Lou Malnati’s Pizzeria has adopted a business model that focuses on relationships as much as profits. Throughout the 47 years of growing the business, dedication to developing people both personally and professionally has resulted in high employee engagement and satisfaction, better employee retention than typically found in the restaurant industry, and increased profitability.
Lou Malnati’s is a family business serving the best Chicago-style pizza with the highest quality ingredients; each pizza handmade from scratch just the way the customer desires it. But it is more than the pizza ingredients that have created success for the company, it is the culture ingredients as well.
When Marc Malnati took over the family business after his father died in 1978 and he started to open more stores, he found he had two clashing styles of management: one from the long-term managers and one from the newly hired managers. In an effort to bring the leadership team together and establish a unified team with common goals, Marc started having monthly group meetings where each manager could express their feelings and clear conflicts. Over time, this lead to a program branded as Compass where all managers in the company – currently 173 people – come together in small groups to work on their communication skills, leadership development, self-awareness, and personal and professional growth.
Since this leadership development program has made a measurable impact on the management team, Lou Malnati’s wanted to offer this growth opportunity to the 3000 hourly employees. The challenge the company faces is that many of these employees are part-time and work varied shifts, making it difficult to find time and ways to gather them together. However, managers have been participating in these groups for years so they are experienced with the concepts and create a large group of coaches that are passionate about sharing the benefits of doing this work.
In spring 2018 Lou Malnati’s started rolling out their new program, called Connections, offering it to all interested employees. The rollout started as a volunteer program with communication going out to all locations encouraging employees to sign up for the Connections meetings. Coaching materials were created for the managers, and training sessions were held with managers in order to prepare them to lead the Connections meetings.
The first year of the program will cover basic self-awareness concepts such as feelings (Lou Malnati’s uses SASHET acronym to identify the six basic feelings of sad, angry, scared, happy, excited and tender), story versus fact, 24-hour rule for eliminating gossip, and listening and empathy. Quarterly meetings are held in each of the company’s 54 locations covering a single concept at each meeting. Next year’s concepts will cover taking 100% responsibility, being curious versus being right, above and below the line awareness, and judgments and reactions.
Success metrics for the Connections program currently measure the number of employees that attend at each store and track the results of a survey that is conducted after every meeting. The survey primarily determines if employees appreciate the opportunity to invest in their development, if they found Connections to be valuable and if they would recommend Connections to a co-worker. Three concepts have been covered to date, and the response from employees has been overwhelmingly positive. Surveys show that 99% of the employees who attend reply positively to those three questions, and attendance for meetings has exceeded expectations.
Employee responses show that Connections is having an impact on both their professional and personal growth. A few of the comments include: “What I liked about the meetings is that they are creating a bigger bond and I am feeling comfortable talking to others about our stories and problems at work.” “Now I have the confidence to say something to solve my problem.” “Connections meetings help to make me more self-aware.” “I love the support.”
For the first time in eight years, annual employee survey satisfaction results jumped significantly. Each year Lou Malnati’s participates in a Top Workplace survey. From the results of this survey the company focuses on three areas: Do employees feel cared for, do they believe they have opportunities to grow, and would they recommend us to their friends as a place to work. This year, results show that Care grew from 75% to 80%, Grow grew from 76% to 80%, and Join grew from 83% to 85%. The survey results from past years had remained stable, so the efforts of Compass have proven to have an impact. This year Lou Malnati’s placed 6th out of the top 100 employers in the Chicagoland area. This survey has been conducted 9 years in a row, and we have placed in the top 10 in each year.
In addition, retention rates for Lou Malnati’s managers continue to be among the highest in the restaurant industry, with 10% turnover compared to 60% for the industry. And despite the growth the company has gone through in the past 5 years, employees still believe that Lou Malnati’s offers a workplace that feels like family. That is a trait the company takes pride in and works to maintain.
The Connections program is in its early stages, and the plan is to continue to revise and adapt it to ensure the positive impact on employees becomes stronger and more benefits from the program are realized. But one thing has been made clear to Lou Malnati’s: employees crave personal growth, are open to being more self-aware, and want to be engaged with the company. Additional programs are being developed and a renewed focus is being placed on leadership development, with a department in the company now established to create personalized programs for employees at all levels. Through their focus on leadership development, Lou Malnati’s plans not only to improve the lives of their employees but also people touched by them.