Chapter 2: Strategic Planning

Learning Objectives for Restaurant Strategic Planning

Objective 2.1: List the basic principles of strategic planning, emphasizing employee assistance and procedures for managing planning information.
Objective 2.2: Describe the development and implementation of value, vision, and mission statements.
Objective 2.3: State the importance of SMART goals in the planning process.
Objective 2.4: Review procedures for conducting a SWOT analysis.
Objective 2.5: Identify how managers use long-range plans, business plans, marketing plans, and operating budgets, and explain their relationships.
Objective 2.6: Explain the need to consider employee abilities and organized processes in plan implementation.
Objective 2.7: Explain technological components leveraged in strategic planning.

The Strategic Planning Process

Foundational Tools: Vision and mission statements chart the course for all strategic planning.
Planning Tools Arsenal: Includes long-range plans, business plans, marketing plans, and the operating budget.
Core Philosophy: "If you don’t know where you’re going, any path will get you there."
Defining Planning: Planning is a process used to determine goals, decide how to achieve them, and develop ways to get work done.
Formal Process Hierarchy:
- Goals must be defined first.
- Work tasks follow goal definition.
- Assignments follow task definition.
Management Requirements:
- A formal planning process is required.
- All information for effective planning must be accessible.
- Planning must be executed at the correct organizational level.
- Stakeholders (those affected by plans) should assist in development.
- Necessary resources must be committed for follow-up.
- Managers must accept that there is no perfect plan and expect surprises; even the best plans require updates or complete revision.

Employee Involvement in Planning

Rationale for Involvement:
- Commitment: Dedicated employees desire involvement.
- Respect: Using employee ideas makes them feel respected and valued.
- Execution: Employees are more likely to follow plans they helped create.
Methods of Involvement:
- Brainstorming: A method for solving problems in which all group members suggest possible ideas. Managers use these sessions to learn employee ideas for development and implementation.
- Feedback: Seeking individual or small-group feedback.
Goal Alignment: All employees should understand how their work relates to short-term and long-term goals for the establishment and department.

Managing Planning Information

Information Foundation: Current and accurate information is essential for successful planning.
Four Vital Categories of Information:
1. Information regarding the operation itself.
2. Information regarding the local community.
3. Information regarding the restaurant and foodservice industry.
4. Information regarding state, national, and international events.

Establishing Value, Vision, and Mission Statements

Value Statements: A set of standards that guide foodservice operations. They shape team attitudes and define acceptable versus unacceptable employee behavior.
Vision Statement: Defines what an establishment wants to become and why it exists. Its primary purpose is to inspire.
Mission Statement: Describes what an establishment is currently doing and how it will get there. It serves as a management tool for planning and decision-making.
Relationship Summary:
- Value statements document core values.
- Vision statements define future aspirations.
- Mission statements explain the intent to meet value goals and vision.
Example Mission Statement (Fine-Dining): "Seoul Sazón BBQ will provide the highest-value dining experience for our guests by consistently offering high-quality, flavorful food served by a knowledgeable, friendly team in clean and relaxing surroundings."

Steps to Create Vision and Mission Statements

Use core values to consider purpose and desired direction.
Organize a team of stakeholders, including both seasoned and new employees for diverse perspectives.
Work with the team to gather suggestions and ideas.
Write a draft of the vision statement based on ideas.
Develop a draft of the mission statement based on the vision.
Review and revise statements with further stakeholder feedback.
Gain formal approval from stakeholders.
Distribute copies to all stakeholders and employees.
Post statements in common areas and areas frequently seen by employees.
Incorporate statements into technology, such as digital BOH checklists or eLearning welcome screens.
Reference statements constantly as a reminder of the operation's goals and requirements for success.

Implementation of Vision and Mission Statements

Integration Ideas:
- Include statements in employee handbooks and discuss during orientation.
- Provide concrete examples of work planned with the vision and mission in mind.
- Explicitly communicate the expectation that everyone supports these statements.
- Align all training materials with these foundational documents.
- Discuss recent examples of successes related to the statements during employee meetings.

SMART Goals and Benchmarks

Definition of Goals: Statements of desired results used to measure operational performance.
Benchmarks: Standards by which something can be measured or judged.
SMART Criteria:
- Specific: Goals must be clearly stated, indicating exact expectations and conditions.
- Measurable: Results must allow for comparisons between goals and actual results.
- Achievable: Goals must be realistic but require the team to strive for them.
- Relevant: Goals must relate back to the vision and mission statements.
- Timebound: Goals specify dates by which they should be reached.
SMART Goal Examples:
- "We will decrease customer complaints by $5\,\%$ over the next $3$ months."
- "We will increase customer counts by $10\,\%$ monthly within $18$ months."
- "We will be able to use $25$ basic conversational phrases in English and Spanish before the end of the current fiscal year."

Strategies and Goal Levels

Strategies: Plans of action to reach a goal, considering the best use of labor, products, money, time, and resources.
Traits of Effective Goals:
- Balanced: Considers interests of owners, managers, employees, and customers.
- Strategic: Align with developed action plans.
- Long-term: Allow results to be repeated over time.
Levels of Goals:
- Organizational Goals: Broad statements for the entire operation.
- Departmental/Team Goals: Links to organizational goals to produce specific results.
- Individual Performance Goals: Focuses on the personal efforts of each employee.

SWOT Analysis

Purpose: To identify internal Strengths and Weaknesses and examine external Opportunities and Threats.
Function: Helps managers set goals and focus plans on areas where the business is strongest and has the greatest opportunity.

Operational Planning Tools

Long-Range Plan: Goals and activities for the next $3$ to $5$ years to move the operation toward its mission.
Business Plan: Goals and activities for the next $12$ months. Often uses worksheets to track tasks, responsible staff, planned completion dates, and actual completion dates.
Marketing Plan: Specific activities designed to meet revenue goals and attract, retain, and expand the customer base.
- Key questions: What must be done? Who will do it? When? How much money is needed? How are results evaluated?
Operating Budget: A financial plan estimating revenue, expenses, and profit for a specific period. Actual results are compared against these numbers to identify problems.
Relationship Example (Business Traveler Focus):
- Vision: Be the best establishment for community business travelers.
- Mission: Meet dining and small-group meeting needs for business visitors.
- Long-Range Plan: Provide F&B services to $60\,\%$ of identified business visitors within $5$ years.
- Business Plan: Increase business visitor counts by $5\,\%$ within next $12$ months.
- Marketing Plan: Strategies to increase counts and revenue within those $12$ months.
- Operating Budget: Expected revenue and costs related to these products and services.

Leadership and Plan Implementation

Factors in Employee Assignment:
- Strengths, weaknesses, and need for career development challenges.
- Ability to perform the job and work independently.
- Commitment level to the goal.
- Whether the task requires one person or a team.
- Required qualities and task breakdown (whole goal vs. small tasks).
- Current skills, knowledge, cooperation ability, accountability, and response to change.
Organized Four-Step Process:
- Step 1: Develop the Plan.
- Step 2: Implement the Plan.
- Step 3: Evaluate the Plan.
- Step 4: Apply the Results.

Leveraging Technology in Strategic Planning

Importance of Technology: Supports efficient operations, provides real-time data, aligns activities with mission, and allows quick responses to industry changes.
Data-Driven Management: Use of Point-of-Sale (POS) and Customer Relationship Management (CRM) systems to analyze sales and labor. Financial software monitors budgets.
Budgeting and Financial Planning: Real-time expense/revenue tracking and automated payroll/invoicing to reduce errors.
Inventory Management Systems: Real-time tracking to reduce waste/shortages and balance stock levels based on historical data.
eLearning Platforms: Facilitate consistent onboarding, safety training, and tracking of employee performance.
Customer Engagement: Using social media, loyalty programs, and online reservations to improve retention and marketing strategies.
Predictive Analytics and Forecasting: Using historical data and external factors to predict sales, labor needs, and inventory requirements. This supports proactive management.

Questions & Discussion

Strategic Planning Importance: Why is strategic planning important for restaurant and foodservice managers?
Planning Principles: List and explain three principles that should be used in the strategic planning process.
Involvement Benefits: How can involving employees in the planning process benefit the restaurant or foodservice operation?
Tool Influence: What are the first three planning tools essential for restaurant or foodservice manager and how do they influence the operation?
Value Statement Purpose: Describe the purpose and importance of a value statement in a restaurant or service’s planning process.
Vision vs. Mission: What is the difference between a vision statement and a mission statement in the context of a restaurant or foodservice operation?
Goal Setting Reasons: What are some reasons for setting goals in a restaurant?
Benchmarks in Evaluation: How do benchmarks aid managers in evaluating goal achievement?
SMART Goal Impact: How can SMART goals help managers improve operations and employee performance?
SWOT Analysis Purpose: What is the purpose of conducting a SWOT analysis in the context of restaurant and foodservice management?
Prioritization via SWOT: How can a SWOT analysis help restaurant and foodservice managers identify and prioritize goals?
SWOT Inquiry: What are some sample questions a restaurant or foodservice team might ask when conducting a SWOT analysis?
Long-Range Plan Relation: What is the purpose of a long-range plan in restaurant or foodservice management and how does it relate to the operation’s mission?
Business Plan Execution: How can managers ensure that specific employees or teams are effectively working on the tasks outlined in the business plan?
Marketing Plan Significance: What is the significance of a marketing plan within the overall operational goals of a restaurant or foodservice operation?
Employee Abilities: Why is it important for managers to consider employees’ abilities when implementing a plan?
Teamwork Factors: What are some factors that managers should evaluate to ensure effective teamwork when assigning tasks?
Accountability: How does accountability contribute to the overall success of a restaurant and what strategies can managers use to promote it among employees?
Data-Driven Decision Making: How can data-driven decision-making enhance a restaurant and foodservice manager’s strategic planning efforts?
Inventory Tech Benefits: What are some benefits of using technology for inventory management in a restaurant or foodservice operation?
Predictive Analytics Success: How can predictive analytics contribute to long-term success in restaurant and food service management?

Key Terms

back-of-house (BOH)
benchmark
business plan
core value
departmental (team) goal
employee turnover
front-of-house (FOH)
income statement
individual performance goal
long-range plan
marketing plan
operating budget
organizational goal
SMART
stakeholder
strategic priorities
SWOT analysis
value
value statement