#115 Danny Meyer: Hospitality and Humanity
Celebrated restaurateur Danny Meyer, CEO of Union Square Hospitality Group, discusses how hospitality is crucial in all businesses. He defines hospitality as trust and outlines the "virtuous cycle of enlightened hospitality," emphasizing culture, values, and specific emotional skills for hiring and growth.
Deep Dive Analysis
12 Topic Outline
Defining Hospitality and its Universal Application
Journey to Becoming a Restaurant Generalist
Importance of Location and Terroir in Restaurants
Winemaking Analogy for Restaurant Operations and Culture
The Virtuous Cycle of Enlightened Hospitality
Scaling Hospitality and Evolving Organizational Culture
The Six Emotional Skills for Hiring (Hospitality Quotient)
Identifying and Managing Employee Performance with a Four-Quadrant Chart
Balancing Systems (Bricklayer) and Customization (Mason) in Business
Reasons for Slow Growth and Overcoming Personal Fears of Expansion
Why Restaurants Fail and the Need for Fair Wages
Learning from Mistakes: The Five A's of Mistake Making
6 Key Concepts
Hospitality
Hospitality exists when you believe that the person on the other side of a transaction is on your side, fostering trust. It's about making others feel good and is applicable to all businesses, not just restaurants.
Terroir (in restaurants)
Similar to winemaking, 'terroir' refers to the inherent characteristics of a location that dictate what kind of restaurant concept will thrive there. The space itself 'tells' you what it wants to be, influencing design, menu, and overall feeling.
Virtuous Cycle of Enlightened Hospitality
This is a framework where providing hospitality to internal staff leads to better service for customers, which in turn garners support from the community and suppliers, ultimately benefiting investors. The profits then allow for further investment in employees, creating a self-reinforcing positive loop.
Culture (in business)
Culture is defined as the common language and 'the way we do things around here' within an organization. It must constantly move and evolve like a shark to stay alive, while being supported by an unchanging value system that acts as a compass.
Hospitality Quotient (HQ)
HQ is a compendium of six emotional skills that predict how much happiness an individual derives from making other people feel better. It accounts for 51% of an ideal employee's 'score,' complementing their technical skills.
Hospitality Golden Rule
This rule, driven by empathy, states 'do unto others as you believe they would want done unto them.' It emphasizes customizing experiences for each individual, recognizing that everyone's preferences (e.g., temperature, salt level, pace) are unique.
6 Questions Answered
Hospitality is when you believe the person on the other side of a transaction is on your side, fostering trust. Everyone is in the hospitality business because success depends on stakeholders (colleagues, customers, community, suppliers, investors) rooting for your success, which is achieved by making them feel valued and supported.
Scaling hospitality involves establishing a common language and value system, understanding that culture must constantly evolve, and intentionally promoting 'culture carriers' who embody the desired emotional skills. It's about advancing culture through growth, not just maintaining it.
Danny Meyer looks for optimistic kindness, curiosity, work ethic (with an 'excellence reflex'), empathy (doing unto others as they would want), self-awareness (understanding one's personal 'weather report'), and integrity (doing the right thing even when no one is looking).
A four-quadrant chart is used: 'can and will' (celebrate), 'can but won't' (fire under their rear end, 90 days), 'can't and won't' (unsuccessful hire, 30 days), and 'can't but will' (coach, 120 days). This helps manage the emotional aspect of such decisions.
Restaurants often fail due to challenging economics, including downward pressure on pricing and upward pressure on prime costs (talent, real estate, food). The industry has historically underpaid staff, and the true cost of dining out, including fair wages for people, has not been adequately communicated to the public.
Businesses can use mistakes as a 'renewable resource' by following the 'five A's': be aware, acknowledge, apologize, act on it (fix it), and apply additional generosity. This approach aims to turn a negative experience into a positive story that customers will share.
13 Actionable Insights
1. Prioritize Internal Hospitality
Apply hospitality first to your internal team members, trusting they are on your side, because this approach fosters their best performance and creates a virtuous cycle benefiting all stakeholders, including customers, community, suppliers, and investors.
2. Hire for Hospitality Quotient
Prioritize hiring based on a ‘Hospitality Quotient’ (HQ), which is the degree to which individuals are happier when making others feel better, as this emotional skill accounts for 51% of an ideal employee’s value beyond technical competence.
3. Six Essential Emotional Skills
Actively seek candidates who demonstrate optimistic kindness, intellectual curiosity, a strong work ethic (excellence reflex), empathy (doing unto others as they would want), self-awareness (understanding one’s ‘personal weather report’), and integrity, as these are crucial for a high Hospitality Quotient.
4. Manage Performance with Quadrant Chart
Utilize a four-quadrant chart (Can/Can’t vs. Will/Won’t) to objectively manage employee performance, assigning specific action steps and timeframes for each category, particularly addressing ‘Can but Won’t’ employees who undermine culture despite their competence.
5. Transform Mistakes with Five A’s
Turn honest mistakes into positive opportunities by following the ‘Five A’s’: Be Aware, Acknowledge, Apologize, Act (to fix it), and Apply Additional Generosity, aiming to ‘write a great next chapter’ where the handling of the mistake becomes a positive story.
6. Culture: A Dynamic Value System
Recognize that culture is like a shark, constantly moving or dying, meaning it must evolve with growth; while the ‘way we do things’ changes, your core value system must remain a constant compass.
7. Scale Culture by Promoting Values
Scale your organizational culture by intentionally promoting individuals who embody desired emotional skills and values, as these promotions signal to the entire organization what behaviors are truly valued and rewarded.
8. Blend Systems with Customization
Combine the efficiency of ‘bricklayer’ systems for consistent baseline quality with the ‘mason’ approach of customized, empathetic judgment to tailor experiences for individual guests, ensuring both repeatable excellence and personalized hospitality.
9. Select Locations with Terroir Mindset
When choosing a business location, deeply understand its inherent ’terroir’ – what the space and its surroundings communicate – and only select a site that inherently makes people feel good, even if it were free, as the location sets the stage for your business.
10. Cultivate Culture Like a Vineyard
Build a strong organizational culture by carefully selecting people who can thrive in your ‘soil,’ continuously nurturing it, providing training, and ‘pruning’ (firing) individuals who hinder the collective growth, much like a winemaker tends a vineyard.
11. Overcome Fear of Business Expansion
Address personal fears related to business growth by recognizing that past failures are not predestined outcomes, and by intentionally surrounding yourself with diverse talent that compensates for your weaknesses and amplifies your strengths.
12. Advocate for Fair Employee Wages
Implement and advocate for fair living wages for all employees in your industry, even if it necessitates raising prices, to ensure a sustainable business model that values its people and contributes positively to the broader economy.
13. Scaling Feeling is Most Tricky
Understand that scaling a ‘feeling’ or human experience (hospitality) is the most challenging aspect of organizational growth, even more so than consistently replicating product or service quality, and requires dedicated strategic effort.
6 Key Quotes
Hospitality exists when you believe that the person on the other side of the transaction is on your side, when you trust that they're on your side.
Danny Meyer
Culture is like a shark. It's constantly moving or it dies.
Danny Meyer
The one thing that must not change is your value system. That's your compass.
Danny Meyer
In a day and age where we're all in, where what you know how to do can be so easily copied by everybody, I really believe that that 51%, which is how do you make people feel while you're doing it, can truly become the alpha that can differentiate different organizations and teams.
Danny Meyer
It's the difference between an off-the-rack suit and a custom suit just made for you.
Danny Meyer
It's not the mistake that sort of does you in. It's how you handle it at the end.
Shane Parrish
4 Protocols
Winemaking Analogy for Restaurant Success
Danny Meyer- Pick the best site (vineyard) that has 'bones' and a feeling that transports people.
- Pick the right 'grapes' (people who work for you) who can thrive in the culture (soil).
- Train the 'vines' (people) so they grow up and don't just grow every which way.
- Prune the 'grapes' that shouldn't be there (fire people) so the rest of the vine truly thrives.
- Pray for good 'weather' (climate/economy) and make the best 'wine' in that particular vintage.
- Repeat year after year, vintage after vintage, to gain a reputation for integrity.
The Six Emotional Skills for Hiring (Hospitality Quotient - HQ)
Danny Meyer- Optimistic kindness: Possessing kind eyes and believing actions can make the world better.
- Curiosity: Viewing every day as an opportunity to learn something new, not being a finished product.
- Work ethic: Caring deeply about doing a job as well as it can be done, having an 'excellence reflex'.
- Empathy: The ability to put oneself in someone else's shoes and understand what *they* would want done unto them.
- Self-awareness: Understanding one's own personal 'weather report' for a given day to manage impact on the team.
- Integrity: Having the judgment to do the right thing, even when it's not in self-interest or no one is looking.
Four-Quadrant Employee Management Chart
Danny Meyer- **Can and Will (Great attitude, lots of competence)**: Action: Celebrate; Timeframe: Forever.
- **Can but Won't (Competent but unwilling to align with values)**: Action: Fire under their rear end; Timeframe: 90 days.
- **Can't and Won't (Lacks both competence and willingness)**: Action: Unsuccessful hire; Timeframe: 30 days.
- **Can't but Will (Willing but lacks competence)**: Action: Give a ton of coaching/teaching; Timeframe: 120 days, potentially trying other roles.
The Five A's of Mistake Making
Danny Meyer- Be aware: Recognize that a mistake has been made.
- Acknowledge it: Don't hide, run, deny, or blame others.
- Apologize for it: Express sincere regret.
- Act on it: Fix the mistake.
- Apply additional generosity: Do something extra on top of fixing it to turn the negative into a positive, leading to a 'great next chapter' in the customer's story.