Transcript of 708: Danny Meyer - How You Make People Feel: The Founder of Shake Shack & Union Square Hospitality Group on Culture as Soil, the 49/51 Hiring Formula, and Leading With Generosity

Applications are now open for our next Learning Leaders Circle. You can go to learningleaderscircle.com to apply. I thought it would be helpful for you to hear from some current members of my Learning Leaders Circle. Here they are.

I chose Learning Leaders Circle because I wanted to be around really winning professionals, people killing it at work, but even better people.

Brian does such an amazing job of vetting the group. It's all A-players. It is all amazing rockstar people who want everybody to become their best and just add value to the group.

We have people with agriculture backgrounds. We have people with white-collar backgrounds, blue-collar backgrounds, people in education.

The totality of the room is very impressive with the amount of knowledge we have to be gained. But when you sit down and you break out with 5, 6, 7 people, you can have that intimate, that in-depth conversation that allows you to go a little bit deeper.

We got additional coaches this year.

They live their lives according to what they teach.

These guys will all jump in and get you back on course.

Definitely do it. Don't think twice about it. Know that you're gonna leave with new relationships, new takeaways to make you better at your job, better as a parent and as a person. So it was just a very intimate, very inclusive environment. To apply for our next Learning Leaders Circle, go to learningleaderscircle.com. Welcome to the Learning Leaders Show presented by Insight Global. I am your host, Ryan Hawk. Thank you so much for being here. Go to learningleader.com for show notes of this and all podcast episodes. Go to learningleader.com. Now on to tonight's featured leader. This one is 11 years in the making. It's the great Danny Meyer, one of the most influential leaders of our generation and the founder of Union Square Hospitality Group. Over the last 4 decades, he's opened landmark New York restaurants like Union Square Cafe and Gramercy Tavern and Shake Shack, now a global brand with 2,700 locations in 22 countries. He built it all on a single idea he calls enlightened hospitality, the conviction that business, like life, is all about how you make people feel. He's the author of the classic Setting the Table, and his new book is called What Could Possibly Go Right?

During our conversation, we discussed the importance of the leader becoming a great writer and speaker. As he says, if you don't have language, you cannot teach. cannot teach, you cannot lead. Then Danny shares what he means by entrepreneurial athleticism and why it's the first thing he looks for when hiring a leader. Then Danny tells the incredible story of how Shake Shack got started as a hot dog stand in an effort to support Madison Square Park. It's so, so good. Ladies and gentlemen, Please enjoy my conversation with Danny Meyer. One of my favorite quotes of all time, business, like life, is all about how you make people feel. It's that simple and it's that hard. I've repeated that a million times over the years. Where does that come from, Danny?

Well, you know, when I wrote Setting the Table, it was really to try to teach me. I didn't come up with that one day and say, I've gotta write that idea down. The process of writing for me is what gets things out of my heart and out of my head. And when I wrote that one sentence, which is right in the introduction of the book, I said, I don't know if I can do any better than that. It really is why we do what we do. We spend a lot of effort trying to make great food and find wonderful wines to pour for people and design beautiful dining rooms. But at the end of the day, it's the human life that happens within those walls. And the relationships that get built and the memories that get created that really make people feel like they're part of that community, like they belong. So that's, that's why I wrote it and I'm sticking to it.

Do you remember the moment you wrote it? Because now everyone would say, well, that, that had to be like AI or something. That's just too good. It's too good. Do you remember after it and thinking like, oh my goodness, this is it?

Yeah, we barely had the internet 20 years ago. I'm just kidding about that. We certainly didn't have AI. You know, one of the things that no one tells you about when you're writing a book is that you don't write the introduction till after you've written the whole book because you don't really know what you're introducing. At least that's the way I write. I don't really know where a book is gonna go. I just start thinking about what ideas mean a lot to me and have meant a lot to me, and then try to make an order out of them and, and some organization that's gonna make it fun for people to, flip the pages. And I'm really grateful that happened with Setting the Table. And now I'm excited to get What Could Possibly Go Right out into the world.

I love the title and I love this ethos of— I may pronounce the name wrong. Is it Shimon or Shimon?

You got it.

Okay. Optimists and pessimists die the same way. They just live differently. I prefer to live as an optimist. Even from the second we connected, I sensed just your aura is one of optimism, of believing things will go well, and certainly reading your books and studying your work for a while, I think that just makes for an excellent attribute of a leader as well as someone that people would want to get in line and follow. A belief that it's going to go well, a belief of optimism. Where does that come from?

Some of it is, I think, wired in people. I do believe that there are people— it's like a bell curve. I believe there are people who are just You know, you could put 'em in a closet with no light for a year and they'd, you open the door and they'd be out there hopping on a pogo stick. Not that many people like that. Then you can shine the sun on some people forever and they're just gonna walk on the shady side of the street. That's the other end of the spectrum. I do believe that most people respond to hope and optimism. I think that people go to work every day or people start their day at home every day or, or whatever it is they're doing. intending to make it a better day than yesterday or hoping that it will be. Right. And I just think that if you can show people that there is a way that that could happen and that they can actually have an impact on that with the approach they bring, it works. And it's not a calculated business strategy. I did get some of this. I think the first time I ever had a job where I was a manager of people, 100% of the people were volunteers.

I was working in a political campaign and nobody was getting a paycheck, right? They were all volunteers. And therefore, each and every single day as their boss, the only way I could motivate them was to talk about the possibility and the hope that something good could happen if the candidate were to be elected. And I think I learned that if you can name what the higher purpose is of your organization, I mean, I know families that actually have their own family pact and they have a higher purpose in their family. This is what we stand for. This is how we do things around here. I think that people really, they follow, they want to follow that kind of a lead. The first book I wrote, Setting the Table, is about the power of hospitality. It is a fact that the root of the word hospitality is hope. And I think that people who are really good at hospitality, in other words, making other people feel like you're on their side are people that exude a sense of hope, and they hope that their own actions can make the world better for people. So again, the quote you just read comes from the introduction to What Could Possibly Go Right?

And I didn't write that until after I had written the book. They should really call introductions epilogues if I'm the guy writing the book. But I realized that you called it the ethos. The through line of What Could Possibly Go Right? is that Things don't, in fact, always go right. They don't. There is no straight line between point A and point B. But I do believe that you can, as a leader or as just a player, you can impact the outcome by bringing a sense of possibility to every single thing you do.

One of the, I think, things that people struggle with is how to advance their culture as something grows from Maybe small or one restaurant to this big business or big organization, and it's something you've done really, really well. And this book has a lot of teachings to help people try to do that. Is that even the right question to ask, or is there a different way to view this when somebody is building something and they go, wait a second, I can't physically be there every day to influence the culture or influence the behavior because now we have multiple locations, we're all over the place. Or some leaders are working in a more remote world and they still want to have that type of culture. How do you view this growing the culture as a business scales?

It's the absolute right question to be asking because I think that when people have a successful business or organization of any type and it's doing good things for people, why would you not want to do more of it? And once you make a choice to scale it, as you just said, or to do more of it, Then there's kind of 2 things, you know, you're going to need. It's kind of like a plant is going to need sunlight and water, right? Well, I think for a business to grow, it's going to need funding and it's going to need leadership. It's going to need the kind of inspiring leadership that makes people want to go someplace with it. And when you put all that together, you end up having the possibility to grow a business. And yet there's still one other crucial thing. that the plant needs. It's not just the water and it's not just the sunlight. It needs the soil. And the soil is the culture. The culture is what the plant is growing in. The culture is what the business is going to either grow in or not grow in. And you can have the best business in the world, but if the way people feel working there isn't great, or if the way people feel doing business with you doesn't feel great to them, or if it doesn't feel great for your community, Your culture is not actually additive to your growth.

So if I've learned any one thing through all these years, it's to tend to the soil, tend to the culture. And there are ways that you can scale that. And I found that the biggest way to do that is to be really, really clear with everyone in the company which behaviors we are going to celebrate and which behaviors we are not going to tolerate. When you put all that together and you really are consistent with people and you do celebrate the stuff you want more of and you don't tolerate the stuff you want less of, you find that the culture can actually flourish. And then I, I would add one more thing to that. When you're growing, you need more people, obviously. And if I've learned any one thing there, it's that when we promote people or when we hire people, Everyone else in the organization is watching very carefully who's getting the promotions, who's getting the raises, who's getting hired. Everyone's watching. And you better make sure that the people you're bringing in and/or the people you're promoting are not only the people who are best at the stuff they do, but crucially, they are the best at who they are for your culture.

Because every time you compromise on either one of those, You're sending a powerful message, maybe unwittingly, but you are sending a powerful message to everybody else. We didn't really mean all those words we were talking about, 'cause otherwise we wouldn't have promoted this guy. So those are the things I really try to focus on as we grow. And we're very, very conscious. Like the thing that gets me outta bed every single morning, and really the reason I wrote this book is I was trying to, to learn. Over the past 20 years, because we were growing and it wasn't always easy. And I was trying to learn when it worked really well, what was working really well, and when it didn't work really well, where were we failing? And it always came back to who we hired and how we did business.

All right. I can't wait to get to some of the hiring stuff because that's rich in your book and I have tons of notes. But before that, my curiosity is getting the best of me. What are some of the specific behaviors that you celebrate? I think that's a really critical point of honoring the people who do it right and celebrating it, not only so that they feel it, but so everybody else sees it and feels it as well. So what are some of those specific behaviors that you celebrate?

Well, I would celebrate you because embedded in your question, you said your curiosity is getting the best of you. I really honor curiosity and You know, if you're gonna be the kind of organization that looks at every day as an opportunity to improve on how well you did it yesterday, you did your best yesterday, but you probably could do it a little bit better. It starts with curiosity. You've gotta actually wonder, what could we do differently? How could we do it differently? What more can we learn? What more can we teach? So that's crucially a behavior that we celebrate.

Does that look and sound like somebody asking questions, somebody like good eye contact, somebody thinking of new ways to do something in a way that maybe has never been done before because they read a book or they talked to a mentor. What does curiosity actually look and feel like?

Well, it— you— every single thing you said would be part of my answer.

Okay.

And I think that curiosity is the crucial fuel for entrepreneurial spirit, because what an entrepreneur does— there's, there's a couple things. First of all, these reading glasses I have on, I only wear when I'm reading really, or if I'm looking at my computer screen. But whatever it is they're correcting is very different than the kind of glasses an entrepreneur wears. An entrepreneur wears glasses because they are upsided. They, they only see what's up.

Mm-hmm.

They only see what could possibly go right. And they're always looking at existing problems that if only they were solved would make the world better. So think about every great innovation you've ever seen in your life started with somebody saying, That could be done better. And I bet I've got a solution for it. And furthermore, and this is one of the most understated things I think about leadership, and curiosity infuses all these things. You got to wonder, right? Wonder is really the kissing cousin to curiosity. But you've got to be the kind of person that can actually persuade others to come along for the ride with you. Because there's not many jobs I know of that don't involve some kind of team. And so it starts with curiosity, seeing problems before others see them, coming up with a solution before others did that, and then persuading a bunch of really gifted people who are like-hearted and like-minded to come along for the ride and help you get there. Because very few things we can get done on our own.

I watched an interview you did on a show at one point, and I think one of your first jobs was a sales job. That was my first job as well. And I, I'm so grateful. I didn't love all of the elements, but I, I got good at it. And I think developing those skills has helped me for the rest of my life ever since. I'm curious because we're all in sales every day. Dan Pink has written a lot about that. He's been on the show talking about we're all in sales all the time. How did that, one of those first jobs you have doing really well as a sales professional, how did that help you for the rest of your career?

It mostly helps me, and I'll try to explain that. If I were really good at it though, I'd have a copy of What Could Possibly Go Right in the picture right now, because then all of your viewers could see how beautiful the COVID is for what— so I'm gonna try to get better at sales. But what it taught me more than anything is really kind of connected to one of the first questions you asked, which is that sales, like anything else, is building relationships with people. You know, I, I remember going to a shoe store when I was younger, and it didn't matter what shoe I wanted. The person brought out everything from the back room that they wanted to sell. And the 2 questions were, does it fit? And do I like it? And even when they fit, if I didn't like it, it didn't matter. So what a great salesman does, a great salesperson is, they really try to put themselves in your shoes and they ask, if I were that person, what would I want right now? And they don't answer questions that you're not asking. They answer a question that you actually have.

And a great salesperson actually sometimes helps you get to that question. I got good at connecting dots also. So for example, yeah, I was, I think, 23 when I first started as a salesperson in New York City. And I had, I had a massive territory. I was selling electronic tags to stop shoplifters of all things. But I had, when I started, I had all of Manhattan. I had Bergen County, New Jersey. I had Suffolk County. We didn't have the internet back then, so everything I got to know was by being curious. And I drove my little company car, which was a powder blue Volkswagen Rabbit, and if I stopped into a dress store and learned that they were having a shoplifting problem and I ended up selling a system to this person, I found out that his cousin had a health and beauty aid store across town, and I found out that his best customer had a food store, right? And I just kept connecting dots and making relationships with people. I also learned that I was willing to put myself out there in a way that I hadn't when I was much younger. Sales is kind of a— it's kind of a gamble.

It's a risky thing because what if they say no? And more often than not, they do. So it was just like one of the best growing experiences ever. And through it all, I think I learned that I love to compete, but I mostly— I wasn't trying to beat anybody. Whatever number of sales I got last week, I wanted to do a little bit better this week. So I learned a lot about my own competitive spirit as well.

It's similar to entrepreneurship because especially a lot of the sales jobs, there's a variable compensation component, meaning if, if you don't sell, you don't eat, you don't get any money. And so you're betting on yourself every day, and that's what you do when start a business is you're betting on yourself and your ability to rally people around the mission and to go make something happen. And so that's why I think if there's any like young person who isn't quite sure what they want to do when they graduate college, I tell them to get a sales job because you probably won't love it. It'll be hard. Maybe you'll like it. I hope so. But, but, but you probably won't. But if you work hard to get good at it, those skills are portable to whatever the thing is you do next. And so that, that's why I think it's, it's useful.

100%. There's no job I've ever seen that doesn't benefit from good sales skills and good writing skills, I might add. Yes.

Yeah. Well, obviously you've shown you've got that. Okay, let's get some of the hiring stuff. One of the phrases that I loved, uh, my background's in athletics, played football growing up in college, a little bit afterwards. And so when you're writing about—

You were pretty famous, weren't you?

No, I'd be good enough to, to have my college paid for, which is great. My parents loved it and I was proud to do that.

for them.

But entrepreneurial athleticism, it's a trait we look for in anyone that you consider for a leadership role in your organization. So, so can you define this entrepreneurial athleticism and how important that trait is for you?

Absolutely. So you wouldn't have gotten as far as you got. You were a quarterback? Yeah.

Yeah.

Okay. So you would not have gotten as far as you got without some God-given physical talent.

Mm-hmm.

But you also wouldn't have, you probably wouldn't have gotten nearly as far as you had gotten if you didn't also have athleticism. When I use the expression athleticism, it's not only what happens in sports, it's what happens anywhere, which is that with whatever gifts I got naturally, I'm gonna actually dedicate myself, train myself to be my best, and I'm gonna have the mental and emotional mettle To figure out a way to win. That's athleticism. And I look for that in leaders that we have because people often say to me, gosh, how are you in the restaurant business? It's so hard, so competitive. Maybe, but I think that's true of what you do, Ryan. How many podcasts are out there?

Millions.

I guarantee you, you, you work really hard and you prepare. Like, I can tell you prepare really, really hard for what you do. That's why you're on top. And I look for that in leaders because there's 26,000 restaurants in New York City. You think we're the only ones who know how to make a good burger or a good roast chicken? Of course not. And so what are the things we need to do to make sure that we become your favorite place to dine? A lot of that has to do with— actually, most of it, when things are not going well, First person I look at is myself, 'cause I'm the ultimate leader. But then I look at all the leaders in the restaurant and somehow they're not bringing out the athleticism in their own team. 'Cause we have an expression we call day one mentality. And the first day a restaurant opens, it never looks better. There's no scratches in anything. All the doors work. You have all the wine glasses you need. You're not running out of anything. The flowers are beautiful. All the shirts on the servers are completely pressed. There's not a smudge on any of the plates that go out.

And you assume that every single person in the restaurant might just be a restaurant critic. Well, what happens naturally over time is that things can go a little sideways. So I really, really encourage our team to bring that day one mentality to every single day, because why should Day 1 of year 10 or year 20 not be as special as day 1 was way back then. And as a matter of fact, it should be a lot better because we've got 20 years of learning, or in the case of Union Square Cafe, 40 years of learning. It should be even better right now. But if you don't bring out that athleticism in your leaders and in the team that today has to be better than yesterday, it only goes backwards.

I read this about some of the attributes that you look for: optimistic warmth, curious intelligence, determined work ethic, empathy, self-awareness, integrity. Really interesting. I think hiring, again, is something that is useful for anybody, whether you're running a restaurant or any business, of how to get great people, how to get the ones that you think will help drive your culture forward. What's like your interview process like? I know you're, you're running the whole show, so you get people who are already really well screened, but I'm still curious, like what it sounds like. Could you take me inside the room when you're interviewing somebody, having a conversation about them either coming to work for you to run a restaurant, to be a leader? What does it sound like? What are some of the questions you like to ask?

Yeah, well, you're right. I don't do most of the interviewing these days, but I do teach how I want to see people interviewed.

Mhm.

You know, I'm still involved with— we're not going to hire a chef without me being involved with that, or we're not going to hire a senior manager without my being involved with that. So really, I'm, I'm looking for 2 things, Ryan. I'm looking— our recipe is pretty straightforward. 49% of what I'm looking for is how well I think this person can do the job we will be paying them to do. Most of that is going to be technical skills, and those technical skills are completely different from every, every single job. You know, if I'm hiring an accountant or the CFO of the company, I'm not— I don't really care how good of a pasta cook they are. And if we're hiring a chef, do I care that they can handle the balance sheet? It's a good skill for them to have, but that's not the primary technical skill. So that the 49% of the technical skills, the 51% that I'm looking for in any interview is, is who are you? And specifically, I'm looking for the degree to which you have what we call a high hospitality quotient, which is— we call HQ. And an HQ is the outcome of all the emotional skills you just read off.

When someone has each one of those things, beginning with optimistic kindness or warmth, right up to and including integrity, But all the ones you just listed, when someone has those at a very high level, they have what we call a high hospitality quotient. And that's someone who is actually happier themselves when they make someone else feel better. Now, I think, you know, as well as I do, that has absolutely nothing to do with whether you can cook a great piece of fish. And yet cooking a great piece of fish only gets you to the 49-yard line with our company. We gotta get the touchdown. We gotta get all 100 yards. And the way we're gonna do that is we're not gonna hire someone who's great at fish if they don't also have a high HQ. And it's not just servers in the dining room who have to have a high HQ. It's everybody.

Everybody. Yeah. Is that just like a gut feel through having a regular conversation? Are there specific questions? Is there a style? Because gut feel could work for you, but maybe again, how does that scale? So how do you teach that to somebody else?

No, you're absolutely right. And I'm pretty sure my IQ is way lower than yours, but my HQ is pretty high. And that can be a liability, by the way, when you're hiring. And the reason having a high HQ can be a liability when you're hiring is that when I'm interviewing, it shouldn't be my job to make you feel better. It should be my job to assess how I think you're going to make our staff members feel.

Yeah.

How you're gonna make our guests and our customers feel. So I really have to kind of sometimes park my own HQ at the door when I'm interviewing. But just because I have a high HQ, I can actually— I can almost smell someone else with a high HQ around the corner. I just sense it. I feel it. But that, as you just said, is not scalable. So we've come up with a number of questions that actually start to get to some of the emotional skills that we're looking for. And, you know, I would never ask somebody, by the way, are you self-aware? Because they'll say, yes, of course I am. But I might ask someone, what's the greatest misperception other people have about you? If you cannot answer that question, if you're not self-aware, because you first have to know, you know, you have to say, well, I'm really this, but I'm putting out there that I'm actually that. That question is a great stepping-off point to get to know somebody. I also think it's, it's an important part when you're interviewing somebody and you get a sense pretty quickly whether this person is a possibility, pretty quickly.

And so you're already beginning the process of leading that person even in the conversation. So you have an opportunity to let them know. So here's an example. When I'm hiring a chef, And I already know that they're a really good cook. What I really care about more than anything is this: in an interview, what's the feedback loop going to feel like when I give this chef feedback on their cooking? Are they going to be defensive about it? Are they going to be grateful for the feedback? Are we going to have a really thoughtful conversation? And by the way, I may not be right with my question and my feedback. But I want to know early on, what is the experience going to be like of leading this person or working with this person? And so right in the initial interview, once I already know that someone's good at the thing they do, I'll really, really want to know what's it going to feel like on a day-to-day basis to solve problems with this person. Because ultimately, that's what business is. It's just solving problems all day long. And it's kind of like I'm sure when you played football or whatever sport you play now, it's hard work.

You come off the field tired and perspiring, but it was fun, right?

Mm-hmm.

And that's what business should be like. It's solving problems. It's hard work. And sometimes you come back exhausted, but you look back and you go, there's no team I would've rather done that with. And that's what I'm trying to gauge in an interview. Is this someone— I hate to say going to battle, that doesn't sound like I'm in the hospitality business, but That's a battle to win the hearts and stomachs and minds of your guests.

Yep. You write about heart share versus mind share. You need both, but how heart share is so important about how you make somebody feel when they walk through that door. And one of the examples, I'd love you to share this full story, is this letter you got from a member of your team named Caitlin and how Caitlin literally saved somebody's life when she thought she was just answering the phone to take a reservation like any other day. What happened with Caitlin?

Oh my Lord. So she, she heard the person call to make a reservation at, I think it was Gramercy Tavern. And Caitlin was in the process of getting the person's phone number, which we always do when we're taking a reservation. And the person started— she got the phone number out, but she started really halting with her voice. And Caitlin sensed that something was very, very different. And she asked the woman, you know, to stay calm and said, I'm going to call 911 because it sounds like you could use some help. Is that okay with you? And the woman said yes. And Caitlin had the wherewithal to get her address. 911 came. Turned out she was having a hemorrhagic stroke. And if they had not gotten there, she most likely would've died, as you just said. It turned out that she was barely able to speak after that. She got all kinds of training, it turned out. And so this woman stayed in touch with Caitlin to thank her. Caitlin was inspired by this woman's miraculous ability to learn how to speak. She had aphasia, and that inspired Caitlin to go to school. to learn how to provide therapy for people who had aphasia.

When this woman died, which was pretty recently, right before Caitlin wrote me, she left money for Caitlin to pay for that school.

Hmm.

And Caitlin, I hadn't known the second part of the story. Caitlin had left our company during the pandemic. So this all happened during the pandemic, but it was only recently that Caitlin wrote me To tell me how the story ended up. I will tell you that the letter that Caitlin wrote me is in the book, What Could Possibly Go Right? When I read it on audio, I started crying. Just, it was that moving. And that's the real stuff that can happen. That was athleticism in action. This is somebody whose job it was to faithfully take reservations, right?

You wanted—

Ryan wants 4 people at 8 o'clock at Union Square Cafe on Friday night. A really good guest relations person is going to faithfully make that happen. A great hospitality athlete in most circumstances is going to learn enough about Ryan so that those notes go to our maître d' and our maître d' has those dots to connect. So when Ryan comes, he has a great time, but that takes having a high hospitality quotient. What she did was putting that HQ into action to actually save someone's life. That, fortunately, we don't have that example all that often, but it all starts with what her heart told her to do. And you just talked about heart share and mind share. Mind share is the outcome of, of great marketing. And for whatever business you have, you need people to know it exists. Better still, you want it to be on the tip of people's tongues. You know, when they're considering which podcast should I listen to, you want Ryan's podcast to be right in the, the top of their, their mindshare. But now we want to take it even further than that. Now that we've got your mindshare, we want to put our hospitality to work to earn your heartshare.

And when we earn your heartshare, which is the people, they don't just know about your podcast, they don't just know about my restaurants. They don't just know about my book. They go, I love that podcast. I love that. And they start telling everyone else they know that they have to go do that, that our work actually makes someone's life better. That's why we do it.

How cool is that story? And there's tons of them, but how does it make you feel when you hear something like that? Because My first question was like, how does she know to do that? And it feels like it's because it's embedded in the culture. This is how we do things here. We don't just say, oh, I can't really hear the person. I'm going to hang up because they can't talk. They think, wait, could I help this person? And they're not even in the doors yet, right? You think, oh, hospitality is about once they're in the restaurant, let's wow 'em a little bit. It's a competitive market. We got to do what we got to do. It's way beyond that. That Caitlin story and others, it's, it's all about how we make people feel. It's all about taking care of people. And so it's just got to be such a rewarding feeling that it is. Yeah, it is.

And it's, it gets back to another thing that you brought up earlier, which is as we hire people, and one of the things we're interviewing for is caring empathy, the unique ability to put yourself in the other person's shoes and ask, how would I want to be treated in this situation? And that allowed me to come up with an idea, which I put in the book, What Could Possibly Go Right? Which is the difference between the golden rule that I was brought up with, which is good, which is do unto others as you would have others do unto you. That's, that's pretty good, right? But the golden rule of hospitality is do unto others as you believe they would want done unto them. Implicit in that subtle but powerful difference is that it treats each of us as individuals. It's one size fits one. Service is one size fits all. It's how we do things for everybody all the time. Hospitality is how we do things Custom just for you. Yeah.

I feel like this type of culture is built through a series of moments and inflection points. And I think one of those moments I was reading about that maybe you could share is this Gramercy Tavern all-staff meeting, I believe it was 1994 or 1995, where— was it a loyal guest? They described like a terrible night. It was like, this is all bad.

And you—

so you gathered everybody around to have a conversation about that as well as this isn't how we do work here. What happened that night and what happened afterwards that, that helped you get it back on track?

Do I have to tell this story? It just makes me so upset every time I think about it.

I think it has a happy ending.

So it did have a happy ending, and then it actually led to some really important thinking that was a breakthrough for our whole company. But it was painful. And I guess that's when a lot of the good stuff comes from painful experiences. So this was very soon after I had opened Gramercy Tavern. At that point, I had had 10 years of experience operating one restaurant, my one and only Union Square Cafe. And this was the first time I had to actually lead by using my words as opposed to just embodying the behaviors I wanted to see. I never did that for the first 10 years. I was a very immature leader. You know, if you saw Danny doing it, that's how you should do it. Once there were 2 restaurants, this was the first experience I had scaling. And therefore the first experience I had scaling how we do things around here, how we do business. Wherever I was, I was not at the other place. And when I went to Gramercy Tavern, the brand new restaurant, and a woman pulled me aside after her meal, and she was a Union Square Cafe regular, and she said, you know, what just happened here was inexcusable.

It never would've happened at Union Square Cafe. So immediately I was crushed. I said, what did we do? And she said, well, it started when you cooked my salmon well done. Everyone at Union Square Cafe knows I like my salmon rare. I ordered it rare here. And the first thing I said to myself was, well, I don't feel that bad that a cook made an honest mistake. But she kept talking, fortunately, and she said the problem wasn't the cook's mistake. At Union Square Cafe, The server who knows I like my salmon rare, who took my order rare, would have seen that it had come well done, would have discreetly come over to me without the rest of my guests seeing, and would have discreetly taken it away, brought a cup of soup in its place so that I could have something to eat and my guests wouldn't wonder why I was eating nothing, and therefore they could keep eating. They would have cooked the salmon the right way without saying anything. And then at Union Square Cafe, they probably would have even taken the salmon off the bill. You know what your guys did here?

Not only did they not come over while I picked at my salmon, but at a certain point, your manager came over, took it away, and gave me a coat check in exchange, telling me that the rest of my salmon would be waiting for me at the door. And then they left it on the check, and she said, I'm just appalled. This never would've happened. So I got sick just hearing this story because I had not used my words. I hadn't taught my staff that we always lead with generosity. I had always been doing that, but now I had a second restaurant. And this gets to the core of your earlier question about scaling culture. If you don't have language, you cannot teach. And I did not have language and I was not teaching. So I did call an all-staff meeting. I think it was maybe even the next day. It was a Saturday before our lunch service. And I brought everyone in and I told them, from this moment on, this is how we're going to be doing business. And that was the day that I named for the first time what I would call enlightened hospitality.

And I said, we are in the business of serving hospitality and We lead with generosity. We are in business for tomorrow dollars, not today dollars. You actually, by charging that woman for a piece of salmon that she clearly did not like because you were afraid that she was trying to rip us off and that if you had taken it off the bill, she would come back again and try to— I mean, that's insane. It's just like, where's the charitable assumption? Where's the sense that— Maybe she wasn't trying to rip us off. Maybe we, we made a mistake and overcooked it. So I named Enlightened Hospitality. I said, the name of our game is hospitality. And from now on, the first customer we have here is you. The way you treat each other with a generous spirit and with a charitable assumption and doing thoughtful things for each other, that's first.

Mm-hmm.

And then you're gonna do extraordinary things for our guests. And then we're gonna do extraordinary things for our community and our suppliers. And I believe if we do all those things, we're gonna have more money left over for our investors. And guess what happens when we have happy investors? You guys are gonna get raises.

Mm-hmm.

And you're gonna get promotions. If you break this anywhere, starting with how you care for each other, it's not gonna work. That was the day that I came up with that idea, and it came from the pain of doing it so wrong the day before with how we treated this guest. I'd like to meet her sometime. I wish I could remember who she was, but she gave us a gift by complaining. She really did.

If you don't have language, you cannot teach. That's so good and so useful because, yeah, like, it's like a lot of people, you're a great player and you go out and you just keep playing even though now you're in a leadership role. Well, it's time to be a player coach and/or a coach/general manager/leader. I think a lot of people who are excellent at their craft can identify with that, Danny, and realize, oh, it's now I got to do more. It's about finding my voice. It's about having language so that I can teach. Another example of a conflict I thought was good to read about was in chapter 15, which is titled, How Could You Not Know? How Could You Not Know? And there's a story there, but I like Focusing on what it is to be nice versus what it is to be kind. There's a difference. Can you tell me more about this difference between nice and kind and how you also learned that one the hard way?

Yeah, I continue to learn that one the hard way. You know, I'm a proud native St. Louisan, and I think that there's a sense that people from the Midwest are nice. And I think nice is not a bad thing in the world of hospitality, but Sometimes the word nice, I think, is a way to avoid addressing problems.

Mm-hmm.

Which is, I'm just gonna keep things nice. And I think there is a big difference between nice and kind. I think kind actually means I'm on your side and I'm gonna, I'm gonna be kind to you. But one of the ways I'm gonna sometimes be kind to you is to hold up the mirror and give you the opportunity to improve. It's not being kind, and it's not even being nice if you're not measuring up and I just let that go on. That's not being kind. So I do think that kind involves the courage to give people honest feedback in a way that is on their side. It's not honest feedback that demoralizes people. And by the way, sometimes it's really, really hard. One of the stories in What Could Possibly Go Right is something that went very wrong for so many of us, which was the pandemic.

Mm-hmm.

It was really, really hard to be told by the government, for good reason, you cannot be in business because this COVID-19 is not only incredibly highly transmissible, and we were losing thousands and thousands and thousands of people in New York City. I think our city got it worsened first. And so we could not be in business. We couldn't, we couldn't offer hospitality. It, it almost, it took away all of our tools. And it was so hard that we were still paying rent. Granted, we got some, a little bit of rent relief in most of our places, not all of them, but the insurance company was still charging, the landlords were still charging. And so we had to lay people off. That is not a nice thing to do. But the kind thing to do was to do it one by one with actually several hundred people. No one got laid off by tweet. No one got laid off by, you know, a big mass email. Everyone got spoken to by their boss. And it was a very hard thing to reconcile. How can you be a people-first company And then lay all these people off.

I had to come to grips with the fact that ultimately, if we went out of business, that wouldn't serve anyone. On the other hand, if we could get back into business once this thing was over, and we all assumed someday it would be over, then we would be able to be in a position to hire most of these people back.

Shake Shack, man, it's incredible. I feel like anytime I see one, it's—

I like the way that this question started. Shake Shack.

That's good. I just want to hear you tell the origin story of it and how this whole thing got going, why it got going, how it helped other parts of your business.

Well, I've got to really credit— I've got to really credit what we just spoke about, enlightened hospitality, because— so this goes back to, um, 2001. We had a hot dog cart in Madison Square Park. that was part of a piece of art that we had helped to bring to Madison Square Park for the purpose of bringing people to the park. Why? Why do we do that? Well, we wanted to have art to take care of our community. That was part of enlightened hospitality. Madison Square Park was the front yard of 2 of my restaurants, Eleven Madison Park and Tabla. Take care of your front yard. A rising tide lifts all boats. That's what I was thinking about.

Yeah.

Take care of your community. And when the artist that we brought in said, hey, listen, I've got this crazy idea for a piece of art. We've got 4 taxi cabs on stilts, and I'm gonna decorate a hot dog cart that I want underneath it, and I need somebody to operate the hot dog cart. And, you know, I went to my teammates and I said, you guys, we have to do this. They said, you're crazy. We're too busy running 11 Madison Park, Tabla, Gramercy Tavern, Union Square Cafe. We don't have time to operate a hot dog cart. We don't even know what we're doing. And I said, no, no, no, you don't understand. Let's imagine what could possibly go right.

Hmm.

That's kind of the first big time I put that to— actually, I've put it to use even before that, but what could possibly go right was this. I said, let's put enlightened hospitality in action. Someone's gotta work that hot dog cart. Let's take our coat checkers who otherwise aren't gonna get to come to work till the weather gets cold in late October. Let's give them a job all summer. That's taking care of our people. Number 2, let's serve not only great hot dogs, but let's serve Chicago-style hot dogs. Why? Because they've got 8 classic toppings. And let's see if our 4 coat checkers can remember everybody's special way they like it. Ryan's the guy that likes everything except pickle relish. Danny likes double sport peppers. Jill can't stand mustard. Let's see if we can actually show that hospitality is not just for fancy restaurants, but it's for everything. And lo and behold, that hot dog cart would attract, you know, hundreds of people. Literally, the line would go through Madison Square Park. And we did that in 2001. We lost a fair amount of money be— there's a reason hot dog carts don't have 4 people working it.

We did it again in 2002. The community said, even though the art's down, please bring back our hot dog cart. Now, I love that when they said our hot dog cart, I said, we're there. We got that heart share, right? They felt shared ownership. Brought it back again in 2003. Now, having lost money in the first 2 years, I came up with a great idea in year 3, 2003. I said, this year, because we only did it during the summer, I said, we're going to donate all of our profits to the Madison Square Park Conservancy. That felt like a good bet because we kept losing money. Wouldn't you know, in year 3, just by saying that, we made $7,500. And that's when I got the idea, let's turn this hot dog cart into a permanent kiosk. And that became Shake Shack. And I had read this great book called The Cathedral Within by Billy Shore, which was all about creating community wealth. And I wanted to, I wanted to put his theory to work that if you want to take care of a community, Historically, the ways that this happened were either philanthropy on one hand, or money from politicians.

You know, the, the government earmarks some money for this. His thesis was you can actually use capitalism to create community wealth. And so I took a page out of that book, donated this kiosk, which cost $750,000 to Madison Square Park. So Madison Square Park would be the landlord. Whereby we would own the business, but they would own the building. And therefore, if this worked, it would not only attract people to using the park, which would keep it safe, but a percentage of every sale would go right back into the park to keep it beautiful, safe, programmed, et cetera. Called it Shake Shack. Never had any dream of having a second one, never mind Today we have 700 of 'em in 22 countries. It's a public company. We didn't even open a second one for 5 years. But to this day, Ryan, that first Shake Shack in Madison Square Park pays just shy of $1 million a year in rent to that park.

Wow.

So you wanna talk about what could possibly go right? A great piece of business for a not-for-profit public-private partnership, Madison Square Park, which is as beautiful as it could be. We got a nice business out of it. Thousands and thousands of jobs have been created and launched, and I think it's made a whole lot of people happy who happen to like burgers and shakes.

Yeah. Incredible. What a story, Danny. I know we gotta run, man, but I'm curious. This is called the Champagne Question from my friend Jason Gaynard. He's a huge fan of your work as well. We're fast forwarding one year, exactly one year from today. You're surrounded by all the people you love and you're popping bottles. You're celebrating like crazy. I'm curious, what are you celebrating?

We're celebrating the fact that my new book, What Could Possibly Go Right, actually meant something to a lot of people. And that, that they understand that while I wrote it selfishly to teach myself, because that's— I learn by writing. that some of these lessons I've learned while scraping my knee along the way were actually useful for them. And if I learn that, that will make me feel like it was all worth it.

So good, man. The book is called What Could Possibly Go Right? The Essential Journey to Scale an Enduring Culture. The reason I love it is because it's, it's very, very portable to business leaders, to sports teams, certainly to people in the restaurant and hospitality industry, hotels, but Your storytelling ability is, is as good as it gets, and it's also very practical and entertaining. So thank you for doing it, man, and thank you for being here. Uh, this is so much fun, and I would love to continue our dialogue as we both progress, man.

I'm really grateful, and thank you for all the fantastic questions. I'm just gonna throw in one thing, which is that 100% of your listeners have either eaten in a restaurant or worked in a restaurant. I happen to have been working in the restaurant business for many years. That's the laboratory for these stories. But as you just said, these stories, it could have been a ball bearing factory. It's just that most of us haven't eaten in one before.

It's so good. I appreciate it, man. I look forward to— hopefully it would be fun to do this again next time in person, man. It would be great.

That'd be great. Thank you so much, Ryan.

It is the end of the Podcast Club. Thank you for being a member of the end of the Podcast Club. If you are, send me a note, ryan@learningleader.com. Let me know what you learned from this great conversation with Danny Meyer. A few takeaways from my notes. Think about your entrepreneurial athleticism filter. Danny hires leaders for optimistic warmth, curious intelligence, work ethic, empathy, self-awareness, integrity, and the ability to connect dots before your next hire or promotion. Write down a few of the non-resume traits that actually predict success on your team and build an interview question for each. An example of this, if you value self-awareness like Danny does, what's the greatest misperception other people have about you? Good one. And then do the nice versus kind audit in your own life. Danny talks about the difference between being nice, where you kind of avoid conflict, and kind, where you care enough to tell somebody the truth. Identify a conversation or two where you've been putting off because you'd rather be nice, which is the feedback, maybe you're softening, or the expectation you haven't set, and go have that kind conversation now. Now, one of my favorite quotes of all time, business, like life, is all about how you make people feel.

It's that simple. And that hard as a leader. It's all about how we make people feel. It sounds simple, but it's very hard in practice. It's worth it to think about every single day. How are we making the people we're serving feel? Once again, I wanna say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of The Learning Leaders Show with Danny Meyer. I think He'll help you become a more effective leader because you continue to do that. And you also go to Spotify, Apple Podcasts, subscribe to the show, rate it, hopefully 5 stars, write a thoughtful review. By doing all of that, you are giving me the opportunity to do what I love on a daily basis. And for that, I will forever be grateful. Thank you so, so much.

Talk to you soon.

Can't wait.