Live

Watch CBSN Live

How to Tap Your Staff for Brilliant Ideas

By Nick Sarillo, Owner, Nick's Pizza & Pub, Crystal Lake, Ill.
I opened the first Nick's Pizza & Pub more than 15 years ago in northwest Illinois. We now have two 350-seat restaurants in the Chicago area, each with around$3 million in annual revenue. The restaurant business took a significant hit in 2008, along with the rest of the economy, and both our locations started to feel the squeeze.

We needed to find creative ways to get more people into the restaurant. Rather than using a small management or executive team to generate answers, we turned to our employees -- everyone from servers, to bartenders, to cooks. The resulting advice not only pulled us through the downturn, but has us looking to expand to a third restaurant within the next few years. Here's how it worked.

Feeling the squeeze
In 2008, we noticed a major decline in traffic from our most significant customer group: families. Weeknights, which had previously been profitable times for us, were extremely slow. Our guest count dropped almost 20% from 2007. That's almost 100,000 fewer guests a year. We recognized the need to act, to put something into place before those numbers dropped even further. So we turned to the people who know the business best -- our staff.

How it works
The practice of inviting staff input on the restaurant's operations had been in place since about 2005. It wasn't until two years after that, however, that we really organized it. I had been to conferences and read books specifically about the importance of engaging employees in fiscal and operational decisions and I was very enthusiastic about creating this kind of open, collaborative culture. We hired employees with this in mind and were eager for them to step up and participate.

Starting in 2007 we began holding a weekly forum at the restaurant for employees to collectively address concerns and devise solutions. At these "huddles" we open our books and ask the employees what steps we should take to improve our numbers. The suggestions come from everywhere: from the 16-year-old kid to the 40-year-old single mom. They're the ones walking the floor, making the food -- they have a great sense of what's really going on and how we can make things better. The employees in attendance then take the initiatives proposed in the meetings and bring them back to the rest of the staff. They, in turn, discuss how to put the idea into practice.

The solutions
This process allows more space for organic idea generation. It was a high-schooler who created an appetizer made from excess pizza dough that generated around $10,000 last year. Were this system not in place, his idea might never have made its way out of the kitchen and onto the menu.

The most successful initiative to come out of the huddles, though, was offering half-priced pizza on Monday nights. Dropping 50% off the price of pizza allowed those families staying at home to come eat with us, and it helped us boost traffic on a slow night. By the end of promotion's second year, the number of employees we needed to staff the restaurant on Monday nights had increased from 14 to almost 40.

By giving our employees the opportunity to participate in the company, valuing their opinions and acting on their ideas, we encourage them to continue working with us. It does have its costs -- we figure huddles cost us about $40 a week in terms of time and resources. But it's worth it: We have a 25% turnover rate, in an industry with an average of over three times that. And the lower turnover reinforces the sense of ownership in our teams. They feel empowered to set the direction of where we're headed as a company, and that's something pretty special to be a part of.

When he's not working at Nick's Pizza & Pub, Sarillo enjoys time with his three children, and sailing his Hobie Cat at Gilson Beach in Wilmette.
-- As told to Alex Coppola

Read more:

View CBS News In