The failure rate for restaurants is brutal. In the US, two-thirds of new restaurants close within three years. In New York City high rents are said to push that rate even higher to close to 80 per cent. Which makes the achievement of Union Square Hospitality Group and its managers extraordinary.
Since opening his first restaurant in 1985, Danny Meyer has assiduously built a rare kind of empire. At the top end are some of New York’s most popular and highly regarded restaurants, from his original Union Square Cafe to the Gramercy Tavern. In the middle are barbecue restaurants and a catering business.
Now an expanding chain of Shake Shacks, which the company describes as a modern-day, roadside burger stand harking back to the joints Mr Meyer knew growing up in the midwest. Delicious as their burgers and shakes are, the noise, crowds and lines make them where parents of young children go to die. But their popularity is only growing and this year, Shake Shacks will open in London and Istanbul.
Managing such a range of restaurants and an ever-growing army of employees in different places and cultures, while ensuring a consistent experience for customers, has been a mighty challenge. Mr Meyer described it well in his terrific memoir/management handbook, Setting the Table: The Transforming Power of Hospitality in Business. Published seven years ago, the book is still worth any manager’s time, whether you are in a hospitality business or not. It is full of great entrepreneurial stories and advice and is especially good on the balance between expansion and control and how an entrepreneur evolves from an intuitive manager into a more consistent one.
At one point, Mr Meyer describes his failure to get his staff to do exactly what he wants. He seeks counsel from an old New York steakhouse manager called Pat Cetta, who tells him to clear a table leaving only the salt shaker in the middle. Mr Cetta then moves the salt shaker and tells Mr Meyer to move it back to dead centre. After Mr Meyer moves it back, Mr Cetta moves it again. Mr Meyer puts it back in the middle. Mr Cetta moves it again. Mr. Meyer puts it back. And so on.
“Your staff and your guests are always moving your salt shaker off centre,” Mr Cetta advises. “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 salt shaker off-centre. It is not your job to get upset . . . Your job is just to move the shaker back each time and let them know exactly what you stand for.”
This lesson led Mr Meyer to give a label to his management style: constant, gentle pressure. Each piece was vital. There has to be pressure to extract performance. It has to be there all the time. But it has to be gentle to keep people motivated in a positive way.
Much of the nuts-and-bolts work of managing the group’s 2,800 employees across 18 branded businesses falls to Richard Coraine, senior managing partner, business development and consulting. The managerial metaphor he likes to use came to him while attending a class on wine for a team of new waiters and waitresses.
The teacher was explaining the solera method used for making sherry. After several years of production, the oldest and youngest sherries are blended each year to create a consistent product. Each bottle contains flavours from the oldest and youngest wines.
That, he says, is how the group thinks about managing businesses: always moving experienced managers to help new businesses and new employees get off the ground and embed the right culture.
The group also retains 100 per cent control of each new Shake Shack in spite of the obvious financial temptations of letting it gallop to scale around the world under franchisees. The managers at its new international branches will be flown over to the US to work in multiple Shake Shacks. “They need to see what success looks like,” says Mr Coraine.
In addition, some managers from the US will be flying over to London and Istanbul to achieve the right managerial blend in the new outlet.
All this for a burger shack. Which may explain why the group’s managers have defied such daunting industry odds.
The writer is the author of ‘Life’s a Pitch: What the world’s best sales people can teach us all’
Andrew Hill is away
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