Advice Line with Danny Meyer of Shake Shack

How I Built This with Guy Raz

In this episode of the Advice Line, Guy Raz and legendary restaurateur Danny Meyer provide strategic guidance to three early-stage food and

Key takeaways

• Danny Meyer advises moving from 'family values' to 'expected behaviors' to ensure accountability in company culture.
• For canned products like Ponyboy Slings, the packaging should act as a brand ambassador or 'bartender' to convey hospitality.

Main topics

• Company Culture
• Brand Hospitality

Notable quotes

Our culture is ultimately all of the wanted behaviors that we celebrate actively minus all of the unwanted behaviors that we tolerate.

Conclusion

The episode provides actionable frameworks for entrepreneurs to scale

Transcript preview

Speaker 5 (0:00) This episode is brought to you by JustWorks, one platform that handles the complicated stuff, payroll, benefits, global hiring, and makes running a small business 1 million percent smoother. Stick around. I'll tell you more later in the show. Speaker 5 (0:26) Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Leave us a one-minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it. This week, I'm joined by legendary restaurateur Danny Meyer, founder of the Union Square Hospitality Group. Danny, it's great to have you back on the show. Thank you, Guy. If any of you listening have ever eaten out in New York City, there's a chance that you know Danny's story. He is the man behind Union Square Cafe, Gramercy Tavern, The Modern. And he's the guy who took a single temporary hot dog stand in Madison Square Park and turned it into Shake Shack, which is now a global publicly traded. burger empire. Danny, you were last on the show in June of 2020. And for those of you who haven't heard the story, we will put a link to it in the show notes. So check it out. That was a crazy time. The world was sheltering in place and dining rooms were dark. And it certainly felt like a long time ago. I think in 2022, you stepped down to become executive chairman of the Union Square Group. So, first of all, before we get into that, just kind of give us an update about what's kind of going on in your life right now. Speaker 4 (1:55) Yeah, well, I actually stepped up to become executive chairman. A lot of people thought I was retiring, which could not have been further from the truth. And by being executive chairman, which was actually a term I had never even heard of before, it gave me the chance to continue to come into work every day, but to spend more of my time on fewer of the things, but those things that... uniquely lined up with my gifts. So really it has to do with the culture of the company, the culinary product of the company, and then all of the creative outlets we have for new businesses. And that's what I spend my time on. Whereas before I was the guy, you know, hopefully making the trains run on time. I'm just not doing that today. Speaker 5 (2:36) You have a new book out. Congrats. What could possibly go right? A big part of the book is about building an enduring culture. and keeping teams aligned. Can you tell us a little bit about how you think about culture? Speaker 4 (2:51) I think culture at its most basic is a word to describe how we do things around here. And every company, whether it's intentional or not, every family, every fraternity, sorority, every sports team, there's a way they do things around here. I think the biggest way to build culture is to have a common set of behaviors that everybody in the organization understands that they are responsible for. for really emanating. So, for example, I actually traveled a long way. I used to think that what we really needed was family values. And we had those in place for about 15 years. And, you know, I wouldn't argue with any of them, but they weren't specific to our culture. And the other problem with that guy was that it was disingenuous in retrospect to call them family values because a business is not a family. And I noticed that every time we held someone accountable to the point that there just wasn't going to be a place for them on our team going forward, people would go into deep grief because you don't fire a family member. And so the big transition I had was really evolving from family values to expected behaviors is the shorthand where everybody knows exactly what you're talking about. They know exactly what you're expected of them. And this is the equation that I figured out is our culture is ultimately all of the wanted behaviors that we celebrate actively minus all of the unwanted behaviors that we tolerate. Speaker 5 (4:29) Yeah, it's interesting. I mean, Reed Hastings has long had a similar view, right, that a business is not a family. And famously has developed a whole sort of theory of management around this. He was on the show several months ago and we talked about it. So it is interesting, right? And I think that's been evolving in many businesses over the last 10 or 15 years. As you know, hospitality can be an overused term. I mean, everybody, but many restaurant groups talk about hospitality as a key value. Speaker 5 (5:05) How can I as a customer tell in a few minutes whether a restaurant or business genuinely has a culture of hospitality or if it's just talking about having one? Speaker 4 (5:18) Yeah, just look at the staff members when you walk in. If the staff members are focused on doing the job as well as it can be done and they're having fun with each other, if they check both of those boxes, that – joie de vivre, that human energy, is going to become one of the ingredients in your meal as well. I've been to restaurants where everything was technically perfect, but there was no love there. And I don't need to go back to that restaurant. I really want to see both of those boxes checked. By the way, that works for me. I can get on an airplane and watch the two flight attendants pushing the cart up and down the aisle. And tell if they're focused on their job. And if they're having fun with each other, they're probably having a playful experience with the passengers. And at the end of the day, the real job of that airplane is to get me where I'm supposed to go on time and alive. Get me my luggage back. The stuff that's happening in the airplane is the determinant whether that's going to become my favorite airline or not. Yeah. How much is that about management? Probably about 120%. And when it's not happening, it's 150 % because of management. Management should take responsibility when it's not working and I think deserves a lot of the credit when it is working. Speaker 5 (6:34) We Speaker 4 (6:35) actually have a whole philosophy, which we call having a day one mentality. And it's so crucial. It's the reason that Union Square Cafe is 41 years old and Gramercy Tavern is 31 and Shake Shack's 22 and The Modern is 22. It's because... Every day we ask our teams to imagine that it's day one. Remember the pride you felt when there was not a scratch in the floor, not a smudge on the wine glasses, and every plate that came out of the kitchen was as perfect as you could get it because you assumed that on any given night there were three restaurant critics in the audience. And so by taking that day one mentality, even at 10 years or 20 years or 30 years or 40 years, it keeps the restaurants. fresh and improving. And that's the fun I get out of this. Speaker 5 (7:27) Yeah. Well, Danny, we got some callers waiting to ask some pressing questions. Are you ready to take our first call? Yes. All right. Let's bring on our first caller. Welcome to the advice line. You're on with Danny Meyer, founder of Union Square Hospitality Group. Please tell us your name, where you're calling from, and just one line about your business, please. Speaker 2 (7:46) My name is Janelle Bass. I'm from Louisville, Kentucky. Hello. I am the co-founder of Ponyboy Slings. We're a bourbon-based canned cocktail that drinks more like a nostalgic soda. Speaker 5 (7:58) Well, thanks for calling in, Janelle. So Ponyboy Slings, it's a canned alcoholic beverage made with bourbon, but it's more like soda. So what do you mean? It's sweeter. It's easier to drink. Speaker 2 (8:09) Yes, all of the above. So Mike, my husband, and I created this. And we come from the beverage and bartending industry, hospitality background. And we realized in Kentucky, in bourbon country, you know, everyone's drinking bourbon the same, whether it's an old-fashioned, a Manhattan, or it's on the rocks and neat, which is great. We love that. But as bartenders, we were having a lot more fun playing with the flavors of bourbon and blending them into these light. cocktails. Speaker 5 (8:40) And Speaker 2 (8:40) so we have a strawberry, a cream soda, and a tart black cherry. And Speaker 5 (8:45) when you say lighter, are they lower in alcohol? Speaker 2 (8:48) So lower than a typical bourbon cocktail, we're 7%. So we're not like at that 30 or 40 % that an old-fashioned would be at. But more like a beer. Exactly. We say we're the bourbon option for a beer occasion. Speaker 5 (9:01) So when did you guys launch? Speaker 2 (9:03) We launched into market. At the very end of 2023. So first full year was in 24. And Speaker 5 (9:11) where are you selling? I mean, alcohol is highly regulated, right? So are you selling mainly in Kentucky right now? Speaker 2 (9:18) Yes. So we are in Kentucky. We opened Tennessee last year. We have a distributor here. So we're off-premise, you know, retail. And then we're also in a good amount of on-premise with some bars and restaurants. Speaker 5 (9:30) Awesome. And tell us what your question is for us. Speaker 2 (9:34) So I guess like at the end of the day, Danny, I just I love that you're here because there's a lot of synergies, you know, because Mike and I come from the bartending scene. We really cared about what we put into that can. We don't use preservatives. We use real juice. We use local bourbon from Kentucky and bitters. Our conversion rate in store when we do tastings is crazy. It's like between 60 and 70 percent. People taste it, they buy it. And so it's great where we have a little bit of a hiccup, you know, when we're not in the store to be able to do the tastings. And there's the sea of RTDs that you're looking at. You know, how do we get, you know, the person to feel excited about trying us with a package product like ours? How do we build that sense of hospitality into the company itself when we're not actually there? Speaker 5 (10:27) Okay, so you're in Speaker 2 (10:28) the Speaker 5 (10:28) ready-to-drink aisle, and how do you build that sense of hospitality into the brand?