Episode 158 Transcript: How to Teach Your Restaurant Managers to Make Better Decisions

Hey there, restaurant pros. It’s David Scott Peters, and welcome to the Restaurant Prosperity Formula podcast. For over two decades, I’ve been guiding restaurant owners to success with the proven principles of something I call the Restaurant Prosperity Formula. I originally created the formula based on the daily practices of the most successful restaurant owners I coach, and it’s now the foundation of what I teach restaurant owners like you so you can achieve success.

What do I mean by success? Success is a restaurant owner who dictates the terms of their life and their bank account, instead of their restaurant dictating those things for them. Success is a restaurant owner who has freedom from their restaurant and the financial freedom they never thought possible. How you define success is up to you, but I do know the way to achieve it is by using the Restaurant Prosperity Formula.

This season, I’m diving even deeper into the core elements of the formula: leadership, systems, training, accountability and taking action. Along with my insights, you’ll hear from special guests, industry experts and inspiring success stories from fellow restaurant owners who’ve turned their businesses around and found their own definition of success.

In this episode, number 158, we’re tackling how to teach your restaurant managers to make better decisions. Let’s get started. But first, a word from our sponsor.

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Restaurant pros, let me start with a question: What do you actually want from your managers? Think about that for a second, because most restaurant pros will say things like, “I want them to take ownership. I want them to show some initiative. I want them to solve problems without calling me. I want them to think like I think.” And I understand what they mean. But that last one is where I think we get ourselves into trouble, because your goal should not necessarily be to create managers who think exactly like you. Your goal is to create managers who can make good decisions without you. Those are not exactly the same thing.

That’s what I want to talk about today: how do you actually teach restaurant managers to make better decisions? Not just follow instructions, not just complete checklists, not just memorize policies, but how do you develop judgment? Because judgment is what your managers need when the answer isn’t printed in the employee handbook. It’s what they need when two employees call off an hour before dinner. It’s what they need when labor is running high and the restaurant suddenly gets slammed. It’s what they need when a guest is angry and the situation doesn’t fit perfectly into your comp policy. It’s what they need when a vendor screws something up. It’s what they need when one of their employees comes to them with a problem they’ve never dealt with before. That’s management, and there isn’t going to be a checklist for every situation your managers will ever face.

So if you’re serious about developing your management team, eventually you have to move beyond teaching them what to do and start teaching them how to think. That is the difference between knowledge and judgment. Today I want to walk through that progression: knowledge, thinking, judgment and, ultimately, independence, because that’s where we’re trying to get.

Knowledge

Let’s start with knowledge. Your managers absolutely need knowledge. This isn’t some Jedi mind trick where we throw somebody into the restaurant and say, “Trust your instincts.” No, that would be stupid. They need to know your systems. They need to understand your standards. They need to know your labor target. They need to understand your food cost expectations. They need to know your cash-handling procedures. They need to understand your comp policy. They need to know your opening and closing procedures. They need to understand scheduling. They need to understand your core values. They need to know what good looks like in your restaurant. That’s training. And if you haven’t done that work first, you cannot reasonably expect somebody to make good decisions.

I’ve said this many times: you can’t hold somebody accountable to a picture that only exists inside your head. The same thing applies to decision-making. Your managers cannot use information you’ve never given them. So knowledge is the foundation.

But here’s where restaurant pros often make a mistake: they assume knowledge equals judgment. It doesn’t. Knowing the labor target doesn’t automatically mean somebody knows what decision to make when labor is running two points high and a bus pulls into the parking lot. Knowing your comp policy doesn’t necessarily tell somebody how to handle a longtime guest whose entire experience just went sideways. Knowing the closing checklist doesn’t necessarily teach somebody how to prioritize when three things are going wrong simultaneously. Knowledge gives your manager information. Judgment helps them decide which information matters most right now.

That’s the next level. And that is why you can have a manager who scores 100% on every training test you give them, and they still drive you absolutely crazy during every Friday night shift. They know the answers in theory. They just don’t yet know how to apply them. That’s not necessarily an accountability problem. It might be a development problem.

Thinking

Which brings us to the second stage: thinking. This is where you stop being the answer machine. If you’ve heard me talk about this recently, you know how strongly I feel about it. When a manager comes to you and says, “What should I do?” your natural instinct is to probably answer, because you know you’ve dealt with this situation before. You can probably solve it in 30 seconds, and it feels productive. But every time you immediately give your manager the answer, something else happens: you take away a decision-making repetition. Managers develop the ability to make good decisions by making decisions, just like virtually every other skill. They think, they choose, they see the result, they adjust, they learn, then they do it again.

So instead of immediately answering the question “What should I do?” start with “What do you think we should do?” And don’t stop there, because I want your managers learning a decision-making process. Here are five questions you can start teaching them to walk through:

1. What happened? Give me the facts. Not the drama, not everybody’s opinion, not what somebody heard from somebody else. What actually happened? This matters because bad decisions often begin with bad information.
2. What matters most in this situation? Now we’re getting somewhere, because not every restaurant decision has the same priority. Are we protecting the guest? Are we protecting safety? Are we protecting the team? Are we protecting the financial targets? Are we protecting one of our standards? Are we protecting one of our core values? What’s actually at stake?
3. What are your options? I don’t want the first idea that popped into your head. Give me a few possibilities, because developing judgment means learning that there is rarely only one available action.
4. What do you think we should do now? Make the call.
5. Why? Walk me through your thinking.

That last question is gold, because now I’m not just evaluating the manager’s answer, I’m evaluating how they arrived at the answer, and those are two different things. A manager can occasionally arrive at the right answer using terrible reasoning, and they can sometimes arrive at an imperfect answer using pretty damn good reasoning. If you’re developing leaders, you want to know the difference.

This is where coaching gets powerful, because when you hear their thought process, you can identify the missing piece. Maybe they didn’t consider the guest. Maybe they didn’t consider labor. Maybe they forgot a policy. Maybe they’re making an assumption they haven’t verified. Maybe they’re solving an immediate problem while creating a much bigger one tomorrow. Now you can ask another question: What happens if we do that? How does that affect the rest of the team? What would that do to labor? Does that align with the standard? What do you think happens next?

You are teaching them to see around corners. That’s what experience gives you. You’ve dealt with enough restaurant situations that your brain starts automatically calculating consequences. Your managers may not have those reps yet, so your job is to help them develop them, not demand that they magically possess 20 years of your experience.

Judgment

That leads us into judgment. Judgment is where things get interesting, because judgment means sometimes your manager is going to make a decision that is different from yours. Restaurant pros, some of you are going to have to work on this one. Different does not automatically mean wrong. I want to repeat that: different does not automatically mean wrong.

You spent years doing things a certain way, so when somebody chooses another path, your instinct may be, “Why the hell did you do it like that?” Sometimes that’s valid, sometimes the decision was bad, but sometimes it just wasn’t your decision. There’s a huge difference. Ask yourself: Did the decision protect the guest? Did it protect the team? Did it protect the numbers? Did it stay inside our standards? Did it align with our core values? Was it within the authority I gave the manager? If the answer is yes, you may need to let that decision stand, even if you would have done it differently.

Because here’s what happens otherwise: you tell your managers, “I want you to make decisions.” They make one. Then you come behind them and say, “Well, that’s not how I would have done it.” So the next time, what happens? They ask you first. Congratulations, you just trained the independence right back out of them.

This is one of the biggest contradictions I see in restaurant leadership: restaurant pros demand initiative while punishing people for not reading their minds. You can’t have it both ways. If you want managers who exercise judgment, they need room to exercise judgment.

There are obviously boundaries. I’m not suggesting your managers get to decide tomorrow that we’re throwing out every system and converting the restaurant into a taco truck. Authority needs limits. Your manager should know: here’s what you can decide yourself, here’s what I can expect you to communicate to me, here’s what requires approval, and here’s where there is absolutely no wiggle room. Think cash controls, food safety, harassment issues, serious HR matters, things with major legal or financial consequences. There are areas where escalation is appropriate. That’s part of good judgment, too. A great manager does not solve every problem alone, and a great manager knows which problems they should solve and which ones they should escalate. That’s a skill.

There’s another distinction you need to teach: mistake versus negligence. Managers are going to make mistakes. That is part of learning. They make a judgment call, it doesn’t work, they learn something. Fine. Negligence is different. You were trained, you knew the procedure, you understood the expectation, you demonstrated you could do it, and you chose not to. Now we’re in accountability territory. Don’t confuse somebody learning judgment with somebody ignoring standards. One requires coaching. The other may require consequences. Knowing the difference is part of your leadership judgment.

Reviewing decisions

Now let’s talk about something I think restaurant pros don’t do nearly enough: review the decision afterward. We tend to review things only when they go badly. A manager makes a decision, now we’re having a conversation. A manager handles a difficult situation beautifully, everybody moves on. That’s a missed opportunity, because one of the fastest ways to develop judgment is to review decisions, good and bad. Ask: What happened? What did you decide? Why? What happened as a result? What worked? What didn’t? What would you do differently next time? And here’s the big one: What did you learn that you can use the next time you face something similar? Now we’re turning one situation into a future capability. This is how experience gets built intentionally. Otherwise, everybody has experience, but nobody necessarily learns from it. There’s a difference.

Years on the job do not automatically create wisdom. Reflection creates learning from the years on the job. That’s why you can have somebody who has managed restaurants for 15 years but has basically repeated year one 15 times. They experienced plenty; they just never improved their thinking. Your job as a leader is to help turn experience into judgment.

And don’t only do this when somebody fails. When they make a great decision, ask them why. Seriously: walk me through what you saw. What made you choose that? What told you that was the right move? Because now you’re reinforcing the thinking behind successful behavior, and that’s much more powerful than “nice job.” Nice job is good, but “tell me why that worked” turns success into a repeatable lesson.

Independence

Now we get to the final stage: independence. This is the payoff. Independence doesn’t mean your managers never need you. That’s unrealistic. It means fewer decisions require you. Think about the difference. At the beginning, your managers may bring you 10 decisions a day. Your goal isn’t to scream, “Stop bothering me.” Your goal is to develop them until 10 becomes eight, eight becomes five, five becomes two, and eventually they mostly bring you things that legitimately deserve your attention. That’s leadership leverage. You’re moving routine decisions down to the level where they belong, and you’re creating more capacity for yourself, but you’re also creating more capacity for your managers.

There’s something else that happens when somebody starts developing good judgment: their confidence grows. Now, confidence without competence is dangerous. We’ve all met that manager who’s been employed for three Tuesdays and suddenly they’re Gordon Ramsay. That’s not what I’m talking about. I’m talking about earned confidence: “I’ve dealt with this before. I know our standards. I know our numbers. I understand how David expects me to think. I know which questions to ask. I know when to escalate. I can handle this.” That’s what you want, because ultimately, restaurant prosperity cannot depend on you making every good decision in the building. There are too many decisions. You become the bottleneck. Your job is to build an organization where good decisions can happen when you’re not standing there. That’s freedom. Not disappearing, not abandoning your team, not lowering your standards, but building capable leaders who can protect those standards without requiring you to personally carry every one of them.

Bringing it back to the formula

That connects directly back to the Restaurant Prosperity Formula: leadership, systems, training, accountability, taking action. You need systems so people know the expectations. You need training so they understand what good looks like. You need leadership to develop their thinking. You need accountability when trained people choose not to perform. And then you’ve got to actually take action and start letting your team use the skills you’ve taught them, because you cannot train independence and then refuse to release control.

Your assignment this week

Here’s what I want you to do this week. Pick one manager, not everybody, one. And pick one category of decisions they’re constantly bringing to you. Maybe it’s labor, employee problems, guest complaints, scheduling, vendor issues, whatever it is. For the next week, unless it’s an emergency or clearly outside their authority, stop answering immediately. Walk them through the five questions: What happened? What matters most? What are your options? What do you think we should do? Why? Then coach the thinking. Don’t automatically replace their answer with yours. If they’re missing something, help them find it. If they’re making a reasonable decision inside the boundaries you’ve created, let them make it. And afterward, review the results: What worked? What didn’t? What did we learn?

Because every time you do that, you’re building judgment. Every time their judgment improves, they need you a little less for day-to-day operations. That should not threaten you. That is the goal.

Restaurant pros sometimes believe being needed proves their value. I want you to think differently. Your value as a leader isn’t measured by how many problems require you. It’s measured by how many people you’ve developed who can solve problems correctly without you. That’s leadership, and it doesn’t happen because you hired somebody who magically thinks like you. It happens because you deliberately taught somebody how to think.

Knowledge, thinking, judgment, independence. That’s the progression. Restaurant pros, if you want the freedom and financial success I talk about when I talk about restaurant prosperity, you need people around you who can make good decisions when you aren’t in the room.

So stop trying to create little clones of yourself. Build capable leaders instead. Teach them the standards. Teach them the numbers. Teach them the principles. Give them the reps. Coach their thinking. Review their decisions. Hold them accountable when necessary. And then give them enough room to actually lead.

That’s how you build managers who don’t just know what to do. They know how to decide what to do. And that’s an entirely different level of leadership.

There’s one number that’s quietly killing your restaurant profits, and most owners don’t even know what it should be. It’s your prime cost. Right now, most restaurants are running at least 15 points higher than they should be, which means you’re working harder and making less than you deserve. If you’re tired of being stuck in your restaurant, tired of inconsistent or non-existent profits, then it’s time to find out what’s really going on. I invite you to book a free 30-minute Restaurant Profit Finder call with my team, where you’ll uncover exactly what’s eating your profits and what it’s costing you every single month. Just click the link in the description to get started.