Look Out, Mean Girls and Slackers: Objective Logistics Tracks Work Habits in Restaurants to Boost Sales

5/26/11Follow @gthuang

Slackers hate it. Go-getters love it. And store owners and managers? Well, so far they seem to be buying it. I’m talking about Objective Logistics, a New Bedford, MA-based software startup that’s looking to transform work environments, starting with restaurants and retail stores.

“It’s polarizing as hell,” says CEO and co-founder Phil Beauregard.

If you believe controversial companies are good, you’ve come to the right place. Objective Logistics has created a Facebook-like interface that accesses the point-of-sale database of a given store, ranks the performance of waiters and salespeople compared to their peers, and rewards high achievers with perks like getting to choose their own work schedules. In certain establishments, that can mean an extra $1,000 in tips for working a busy Saturday instead of a slow weekday, for instance.

“We’re kind of ‘gamifying’ the labor market,” Beauregard says. “The real vision is, if I can rank productivity through technology, I can reward you and compel you to perform better.” He adds that his company is about “objective transparency through technology.”

And despite its clunky name, Objective Logistics has been attracting lots of buzz among venture capitalists—and customers—this year. The five-person company’s software was first deployed last month at Not Your Average Joe’s (it’s slated to go live in 15 of those restaurants), with several other local stores and major chains also at various stages of adoption. Objective Logistics has raised $750,000 in seed-stage funding from angel investors including Richard Darer, Greg Pesik, Serguei Netessine, Nigel Machin, and other Boston-area investors. The company might look to close a VC round in the next few months, Beauregard says.

Beauregard, who turns 30 next week, is a former investment banker who started Objective Logistics in early 2009. His partners in crime include co-founder Matt Grace, who was reputed to be the youngest product management director in Oracle’s history, and engineering vice president Dan Velcea, a 3Com and Credit Suisse veteran and a Romanian native who, in 1986, dropped his army-duty AK-47 in favor of a tech education and career. (“I just realized I was a sitting duck with a big bull’s eye on my back,” Velcea says.)

Restaurants and retail stores aren’t exactly the earliest adopters of new technologies. But that’s where Beauregard’s past experience pays off. He started washing dishes at age 14, and worked at places like Freestones City Grill, The Back Eddy, and Abercrombie & Fitch to put himself through college. So he has seen the pain points from the inside. He talks about “busting my rear end in a full restaurant” and seeing two or three other waitstaff slacking off and talking about weekend plans while he was “serving martinis and making a lot of money for the restaurant.”

Most people can relate to that experience; the question is whether managers are willing to do much about it. It’s early, but so far the answer seems to be yes. Restaurant owners say, “We’ve been doing this in our heads for the past 20 years,” Beauregard says.

That’s because only recently could such a point-of-sale (POS) technology even exist, he says. In restaurants, POS systems are the touch-screen computers on which waiters enter orders and process payments. They keep track of who sold what to whom, when, at which table, and so forth. The resulting databases are “the dirtiest and most disgusting things you could see on Earth,” Beauregard says. “The restaurant industry has been so reticent and slow to adopt new technology until just recently. We were lucky in our timing.”

Objective Logistics’ software-as-a-service, called MUSE, roots through all of that data, pulls out performance metrics (like who sold the most drinks that week), ranks each worker, and displays the metrics for the manager, who can then drill down into the various records. Meanwhile, workers input the hours they’re available to work and their preferred times. They can also see how they rank every week, and what they need to do to improve.

The payoff: Objective Logistics forecasts that this system will increase customer sales by 2-4 percent overall. It will also save managers somewhere in the ballpark of 10 hours a week in administrative duties, Beauregard says.

Those improvements are key, because surely some workers will not want their boss to know their every move—or will disagree with the metrics. Beauregard predicts that employees will be split about 70-30 in favor of adopting the new system. On a recent visit to a store in Beverly, MA, he was explaining how the software works, and one staffer burst into tears, while half a dozen others had smiles on their faces, he says. He also predicts increased attrition rates, because stores will be able to root out their low-performing employees more quickly (or they’ll quit).

It’s certainly not for everyone. Besides “the mean girls who’ve been there 20 years,” Beauregard says, mom-and-pop stores that have employed the same waitress for a decade won’t want to use the software. He admits the technology will be “culture shock” for some people in the business.

But if the company can overcome the backlash from some workers (and presumably unions)—as well as inertia in the industry—and prove to store owners that its software boosts sales and workers’ performance, it should have a bright future. What’s more, its ideas just might leak into other work environments besides service industries and retail.

“A good portion of your life is at your job,” Beauregard says. “We want to create transparency there.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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