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Danny Meyer - The expansion of Enlightened Hospitality

by Matt DeLucia

October 1, 2008

Danny Meyer

I’ve always been intrigued by the diversity of personalities in this industry, and after interviewing scores of successful chefs and restaurateurs I’ve noticed distinctions and similarities between the two. If you’ll pardon a little stereotyping, chefs do tend to be more reflective, thoughtful, and creative, with a tenacious, borderline-ADD capacity to concentrate on singular tasks for hours at a time. Successful restaurateurs tend to be more people oriented, with many of them bringing a solid sales pedigree before entering the hospitality business, but the most important skill a restaurateur must possess is a nearly uncontrollable desire to make others feel comfortable and to derive pleasure from the experience of treating people well. While performing this function from time to time is certainly within the abilities of most people, the ability to reaffirm this duty from all day long, year in and year out, requires much more than a commitment or the acquisition of skills or the purchase of an expensive 30-year lease - something I realized after spending an afternoon with Danny Meyer. Mr. Meyer, who went from being a theft-prevention device salesman into one of America’s most successful restaurateurs, shared his opinions and insights into the origins of his profitable and growing restaurant empire. Much like reading between the lines of a thoughtful letter, interspersed between my questions and his answers I think that you’ll find subtle insights that shed light on his success.

We sat near the front of Union Square Café, a location I was not quite comfortable with. For my interviews, I tend to prefer a private spot with fewer distractions, but our location turned into an education, of sorts. A few minutes into our discussion he looked up and with his boyish smile and bright blue eyes, said “Thank you” to a customer who was on his way out of the restaurant. A few minutes later while we were discussing his book, “Setting the Table,” he politely stopped mid-sentence for another customer farewell. Most people would not bother to stop talking to an interviewer to thank someone walking by for their patronage, but to Mr. Meyer it seemed natural and involuntary, like taking a step or drawing a breath, and just as critical. On the third “thank you”, I turned around expecting to see another well-heeled businessman leaving after a satisfying lunch, but saw instead a middle aged woman.

“She’s been working here for 20 years as a prep cook,” he said with pride. Suddenly I was reminded of the primary philosophy he detailed in his book, a concept called “Enlightened Hospitality,” which prioritizes the five groups of people whom a business owner needs to please. The list is actually a continuous cycle that begins with employees, followed by guests, community, suppliers and finally investors. The employees-first idea is an important distinction that runs counter to the traditional idea of “the customer always comes first,” because Meyer believes that if a business’s employees are their primary priority, the customer will consistently be treated better. It is one thing to dedicate yourself to a philosophy, but quite another to see an elegant example of that philosophy as Meyer graciously thanked a prep cook – one of over a thousand of his employees - for her day’s efforts, as well as one customer after another, regardless of their VIP ranking.

daniel humm Foie gras cherry

Although the front and back of the a restaurant’s house tend to live in two different worlds, Meyer finds plenty of symmetry between what a chef does and what service people bring to the table.

“If it’s August and we’ve got the best tomatoes in the world, and you give those tomatoes to two chefs,” he explains, “the one whose sauce is going to taste the best is the guy who handles the tomatoes the best once he got them in the house. They did not throw them in the walk in and refrigerate them and bruise them. No matter how good the food is, it’s never going to be more than 49% of our recipe, because 51% of it is how we make people feel. The people we hire will never work any better than the respect and care with which they are treated, just like the tomatoes. Intuitively, I had been doing with people what chefs have known forever about ingredients. We are the ingredients of hospitality.”

Meyer had been doing many things intuitively over the past twenty years as he became one of New York’s most successful restaurant entrepreneurs. As his customer base grew and time went on, the editors, agents, and publishers who were a significant portion of Meyer’s customers at Union Square Café slowly convinced him that his next book should contain not food recipes, but rather an accumulation of his formulas for planning, opening, and running successful restaurants. He finally acquiesced, logging over 50 hours of interviews with a former People magazine interviewer. The interviews themselves did not result in the book, but they made him think more of the “Why,” and pushed him into looking deeper.

The Modern

“I knew the process of writing a book would force me to analyze and create language for what was actually happening. I had the same kind of resistance that I think a lot of chefs have in writing recipes, which is forcing a chef to create a regimented approach to the things that are intuitive. If you ask a typical chef, ‘How do you know when the duck is done,’ he’ll say ‘because I know.’ Or ‘How do you know when you’ve put enough salt on it?’ He’ll say ‘when it’s seasoned properly.’ But as soon as it becomes a cookbook, they have to measure and stop and think.”

In addition to the business philosophies he discussed within the reams of interview transcriptions that he wound up with, there were also many personal stories that Meyer initially didn’t want to delve into. However, the publisher insisted that his business book should begin with his personal story in order to provide a relevance and background to how he would eventually mold his business philosophies.

“They said the only way that this book is going to have any credibility is if you begin by providing a memoir of who you are and where you came from. Then you talk about the problems and how you solved them, because by the time you get there they are going to know who the person is and why they made these choices.”

“Setting the Table” includes stories about Meyer’s family and how his entrepreneur father had started some wonderful businesses, some of which went bankrupt. This is presented as a major reason why he has tended to grow his Union Square Hospitality Group so slowly and carefully over the years. One of the most intriguing jobs he had early on was in politics, an area he was interested in just after graduating from Trinity College in Hartford. He landed a $216 a week job as the Cook County campaign coordinator for Independent candidate John Anderson. For those who don’t recall, Anderson ran for President in 1980 against Ronald Reagan and incumbent President Jimmy Carter. Meyer’s job was to create a major national organization for Anderson in one of the most critical voting counties in Illinois, and to get people to work for free, with nothing to offer them but a common cause.

“I realized that if I can get 20 people on the John Anderson campaign to come to work every day when I asked them to, and to go out and sell bumper stickers or knock on doors purely based on a common vision, imagine what I could do if in addition to a common group of ideals to believe in, I could also offer a paycheck.”

Many people who open restaurants assume that their establishments are indeed unlike any other business, and immune to some of the basic rules of business, and to some degree there is truth to that belief. But one of the most common misconceptions when starting any new business is the overlooking or underutilizing the sales aspect. Many restaurant operators believe that if you hire a competent chef and keep making terrific food, people will show up and they will keep coming. Other entrepreneurs think that with the right location, as long as the concept hit some regional hot buttons, any restaurant will become enormously profitable. If you look at some of the most successful restaurant operators of our generation - even if you just look at fine-dining - you’ll usually see not chefs, but salespeople. Terrific salespeople. And after his political experience, Meyer began his corporate life as just that, moving to New York from the Midwest and selling anti-theft devices to retail stores for a company called Checkpoint.

“It was my ticket to unlocking my competitive drive which I had been holding back for a lot of years. When you are a salesman, it’s all about measuring performance and getting paid for it. I loved ratcheting up the bar all the time and I learned that I love making money too. I also got a lot of self confidence that I had not had because I had never been in a position where I had to make cold calls and put myself out there, and see how my Midwestern self would play against the big leagues in New York.”

Even though he saw himself as a shy kid from the Midwest willing to do what it took to succeed in the Big Apple, he found that at his new job he had some underlying biases about his new profession. During his training, he said something that made it clear to his boss that he was embarrassed to be thought of as a salesman. “If you’ve ever seen the movie Paper Moon or The Music Man, I thought that salesmen were all cut out of that cloth, trying to put one over on somebody. My boss said to me, ‘if you are going to work here and you’re ever going to succeed at this, you need to embrace the fact that what a great salesman does is to help someone be in touch with something they need. If you believe this is a good product, you’re doing something great for them.’”

It turned out to be good advice, as Meyer went on to be a top salesman for the company for three years. He eventually earned enough at Checkpoint to eventually open his first restaurant, Union Square Café, in 1985. That restaurant cost $740K to open. Meyer had saved two thirds of that amount from his three years at Checkpoint, and the final third came from members of his family. Although he loved to cook, he made a decision at the time, “The best decision I had ever made, ever, ever,” he says now, to concentrate his efforts on running the restaurant and being up front, rather than being the restaurant’s chef. “I don’t know if I would have the attention span to do that properly, and I think it would have prevented me from doing a lot of the other things that I loved about the business,” he says. For that important job, he initially entrusted Ali Barker, who had never run a kitchen before. Before he opened his first restaurant he spent time in London and France and a year and a half in Italy studying the best restaurants there in a studious quest to discover what made them so successful so he could bring that knowledge home. This quest for authenticity, along with his tendency toward being selective and cautious, became defining traits each and every time he would create a new restaurant enterprise. Meyer believes this research and authenticity is also a major reason that his customers enjoy their experience, even if they don’t know it themselves.

“Authenticity is palpable in food, and I think that authenticity comes from an understanding of the culture in which a food idea came about - and travel is hugely important if you want to be authentic with anything. You can be an amazing cook and read a great recipe and reproduce it, but I think if I don’t know how the originators used that dish and how they spent their day and what were they doing beforehand, it won’t be authentic. For instance, why do Italians drink espresso? What role does espresso play in their lives? If I don’t get that, I’m never going to make a great espresso. The way I learn about people is through the food they eat, and while it may appear that I am trying to learn about the food, I am really trying to learn about people.”

Even with all the research and planning, Meyer’s first year at Union Square was a difficult one. In addition to the normal growing pains of a restaurant that became successful fairly quickly, shortly after his grand opening Meyer had to deal with a months-long case of Bell’s Palsy, a condition that paralyzed half his face and tongue for several months. Mistakes were made, but Meyer found that these missteps could be turned into advantages if they were dealt with smartly, and quickly. He referred to this as “writing a great last chapter,” a policy that was so rarely seen at the time that many customers who encountered problems were often pleasantly shocked in situations where they may have gone away unhappy. “While we can’t erase what happened, we do have the power to write one last episode so at least the story ends the way we want,” he says. It became a governing philosophy among Meyer’s employees to ensure that any customer who has a bad experience, whether it is the restaurant’s fault or not, would leave Union Square Café satisfied.

“The biggest mistake I made back then, and I was probably making that mistake for several years after opening this place, was overemphasizing the desire to be liked by the people working for me, as opposed to being respected. Just because you are respected does not mean you need to be disliked, but just because you are liked does not mean you should be respected. I think that is a very natural mistake for a young first time manager to make.”

Barker ran the kitchen for three years before he was replaced by a French-trained Italian chef from La Caravelle named Michael Romano in 1988. Romano, who twenty years later is still a Union Square Hospitality Group (USHG) partner and corporate chef, brought the food to a level that Meyer had always dreamed it would reach. As most people in the restaurant industry know, now Union Square Cafe became the city’s most popular restaurant for many years to come, and after 23 years it is still consistently at the top of any “best restaurants” list. Although Meyer had practically lived in the restaurant for the initial years of operation – “if I wanted a vacation, I closed the restaurant for two weeks,” he wasn’t quite done yet.

“The point of view back then was, if you wanted to be taken seriously as a fine dining restaurant you did one restaurant, and if you really wanted to be taken seriously you lived upstairs like Andre Soltner did. If the first restaurant is working, of course I may do a second, wouldn’t you? That is what any entrepreneur does.”

Meyer’s experience in hiring a great chef such as Romano led him to seek out another similarly talented chef to open his next restaurant, Grammercy Tavern, in 1990. He eventually found his chef and new partner Tom Colicchio. The flair for finding and partnering with one incredibly talented chef after another, such as Daniel Humm, Gabriel Kreuther and Kerry Heffernan, would become one of Meyer’s most important business skills. Today, Meyers says, it may be a little easier to find top talent than it was 15 years ago.

Shake Shack burger

“I think that there are probably more well trained and well-traveled young cooks in this country now than there have ever been. And I think that the people who have become chefs in our organization have led very successful careers. We have never closed a restaurant, so I think it’s like a rolling stone that is collecting a lot of great moss. Anyone who is a chef at one of our places knows they are going to get attention, they are going to get a large stage, they are going to get a great audience, and they’re going to have access to a great front of the house.”

Although Meyer has opened new restaurants thoughtfully and deliberately over the years, he has an impressive record of never having closed one in his 23 years of being a New York restaurateur. But just being careful wouldn’t be enough to preserve his spotless record. As most business owners will tell you, it’s the team you put together – or rather, the multitude of teams – which inevitably turns a good restaurant into a great one, or conversely can turn a moderately successful one into a shuttered one. To Meyer, this begins with articulating what the team will be responsible for, so they understand what the goals are and know how to react when Meyer isn’t there.

“It’s kind of like when you’re a kid and you want to be the captain of the neighborhood baseball pick-up game. People who are the captains have three things they get to do: they get to pick their team and they get to argue with the other captain over what the rules are going to be, and they get to call the plays. So, I think I do a really good job of picking a team and setting the rules on how we are going to play, and then calling the plays.”

Much like a batter’s choosing which bad pitches not to swing at, batting one thousand in his project selections can be attributed as much to the offers he has turned down as the ones he has agreed to take on. Two new projects he has taken a swing at recently, which will certainly become the biggest challenges he has faced since the three restaurants he opened in the Museum of Modern Art, will come next year. His company will control the high-end food service at Citi Field, the brand new Mets baseball stadium which opens in the spring of 2009. While the Met’s improved food may not make up for that team’s habitual end-of-season collapses, it is nevertheless an exciting prospect for Mets fans. Meyer’s involvement there will be substantial, and will include a Blue Smoke, a Shake Shack, and fine dining for “Sterling Club” seats behind home plate.

While these operations would technically be Meyer’s first outside of Manhattan, his first restaurant outside of New York will offer a different set of challenges. The Chop House in Greenwich, Connecticut will be based on his successful Blue Smoke barbeque restaurant he opened in New York in 2002. But the Greenwich version, which will also open in the spring of 2009, will have some major differences.

“I’ve done 12 completely different restaurants, and I’ve never replicated any of them, so it will not be exactly Blue Smoke, it’ll be Blue Smoke Chop House. We are going to be toning down the barbecue and turning up the Chop House aspect. We’ll be using wood for all of our cooking, but only some of it will be smoked. Much of it will be wood grilling and much of it will be wood roasting. We think that that’s going to provide a more enduring menu mix, with food that is more wine-friendly and the guests who we know live in that area, love their wine.”

Gabriel Krue black angus

Meyer will approach that opening as he has all his others, with the exception that he won’t be able to jog between all of his restaurants anymore. In Greenwich he’ll be putting his head to the ground, listening to feedback, and making adjustments. He’ll no doubt be passing out copies of his book to Mets staffers and Greenwich servers alike, encouraging them all to help write a great last chapter.

“We will take our opening shot but we will be really good listeners, and we’ll end up with a restaurant that in the end was not exactly what we thought it was going to be, because that’s the only way to make it ‘their’ restaurant. What we have learned is there is no shortcut to breaking in a baseball glove. You have to play catch.”

Not long ago, the organizational structure at Meyer’s Union Square Hospitality Group would have made it difficult to bid on a project such as the Mets’ Citi Field, or to open his Hudson Yards catering business, or even to expand outside of New York City.

“Every time there was any opportunity or a problem or a crisis,” Meyer explains, “everybody would run to it like an ant to a piece of chocolate. I am wearing my people hat, how can I help? Every time they ran to that one thing no one was minding any of the other 11 areas.” Paul Bolles-Beaven, who until recently was the “Chief People Officer,” now runs USG’s core restaurants - not just the people in the restaurants, but every aspect of them. David Swinghamer is now the president of USHG’s growth businesses, the businesses that they intend to expand such as Blue Smoke, Shake Shack, and Hudson Yards. Chief Operating Officer Richard Coraine, whom according to Meyer “I would always send in two months after something opens to go fix all the problems,” will now become the company’s incubator czar. Whenever Meyer comes up with a new idea, Coraine will be in charge of that new idea until it becomes a reality and it grows roots. Michael Romano will continue to be Partner and Corporate Chef (aka the food czar). Meyer says the new system is working pretty well. “I have never been busier and they have never been happier because now they are accountable,” he says. The new structure will allow USHG to be quicker on its feet and will provide his employees with greater upward mobility, while still allowing him to keep his eyes on his most prized possessions. “The conflict I feel is I do not want to hold back my colleagues from the kind of professional growth and financial growth that they may want, but I do not want ever get myself too far away from why I got into this business in the first place - which is remaining close to people and food.”

Gabriel Krue Almond Panna

Danny Meyer’s new approach to expansion may surprise some, who have grown fond of his dedication to remaining in Manhattan and his guarded yet prodigious upward climb. “Today, it’s more of a surprise when someone does not expand, or when they do not expand quickly. For me, that’s not a bad thing. It’s just another way of describing how our industry has changed dramatically, because the restaurant business has in fact become a credible and legitimate entrepreneurial pursuit. Whereas when I first got into the business it was something that many of us were ashamed or afraid to tell our parents we were doing. ‘This is not what we sent you to get a Liberal Arts degree on the East Coast to do.’ It was not a business for educated people, it just was not thought of that way.”

Meyer was certainly one of a handful of people who have helped turn restaurant ownership in this country into something that well-educated people increasingly aspire to, and are comfortable with. He’s done it with a simple recipe whose primary ingredients are respect and recognition.

“We all live life and we’re dealt some Aces and some Jokers. I think there are people who can learn to lose less with the Jokers than everyone else is losing, and who make sure to win every time they get an Ace. But I think that if you boil my job down into two things, it is picking the best people and making sure that they treat each other and they are treated with the most possible care and respect. I guarantee you that whatever you taste on the plate is always going to be a direct result of those two things.”

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