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Dunn and Laibson had spent a few months visiting 23 of the best restaurants in the Southeast. Driving for hours, they’d listen to tapes on management, stop them at key points, and ask, “Why don’t we do something like this?” At night, they read management books, underlining significant passages, looking for answers.

“They were all saying that people is where it’s at,” says Dunn. “We’ve got to start thinking of our people as an asset,” they decided. “And we’ve got to increase the value of that asset.” Dunn was excited by the prospect of forming McGuffey’s into the shape of a reverse pyramid, with employees on top. Keeping employees, he now knew, meant keep- ing employees involved.

He heard one consultant suggest that smart companies keep managers involved by tying their compensation to their performance. McGuffey’s had been handing managers goals every quarter; if they hit half the goals, they pocketed half their bonus. Sound rea- sonable? No, preached the consultant, you can’t reward managers for a halfhearted job. It has to be all or nothing. “From now on,” Dunn told his managers firmly, “there’s no halfway.”

Dunn also launched a contest for employees. Competition, he had read, was a good way of keeping employees motivated.

So the CUDA (Customer Undeniably Deserves Attention) contest was born. At Hendersonville and Asheville, he divided the employees into six teams. The winning team would win $1,000, based on talking to customers, keeping the restaurant clean, and collecting special tokens for extra work beyond the call of duty.

Employees came in every morning, donned their colors, and dug in for battle. Within a few weeks, two teams pulled out in front. Managers also seemed revitalized. To Dunn, it seemed like they would do anything, anything, to keep their food costs down, their sales up, their profit margins in line. This was just what all the high-priced consultants had promised.

But after about six months, only one store’s managers seemed capable of winning those all-or-nothing bonuses. At managers’ meetings and reviews, Dunn started hearing grumblings. “How come your labor costs are so out of whack?” he’d ask. “Heck, I can’t win the bonus anyway,” a manager would answer, “so why try?” “Look, Keith,” another would say, “I haven’t seen a bonus in so long, I’ve forgotten what they look like.” Some managers wanted the bonus so badly that they worked understaffed, didn’t fix equip- ment, and ran short on supplies.

The CUDA contest deteriorated into jealousy and malaise. Three teams lagged far behind after the first month or so. Within those teams, people were bickering and com- plaining all the time: “We can’t win, so what’s the use?” The contest, Dunn couldn’t help but notice, seemed to be having a reverse effect than the one he had intended. “Some people were really killing themselves,” he says. About 12, to be exact. The other 100-plus were utterly demoralized.

Dunn was angry. These were the same employees who, after all, had claimed he wasn’t doing enough for them. But okay, he wanted to hear what they had to say. “Get feedback,” the management gurus preached; “find out what your employees think.” Dunn announced that the owners would hold informal rap sessions once a month.

“This is your time to talk,” Dunn told the employees who showed up—all three of them. That’s how it was most times, with three to five employees in attendance, and the owners dragging others away from their jobs in the kitchen. Nothing was sinking in, and Dunn knew it. He now was clear about what didn’t work. He just needed to become clear about what would work.

Source: Hyatt, J. (1989, February). The odyssey of an excellent man. Inc., 63–68. Copyright © 1989 by Goldhirsh Group, Inc. Reprinted with permission of the publishers, 38 Commercial Wharf, Boston, MA 02110.




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