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August 6, 2019

The Importance of Setting Goals

I work with a lot of business owners who struggle with employee engagement, performance and retention. What I often find is that these businesses are also struggling with profitability and that the owner stress levels are high. Not a great recipe for success.

On the flipside I find that the businesses that are thriving, and not just surviving, have leaders that are working toward an articulated goal, and team members that are also working toward some kind of target. In most cases this is not a formalised process, it’s generally an engaged business leader, naturally driving sales and building a great team culture through other employee engagement activities.

Being a lover of creating businesses that can run themselves, I assist by creating internal frameworks to ensure there is some level of formality and accountability around goal setting and targets, and these support systems are often where success, sanity and profitability lays.

Key performance indicators (KPIs) and performance reviews generally make employees cringe and there are a few reasons why. KPIs are mostly associated with the corporate world, where performance reviews and meeting your KPIs become an added pressure for workers who are already struggling to achieve daily goals. They can be intimidating in terms of how performance is managed when an employee is not meeting them. They’re often created for, rather than with, team members, which potentially leads to a lack of engagement and an ineffective outcome, and there are often situations where KPIs don’t really change anything in terms of improving an employee’s skills. Rather, they just feed into fiscal goals.

Large organizations use KPIs at multiple levels to evaluate their success at reaching targets. As a cafe owner you should have your own business goals, which should cascade down to your manager’s targets, which in turn should cascade down into your team members’ targets.

KPIs as a term doesn’t fully talk to the cafe environment – one where you’re often dealing with family owned businesses, lower sales budgets, casual and transient staff and the uniqueness that is the cafe landscape. For that reason, in my consulting work I use the term CPIs (Cafe Performance Indicator), in talking about setting benchmarks and targets that not only addresses the needs of the business, but also stimulates employee engagement and increases staff retention. These CPIs consist of hard and soft targets, which include both tangible and intangible aspects of the cafe environment.

The tangibles in a cafe are the hard targets like spend per head, wage percentages, cost of goods and wastage levels. These elements feed into the financial success of the business, but they are often not part of the language used between owners, managers and team. They need to be.

Cafes are also spaces where intangible elements like cleanliness, ambience, using eye contact, or having a music policy that aligns with customer and brand, directly impacts on the customer experience, so setting targets around the intangible elements that deliver a great customer experience also need to be in place. This is where you’ll need to get creative.

Because the cafe is a unique space, being home to team members with varying skills and engagement levels, creating CPIs in your cafe can be a collaborative process between owners, managers and team members. There are no rules here, you can have some group CPIs and you could even invite your customers to input on the intangible and soft targets!

There are a few steps in getting the process of CPIs in place. Firstly, you need to understand the skills, strengths and weaknesses of your team.

Once you are clear on which areas need to be developed in your team, create a ‘CPI Register’ for each role, that defines the hard and soft targets that you can assign to each position eg. barista, waiter, chef, kitchen hand, team leader, manager etc. Depending on the role, these can be anything from spend per head, second coffee sales, punctuality, wastage, or food safety compliance to smiling, managing a section, pouring a rosetta, leading a team meeting or creating a new weekly drink special.

Like other performance review and training/development programs, the easiest way to get traction is to lock in set times on the calendar and action the process regularly, regardless of what is happening in the business. Whether you’re doing weekly, monthly or quarterly CPI reviews, your manager or team leader should be across what the team members are working toward, and be having regular conversations around progress and/or ongoing training relating to their CPIs. One of your CPIs, as the owner, is to keep your team leaders on track with their own and the team’s CPIs.

When your team members have achieved a target, move on to a new one. As I said earlier, the more you can engage your team in deciding on their targets, listening to their desires, working to their strengths, and supporting them to improve their weaknesses, the more they will understand the needs of the business and contribute to the business.

In business it often feels like there is no time to initiate these kinds of practises but if you don’t change things, nothing will change. Once you have a process around CPIs and have practised that process a few times, it will become second nature to you and the team. The outcome will be a healthy cafe that is an ecosystem of learning, accountability and achievement and you will see the results in sales growth and team engagement.

cafelab.com.au

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