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; and to communicate a well-defined set of cultural priorities and nonnegotiable 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.
I struggled mightily with the emotional and technical skills required for that kind of leadership as a twenty-seven- year-old first-time leader of my own company. As Union Square Cafe grew up, I realized that I too would have to develop new skills just to keep pace with my own restaurant and its staff.
During one of his uncannily well-timed, impromptu visits to Union Square Cafe when I was still in my twenties, Pat Cetta sat down at a table with me and indulged my need to fret about the travails of managing my staff. I bemoaned the fact that I was failing to get any kind of consistent message across to my staff members regarding standards of
excellence. Waiters and managers (at least half of whom were older than I) were continually testing me and pushing the limits, and this was driving me crazy.
“If you choose to get upset about this, you are missing the boat, luvah,” Pat said with reassuring calm, in his indelible New York accent. Then he gave me a demonstration that has become integral to the way I view management. Pat Cetta’s simple lesson has helped me navigate through years of challenging moments as I’ve worked to encourage our team to build and sustain standards of excellence, especially while we’re growing.
Pat pointed to the set table next to us. “First,” he said, “I want you to take everything off that table except for the saltshaker. Go ahead! Get rid of the plates, the silverware, the napkins, even the pepper mill. I just want you to leave the saltshaker by itself in the middle.” I did as he said, and he asked, “Where is the saltshaker now?”
“Right where you told me, in the center of the table.” “Are you sure that’s where you want it?” I looked closely.
The shaker was actually about a quarter of an inch off
center. “Go ahead. Put it where you really want it,” he said. I moved it very slightly to what looked to be smack-dab in the center. As soon as I removed my hand, Pat pushed the saltshaker three inches off center.
“Now put it back where you want it,” he said. I returned it to dead center. This time he moved the shaker another six inches off center, again asking, “Now where do you want it?”
I slid it back. Then he explained his point. “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. It’s good to be open to fresh approaches to solving problems. But, when you cede your core values to someone else, it’s time to quit.
That center point of the table, Pat was saying, represented my core of excellence. Every other point on the table was, to some degree, a measure of mediocrity, or even failure. But his powerful lesson also taught me to preserve my energy and not waste it getting upset about a basic, ongoing fact of life: “Shit happens, luvah!”
Understanding the “saltshaker theory” has helped me develop and teach a managerial style I call constant, gentle pressure. It’s the way I return the saltshaker to the center each time life moves it. A restaurant is like the stage for a modern dance ensemble, designed with props and animated by an intricate choreography from the front podium through the dining room, into the kitchen, and back to the dining room again. It doesn’t take much to move our saltshaker off center. All it takes is for one guest to be late, having taken
longer than expected to send that last e-mail from the office, to kiss the kids good night, or to finally get a taxi in the rain or cold. One party’s tardiness may cause us to be as much as twenty minutes behind for the next reservation. If two or more tables are running late, we may end up with a pileup at the front door—causing our standards to appear less than excellent. Our job is to adjust to circumstances, and keep the dance flowing with technical precision and artful grace.
It’s my job, and consequently the job of every other leader in my company, to teach everyone who works for us to distinguish center from off center and always to set things right. I send my managers an unequivocal message: I’m going to be extremely specific as to where every component on that tabletop belongs. I anticipate that outside forces, including you, will always conspire to change the table setting. Every time that happens, 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.
Constant, gentle pressure is my preferred technique for leadership, guidance, and coaching. It’s the job of any business owner to be very clear as to the company’s nonnegotiable core values. They’re the riverbanks that help guide us as we refine and improve on performance and excellence. A lack of riverbanks creates estuaries and cloudy waters that are confusing to navigate. I want a crystal-clear, swiftly flowing stream. Riverbanks need not hinder creativity, and in fact I leave plenty of room between the riverbanks for individual expression and personal style.
Every business needs a core strategy to be what I call always on the improve, and for us it’s constant, gentle pressure. The name for this management style came to me from another restaurateur, who was using it to describe his view of our company. I was in Aspen for one of my annual summer appearances as a speaker at the Food and Wine Classic. My partner at Union Square Cafe, Paul Bolles- Beaven, and I had returned to town following an appearance on Good Morning America at the crack of dawn, and we dropped in to the Ajax Tavern in search of a cup of coffee.
We got to talking with Michael Chiarello, who was then the chef and coowner, and who was holding court at the bar.
This was in June 1998, a few months before we were to double the size of our company by launching Eleven Madison Park and Tabla, and we were looking for all the strategic advice we could get. Michael was in a growth mode himself, with restaurants in California and Colorado, and a big idea for a mail-order company to be called Napa Style. We asked him a lot of questions about how he managed his time with so many businesses to run, how he delegated, and to whom. After sharing a number of valuable insights, he said, “There are some things I could learn from you guys as well.”
“Like what?” I asked.
“Well, the word on the street is that you’ve got the single best management style of any restaurant company.”
“It’s nice of you to say that,” I said. “But what do you mean?”
“I’d call it constant, gentle pressure,” Michael said, and then described precisely what we had been doing.
That morning was the first time I ever stopped to really think about this important aspect of my own business style, which so far had been intuitive. Michael Chiarello had given us a great gift by providing language that would allow us to share and teach a business philosophy. It helped me understand that we needed all three words—constant, gentle, pressure—working at once to push our business forward. This is one aspect of business where batting .667 isn’t a winning average. Leave any one element out, and management is far less effective. If you are constantly gentle but fail to apply pressure when needed, your business won’t grow or improve: your team will lack the drive and passion for excellence. If you exert gentle pressure but not constantly, both your staff and your guests will get a mixed message depending on what day it is, and probably won’t believe that excellence truly matters to you. If you exert constant pressure that isn’t gentle, employees may burn out, quit, or lose their graciousness—and you will probably cease to attract good employees. Leaders must identify which of the three elements (constant, gentle, or pressure) plays to their greatest natural strengths and, when necessary, they must compensate for their natural weaknesses. For example, over the years I’ve learned that constant and gentle are my natural instincts, and so I’ve had to focus on developing ease at applying pressure. My friend Robert Chadderdon has his own variation on this management style: “Spread some sunshine, kick ’em in the ass, and always remember who loves you! (And hope you’ll wake up tomorrow to do it again!)”
ULTIMATELY, THE MOST SUCCESSFUL business is not the one that eliminates the most problems. It’s the one that becomes 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 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, whether at a restaurant, a law firm, a hardware store, a university, or a major corporation, nine times out of ten the 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 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.
Imagine a pond filled with lily pads and a frog perched serenely atop each one. For the fun of it, a little boy tosses a small pebble into the water, which breaks the surface of the pond but causes just a tiny ripple. The frogs barely notice, and don’t budge. Enjoying himself, the boy next tosses a larger stone into the center of the pond, sending stronger ripples that cause all of the lily pads to rock and tilt. Some
frogs jump off their lily pads, while others cling to avoid falling off. But the ripples affect them all. Not content, the boy then hurls a huge rock, which creates a wave that knocks each and every frog into the water. Some frogs are frightened. All are angry (assuming that frogs get angry). If only the frogs had had some warning about the impending rock toss, each one could have timed its jump so that the wave would have had no serious impact.
Grasping the lily pad theory and training yourself and your managers to implement it prevents many, if not all, communication problems.
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.
In the fall of 2004 I was invited to appear on the Today Show with Terry Miller, a gourmet sausage specialist from Colorado, to do a segment on pairing hot dogs and wine. This was based on a popular seminar we had conducted together the previous summer at the Food and Wine Classic. The jovial Miller, a self-described redneck, was in New York to help us with our inaugural Shacktoberfest at Shake Shack. On the segment with Al Roker and Ann Curry, Terry mentioned some of the specialty bratwursts (jalapeño-elk, smoked buffalo, pheasant-and-mushroom) that we’d be serving at Shake Shack throughout our Shacktoberfest festival. He got a whoop from the studio audience when he asked Ann Curry to kiss the colorful, life-size smiling hot dog he had tattooed on his calf.
I am not naturally inclined to send out a lot of e-mails whenever I’m going to be on television. (To her chagrin, I usually don’t even remember to tell my mother.) But by not forewarning anyone that day, I tossed a rock and failed to give my team adequate warning of some wave-like ripple effects. The seven-minute segment on Today caused the day’s lunch business at Shake Shack to soar, and our staff had no idea what had hit them, what had caused it, or how to prepare for it. Their lily pads were pounded, turning what should have been a public relations triumph into a fiasco.
The cooks couldn’t keep up with the unanticipated demand for bratwursts, guests waited far too long for their orders, and we quickly ran out of food. Any company that thrives on a steady flow of creative ideas needs correspondingly strong communications. Ideas at their best happen for people. At their worst they happen to people. Had the staff members known in advance about the Today Show, they probably would have brought in an extra cook and additional product, and we would have had a lot more fun serving a lot more bratwursts.
IN THE BIMONTHLY TRAINING sessions I conduct with all our new managers, most of whom have just recently taken on the big new responsibility of becoming someone else’s boss, I stress how fundamentally different their new job is from their old one. As “line” employees (cooks, waiters, hosts) their first concern was to achieve win-win transactions for guests. As managers, their 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. By what they embody and the spirit in which they embody it, good managers can have a multiplier effect and add significantly to the company’s excellence.
Poor managers have the power to do just the opposite.
The moment people become managers for the first time, it will be as if the following three things have happened:
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An imaginary megaphone has been stitched to their lips, so that everything they say can now be heard by twenty times more people than before.
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The other staff members have been provided with a pair of binoculars, which they keep trained on the new managers at all times, guaranteeing that everything a manager does will be watched and seen by more people than ever.
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The new managers have received the gift of “fire,” a kind of power that must be used responsibly, appropriately, and consistently.
The imaginary “megaphone” is to let our managers know that we place so much value on what comes out of their mouths that we want to make sure everyone hears it. The “binoculars” are to convey that we expect each of our
employees—as well as our guests—to watch them as they exemplify the values and goals of our restaurants. The megaphone and the binoculars place a weighty responsibility on the shoulders of the managers. What they say and embody matters and will be heard, seen, and scrutinized by all. If we were a copy machine, managers would be the documents we’d want to replicate. We are very careful about which documents we feed into that machine.
“Fire” is the most important element in management’s application of constant, gentle pressure. During my early, inexperienced years as a boss when I first got into business, it was far more important for me to please people and be liked than to be respected. By abandoning my fire, our excellence suffered. 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.”
I’m a bottom-up manager who subscribes to the concept of “servant leadership,” as articulated by the late Robert Greenleaf. He believed that organizations are at their most effective when leaders encourage collaboration, trust, foresight, listening, and empowerment. In any hierarchy, it’s clear that the ultimate boss (in my case, me) 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. 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. Ultimately, our cooks, servers, reservationists, coat checkers, and dishwashers are then in the best possible position to serve our guests. A balanced combination of uncompromising standards and confidence-
building reassurance sends a very clear and consistent message to your team: “I believe in you and I want you to win as much as I want to win.” You cannot have a dynamic organization unless you are constantly encouraging people to improve, and believing that they can do it.
For years I didn’t believe that power was a positive force, or anything to strive for. I grew up in the 1960S, and 1970S, when many young people saw business as about taking, not about creating value for the world as you profited.
When I first went into business in 1985, I was determined not to display power overtly. I thought I could be a business owner and a manager without using my own fire. I was entirely wrong, and for years I unwittingly sent mixed messages, befriending staff members rather than leading them. So I now tell new managers: “Fire is power. We are giving you the gift of this fire. Use it responsibly, appropriately, and consistently. People need it, want it, crave it, and expect it. Use it wisely, and you will become the greatest leader your team ever had. Use it abusively, and you will lose your fire.” Don’t be afraid to lead and to teach. As it does in cooking, fire adds heat, clarifies, and distills the ideas that drive your business to solid results.
Most managerial problems stem from an irresponsible, inappropriate, or inconsistent use of fire. It takes time to learn, but until managers understand all the different ways they can—and must—use their fire, depending on the circumstances, they cannot reach their own greatest potential or help others reach theirs. Managers can use their fire as a torch: a light for guidance and teaching, and for leading and showing the way. They can use their fire to offer warmth and empathy, to make employees feel safe. A manager’s fire can be used as a campfire, to form collegial bonds with employees, and to inspire others and help them
grow. A fire can also be a bonfire to rally the troops, to foster team folklore, to get the group motivated, and to bring people together in a unified pursuit of a common goal.
Managers who inspire high levels of performance in their employees know how to produce magical results that leave people in awe. Managers must be wizards—the way they “breathe fire” is a source of motivation that impels employees to imitate them, and to grow. And managers must learn to use the fire in their own bellies as a way to fuel and refuel their own ongoing passion for this business. If leaders lack fire, why would anyone want to follow them?
When managers use their fire improperly, employees will always figure out ways to snuff it out. If a manager builds too many campfires (suspending his or her power and authority and spending too much time relating to certain employees as close friends), power may be compromised, causing the line between manager and employee to dissolve. And others may resent feeling left out. Even the most compassionate manager must sometimes use fire to singe or scorch someone who is dishonest, or disrespectful to a teammate, a guest, the community, a supplier, or the restaurant itself. An organization puts itself in grave danger when it permits integrity to be compromised.
The development and training of managers and the articulation of a cohesive and consistent management model are crucial for any company, especially a company that is experiencing rapid growth. With each year I’ve spent as a leader, I’ve grown more and more convinced that my team—any team—thirsts for someone with authority, and power, to tell them consistently where they’re going, how they’re doing, and how they could do their job even better. And all the team asks is that the same rules apply to everyone.
BY 2004, AS WE prepared to open the complex of dining operations for the Museum of Modern Art (MoMA) that now together serve up to 2,000 people each day, I realized that we had been making an error that left us ill prepared for success. However well we had hired and trained line employees, we had done only a middling job of developing managers who had the requisite skills to open and operate a high-volume, high-level restaurant. There wasn’t enough depth on our team to transfer managers to the MoMA complex without also stripping away talent we needed at our existing restaurants. For me this was a troubling, slap-in- the-forehead moment. I asked myself, How could we have been in denial all this time? As our company grew, virtually overnight, from about 650 employees to over 1,000, we needed to focus even more intently on strengthening operating and accounting systems, human resources, and technology. It’s delusional to think that the day-to-day performance of your business is anything other than a reflection of how motivated (or unmotivated) your managers make your line employees feel. It was suddenly imperative for us to give priority to the development, education, and coaching of managers. This part of our infrastructure was all but nonexistent. It was as if we had been basing my approach to readying managers on the tenuous assumption that anyone we hired as a manager already “got it,” knew the system, and could articulate and pass along the values and methods that define the company. Not only was I wrong; this sweeping assumption—“just add water”—was grossly unfair to the managers and the people they led. We were at a turning point.
THE BIGGEST CHANGE IN our industry over the past twenty years has been the emergence of “fine-dining” restaurant groups. They didn’t exist when I got into the business. In those days, you encountered either a single-unit fine restaurant—like Lutèce, where the peerless chef and owner, André Soltner, was always present and actually lived upstairs—or multiunit restaurant chains like T.G.I. Fridays.
There was a widespread belief that one could own only a single fine-dining establishment, because it was mandatory to be on site all the time, greeting every guest, watching every employee, and personally inspecting every plate that left the kitchen.
That all changed in the 1990s, when the restaurant business at last came to be viewed as a valid entrepreneurial pursuit, and consequently began to attract more and more people who, in addition to their culinary and hospitality skills, had a solid education and impressive business acumen. As a way to provide growth opportunities for outstanding employees so that I wouldn’t keep losing them to restaurateurs who could provide “next-level” jobs, I gradually found myself with four, then five, and then six restaurants. And of course, when I was in one of them, I was not in any of the others.
For the first time, it hit me—although I had tried hard to deny it—that I was no longer purely a restaurateur. Rather, I had become the CEO of a growing restaurant company. That was a huge pill to swallow. My passion and professional identity had been based on the pure pleasure I derived from greeting guests at the front door and in the dining room, as well as working closely with our restaurant staffs. But now my responsibilities had become far broader. For years, I had been afraid of overexpanding as my father had done; and I had contended with this fear by simply pretending that our
organization was in fact not expanding. Turning a blind eye to reality was handicapping me and my company.
When we launch a new restaurant, I am still intently focused on the entire opening process and on trying to help the venture become as good as possible as quickly as possible. It’s demanding to be in that mode and also to play the role of CEO and do “big picture” things like formulating and presenting our five-or ten-year strategic plan.
Consciously or not, I’d created a new challenge for myself by reinventing my own job description. Nothing about being the CEO at a restaurant company had diminished my yearning to be in my restaurants all the time. The only way I can be effective is to remain a high-touch leader and stay involved with our staff, our guests, and our product. It’s rare that I’m in my office more than 25 percent of my day. Yet as recently as 2003 I was actually trying to operate five restaurants, a jazz club, and a hot dog cart out of my basement office at Gramercy Tavern without any type of corporate structure at all. My philosophy back then was that supposedly smart organizations (where there was a corporate chef and pastry chef, a corporate wine buyer, a corporate everything dictating to managers how to toe the company line) led to dumb—or at best average— restaurants. Wherever I saw the word corporate applied to restaurants, I saw cookie-cutter or at least derivative establishments with little soul.
I’ve always strived to create and develop distinct restaurants that each bear, over time, the handcrafted feel of a mom-and-pop venture. But our growing pains were making it clear to me that we needed to figure out how to remain soulful and become a lot more sophisticated. I was now sharing my basement office with David Swinghamer, my CFO and partner in business development. Another partner, our director of operations, Richard Coraine, worked
out of an office four blocks to the north at Eleven Madison Park. We had no public relations, marketing, IT, human resources, or any other infrastructure. I wanted us to become a group of intelligent restaurants served by an intelligent organization, but I just didn’t think it was possible. I honestly believed that to sustain smart restaurants, we would need to have a “dumb” organization. And that’s exactly what we got.
I admired some excellent restaurant companies in New York and across the country. But those large groups seemed more effective at building systems, “stores,” and “concepts” than they were at taking the time to develop the personal, groundbreaking, soulful restaurants I was interested in.
Not surprisingly, thanks to my own mixed feelings about expanding, our undeniable business growth had at last butted up against my skittishness and inertia. Standing in place had become unacceptable and risky. I had to figure out some way to have both smart restaurants and a smart organization. Finally, I listened to my partners, and bit the bullet. Taking the lead, David Swinghamer persuaded me to join him in searching our neighborhood for office space. We looked throughout a long, hot summer, and eventually we found a bare-basics office overlooking Union Square, which had been vacated by a failed dot.com. In 2003, almost twenty years after I’d opened my first restaurant in New York, I finally admitted to myself that I needed to change my career and become chief executive officer of Union Square Hospitality Group, or USHG.
At first, “USHG” had simply been my way to name the family of restaurants of which I was the founding and principal owner. Each restaurant began as a separate company with, in some cases, separate outside investors. That would still be the case. But now USHG would also need
to evolve into a management company on its own—to provide coherent direction and support for each of the restaurants in whose success I and others had such a large stake. My goal was to extend my reach over many restaurants by surrounding myself with a team of people who were more talented at any given specialty than I had ever been on my own. I wanted a capable team that would act for me as “owner’s representatives,” applying their respective talents to my style of doing business. In my first decade as a restaurateur at Union Square Cafe, I was solely responsible for the kinds of things I would now need an entire team to accomplish:
- 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.
At last I realized that the dynamics of company and restaurant need not be either dumb-smart or smart-dumb. We had to make the dynamics smart-smart. Like any business owner, entrepreneur, or corporate executive, I had to figure out how to put winning systems in place, clarify for others all the things that I do and all the things that I expected everybody else to do, while repeatedly asking myself one essential question: How many of these things could be done at least as well or better by somebody else if only I were willing to let go and allow that to happen? I was suddenly faced with a mandate to grow personally. An extra year to prepare me for becoming a CEO would have been wonderful. But I hadn’t given myself that luxury. This was a deeply disconcerting time of organizational change and self- redefinition—it felt like trying to change the wheels on a high-speed train while the train was roaring down the track. This hugely challenging period taught me critical lessons about how to lead a business. Often, I wanted to throw in
the towel, and I fantasized about traveling back to 1985 and finding myself welcoming guests for lunch at Union Square Cafe’s front door. But I had chosen the appropriate path, and I knew there was no going back.
Until now, our restaurants had been determinedly individual and therefore inconsistent in the way they did just about everything: promoting themselves; recruiting, hiring, orienting, coaching, reviewing, disciplining, and “transitioning” employees; and establishing vacation policy. Dissatisfied staff members had no systematic way to air grievances beyond speaking with their general manager or chef. But what if they needed advice on how to solve a problem that involved their general manager or chef? Their issues would come to our attention—sometimes in unhealthy ways, such as anonymous letters, Internet posts, or even via a legal complaint. We lost some good people along the way. We found ourselves handling an increasingly large number of HR issues from a reactive posture.
One of the first things I did as CEO was to promote my longtime colleague Paul Bolles-Beaven from managing partner of Union Square Cafe to director of human resources for all of USHG. I wanted to bottle his exceptional judgment, wisdom, and sensibility about working effectively with people and sprinkle it liberally over my entire organization.
Paul’s efforts in human resources swiftly provided inputs and outlets for people where previously there were none. He’d host “roundtables” and other forums where employees felt safe about providing feedback. At the outset the process uncovered some unpalatable realities—some areas of discontent that we hadn’t previously known about. But the openness was a breath of fresh air and allowed us to address the preexisting issues as we learned of them. More dialogues began flowing among team members. Instead of chronically internalizing their anger and frustration, people
now had far healthier ways to express their feelings about problems that arose with colleagues or management.
As we had learned to do many years ago with our guests, we were now giving our staff a lot more opportunities to feel heard. My mentor (and our longtime consultant) Erika Andersen gave me a gift when she taught me that for most people it’s far more important to feel heard than to be agreed with.
You can get the best productivity from your employees only when they believe that their leadership is open- minded, is accessible, and welcomes input. Managers who give only lip ser vice to an open-door policy effectively shut the door by being defensive, by not holding themselves accountable when they make a mistake, and mostly by not actively looking for ways to make their employees feel heard. We apply constant, gentle pressure to our leaders to stay tuned in to the aspirations and frustrations of staff members. We want the leaders not just to keep the door open but to walk out that door and actively beckon people to come in.
HIRING MANAGERS
I have yet to find any skills more pivotal to success than effective recruiting and hiring. And the most important hires are the managers, who are themselves responsible for hiring and setting the tone for the business. Like it or not, it’s their performance that represents the highest excellence and hospitality you can expect from your staff. At any given time, approximately 15 percent of our employees are managers. Since I believe that as our management team goes, so goes our staff, Paul Bolles-Beaven and his HR staff created a list of nine specific traits that define the mind-set
and the character traits we look for when making a decision about hiring a manager.
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Infectious Attitude
Does this person have the type of attitude I would want to have spread around? Would I want my staff to be imbued with it? If the answer is yes, I continue on.
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Self-Awareness
When I scan their resumés, I often tell management candidates that their career story is like an autobiography they have been writing for many years: “You’ve made a lot of interesting choices. I’m very curious about why a job with us strikes you as the logical next ‘chapter’ in the book of your life.” I also want to know why they feel they have finished the most recent chapter: “Why does this particular twist in the plot make perfect sense to you right now?” Candidates may convey a straightforward desire to move on to a better place. They may express resentment about the managers they have been working for. If a person shares details that are none of my business, that can reveal something about his or her discretion, or lack thereof.
Sometimes candidates indicate that they have simply maxed out on their present employer’s career curve, and are determined to make a wise next choice. I am also quite interested in people who have shown enough enterprise and curiosity to have learned something about our restaurants.
I’m most impressed when they apply what they know about themselves and about us to what they know they want for their career.
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Charitable Assumption
Enlightened hospitality is a philosophy that works best with optimistic, hopeful, open-minded people at the helm. It tends not to work when the leaders are skeptics who think they already have all the answers. Those people are a finished product in their own minds, and so is everyone else they work with. A charitable mind-set assumes the best in other people. Mind-sets tend to become self-fulfilling prophecies. When you assume that people’s stumbles are honest mistakes that come from a good place, you get farther with them during their victories. When you assume the worst of people, you get the worst from people. It’s important that our managers maintain a charitable assumption about the people with whom they work and about the guests we serve. Doing so even when a mistake has been made gives employees the chance to react with integrity and to be accountable for their actions.
I expect our managers to have the same mind-set with regard to our guests. I’ve been to many restaurants where management berates guests for being twenty minutes late for a reservation—when there may well have been a good reason for their tardiness. It’s hard to justify being ungracious to anyone who wants to spend money at your restaurant. A charitable assumption might be, “You must have had a tough time getting here. We’re delighted that you made it!” I am going to get the most out of my relationship with every guest, including repeat business, when I base the relationship on optimism and trust.
Hospitality is hopeful; it’s confident, thoughtful, optimistic, generous, and openhearted.
To be sure, there are other ways to run an organization. Many people have grown very successful by managing the downside. They’re nobody’s fool, and they’ll be damned if they’re going to be taken to the cleaners. That’s a valid attitude. But skeptics tend not to thrive in our organization,
because their values are the antithesis of the business and personal principles that guide every decision we make, as well as the way I choose to connect with people. My way is certainly not the only right way, but it is my only right way.
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Long-Term View of Success
If you have a philosophy that puts employees first, guests second, community third, suppliers fourth, and investors fifth, you implicitly have a long-term perspective— at least as long as your lease. We create restaurants for the long haul, and we make decisions based on that commitment. Every time I’m faced with a decision that involves an investment of money, I analyze the potential return by asking, “Will this yield today dollars, tomorrow dollars, or never dollars?” Only the third alternative—never dollars—is unattractive to me.
For example, if you come to one of our restaurants and the waiter accidentally breaks the cork on your bottle of wine, everyone is uncomfortable. The waiter is embarrassed, and you might be wondering if that means the wine itself is bad. At this point I would want the waiter to be candid: “I’m sorry I broke the cork. I assume the wine is still fine but if for any reason it’s not, please let me know and we’ll gladly replace the bottle for you.” If the wine is good, we’ll get our today dollars. If it’s not, we’re still in the running for tomorrow dollars, because we’ve established goodwill with our guest.
This approach also gives the guest a stress-free opportunity to be right (in the event that the wine turns out to be “off”) and removes the onus on them to challenge us.
There’s practically no downside to a hospitable, charitable assumption. Experience has shown me that 90
percent of the time the bottle of wine whose cork broke is going to be good. If the guest rejects it and I still believe it’s good, I can always sell the wine by the glass at the bar. And if the bottle’s not good, it’s far better for me to have been gracious about the transaction in the first place. That’s a long-term view, and it’s one that sees an investment in a guest’s continuing loyalty as being far more valuable than almost anything else.
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Sense of Abundance
One of the toughest disciplines in every business is to measure and predict cash flow—the volume of money available after all expenses have been paid. In very lean times (such as we’ve experienced during serious recessions or in the weeks and months following 9/11) effective managers and owners need to develop the ability to squeeze olive oil from a stone. In our restaurant culture that tightfisted approach can put the optimistic principles underlying our business style to the test. This approach makes it much more difficult to be generous to staff members, guests, and the community. In hard times, it can be enormously challenging to be generous with suppliers, and next to impossible to be generous with investors. But counterintuitively, we’ve also learned that it is sometimes possible to recharge and stimulate the top line of a business by instilling a generous and confident sense of abundance.
Just after September 11, 2001, the revenue at each of our restaurants dropped precipitously. The number of guests reserving was also way down. For about two months following the attacks on the World Trade Center, the entire downtown restaurant and business sector suffered. Of our restaurants, Tabla suffered most and had the toughest time recovering. One reason was that Tabla (like Eleven Madison Park) is housed on the ground floor of the investment bank
Credit Suisse, whose own business suffered dramatically following 9/11, and whose bankers cut back on their business entertaining. A further reason was that Tabla, being associated with Indian culture, was unfortunately an object of the early backlash after 9/11. Some Americans were prejudiced against any person who looked like what ignorance and fear imagined a terrorist to be, or toward any business staffed by such people. Bangladeshi and Indian taxi drivers in New York were affected by this ill-informed wariness, and so was Tabla.
We tried hard to not lay anyone off, but to make ends meet we did have to shorten the hours many of our staff members were scheduled to work. We looked at the menu and asked ourselves whether we really needed to use expensive ingredients like lobster. Did we really need twelve entrees if ten would save money by ending each night with less waste?
We also analyzed the menu to see if it might be possible to eliminate a cook through attrition. The fewer menu items, the fewer hands we’d need. It occurred to me that starving our way out of this predicament might protect our business; but for me, playing defensively was an unnatural approach to the underlying problem of too few guests and too little revenue. I hated doing business that way.
So I made a decision that taught me a lasting business lesson: rather than apply a sense of scarcity and uncertainty to Tabla, I applied a sense of abundance. Hand-wringing over low covers and low revenue was getting us nowhere. I truly believed that a sense of abundance would create more business. Though it made little apparent budgetary sense, we began participating in charity fund-raisers and offering gift certificates for dinners at Tabla as auction prizes—far more generously than ever before. It was a very effective
way to target our marketing to people who tended to care about our favorite causes, and who also might take an interest in Tabla. If an occasional guest at Tabla happened to attend a charity fund-raiser and noticed that we were a sponsor of the charity, he or she would probably feel a sense of affiliation with our restaurants. And anyone who would compete to make the highest bid on an auction item for our restaurants is a fan or a potential fan. By giving more, we’d end up getting more. If you want to be busy, especially in times of scarcity and uncertainty, you cannot accept diminished standards of excellence in even one area. 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.
Not long ago we donated dinner for four at six of our restaurants to the Brady Center for Handgun Safety, which would auction off the dinners. The winning bid for the twenty-four dinners was $12,000. We helped a cause that mattered to us, created an opportunity for like-minded guests to affiliate with us, and effectively advertised all our restaurants to an ideal audience.
Since 1992, we have applied our philosophy on abundance most effectively during New York City’s annual Restaurant Week. More than 150 participating restaurants throughout the city have offered a three-course lunch for about $20. (The price began at $19.92; then it rose to
$19.93, $19.94, and so on.) Most restaurants are packed during Restaurant Week as guests flock in to experience new restaurants as well as old favorites. The value is unbeatable, and people feel good about doing something
collectively with so many other New Yorkers. Some restaurants, unfortunately, offer inexpensive fare and propose very limited menu options as a way to manage costs and do a bit better than break even on a three-course meal. We take the opposite approach. I am convinced that if you’re going to offer a gift, it’s important to give it graciously. We approach Restaurant Week by offering a generous number of choices for the appetizer, main course, and dessert, representing considerably more than $20 worth of food and quality. The point is to make people feel a sense of abundance and value.
In several of our restaurants, we go a step further. As the already-low check is dropped, each guest at the table is presented with a thank-you note as well as a gift certificate to welcome him or her back for lunch at another time. (In 2005, for example, we presented each guest with a “come back” lunch certificate for $20.05.) At this point, guests are thinking, “They’ve already offered an outstanding lunch for
$20.05, and now they’re giving me a $20.05 gift certificate to return!” And return they do.
Countless times, this has proved that the more we give the more we get back. Generosity is clearly in our self- interest. We get two things out of the deal. We gain a means of reaching new guests and remaining in touch with them, because the only way guests can redeem their certificate is first to provide us with their name and contact information.
And when they return, we’ve gained a crucial second opportunity to create regulars. In fact, a returning guest may bring, say, three new guests with him or her, having told them how generous we were during Restaurant Week. So, for example, four gift certificates worth $80 can have a multiplier effect and produce as many as twelve additional new guests at full price. Roughly 80 percent of the certificates are redeemed at lunch in the season following
Restaurant Week, and lunch business in each of our restaurants has consistently grown each year.
As I always point out to managers and staff members, the single most powerful key to long-term success is cultivating repeat business, and ultimately regular guests. I don’t believe you even enter the competition for regulars until you get people to try your product for at least a third time. Restaurant Week provides us with a perfect opportunity to do that.
Although this event—organized by NYC and Company—is certainly a bargain and a huge promotional occasion for New York City, it pays its largest dividends to restaurants by generating goodwill—and, eventually, revenue (tomorrow dollars). Some of our managers have asked me whether all this largesse is worth it. I remind them that after each year’s Restaurant Week, our restaurants have grown more popular and more profitable. No amount of generosity has so far succeeded in putting us out of business!
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Trust
It’s extremely difficult for a manager to motivate people if he or she tends not to trust others. Similarly, it’s extremely difficult for employees to trust or want to follow the lead of a manager who doesn’t trust them. It’s hard to do your best for an extended period of time when your primary motivation is to avoid disapproval. We look for people who are naturally trusting. True, it’s necessary for a manager to have a modicum of healthy cynicism in order to identify team members who act out of self-interest or who work the system to their advantage. But it is never useful to cause paranoia in everybody else by having a mind-set of mistrust and fear.
Most human beings are motivated far more by the desire to please other people than by the desire to stay out of trouble. Mistrust tends to breed more mistrust and ultimately dishonesty. If your bosses do not trust you to begin with, they unwittingly set up a game, or a trap: the employee is challenged to figure out ways to beat “the system.” If I can’t please you by just being good and honest, and I can’t advance at work by performing admirably, I may as well play a game in which I can win by giving you what you’re expecting from me: mistrust. Trust and mistrust are also mind-sets that become self-fulfilling.
Some bosses and managers rule by constantly threatening disapproval or, as is often worse, by giving no feedback whatsoever. Being nonresponsive keeps employees on edge, off-balance, feeling vulnerable and divided. For many insecure managers, that’s the point. It’s not an oversight; it’s a strategy—or it’s insecurity about confronting conflict. Either way, it’s counterproductive. It will not sustain a healthy workplace.
Our managers need to understand the dramatic distinction between fear-based and trust-based control. Analyzing this distinction helps us to sharpen the managerial skills needed to define excellence and failure in our model of enlightened hospitality.
FEAR VERSUS TRUST
Fear: them against us
Trust: us as a team, together and united
tyranny collaboration
ruling empowering
fleeting enduring
selfish giving
scarcity abundance
closed expressive
telling listening
knowing learning
cynical hopeful
gatekeeper agent
In the divisive fear-based system, employees miss out on the true joys of sustained satisfaction, the satisfaction that comes from achieving for the sake of the pleasure that achievement itself affords. They also miss out on the pleasure of being part of a unified ensemble that achieves great things together. Fear-based management fosters a corrosive, dim-witted business culture where huge amounts of energy are squandered by bosses who fear employees, and by employees who fear bosses. There’s a steep price to pay for an organization when a staff member feels confused or intimidated. Prospective leaders often opt to leave before they can become great managers; and good employees quit because they know they can never thrive in such a negative climate. That leaves the kind of employees whose emotional needs are met by autocratic, non-empowering bosses. And those are not always the world’s brightest, happiest, or healthiest employees. And so goes the business.
The good news, for us, is that there are enough bosses out there who rule by fear that they actually make hiring well-trained, motivated managers much easier. It often happens that bosses who rule through fear are actually very good at teaching skills. You never need to wonder what’s expected of you when you work for an ironfisted boss. When they drive people with excellent skills out the door, some of those talented people find a haven working for a company that welcomes them and encourages them to contribute and thrive. Happily, they often come to us.
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Approving Patience and Tough Love
Tough love is another term for frank, “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. It is absolutely incumbent on managers to praise employees for good work. As I once read in Kenneth Blanchard’s One Minute Manager, it’s the managers’ job to “catch people in the act of doing things right.” I subscribe to that and take it one step further. When managers catch somebody on their staff doing something right in a consistent or remarkable way, I encourage those managers to let me know about it first so that I can learn, and also so that I can connect with employees and tell them that their boss told me what a great job they’ve been doing, with specifics. This allows the employees to feel seen and appreciated by both their boss and me. It feels especially good and is a powerful motivator when your boss’s boss catches you doing something right.
Our former chef at Eleven Madison Park, Kerry Heffernan, once told me that since a dishwasher named Juan had been on the dish station, 50 percent fewer forks and knives were
being lost by getting carelessly thrown into the trash. Juan was helping to sort through dirty plates that hurried waiters and busboys were bringing back to the kitchen after clearing tables in the dining room. Such savings add up. I found out when Juan, who had been with us for many years, was working his next shift, and I was there that day to catch him in the act of doing something right. “Chef Kerry has told me that you are doing an amazing job saving our silverware, and I want you to know how much I appreciate that,” I told him. “Your work means a lot to the restaurant.” He learned that his boss had noticed what a terrific job he was doing, and that Kerry was so pleased that he had chosen to tell his own boss—me—about it. I hope the experience made Juan feel good about the value of his work and proud that his contribution was appreciated by somebody he didn’t even know was paying attention.
Feeling seen and acknowledged is a powerful human need. Paul Bolles-Beaven taught me that a traditional greeting among South Africans is umbuntu. It is not traditional there to salute people by saying “Hi,” “How are you?” or “What’s new?” Umbuntu is an expression of humanness, which conveys “I see you.” That simply and effectively addresses the core human need to be seen and to feel seen. It’s hard to imagine that it wouldn’t also apply to an employee, a customer, or a manager of a company.
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.
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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.
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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.
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 efffective auxilliary 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.
A leader can be charismatic and lack integrity. A leader can be charismatic and have no compassion or empathy. A great leader must repeatedly ask himself or herself this tough question: “Why would anyone want to be led by me?” And there had better be a good number of compelling reasons.
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.
Frequently, the people who tend to get tripped up in our company at higher levels have a tough time plugging into how other people feel. It’s not that they don’t care about others. They just lack a strong natural sense of empathy. We do the best we can to coach them and to show them where they are missing the boat. Some are able to rise to this challenge; many aren’t.
The air grows increasingly thin the higher up the ranks of leadership a manager moves. The more powerful people become in an organization, the more emotionally intelligent their management skills must become. We’ve had many, many people who have succeeded as dining room managers and even in the next position up, such as assistant general manager. But they’ve subsequently fallen short as general managers, and we’ve had to part ways. This has also been
true of some cooks who became sous-chefs and ultimately executive sous-chefs, the rank just below chef. Many excellent cooks have become sous-chefs after technical cooking prowess won them the respect of the staff. But when they next became executive sous-chefs, their emotional skills were no longer adequate for this higher level of authority and power, and the staff withdrew its support—making it clear that we should do the same.
For some reason, when certain people gain more authority and power, they tend to demand respect from those who work for them. But what got them their promotion in the first place was their natural ability to command respect. Demanding respect creates tension that can make it very tough to lead, and very uncomfortable to follow.
Strong technical skills are usually the reason most people get their first or second promotion. But the higher you climb the ladder of power, the less technical skills count and the more significant emotional skills become. Employees are expert boss-watchers who instinctively focus their “binoculars” on the bosses with the most power. If they see weaknesses in character traits and ideals, they can and often do strive to put out the boss’s fire in a hurry.
