People First Culture - Best Practices That Are Working In Restaurants (Ep 165)
I had no idea we'd uncover so many valuable gold nuggets in this one...
You absolutely don't want to miss my conversation with Michel Falcon, author of Peolpe First Culture and Founder/CEO of Brasa Peruvian Kitchen.
How do you start, grow and make future expansion plans in a pandemic? Well, Michel has the formula and I promise that some of it will be eye opening!!!
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People First Culture - Best Practices That Are Working In Restaurants With Michel Falcon
Introduction
We've got a great episode for you all about people and culture with Michel Falcon, who is the author of People First Culture and also the founder and CEO of Brasa Peruvian Kitchen. Michel, it’s nice to meet you. How are you?
I'm well, Jaime. Thank you for having me. I'm excited.
Michel does a podcast himself. We'll talk a little bit about that. We'll talk about the book. We'll talk about culture. We'll talk about restaurants. First and foremost, you're in for the restaurant. I know you're at least in the Toronto marketplace. Where else are you?
Toronto, right now. We are on to our third location. We'll be at five corporate stores within the first fifteen months since inception, all open during the pandemic. That posed interesting challenges. I had to ignore a lot of people who said, “Don't do it.” The next market we're looking at is California or Florida for 2022.
Here's a great idea. I'm going to open a bunch of restaurants during the pandemic and people would be like, “What are you doing? Why?” Was it the concept that you felt? Was it quick service, quick take? Did it work at the time and you thought people were looking for that?
I was paying attention because I was supposed to open the first location before the pandemic became a thing. It allowed me to pause and observe. I saw fast, casual restaurants were doing well and third-party delivery exploded. I know how to look at data. When it comes to Uber Eats and all these other platforms, I think I can figure this out in terms of how you keep conversion high on the platform, and how you keep ROI high when you're buying ads. I said, “Let's do it and see what happens.”
The first location opened with great success in its early days and then I started signing leases. I said, I'll figure this out.” So far so good. We’re building the team. One of the things that is most interesting to me is that we've had zero turnover in six months. Zero turnover, zero late, zero sick in six months. That adds to our bottom line and it's an indication that we're doing the right thing. Couple that with customers who like our products, it gives me a lot of hope and motivation to want to keep going.
Culture And People In Restaurants
Maybe we'll circle back to the growth aspect because I'm curious about your plans down the road. Let's stick to the people equation because it probably ties into the culture, A lot of restaurants have exactly the opposite numbers that you're talking about. Is it something that you've built from the start into the DNA of this culture, or is it training or finding the right people? What do you think?
It's many things. The first thing I did during this moment of pause when the pandemic was presenting itself was you couldn't go a day without reading a headline that said something like there's a labor shortage. I always rejected that even from the very beginning. There was a shortage of people who were willing to work hard for little money and not be treated well. That was starting to surface even before the pandemic.
What I did is I reached out to frontline employees of fast, casual, and quick-service restaurants, and I started to ask them questions. I paid them for their time and said, “This is who I am. This is what I'm trying to do. Let me understand what's repelling you right now or what is motivating you.” The common denominators are things that aren't paradigm-shifting. I think we understand these things. It's like, “I want to be paid well. I want to have an opportunity to grow. If your company can help me do that, that's great. Maybe I grow within the company.”
The last is the highest-performing companies, regardless of industry, are surrounded by high-performing people. How often in the fast, casual, or quick service restaurant space is one person or a couple of people doing the lion's share of the work and the other people might be not holding their weight? I took all that information and started thinking about the type of company I wanted to build. What were we going to be about?
The highest-performing companies, regardless of industry, are surrounded by high-performing people.
That is distilled in our mission statement. This is the verbatim word for word, Jaime. Our mission statement, which I've rephrased as why we work statement. This is why we work and why we come together. It's to build a company that the world needs more of. One where everyday people are empowered to make great money, achieve career growth, and help close the income inequality gap. We do that by paying well.
Right now, the minimum wage in Toronto, Ontario, which I've rephrased as starting an income. I don't like minimum wage. I think it's not a good set of words. I think language matters to your culture, so we call it starting income. Right now in Ontario, it's $15. We start at $19. People are earning $20 and $21, and we're still able to make a 17% EBITDA. The model is proving itself.
That was one element of it, making sure that we had a mission that people wanted to be a part of. I know that sounds like a platitude, but it's working. It has worked for companies that have done a similar model before I built Brasa and then grew. I want Brasa to be one day seen as a university in that Brasa was your alma mater. You came and you did great work. Maybe you're a student. You learned a lot about leadership, business, entrepreneurship, marketing, and whatever discipline you want to learn. You graduated because you were a fashion student and then Patagonia hired you or something like that. You remember your time at Brasa very fondly and that's good business.
Alternatively, you join us and you get promoted. We have a person on our team named Marielle. She started as a frontline team member full-time and a team lead and then got promoted to general manager. She got promoted three times in less than a year. Now she's earning a high salary and she's leading an entire business that will do over $1 million in sales in its first year.
This is what excites me. There are going to be a lot of people who want to be a part of this. I caution that not every culture is for everybody. One of our core values, which I've rephrased as how we work. These are a set of things, rules, or guiding principles of how we work. One of them is only the paranoid survive. It's a hard set of words. I understand that it's repelling for some individuals. What I mean by that is tomorrow always has to be earned.
The thing that is going to stop us is ourselves because we think we're good. We’re good right now, but I worry about tomorrow. That constant push for improvement and betterment isn't for everybody. I don't reject the idea of somebody saying, “It's not easy working there, but they pay you well. They treat you well and they genuinely care about your growth with or without the company.” I would like that reputation for Brasa.
I always take notes. I took a bunch of notes there, but that five-minute snippet, we want to pull that out. It's a very good and different way of hospitality that you don't hear often enough when you think about the business, people, and growth. A lot of times it's disposable workers who come in, work, leave, pay as little as you can, and treat them as such. That may be the endemic problem.
The other thing you talked about is the people who don't pull their weight. A lot would do some other training. We talk about A players, B players, and C players. Of course, you don't want C players. Since we're talking about people, what is one of the ways that you identify those A players? It sounds like that's your sticking point.
Hiring is a guess at the end of the day. You have to make the best guess possible. There are things you can do in the recruiting and interview process to filter people out from the very beginning. One of which is our job description at the beginning. It's a longer job description. It takes you at least 45 minutes to go through it. It's not because it's dozens of pages. It's because at the beginning of the job description and after it says in the header, “This is what we're hiring, this is what we pay,” and the typical stuff you see there, there are three videos. One of which is a 27-minute video of me talking about our culture, values, mission, and vision of what we're trying to build.
The next video is a seven-minute video that talks about our menu and how it was created. The last video is a four-minute video talking about the brand, who created the brand, and why Brasa Peruvian Kitchen. It goes on to things such as your responsibilities, your duties, and what we're looking for in an ideal candidate. The reason that I have those videos is because it is a repellent. Somebody might look at that and say, “Is this guy insane? He wants me to watch almost 30 minutes of videos. I just want a job.” You're probably not going to get a job here though.
You may do well somewhere else. It just might not be here. For me, if you can't put forth 30 minutes of watching some videos to earn a top wage in an industry that pays little, then I don't want you on our team. I'm not apologetic about that. We then ask you to fill out an application form, which only takes five minutes, and then we review it and reach out to individuals who respond well to the application.
The first question that we ask in the group virtual interview is, “Tell me something that excited you or was there anything that you questioned while watching the videos?” I know when somebody is lying to me., I know when somebody is like, “They were good,” just a general answer. I know when I'm being lied to and that's all I need to hear. You'll pay attention to some team members and it's virtual.
You can still read body language, but they lean in. Maybe they have their elbows on the table and they're leaning in and talking to you directly to the screen. I had one person say this and immediately, I was like, “You're hired.” She had said, “Michel, at 7 minutes and 27 seconds of the culture video, you said this.” That's a good sign. You have to filter and repel people right away.
One of the things that I want to remove is this gap that we have between the relationships we have in our personal lives as we do in our business lives because the commonality is human behavior. My fiancée’s name is Sophia. I had a list of things that I was looking for in a partner. Somebody who likes to eat, somebody who has an uplifting demeanor and sunny disposition about them, and somebody who's kind. I had this criteria as most people do.
We have to have that same type of criteria with people that we're trying to hire. It doesn't have to be a carbon copy, but the modality could be the same. This is what I look for. I'm very strict. To scale, it's my responsibility to teach our general managers how to see this process and execute it. One thing I learned earlier in my career is to inspect what you expect. I'm constantly making sure that I'm looking under the hood of our hiring methodologies and making sure that we're staying to plan. I'm also relying on our general managers to bring forth their own ideas because they're the ones doing it.
I want to stay as far away from operations as possible. We have a director of operations, and I have to give him autonomy to be able to execute. It's my responsibility as the flag bearer of the culture to make sure that I'm championing this. It begins and ends with me. We’re helping to motivate our team members to find better ways of doing things because what worked for us in 2022 likely will be different in 2025.
I wrote down what I think is probably the most important question of the interview to follow up with. Did you make your fiancée watch the 27-minute video?
No, but I will tell you this. On one of our first dates or I think it was the second date, I said, “I enjoyed our first date. I'm pretty sure we're going to enjoy the second date. Maybe there's a third and fourth, but I'm going to tell you now, these are my unbecoming qualities. I'm short-tempered sometimes. I'm irritable sometimes. I carry a lot of stress.” I was showing my ugly and saying, “I don't want you to be surprised by this six months down the road. I'm telling you now.”
Guess what I do? One of our interview questions with everyone in the company, regardless of whether we're hiring marketing or frontline team members, I say, “What is the unbecoming quality I'm going to learn about you in three months?” I go first and I tell them, “Sometimes I can speak in a condescending way when I'm irritable. I hate it about myself, but I'm working on it. I want you to know that if it shows up, I told you. Don't be surprised by this, but trust me, I am working on it.”
I also submit the interview questions beforehand. I give them the set of questions because I'm not trying to fool them. I'm not trying to stump them. I'm trying to have a conversation with another human being. Why not give them the opportunity to prepare themselves? I don't like this whole culture of I fooled you or “Here's a question and you didn't know the answer. You're not getting hired.” How natural is that? It's not at all.
It makes them feel very uncomfortable. You go like this.
Exactly, because when you don't know the answer to something, often you're demoralized. That goes on for the rest of the interview. You're not yourself. At the end of the day, we're not doing what SpaceX is doing here. It's restaurants. For the most part, it's pretty straightforward. This is going to sound like a major platitude, but it's a people business. The product is the outcome. There are human beings right now at my restaurant preparing for lunch service. The outcome is a phenomenal product, which our customers will enjoy.
Restaurants are a people business. The outcome, when there are human beings preparing for lunch service, is a phenomenal product.
I like asking uncomfortable questions. That's good. I like the way you're talking about the interview process. That is going to eliminate people. Watching the video sequence and then asking the questions directly afterward will naturally eliminate the slackers from the process. They'll go away by themselves, which is in essence what you're trying to do.
Our culture isn't for everyone. Some people would not like it. It is pretty advanced. We're trying to do ambitious things with people that have a plan for themselves. Not everybody is cut from that cloth, and that's okay. I'm not saying that there are any lesser or greater than us. This is our little domain. If you feel like you're going to fit in, come join us. The people that do, as I mentioned, there's zero turnover in six months because they see what we see.
Writing The Book
That's an incredible number. I'm going to pop out to the book page here, and you can tell me about this. How long has it been out? The process of writing a book, I always think about it as daunting as hell.
Full transparency, I didn't write it. They are my thoughts, my strategies, and my words. It was composed by a company called Scribe based in Austin, Texas. Scribe Media recorded me for maybe nine hours of talking, maybe a dozen or more. They take all of these conversations and distill them into a book, mapping it all out for you. I would not have been able to write a book. This was a way for individuals who were in my position of not being able to write extremely well to produce a book. It came out on my birthday. October 16th, 2018 is when it came out. It was a gift to myself.
It's pretty much how you earn a profit by doing right by others. I genuinely believe this. I don't want to be successful by stepping on people. I'm still capitalistic. I believe in earning a profit and helping investors make money. There's a right way to do it. It's the way that I see fit for myself. I'm not going to be a preacher on this is the only way to do it. It's just the way that I'm finding success.
If anybody reads the book and says, “That interview question you recommend asking worked for us. We're using it.” There's one interview question that I have that has been replicated by hundreds and hundreds of companies. It started with them reading the book. That brings me joy. Some of the best emails I get are from individuals saying, “My name is Joe from Kansas City, and I read your book, and it's working.” That brings me a lot of joy.
I'm guessing. I'm going to hit a keynote. You probably enjoy speaking. How often do you do that? Do you travel around a little bit?
It’s limited now. Before the pandemic, it was at least a couple of times a month traveling quite a bit. Now I have to be protective of my time because Brasa is growing and demanding of my time. Right now, I speak about once a month. Because of the pandemic, that came to a screeching halt and everything went virtual. It was interesting that a bunch of companies reached out to me during the pandemic and said, “Can you talk to us about creating a great company culture, a virtual company culture?” I was like, “I don't know how to do that.”
Very few people know how to do this. Anybody who says, “I'm an expert in that,” is lying and trying to take a paycheck from you. Nobody has had experience in doing it. There are very few remote teams. I found that interesting that a lot of people's LinkedIn bios turned to virtual company culture experts. I see through that. I do some keynote speaking. I enjoy speaking. I love meeting people after the keynote and talking about all things company culture and customer experience management.
Website And Culture Deck
I don't always pop the screen share, but since we're out there, I wanted to bring up the website for the restaurant. Any one page I want to click on here or anything you want to show real quick?
Why don't you go to the About page? If you scroll down a little bit, you'll see here, “Why do we work? What's our work and how do we work?” We're constantly advocating this because we do want it to be a North Star of the company. It is amongst everything. Our company culture is more important to me than our product quality, only because product quality is the outcome of having a culture where people care about coming to work and helping us achieve our goals together.
Our company culture is more important than our product quality because product quality is the outcome of having a culture where people care about coming to work and helping us achieve our goals together.
I don't want this to sound too fluffy or unbelievable, but it's true. I recorded a video and shared it in our Slack where every employee got it. It was to announce that everyone was getting a raise. It announced who our three general managers are. It also announced new roles we're hiring and creating within the company, our product manager and our culture manager.
Each store has a product manager and a culture manager who support the general manager. It's another layer in our organization that allows people to grow within the company. That's very important to me. It's things that we all know are important to people. Why do some succeed and others fall short? I have a few opinions, but it comes down to, “Do you practice what you preach.” I'm trying to do that.
I'm not going to click on it, but I'm fascinated. Maybe I will later, but the fact that it says, “Visit our culture deck.” I assume if I click that, it's going to be a presentation that talks even more about you. We have talked about restaurants promoting themselves in the past, using your About page to tell your story, videos, and so forth, especially from a recruiting standpoint when people are hard to find, talking about you being special, and so forth. I'm assuming that digs into that. Imagine that as a tool, versus regular, no story, no about, no passion, no anything. Why should I choose them versus you? Do you think about that as a differentiator?
Absolutely. There's one element to the culture deck that I'm going to implement that says why you shouldn't work here and make it very apparent because you want the turnover to happen before you hire somebody. Another thing that I'm proud of is that in every store we open, we donate $10,000 to an organization called Crusoe International. The money goes to help urban farming projects in Peru.
We're helping with food insecurity. That's another thing that people enjoy about working with us and customers enjoy dining with us. Their efforts are going toward helping people who are food insecure. It's an emotional topic for me. I'm Canadian Peruvian. Imagine not having food. Imagine being a parent not knowing how you're going to feed your kids. My problems are very small in comparison. It keeps me grounded. I want to open more stores. The best check I can write is that $10,000 check to Crusoe International. It means a lot to me.
Connect With Michel
Good for you. That's a great way to start each location. I appreciate that. Let's go ahead and do this. We'll close. Send them to websites, send them to social, and send them to the book.
My personal website is MichelFalcon.com. If you go to MichaelFalcon.com, I don't know where that's going to take you. That's not my name, but it happens to me all the time. There you can share your email address. I share weekly tips on what strategies are working for me and which ones aren't. If you can glean some lessons from that, awesome. If it works for you, email me, please. I love getting emails where people are using the strategies that I recommend and they're having advantageous results. Let me know and I'm Michel Falcon everywhere. My parents bless and curse me with this name. I'm easy to find, which is a good part of my socials and my website.
This has been fun. I always enjoy talking about this stuff. Good stuff there, folks. Michel Falcon from Brasa Peruvian is also the author of People First Culture. Make sure to check them out on MichelFalcon.com and also BrasaPeruvian.com for the restaurant. If you're up in the Toronto area, but soon to be elsewhere. I can see they're going to grow quickly based on the story that we've heard today. For more great restaurant marketing and service and people and tech tips, stay tuned to us here at RunningRestaurants.com. We'll see you next time. Thanks much.
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