Setting the Table

In Setting the Table the author talks about his life as an entrepreneur in the restaurant business, his restaurants, and his philosophy of "enlightened hospitality".

I found Setting the Table an interesting read as it provides a look behind the scenes of some fine dining restaurants, supported by many anecdotes. It makes you want to visit one of those restaurants to experience the hospitality for yourself. On the other hand, the book is a bit repetitive and could have been shorter. I also didn't like the name dropping. And as the book was published in 2006, the more recent developments, like the going public of Shake Shack, are missing. Hence I hope that one day there will be an update...

My notes

Introduction

[...] what really challenges me to get up and go to work every day [...] is my deep conviction about the intense human drive to provide and receive hospitality – well beyond the world of restaurants.

I've learned how crucially important it is to put hospitality to work, first for the people who work for me and subsequently for all the other people and stakeholders who are in any way affected by our business – in descending order, our guests, community, suppliers, and investors. I call this way of setting priorities "enlightened hospitality".

[...] a restaurant has all kinds of moving parts that make it particularly challenging. In order to succeed, you need to apply – simultaneously – exceptional skills in selecting real estate, negotiating, hiring, training, motivating, purchasing, budgeting, designing, manufacturing, cooking, tasting, pricing, selling, servicing, marketing, and hosting. And the purpose of all this is a product that provides pleasure and that people trust is safe to ingest into their bodies. Also, unlike most any other manufacturer, you are actually present while the good are being consumed and experienced, so that you can gauge your customers' reactions in real time.

Business, like life, is all about how you make people feel. It's that simple, and it's that hard.

The First Course

Creating restaurants or even recipes is like composing music: there are only so many notes in the scale from which all melodies and harmonies are created. The trick is to put those notes together in a way not heard before.

Virtually nothing else is as important as how one is made to feel in any business transaction. Hospitality exists when you believe the other person is on your side. The converse is just as true. Hospitality is present when something happens for you. It is absent when something happens to you. Those two simple prepositions – for and to – express it all.

To this day, my surest form of motivation comes from someone telling me I'm not measuring up.

Learning to manage volunteers – to whom, absent a paycheck, ideas and ideals were the only currency – taught me to view all employees essentially as volunteers. Today, even with compensation as a motivator, I know that anyone who works for my company chooses to do so because of what we stand for. I believe that anyone who is qualified for a job in our company is also qualified for many other jobs at the same pay scale. It's up to us to provide solid reasons for our employees to want to work for us, over and beyond their compensation.

In Business

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The Restaurant Takes Root

When I thought about how much time and care I put into choosing where to take myself to dinner, and how often I recommended those places that treated me well (and conversely, how strongly I warned everyone off the inhospitable ones), I knew that treating solo diners as royalty was both the right thing to do and smart business.

I have always felt that solo guests pay us the ultimate compliment by joining us for a meal. Their visit has no ulterior motive (it involves no business, romance, or socializing). These guests simply want to do something nice for themselves, chez nous. Why wouldn't we reward that?

What mattered most to me was trying to provide maximum value in exchange not just for the guests' money but also for their time. Anything that unnecessarily disrupts a guest's time with his or her companions or disrupts the enjoyment of the meal undermines hospitality.

Understanding the distinction between service and hospitality has been the foundation of our success. Service is the technical delivery of a product. Hospitality is how the delivery of that product makes its recipient feel. Service is a monologue – we decide how we want to do things and set our own standards for service. Hospitality, on the other hand, is a dialogue. To be on a guest's side requires listening to that person with every sense, and following up with a thoughtful, gracious, appropriate response. It takes both great service and great hospitality to rise to the top.

[...] the trick to delivering superior hospitality was to hire genuine, happy, optimistic people.

Turning Over the Rocks

There's always a story behind a story if you look for it; and you can augment your success at "hooking" customers by taking the care, time, and interest to look. On my rounds in our dining rooms, I'm constantly turning over rocks, hunting for those details – a guest's impatient look or a glance at a watch, an untouched dish, a curious gaze at our artwork. These details could indicate that someone is bored, impatient, in need of affection, puzzled, interested, or just daydreaming. But each gesture is a potential opportunity for me to visit the table and provide some hospitality.

There is no stronger way to build relationships than taking a genuine interest in other human beings and allowing them to share their stories. When we take an active interest in the guests at our restaurants, we create a sense of community and a feeling of "shared ownership".

Shared ownership develops when guests talk about a restaurant as if it's theirs. They can't wait to share it with friends, and what they're really sharing, beyond the culinary experience, is the experience of feeling important and loved. That sense of affiliation builds trust and a sense of being accepted and appreciated, invariably leading to repeat business, a necessity for any company's long-term survival.

The more information you collect, the more frequently you can make meaningful connections that can make other people feel good and give you an edge in business. Using whatever information I've collected to gather guests together in a spirit of shared experience is what I call connecting the dots. If I don't turn over the rocks, I won't see the dots. If I don't collect the dots, I can't connect the dots. If I don't know that someone works, say, for a magazine whose managing editor I happen to know, I've lost a chance to make a meaningful connection that could enhance our relationship with the guest and the guest's relationship with us. The information is there. You just have to choose to look.

One advantage a restaurant has over many other businesses is that we can get instant feedback while our consumers are consuming our product.

[...] there is simply no point for me – or anyone on my staff – to work hard every day for the purpose of offering guests an average experience. I want to hear: "We love your restaurant, we adore the food, but your people are what we treasure most about being here".

Who Ever Wrote the Rule...?

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No Turning Back

Invest in your community. A business that understands how powerful it is to create wealth for the community stands a much higher chance of creating wealth for its own investors. I have yet to see a house lose any of its value when a garden is planted in its front yard. And each time one householder plants a garden, chances are the neighbors will follow suit.

Know Thyself: Before you go to market, know what you are selling and to whom. It's a very rare business that can (or should) be all things to all people. Be the best you can be within a reasonably tight product focus. That will help you to improve yourself and help your customers to know how and when to buy your product.

It had always been a priority of mine to develop leaders from within, both for the sake of team morale and as an assurance that we'd begin our new restaurants with as much of our preexisting DNA as possible. Letting our business grow on the shoulders of those who've gotten us there provides safety and is its own rationale for growing in the first place.

The 51 Percent Solution

The only way a company can grow, stay true to its soul, and remain consistently successful is to attract, hire, and keep great people.

Our staff performance reviews weigh both technical job performance (49 percent) and emotional job performance (51 percent) – how staff members perform their duties and how they relate to others on a personal level.

People duck as a natural reflex when something is hurled at them. Similarly, the excellence reflex is a natural reaction to fix something that isn't right, or to improve something that could be better. The excellence reflex is rooted in instinct and upbringing, and then constantly honed through awareness, caring, and practice. The overarching concern to do the right thing well is something we can't train for. Either it's there or it isn't. So we need to train how to hire for it.

To me, a 51 percenter has five core emotional skills. I've learned that we need to hire employees with these skills if we're to be champions at the team sport of hospitality. They are:

1. Optimistic warmth (genuine kindness, thoughtfulness, and a sense that the glass is always at least half full)
2. Intelligence (not just "smarts" but rather an insatiable curiosity to learn for the sake of learning)
3. Work ethic (a natural tendency to do something as well as it can possibly be done)
4. Empathy (an awareness of, care for, and connection to how others feel and how your actions make others feel)
5. Self-awareness and integrity (an understanding of what makes you tick and a natural inclination to be accountable for doing the right thing with honesty and superb judgment)

I want to employ people I'd otherwise choose to spend time with outside work. Many people spend a large percentage of their waking hours at work. From a selfish standpoint alone, if that's your choice, it pays to surround yourself with compelling human beings from whom you can learn, and with whom you can be challenged to grow.

It's not hard to teach anyone the proper way to set a beautiful table. What is impossible to teach is how to care deeply about setting the table beautifully.

In restaurants, as in any other business, you stand a much better chance of ending up with the most customers when first you have the best employees.

A business owner can too easily squander the winning edge that comes from fielding a great team by not treating its members with respect and trust, teaching them new skills, and offering clear challenges.

I have found that the people most likely to thrive in our organization are individuals who also enjoy playing team sports. And that's true for any organization in which people depend on others for their ability to succeed.

Chronic lateness (whether it's showing up late for appointments or not returning phone calls or e-mails promptly) is a form of arrogance – "I'm important enough to make others wait for me" – and it puts other team members in a bind because they have to cover for the tardy person or just wonder what's going on.

Broadcasting the Message, Tuning in the Feedback

The minute the business hangs its shingle on the door it is not only open for business, but open to public feedback and scrutiny. Effective businesses remain true to their core, but also know how to hear, respond, and adjust to constructive feedback.

Previous success in any field invites high expectations and scrutiny the next time around. People are less forgiving when a winner falters than they are when an up-and-comer stumbles. But a mark of a champion is to welcome scrutiny, persevere, perform beyond expectations, and provide an exceptional product – for which forgiveness is not necessary.

People will say a lot of great things about your business, and a lot of nasty things as well. Just remember: you're never as good as the best things they'll say, and never as bad as the negative ones. Just keep centered, know what you stand for, strive for new goals, and always be decent.

Constant, Gentle Pressure

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.

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.

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."

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 [absolutely essential] of great leadership.

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.

The moment people become managers for the first time, it will be as if the following three things have happened:

• 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.
• 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.
• The new managers have received the gift of "fire", a kind of power that must be used responsibly, appropriately, and consistently.

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.

You cannot have a dynamic organization unless you are constantly encouraging people to improve, and believing that they can do it.

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.

[...] for most people it's far more important to feel heard than to be agreed with.

[...] the single most powerful key to long-term success is cultivating repeat business [...].

Great bosses own up to their mistakes, insist on learning from them, thank others for pointing them out, and move on.

You cannot be a great leader unless a critical mass of people are attracted to following your lead.

A great leader must repeatedly ask himself this tough question: "Why would anyone want to be led by me?" And there had better be a good number of compelling reasons.

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.

The Road to Success Is Paved with Mistakes Well Handled

[...] business is problem solving.

[...] the worst mistake is not to figure out some way to end up in a better place after having made a mistake. We call that "writing a great last chapter". Whatever mistake happened, happened. And the person on the receiving end will naturally want to tell anyone who's interested all about it. That's to be expected. While we can't erase what happened, we do have the power to write one last episode so that at least the story ends the way we want. If we write a great one, we will earn a comeback victory with the guest. Also, the guest will have no choice but to focus on how well we responded to the mistake when telling anyone we made it. We can, then, turn a mistake into something positive.

I have found that when you acknowledge a mistake and genuinely express your regret at having made it, guests will almost always give you a chance to earn back their favor.

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.

In handling mistakes, our goal is always to alter course to create a positive outcome and an experience that ends up being memorable for the right reasons.

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.

I realized that a critically important role for me, as the leader of the company, was to define upfront what was nonnegotiable. That way, if employees were not comfortable, they could choose to walk.

There's always a solution if you're open to finding one.

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.

The Virtuous Cycle of Enlightened Hospitality

The interests of our own employees must be placed directly ahead of those of our guests because the only way we can consistently earn raves, win repeat business, and develop bonds of loyalty with our guests is first to ensure that our own team members feel jazzed about coming to work. Being jazzed is a combination of feeling motivated, enthusiastic, confident, proud, and at peace with the choice to work on our team.

Suppose that you care for your investors' interests first. You can then potentially make a speedier financial hit for them, but it's not as likely to sustain itself over time. There will inevitably be a revolving door of staff members who, finding themselves in a business culture that does not place their own or the customers' interests ahead of the other key stakeholders, will quickly cease to feel particularly proud, motivated, or enthusiastic about coming to work.

Well before our staff members can extend any kind of meaningful hospitality to our guests, they need to first understand the primary importance of being on each other's die. Mutual respect and trust are the most powerful tools for building an energetic, motivated, winning team in any field. And the most talented employees are often those attracted to companies that can provide them with the most important job benefit of all: other great people with whom to work.

Considering that most of us spend about one-third of our lives at work, it is the value of the human experience we have with our colleagues – what we learn from one another, how much fun we have working together, and how much mutual respect and trust we share – that has the greatest influence on job satisfaction.

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 any guest, the greeting should provide an immediate affirmative answer to the question: "Are they happy to see me or not?" Guests know when a host is insincere, harried, or just going through the motions in greeting and seating them.

It is in any company's self-interest to take what it does best and apply that core strength to an appropriate form of outreach beyond its own four walls.

Context, Context, Context

I have always believed that you can tell as much about a company by the deals it does not make as by those it does. Much of the success we have had has resulted from saying "no, thank you" to opportunities that, while initially compelling, would not have been wise to pursue.

The "Yes" criteria for new ventures:

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

Timing is everything. There is an important art not only to determining whether one should or should not go into a deal, but to knowing whether one might want to go into such a deal somewhere down the road. Especially in cases where timing was the decisive factor in not making a deal, there is value in remaining in close contact with the potential future partner. While it's true that today's potential business deal may later evaporate, it also may one day evolve into something bigger, better, and more richly textured. Patience has its rewards.

The Art of Hospitality

The courage to grow demands the courage to let go. Whenever you expand in business – not just the restaurant business – the process is incredibly challenging, especially for leaders who first rose to the top because of their tendency to want to control all the details. You have to let go. You have to surround yourself with ambassadors – people who know how to accomplish goals and make decisions, while treating people the way you would. They're comfortable expressing themselves within the boundaries of your business culture, and content with the role they play in helping a larger team achieve its greatest potential success.

It's nice to be invited to a lot of parties. But as much as you may want to attend them all, it's important to acknowledge that you can be in only one place at a time, and do one thing well.