Any business in any industry

April 22, 2015

Awesome article in a New York Paper on a sandwich business that does things differently and has fantastic results from – low team turnover, high team morale, extensive team training, bonuses, prizes and staff parties and rewards go to the whole team and not individuals.

British sandwich chain keeps lines short and employees energised

Something weird is happening inside a Pret A Manger sandwich shop on Broadway in New York.
It is not all those unfamiliar British sandwiches, thin and understated, with ingredients like free-range egg mayonnaise and avocado-and-pine-nut filling.

No, it is the employees. The cashier is asking New Yorkers how they are doing -and genuinely seems to want an answer. The guy who is throwing out the garbage offers customers cups of water.
The manager swings by to commiserate about the sweltering weather.
This is fast food? In New York?

Pret A Manger, the British chain, has gained a foothold in New York’s McWorld of burgers and fries, where you can fun-size this, combo that and, face it, sort of expect sullen service.

Next to, say, McDonald’s, Pret A Manger amounts to a fleck of relish, if that. Last year, Pret posted sales of £327.5 million, or about $534 million. The take at McDonald’s: $24 billion. But Pret A Manger -the name means “ready to eat” in French -is slowly expanding in New York and other cities with its own brand of grab-and-go food and, more significant, a fresh approach to fast-food service.

What makes Pret A Manger a compelling business case study is its approach to customer service and to training and motivating its staff. Yes, Pret happens to make sandwiches -but the lessons are worth knowing, whatever your line of work.

Many businesses have trouble getting longtime employees to work well and, in particular, to work well together.

But Pret has managed to build productive, friendly crews with relatively lowpaid, transient employees. And its workers seem pretty happy about it. Its annual work force turnover rate is about 60 percent -low for the fast-food industry, where the rate is normally 300 to 400 percent.

At the request of The New York Times, whose global edition is the International Herald Tribune, Francis J.
Flynn, a professor of organizational behavior at the Stanford University Graduate School of Business in California, reviewed some of the management practices of Pret A Manger. He liked what he saw.
“A lot of people think about these jobs as almost hopeless, when it comes to motivating the employees who work there, and it’s kind of sad, and I also think it’s incorrect,” Mr. Flynn said. “My sense is, there’s a really holistic approach, a comprehensive approach, to development.” Pret is succeeding with just such an out-of-the-box approach. So far this year, sales in its 34 U.S. stores -in New York, Chicago and Washington -have increased 40 percent from level in the same period last year. The company’s total profits, with its approximately 225 British shops contributing the most by far, rose about 37 percent, to £46 million, in 2010. Pret, which also has 11 stores in Hong Kong, plans to expand further in the United States and in Paris, where it plans to open two shops this year.

It all began in 1986, when Julian Metcalfe and Sinclair Beecham, who had been college friends in London, felt that they could not find a decent sandwich.

Many other Britons apparently felt the same way. By 2001, Pret A Manger had 100 stores in Britain and was moving into the United States. Mr. Metcalfe and Mr. Beecham sold a third of the business to, of all companies, McDonald’s, for an estimated £26 million.

After the McDonald’s investment, the founders “got pushed like mad” to expand, said Clive Schlee, who was appointed chief executive in 2003. (The founders, still investors in the company, have other hospitality businesses.) Pret added more stores in the United States without figuring out some basics -the fact that some Americans are not fond of mayonnaise, for example, and that they tend to drink more drip coffee than espresso or lattes. Overextended, Pret lost sales and closed stores.
“We burnt ourselves quite badly,” Mr. Schlee said.

In 2008, McDonald’s sold its stake, and a private investment firm, Bridgepoint Capital, bought a majority of Pret for about £345 million. Bridgepoint still controls the company.
These days, Pret seems to have its operation down pat. At 9:30 in the morning at a Pret near Victoria Station in London, there is no customer line. There rarely is.

“A very important part of Pret is, you see four, five, six to nine people on till,” Mr. Schlee says, using the Britishism for cash register. “Pret A Manger does mean ready to eat -kapow! – not ready to wait.” How does any company encourage teamwork? At Pret A Manger, executives said, the answer is to hire, pay and promote based on -believe it or not -qualities like cheerfulness.
There is a certain “Survivor” element to all of this. New hires are sent to a Pret A Manger shop for a six-hour day, and then the employees there vote whether to keep them or not. Ninety percent of prospects get a thumbs-up.

Those who are voted out are sent home with £35, no hard feelings.

The crucial factor is gaining support from existing employees. Those workers have skin in the game: Bonuses are awarded on the basis of performance by an entire team, not individuals. Pret workers know that a bad hire could cost them money.

Pret also sends “mystery shoppers,” people who anonymously visit and grade the stores, to every shop each week. Those shoppers give employee specific critiques (“Bill didn’t smile at the till,” for instance). If a mystery shopper scores a shop as “outstanding” -86 percent of stores usually qualify -all of the employees get a £1-per-hour bonus, based on a week’s pay, so full timers get about $73. “There’s a lot of peer pressure,” said Andrea Wareham, the human resources director at Pret.
Pret reinforces the teamwork concept in other ways. When employees are promoted or pass training milestones, they receive at least £50 in vouchers, a payment that Pret calls a “shooting star.” But, instead of keeping the bonus, the employees must give the money to colleagues, people who have helped them along the way.

There are other rewards. Every quarter, the top 10 percent of stores, as ranked by mystery-shopper scores, receive about £30 per employee for a party. The top executives at Pret get 60 “Wow” cards, with scratch-off rewards like £10 or an iPod, to hand out each year to employees who strike them as particularly good. Pret has all-staff parties twice a year, and managers get a monthly budget of £100 or so to spend on drinks or outings for their workers.

Pret also has highly detailed training programs and materials. “If people know what they’re there to do, and how to do it, there’s no confusion,” Ms. Wareham said.
Every new employee gets a thick binder of instructions. It states, for example, that employees should be “bustling around and being active” on the floor, not “standing around looking bored.” It encourages them to hand out free coffee or cakes occasionally to regulars, and not “hide your true character” with customers.

By their third month, employees have to pass a written quiz with questions like “What is the maximum time a customer should wait in line?” and show that they are proficient in dozens of practical criteria. Then they become “Team Member Stars,” or T.M.S.’s, and can move up to food preparation positions like “hot chef,” which oversees soups, pastries and other hot foods, en route to more senior shop-management positions.

It takes about three months to become a hot chef. It might seem that the training would cover procedures like making soup or baking croissants. But Pret has standardized so much -soups, for example, are sent to the shops premade and in plastic bags, and ovens are preprogrammed for each baked item -that the training is largely about food safety and disposal.

Mr. Flynn, the Stanford professor, said that emphasizing small advancements made sense.
“That’s actually a very reasonable way to approach motivation,” he said.
“Having them make continual progress provides them with feedback that they are doing what they need to be doing.” The streets were still wet from an early-morning cleaning on Eastcastle Street, not far from Paddington Station.

It was not yet 6:45, but Petronela Roman, with a big brunette topknot and cat-eye eyeliner, was making coffee for co-workers at a Pret store. Upstairs, employees put on white coats with red Pret logos.
At 7 o’clock, as the store manager, Lenka Karlovic, wrapped up the morning meeting and employees were still downing their coffee, the first customer walked in. Flicking crumbs from her fingers, a worker rushed over with a “Hello.” The scream of the latte machine followed, and it was off to the races.
It was giddy in the kitchen at the back of the shop. It smelled of chutney and mayonnaise, and Lukasz Gorczynski, who was training to become a kitchen supervisor, had his iPod blaring. Eight or so workers were running into the giant refrigerator, placing tomatoes on sandwiches, scooping mayonnaise from buckets and slicing through sandwiches with an electric-powered knife.

“Lemon juice, guys!” someone shouted.

“Open bread, guys!” said another.

Mr. Gorczynski and Ms. Karlovic had determined what must be ready when, based on average sales and the weather. The clock was running: Mr. Gorczynski’s task list included making six bowls of granola within 1 minute and 17 seconds; 24 edamame packs within 6 minutes and 2 seconds; 20 containers of honey-granola within 6 minutes and 17 seconds. Berry bowls, muesli bowls, porridge toppings -the list went on.
The food was taken to the shop floor as soon as it was finished, and hundreds of sandwiches, salads and other items had to be in the cases by 10:30 a.m.

“These are theoretical times,” Mr. Gorczynski said. But “if we’re late in the morning, then we’re late later on.” Ms. Roman was training to be a hot chef, and, after eight months at Pret, a promotion would mean a raise to £7.90 an hour from £7.30.

She had been training with Ms. Karlovic, filling out workbooks and taking quizzes. After lunch, it was time for Ms. Roman’s final test: With Ms. Karlovic watching, she had to train someone else.

She called over Aurora Amador.

Ms. Roman stuck to the manual. She introduced herself, even though the two had just been eating lunch together, and they began to review baking as though it were a catechism class.
“You have to use the gloves,” Ms. Roman said.

Ms. Amador nodded solemnly: “I will.” Ms. Karlovic marked her notebook as Ms. Roman progressed, then called the kitchen workers to gather as Ms. Roman waited nervously by the stove.

“Guys, it’s about Petronela, O.K.?

She’s a new hot-food chef,” Ms. Karlovic said. “And, guys, she’s getting a £50 shooting star, so be nice to her.” The employees started clapping and shouting, and some customers did, too.
Then the assistant manager shooed everyone away -“Go back to the kitchen! Get on, get on!” Standing next to the case of croissants, Ms. Roman had tears in her eyes.

Now that is truly awesome. The key to believe and understand is that can and should apply to any business no matter the industry. Businesses that succeed moving forward will be the ones that do things like the story above. It is truly up to us to ensure that we take care of our team and in turn our clients, customers or patients.


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