By Jennifer Salopek
Apr. 16, 2009
In late 2004 and early 2005, Ruby Tuesday was in trouble. The casual dining chain’s restaurants were under-maintained; employees were leaving; guests were unhappy and weren’t returning. Same-store sales and profits declined. In his letter introducing the annual report for fiscal year 2005, founder and CEO Sandy Beall wrote, “We did not perform well or provide financial value for any of us, and it is our top priority to make sure that doesn’t happen again.”
The company moved swiftly to reverse the downward trend, investing heavily in the brand, the product, the places and—most important—the people of Ruby Tuesday, all in an attempt to create “flawless food and service” in a new, high-quality casual dining environment. Those initial investments in 2005 set off a multi-year process of continuous improvement that values employee training and development and has helped the restaurant chain weather the economic downturn.
Although revenue was down 3.5 percent in fiscal 2008, Ruby Tuesday’s guest satisfaction scores are at historic highs and employee turnover is at historic lows, says Jim Domanic, who has been director of training and development since late 2006.
Domanic has worked for Ruby Tuesday since graduating from college in 1992, and has either performed or managed every role in the company. “That operational knowledge has really helped me to understand the realistic obstacles to effective training,” he says.
Ruby Tuesday pursues a field-based, centralized model for employee training. Soft-skills and management classes are delivered by local and regional leaders and franchise owners, many of whom have been trained at the company’s Center for Leadership Excellence. Standardized, consistent food and drink preparation and guest service procedures training is delivered via a kitchen display system and bar display system in each restaurant. Electronic recipe cards display four-color photos of all food and beverage menu items using an “exploded-build” version of the food product. In addition, all training documents have been converted to electronic format, and can be accessed through the corporate intranet.
“This system enables real-time updates, supports our ‘green’ initiative, produces higher-quality materials and permits prescriptive testing,” Domanic says.
The company integrates individual learning with quarterly development plans, specified career pathways and corporate training initiatives. In order to establish instructional objectives that are customized to the employee, needs assessments and skill inventories are conducted. Multi-unit operators and managers are evaluated quarterly and are eligible for merit increases. Online assessments are conducted through the learning management system, which facilitates the selection of employees for advanced training. It also identifies gaps and develops course content.
Career pathways spell out specific goals that must be met in order to advance to the next career level. Basic requirements have been established for each position, and are then adjusted to the individual based on the results of skill assessments. This “prescriptive training,” as the company terms it, focuses training on what the employee does not know, rather than wasting time and money training skills that have already been mastered.
One key element of Ruby Tuesday’s turnaround was giving employees more control over decision-making at work. Hourly employees, who formerly had to get a manager’s approval for every decision, were given training on how to handle guest dissatisfaction with a meal and were given the power to implement one of several options: They could offer to recook the meal, take the charge off the bill or offer a free dessert. The benefits were multiple: Checks were higher, the servers made more money, and managers were left free to manage. Further, management training costs were reduced by $1.5 million in the first year alone.
In early 2008, Ruby Tuesday further revised its service procedure, analyzing and refining every step of guest interaction from greeting them to anticipating their needs to saying goodbye to them. The new “Service Excellence” program was delivered to all 40,000 team members via the field-based training team, and the results are measurable: Guest satisfaction ratings are higher than ever before, Domanic reports.
Although the company constructed a state-of-the-art, 6,000-square-foot Culinary Arts Institute in 2006 (now known as Wow U), the current economic climate has forced some hard choices about whom to bring to Tennessee, and for what. The result is innovation, though: Because the company’s commitment to employee training and development is unwavering, Domanic and his staff have been inspired to explore new and more cost-effective delivery methods.
“We are working on delivery in every form—Web-based, podcasts, mobile phone delivery,” says Domanic, who has a video production department as part of his team. Food and beverage preparation is well suited to video, and Domanic relies on it for high-quality content that is also cost-effective.
The company also uses a “master’s training” approach. “We have two intended results for all of the training that takes place here at Wow U,” explains Domanic. Intended to be more in-depth than a simple train-the-trainer program, on-site training at HQ is intended to make people experts in the subject matter, and to prepare them to teach others.
For example, when Ruby Tuesday switched to fresh proteins only in 2008 (meaning no meat, poultry or fish to be cooked in the restaurants is ever frozen), that change affected restaurant supply ordering, receiving, handling, storage, and inventory management procedures. Through the “master’s training” approach, general managers were trained on the new procedures during their quarterly meetings in Tennessee, then returned home to teach restaurant managers and staff.
The company launched new management training materials in February as it continues its shift to being a high-quality casual dining brand. Managers follow structured outlines as they pursue training and continued development; they must score 100 percent on every assessment in order to proceed.
However, with change comes challenge: Same-store sales were down more than 9 percent in 2008. In his annual report for last year, Beall wrote, “Making significant changes to nearly all our company-operated restaurants certainly caused distractions for our Operations team and some confusion for our guests.”
“Timing is everything,” Domanic says. He estimates that the company has invested $70 million to $80 million in executing a five-year strategic plan.
Employees have been recruited to serve as “Brand Champions,” provided with field-based education on how to explain the changes at Ruby Tuesday and the new things in store.
“When you change, you do lose guests initially,” Domanic says. “However, we feel fantastic about our brand. We just need more guests to give us a try and tell their friends.”
He recommends the ribs.
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