Episode 453: Why Waffle House Is More Systematized Than Your Construction Business

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I was at a Waffle House recently sitting at the bar during a busy lunch rush and I learned some really valuable lessons for running a construction business. it started when I noticed the back of the cook’s shirt. It’s a $2 million club and that sent me down a rabbit hole. I started looking at the process and it was sort of like stepping back in time. I looked around and I didn’t see any iPads. There were no kitchen displays, no fancy software, just

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a grill, server yelling orders, a bunch of jelly packets on plates, basically the way they’ve done it for decades. By the end of this episode, I’m going to show you what that shirt has to do with your construction business and why Waffle House’s systems actually embarrass most contractors’ systems. Be sure to stick around to hear the lesson about that $2 million club shirt that could be the most viable.

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lesson from this video. So if you’re a custom home builder, remodeler, commercial general contractor or trade contractor doing at least a million dollars a year and you’re still working 60, 80 hours a week, putting out fires, you can’t get away from the job, spending all your time on low value activities, it’s very likely that Waffle House, little old Waffle House is likely more systematized than your company. And there are a lot of lessons you can learn from that.

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This is the construction leading edge podcast from construction leading edge.com. My name is Todd DeWalt and we’ve been helping construction business owners systematize their businesses since 2014. So quick note before we dive in, if this already hits home and you’re like, yeah, I need to get out of my business. I’ve got a free training called get out of your construction business, how to make it run without you in that training. You’ll learn the hidden trap.

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you’re probably stuck in that’s causing all the chaos, the forgotten step in every project that could cut out 80 % of your profit bleeds and how to build a business that runs smoothly and more profitably even when you’re not there. So to get your little hands on that training video, go to the link in the description or the show notes, or you could just go straight to constructionleadingedge.com forward slash get out, G-E-T-O-U-T after this episode. All right.

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So let’s get into the four Waffle House lessons you can steal for your construction business. So the first thing I noticed as I started down this rabbit hole was how an order actually flows at the Waffle House. The server does not type something into a tablet and walk away hoping the kitchen got it. Here’s what they do. If you’ve never been to a Waffle House, I recommend you do this. Go there, sit at the bar so you can watch.

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this masterclass in business processes. The server stands at a specific spot. They face the cook and they call the order out in a specific pattern. And as part of this rabbit hole, I went down, I realized, I learned that it’s called the pull drop mark process. Pull this drop this, and then they mark the plates with the order. No screens, no printouts, no tickets hanging up.

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It is a real time face-to-face handoff of information from the server to the cook. Why do they do that? Well, because at Waffle House, the volume is insane. Maybe it’s because there’s a chance there’s a fight going on or chairs are being thrown. That’s one thing Waffle House is known for. The orders are heavily customized, especially if you get the hash browns, smothered, covered, chunked, diced.

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whatever else you can put it on there. And they also do this because mistakes are expensive. Food cost is really high and piss off customers. Maybe, maybe that’s one of the reasons they do it because wall follows customers could be more likely to want to fight than your average customer. don’t know. So what they, they can’t afford to hear things like, well, I never saw that ticket or I thought that was somebody else’s order or I thought somebody else was cooking that they can’t afford to have plates sitting in limbo while the cook.

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guesses what’s next. They can’t afford the cook tracking down a server. Hey, what did they want? Or tell me about this. This real time, when I say real time, it’s happening right now. There’s a real time synchronous handoff of information. And it does three big things. Number one, it kills ambiguity. Everybody hears the same thing at the same time. There’s no mystery contract if this were a construction.

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business, there’s no mystery contract sitting in a CRM somewhere. It’s not sitting in the order is not sitting in somebody’s email box or in a text thread. Everybody hears the same thing at the same time. is parallel communication. So in this case at Waffle House, there’s a cook, there are three people standing shoulder to shoulder. They all hear the same thing in real time, not the telephone game. Okay. Number two, it allows for seamless flow.

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The server steps up, they give the order, pull, drop, mark, and then the server goes back to the floor to help other customers. That’s it. They’re not standing there answering a bunch of questions. Number three, it prevents rework and what we might call profit bleeds. There’s no cold food, no wrong plates, no throw this out and start over because some detail was buried. Do things get missed? Yes, but it eliminates a lot of the

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the lost money. Now let’s translate that to construction and most construction companies, the way the handoff is handled is that the sales guy or gal, the pre-construction person just dumps a contract, dumps a bunch of PDFs into a Dropbox folder. It’s buried in job tread or builder trend. Maybe there’s an email that says here we’re go and more likely

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The information is in a bunch of different places. When you hand off a project, it’s all in a bunch of different places. And this adventure begins to go find out all of the information. And then we act surprised when something falls through the cracks, right? When there’s rework, schedule delays, selections got missed or somebody’s building from the wrong version of plan. So here’s the move, all right? No job starts without a live handoff meeting. Every job.

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should have a handoff meeting, a real-time handoff meeting that operates a lot, feels a lot like a loan closing. If you’ve ever had a loan closing, there’s a list of loan stipulations and you ain’t going to close on that loan. You’re not going to get that truck, that piece of property, that loan until all of the stipulations are met. And that’s how a handoff meeting should be. It should be in-person, the estimator, the pre-construction person, the selections coordinator, the project manager, the superintendent should all be there and there’s a handoff.

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of everything they need to finish the job instead of just enough to start. Same agenda every time, just like the Waffle House order method, the pull, drop, mark, you should have an agenda to review the scope, the constraints, are there access issues, are there crazy neighbors, inspections, any weird client stuff at hot buttons, the schedule, the high risk details, what’s the…

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The financial picture, what’s the budget? What selections have been made? What about long lead materials? And then the field takes that hand off if it’s complete or if it’s not complete, they ask questions and they get their questions answered in real time. It is Waffle House on a real life construction project. Real time, face to face, nothing gets buried in documents. Lesson number two, as I said there at the bar,

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I noticed, I was wondering how do they, how does the cook know what’s going on? Because when the, the server was calling out orders, the cook wasn’t paying attention. And then I noticed there was a young lady standing to the right of the cook. She took the orders and she, when an order came through, she would pull a plate out and she was putting jelly packets and utensils and things on the plate. And as I went further down this Waffle House rabbit hole, I found out they have what they call the magic marker.

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system that has nothing to do with like Sharpie markers. It’s a system of marking plates for orders. Some people would call it the secret plate code system. So if you’ve never noticed this before, next time you’re there, go watch the plates, sit at the bar and watch this. They’re not just throwing jelly packets on there randomly. I used to think that the cook had to remember all of these orders somehow, but that’s not the case. So if you look up the magic marker waffle system, they use plates.

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and jelly packets and utensils and other things to indicate what the order was. The type, the position, and the orientation of these packets is a code. So for example, a jelly cup or jelly packet placed in one specific spot might mean scrambled eggs. That same jelly packet at a different clock position, like 12 o’clock or three o’clock, means some kind of egg style. A mustard packet means something. A few shreds of hash browns dropped on the plate means something.

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The server calls out the order verbally and then somebody marks the plates with this code. The cook doesn’t stare at a ticket. They don’t scroll with a screen. They don’t memorize a paragraph. They look at the plate, they read the code and they just execute. And here’s why that matters for you as a construction business owner. Number one, it standardizes the whole system. right. Every Waffle House uses the same code. That means you can move that grill operator that

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cook from one store to another and they’re productive almost instantly. So it’s easier to train somebody. It’s easier to replace people. It’s not based on people. It’s not designed around people. It’s designed around a process. The cooks and the grill operators are not reinventing how to run the line at every location. They don’t have to be creative. So it’s easy to train, easy to onboard, easy to replace. So you cannot have five project managers

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all running five different versions of your company. You cannot have five superintendents doing their daily logs differently. You can’t have two selections coordinators or three estimators, all estimating projects their own way. You need a consistent process. number one, standardizes the entire system. Number two, it reduces dependence on the unicorn employees. Now some of you think you want unicorn employees. I’m going to talk about that in a minute.

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In Waffle House, the system does the thinking. The human just runs the pattern. When the load goes up, they don’t need to be smarter. They just move faster inside the same rules. So you don’t, the cooks don’t have to be great at, they don’t have to have a great memory. They just need to be able to follow the process. Number three, it prevents the classic chaos that happens on so many construction.

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projects, like I thought you were ordering that material. I thought you would get the permit this time. I didn’t know we needed that sub on site today. I run my jobs this way. He runs them that way. So in your world, the, the magic marker system is your playbook. You need a, this is how we do it playbook. So everybody’s doing it the same way, right? Imagine if you had a band.

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And they’re all just playing from different sheets of music. That’s how a lot of construction companies are. Now I’m not talking about a 200 page SOP that’s in a three ring binder that nobody reads. I’m talking about a playbook, simple visual repeatable standards. So everyone knows what everyone else is doing and they’re somewhat interchangeable. So this is how we set up a job. This is how we run pre-construction. This is how we.

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handle selections. This is how we handle change orders. This is how we close out a project, right? So if you moved a PM or a superintendent to another project tomorrow, would they instantly know the sequence or would they be guessing? Would they have to recreate this entire project if they were taking over for somebody else? If they would be guessing or reinventing the wheel or recreating things, you don’t have a good system yet.

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Now, maybe you think you want that Unicorn employee. Maybe you’ve been looking for that Unicorn employee. Like if we could just find this Unicorn employee who can do everything, we would be set. Unicorn employees can actually be incredibly risky. I don’t have time to get into that. Go listen to episode 424 of the Construction Leading Edge podcast to see how risky Unicorn employees actually are and why.

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average people are the key to successful growth. Quick break for something that might hit close to home. If you are a custom home builder, remodeler, or a commercial GC and your business basically lives in your head, this is for you. I was on a business evaluation call recently with a builder doing multi-million dollar custom homes and big renovations. On paper from the outside, everything looks great. But in reality, he was working 60 to 70 hours a week. And when we looked at it, he admitted

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that he was spending about 75 % of his time in reactive mode, putting out fires on low rent activities. When we talked about his handoff from the office to the field, he graded it at like a C minus or a D plus. You see, they were starting jobs before the scope was nailed down, subs weren’t clearly lined up, material selections were half-baked, and there was a lot of we’ll figure it out as we go. Classic just enough to start.

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trap stuff and that led to costly mistakes, delays, and there were a couple of near disasters on high profile projects that he absolutely could not afford to screw up. And then when we went through the evaluation, we found hundreds of thousands of dollars a year in hidden profit between the rework, giveaways, lost productivity, scheduled delays, and then the opportunity cost. And the common thread was a weak pre-construction and handoff process. There was a

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pre-construction deficiency. And that call is what I would like to invite you to today. It’s a free, about 45 minute business evaluation call with my team. We’ll walk through a simple diagnostic to grade your office to field handoff. We’ll quantify the hidden profit that may be in your business. And then we’ll map out what a real operating system for your business would look like so it can run without everything going through you. Then if it looks like we can help,

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We’ll schedule a second call to go through the implementation program that fits your specific situation. If it’s not a fit, you’ll still walk away with clarity and a concrete plan. But here’s the deal. This is not for everybody. It’s for companies doing over a million dollars a year in revenue. And we only have capacity to take on a handful of clients each month. So if you want your business to look uh real different 12 months from now, now is the time to take action to book your business evaluation call.

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You can click the link in the show notes or simply go to constructionleadingedge.com forward slash apply a PPL Y and book your business evaluation call. Let’s get into lesson number three. You’ve probably heard the old saying people don’t want to see how the sausage is made, right? They don’t want to see the back of the house. They just want results. People don’t want to see how the sausage is made. Maybe that used to be true, but it.

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is not true anymore. Today, when it comes to sausage, people want to know how the sausage is made, where it was made. Is it chicken sausage? Is it pork sausage? Where was this chicken raised? I want to see the farm that this chicken was raised on. Where did it live? Was it free range? Was it grass-fed? Did it live in a cage? What was it fed? Was this chicken a vegetarian? I want to know about its medical history. Did it receive hormones? Did it have antibiotics?

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Was it on testosterone? They may even want to know the farmer’s political beliefs because whether it was a liberal farmer or a conservative farmer, maybe that those political beliefs and their ideology somehow got into the chicken’s muscle tissue. don’t know. Marcus Sheridan, pretty sharp guy. You can check him out. He calls this out. He says, modern buyers do most of their decision-making before they ever talk to you. Right. As time goes on.

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People are doing more and more of their own research. making more of the business decisions on their own or buying decisions on their own before they even talk to you. So they expect honest, transparent answers about pricing, problems, process, and options. If they feel like you’re hiding something, trust is gone and they’re probably going to go to somebody else who is more transparent. So Waffle House leans into this. There’s no mystery kitchen.

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Right? The kitchen’s not in a black box. Like a lot of restaurants, the grill is in the back and you look through a little narrow slot that has some warming lights on it. Maybe you catch a glimpse of the cooks back there. The waffle house, it’s all right there. The grill, the back of the cook is, if you’re sitting at the bar, five feet away from you, right? You can see every mistake. You can see how busy they are. You can see the skill of that $2 million cook. You can see,

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if he drops your stake on the floor. And that visibility actually increases trust. It does a lot of other things for efficiency, but it increases trust. You can see the work, you see the effort, you don’t feel like they’re hiding anything. There’s no way to hide something. Another way to say this is that at Waffle House, the customer becomes a passive supervisor. The customer being right there provides another level of accountability.

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And construction is way behind here. So most contractors hide as much as possible. They play their cards really close to the vest. They hide their pricing. They hide their margins. The schedule is hidden. Change orders are a black box. Scope is often unclear. And the client only hears about problems when things blow up.

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Radical transparency looks like a clearly defined process and clear expectations for the client upfront. A schedule that clients can view and actually see and understand in real time. A change order log with potential changes that are out there with status and pricing. Customers want to see regular video or photo updates from the field showing progress and knowing what happened last week, what’s coming up next week.

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And then being upfront about risks and potential delays before they happen. All right. And the side effect of this is when people see the complexity and the effort and there’s transparency around it, they argue less about price. They’re more patient when things happen because they feel in the loop. Right. Your customers will project their worst fears into a vacuum of information. When there’s no information, they will project their worst fears.

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onto that. So your job is to provide information, fill up that vacuum of information. And then what’s the other side of effect of this? More accountability for your team. If your team knows the customer sees everything that’s going on, they will be more accountable. It adds another level of accountability. Let’s talk about the fourth lesson. Let’s get back to that shirt that started all of this, the shirt that sent me down the rabbit hole.

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The first thing I noticed was this cook and on the back of his shirt, it said $2 million club. So I did some research asking what does that mean? And found out that it meant this guy had cooked $2 million of food for Waffle House. did some research on Jim and I, and Jim and I told me I was in the presence of greatness. All right, this guy had been cooking for probably six or eight years to get to that point, to cook $2 million worth of food for Waffle House.

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Why does Waffle House bother with these shirts? And then as I looked around, I noticed the young lady on his left had a t-shirt that said Rockstar Grill Operator. I noticed some name tags showed how long they had been employees of Waffle House. Some people had been there for, I think one person was since 2007. There were some long tenured employees and it had their start date, the year that they started with the company right there on their name tag.

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So they could just quietly say, good job on the back and the back of the store, or like some, I’ve heard some people say to their employees, you should just be glad to get a paycheck, right? Or, you know, we’re paying you so much money. You should just be happy. get a paycheck, but Waffle House knows something that most owners forget. I think about Waffle House. have unskilled labor. They have a high turnover, perhaps because of all of the

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the chair throwing and the fighting, and they lean into this statement that I’m about to make, that status and recognition is currency. Those visible markers, the shirt, the $2 million club, the rock star grill operator, these visible markers, they do a couple of things. They tell customers, this person is a pro. They tell new employees, here’s what you could become if you stick around and perform. It tells the veterans, hey, you’re not invisible. We see you, we appreciate.

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You there’s some recognition and that changes behavior. What do I mean by that? Here are a couple of soundbites on that. People will work harder for status than they will for a tiny raise. And if they don’t get it from you, they’ll go somewhere else that gives it to them. Okay. People work harder for status and recognition than they will for a tiny raise. So if you’re thinking about giving your people a 25 cent an hour,

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raise or a 50 cent an hour raise or maybe even a dollar an hour raise. Wow, 40 whole dollars a week before taxes. It’s very likely they’re going to go somewhere else. That provides the status or the recognition. Another thing is acknowledging exceptional performance often has a longer lasting impact on loyalty than a one-time cash reward. And I’ll share an example of that in a minute. Another one is while competitive pay provides fundamental security,

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covers their bills, non-monetary recognition like peer-to-peer praise, public acknowledgement, or career growth opportunities fuels intrinsic motivation. And research shows that consistent appreciation significantly lowers turnover, it builds psychological safety, and it boosts daily engagement far more than zero recognition. It also creates a culture of good competition, all right?

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So years ago, I was running a construction company. When I got there, it was at about three or $4 million in revenue and 15 employees and ended up growing into 11 million in revenue and 50 employees. And one of the things I did was I created a recognition program and my thought process was, I want people to follow the process and do what needs to be done. And how can I do that? So what I decided to do would be I created the Extra Mile Club.

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And I wanted to incentivize, recognize people who went the extra mile, people who did a little bit more than was required. So I created this club, had some t-shirts made up, and I had my foremen and crew leaders nominate people on their crew when they caught them going the extra mile. And we gave out t-shirts and these guys wore the t-shirt like a badge of honor.

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And then it set off this chain reaction of people thinking, I want to have, I want to be part of the extra mile club. want to, I’m going get a t-shirt. So they would ask, what do I need to do? And they were, they started doing the things that would get them the shirt. were doing the extra things. And I’ve also, I’ve talked to other construction business owners. One guy in particular gave out poker chips for recognition and the poker chips were worth a hundred bucks. They could cash them in and get a hundred bucks.

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but his name was Don. And what Don told me was, what was really interesting was these guys would carry these poker chips around in their pocket while they were working for months. And having that poker chip in their pocket was more valuable to them than having the cash in their bank account. So little things showing recognition. So decide what sort of behavior you want to see more of, make the criteria clear, tie it to those behaviors.

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And then make the reward visible. Stickers, gold stars, t-shirts, hats, whatever fits your culture. And then the other thing I did for the Extra Mile Club was when we had a safety breakfast, people were recognized publicly. They were given that shirt publicly and we talked about what they did. Jose went the extra mile and he was on this job and he saw this problem with an air conditioning unit and he decided to take things into his own hands to

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take care of the client and as a result, he gets the t-shirt and everybody hears that. So public recognition. So think about building your own version of the $2 million club for your team. Foreman, supers, project managers, estimators, whatever sort of behavior you want publicly recognize that behavior. The side effect is retention, pride.

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increased performance, a little good competition and way less it’s just a job type attitude. All right, so let’s bring it all together. Four Waffle House lessons for your construction business. Number one, real time, face-to-face handoffs. No more jumping, dumping jobs over the wall, throwing it into your software or Dropbox folder, office and field meet live before every project they hand it off. Number two, have a this is how we do it system.

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One simple shared way that you run projects, specifically your pre-construction process, so people are somewhat interchangeable, everybody knows how things are done and chaos drops. Number three, radical transparency. Go from a black box to a glass box. Show how the sausage is made. Schedules, changes, problems, progress, expectations.

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The more your clients see, the more they trust you and the more accountability it builds in your team. And number four, visible recognition. Create your version of the $2 million club. So your best people who are actually performing feel seen and everybody knows what winning looks like. Now, if you’re listening to this thinking, yeah, that’s us. And we are flying by the seat of our pants. We’re winging our handoffs. Our handoffs are like a C or a D grade. Everybody does things a little different. Clients are in the dark.

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And I feel like my best people are redlining and maybe they’re out looking for another job. Here’s what to do next. First, go register for that free get out of your construction business, how to make it run without you training. The link is in the show notes or go to constructionleadingedge.com forward slash get out G E T O U T. I’ll walk you through the hidden trap causing your chaos. The forgotten phase, the secret.

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profit phase of every project. It could be bleeding your profits and how to start delegating so the business doesn’t depend on you for everything. And when you’re ready to fix this for real, go book a business evaluation call with me. The link is in the show notes, or you can go to constructionleadingedge.com forward slash apply, A-P-P-L-Y. We’ll look at your projects, your teams, your systems, and show you exactly where your

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Waffle house gaps are and what to change so you can build a business that runs smoothly and profitably even when you’re not there. Hey, do me a favor. If you got some value out of this video, like it, subscribe it, share it with somebody else who needs to hear about it. And if you liked this, these business lessons for construction of business owners, go check out the construction leading edge podcast, especially episode four 10.

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which is about how to use the moneyball strategy to run your construction business like a machine. If you’re thinking moneyball, you mean like the Brad Pitt movie about the Oakland A’s, that’s exactly the one. It is one of the episodes I’ve received the most feedback about. That is episode 410 of the Construction Leading Edge podcast. Hey, I’m Todd DeWalt from constructionleadingedge.com. Thanks for listening or watching. See you next time.

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Hey, before you hit stop and skip on to the next episode, let me ask you something. If you’re building custom homes or big renovations and you’re starting jobs before scope, subs and selections are completely dialed in, how long can you keep scaling like that before something cracks? That’s exactly what we’ll unpack on your free business evaluation call. In about 45 minutes, my team will help you do a few things. Grade your current handoff from office to field.

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Put some real numbers to the hidden profit bleeds that could be in your business. There could be hidden profits in your business. Sketch out what a repeatable operating system would look like in your business from sales to pre-construction through completion. And if it looks like we can help, we’ll book a follow-up call to talk about the right implementation program for you. If it’s not, you’ll still leave with clarity and next steps. We will leave you better than we found you. So to book your call and be…

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sure that you qualify for that call, go to constructionleadingedge.com forward slash apply a PPL Y or click the show notes. There’s a link in the show notes and book your business evaluation call.