The Secret Decoder Ring and Loss Prevention

The Secret Decoder Ring and Loss Prevention
Tags: Business Strategy and Profitability, Insurance / Risk Management, Loss Prevention, Staffing & Training
February 1, 2012

Over the holidays I watched “A Christmas Story” for the gazillionth time. One of the scenes in the movie is Ralphie getting his secret decoder ring to unlock the mysteries of the universe. His ring consisted of all the tools that when utilized would transform his world. He waits anxiously for the secrets to be revealed. He would have vast knowledge at his fingertips. In Ralphie’s case it was a series of letters and numbers – the secret code. He is thoroughly disappointed when the first message he interprets with his super secret decoder ring is “be sure to drink your Ovaltine.”

The secret decoder ring literally and figuratively still exists today. At times the secret decoder ring is needed to unlock the mysteries of losses in restaurants. It’s not a secret really, but unlocking the mysteries of losses of product and cash takes all the tools and knowledge that the manager and/or owner may already have. Lining up the numbers and letters on the imaginary decoder ring may be matching cause with effect. Poor food cost may line up with poor inventory control, over portioning, no back door security, theft, or any number of other possible reasons. Poor sales may line up with customer service issues, food quality, theft, competition, etc. The secret involved in unlocking the mystery is uncovering the reasons that are evident but have not been deciphered. The manager or owner may not have the decoder ring. If they are searching for the reasons, perhaps they are not looking in the right places. At times they may not be looking at all or are making poor assumptions.

Unlocking these mysteries of losses and profit is an assessment process. The secret decoder ring is a simple analogy to get us there. It’s never ONE thing. A thorough audit process will provide review, guidance, and inspection of the core processes that may already be in place to find the leaks in profit. Has compliance to policies and procedures eroded? Have shortcuts to expectations become the norm? Has looking “underneath” the issues leading to theft by employees been discontinued? Has hiring and training become ineffective? The audit process should be a routine evaluation of all areas of restaurant operation. It can be as simple as written questions with a check for ‘yes’ or ‘no’. An important part of the audit process is the truthful objectivity during the assessment and the follow-up afterward. Accountability for taking action on deficiencies must be assigned as well as the confirmation that the deficiencies have been corrected.

Running a restaurant is not easy, particularly one that isn’t profitable. Disorganization becomes prevalent, problems become magnified, and the manager or owner runs the restaurant with their head down. The secret decoder ring is needed to keep the focus and decipher the many issues that are presented every single day. Unlock those secrets, take corrective action, and be sure to drink your Ovaltine.