The Exchanges

Q in the hospitality business, how you scale a feeling, whether he's a bricklayer or a mason hiring great people, why restaurants that survive more than a year fail, and so much more. I hope you enjoy this conversation as much as I did. It's time to listen and learn. Danny, can you briefly tell us how it is, uh, that you came to be what you call a restaurant generalist?

A I came to be a restaurant generalist really as a reaction to almost backing into being a specific thing called an executive chef. I love cooking. When I decided to get into the restaurant business, it was a time back in the And there was something in my mind that said, my parents are gonna totally reject the idea of me being a restaurateur, because that's a sketchy job, but they might accept if I say I'm gonna be a chef, because we had started to see some celebrity chefs, Paul Prudhomme, Wolfgang Puck, I remember, Jeremiah Tower from the West Coast. We were reading about Alice Waters with Chez Panisse, and I said, there's a bunch of people who I could aspire to. And so I, I got myself trained a little bit in France and Italy, and just enough to, to learn that there's a whole lot of people out there who would be a whole lot better than I as, as a chef, because I just, I don't think I have ADD, but I definitely did not have what it took to just delve singularly into one topic. And meanwhile, what I loved about getting to run a restaurant as a twenty-seven-year-old in New York City was I could dabble in everything. Writing, marketing, Tasting food, tasting wine, learning about all those things, teaching those things, hiring, decor, welcoming guests all day, seating people. I just really loved all aspects of it, and I knew that if I just did one thing, there's a whole lot of other …

AI assessment note: “I came to be a restaurant generalist really as a reaction to almost backing into”

Q Before you opened your first restaurant, you looked at over a hundred locations. I'm wondering what the key ingredients are to a location. How did you think about that?

A Well, the location becomes the stage set for the play you're trying to write, and there's a lot about locations that you can change, but there's a lot you cannot change, and you really, really have to understand that. The one thing you can never change about a location is where is it, and what surrounds it. You can't go knocking down all the buildings around you. You can't go building buildings where there aren't any. You know, if you want greenery outdoors, tough luck if you're on the wrong street in New York City. So it's really important to understand what is the, what is the location saying? How did people get there? How did they feel when they were there? What were they doing before they came to you? And I really have always looked at, at restaurant spaces, the way a winemaker looks at a vineyard, which is that there is a terroir. And the terroir is, is really in charge. So, for example, if you're a great winemaker in France, you don't wait to read the Wine Spectator to tell you what grapes are in fashion today. You listen to the soil, which says, guess what? We're in Burgundy, and Pinot Noir grows really, really well here. And if you want white, Chardonnay happens to grow really well here too. But don't try Syrah, because it doesn't work. If you go to Bordeaux, Don't try Pinot Noir or Chardonnay because they're not going to work. And so the same exact thing happens with, …

AI assessment note: “I really have always looked at, at restaurant spaces, the way a winemaker looks”

Q How do you create that winning culture? I'm curious. You sound like somebody who's put a lot of thought into the curation of this culture and how you grow it, and I'm interested in how you grow it internally, and how do you scale hospitality? Like, how do you scale a feeling across thousands of employees?

A Well, culture is a language. It's almost like culture is the brick, but language is the mortar. And it's a common language that actually drives a culture forward, and you see this in any culture you know. You see it in religions, fraternities, you see it in sports teams, you see it in families, you see it in businesses, and what the language does is, is two things. It clarifies what we intend to do, and it creates a sense of belonging because we all know what this means. I mean, I've seen this when our kids were younger and they went to summer camp. There were languages at these camps, or languages within the cabins of the camp, and there could be language via a song. It could have been language via a chant. And I had no idea what they were doing, but I could see that they felt this bond because they knew what that language was. So here, here's something I think I've learned along the way. Early on in my career, I would have people say, our culture doesn't feel the same anymore. I, I would melt. I feel like, oh my god, we're failing. It doesn't feel the same around here anymore. And I finally realized, well, you're damn right it doesn't feel the same anymore, and the culture isn't the same anymore, because culture is not something that wants to be contained or maintained. Culture is like a shark. It's constantly moving or it dies. And if you define culture as the way we do thin…

AI assessment note: “it's a common language that actually drives a culture forward”

Q One of the questions I have about restaurants is that if you make it past the first year, which I think is the hardest sort of milestone, There's a lot that survived to six, seven, eight years, and then they, they fail. Why do, why do restaurants that survive tend to fail?

A I think restaurant economics have always been challenging, but never more so than probably the last, I don't know, 10 years or so, especially in cities where there are many, many restaurants. There's been downward pressure on your pricing ability, but meanwhile, lots and lots of Upward pressure on your, your prime costs, which are talent, real estate, and, and your food and beverage product. And those prices just keep going up every single year, but the ability to charge appropriately hasn't. And, and I think the biggest area that our industry has failed at is to educate the public that we are a people business, and we have been underpaying people for many, many years. We've somehow in the fine dining world have taught people to pay up for better quality ingredients. You know, you take Shake Shack even. You cannot compare the prices of Shake Shack to any fast food without smiling, because we've educated the public that all natural beef, i.e. beef raised without growth hormones or antibiotics, um, with proper animal husbandry costs a lot more than Your run-of-the-mill fast food burger, and people understand that, and they're willing to pay for it, but we haven't succeeded at doing that with people, and as cities, states, and now the entire country move to a higher minimum wage, and then perhaps one day, one wage for everybody, as opposed to a second-tier For tipped employees, wh…

AI assessment note: “lots and lots of Upward pressure on your, your prime costs”

Q What are those six emotional skills that you hire for?

A It's going to sound like second grade stuff because it's really obvious, but I'll tell you one thing. I've been doing this for a long time, and every time we take our eye off these six obvious emotional skills, our batting average goes down quite a bit. We want to get a hundred percent employee, just like our employees want us to be a hundred percent boss. Now, no one, I never get a hundred on my test as a boss. I'd be really, really happy to get something in the mid-nineties, believe me. If I could have brought home an A minus on my report card, straight A minuses, my parents would have sure been proud, because I didn't do that. But the way we ideally get to a hundred, 49 of those points are going to be how well someone does the job they do. How good of a cook are you? If you can make the best bowl of pasta I've ever had in my life, You get 49 points. That leaves 51 points if you want to get a hundred. And the 51 points are all going to have to do with your HQ, your hospitality quotient, which is the degree to which you are happier yourself when you make someone else feel better. It has nothing to do with how good of a pasta cook you are. It has everything to do with what are your motivations behind the amazing technical skills you have. I need them both. So here's what the six emotional skills that we always see at a very high level when someone's got a high HQ. The first one…

AI assessment note: “So here's what the six emotional skills that we always see... The first one is”

Q What I like about these is like all of these skills can be learned, but they can't really be taught. They don't show up on paper. How do you, is there key questions that you've learned to ask people that are revealing, especially around sort of work ethic and empathy and curiosity? How do you figure out who has them and who doesn't?

A Well, let's go back to the first thing you said. I'm not sure they can be learned and I'm not sure they can be taught. I think we can teach people how to identify them in others. I'm sure that we can teach people how to celebrate them when they see them happening. And I actually believe that this is a classic bell curve population. I think that there is a tiny population that has these emotional skills, you know, in such abundance that you could lock them in a closet for 30 years and they would come out whistling Dixie. Tiny population. And I, likewise, I think there's a tiny population of people who Don't really care about making other people feel better. Ever. The vast majority live in the middle of the bell curve, and when they go to work, they genuinely want to do a good job. They genuinely hope that their work becomes part of a winning team. The thing that can be taught is to be very, very articulate and purposeful about why you are hiring for those skills. I talk about this in an opening interview with someone. We make this part of our performance reviews, and when we see these behaviors come to light in a big way, we celebrate them. And in a way, what that's trying to do is to look at the field of people on our team almost as if they're a field of sunflowers, And they will turn wherever the sun is shining. If you constantly shine your light on those emotional skills, you…

AI assessment note: “I, I don't know how to measure it.”