La Rosa’s Company

Putting People First

Gregory P. Smith

The service and food industry probably has the lowest retention and highest turnover of all the industries in the United States. The reasons for this are varied, but a lot of it can be attributed to low pay, long hours, weekends and a workforce that is perceived to be low caliber and/or low skill. Rightly or wrongly, this leads to an industry facing constant turnover and managers who find themselves frustrated and in some cases reluctant to make fundamental change to the way they manage people.

However, one company clearly stands out above the others. La Rosa’s Pizza Company is a national chain of 53 outlets consisting of 3000 employees with over $100 million in sales each year.

La Rosa practices the art of leadership and takes the science of quality management to its highest form. The first major difference between this company and other food businesses is they consider their employees their internal customers. They spend as much time and energy focusing on their internal customers as their external customers. Putting their people first is like the law of physics—for every action there is an equal and opposite reaction. In this case the reaction is a higher level of customer service provided to their external customers, which in turn generates higher profits.

In most businesses the HR department is responsible for people issues. The problem experienced in most American companies is the HR manager is only holding a staff position. Unfortunately, in some cases, most HR departments do not have the power or respect to make change. The power to make change rests with the people who have the authority.

The philosophy is different at La Rosa’s. Their CEO Tillman Hughes says, "The soft stuff needs to become the ‘hard stuff." They eliminated their HR department and created a Chief People Officer. They did more than merely change names. Now the responsibility, authority and the power for the internal customers rests with the top executives.

Most businesses play lip service when it comes to taking care of their employees. However, it goes from lip service to reality when you actually measure it. This puts a company in a powerful position to make improvements and hold people accountable. At La Rosa’s they use several different measurement methods.

1) Managers meet with new hired workers for the first four weeks and conduct a new hire survey approximately 30 days after they have been on board. Then they ask questions such as how do you feel about working here and how is training going?

2) They do a cultural audit, similar to an internal climate assessment, once a year, which measures feelings about pay and benefits, care and recognition etc. This gives them a quick pulse on how employees feel about how they are being treated.

3) Employees evaluate their bosses twice a year. A bottom-up Internal Customer Satisfaction Index (ICSI) is conducted twice a year with all employees. The ICSI has only four questions and asks the employees to give their manager’s a letter grade from A to D in four categories listed below.

• Communication: Use of basic principles, effective method used/established for verbal and written messages or instructions, feedback provided or allow—Code of Conduct honored.
• Accountability: Timeliness, maintains schedules, facilitates the workflow, responsiveness.
• Quality: Provides quality work and/or service (i.e.: accurate info, support documentation, quality products etc.)
• Professionalism: Exhibits courtesy and professionalism. Handles situations in a mature manner. Effectively communicates and delivers quality products/service resulting in total Team Member Satisfaction.

After the ICSI is completed and the comments have been tabulated the CEO has the managers come in and talk about the results. They address specific behaviors and come up with action plans for improvement that can be tracked daily. The meetings are held in an open and trusting environment so not to cause any fear of retaliation.

They also discovered that leadership training is key to their success. At one time they sent their managers to those public, one-day leadership courses downtown. Doing this they found it was hard to reach critical mass because everyone came back with different ideas, a different philosophy and a different language of what leadership meant. La Rosa now sends all their managers to the same 6-week training program.

Free Newsletter: Sign-up for Greg’s free monthly newsletter.