Multi-location operations – why performance and profitability varies from store to store

Home » Multi-location operations – why performance and profitability varies from store to store

I probably shouldn’t have been thinking about business when I was supposed to be enjoying a meal out with my wife and daughter. We headed down to the closest location of a national italian restaurant chain. Based on previous experiences, it wasn’t my first choice.

I should have trusted my gut. The men’s washroom was littered with paper towel, the service was slow and the staff were frazzled. This wasn’t an isolated incident; previous visits had exposed similar poor performance.

Another location in the same chain had a totally different feel. Staff were happy, service was fast and as customers we were happy. While I didn’t have actual data, one outlet certainly looked busier than the other.

How can it be that two locations of the same chain in different cities could have such a different customer experience? Sites are selected using strict criteria and there are standard operating procedures. So what would explain the difference? Leadership.

In our experience a weak manager or supervisor will cause differences in profitability, sales, costs, cleanliness, morale and turnover. This variation doesn’t just show up in restaurants. It applies to retail stores, factories, production lines and engineering groups.

What leadership behaviors lead to these variations in performance?

  1. Expectations: A weak manager doesn’t make his or her expectations known clearly to all staff. Without clear standards, performance tends to drop to the bare minimum.
  2. Hiring: A manager will contribute to his or her own demise be being less selective in hiring decisions, poor interviewing skills and deviating from standard procedures and guidelines.
  3. Training: Weak managers will either omit training or delegate training to staff members who are not qualified to teach the company system.
  4. Monitoring: Managers need to personally observe performance and make sure staff are doing what is expected, correct unacceptable performance and provide encouragement.
  5. Communication: Weak managers spend less time speaking with staff one on one and in team meetings.