A bowl of beef noodles triggers management challenges!

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How much beef should be used in a bowl of beef noodles? Too much meat, and the costs won’t be covered. If there is less meat, customers will leave. What’s even more intriguing is that this is also a real-life management fable. This article starts with a bowl of beef noodles to discuss issues such as cost control and profit distribution that companies often have to deal with. Management requires a set of quantifiable standards; otherwise, it cannot be implemented. Only with standardized management, supplemented by leadership, can a company be run successfully. Main text begins: My friend and I were eating noodles at a unassuming small shop by the road. Since there weren’t many customers, we took the opportunity to chat a bit with the owner. Talking about business these days, the boss had many reflections. He was once brilliant, but then he stopped doing it. The friend asked doubtfully why. The boss said, “I hired a ramen chef at the time, but we couldn’t reach an agreement on the salary.” At first, in order to motivate him, we paid him a commission based on the volume of sales – 0.5 yuan per bowl of noodles. After some time, he realized that the more customers he had, the more income he would earn; so he started adding an excess amount of beef to each bowl of noodles in order to attract repeat customers. At that time, a bowl of noodles cost only 4 yuan. We relied on selling large quantities at low profits; if I added more slices of beef to each bowl, how could I make any profit at all? ”“Later, I realized that this approach didn’t work – he ended up taking all the money. So I changed the distribution method and started giving him a fixed monthly salary; it didn’t matter if the salary was high, that way he wouldn’t add too much beef, right? Because the number of customers has nothing to do with his income. Guess what? ”The boss got a bit upset. “He used less beef in each bowl of noodles, which drove the customers away!” ”“If the amount of beef served is small, customers will be dissatisfied, there will be fewer repeat customers, and business will surely be slow. The master chef doesn’t care whether you make a profit or not; he gets a fixed salary and would prefer it if there were no customers at all, as that would mean more leisure for him! ”As a result, a great project was forced to withdraw from the market due to poor management, even though there was only one person in charge. We shared this case with other friends and discussed it: 1. First, we considered finding a compromise between the two approaches used by the small business owner, namely a base salary combined with a commission, where the commission is determined based on the profit per bowl. This prevents him from using too little beef as well as from using too much. 2. This clause is conditional, depending on how the profit from each bowl will be distributed once it has been determined. The amount that can be earned from a bowl of noodles cannot be hidden from the master chef; if it’s not possible to find a balance between the interests of both parties, everything will return to its original state. Reaching that balance involves a complex issue of correlation functions, and game theory might also be necessary. 3. The noodle shop was entrusted to a master chef, and after receiving his commission, the owner went home to cultivate flowers and birds. Of course, after this proposal was put forward, everyone blushed briefly before rejecting it! 4. Next, everyone discussed corporate culture, justice, morality, and human nature, and agreed that management is a profound field; becoming an excellent manager requires extensive training and effort to achieve success, and even the most advanced management theories have their limits in certain situations. Yes, it is this small story about beef noodles that reflects the various problems a small business faces in its management. First is the issue of employee motivation. A incentive mechanism can be designed, namely cumulative rewards for sales volume or profit under quota constraints. A quota for ingredients is established based on what customers are willing to pay per bowl of noodles and the associated costs. The master chef’s salary is still determined based on sales volume, provided that the monthly ingredient consumption does not deviate too much from this quota; for example, the maximum allowable variation is 20%, otherwise the master chef will only receive a basic salary. In other words, there is a specified amount of beef that must be added to each bowl of noodles; the total amount of beef available is fixed, and the number of bowls that can be sold can be calculated. A certain weight of beef is required per bowl, and if more or less beef is used, it doesn’t match the requirements, which means the workers won’t be properly paid. It’s still a base salary plus commission; the boss needs to figure out in his own mind what the cost of a bowl of noodles is and what the profit is. If too much beef is used and there are many customers, the maximum amount of beef will be set as a fixed value, while the amount of noodles will be treated as a variable; by controlling the quantity of noodles used, it’s possible to still make a profit. This requires a process of obtaining a value! Although it is now common to link a company’s performance to the interests of its employees, and equity distribution is a good approach, it is somewhat impractical for a small business to implement equity incentive plans. Secondly, restaurants must also have work procedures, standard consumption levels, and institutional regulations; the owner needs to be aware of these things. For this small owner’s ramen shop, it essentially means that the chef contributes his skills as an investment, and profits are shared with the owner, resulting in a win-win situation. The two of them work together, sharing the costs equally, and implement standardized management. In terms of work procedures: for example, by establishing SOPs (Standard Operating Procedures) to specify the exact amounts required for ingredients such as noodles, water, and meat, and by standardizing the manufacturing methods and processes through experienced craftsmen ； Regarding fixed consumption levels, it is also closely linked to the incentives mentioned above ； Regarding salary compensation, it is determined by taking into account the average wage levels in society and the store’s profitability, as well as the amount of work done by the employee and the results of that work (such as increases or decreases in sales volume, customer feedback, etc.). Furthermore, simplify things: just ask the boss to use beef, right? Critical resources must be in the hands of key people! Key resources are the most important. Only when the boss owns the store can he have master craftsmen working for him ； Only by having the bossess in control of the distribution of beef can waste and misuse of materials be prevented. However, the owner should also retain master craftsmen as a key human resource; of course, figuring out how to do that remains a challenge... As a small-scale business, the owner needs to be familiar with every aspect in order to manage it effectively. If the ramen shop owner is very skilled at making beef ramen, even the master chef wouldn’t dare to mess around. Effective operational supervision is just like that. Furthermore, for any task, aside from supervision and control, everything else can be resolved through communication. We believe that in this case, there is no perfect solution that can resolve the distribution issue once and for all; in such small, workshop-style businesses, where the owner and employees spend a lot of time together every day, it is very important for their relationship to be harmonious. Only by relying on the small boss’s good personal charm and his kindness toward his subordinates can master craftsmen feel a sense of belonging and satisfaction, work diligently, and strive to generate profits for their boss; at that point, the amount of beef will no longer be a problem. Based on the above analysis, I believe management should be as follows: 1. A base salary combined with commissions to boost motivation. 2. Power over key steps cannot be delegated entirely to the master chef, such as adding beef. 3. Establish effective systems, including rewards and punishments, based on customer satisfaction and profits. 4. The salary or commission of master chefs should not be tied solely to sales volume; it should be linked to the owner’s profits. For example, 30% of the owner’s profit from a bowl of noodles should go to the master chef as his profit. 5. Foster effective communication and motivation to make the master chefs feel that they are also owners of the noodle shop.