Problem-Solving & Continuous Improvement for Bar Owners: Maximize Your Bar's Success

This is going to play a lot more into the culture that you maintain for your team , but it really is one of the key ways to build an organization that really values its employees and also allows you to bring the best ideas to the forefront continually and to really optimize what you have going on .

Before we dive into the nuts and bolts of problem solving , though , I want to take a step back and talk about the framework that I like to use , and I've talked about this many times , but my opinion of a good framework for the bar business it's mindset , concept and culture .

You have to have the right mindset as an owner to work with your team , to have a successful business , to not hold yourself back . You have to have the right concept , so the nuts and bolts have to be in the right places . You have to have a good drink menu , you have to have a good food menu , all of those things .

And then you have to have the right culture , and culture is how both it attracts your guests , it brings them in , it makes them feel great about drinking at your establishment . Culture is also important for your employees attracting and retaining the best talent and developing that talent .

The cool thing about problem solving is problem solving actually hits on all three of these pieces .

Problem solving is part of a really good mindset in that you're constantly open to ideas , you're constantly trying to adjust , you're really working on and continuously improving 1% every day and getting those compounding returns that you get when you make things better every single day .

It fits in your concept , because the problems you're going to solve are going to be related to your concept . They're opportunities to make your concept better , whether that's your menu , whether that's your physical layout .

It could be something as simple as the order that the bottles are in your bar rail , or it could be much more complex , but the value of problem solving is it helps your concept . And then it also is going to greatly impact your culture , because one of the main tenets of problem solving is that you want to involve everyone in your establishment .

You need to use the brains of the people that are doing the work day in and day out . A lot of times , as owners , we're in the bars a lot . We think we know what's going on , but we don't actually know every little problem that the bartender's face .

We don't know that the rail is in the wrong order to use that example again because we're not pouring the drinks that often and just because something works for us or just because something makes sense to us and the ownership or management from the outside doesn't mean that it makes sense to our frontline workers , to our cooks on the line , to our bartender behind

the bar , to our server out on the floor , because they are doing the work day in and day out and they , frankly , know more about how to do their jobs than we do . We write the standards , we help them , we facilitate them in doing their jobs , but that does not make us the experts at their jobs . They are the experts .

So we get to increase our culture and promote a more positive culture by bringing those folks in and using their expertise . Now , when we look at problem solving , our main goal is to improve our establishments . It's to find issues that we can fix and to fix them , and you need to do this on a continual basis .

I am a firm believer in the idea of continuous improvement . There's always something that you can optimize . There's always something you can make better , and I don't care if you're starting from a lot of problems or you think you have an establishment that runs absolutely perfectly . There is always room for improvement .

There's always room to grow and to have a better product for your guests , have a better experience for your team , whatever improvements you might be able to make . But there's always the opportunity to improve . And one thing that I also firmly believe in is that continuous improvement is continuous . I know that's a bit of a cliche .

The same when people talk about 1% improvement every day and you get compounding results . It sounds cliche . It sounds like something that someone like me , as a business consultant , would just flippantly say . That's not true , but the thing is it actually works when you work at making yourself better every day .

The results you can accomplish in a year or two years or five years , if we're looking longer term , are absolutely huge and really continuous improvement . But using problem solving as the driving factor behind your continuous improvement or the way that you go about doing your continuous improvement , is what can take a bar from great to outstanding .

It's what unlocks your ability to go way above and beyond the competition and to really develop something awesome and amazing and unique .

We are going to spend the rest of this episode talking end to end through the process of problem solving and how you can use that to develop standards for your bar , to make it better and to solidify all the wonderful things you find in the problem solving process . And to do this , we're going to go through five steps .

One , we're going to talk about identifying areas for improvement . Two , we're going to talk about how to prioritize ideas when you have , hopefully , a whole bunch of them that you can go after . Three , we're going to talk about root causing your problems , actually figuring out what the real issue is , what the real problem is .

Fourth , we're going to talk about running experiments and how to determine if what you think is the answer is the right answer . And fifth , we're going to talk about creating new standards , because everything involved in this we identify a problem .

At the end we solve the problem , but we have to go through the process to get there , and this is a process that you really do not want to shortcut . If you shortcut the process , if you try to jump from . I have a problem to . Here's a solution . A few things are going to happen .

One is , as we talked about before as the owner , we think we know what's going on , but we don't always know what's going on . We don't have that first hand , day in , day out , experience . So maybe our solution is wrong , maybe our solution doesn't make things better . Maybe our solution solves one problem but creates other problems .

We don't want to do that right . You want to identify a problem and come up with a solution that actually works . It's actually going to solve your problem for the long term . So it's very important that you go through each and every step . Don't shortcut the process . Don't try to make it faster .

As a matter of fact , enjoy it and enjoy the process for what it will do for your culture and your employees , because your team will enjoy working on these things . Your team will enjoy feeling like they have more input into the way that your bar runs and what your bar standards are .

Let's go ahead and get started . The first thing we're going to do when we problem solve is identify areas for improvement . So these are finding problems , issues that make your team's job harder . At the end of the day , all of this comes down to the customer and we serve the customer .

Our guests are very important because , obviously , if we don't have people coming in and spending money , we don't have a business . But the mechanism by which we serve our guests is our team , it's our servers in the front , it's our bartender in the front . In the back , it's the cooks making the food that goes to those guests .

We have to do everything we can to make our teams job easier so they have more time and more energy to spend serving our guests . So along those lines , there's a couple different ways that we can start to identify areas for improvement or identify issues and problems that we need to solve . Now there are some real easy ones . You can have a suggestion box .

Now I think , as all of us know from watching I don't know how many comedies where a business says here's a suggestion box , you may get some things in there you don't want to hear . You probably will get just some old receipts and some trash in there as well . So I'm not sure a suggestion box is always the best way to go .

But at the same time , suggestion boxes can work as a way to get ideas from your staff on what makes their job more difficult . You can also use things like Google Forms and have a Google Form they can fill out that allows them to put in suggestions .

If you don't want , though , to just take suggestions as they come in the door , you can do a thing called Value Stream Mapping , and Value Stream Mapping is where you map everything that happens in the course of serving your guests , and when I say everything , I mean everything from the food and the liquor being dropped off from your supplier through that guest

paying for their meal and walking out the front door , so literally end to end . How does the supplies come in , how do the supplies turn into our product Whether that's being made into a cocktail or made into Buffalo Ways and then how do we serve those to the guest ? How does the guest pay ? How does the guest know what we have ?

All of that would end up on a Value Stream . You literally spend time going through , end to end , the entire process , and that , admittedly , will take some time . It can take 8 , 16 , 24 hours of working on that to really map that out well and identify where there are issues in that process .

It's not something you want to do every day , but it is definitely something that you can do every year or two with your team to really help determine in the entire process where there could be issues , and you're going to look at a much more holistic view than if you just have a suggestion box .

Another way to look for areas of improvement is to think about areas for improvement when you're looking at your KPIs or key product indicators , and those are things we've talked about before . If you have not had a chance to listen to the episode on KPIs , go back and listen to it .

I go through a whole bunch of them , how to measure them , all that good stuff . But we're talking things like guest check , average sales per labor hour , those sorts of metrics , and you can use metrics that are not where you want them to be to start problem solving .

So maybe you're looking at your food cost and your theoretical food cost is 26% and your actual food cost is 30% . Now , those of you that have listened to the episodes , you know that I always think that our theoretical and our actual should be within 2% . So here we have a 4% gap . That's definitely over 2% .

It is worth digging in and saying why do I have this gap ? No-transcript , so whether you're doing it from value stream mapping with your whole team , a suggestion box or actually taking on your KPIs . The first thing you have to do is identify where there are areas to improve .

And when you do this , a word of caution you're not trying to figure out why these problems happen . You are definitely not trying to figure out solutions . That comes way later in the process . All you want to do at this point is identify and list out those issues , make a list of things that you can build on and work on moving forward .

Now , once you have that list of problems , we're going to move on to step two , which is to prioritize your ideas . So obviously you have a lot of problems and some of those are going to be very easy to solve . Rearranging bottles in the well because your bartenders think it could be more efficient in different order , that's obviously an easy solve .

Figuring out why your food cost is 4% higher than your theoretical cost that's going to be a lot harder . So you need to prioritize ideas , and when I do this , I like to break things into two buckets Quick fix things that we can just go ahead and do right now , and items that are going to take longer and more study for improvement .

Now it doesn't mean that the quick fix is we jump straight to the solution , but it means that we don't have to spend as much time studying and looking into the issue . It's an easier solve . So , for instance , with our bottles in the well example , we can solve that pretty quickly . We rearrange the bottles .

Now we do have to do some testing and things that we'll get into later , to make sure that we've rearranged them in the right way and that the way that the new order we put them in rather that that works . But it's safe to say that rearranging bottles in a well is not a big lift .

Now , with our food cost example , obviously that's going to take more time . So we need to realize that's going to be difficult and devote , schedule more time in the future to work on that issue , to really problem solve it and really get down to what we think the root cause is .

Now we're jumping ahead to step three , but before we get there , always remember that you have to put these , your problems , in order .

You have to decide what you want to go after first what is a quick win , what is going to take a little bit more effort , and as you prioritize them , look at each problem and try to find someone to own each problem , and those owners should not be you , the owner of the bar . They should be whomever that problem affects the most .

So if we're talking about order of bottles in a , well , the owner of that problem should probably be one of your bartenders . They're the ones that work with it , not you . They're the ones with the expert knowledge . They need to be the one that helps you solve that .

If we're looking at food cost being out of whack , well , then probably the person that should own that problem is your chef or your kitchen manager , because they are the one that , hey , they're on the hook for your food cost problem , but B they are the ones that are most close to that problem . Now , let's say that it wasn't all of your food .

But let's say , for some reason , you were using twice as many fries as you should . Well then it should come down to your line cooker . Whoever works that fryer , they should be the one that owns that problem . So , as you prioritize your issues to fix , figure out who the most expert person in your bar is and give them ownership of the problem .

Not only then do you have that expertise . But , as we talked about earlier , you're really making your team feel involved . You're expanding that culture . You're creating an environment where your employees feel like they have more of a voice than they ever have at any other bar they've worked at , because I promise you not that many bars do shit like this .

So when they see that opportunity , when they see the input they have , it will make a huge impact on them that you're allowing them to own the issue and to work on fixing that issue . Now , after we've prioritized , after we've assigned owners , now we need to root cause the issue , and root causing the issue means we find what is the real problem here .

So , for instance , with our wells , we need to rearrange it because it's not as fast , it'll be more efficient . Our root cause for our well not being efficient is that the bottles are in the wrong order . That's easy . But going back to our food cost example , why is our food cost that high ? And there could be any number of reasons .

Now there are two tools that I really like to use when we're talking about root cause analysis , in determining what the cause of a problem is . The first one is called a fish bone diagram , and so if you think of a fish and this would be a lot easier if I had slides , but I don't , so I'm just going to try to describe this to you .

If you think of a fish , you have a head on a fish , you have a spine that goes down the back and you have bones that go kind of at a 45 degree angle towards the back of the fish , on the top and the bottom . So think of the head of the fish . That is your problem . That is your 4% gap to theoretical in your food cost .

That spine going back , that's just the line that you have to get to , and all those bones coming off are different things that affect your food cost . Maybe one's waste , maybe one is inflation , maybe one is supplier issues and substituting products .

So any different cause that could exist should go on one of the fish bones on that diagram You're literally figuring out . Here are all my potential problems , and then you can go through and say , okay , is this really something that impacts us ?

No , okay , inflation has been bad , but our food cost went up and prices have not changed from our supplier , so it's not inflation that's the cause here . Cool , cross that one out , move to the next bone . Now , either within each bone or as another way to approach problem solving .

There's another way I like to do things , called the 5-wise . Now , the 5-wise is just 5 , is not really an important number here . Everyone calls it the 5-wise , but it's asking why , until you get to the root cause of an issue and then people say that's 5 times , that's what's called the 5-wise . So we would go .

My food cost is 4% higher than my theoretical food cost . Why is that the case ? Well , because I have a lot of waste . Okay , so we've determined it's not a supplier issue , it's a waste issue . Well , why do I have a lot of waste ? Because I'm over prepping and throwing things away . Why are you over prepping and throwing things away ?

Because we have pars that worked for us during our busy season , but now we're in a slower season and so we're not going through as much food as we used to . Okay , why are our pars still what they were before ? Well , because I haven't changed them yet and I still tell my kitchen manager to order based on the pars that he was given before .

So we've gone from my food cost is 4% higher to I need to change the pars on my ordering and inventory sheets , and that's how the 5-wise work . Any issue you just keep asking why , until you get to the root .

And the reason why I talk about 5-wise after fishbone is maybe you have multiple rounds , maybe your food cost is 4% higher , partially because of waste , partially because you're not doing pars , but it also is due to inflation and supplier prices from your supplier coming up , going up and you have not adjusted the prices on your menu yet to reflect the higher cost

that you're paying . So you need to fishbone with all your ideas and then 5-wise within each one of those to really get to the root cause of each individual potential issue and say is this real ? A and B , what can I do about it ? The what can we do about it ? This is the first time we're getting into actually worrying about a solution .

Everything up to this point has been building to find the root cause of the problem . And once we found that root cause , we're asking what do we do about it ? That takes us to step 4 , which is run experiments . So we have somebody on your team let's just say your kitchen manager . Let's keep rolling with this 4% food cost issue .

Your kitchen manager , they figured out the root cause . One of the root causes was excess waste due to pars . Your kitchen manager owns this problem . So now it's on your kitchen manager , or , if it was behind the bar , it could be on your bartender . If it was something on the floor , it could be a server .

Whomever it is that you've identified as the owner of that problem , it's up to them to help come up with solutions . As a matter of fact , you should listen to their solutions first , before the ones you think of , because , again , like I said before , they are closer to the issue . They understand the issue better , they understand potential solutions better .

They understand solutions that are going to get in their way and make it harder for them to do their job better than you do . So they have to figure out some ideas . Hey , here's how we can get our food cost back in line by changing our PARS on our inventory and order sheet .

So then you're going to run experiments and when I say run experiments , think back to high school , think back to the scientific method , where you have a hypothesis .

In this case , our hypothesis is that our food cost is high because our PARS are wrong , and you're going to run an experiment , which is you're going to adjust those PARS and you're going to do that for two , three , four weeks , whatever period you decide .

You want to run your experiment and you're going to collect the data and say , okay , after doing this , is my food cost still 4% too high or is it 3% too high ? And if we find it is 3% , still 3% gap between our actual and theoretical . Okay , we saw part of this . We got one problem wrong .

But now we're going to loop back to that fishbone diagram and say what did we miss ? What else could be a cause of this previously ? For now , 3% gap . And when you identify a new cause , you're going to run another experiment . It's constant process of hypothesize a reason , determine a hypothesis for a solution , test that solution , see if it works or not .

And if it works , great . If it solves your all problem , great . If not , go back and look at root causation again . So you just make these little loops .

But every time you make a loop , what you're doing is optimizing your business , you're making your bar stronger , you're increasing your bottom line , with the added benefits of making your concept better , making your culture better . It's such a win-win to do this .

With these experiments , one thing to always keep in mind is you need to have a trackable result , and when I say trackable , you need hard data .

This is all , at the end of the day , about data driven decision-making , and the only way to make a good decision on the basis of data is to have the data to back it up , whether that is my food cost went down , whether that is my bartenders are reporting that they pour drinks faster because I rearranged the well .

Now , if we're talking back about rearranging the well and we're running an experiment to say , hey , if we arrange the bottles in this order , are things faster ? Your experiment should involve a stopwatch and sit there and go . Are my ticket times actually down ? Is my time to make this set of drinks quicker ? Are my servers getting better service on the server ?

Well , because these drinks are coming out faster . Because , if the data doesn't show it , this is the hard part for some people and this is the hard part for some owners . This is also the hard part for some team members . It doesn't matter how you feel about it . It doesn't matter if you think you did a great job .

What matters here is that you've moved the needle on the data , and experiments must move the needle on the data , otherwise you need to go back , create a new hypothesis , run a new experiment , because the absolute thing you do not want to do is to say I have a problem and then solve that problem with a new problem and not make any forward progress .

That is not going to take your bar from great to outstanding . That's going to leave you spinning your wheels right where you are now . So if you have a solution , make sure it's a real solution . Make sure that moves you forward in a way that you can prove in your data .

Now , once you have found that way that moves you forward , once you have realized that your hypothesis was correct , your experiment proves out that what you thought would be a solution is a solution . Your data is looking better .

Now we need to memorialize whatever we did and a lot of times that's going to come out in your standards Because , as we've talked about before , you should pretty much have a standard for everything , and having a standard for everything is not about micromanaging .

It's definitely not about micromanaging and it sounds micromanagy , but it's definitely not about micromanaging because , if you think about it , we had our team help us identify a problem . Then we put someone on our team in ownership of that problem . They figured out what the cause of that problem was . They figured out a hypothesis to experiment to fix that problem .

They determined a solution to that problem . So it can't be micromanaging in that way . It's not . You're not , as the owner , saying you must do it this way . No , your team came together , they worked together , they determined what would be the best way out . The data works for you . You say , yeah , let's do it , let's solidify this standard .

So it's not micromanaging period and you have to remember that because standards have to be very precise . If there is a certain order that the bottles in your well should be , it should always be that way , 100% of the time . You should be able to put it in your training . This is the order of bottles in the well .

Everyone should do it the exact same way every time . If your food cost issue was waste due to PAHRs and you create a standard that says we're going to update our PAHRs based upon this new forecasting model , we're going to use blah , blah , blah , blah , blah , blah , blah .

That should be memorialized , that should be written down so that when your forecasting changes , when you hit a change of season , you don't repeat the same mistakes . But you need standards . They need to be concrete . They need to be written down , they need to break things down into detail . And when I say into detail , let's talk about making a cocktail .

Alright , I'm going to make a vodka rocks , don't really ? Most people say I don't need a standard for a VacaRox . I tend to agree , but let's just play with this for a second , because it's a really easy example . I look at you and I say make me a VacaRox . What glass do you grab ?

Are there multiple glasses that might be able to be used for rocks in your bar ? You better have the exact glass written down . Then you're going to put ice in the glass . Alright , are you using one giant cube or are you using little ice ? Do you even have a giant cube ? But let's assume you do .

Which ice do you use If you're using more standard ice , not one big cube ? How much ice goes in the glass ? Should it be full all the way to the berm with the glass ? Should it be full three quarters with ice when you pour the VacaRox in ? So rocks pour Is a rocks pour for you ? Two ounces , two and a half ounces is three ounces .

You need to define every little bit of that Down to even before I serve that rocks pour to a guest . Does it come with a cocktail straw ? If the guest doesn't ask for a garnish drawer , I automatically put a lime on it . You need to define all of those pieces because that's how you build consistency .

That's how a guest comes in today and next week and next month and they have a different bartender every time . The team working each of those three visits is totally different , but the experience is the exact same . You do that by having written standards for everything . Again , it's not micromanagy , because your team is the one coming up with the standards .

If they come up with a standard and they complain about it down the road because you say well , we determined on a rocks pour , a glass should be three quarters full of ice and you only filled it halfway and they start to blow you some crap . You can always look at them and go well , you guys came up with this .

If you think it should be half , let's have that conversation . Let's problem solve it . Let's discuss it as a group . Let's see if everyone's aligned with going to a half glass of ice instead of three quarters of a glass of ice .

But you have to have the standards and those standards have to be written down so that when someone new comes in , when you're training a new member of your team , you can hand that to them . They know exactly what they're supposed to do , exactly how to do it .

All I can say because that really is the end of your problem solving cycle is coming up with these standards . All I can say is you should be doing this often , like really , really often . Solve a problem every week , and some of them , like our food cost example , where your gap between your theoretical and actual is 4% yeah , you need to solve that today .

That's a big problem . You need to put a lot of energy on it . Some problems are going to require less energy . Some problems are going to matter a lot more to your team than they do to you because I am at you guys . But I don't think in any bar I've owned I have ever cared .

Matter of fact , I'll tell you this for a fact In every bar I've ever managed , owned , been involved in whatever since years and years ago when I bartended , I have not given a crap about what order the bottles are in the well , it's whatever works best for the team . So some of these problems as an owner are going to seem a lot more important .

Some of them aren't , but that's why you assign owners to them , because the people that care , the people that that problem affects , they are the people that can solve it and you don't have to do it . You just delegate that off and they can do it for you .

And if you teach everyone on your team this process , if you make this process part of your initial training , then everyone knows hey , I have a problem , this is what I need to do . Yes , it will require some oversight on your part . Yes , you have to kind of make sure that the train stays on the tracks , but you don't have to do this all yourself .

Involve your team . That's what this is all about .

Hopefully that has made you guys really energized to go out and solve some problems and to involve your team in really optimizing your establishment and taking what you do from good or awesome or great to absolutely world-class , outstanding , because I'll tell you right now , this is the quickest , easiest and best path to solve almost every issue that exists within your

bar . With that , one more note before I let you guys go . We did a meetup with the Facebook group on Monday night . It went great . I really hope down the road , we want more and more people involved because to be able to have a conversation with each other , interact with each other , learn from each other it is a great experience .

If you're a fake listener of the podcast , I know you enjoy listening to me , but the wonderful thing about the meetups is it's not just me . There are other baroners , there's other ideas .

I will tell you right now that I learned things in the meetup because different people are in different areas , they have different experiences and we can all learn and grow from each other . So really consider coming to the meetup next month .

We're doing it the second Monday of every month , so it's a wonderful opportunity to just interact with other baroners , swap ideas , talk about the problems that you are facing and in order to join that meetup , you got to join the Facebook group .

So look in the show notes , look on Facebook Bar Business Nation is the Facebook group . Join there . We are growing every day .

We're having a lot of conversations and swapping a lot of ideas back and forth there on a regular basis , just through normal posts and comments , and then consider joining us for the meetup , because I think it's a really cool opportunity here to build a community of people that really want to help one another succeed and to help make the bar business not just our

business , not just our bottom line , not just our profit , but to really make the community as a whole better and more awesome . With that , guys have a great week . I will talk to you again later .