The Distillation of Danny Meyer: A Guide to Leadership, Culture Building & Hospitality
“Business, like life, is all about how you make people feel. It’s that simple, and it’s that hard.”
– Danny Meyer
Danny’s BIO
Danny Meyer is the Founder & Executive Chairman of Union Square Hospitality Group and a lifelong restaurateur. Danny grew up in a family that relished great food and hospitality. Thanks to his father’s travel business, which designed custom European trips, Danny spent much of his childhood eating, visiting near and far-off places, and sowing the seeds for his future passion. In 1985, at the age of 27, Danny opened his first restaurant, Union Square Cafe, launching what would become a lifelong career in hospitality.
Thirty years later, Danny’s Union Square Hospitality Group (USHG) comprises some of New York’s most beloved and acclaimed restaurants, including Gramercy Tavern, The Modern, Maialino, and more. Danny and USHG founded Shake Shack, the modern-day “roadside” burger restaurant, which became a public company in 2015.
Under Danny’s leadership, USHG is renowned not only for its acclaimed restaurants but also for its distinctive and celebrated culture of Enlightened Hospitality. This guiding principle of prioritizing employees first and foremost has driven and shaped USHG’s ongoing evolution from a small group of restaurants into a multi-faceted hospitality organization.
Danny and USHG’s diverse ventures have added to the hospitality dialogue in many contexts including dining options in museums, sports arenas, and cultural institutions, as well as prescient investments in burgeoning neighborhoods.
Danny has been generously recognized for his leadership, business achievements, and humanitarianism, including the 2017 Julia Child Award, the 2015 TIME 100 “Most Influential People” list, the 2012 Aspen Institute Preston Robert Tisch Award in Civic Leadership, the 2011 NYU Lewis Rudin Award for Exemplary Service to New York City, and the 2000 IFMA Gold Plate Award. Together, Danny and USHG’s restaurants and individuals have won an unprecedented 28 James Beard Awards, including Outstanding Restaurateur (2005) and Who’s Who of Food and Beverage in America (1996)
This Distillation will unpack the signature business and life principles that translate to a wide range of industries that I’ve learned from Danny over the years. The main themes being unpacked are:
- Understanding the importance of Hospitality for every business.
- The never ending pursuit of excellence.
- The keys to leadership and the ways to develop other leaders.
- The essential frameworks and practices for hiring & building culture.
- How to use mistakes to your advantage.
Business Philosophy
Hospitality is the foundation of my business philosophy. Virtually nothing else is as important as how one is made to feel in any business transaction.
People will say a lot of great things about your business, and a lot of nasty things as well. Just remember: you’re never as good as the best things they’ll say, and never as bad as the negative ones. Just keep centered, know what you stand for, strive for new goals, and always be decent.
We not only had to be really good at what we did, but we had to be even better at how we made you feel. We had to make you feel like we were on your side, which is hospitality, but then to take it a step further, we had to really make you feel like you belonged. And it was this unlocking of a human emotion, which is that more than anything else, I think human beings long to belong.
I have always viewed Excellence as a journey, not a destination. Danny is in pursuit of excellence in everything he does.
What are the two or three things that are most important for an entrepreneur to succeed?
“I think what all entrepreneurs have in common is that their idea solves a problem for people and it makes them feel so happy that they just cannot wait to share that with other people. And you cannot see failure as a possibility. The third thing is you just gotta be willing to work.”
You need to ask yourself, “Are you in it for keeps?” It’s almost always worth bearing a higher short-term cost if you want to win in the long run. I’m convinced that you get what you give, and you get more by first giving more. Generosity of spirit and a gracious approach to problem solving are, with few exceptions, the most effective way I know to earn lasting goodwill for your business.
Service vs. Hospitality
How many of you are in the hospitality business?
Every single one of us is in the hospitality business because there’s this thing (whatever your job is) you do that only gets you to the 49-yard line. You want to get all 100 yards. The 51 extra yards come from how you make people feel while you’re doing that incredible thing you do. That’s hospitality.
Service is the technical delivery of our product. Hospitality is how the delivery of that product makes its recipient feel.
Service is a monologue — we decide how we want to do things and set our own standards for service. Hospitality, on the other hand, is a dialogue. To be on the guest’s side requires listening to that person with every sense, and following up with a thoughtful, gracious, appropriate response.
It may seem implicit in the philosophy of enlightened hospitality that the employee is constantly setting aside personal needs and selflessly taking care of others. But the real secret of its success is to hire people to whom caring for others is, in fact, a selfish act. I call these people hospitalitarians. A special type of personality thrives on providing hospitality, and it’s crucial to our success that we attract people who possess it. Their source of energy is rarely depleted. In fact, the more opportunity hospitalitarians have to care for other people, the better they feel.
“Enlightened Hospitality”
I began to outline what I considered non negotiable about how we did business. Nothing would ever matter more to me than how we expressed hospitality to one another. (Who ever wrote the rule that the customer is always first?) And then, in descending order, our next core values would be to extend gracious hospitality to our guests, our community, our suppliers, and finally our investors. I called that set of priorities enlightened hospitality. Every decision we made from that day forward would be evaluated according to enlightened hospitality. We would define our successes as well as our failures in terms of the degree to which we had championed, first, one another and then our guests, community, suppliers, and investors.
“The service is the technical delivery of a product. Hospitality is how the delivery of that product makes its recipient feel.”
In the realm of enlightened hospitality, managers prefer employees who have better emotional skills than technical ones — a person, in other words, who knows how to cater to a diner’s every need over a person who just knows how to refill the water glass.
I realized that in all the years I’ve been in business, we have never succeeded at making our customers any happier than our staff members feel coming to work. So that’s what I said, the input to this virtuous cycle has to be how did we provide hospitality for the people who work for us? Did we create a servant leadership model, where when people come to work, they understand that while they do have responsibility to get their job done incredibly well, as their boss, I have an even greater responsibility to provide the kind of setting where they can thrive, and I must provide the tools they need to do the best job they can for customers. I realized in this virtuous cycle of enlightened hospitality we put our employees first, our customers second, the community in which we do business third, our suppliers fourth, and our investors fifth.
The Virtuous Cycle of Enlightened Hospitality
There are five primary stakeholders to whom we express our most caring hospitality, and in whom we take the greatest interest. Prioritizing those people in the following order is the guiding principle for practically every decision we make, and it has made the single greatest contribution to the ongoing success of our company:
Our employees
Our guests
Our community
Our suppliers
Our investors
“It’s human nature for people to take precisely as much interest in you as they believe you’re taking in them.” Change works only when people believe it is happening for them, not to them.
The Excellence Reflex
People duck as a natural reflex when something is hurled at them. Similarly, the excellence reflex is a natural reaction to fix something that isn’t right, or to improve something that could be better.
The excellence reflex is rooted in instinct and upbringing, and then constantly hones through awareness, caring and practice. The overarching concern to do the right thing well is something we can’t train for. Either it’s there or it isn’t. So we need to train how to hire for it.
“I‘m very, very interested in the notion of excellence. I do believe that excellence is a journey. And I believe excellence is honoring the work you did yesterday, all the mistakes and everything, you gave it your best, but damn it, figure out how you could do it a little bit better today. And when you see something that can be better, you fix it.”
Restaurant workers are famous for a lot of things, but there’s this consistently weird thing I’ve noticed through the years where they don’t often know how to look down. They walk right over the little pink Sweet-n-Low wrapper that somebody dropped from their table. That’s not using your excellence reflex. That doesn’t belong there. It’s like, if it’s not right, you gotta fix it, whatever it happens to be. There’s a great expression, “always leave your campsite neater than you found it”, which I really, really believe in. That implies some excellence, which is what I saw when I got here. I’m going to make it even better. But I’ll be damned if I’m going to leave it even worse. There’s just no way I’m going to do that. We think a lot about that.
I also think a lot about competition. I’m a sports fan and I love learning about what motivates championship performance because in business, that’s our sport. It’s a game. We are paid to be problem solvers. I’ve learned over time that I need to surround myself with people who are motivated to be champions. I’ve also learned that there are three primary differences in the kind of motivations that champions have, and not one is better than the other.
Beating the competition
Fear of losing
Outdoing personal best
“We tell every single person who works on our team that your highest priority is how you treat each other. You yourself need to be the single highest reason that all of the rest of your colleagues want to come to work.”
Leading
I believe that leadership is not measured just by what you’ve accomplished, but rather by how other people you depend on feel in the process of accomplishing things. Leadership is about setting priorities and then exemplifying the behaviors that you want to see in other people.
Three hallmarks of effective leadership are to:
provide a clear vision for your business so that your employees know where you’re taking them
to hold people accountable for consistent standards of excellence
to communicate a well-defined set of cultural priorities and non-negotiable values.
Perhaps most important, true leaders hold themselves accountable for conducting business in the same manner in which they’ve asked their team to perform.
It’s like the Japanese word Omotenashi which means I get pleasure in anticipating your needs and providing that hospitality without expectation of further compensation makes it all the more genuine…
What makes a great leader in your culture?
“I think first and foremost a great leader has to express what success looks like, where are we going and what success looks like. And how are you supposed to behave while you’re getting there and consistently shine your light. I look at it like the Statue of Liberty with the beacon and anytime you do something really well according to what we agreed you’re gonna do I’m gonna shine the light on you. Anytime anything good happens for our company I’m going to shine the light on you. Anytime you screw up I need to shine it on both of us. And anytime I screw up it’s gonna be squarely in my face. I think leaders who do that make it safe to make mistakes. I will put up with any mistakes that do not lack integrity because I think that’s where some of our greatest learning comes from.”
“I also think you’ve got to use your leader “Fire” in many ways. So one way is to light the way for others. One way is to shine the light on you but another way to do it is you have to have fire in the belly. Sometimes leaders can have a bonfire and that’s where we all have something in common. You’ve got to look for those common celebrations but sometimes there’s time for a campfire. What a campfire is, is there’s only four or five of us there. A leader sometimes needs to take three or four people and have a campfire where you get a little more intimate. What the leader’s doing at that point is taking the fire out of your belly and trusting that you put it “here” where we don’t have a power differential and it can bring us all together. If you do that too often though, other people on the team are gonna get jealous that they were not invited with their marshmallows and when you’re sleeping in the tent they could put out your fire. So you got to use that campfire and of course sometimes you use your fire to warm somebody who needs it and sometimes you gotta use your campfire to singe somebody out because they betrayed your principles.”
Culture
“The biggest thing that any tribe has is a common language and I think that words are the most powerful mortar between the bricks of any culture.”
Culture is just a fancy word for how we do things around here.
The 4 Family Values That Guide Our Culture
Excellence
Doing the thing you do as well as you can possibly do it and figuring out how to do it even better tomorrow.
Hospitality
Doing the thing you do in a way that makes other people feel better.
Entrepreneurial Spirit
Coming up with a fresh way of looking at a process than the rest of us wish we thought of first. Everything can get better and the best ideas need to come from people on the front lines.
Integrity
Having the judgment to do the right thing even when it’s not in your own self-interest even when no one else is looking.
How do you intervene when the culture is not where it needs to be and hold people accountable?
You hold people accountable to the family values. Family values and culture is not a way to tame the ocean of its waves. The waves (challenges every business will face) are going to keep coming but when you have a mirror you can hold up and show your family values. That’s when you can learn to ride the waves.
“I’m not going to have a long leash on someone who ‘Can’ but they won’t’. Too many organizations put up with culture defeating behaviors because they’re so good at what he or she does but that just doesn’t work.”
“I just don’t think there’s a greater center of the table than culture, because if it gets off then you’re in trouble.”
- Danny discussing culture- https://youtube.com/clip/UgkxQA3hFKmyg5IsN9yVH40yKjUN6TsdTIY8
Flip The Org Chart
In any hierarchy, it’s clear that the ultimate boss holds the most power. But a wonderful thing happens when you flip the traditional organizational chart upside down so that it looks like a V with the boss on the bottom.
Very similar to the former CEO of Visa, Dee Hock
My job is to serve and support the next layer “above” me so that the people on that layer can then serve and support the next layer “above” them, and so on. I staunchly believe that standing conventional business priorities on their head ultimately leads to even greater, more enduring financial success.
A managers’ primary job is to help make other people on our team successful. I urge them to use their position to maximize the positive impact they can have on and for our team. Good managers can have a multiplier effect and add significantly to the company’s excellence.
The biggest mistake managers can make is neglecting to set high standards and hold others accountable. This denies employees the chance to learn and excel. Employees do not want to be told, “Let me make your life easier by enabling you not to learn and not to achieve anything new.”
Overall, integrity and self-awareness are the most important core emotional skills for managers. You must be self-aware enough to know what makes you tick. You have to understand your own strengths, weaknesses, and blind spots. You need to surround yourself with a team of people who will mirror your integrity but complement and compensate for your strengths and weaknesses. That’s critical.
There is absolutely an art to surrounding yourself with great advisers and effective auxiliary sets of eyes and ears. These are the leaders on whom you must rely to present you with timely, accurate, balanced information and to apply constant, gentle pressure on your team so that you can move your company decisively forward.
Always Be Collecting Dots
ABCD simply means Always Be Collecting Dots. And in this case, dots, some people would rather call it data. But when I talk about a dot, I’m talking about a morsel of information that matters to you. And if it matters to you, then it better matter to me. Because if I want to matter to you, I better care about something important to you.
This gets back to this notion that people really want to belong to something. I think people also want to connect with people and we look for things that we have in common, which is the root of the word community, which we’re all craving. I want to belong to a community. I better start by finding things we have in common. It could be a sports team that we root for. But we’re looking for that stuff. That’s the collection of dots. And then when you connect those dots, you’re showing an interest in someone else. And what happens is you get that interest back.
We take extensive notes on guests… We also make sure to enter into “customer notes” any previous mistakes we made (“overcooked salmon on 7/16, spilled wine on purse 5/12”). We also indicate all “special requests” (“likes table 42; bring hot sauce with food; loves corner table;
Lessons Learned from Danny Meyer told by Will Guidara
Language Creates Culture
- Danny has always understood how language can build culture by making essential concepts easy to understand and to teach.
- “Constant, gentle pressure” was Danny’s version of the Japanese phrase kaizen, the idea that everyone in the organization should always be improving, getting a little better all the time.
- “Athletic hospitality” meant always looking for a win, whether you were playing offense (making an already great experience even better) or defense (apologizing for and fixing an error).
- “Be the swan” reminded us that all the guest should see was a gracefully curved neck and meticulous white feathers sailing across the pond’s surface—not the webbed feet, churning furiously below.
- “Make the charitable assumption,” a reminder to assume the best of people, even when (or perhaps especially when) they weren’t behaving particularly well. So, instead of immediately expressing disappointment with an employee who has shown up late and launching into a lecture on how they’ve let down the team, ask first, “You’re late; is everything okay?”
- Danny encouraged us to extend the charitable assumption to our guests as well. When someone is being difficult, it’s human nature to decide they no longer deserve your best service. But another approach is to think, “Maybe the person’s being dismissive because their spouse asked for a divorce or because a loved one is ill. Maybe this person needs more love and more hospitality than anyone else in the room.”
Culture
- USHG’s culture sent an immediate signal: “There’s a certain way we do things here, and it’s bigger than teaching you how you move through the dining room or how to spiel a dish.”
- To begin, Danny would ask everyone to introduce themselves with a line or two. But those introductions were also a meta-message. The fact that the head of the company was willing to use at least half of his meeting to take the time to hear from us individually made a big impression. It was our first indication that this central concept of enlightened hospitality— the idea that taking care of one another would take precedence over everything—was real.
- For the rest of the meeting, Danny would walk us through every one of those phrases and the role they played in the culture, showing us right away that words mattered. He didn’t focus on the what—he focused on the why. As a result, those meetings were more like freshman class orientations at college than an introduction to company procedures.
Just being in the room felt like joining a movement or accepting a mission—a vibrant and exciting community more important than yourself.
Hiring
I first look to build a sense of family amongst my team…
I ask managers to pose themselves 3 fundamental hypothetical situations when they are hiring:
Situation 1: Think of someone you know well who has an uncanny gift for judging character. When the prospect leaves and the door closes behind him or her, what will be the first thing your character says?
Situation 2: Imagine your keenest rival in business. Then imagine that the day you make a job offer to a prospect, he or she calls you back and says “Thanks, but I just got a great offer and taking it from the competitor”. Is your immediate reaction “Shit, we blew it!” or “Whew, we’ve dodged a bullet!”
Situation 3: Imagine a person with an especially weighty opinion (who you really, really care about) drops in announced, and the only person available is the new prospect to serve them. Is your reaction “Great!” or is it “Oh no!”
Finally — Does the candidate have the capacity to become one of the top 3 performers on our team in their job category?
“I rarely interview a candidate until two or three other managers have first had an interview with him or her. Since our restaurants thrive on a team spirit, I prefer to hire by consensus. I ask our managers to pursue a candidate’s relevant job references; I ask them to take personal notes and then rank the strength of each one of the candidate’s five emotional skills on a scale of zero to five; and I ask them to consider and react to the three hypothetical situations and then listen with their guts.”
9 Mindsets & Character Traits to Hire For:
Infectious Attitude
Self-Awareness — why is this your next logical chapter in your life?
Charitable Assumption — optimistic, hopeful and open-minded
LongTerm View of Success — enlightened hospitality, employee first
Sense of Abundance — be generous also in hard times
Trust
Approving Patience and Tough Love
Tough love is another term for, “I’m on your side” honesty. It’s saying, “I care enough about you to tell you the truth, even if the truth is tough to hear.” Patience with tough love sends a clear message to your staff that you’re on their side. We also put a premium on outward and unequivocal messages of approval.
Not Feeling Threatened by Others
I would not want to follow a paranoid leader who is always looking over his shoulder, fearing that someone was trying to put out his or her fire. I’d want to follow a leader who is secure, firmly in control of that fire to illuminate the way for me, to keep me enlightened; teach me; keep me warm, motivated, awed, and inspired. Under those circumstances I’d be delighted to follow my leader and, occasionally, even lead my leader. But I would certainly not be at my best as an employee if I were constantly enabling my leader’s insecurities. Show me a defensive boss and I’ll show you a team desperate for new leadership. Great bosses own up to their mistakes, insist on learning from them, thank others for pointing them out, and move on.
Character
For our managers to become great leaders, we identify and assess a number of crucial character traits that are a subset of the five core emotional skills—optimistic warmth, intelligence, work ethic, empathy, integrity, and self-awareness—that make a “51 percenter.”
Those traits include honor, discipline, consistency, clear communication, courage, wisdom, compassion, flexibility, ability to love (and be loved) humility, confidence (to possess it and to inspire it in team members), passion for the work and for excellence, and a positive self-image. These traits may mean something slightly different to different people, but in the aggregate they are the ideal characteristics of a highly effective leader, no matter what business he or she is in. You cannot be a great leader unless a critical mass of people are attracted to following your lead.
This becomes a “virtuous cycle.” People who get promotions should earn them not just because they’re ambitious, but primarily because they embody the company’s character traits in abundance. And since they are willing to do everything it takes to perpetuate those ideals, we function as a “hospitalitocracy,” with the entire team reciprocally bound by the same underlying culture of enlightened hospitality.
The 51% Solution
Our staff must be like a scintillating string of one-hundred-watt light bulbs, whose product is the sum of 51 percent feeling and 49 percent task.
When hiring Danny looks for people who have a ratio of 49% technical skill and 51% emotional skill. “We are hoping to develop 100 percent employees whose skills are divided 51–49 between emotional hospitality and technical excellence.”
It is my firm conviction that an executive or business owner should pack a team with 51 percenters, because training them in the technical aspects will then come far more easily. Hiring 51 percenters today will save training time and dollars tomorrow. And they are commonly the best recruiters for others with strong emotional skills. Nice people love the idea of working with other nice people. Over time, we can almost always train for technical prowess.
5 Core Emotional Skills of 51%
I’ve learned that we need to hire employees with these skills if we’re to be champions at the team sport of hospitality. They are:
Optimistic warmth (genuine kindness, thoughtfulness, and a sense that the glass is always at least half full)
Intellectual Curiosity (not just “smarts” but rather an insatiable curiosity to learn for the sake of learning)
Work ethic (a natural tendency to do something as well as it can possibly be done)
Empathy (an awareness of, care for, and connection to how others feel and how your actions make others feel)
Self-awareness and integrity (an understanding of what makes you tick and a natural inclination to be accountable for doing the right thing with honesty and superb judgment)
I want the kind of people on my team who naturally radiate warmth, friendliness, happiness, and kindness. It feels genuinely good to be around them. There’s an upbeat feeling, a twinkle in the eye, a dazzling sparkle from within. I want to employ people I’d otherwise choose to spend time with outside work. Many people spend a large percentage of their waking hours at work. From a selfish standpoint alone, if that’s your choice, it pays to surround yourself with compelling human beings from whom you can learn, and with whom you can be challenged to grow.
When we look for intelligence, we’re thinking about open-minded people with a keen curiosity to learn.
Do they ask me questions during interviews?
Do they display a broad knowledge about a lot of subjects, or a deep knowledge about any one subject?
A hallmark of our business model is to continually be improving. I need to stock our team with people who naturally crave learning…
Avoid the “Whelming” Candidates
It’s pretty easy to spot an overwhelmingly strong candidate or even an underwhelmingly weak candidate. It’s the “whelming” candidate you must avoid at all costs, because that’s the one who can and will do your organization the most long-lasting harm.
Overwhelmers earn you raves. Underwhelmers either leave on their own or are terminated. Whelmers, sadly, are like a stubborn stain you can’t get out of the carpet. They infuse an organization and its staff with mediocrity; they’re comfortable, and so they never leave; and, frustratingly, they never do anything that rises to the level of getting them promoted or sinks to the level of getting them fired. And because you either can’t or don’t fire them, you and they conspire to send a dangerous message to your staff and guests that “average” is acceptable.
Idiosyncratic Job Application
I ask questions like:
“How has your sense of humor been useful to you in your service career?”
“What was so wrong about your last job?”
“Do you prefer Hellmann’s or Miracle Whip?” If you’re trying to provide engaging hospitality and outstanding technical service, there must also be a certain amount of fun involved, and those bizarre questions gave me an idea of whether or not applicants had a sense of humor.
The single most powerful key to long-term success is cultivating repeat business, and ultimately regular guests. The number one reason guests cite for wanting to return to a restaurant is that when they go there, they feel seen and recognized. Imagine if our hosts consistently conveyed, “I see you!” I’m fairly certain that’s precisely what most people want.
Build Connection
Everyone has an invisible sign hanging from their neck saying, ‘Make me feel important.’ Never forget this message when working with people. ~ Mary Kay Ash
Everyone truly is walking around with this invisible sign around their neck that says “make me feel important”, but the thing is it’s invisible. So you can’t see quite how brightly lit it is and you can’t see the font size, but the biggest thing I’ve learned how to do was to read the subtitle because every one of those signs has a subtitle that starts with the word By. So, “make me feel important by leaving me the hell alone.” “Make me feel important by letting me tell you everything I know.” “Make me feel important by just listening to me.” I feel like it’s an amazing gift in business to be able to understand that.
In all these years I’ve learned that there is a golden rule of hospitality which is “Do unto others as you believe they would want done unto them”. And you’ve got to be able to read their sign because not everybody wants it the same way.
There is no stronger way to build relationships than taking a genuine interest in other human beings and allowing them to share their stories. When we take an active interest in the guests at our restaurants, we create a sense of community and a feeling of “shared ownership”.
For most people, it’s far more important to feel heard than to be agreed with.
Flying Fishing Lesson on Business
What I got out of fly fishing has helped me in business, and that is that the expert fly fisher people, even before they show their physical dexterity in fishing, they have to actually show an interest in the fish themselves before they can possibly catch a fish. And the way they show interest in the fish is to figure out what is actually hatching in the water at that moment. A really good fly fisherman wades into the water, turns over a rock, underneath which is a whole community of things hatching. And a really good fly fisher sees what’s hatching, says, “Aha, I’ve got to tie a fly that’s going to actually look just like what’s about to hatch. And that’s what I’m going to tie at this moment if I want to catch those fish.” So that’s where this all came from. How does that apply to business? Well, I think if you’re in business, you want to catch as many fish as you possibly can, also known as customers.
In business, turning over the rocks and reading the water, as a fly-fisherman might do, gives you crucial information so that you can take an even deeper interest in your customers, and encourages them to do the same with you.
Learn From Mistakes
The worst mistake is not to figure out some way to end up in a better place after having made a mistake.
My notion of mistakes is that they are the greatest renewable resource on earth. There’s always another one. You’re never going to run out of it ever, ever, ever. We can either hide from our mistakes. We can either deny that we made mistakes. We can either lie about our mistakes, or what if we could actually put those mistakes to work for us? What if we could say, hey, as long as there’s this constant waterfall or constant waves of mistakes coming. Think about the waves in the ocean. There’s always another one. You don’t know when it’s going to come. You don’t know how big it’s going to be. The water might be calm enough for a while to make you think there’s no waves, but there’s going to be another one.
I have zero patience whatsoever for dishonest mistakes. But an honest mistake, it’s like, great, let’s use it to our advantage. Let’s learn from it. Let’s own it. Let’s name it. Let’s teach from it.
The Five A’S For Effectively Addressing Mistakes
Awareness—Many mistakes go unaddressed because no one is even aware they have happened. If you’re not aware, you’re nowhere.
Acknowledgement—“Our server had an accident, and we are going to prepare a new plate for you as quickly as possible.”
Apology—“I am so sorry this happened to you.” Alibis are not one of the Five A’s. It is not appropriate or useful to make excuses (“We’re short-staffed.”)
Action—“Please enjoy this for now. We’ll have your fresh order out in just a few minutes.” Say what you are going to do to make amends then follow through.
Additional generosity—Unless the mistake had to do with slow timing, I would instruct my staff to send out something additional (a complimentary dessert or dessert wine) to thank the guests for having been good sports. Some more serious mistakes warrant a complimentary dish or meal. Unless something truly grave has occurred (food poisoning, someone slipping in a pool of olive oil), it’s sometimes helpful, when appropriate, to inject a little humor into the “great last chapter.”
Ultimately, the most successful business is not the one that eliminates the most problems. It’s the one that becomes the most expert at finding imaginative solutions to address those problems. And lasting solutions rely on giving appropriate team members a voice, as well as responsibility for making decisions.
There is definitely an art to this inclusive type of leadership. It can take away a lot more time than leadership based on “my way or the highway.” It demands dialogue, compromise, and a willingness to share power.
Two keys to building consensus for problem solving are coaching and communication.
Coaching is correction with dignity. It’s helping people refine skills, showing how to get the job done, and truly wanting employees to reach their peak potential.
Communication is at the root of all business strengths – and weaknesses. When things go wrong and employees become upset, nine times out of ten a justifiable complaint is, “We need to communicate more effectively.” I admit that for many years, I didn’t really know what this meant. I had no problem standing up in front of a group to give a talk. I thought I was a pretty good communicator, but then it dawned on me: communicating has as much to do with context as it does content. That’s called setting the table. Understanding who needs to know what, when people need to know it, and why, and then presenting the information in an entirely comprehensible way is a sine qua non of great leadership. Clear timely communication is the key to applying constant, gentle pressure.
Handling Mistakes
The time frame for addressing mistakes is crucial. When something goes wrong, it is essential for the manager on whose watch the mistake occurred to make every effort to connect with the guest within twenty-four hours. Meanwhile, we immediately review and analyze our own performance to determine exactly what happened.
1. Respond graciously, and do so at once. You know you’re going to resolve the mistake eventually. It’s always a lot less costly to resolve the matter at the outset.
2. Err on the side of generosity. Apologize and make sure the value of the redemption is worth more than the cost of the initial mistake.
3. Always write a great last chapter. People love to share stories of adversity. Use this powerful force to your advantage by writing the closing statement the way you want it told. Use all your imagination and creativity in thinking about your response. Whatever mistake happened, happened. And the person who it happened to will naturally tell everyone. While we can’t erase what happened, we do have the power to write one last episode so that at least the story ends the way we want. The guest will have no choice but to focus on how well we responded to the mistake when telling anyone we made it.
4. Learn from the mistake. Use every new mistake as a teaching tool with your employees. Unless the mistake involved a lack of integrity, the person who made it has actually helped your team by providing you with new opportunities to improve.
5. Make new mistakes every day. Don’t waste time repeating the old ones. When we do learn about a mishap in one of our restaurants, I always want to hear the staff member’s side of the story before I connect with the guest, since our first responsibility in the culture of enlightened hospitality is to be on the side of our team.
What has guided me most as an entrepreneur is the confluence of passion and opportunity (and sometimes serendipity) that leads to the right context for the right idea at the right time in the right place and for the right value. I have never relied on or been interested in market analysis to create a new business model. I am my own test market. I am far more intuitive than analytical. If I sense an opportunity to reframe something I’m passionately interested in, I give it my absolute best shot.
“What makes ours different and special?” is the question we ask and try to answer every day, and not just with food.
“We tell every single person who works on our team that your highest priority is how you treat each other. You yourself need to be the single highest reason that all of the rest of your colleagues want to come to work.”
Invest In Your Community
A business that understands how powerful it is to create wealth for the community stands a much higher chance of creating wealth for its own investors. I have yet to see a house lose any of its value when a garden is planted in its front yard. And each time one householder plants a garden, chances are the neighbors will follow suit.
Human resources—making sure we get the best (and right) people on our team, training them to succeed, and ensuring the kind of healthy culture and environment in which they can thrive.
Operations—making sure that people and things work as excellently as possible and that we are executing to our fullest potential. Accounting and finance—making sure we have a constant stream of timely, accurate information that reflects our past performance, and helping us make good, informed choices about our future through a culture of planning, budgeting, and analysis.
Public relations and marketing—making sure we are telling the stories about our business and its employees that will keep our restaurants on the tip of people’s tongues, whether they be journalists, prospective guests, or employees; and building relationships with other like-minded companies with whom we can forge the kind of business partnerships where 1+1=3.
Information technology (IT)—making sure we have the most effective software and hardware to allow us to communicate internally and externally, and to assess and improve our performance as a company.
Business development—making sure we’re not leaving money on the table with existing businesses, and analyzing and negotiating potential new business ideas to keep our employees and company vital and moving forward.
Community investment—making sure our company and its employees are finding and taking ample opportunities to play an active role in helping our communities fulfill their greatest potential.
Communication
I thought I was a pretty good communicator, but then it dawned on me: communicating has as much to do with context as it does content. That’s called setting the table. Understanding who needs to know what, when people need to know it, and why, and then presenting that information in an entirely comprehensible way is a sine qua non of great leadership. Clear, timely communication is the key to applying constant, gentle pressure. To illustrate the point, I teach our managers about the “lily pad” theory.
People who aren’t alerted in advance about a decision that will affect them may become angry and hurt. They’re confused, out of the loop; they feel as though they’ve been knocked off their lily pads. When team members complain about poor communication, they’re essentially saying, “You did not give me advance warning or input about that decision you made. By the time I learned about it, the decision had already happened to me, and I was unprepared.” Team members will generally go with the flow and be willing to hop over the ripples, so long as they know in advance that you are going to toss the rock, when you’ll be tossing it, how big it is, and—mostly—why you’re choosing to toss it in the first place.
The key is to anticipate the ripple effects of any decision before you implement it, gauging whom it will affect, and to what degree. Poor communication is generally not a matter of miscommunication. More often, it involves taking away people’s feeling of control. Change works only when people believe it is happening for them, not to them. And there’s not much in between. Good communication is always a factor of good hospitality.
You do everything you possibly can afford to show your staff and guests that you care deeply about improving. That’s acting from a positive and hopeful place, rather than from fear that can ultimately be self-fulfilling. The mind-set “We’re just hanging on” perpetuates scarcity. Investing money, imagination, and hard work to create a mind-set of abundance achieves abundance.
Your Job Is To Move Things Back To Center
“Listen, luvah. Your staff and your guests are always moving your saltshaker off center. That’s their job. It is the job of life. It’s the law of entropy! Until you understand that, you’re going to get pissed off every time someone moves the saltshaker off center. It is not your job to get upset. You just need to understand: that’s what they do.
Your job is just to move the shaker back each time and let them know exactly what you stand for. Let them know what excellence looks like to you. And if you’re ever willing to let them decide where the center is, then I want you to give them the keys to the store. Just give away the fuckin’ restaurant!”
Wherever your center lies, know it, name it, stick to it, and believe in it. Everyone who works with you will know what matters to you and will respect and appreciate your unwavering values. Your inner beliefs about business will guide you through the tough times.
Every time someone moves the salt shaker, I’m going to move everything right back to the way it should be. And so should you! That’s the constant aspect. I’ll never recenter the saltshaker in a way that denies you your dignity. That’s the gentle aspect. But standards are standards, and I’m constantly watching every table and pushing back on every saltshaker that’s moved, because excellent performance is paramount. That’s the pressure.
Final Lessons
The courage to grow demands the courage to let go. Whenever you expand in business—not just the restaurant business—the process is incredibly challenging, especially for leaders who first rose to the top because of their tendency to want to control all the details. You have to let go. You have to surround yourself with ambassadors—people who know how to accomplish goals and make decisions, while treating people the way you would. They’re comfortable expressing themselves within the boundaries of your business culture, and content with the role they play in helping a larger team achieve its greatest potential success.
Why do I keep climbing mountains? Because with a few exceptions there’s always a higher, steeper mountain to scale, and I’m willing to confront all sorts of treacherous conditions, especially when I’m convinced that they’ll lead to exhilarating views from the top. It’s the same with opening new restaurants, and with any new business initiative.
Lacking a crystal ball, I have no idea how many or what kind of episodes and temporary setbacks there will be along the way, or what shape they’ll take. However, we’ll have no choice but to improve and persevere with each step we take up the mountain.
Our job—and our joy—is to create restaurants you’d want to return to, and to build businesses that ultimately contribute at least as much to their communities as they reap from them.
