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

The Learning Leader Show With Ryan Hawk

In this episode of The Learning Leader Show, Ryan Hawk interviews Danny Meyer, the legendary restaurateur behind Shake Shack and Union Squar

Key takeaways

• The 49/51 hiring rule: Meyer looks for 49% technical proficiency and 51% 'Hospitality Quotient' (HQ), which includes empathy, integrity, and warmth.
• Culture as soil: Meyer argues that culture is the environment in which a business grows; if the soil is poor, even the best business model will fail.
• The difference between nice and kind: Being 'nice' can be a way to avoid conflict, whereas being 'kind' involves the courage to provide honest feedback to help others improve.
• Entrepreneurial athleticism: A trait defined by using natural gifts combined with intense dedication and mental grit to find ways to win.
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Main topics

• Enlightened Hospitality
• Scaling organizational culture
• Hiring for the Hospitality Quotient (HQ)

Notable quotes

Business like life is all about how you make people feel.

Conclusion

The episode provides a profound framework for leaders to build endurin

Transcript preview

Speaker 5 (0:00) Applications are now open for our next Learning Leader Circle. You can go to learningleadercircle.com to apply. I thought it would be helpful for you to hear from some current members of my Learning Leader Circle. Here they are. Speaker 6 (0:17) I chose Learning Leader Circle because I wanted to be around really winning professionals, people killing at work, but even better people. Speaker 5 (0:25) Brian does such an amazing job of vetting the group. It's all A players. It is all amazing rock star people who want everybody to become their best and just add value to the group. We Speaker 6 (0:37) have people with agriculture backgrounds. We have people with white collar backgrounds, blue collar backgrounds, people in education. The Speaker 4 (0:43) 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 five, six, seven people, you can have that intimate, that in-depth conversation that allows you to go a little bit deeper. Speaker 3 (0:55) 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. Speaker 1 (1:05) Definitely do it. Don't think twice about it. Know that you're going to 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. Speaker 5 (1:26) To apply for our next Learning Leader Circle, go to learningleadercircle.com. Speaker 5 (1:36) Welcome to the Learning Leader Show presented Speaker 4 (1:40) by Insight Global. I am your host, Ryan Hawk. Thank Speaker 5 (1:46) 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 four decades, he's opened landmark New York restaurants like Union Square Cafe and Gramercy Tavern and Shake Shack, now a global brand with 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 money. 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. And if you 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? Speaker 2 (3:37) 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 got to 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 Speaker 5 (4:27) you wrote it? Cause 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. Speaker 2 (4:36) 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 going to 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 some organization that's going to 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. Speaker 5 (5:15) I love the title and I love this ethos of, I may pronounce the name wrong. Is it Shimon or Shemine Peters? No, Speaker 2 (5:23) you Speaker 5 (5:23) 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? Speaker 2 (5:59) 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 them in a closet. with no light for a year and they'd 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 going to 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 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. Speaker 5 (8:46) 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? Speaker 2 (9:37) 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 two 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. 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 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 because 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 out of bed every single morning and really the reason I wrote this book is I was trying 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. Speaker 5 (12:52) 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 Speaker 2 (13:19) 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 going to be the kind of organization that looks at every day as an opportunity