Embracing Change in Restaurants

Covid 19 has eviscerated the restaurant industry. Countless beloved independent restaurants have closed, while countless others have taken on new suffocating debt to stay afloat.

At the same time, the past 18 months have lifted a veil of systemic abuse and inequality present in many restaurant industry spaces. Through thoughtful journalism and media, the plight of the restaurant owner has become common knowledge - shrinking if not non-existent profit margins, astronomical rent payments, and ingredients that continuously get more expensive.

It is very easy to fall into a rabbit hole of despair when it comes to the restaurant industry, yet I would like to offer a small silver lining. I think restaurant customers are changing or, at least, are ready for a change. They are willing to shed old habits and customs so that the restaurants they love can survive.

Frankly, the restaurant industry needs to change. We need to pay our employees more, and treat them better. This means that we need to divorce ourselves from the old system that told us how a restaurant must be run.

The classic American restaurant system requires far too many employees - hosts, bartenders, food runners, server assistants, servers, managers, chefs, line cooks, prep cooks and dishwashers. We need to reduce the number of employees that a restaurant employs so that we can pay a smaller number of employees more.

This will require restaurant customers to make three major changes.  First, customers will need to give up long standing restaurant customs. Second, customers will need to take more ownership of their dining out experience. And third, and perhaps most importantly, customers need to be patient and willing to evolve and adapt along with creative restaurateurs as they redefine dining out.

Frequently, when debating new ideas, I hear restaurant owners say something along the lines of, “the customers won’t go for it, they are too set in their ways, or that is not what they expect.” I think those days are over. The generation of young professionals who are eating out in force today embrace change. They have changed the way they bank, the way they work out, and the way they travel. They will welcome change in the restaurants they love.

The formal restaurant experience as we know it relies heavily on customs and expectations. Customers are seated by a host. A server gives a customer a menu and introduces themself and the restaurant. Drinks are ordered first, followed by food. Coffee is offered with dessert - etc, etc.

All of these customs will need to be evaluated and, perhaps, discarded. The custom that needs the most thorough examination however, is tipping. Thankfully a few intrepid restaurateurs have started to question the merits of the tipping system and are seeing positive results - proof that restaurant customers are ready for change.

The simple truth is that the tipping system distributes a restaurant's revenue incredibly unevenly amongst restaurant staff. Servers, and to a lesser degree other front of house employees, are paid handsomely while cooks and dishwashers are paid much lower wages to cook food and wash dishes. Eliminating tips will increase back of house wages.

This is not to say that a customer will not be able to express gratitude, in the form of money, for their experience. The custom that needs to change is the tip line on a bill where a customer determines a percentage to tip their server. By law this tip cannot be distributed to all of the employees in a restaurant.

On the other hand, a service charge that is applied equally to every bill can be distributed to all restaurant employees, including those working in the kitchen. Customers will still pay the same general amount that they were paying when they tipped.

For example, a restaurant might apply a service charge of 18% to all meals, whereas a customer might regularly tip 20%. Customers need to forgo the custom of determining their tipped percentage so that all restaurant employees can be compensated more equitably.

Tipping is merely one of countless restaurant customs that need a thorough examination - here’s a thought - perhaps the way we think about restaurant menus needs to change, which brings us to our next point.

Most restaurant customers do nearly everything online. They bank, they workout and they book travel on a screen. They take ownership of their lives without the help of another human. Why then, has dining out remained largely unchanged, while other industries have streamlined with the help of technology?

What if customers ordered from a menu online the day of their reservation before arriving for their meal?  After they are welcomed and seated at their table their pre ordered menu would be prepared.  A server would quickly introduce themselves and welcome guests, but would not need to take the time to describe the menu and take an order. Turn times and the number of servers on the floor could be reduced.

With turn times reduced, restaurants could seat more tables each night and make more money. With less servers, restaurants would have fewer employees and could pay those employees more. It just takes a little ownership from the customer before they arrive at the restaurant.

Online pre-ordering is not a radical idea, it is, in fact, easy to imagine. There are many other opportunities for a customer to own their restaurant experience. Flight check in is handled on a screen; why can’t restaurant check in be similar? Short films are effective means for education; why can’t a restaurant concept, style, and ordering system be explained with a short film on a customer's cell phone?

Thus far, this article has addressed and raised some pretty radical ideas. The elimination of tipping, although already underway, is a systemic change. Old school restaurants, and old school restaurant customers, embracing technology - this might seem far-fetched. 

Here’s a simple, non-radical idea that would reduce the number of employees and allow restaurateurs to pay their people more: smaller menus.

All too often, restaurant menus are huge, frequently 30-40 items. This is usually because of some deadly combination of chef ego and a belief that ‘we need to offer every customer that walks in the door exactly what they want.’ Large menus require more staff to prepare and waste more food. They cannot effectively take advantage of economies of scale.

Large menus mean more prep cooks and more line cooks; they also mean investing more time in front of the house training. Here’s the idea, execute a small menu exceptionally well with a small staff of well trained and well compensated cooks. Train your staff to love and to sell that menu and convince your customers that they can have a wonderful experience without a 30-40 item menu.

I don’t know if any of the ideas that I have listed on this page will work. I do know that these ideas are just a few of many that could change the restaurant industry for the better. The key is that we need restaurateurs who will try these and other crazy ideas, and we need customers who will stick with those restaurateurs when some of their creative ideas fail.

Restaurant owners cannot be afraid to do something that might seem risky, but would make the lives of our employees better. What restaurateurs cannot compromise on is the quality of their food, the authenticity of their service, and the warmth of their restaurants. How these qualities are delivered can change. It is restaurants that are married to old and tired traditions; restaurant customers are adaptable and hungry for change.

So, what is the path forward? I wish that I had a crystal ball answer. A few weeks ago, I was giving a lecture that touched on many of the topics addressed in this article. An older distinguished gentleman raised his hand and asked, “I know that many of the younger members of this audience might be ready for technology to enter their dining experience, but I can’t figure a lot of this technological stuff out. I don’t want to change my restaurant experience. What are you going to do for people like me?” 

My answer was simple. “We are going to push forward, we have to, or we risk losing the profession that we love. But, we also understand that our currency is hospitality. And if you need a manager's cell phone number so that you can make a reservation the old school way, then we will get you a manager's cell phone number.”

Restaurateurs need to embrace change while still embracing hospitality. We need to constantly communicate with our customers and explain why we are trying new systems and technologies. We need to bring the customers in on the journey and let them take that journey with us. Restaurant customers are ready to ride with us as we define what dining will be over the next two decades. Restaurateurs need to rise to the challenge. Don’t be afraid of change, it may very well be our only path forward.