Moneyball for Restaurants

Moneyball for Restaurants

You may have read the novel, Moneyball: The Art of Winning an Unfair Game by Michael Lewis, or more likely, seen the movie starring Brad Pitt. Moneyball is about how an underfunded Oakland A’s baseball team sought to compete against the wealthy teams like the New York Yankees by using math and statistics. It’s a story about David vs Goliath - a true underdog story. And that story resonates more than ever for the restaurant industry today.

Overnight, COVID-19 made an already unfair game almost unplayable for the restaurant industry. Shutdowns, mandates and an exodus of workers have created an inhospitable operating environment for the hospitality industry. Meanwhile, as the economy has started to reopen, many enterprise restaurants find themselves matching or exceeding pre-pandemic sales with less staff. According to Blackbox Intelligence, full service restaurants are operating with 6.2 employees in the back-of-house and 2.8 fewer staff members in the front-of-house. Limited-service restaurants are also under labor pressure, and a handful of Chick-fil-A and McDonald's units have had to close their dining rooms due to insufficient staffing. The labor crisis has created an unsustainable and unprecedented problem for this industry as a whole.

How data changed sports

Using data has evened the playing field in sports. With a comparatively shoestring budget, Beane turned the Oakland A’s into one of the best teams in baseball by looking past scouting cliches and counting the stats that really mattered. Since Beane took over as general manager in Oakland in 1998, the A’s have won the sixth-most games in MLB, despite maintaining the league’s second-lowest payroll over that span. Daryl Morey, meanwhile, became the GM for the NBA Houston Rockets 10 years after Beane started his stint in Oakland, and much like Beane, Morey transformed his franchise by, once again, looking past scouting cliches and counting the right stuff. While he was in charge, the Rockets won more games than any team in the NBA other than the San Antonio Spurs.

What looked strange 20 years ago, is now common place in professional sports. Every play, pass, and fumble is measured so that the team can coach, train and improve. Data now dictates decision making. Data creates a culture of competition and knowledge sharing within the organization. Data is used to reduce bias when drafting and hiring players. And the teams that use data best and fastest, come out on top - despite how rich or poor, or how big or small their market is. 

And what does this have to do with restaurants?

Restaurants are a perfect analogy to sports teams in the business world. Each day and each service is new game with multiple players on the floor who need to work together to win. And all of their actions - from wait times, to items sold, to food wasted,  to comps given - can be tracked and measured. All of this data creates a new operating paradigm. Restaurants can use data to improve every aspect of their operation - ultimately, to make customers happier, drive more revenue, and keep teams engaged. This data can be used to measure and track each employee (ie. player) to make sure they are getting timely coaching and training, so that each individuals’ success can help the team win.   

Restaurants, like sports teams, are already positioned to use data to their advantage. In the past decade, restaurants have adopted hardware and software that allows them to track and measure everything that happens within and outside the 4 walls of the restaurant.

     - POS:   Sales, Sales Mix, Employee Sales

     - HR:  Turnover

     - Scheduling:  Hours, Clock In/Out

     - Inventory:  COGS, Waste

     - Loyalty/CRM:  Customer visits and spend

     - Feedback:  Guest Reviews

     - 3rd Party Delivery:  Wait Times, Accuracy

     - Online Advertising: Marketing Spend

The next step for restaurants is to unsilo the data and correlate all data sources against each other.   

Before “moneyball,” baseball scouts would use appearance and personality to evaluate potential players (ie.  looks strong and has a nice swing). But now sports teams have adopted Sabremetrics to fully understand how a player impacts a game; combining many statistics to calculate predictive analytics on how a player will impact the game. 

Restaurants are now positioned to do the same; to use all of their data to create a whole picture about an employee and team in order to get the best results possible. Instead of using qualitative judgement (eg.  is a nice talkative person who dresses well)  to evaluate an employee, restaurants can combine data from dozens of sources in order to provide the right training, coaching, and scheduling in order to drive the business.   

But how?

Many enterprise restaurants are still using old school methods to extract actionable information from their data  (ie.  Excel spreadsheets run once a week by a financial analyst). These legacy methods lead to slow decision making that are informed by a limited amount of data that an analyst has access to or time to extract. Expo solves this problem. Expo integrates with any and all data sources that a restaurant uses, in real time. And for the first time, all your data is aggregated and correlated against each other in order to provide complete and actionable insights about your team.   

The ROI is proven - increase revenue, make customers happier, and get more out of our existing teams by keeping them laser focused on the things that matter. While COVID has made running restaurant organizations seem unfair, with Expo, restaurants can finally leverage all of their data to level the playing field and win more games.