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Innovation Economy

On the menu: competition

By Scott Kirsner
Globe Correspondent / August 15, 2011

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Excerpts from the Innovation Economy blog.

Objective Logistics is a New Bedford start-up trying to introduce an intriguing idea to the restaurant industry - and eventually, to other businesses.

What if waiters could see their performance, relative to that of their coworkers, every day? And what if better performance meant they could nab the shifts they most wanted? Borrowing terminology from the world of sports, what if there were a leaderboard in the workplace?

“Hourly staff at a restaurant can be hard to motivate, but they can also have great energy when they are motivated,’’ said Objective’s chief executive, Philip Beauregard, a former waiter and bartender. “One of the things that motivates them is that they want to name their own schedules.’’

Here’s how it works:

Objective’s system, called MUSE, monitors performance based on how well a waiter sells. That can mean pushing the special of the day, selling bottles of wine, or encouraging big groups to order appetizers and desserts.

(Eventually, the company wants to integrate feedback from diners - after all, a waiter who foists sparkling water on a table that doesn’t really want it might be driving away business.)

The software grades performance on a curve: It’s obviously easier to gin up big checks on a Saturday night than it is at 11 a.m. Monday.

Servers who rise to the top get first dibs on shifts. That frees the manager from what Beauregard estimates is as much as eight hours a week of scheduling duties. (Managers can tweak the schedule, if they want.) Beauregard, a former investment banker, and chief technology officer Matthew Grace, a former Oracle software developer, have been working on the idea since 2008.

Beauregard said the software will be sold on an annual subscription basis. “We see it going beyond just restaurants, into places like hair salons, clothing stores, car dealerships - any kind of retail environment,’’ he said.

The company is about halfway through a $1 million funding round.

So far, the software has been tested at Not Your Average Joe’s locations around the Boston area, starting in Beverly and Acton. (One of Objective’s early investors was Stephen Silverstein, founder of Not Your Average Joe’s.)

Joe’s vice president of operations, Scott Flanagan, said one or two servers at his Beverly location quit because they did not like the system. “Those were the people who were ranked down low, and the people who were performing better were getting the better shifts,’’ he said.

A future version of the software will enable servers to choose the group of tables they serve. “Certain stations are just better, if they include a lot of booths or they’re close to the window,’’ Flanagan said. “We now have data that shows that one station may sell $400 more food and beverages during a shift than another.’’

A server who doesn’t want to work a Friday night for personal reasons might earn about the same amount by working a Wednesday night but getting the best station in the restaurant.

Beauregard acknowledged that making employee performance so visible - and encouraging competition - can be polarizing. But, he said, “We had one server who was ranked 22. She’d lost her Saturday night shift. Suddenly, she was asking how she could do things better. And she started rising in the rankings, and got that shift back.’’

Darwinism is the newest menu item, it seems.

Bad-news bulls Everyone who works in the start-up realm tends to live in the future. All day long, they’re working on products that will be launched and sold in a month or a year or a decade.

So when the stock market soars or swoons, they tend to ignore it. “That’s today’s news. We’re tomorrow’s,’’ the thinking goes.

Of course vertiginous plunges in the markets do affect young companies, which must raise venture capital money and which hope to one day go public themselves or be acquired.

But here’s how various players in the innovation economy rationalize away stock market drops and other macro-economic bad mojo:

■Venture capitalists: “We are counter-cyclical investors.’’

“Economic slumps are the best times to start a company.’’

“We can invest less and own a bigger chunk.’’

“We’re a top-decile firm. We won’t be hurt by a shakeout in the VC industry.’’

■Angel investors: “At least the VCs won’t be falling all over themselves to invest in my companies and cram me down.’’

■Entrepreneurs: “We’ll do better without so many me-too companies getting funded.’’

“My entire net worth is wrapped up in this company. What do I care about the stock market?’’

“We’re developing a product that will disrupt the established players. There are always customers for that.’’

“I don’t regret turning down that $100 million acquisition offer last week. The IPO window will open again.’’

■Employees “It’ll be nice not to be distracted by all of those calls from recruiters offering me jobs at other companies.’’

“I never wanted to sell any of my shares on SecondMarket anyway.’’

■Investment bankers: “Without so many IPOs to manage, I’ll get to spend more time at my place on Nantucket.’’

For the full Innovation Economy blog, updated daily, visit www.boston.com/innovation.