Setting the Table: The Transforming Power of Hospitality in Business

by Danny Meyer

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.

This becomes a “virtuous cycle.” People who get promotions should earn them not just because they’re ambitious, but primarily because they embody the company’s character traits in abundance. And since they are willing to do everything it takes to perpetuate those ideals, we function as a “hospitalitocracy,” with the entire team reciprocally bound by the same underlying culture of enlightened hospitality.

Stanley set his martini down, looked me in the eye, and said, “So you made a mistake. You need to understand something important. And listen to me carefully: The road to success is paved with mistakes well handled.”

THE FIVE A’S FOR EFFECTIVELY ADDRESSING MISTAKES Awareness—Many mistakes go unaddressed because no one is even aware they have happened. If you’re not aware, you’re nowhere. Acknowledgement—“Our server had an accident, and we are going to prepare a new plate for you as quickly as possible.” Apology—“I am so sorry this happened to you.” Alibis are not one of the Five A’s. It is not appropriate or useful to make excuses (“We’re short-staffed.”) Action—“Please enjoy this for now. We’ll have your fresh order out in just a few minutes.” Say what you are going to do to make amends then follow through. Additional generosity—Unless the mistake had to do with slow timing, I would instruct my staff to send out something additional (a complimentary dessert or dessert wine) to thank the guests for having been good sports. Some more serious mistakes warrant a complimentary dish or meal.

Why wait for a second or third letter from somebody who has now cc’d his report of your fallibility and culpability to the Chamber of Commerce, the restaurant critic of the New York Times, and the Zagat Survey? Instead, take the initiative: 1. Respond graciously, and do so at once. You know you’re going to resolve the mistake eventually. It’s always a lot less costly to resolve the matter at the outset. 2. Err on the side of generosity. Apologize and make sure the value of the redemption is worth more than the cost of the initial mistake. 3. Always write a great last chapter. People love to share stories of adversity. Use this powerful force to your advantage by writing the closing statement the way you want it told. Use all your imagination and creativity in thinking about your response. 4. Learn from the mistake. Use every new mistake as a teaching tool with your employees. Unless the mistake involved a lack of integrity, the person who made it has actually helped your team by providing you with new opportunities to improve. 5. Make new mistakes every day. Don’t waste time repeating the old ones.

I got Tabla’s general manager, Randy Garutti, involved. “Randy,” I said, “this woman is going to tell the whole world that she left her wallet in a taxi while she was on her way to Tabla. I know we can create a legend out of this somehow.”

Are you in it for keeps? It’s almost always worth bearing a higher short-term cost if you want to win in the long run. I’m convinced that you get what you give, and you get more by first giving more. Generosity of spirit and a gracious approach to problem solving are, with few exceptions, the most effective way I know to earn lasting goodwill for your business.

Stanley Marcus was absolutely right. By viewing mistakes as opportunities to repair and strengthen relationships, rather than letting them destroy relationships, a business is paving its own road to success and good fortune. And mistakes are the best form of job security I know of. Just as with waves in the ocean, you can bet your bottom dollar that there’s always another mistake behind the one you’re confronting at any time. So long as you’re determined to distinguish yourself and your company by how well you approach mistakes, you’ll always have steady work.

THERE ARE FIVE PRIMARY stakeholders to whom we express our most caring hospitality, and in whom we take the greatest interest. Prioritizing those people in the following order is the guiding principal for practically every decision we make, and it has made the single greatest contribution to the ongoing success of our company: Our employees Our guests Our community Our suppliers Our investors

We also conduct a monthly dining-voucher program for all staff members with at least three months’ tenure that allows them to dine at any of our restaurants using a credit. The catch is that in exchange for the credit, employees must answer a detailed questionnaire about their dining experience.

In the course of their calls, our reservationists must continuously listen to themselves and ask: am I being perceived by this caller as an agent or a gatekeeper? An agent makes things happen for others. A gatekeeper sets up barriers to keep people out. We’re looking for agents.

In every business, there are employees who are the first point of contact with the customers (attendants at airport gates, receptionists at doctors’ offices, bank tellers, executive assistants). Those people can come across either as agents or as gatekeepers. An agent makes things happen for others. A gatekeeper sets up barriers to keep people out. We’re looking for agents, and our staff members are responsible for monitoring their own performance: In that transaction, did I present myself as an agent or a gatekeeper? In the world of hospitality, there’s rarely anything in between.

For the next two years, I took on the responsibility of chairing New York’s Taste of the Nation, and I loved it. I convinced the city’s best chefs to participate by telling them, “I don’t want you to do this unless you’re fully committed to fighting hunger.” Interestingly, the more chefs I asked not to participate unless they were doing so because they cared about the cause, the more chefs chose to commit themselves.

Soon thereafter, American Express invited me to do a test radio spot that would be broadcast in the Boston area. They hoped it would defuse the still explosive situation with Boston’s merchants. They assured me that the spot would raise the profile of Union Square Cafe. But mainly they wanted me to tout the Amex card for bringing my restaurant “a higher quality, higher-spending customer than any of the credit cards.” I said, “No thanks.” That message would sound offensive to those guests of ours who chose to use other charge cards. But I made a counteroffer. “What I would do, and do very proudly,” I said, “is talk about American Express’s incredible generosity in supporting Share Our Strength. For your company to be partnering with our industry for the purpose of fighting hunger is an extraordinary story, one you should be proud of, and I’d be delighted to tell it.”

freaking amazing story

The greatest gift I have received from Share our Strength founder, Billy Shore—beyond his friendship—is his brilliant notion that creating community wealth is the most effective way to achieve lasting social change. Instead of relying exclusively on individuals to make charitable donations or on governments to make grants or subsidies (the two traditional—and self-limiting—means of fund-raising), Share Our Strength has encouraged the corporate community to create self-sustaining, for-profit businesses and programs that in and of themselves add consumer value, build business, and do the community some lasting good. This creates a virtuous cycle that links the corporate interest in earning profit to the consumers’ desire to affiliate with brands that embrace social causes they believe in.

I’ve repeated that model with each subsequent business and have accepted that my grandfather’s advice was sage. By taking on the right kind of outside investors, we’ve not only given our business the fuel necessary to grow, but enlarged our spheres of information, advice, wisdom, contacts, and influence. The fiduciary responsibility I feel toward our investors (both managing partners and outside investors) has also sharpened my own discipline as a businessman to provide a healthy, sustainable return on their investment.

THE “YES” CRITERIA FOR NEW VENTURES The opportunity fits and enhances our company’s overall strategic goals and objectives. The opportunity represents a chance to create a business venture that is perceived as groundbreaking, trailblazing, and fresh. The timing is right for our company’s capacity to grow with excellence, especially in terms of our having enough key employees who are themselves interested and ready to grow. We believe we have the capacity to be category leaders within whatever niche we are pursuing. We believe our existing businesses will benefit and improve by virtue of or notwithstanding our pursuing this new opportunity. We feel excited and passionate about this idea. Pursuing it will be an opportunity to learn, grow, and have fun! We are excited about doing business in this community. The context is the right fit. Our restaurant and our style of doing business will be in harmony with its location. An in-depth pro forma analysis convinces us that it is a wise and safe investment.

Another serious consideration is that wherever and whenever we open a new restaurant we must have the talent and capacity on all levels to meet our guests’ expectations for high quality. And if our existing businesses are not constantly improving, then expansion loses all of its merit. Think of a balloon: it isn’t really a balloon until it’s inflated, but as soon as you blow too much air into it, it’s going to pop. Having seen firsthand the consequences when my father expanded his business too rapidly, I am wary of blowing too much air into our balloon. Often, when businesses fail in our industry it’s because of too much expansion; quality suffered and the organization couldn’t handle it.