It was starting to get under my skin when people would say, 'Yeah, hospitality is great for fancy restaurants.' And I'm going like, 'No, hospitality works in all walks of life. If you have employees and you have competitors and you have customers and you have a community, what stakeholder do you know who would rather not feel better?'
Welcome to Gray Matter. I'm Dean Kelly, founder, chairman, and CEO of Concello. I've spent the last 30 plus years advising the CEOs who are leading the world's top companies. If there's one thing I've learned in that time, the best leaders think differently. That wiring, that gray matter, separates the truly exceptional leaders from everyone else. Understanding it is what allows us at Concello to help the best in the world be even better. This podcast exists because the most accomplished leaders agreed to sit down and talk about something they rarely discuss publicly, how their minds actually work.
For four decades, restaurateur Danny Meyer has obsessed over how people feel. He began with a single restaurant in New York and went on to build one of the most influential hospitality companies in the entire world. Along the way, he learned that the quality of the food is essential, of course, but the service and how you make patrons feel is ultimately what they remember most. That hospitality first philosophy shaped Union Square Cafe, his very first restaurant, and guided the growth of all the restaurants that followed, including the Shake Shack phenomenon. During our conversation, we talk about where that philosophy came from and the question that has defined its growth. How do you scale a human feeling? This is Gray Matter. Danny Meyer, welcome to Gray Matter.
Welcome to Gramercy Tavern.
You know, I love it here. Every major event in our family, we celebrated in this restaurant. And I didn't tell you that before we started.
Not in this room. Actually, we like to eat out there. Birthdays, anniversaries, all kinds of gatherings. There's been at least a dozen in my life in the last 20 years. So, I'm very happy to be here because it's my happy place.
Thank you. What I think is most interesting about you apart from all the obvious as we've gotten to know each other is you have done a remarkable metamorphosis almost without knowing it, which is you're obviously known as one of the world's best restaurateurs but also you've become a leadership guru and your book that is soon about to come out is a version of that but Setting the Table was as well 20 years ago and the frameworks that you've put in place for people to sort of run their businesses are universally applicable. So, it's kind of interesting because they're not just about the hospitality space. How did you come up with the concept? Because you have a lot of you've invented your own lexicon.
I came into this entirely by accident. Entirely. I write books when I write them, which as you just said is once every 20 years. So, obviously I'm not all that prolific. But I write books to try to understand myself what's working. You know, so many things come to me intuitively, but as a leader, you cannot teach intuition. And so, by writing words down for myself and then sharing them with other people, what was always intuitive becomes intentional. And then I can teach from it. And you know, before I had written Setting the Table, I had written a couple cookbooks. Union Square Cafe cookbook and then Second Helpings from Union Square Cafe, a cocktail book called Mixellatory. So those were all recipes and recipes are to share what you know how to cook with others so they can cook those same dishes or cocktails.
Setting the Table and What Could Possibly Go Right are really recipes for how we do business. You know at the beginning I was concerned about should we share our playbook with other people and then I said to myself you know the recipe cookbooks never put us out of business because other people were cooking our food. Why would it put us out of business if other people took some of the lessons, most of which are lessons I've learned by making mistakes?
You know, it's interesting because so much of your story has been recounted and there have been hundreds of interviews. You've done so many things over the years, but what I'm really interested in is the how and not the what. And by that I mean, the how your brain works because it's clearly very differentiated. And you have this innate sense probably from birth of how to read a room. So it's EQ driven. I even saw it when I was walking into the restaurant and you were walking around and what you were doing and what you were fixing and what you were touching and who you were talking to and it only took a minute and a half. But right there was an encapsulation of all those things. Is it fair to say you were born with that?
Well, if we can answer that question, I think there can be books written about, you know, nature versus nurture. The truth is, I think it's probably both. My parents were both very social people. My mom moved all around the United States because of her dad. My grandfather's various businesses, St. Paul, Minnesota, Washington DC, Beverly Hills, Highland Park, Chicago.
They're all very different. I went to five different schools by the time I was 18. Thankfully, not because I got kicked out of any, because we moved. And I think you learn when you're put in those positions of adversity, which is how do I get my feet on the ground? Who am I? How do I build a social network that can support me as I grow? You learn some of those skills. And, you know, it's not something that I ever woke up one day saying, 'This is who you are. This is what you know how to do.' But I think I put myself in situations as I got older and older, meaning like 17 years old, 18 years old, 20 years old, where I was always learning to put my own two feet on the ground and find my way and it was working. And I'm just really lucky that I found a profession where those gifts actually are meaningful to what I do.
But there is an attitudinal aspect to it. Like these stories have been recounted but they are sort of apocryphal. When you were a tour guide in Italy, you wanted to be the most successful tour guide so people would go away happy. When you were going to do your LSAT the night before you had dinner with your uncle and told you, you know, you can do a restaurant if you really want to do one. So you never actually went after you did the exam to do anything else. You have done things that are completely unorthodox and against people's expectations, but you've done them because you had an ability to sell. I think that's fair. But I also read somewhere that you worked for a Checkpoint Security System where you sold security tags and you were the best salesman in the region.
Excuse me. In the country.
In the country. Forgive me. Oh, forgive me. But you know, it's in all seriousness, it comes from somewhere, right? And what were you exposed to in your life growing up that made you like that as opposed to just, you know, observationally seeing things happen all the time?
I was exposed, I think, to diametric opposites. You know, I saw my maternal grandfather had an amazingly successful business based in Chicago. His father before him, my great-grandfather, started off in America selling peacock feathers on the streets of New York, got thrown in jail because he didn't have a license to do it.
And somehow made enough money selling peacock feathers that he started a clothing company in St. Paul, Minnesota. Good place for overcoats. Gets pretty cold in the winters there. There were a lot of examples of entrepreneurialism and really caring about people and caring about the community. My paternal grandfather who couldn't have been more different. You know, my mom's side of the family were staunch Democrats. My paternal grandfather was not only a staunch Republican but actually ran for Republican office in St. Louis, Missouri. He was responsible for helping to build the great flood wall that has saved St. Louis many, many times, you know. And what was kind of cool about that is that I grew up at a time when we had some, you know, things going on in this country that maybe everybody today thinks we're at the most divided time ever. I was the middle child of three in a very divided family at the time of Vietnam and Watergate. And every night there was an argument or discussion at our dinner table about what right was and what wrong was. And as the middle child, always looking to bring everybody together, not knowing that there was going to be a time a few years later when my parents would actually get divorced, food was the thing that we all had in common. Food was the one element we could all agree on.
And I don't have any question that those early experiences of growing up in St. Louis, which was also the most middle state in the country at that time. Missouri was so purple back then, unlike today. And so I had this amazing opportunity growing up to just consider all sides of everything and figure out who I was and where I was on the spectrum of things. And I think what mattered to me more than anything was I really wanted people to talk to each other. I liked the dinner table because even though we didn't agree, I wanted to be the guy that brought everybody together.
So that whole EQ skill, I've read in some of your writings about your views on hospitality that it's an emotion more than anything else. And you know what you're trying to tap into is the emotional response of the people who walk into your restaurants. The food obviously is the product, but at the end of the day, you either have them at hello or you don't. And is that something that you carry through in all of your restaurants and all of your work or have you decided to sort of homogenize that in any way when you train your people how to do it?
First of all, I love food and I love wine and I love making other people happy with really good food and really good wine. I like design. I like to surround myself with people who have great taste in how the restaurant itself feels. So all that stuff is what we do. And I think what I've learned right here in this restaurant, in fact, right here at this table, I remember having a meeting with our managers back in 1994 after a really bad experience that a guest had had the day before that. And this was a guest who was a regular at Union Square Cafe. And the guest pulled me aside after her lunch here where she was entertaining six other people. And she said, 'That never would have happened at Union Square Cafe.' I said, 'What? What happened?' And she said, 'My salmon came well done.' And I said to myself, 'Well, she's so regular. We know she likes her salmon rare, but I'm sure we overcooked it once.' She said, 'It wasn't the salmon that was the problem. It was the way the staff reacted to it.' She said at Union Square Cafe, the server would have not only known that I ordered it rare, but would have seen when the server checked in on my table that it came well done. Your server didn't even check in on the table here. And then when your server finally came to the table, they ignored it. I ate a little bit of it because what was I going to do? Make the rest of my guests feel uncomfortable? Your server then brings me a doggy bag and says, 'You can pick up the rest of your salmon at the host stand.' That was a good turning point moment because what I realized was that up until that moment, I had never articulated to this team or even at Union Square Cafe what mattered most. At Union Square Cafe, when I only had one restaurant, I was able to model the behaviors that I wanted to see every day.
Right? Once there were two restaurants, wherever I was, I was not at a second. Now, fast forward all these years later, wherever I am, if you add Shake Shack in, I'm not at over 700 restaurants at a given time. So, that's when I really learned I've got to use my words and I've got to codify what matters. So, here's what I would say. What I've learned more than anything is unlike what's happening in the kitchen in back of me right now where the chefs are putting together some pretty complex amazingly delicious foods, my recipe only has two ingredients. Sounds pretty simple, right? It's 49 parts performance, how well you do the thing you do. And it's 51 parts hospitality, how well you make the other person feel. We know how to teach anyone who cares how to do this stuff really well. Is it going to take a long time to learn to cut the mirror the way the chef wants you to? Yes. But it can be taught at Shake Shack. Is it going to take a long time to teach you how to make a milkshake? Yeah, probably about 3 hours. But we can teach that 49% stuff. The 51% how you make other people feel. That's what we have to hire for because I don't know how to teach someone who's otherwise not kind how to be kind. I don't know how to teach someone who's otherwise not curious how to be curious.
How do you do that at scale though? It's interesting.
That's why I wrote my book, What Could Possibly Go Right? Because what's Setting the Table? Remember I told you I write my books selfishly so I can learn. You think I'm doing it for you and for others, no, I'm doing it for me.
Self-discovery. And what I learned from Setting the Table was the power of hospitality to really drive business success or organizational success or home life success. How you make people feel is what they remember more than anything. Because Setting the Table worked so well, we started growing our company. But Setting the Table didn't teach me a darn thing about how to do it at scale. And so the last 20 years where we've gone from one Shake Shack to over 700 where I've closed restaurants for the first time in my life where I've had to figure out how to take the way people love Union Square Cafe and Gramercy Tavern and expand it to places like Maialino and the Modern and know how to open restaurants with M in them. But learning how to scale a human feeling is not easy, but it's doable. And that's really what I wanted to write about and learn about.
I interviewed Mickey Drexler recently and I was telling him about, you know, how you've talked about emotion being at the center of everything and he said it resonated very deeply with him because he feels the same way that if you don't capture the person's emotion when they walk in the room, you really have lost them before you start. And what's fascinating about what you've been able to do is you've created that emotion across different genres, different types of food, different restaurant concepts, different countries, different geographies, and via very different people, right?
Because it is a people business. We don't have robots walking around making Declan feel really good.
Right? That's much appreciated. Reading the room is really what you're teaching your people. And I find in my line of work that actually that's a skill that is very very rare to teach people. It's hard because most people don't know how to do it and most people don't have the EQ to sustain it and the durability that goes with it constantly. They give up on it at a certain point. Whereas that EQ is at the center of what you do. You sell EQ every day. And we call it HQ, which is I think all people who have a high HQ probably have a high EQ, but not everybody who's got a high EQ also has a high HQ. Let me explain what I mean. So, we call it hospitality quotient. And someone who's got a high HQ is someone who is happier themselves when they're making someone else feel better. So having a high EQ, I think you've said it really well, the ability to read the room. And we actually teach some things about how to do that, which I'll be glad to share. But an HQ is a little bit, it's a cousin, but it's different, which is not only can I read the room, but I actually care how I am making all these different people feel, and I actually get fed myself when I succeed at doing that. Now, I've got lots of family members and great friends who I love. They don't have a high HQ. And I can still love them. They're great people. I just don't want to hire them because I need to surround myself with people who when they do the thing they do really well, that 49% are motivated by a desire to make other people feel better. And when you hire people and we have a really high batting average of hiring people with a high HQ and they happen to be great cooks and they happen to be great sommeliers or great bookkeepers or accountants, whatever it is, their motivation is to take great care of their colleagues so that their colleagues can take great care of our customers so that we take great care of our community and our suppliers. Guess who else wins as an outcome? Our investors. When you are hiring someone for that HQ, what are you looking for?
Well, let's get back to reading the room. This was a lesson I learned from someone whose nickname is Mama. She's been a server in our company for over 30 years. I'm telling you the story because Mama came up to me one day at Union Square Cafe a million years ago. And you know what she did before she was a server there all those years ago? She was not even in the restaurant business. She worked for Mary Kay Cosmetics. She said to me, 'Do you know what you do really well?' She said, 'You would be great at selling cosmetics. You do what Mary Kay taught us.' What's that? She said, Mary Kay taught us that every human being in every situation, every transaction is wearing an invisible sign around their neck that says, 'Make me feel important.' And it's invisible. And she said the people who really know how to read the room know how to not only read the sign but see how big the font is or small because some people it's very small font. They can see how brightly it's flashing. I took it a step further and I said Mary Kay was like 95% of the way there. Let me add 5% more. Make me feel important colon by. And if you can fill in that blank, then you're really great. Like if I'm working in the dining room, make me feel important by coming to stop by my table to say hi. Or make me feel important by leaving me the hell alone. Or make me feel important by telling me everything about the glass of wine I just ordered. Or make me feel important by letting me tell you everything I know about the glass of wine. So, we teach a whole class to our team called Reading Signs.
And it's incredibly helpful. There was an article written, I think, in the 1990s or early 2000s in Gourmet Magazine. Remember that one?
And it was written by a terrific writer named Bruce Feiler. And he followed us. He put on the Union Square Cafe shirt back in those days and he embedded himself in the dining room at Union Square Cafe to learn what was it that was making so many people feel so good there. And his article was called 'A Therapist at the Table.'
And he was basically saying that there was something about these people with a high HQ who were so able to read signs that they knew in a customized way how to make every single table get exactly what they needed. And really taught us that in hospitality, one size fits one.
We have a mutual friend who used to work for you in Union Square Cafe many years ago when you started out and she was at our house for the weekend with her husband and she talked about what it was like working with you in the first restaurant, the first week you opened, the first month you opened. And she talked about sort of the dignity and respect and friendship that you inculcated with the people around you and people would have taken the hill for you under any circumstances because you were so kind and nice to them. A lot of that I think from what I've read about you comes from how you grew up and your experience following your dad going bankrupt and you saying I'm going to get this restaurant right before I build another one. So you did it for 10 years and I think the thing that resonates most of all when you got your first review at Union Square Cafe and you went to the guy who wrote it and you asked him to come back and do it again after you'd improved on the things that he found wrong and he did it and gave a completely different review. I mean this kind of stuff doesn't happen in real life anymore. I mean it's just not done that way.
I got to tell you a story because I think I may know who you're talking about. And I think this story may illustrate what you're saying. Before I tell the story though, when I was 22, I had a job in Chicago as the Cook County field coordinator for John Anderson's independent run as president. And he was running as you remember against Ronald Reagan, the Republican candidate, and Jimmy Carter, the incumbent president. And John Anderson at that point was a congressman from Rockford, Illinois. He was really the first candidate I had ever heard who was fiscally conservative and socially progressive, kind of taking stuff I had grown up with a few miles south in St. Louis. And I got a big job in the campaign. I was 22. I had never had anyone report to me in my life. I had had jobs, you know, working for my dad, working in a printing factory in St. Louis, working as a camp counselor at the age of 17. And but I had never had people reporting. The 22 people reporting to me were all volunteers, meaning I couldn't dock anyone their pay. I couldn't give anyone a raise. And so the only currency I had with these volunteers was to constantly talk about the higher purpose of why we are doing this thing. What the mission was, get this guy elected. This is what we had in common. And so that was the lesson I had. And when I opened Union Square Cafe and the friend you're talking about was one of our very first employees there. I ran it the same way. And I realized that anyone who had that kind of talent could have easily taken their gifts to anyone else's restaurant. And therefore, I treated everyone as if they were volunteering. And that's when I was kind of learning servant leadership without even knowing the term of that. But I'm pretty sure the person you're talking about when she was brand new, she was not our strongest server in terms of the 49%. She was learning. She was learning to be a technically proficient server, but she totally had the 51%. Everyone liked working with her. So, one night during our first review from the New York Times, the reviewer comes and the only available table was in her section. And I remember at least two people came up to me and said, 'You're definitely going to move her off that section and move someone who really knows what they're doing.' I said, 'No, we're going with her because that's her job. She'll do it. Let's believe in her.' Like, what could possibly go right? She did a great job. She did a great job. Now, I had a problem that night because I knew that Brian Miller loved Italian wines and I knew that he knew that I knew a lot about Italian wines. And so, I predicted five Italian white wines he would start with. Now, what you don't know is that in those early days, I had no money in the restaurant. And so, I didn't even have enough money to fix our white wine refrigerator. So there was only one refrigerator that was the right temperature. The rest of them, the wines were either too warm or way too cold. So lo and behold, he orders the one wine I had not put in the right refrigerator that's almost freezing. It was like probably 35 degrees. And I also knew that he does not like his white wine too cold. So he orders it from our friend. She said he ordered the Tokai Friulano. And I go, 'Shit, that's the only wine that's not.' So I said, 'You're going to have to dance at his table a little bit because I got to get this wine warm enough for him.' So I stick the wine between my legs to try to bring it down to the 48 degrees it should have been. And she checks back in. She says, 'You know, he needs his wine.' And I'm going, 'Just it should just need like 30 more seconds.' I'm like rubbing it around my hands and everything. I finally give her the bottle. I said, 'Oh.' She takes it to the table. One minute later, she comes back to me with the bottle of wine. He's sending it back because it's too warm. It was not her fault. It was my fault. She did a great job. But I think it's also an illustration of when you believe in your people, it comes back in loyalty. And I'm pretty sure that's probably all these years later what she's responding to.
I'm sure it is. And evidenced by everything else you've done. Talk to me a little bit about your decision to branch out. You know, I used to go to Tabla and I used to go to Eleven Madison, still do. And I know that you eventually sold that restaurant. But to open two restaurants across the street from one another, in fact, and cross a sidewalk,
Exactly. Everybody who knows Danny Meyer knows that you do things with dignity, with humanity, with kindness. You've built businesses the right way. But I thought what was most interesting at that period in your life is that you had waited 10 years to launch another restaurant and then you launched two of them together at the same time. So why did that happen?
Gramercy Tavern had a very rough first year. But it started to click in really really well and I started getting calls. I had already lost my new restaurant virginity at that point because for a while I was never going to open another restaurant. One day a call came in which my assistant almost didn't even give me the message because she knew I had no interest in opening another restaurant. And this was somebody who was calling on behalf of what at the time was the MetLife building. And MetLife at that point was making a big decision. They were right on Madison Square Park which nobody went to. It was somewhere between forgettable and dangerous at that point. But MetLife faced a big decision. They were either going to sell their building, the building which is at 11 Madison Avenue. It's a 29-story building that was built right before the Great Depression.
