circles are, what do you care deeply about? Meaning, what do you love to do? Right? What are you better at than anyone else in the world? Or what can you do better than anyone else in the world? And then the third thing is, what will people pay you for? Right? What do you love to do? What are you great at? And what will people pay you to do? And where you create your business, where your business exists is right in the middle where those three circles overlap, because that is incredibly unique. The things that you're excited, exceptional at are different than the things that your neighbor is or your colleague is or your spouse is that should be embraced. The things you love are different than all of those people. That's how you know that you're in the right business, that it's right at the center of that Venn diagram. So the fourth key to being a great leader is that Jim Collins idea of the hedgehog concept. So if you're floundering, if you're struggling to find enough guests to do enough business, you have to look at that and say, well, am I doing what I should be doing? Am I fulfill my life's purpose? Am I doing something that only I can do, right? Or is the thing I'M doing being executed better by someone else in that situation, why would someone come to you if they can get a better version somewhere else? And that becomes really crucial. So this idea, those are the first four keys to this. We're going to hit the next four after a word from. Not a sponsor, but just something that I've recently discovered that I want to bring to you guys. So when I run my mastermind, my members are always asking me about funding, right? This is funding to consolidate debt, funding for cash flow, funding for growth. And of course, we know we can go to the bank, we can secure an SBA loan, we can go back to our investors, we can find new investors, all of that. But Honeycomb Credit is a site out there. It's a platform that allows you to crowdfund. So raise money from a bunch of different people, often people who know your brand, who are in your community. It is not asking for donations. It's raising money and paying back the loan, therefore, paying your community back. So I've got a bunch of clients who have gone through this. I was asked if this was legit and if I could do my due diligence, and I did. And I've now got, I don't know, six or seven different members who have gone through it and have had a very positive experience and have raised 70, 80, $90,000 in the matter of a couple of weeks. By leveraging the platform and by tapping into their network, it became a much easier way to raise money and a way to bring your community together. Every single person said, why would I take a loan out and just pay the bank back when I could take a loan out from my community and pay them back? They're helping me grow. So in some small way, I'm going to help them grow. Whether they donate 100 bucks, a thousand bucks, 10,000 bucks, they get to be part of it. The residual benefit of this site, right, the residual benefit is that everyone I've talked to says, now the people who have donated to them, right? Not donated, invested with them, are coming back to the restaurant more. They're coming back more frequently. They're bringing friends because they're showing it off. This is that restaurant I love. This is the restaurant I invested in because they want to build a new patio or they're going to redo their private dining room or they're going to redo whatever it is, right? They show it off, which is a really cool thing. I didn't envision that, and a bunch of my clients didn't envision that later but every single one has gone back and said it. So if you are looking for unique, maybe non traditional funding options, Honeycomb Credit is a crowdfunding platform. It's very reputable. I've got a lot of clients who have gone through it. I'm putting a unique link in the show notes. If you go through me, you get a discount on your startup fee to do that. So it's HoneycombCredit.com chip K L O S E. Right? HoneycombCredit.com chip Close my name. If you go there and you use that link, you'll get. They'll know that you are listening to the podcast and you get a discount on your startup fee. You'll also find that link in the show notes. Okay, so we're talking about leadership and we're talking about how leaders aren't born, they are nurtured. And I'm sharing with you the eight key keys to being a great leader. These are ideas that were passed on to me that I got either through observation, through mentors of mine. They're things that were taught to me that helped me be a better leader. They are things that I've read and passed along to my people, to the members of my group that have helped them be a better leader. These are the keys to being an exceptional leader. And these are if you want to fine tune your own abilities, your own role as a leader in your organization, this is where I would start. So again, the first four. Number one, it's the importance of systems and goals and building smart goals, specific, measurable, assignable, relevant and time bound. Everything you do is focused on that. We reverse engineer everything. Number two, remember what gets measured gets managed. Right? The quality of your decisions is based on the quality of the information that you used to make those decisions. Number three and four are both ideas that Jim Collins talked about in his book Good to Great. Number three is this idea of a level five leader looks in the mirror always before they look out the window. You always say, how is this problem my fault? How can I take responsibility for it? Meaning then how can I be responsible for the solution? And number four was the hedgehog concept, right? This Venn diagram, three circles, overlapping circles, and where you want to be is right in the middle. The three circles are what are you deeply passionate about? Meaning, what do you love? Number two is what are you better at than anyone else in the world? Or what can you do better than anyone else in the world? And the third one is what will people pay you for? And where those three circles overlap, that's where you want to be. That's where you find the business that you were meant to run. Number five, this idea of sunk costs. So sunk costs are. Is money already spent, an investment already made, and something that we. That got drilled into me during business school, right. Is this idea that great leaders do not make future decisions based on sunk costs. Put another way, we don't throw good money after bad. So we invested in something, in a menu change, in a redesign or whatever. We run it for six months or a year. It's not working. A great leader is unafraid to make another shift, to make another pivot, to say, I was wrong. Let's go back to the way things were. So in everything, right? In everything. And this is a hard lesson to learn, and it's a hard pill to swallow. It is not easy to do. But the best leaders I know out there, the best restaurateurs, are really good about just cutting it off. Okay? That was money, that was capital that was lost. You know, an investment that went bad, but I don't need to lose any more after it. So internalize that, right? We do not throw good money after bad. We do not make future decisions based on sunk costs. Number six is something you hear all the time. Most recently, I heard Myron golden talking about it in a lecture. And he says, hey, the good Lord gave us two ears and one mouth. And that is a really important thing to remember. We should be listening twice as much as we should be talking. And I know as a leader, we do a lot of talking. We put ourselves out there. We have to explain what we should be doing, how it should be done, why it matters that it gets done. That way, people look to us to guide them. I get it. I know I've run restaurants, I've run my own small business now for eight years. I get it. People look to me just like people look to you. But still, two ears in one mouth do more listening than you do talking. The way you do this, and here's a little coaching tactic is that always ask the next natural question before you put in your two cents and listen, I love to put in my two cents. If I feel strongly about something, I just want to be able to tell people what to do. It's partially why people come to me say, hey, listen, here's my problem. What should I do? But what I try very carefully to do, unless I really know their situation well, is they say, here's my situation. What should I do? I said, tell me a little bit more. Let me dive deeper Let me ask another question. If you can just ask one question, just one question before you answer, you will have more information to go on. Now you start seeing how all of these are intertwined, all of these eight keys. But if you can do more listening, and the way you do more listening is by, when it's your turn to talk, asking a question which will naturally get the other person to talk more, giving you more information so you can make a more informed decision, so you can give better advice, better insights, that becomes crucial. I promise you, if you just get in the habit of asking just one question, inevitably, when they give you the answer to that question, there's a great deal of time where you're going to say, oh, no, actually, now I have to ask another question. It's okay to ask more questions before you make a decision. In fact, that's the best way to do it. All right, number seven. I talk about this book a lot. This idea has really stuck with me and changed me over the last, let's say, three years. Gary Keller wrote a book, so. Gary Keller is the founder of Keller Williams. It's the largest real estate agency. More agents than any other agency in the world, period. Hard stop. Gary Keller wrote a book called the One Thing, and he basically talks about this idea of priorities, right? That in ancient times, priority was singular, right? We had one priority, not priorities plural. So now we're like, well, what are my priorities? Well, I want to drive revenue. I want to lower staff churn. I want to really watch my food costs. I want to see if I can lower labor cost, I want to do more marketing, et cetera, et cetera. It's all the things that, of course, are important to a business, but that's not the one thing. If you can boil your business down to the one thing. Gary Keller shares this mantra. I lovingly share it here with you. What is the one thing you could do such that by doing it would render all else irrelevant or unnecessary? Again, what's the one thing you could do such that by doing it would render all else unnecessary or irrelevant? What's that one thing? For me, that's profit. If we can generate consistent, predictable profit in our restaurants, everything else takes care of itself. Right now, there's a lot of things that go into profit, but the one thing we're focused on is that now, of course, we have to continue to grow revenue. We have to watch cogs, we have to watch labor. We have to limit staff churn. We have to make sure we're sticking up with. With increases with Prices and all of that, I get it. But the one thing, if we had to boil it down to one thing, it's managing the profitability of the restaurant. Now that's what I think you should focus on. And everything else feeds into that. Meaning why do we serve good food? Well, because if people enjoy the food, they will come back and they will tell other people about it, right? Why are we warm and gracious to people? Because if this becomes the kind of place that they want to be, they will want to be here again and again. But those things, repeat visits, help us increase lifetime value of the customer, which helps us ultimately grow top line revenue and increase profitability. So again, for me, good food, good service, limiting staff churn, all of that just drips down to the one thing, which is profitability. Now, it can be anything to you, and maybe in your business it's one thing and in your personal life it's something else. I will tell you, it's something very different. For me in my personal life life, it is not profit. Profit is the key to my business because profit allows me to do so much. If I can generate more profit, I can bring more team members on to free up more of my time so I can spend more time doing the things that I love outside of my work, or I can then leverage my time better and do other things to help grow me my small business. But my personal word, my personal one thing is different than my business one thing. So I would urge you to get clear on both of those finally. Then the last thing, right? The eighth key to being a great leader is, and I swear, I swear this will change your business. Set big goals, right? So in that book, good to great, Jim Collins said, big, hairy, audacious goals, right? Set big goals. And there's this old, there's this old quote, right? If you shoot for the moon and fall short, you'll still land among the stars. I work with all of my clients, all the members of my P3 mastermind, to aim for 20% profit, right? Minimum 20% profit. Because even if we fall short and we hit 17 or 18, you're still at 17 or 18. Rather than thinking 10 was where you had to, you know, was where you could land. That was all we could hope for. When I show you a way to do 20 and you land, fall short and hit 17 or 18, life is way better than it was at 8, 9, 10. I would urge you in everything you do to set really big, aggressive, ambitious goals. Now you might have to step it up and take, you know, Take steps to get there. But, but if you keep coming up with moderate, average goals, mediocre goals, you are never going to accomplish the big, big, big things. And this is coming from someone, right? I do, I do value having a small business. I value having a very manageable business. I still set aggressive, audacious goals even while maintaining a business the way that I want it. So there is a way to have your business be what you want it. But I promise you, I'm. I promise you that setting bigger goals than you're used to will actually help you get to exactly where you want to go. And that's it. The eight keys to being a great leader. Again, the importance of systems and goals and using a smart goal framework. Number two, what gets measured gets managed. Make sure you're getting good information so you can make better decisions. A great leader looks in the mirror before they look out the window. A great leader identifies the thing that they love, the thing that they are best in the world at, and the thing that people will pay them for. That's that little circle, that little area right in the middle of the three circles. That's the idea. The hedgehog concept. Remember, the key to sunk cost is we don't throw good money after bad. We do not make future decisions based on sunk costs. The good Lord gave us two ears in one mouth. We should do twice as much listening as we do talking. The best way to do that, right, to keep that active, to activate that, is to just ask questions. Remember the one thing what Gary Keller wrote about? What's the one thing you could do such that by doing it would render all else irrelevant or unnecessary? You need to get really clear on what that one thing is. And the last piece was set goals, big goals, audacious goals. Do not play small, play big. It will make all the difference. That's it, guys. Listen, I appreciate you making time out of your day every single week to be here. Thank you very, very much. Any questions for me, you email me chip chip close.com c h I p k l o s e dot com I answer each and every email I ever get. Might not happen right away, but over the next couple of days after receiving it, I will, I promise. Try me. Send me an email. Just tell me what's going on. If you have any questions about this or anything else, you can reach out to me. Otherwise, if you're curious in learning more about the P3 mastermind, you know the link is in the show. Notes to go, set up a time to chat. Thank you very much. Guys. I will see you next time.