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8:00pm EDT June 25, 2007

Ed Levine is in an industry with high turnover rates, but he’s making the best of it.

Levine, founder and CEO of Left Bank Restaurant Group, a group of casual French restaurants that employs 400 people, says turnover can be difficult.

“Turnover is tough on you,” he says. “You’re trying to imbue people with a sense of culture in your organization. If those people all leave after a year, that’s a lot of imbuing of culture.”

Levine says Left Bank, which earned $21 million in revenue in 2006, is like a school for entrepreneurs who want to learn the restaurant business. He has embraced that concept, and one of his keys to retaining employees is a comprehensive training program.

Smart Business spoke with Levine about why delegation does-n’t help if you’re just putting someone in charge of paper clips.

Q: How involved in daily operations should a leader be?

You need to be aware of what’s going on in the day-to-day operations, but you can get so lost in details that you lose sight of what you’re trying to do with the business. For example, I have a VP of operations who manages day-to-day operations. My job is to manage him. I’m not clued in on whether or not we’re short busboys in Menlo Park. That’s his job to know that.

Often I’ll get feedback from guests directly, and I want to respond to that directly and appropriately. So at those times, I’ll say to him, ‘This guest had this issue. Find out about it for me so I can show them what happened, what we’re doing about it and figure out how to get them back in the restaurant.’

I don’t get caught up in the day-to-day nitty-gritty. If I did, I would probably drown.

Q: How do you motivate or empower your employees?

Give people significant chunks of responsibility. Not just a project here or a project there, but you need to make them significantly responsible for a component of the business, and then you need to hold them accountable for it.

As a CEO, you can’t manage all the details. But you have to work with people to carve out responsibilities within their organization and say, ‘This is what you’re responsible for. This is how we measure it.’ Taking the pie and cutting it up into pieces is critical if you’re going to try to grow your business.

Lots of entrepreneurs are in my situation, where it’s one restaurant and you’re heavily involved and you know everybody. But when you spread that to 400-plus employees over a bunch of different restaurants, you can’t be effective anymore. You really need to work with your general managers so they’re running the restaurants.

Delegation is important, sure, but it has to be delegation of meaningful chunks. I can’t delegate to somebody, ‘You’re responsible for paper clips.’ It has to be broader and more significant than that. You have to help them understand how they’re going to pay attention to it.

Q: How do you attract and retain employees?

We have a company that is growing. Ideally, what we do is we bring in somebody who might be young. They might start as a server or cook, but we provide opportunities for advancement. If our business is expanding, those opportunities for advancement increase more quickly than if we are static.

Frankly, quite a few people come to work for us because they want to learn about the restaurant business. It’s always better to learn about the business by working on somebody else’s nickel than on your own.

Q: How do you train employees?

I teach a financial seminar where all my managers have to come learn about what I look at in terms of restaurants and how the numbers work. We model their restaurants using a big pile of poker chips. We show them, ‘This is how many chips go to ingredient costs, this is how many chips go to labor, here’s how many the landlord gets.’ Then we compare that to the investment.

So, we spend a fair bit of time teaching our people, which helps them be more loyal, but it also prepares them for a career down the road if they decide to move on.

You’ve got to watch expenses very carefully because the restaurant business is a nickel business. Keeping people focused on that is important.

Q: How do you keep employees focused on expenses?

I pull out the poker chip box and show them. If you just saved one chip here and one chip there, you can increase your profit by 40 percent. For example, if we do an exemplary job of work safety, the amount of money we spend on workers’ comp goes from this pile to this pile. Guess where the difference goes.

When you give them that kind of example, they really see it in 3-D. It’s more helpful than trying to look at it on a piece of paper.

HOW TO REACH: Left Bank Restaurant Group, (415) 927-3308 or www.leftbank.com