Success by the slice Featured

7:00pm EDT December 31, 2006

LaRosa’s Inc. offers a generous package of benefits for its managers compared to the rest of the food service industry, but its most powerful recruitment and retention tool may be theway the company develops its people.

“I was the company’s chief people officer for many years, responsible for the human resources and culture side of our business,” says Mike LaRosa, the company’s president and sonof its founder, Buddy LaRosa. “One of the challenges I faced in that role was to improve the management training piece of our process.”

LaRosa’s operates or franchises 59 casual pizzeria restaurants and employs 3,000. The company posted $120 million in revenue in 2005 and is aiming for $250 millionby 2010.

Much of that projected growth is riding on its ability to staff its stores with capable, well-trained management, so several years ago, LaRosa formalized a training program by establishing the LaRosa Center for Learning, an operation that’s funded at the six-figure level. “Some people talk about providing an environment where there’s continual learning made available to their people, but we live it,” says LaRosa. “The cost of turnoveris a hidden cost; you don’t see it on your statements. It’s there, it’s in your labor costs, it’s in dissatisfied customers. The better our people understand their role and whatwe expect of them and they can accomplish that, the more we’re going to have happy guests.”

LaRosa says that the training program he put in place has increased retention rates for LaRosa’s, keeping it, at some stores, at the 30 percent to 35 percent level — farbelow industry averages — and allowed it to successfully meet its competitive challenges.

“We don’t have any control over the external competition that comes and goes; it’s just going to happen,” says LaRosa. “But what we do control is what goes on withinthe four walls of our restaurants. I think our proactive approach to leadership training positioned us to weather the competitive threats that came our way in the pastfive or six years.

“There has to be two or three times the number of choices out there today than there were 10 years ago, so it positioned us to weather the threat. There’s more competition of all types, the whole fast-casual boom that has taken place. We’ve been able to remain dominant in the areas where we compete because we’ve been able toperform in a way that stands out.”

The head of the fish
LaRosa started with store manager training because training them and improving their management skills provides the greatest leverage to build and improve the skills andattitudes of other store employees.

“It’s all about the head of the fish, the leader at the store level and how they interact with their team, because the head of the fish makes it happen,” says LaRosa. “We talkabout it all the time; the head of the fish has to understand and value the people and make sure that from the very first day on the job that they set their people up for successand create the expectations and support and resources around that person that positions them for success.”

The first step was to ask managers what kinds of training they thought would be of most value in a formal program.

“We went to all of the managers and assistant managers, and we asked them, ‘What are the types of classes that you would like made available that you could receive focused,additional training on?’” says LaRosa.

He investigated what other organizations in his industry were doing with training to get ideas for his company.

“It was difficult initially to offer everything that everybody wanted, but we prioritized the list based on inside and outside perspectives and got the program going,” saysLaRosa. “Over time, we’ve added a couple of classes each year.”

LaRosa’s uses in-house professionals to teach some of the classes.

“Many of the classes are taught by people in our organization who are experts in that subject matter, so we may have a leader who always has been superlative at controlling food costs, so he or she leads the food costs brush-up class,” says LaRosa. “Our HR director will lead a number of classes that are related to human resource management.Our finance director will teach classes about profit-and-loss statements, cash balance sheets and things you can do to improve efficiency in your back office work.”

Outside experts such as lawyers are brought in to discuss more complex topics such as regulatory matters.

One of the most successful aspects of the program has been involving managers as trainers and information providers in the training process. LaRosa discovered that managers like to get the firsthand experience of their peers who are working in the restaurants and have demonstrated success. “The managers like to see some of their peers involved in the classes,” says LaRosa. “At the beginning, it was corporate types who were teaching everything. But they told usthey really wanted to hear from their peers.”

Those types of observations led LaRosa’s to form roundtables at the Center for Learning for general managers to address specific topics related to store operations.

“We’ll put a panel in front of the room that are some of the best-in-class, and they’ll just expand on a topic like safe food handling,” says LaRosa.

A critical part of the process that has helped to improve the program has been the use of a process that LaRosa’s uses across the organization to do self-evaluation, solicitfeedback and drive improvement. “We use a lot of quality processes at LaRosa’s,” says LaRosa. “We have a term we call Plus Delta. After any event or significant piece of work, we’ll get a group of peopletogether and do a Plus Delta. The pluses are what went well, what we feel good about. The deltas are the things we need to do better or different.

“After every class, every participant is given a feedback form and we ask, ‘What are the three things you liked about this class, and what do we have to do to make it better?’”LaRosa’s also surveys some employees about their managers to identify additional training needs.

“Another thing we do is a type of 360 survey with all of our managers and our directors once a year,” says LaRosa. “It’s a process where they give a feedback form to six oreight people that they supervise or they work very closely with, and they’re rated in four areas: their communication, their professionalism, the quality of the work they do andtheir accountability. The feedback provider gives a grade, an A, B, C or D. If they give a B or less, they have to provide a comment explaining why they gave the grade.”With the success of its management training efforts, LaRosa is planning to expand them to include the general employee population in its stores.

“When we do our strategic planning, we spend a lot of time looking at strengths and weaknesses,” says LaRosa. “On the weakness sheet, we identify that we have an inconsistent approach to training at the store level. We provide materials for them, books, videotapes and signage, but it’s really up to each store to do the training.”

LaRosa’s strategic plan for this year includes providing improved training for its store-level employees below the management level. Part of the reason is to leverage a newIT system slated to go online at LaRosa’s later this year. “That new system is going to provide some capabilities that will allow us to understand who our best customers are, what the preferences of our guests are,” says LaRosa.“So we want to make sure we put in some training in advance of that equipment hitting the stores.”

Find the leverage points
LaRosa says a key to making training effective is to remove as many obstacles to it as possible to encourage people to take advantage of it.

“First, create an environment where you make it easy for your people to sharpen their saw,” says LaRosa.

For LaRosa’s franchisees, for instance, he tries to make the classes affordable, charging about $25 an hour per person to attend the sessions, which last one to four hours.LaRosa says celebrating successes is also key when it comes to encouraging participation. Improved performance that is traced back to training experiences encouragesthose who need skills improvements to take classes and raises the prestige of the training program.

“When people look at that high-performing group, that top third, they look at those margins and they have good things to say about their training and their experience, thatall just keeps the wheels spinning,” LaRosa says. “So we’re always looking for success stories to share. If somebody attends a class and they really have some great feedbackthat they provide about a class, then we’ll share those quotes and comments.”

LaRosa’s selected training as a key point of improvement for its business, but LaRosa points out that the process can be applied by any company to any aspect of its business. “You have to have a thorough understanding of your business and where the leverage points are,” says LaRosa. “Where are the areas where, if you focus and you do a betterjob, you’re going to get a better return? I’d say you have to begin with a key understanding of your industry. It’s understanding where you are, where you want to go and howyou’re going to get there.”

HOW TO REACH: LaRosa’s Inc., www.larosas.com