The Difference Between Leadership and Management (ENCORE) - RESTAURANT STRATEGY

Podcast Summary: The Difference Between Leadership and Management (ENCORE)
ReSTAURANT STRATEGY Podcast
Host: Chip Klose
Release Date: December 23, 2024

Introduction

In this encore episode of the Restaurant Strategy podcast, host Chip Klose delves deep into the nuanced differences between leadership and management within the restaurant industry. Building on his extensive 25-year experience, Chip offers valuable insights tailored specifically for independent restaurant owners and operators aiming to enhance their establishments' profitability and sustainability.

Understanding Leadership vs. Management

Key Distinction:
Chip begins by establishing a foundational understanding: while leadership and management often overlap, they serve distinct functions within a business.

Leadership: Focuses on the what and the why—providing vision, setting direction, and inspiring the team.
Management: Concentrates on the how—executing plans, implementing systems, and managing day-to-day operations.

Notable Quote:
"Leaders are responsible for the what and the why, managers are responsible for the how."
— Chip Klose [05:30]

The Role of a Leader in the Restaurant Industry

Chip emphasizes that effective leadership is paramount for setting a restaurant's trajectory. Leaders are tasked with:

Providing Vision: Establishing where the restaurant is headed and why that direction matters.
Guidance and Oversight: Ensuring that every team member understands their role in achieving the restaurant's goals.

He references Simon Sinek's concept from "Start with Why," expanding it to include a second "why":

Why Are We Doing What We're Doing?
Why Should Anyone Else Care?

Example:
A restaurant in Columbia, South Carolina, set its mission to be the best in the area. The vision was not only to achieve excellence but also to position Columbia as a dining destination, thereby attracting other restaurateurs and elevating the local culinary scene.

Notable Quote:
"A great leader provides vision, guidance, and oversight to ensure everyone understands what they're supposed to be doing and why it matters."
— Chip Klose [12:45]

Cultivating Leadership

To cultivate leadership, Chip advises restaurant owners to shift from a "workman" mentality (focusing solely on daily tasks) to a "leader" mentality (focusing on strategic growth and empowerment). Key strategies include:

Education and Empowerment: Educate team members about the restaurant's mission and empower managers to execute strategies effectively.
Systematization: Develop repeatable systems that allow the restaurant to operate efficiently, even in the owner's absence.

Notable Quote:
"I want to help owners create restaurants that don't need them to be present constantly, allowing leaders to decide where their time is best spent."
— Chip Klose [18:20]

The Role of a Manager in the Restaurant Industry

Managers play a critical role in translating the leader's vision into actionable tasks. Their responsibilities include:

Implementing Systems: Creating and maintaining systems that ensure the restaurant operates smoothly.
Execution and Motivation: Ensuring that the team executes tasks effectively and remains motivated.
Managing for Profitability: Focusing on the financial health of the restaurant by monitoring revenue, controlling costs, and ensuring profitability.

Chip highlights a common misconception: management isn't just about routine tasks like opening the restaurant or handling customer complaints. It's fundamentally about steering the restaurant towards financial success.

Notable Quote:
"Managing for profit means ensuring the business is stable and scalable, not just handling daily operations."
— Chip Klose [25:50]

Cultivating Effective Management

To develop strong managers, Chip suggests:

Goal Setting and Measurement: Establish clear financial and operational goals, and implement metrics to track progress.
Systemization: Develop repeatable processes that ensure consistency and scalability.
Empowerment through Education: Train managers to understand the broader vision and how their roles contribute to achieving it.

Notable Quote:
"A manager's job is to put a system in place, figure out how we're going to achieve our goals, and measure our success."
— Chip Klose [30:10]

Integrating Leadership and Management for Success

Chip concludes by underscoring the symbiotic relationship between leadership and management. Successful restaurants require both strong visionary leaders and efficient managers who can translate that vision into reality. Balancing these roles ensures that a restaurant not only thrives financially but also fosters a motivated and cohesive team.

Key Takeaways:

Leaders set the direction and inspire the team with a clear vision and purpose.
Managers implement systems and processes to achieve the set goals efficiently.
Both roles are essential and interdependent for a restaurant's sustained success.

Notable Quote:
"Strong leadership and strong management come down to education and empowerment. Leaders educate and empower managers to achieve the restaurant's vision."
— Chip Klose [35:40]

Conclusion

This episode serves as a comprehensive guide for restaurant owners and managers to understand and refine their roles. By distinguishing between leadership and management and nurturing both, restaurant professionals can drive their businesses toward consistent, predictable growth and profitability.

For further insights and resources, listeners are encouraged to explore Chip Klose's offerings, including his book Restaurant Marketing Mindset, the P3 Mastermind group, and free resources like the Server Playbook available through the podcast's show notes.

Resources Mentioned:

Restaurant Marketing Mindset by Chip Klose
P3 Mastermind Group
Server Playbook (Free resource available via show notes)
Website: restaurantstrategypodcast.com

Connect with Chip Klose:
Email: chip@chipclose.com

Transcript

Chip Close (0:01)

Leadership and management sound similar. There is overlap, but ultimately they are very, very different things. We've talked about this before on the show. It certainly comes up a lot in the interviews that I do. But today I want to hit it head on. I want to talk about what makes a great leader and the qualities that are required to be a great leader in our industry. And then I want to talk about management. And I want to talk about what it takes to be a great manager. And I want to talk about how we cultivate and motivate great managers. Leadership and management. That's what today's episode is all about. Don't go anywhere. 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 I leverage my 25 years in the industry to help you build a more profitable and sustainable business. I wrote a book, right? It's called the Restaurant Marketing Mindset. I travel all over the world giving talks and keynotes. I run a mastermind, the P3 mastermind. But here's something very, very important. I have released a 10 video playbook. It's called the Server Playbook. Our servers are our greatest asset. This is available to you totally for free. And anyone who gets this playbook also gets a free month of my membership community. It's called Restaurant Foundations. At the end of that month, it starts billing at $97. If you want to cancel it at the end of that month, it's totally fine. If for no other reason, go to get these 10 server playbooks. They are scripts. They are server tactics that will help make you more money and therefore your servers more money. You get that totally for free. It's such a great time to take advantage of this just as you're starting to look at the year ahead. The link is in the show notes. Go grab your copy right of the server playbooks absolutely for free and get a free month of my Restaurant Foundation's membership community. Again. You do that by clicking the link in the show notes. Now, are you tired of juggling schedules, tracking hours, worrying about HR compliance, and dealing with those last minute no shows? Well, it's time to say goodbye to the headaches and say hello to Time Forge. Time Forge is a labor management solution designed for the Fast paced world of restaurants with product offerings ranging from recruitment all the way to retention. All ways that we can better manage our people is exactly what we're talking about today. With Time Forge, you can, number one, simplify employee scheduling with automated AI schedules based on sales, weather and other events. Two, you can track attendance and manage labor costs in real time, keeping up with the complex labor laws like fair work week and meal penalties. Number three, it helps you recruit staff who live near your stores from more than 11 million hourly job seekers. Number four, pay employees their wages and tips on a daily basis after every shift. And number five, communicate proactively with your staff using messaging or surveys. And that's not all. Time Forge integrates seamlessly with most POS systems, giving you full visibility into labor and sales performance and suggesting when you should staff up or staff down. Whether you manage one location or dozens, Time Forge saves you time, money and stress so you can focus on what really matters, delivering exceptional service and growing your business. Thousands of restaurants already trust Time Forge. Why not yours? Visit timeforge.com restaurantstrategy today and see how they can help your team run like clockwork again. T I M E F o r g e.com RestaurantStrategy as always, you're gonna find that link in the show notes. Now today we're gonna have two conversations. That's really part of one big conversation. I wanna talk about leaders and I wanna talk about managers. I wan how we cultivate leadership in ourselves and how we cultivate management skills in the people who work for us and the people that we trust to run our restaurants. Now, most of the listeners of this show are independent restaurant owners, but there are also high level independent operators, meaning the people who own the places and the people who help run the places. And I want to talk about what makes a good leader because maybe you're listening and you're a restaurant manager, maybe you've been doing this for a while. So how do you get over that next hurdle and cultivate the skills needed to be a great leader to maybe own your own place one day? Right. And then also for the leaders listening to this or for the restaurant managers, how do you be met? How do you be a better manager and how do you cultivate that? How do you teach the skills required to be a better manager? Right. That's what we're going to talk about on today's episode. Really though, we have to start by understanding the differences between these two. This was articulated a long, long time ago. And forgive me, I forget who said it but it is stuck with me all these years later. And it says here, leaders are responsible for the what and the why, managers are responsible for the how. And I think that very clearly describes, very clearly articulates what it is, the big differences between leaders and managers. Now, a manager is also a leader. They are in charge of a staff of people. They have to motivate and guide those people. But a leader, pure leader, is different, right? And what we need from our managers is somewhat different than what we need from our manager, from our leaders. And there are leaders out there. There are restaurant owners who are just good managers, right? And likewise, there are managers who are just really good leaders. But you have to understand the two different sets of skills that are required to do both of those jobs, right? So again, the best way I've ever heard it articulated is that leaders are responsible for the what and the why, and managers are responsible for the how. So let's start with leaders. Because the what and the why really has to do with direction, right? It has to do with vision. Meaning where are we going and why does it matter that we go there? So I've said this before, so I gave this talk with Sean Walsheff a couple of years ago, talked about it in my book, the Restaurant Marketing Mindset. We talked about the two whys, right? So Simon Sinek, really famous author, public speaker, wrote a book called Start with why, and he talked about the what, the how, the why said that most companies understand what they do. They understand how they're supposed to do it or how they do it better or differently than anybody else out there, but most of them know the what and the how, but they. So they never bother figuring out the why. And he makes the case in his book. He says the best companies out there understand why they do what they do. And that informs the how and the what, right? And what we did is we took that one step further in a talk that we gave at the California Restaurant show about two years ago. And. And Sean and I basically said the one why isn't enough. You really need the two why's. Number one, right? Why are we doing what we're doing? And number two, why should anyone else care? Because ultimately, that's what we're responsible for. That's what we have to explain, we have to explain to people is why they should care that we exist, that we serve the food that we serve, that we're trying to convince them to come in and eat. We have to tell them, we have to give them a reason, right, why we do what we do and why they should care. Ultimately, that's a leader's job. A leader's job is to figure that out. And just having good food and good service is no longer enough. That's a prerequisite, right, for entering the market. You got to have good food, you got to have good service, you got to have a cool looking place, a comfortable dining room. The bigger thing is, right, why do we exist? So leaders really have three things, right? They're responsible for providing vision, guidance and oversight, right? Their job is to make sure everyone else understands their job. I want to say that again. The leader's job is to make sure that everyone else understands their own jobs, right? This is what we're doing. This is why it matters. This is what I need you to do. This is what will be required from you. And if you and you and you and you, all of you guys do what you're supposed to do, we can't help but be successful. I always use the football analogy, right? So when you're talking about football, 11 guys on the field, right? 11 on offense, 11 on defense, right? I promise you, not every player on offense knows what all other 10 players are doing. The head coach knows where everyone's going. The quarterback probably knows where everyone's going. And some of the really astute players, right, the real students of the game, they might know where everyone's going, but I bet you not on every single play. That's why the role of quarterback is so hard, because you have to actually execute the play. But you have to have the breadth of knowledge that a coach has, right? So that you understand what's supposed to happen, what everyone is supposed to do, right? Really great leader provides vision, guidance and oversight. And the role of the leader, the job of the leader is to make sure that everyone understands what they're supposed to be doing. Make sure those people understand why they're supposed to be doing it. Right? Now, how do we do that? How do we cultivate, how do we cultivate leadership ultimately, right? Ultimately. And we get stuck in this, in our industry because we get stuck in this workman mentality, right? And this goes back to that, you know, we spend all our time working in the business. We have no time to work on the business. A lot of what I do as a restaurant coach, working with the members of my P3 mastermind, a lot of what I do has to do with getting people to be absentee owners. It's my not so secret, secret goal in the work I do. I want to help them create a Restaurant that doesn't need them in order to succeed. A restaurant, I don't believe, needs the owner to be there all the time in order to succeed. Now, if the owner wants to be there all the time, fine. But I want to get it to the place where the restaurant can run successfully without them being there, so that it's up to the owner. The owner gets to decide where they are. When I say owner, I really mean leader. That the leader gets to decide, right? They get to decide where their time is best spent. Because sometimes maybe there's time to, you know, if we can step outside the leader, the owner can assess other opportunities, right? They can figure out other businesses to open, ways to expand, ways to improve the business. So in order to do that, it's really important that everyone understands what we're all doing and why that matters, right? We talk a lot about mission, vision, and core values, right? Mvv, Mission, vision, values. Mission says, right? This is what we're trying to achieve on a daily basis. The vision says, assuming we achieve our mission, what does that mean globally, right? We can define globally in a bunch of different ways, not necessarily all of planet Earth, but what does that mean for our broader community? And then core values are, what are the things we hold most dear? What are the things that are clutch to us actually achieving our mission and our vision? That's really important to understand. So I'll give you an example. I work with a restaurant down in South Carolina, right, Down in Columbia, and they opened a restaurant a couple years ago, and they said, our mission is to be the best restaurant in Colombia. I said, I love that. I think that's great. And that dictates what we do and what they do, right? How they conduct themselves, the kind of food they bring in, the kind of service that they provide, kind of beverage program they run, all of that, right? That was a very clear. That was very clearly defined, the way they defined best restaurant in Colombia. They said, our mission is to become the best restaurant in Colombia. Then the vision was, assuming we become the best restaurant in Colombia, we believe we'll be helping to put Colombia on the map as a dining destination in the way that Charleston has become, or Nashville has become, or San Francisco and New York and Chicago. Right? I love that. That made sense. We want to be the best restaurant in Colombia. And if we do that, we will attract other great restaurateurs, other great operators, chefs, other great people who will open other great restaurants because they see what we're doing and they see it's possible, and that will Put this town on the map, right? Rising tide lifts all ships. And then, so then the conversation became, so what are our values? What are the things we hold most dear? What are the things that we cannot do without, right? And we came up with those. And that influenced how we put together the menu, how we priced the menu, how he played at that menu, the service style, the decor, the kind of cocktail program, the kind of managers we hired. All of that, right? All of that really had to do with vision, right? Now, a great leader is really good at articulating where we're going, right? Meaning what we're doing and why we got to do it, where we're going, why we're going to go that way. Then the key then becomes guidance and oversight. The very best leaders are not experts in everything, right? The best example of this I can give is the presidency, right? The president is not the presidency. The presidency is all of the cabinet, all of the people that help run the country. So the president puts together, right? Labor Secretary, HUD Secretary, Secretary of State, Transportation, all of this people who will be or are experts in all of these fields, all right? And then he provides guidance and oversight to those people. So those people, those jobs are all big enough, right, that they're going to power through every single day. The president just needs to give them direction and guidance and then eventually, you know, provide some oversight. You know, be the. Be the one to set deadlines and all of that, right? Where are we going? Why are we going to go there? Where are we going? When do we need to get there by? That's part of the deadlines. That's that vision, guidance and oversight. And the very best leaders do that very, very well. That's the best way that I can articulate leadership. And after the break, we've got a word from another one of our sponsors, but I want to talk about management. Not only how we become really great managers, but how we cultivate great managers and help ultimately help people be the best managers they can be. Pop Menu has reimagined the restaurant. They're breaking the mold of the menu, taking the kitchen doors off the hinges and serving up their most comprehensive technology solution yet. It's called Pop Menu Max. It comes with all the previous ingredients that we've mentioned here on the podcast, right? So websites designed with SEO marketing tools to keep you top of mind with guests, and of course, the patented interactive menu technology. But this new recipe brings automated phone answering to the table, third party online ordering, aggregation, wait listing, and more. Pop Menu's phone answering for Example, that technology has your ringing phones covered. It uses AI, right? So artificial intelligence and makes the simple questions that keep your phone line tied up normal now can be handled by the computer without pulling a staff member from your in person hospitality. So no more missed reservations, no more people asking for your hours or missing out on revenue. And that's just the beginning. You have a passion for food. Pop Menu has a passion for technology. Together it's a recipe for restaurant success. And now even more digital ingredients are in that technology Pantry and Pop Menu is helping restaurants attract, engage, remarket and transact with their guests on a whole new level. Trust me, if you're a restaurant owner, you need Pop Menu to take your business to the next level. And for a limited time only get 100 bucks off your first month. Plus you get to lock in one flat unchanging monthly rate. Go to popmenu.com restaurantstrategy to claim the offer. Again, that's $100 off your first month by visiting p o p m e n u.com restaurantstrategy as always, you'll find that link in in the show notes. Okay, so when we're talking about the difference between leadership and management, then we have to talk about the other side of it, right? The other side of it is managing. And the managing again is the how. If leadership, right, is the what and the why, what we're going to do, why it matters that we do it, then management managers are required for the how, how do we actually execute it, right? So implementation, execution, motivation and ultimately what I call metrics, right? Making sure we can measure it, right? What, what do we say, right? One of the, one of the biggest, the biggest management phrases of all time, what gets measured, gets managed. So we have to understand, right? Part of this, and I've talked about this before, people have been listening for a while, will know I'm crazy about this. But it all comes down to systems and goals really understanding. Where are we now? Where are we net right now is point A and where we're going is point B, right? So where are we, where are we going? What do we need to do to get from point A to point B? Right? What we do to get from point A to point B is a system. A system is just a repeatable set of actions. And if it's repeatable, it's replicable. If it's replicable, it is scalable, right? Meaning if I do this, this, this, this, to get this result, then I can teach someone else to do this, this, this and to get this Result, ultimately, then I can teach 10 people to do it at 10 units, right? That's how we scale a business. Management is really about the systemization, right? So managers, the what and the what, I'm sorry, leaders, the what and the why, about goal setting, about vision, right? And then you say to the managers, great, now go ahead and put a system in place, right? Figure out how we are going to get these results and figure out how we determine success, how we measure it, how we make sure that we do it, and look at the stuff that worked, figure out how we can do more of it, figure out the stuff that didn't work, and figure out then what we should be doing instead. Both of these are crucial. In a successful business, right? And especially a successful restaurant, we need strong leadership, someone to guide us, to tell us where we're going, why we're going in that way, right? To provide vision. And ultimately, what I said was guidance and oversight, right? That I don't want a leader down in the trenches doing it and doing it and doing it, but I want them to know what's being done and I want them to have a say in what's being done and why it's done a certain way. And I want them to provide oversight. Oversight is deadlines. Oversight is, you know, is providing some sort of tracking for the people whose job it is to actually execute it. Right? Again, implementation, execution, motivation, and those metrics are all the responsibility of the manager. A manager's job in the restaurants, right? A manager's job in any business is to manage for profitability, right? We don't talk about that enough, but it's managing for the profitability of the business. And too often in the restaurant industry, we think of a restaurant manager as showing up and locking the doors, turning on the lights, doing the bank drop, doing the side work, checking in the staff, dealing with customer complaints, closing up at the end of the night. I'm sorry, but those are all things that need to be done. That is an aspect of the job of a restaurant manager, but it is not nearly the most important part. The most important part is managing for profit, making sure that the business is sound. Profit is not a dirty word. Profit means stability, security. It means the business is sound. If it's profitable, right? We can repeat it, we can. We can replicate it, we can scale it, right? So we can come up with multiple units of this concept. Ultimately, both are. Both are really crucial. The other thing I want to say about managers is that it's a manager's job to get the most out of the line level employees, right? The servers, the busers, the bartenders, the runners, the hosts, the cooks, all of them. It's. That's their job. So a big part of that is motivation. How do we motivate them? I think that's where we look to our leaders and we say, well, the leader's job is to set vision, the what and the why. The manager's job then is to understand that what and that why and translate that to the line level employees to make sure they understand how their job, their individual job, helps fulfill the why. And that cannot be overstated. That is very rarely done. Why do the onions have to be peeled? Why does the garlic have to be chopped? Why does it have to be chopped in this way? That goes back to the vision that was set by the leader. Both of those are important roles. Now here, let me just say this. Plenty of you out there that are owner operators, right? You own the place and you actually run the place every single day. Well, you got to figure out when you're wearing which hat because we need both. If you don't have time for either one of those, you have to make the time for the other one that you're, that you're ignoring. So again, leadership is the what and the why. Management is about the how. It all comes down to systems and goals. The leaders set the goal and the managers put a system into place to help us achieve that goal. We're going to do the following things to achieve the following things, right? So much of what strong leadership and strong management comes down to, right, Comes down to education and empowerment. That a leader educates, tells them the what and the why, gives them the tools to succeed, and ultimately empowers the managers to do what they know to do to achieve what has been stated. I need to make sure we do $165,000 in revenue this month and I need to make at least 18% profit. And I trust you, the managers who are overseeing this property, I trust you to do what needs to be done to make sure we do that. To set daily revenue targets, to set budgets, to hold people accountable to staying under budget. That's how a restaurant operates successfully. I hope you found this helpful. For any of you out there that are struggling with this or profitability, you know where to find me. You can email me chipclose.com C H I P K-L-O-S-E.com I would love to chat about your restaurant. Love to hear what's going on. And again, another reminder, if you're curious about the P3 mastermind. If I haven't said it before, I will say it now. Every listener of this program gets access to a specific discount that, that will get 30% off the price. If you want that. If you think you can't afford it, I'm probably, I'm telling you, you probably can. I think you'd be surprised. We try to offer this program at a very fair price. And if you're, if you're curious, this is something you struggle with, then I'd love to chat with you. The way to get started with that conversation is go to our website, restaurantstrategypodcast.com schedule, grab time on the calendar. Make sure you click that you heard about it here on the podcast. Tell your Tell the coach when, when you get on the phone with them. Either me, if it's me or one of my other coaches. Again, there are a bunch of people that work with me on this and we will get you set up. I appreciate you guys being here each and every week. Thank you very much. And I will see you next.