Recommendation Letter from Green Street Restaurant. Zero Based Labor Budgeting

1. June 3, 2017
Mr. William H. Bender
W.H. Bender and Associates
1430 Norman Avenue
San Jose, Ca 95125-5217
Dear Bill:
It’s been a little over a year and half since you met with our management team at Green Street and I
thought it might be a good time to update you on the progress we have made.
First was the zero based budgeting process that you worked through with our team. Before I get to the
labor hours saved, I want to focus on one of my unexpected outcomes after the process – remember, no
owners were present for any of your meetings with the management staff – the initiation of the team
management approach. It’s been a struggle, to be honest, but we are slowly getting there. As a friend
of ours says, “Change is easy. You go first.” The one thing I have noticed is that the team seems
dedicated to working through the issues and getting to solving problems and initiating growth. They are
dealing with issues that we, as owners, would usually have to initiate and work through with them. We,
as owners, are finding ourselves more and more in the position of asking questions, setting policy
matters and being supporters. Which, to be honest, is nice for a change.
So, with that background, after you left, they got busy working together to figure out how we were
going to reduce labor hours and still give WOW service. It was hardest on our head chef to cut hours of
people he had worked closely with over very many years. But he knew he had to. The great thing is that
the team rallied around him and gave him support, offering to meet with him with each individual cook
and explain what was going on. That did in fact happen and there was a period of upheaval for a few
weeks. But it has calmed down and people are moving forward getting the work done.
I guess the best way to say it is that minimum wage increased in 2016 in California by $1.00 an hour over
2015. And you know that we are fortunate here in California because our state and local leaders have
seen fit to block any effort to institute a tip credit. And that means that wage increases apply to
everyone who works in the company, tipped or untipped. With that as background, with the wage
increase in 2016 our total payroll actually decreased below 2015 numbers. With a lot of thinking and
hard work the management team cut over 300 hours per week – over 15,000 hours for the year. That’s
a lot of money and hours. Honestly, there have been WOW hiccups, especially in the beginning, but we
all have come together to work through those issues. We use PerformanceScope, which gives us guest
feedback on how we are doing. It continues to be positive.

2. Going forward, I met with the team yesterday and talked about the challenges we face here in Pasadena
because the minimum wage will increase to $12.00 on July 1, going up $1.50 over what it currently is.
Before taxes and comp is added, that amounts to an increase of about $3,000 per week, $150,000 for
the year. And it goes up to $13.50 July 1, 2018. We talked about the challenges going forward and what
needed to be done. Quite frankly, they had already been in discussions about possible next steps. That
would never have happened before your meeting with them.
So, we here at Green Street are indebted to you for the time and patience you took in taking the team
through the process of exactly what zero-based budgeting is. They got the message and they are
implementing it. The savings were very significant last year. The best year in memory. While the
money saved is so very critical, I think the most important occurrence is that the management team has
a way to talk about and deal with problems. They get frustrated – and that’s normal – but they work
through it because they know it works.
I will keep you posted as we move forward dealing with the challenges that we face. Thanks for being a
HUGE part of our solution and for being available to the team and us, as we need to talk and clarify
issues. All the best going forward!!
Sincerely
Michael Hawkins
President
Green Street Restaurant