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 www.LearningLeader.com My new book, The Price of Becoming , is a USA Today, LA Times, Success Magazine, and Publishers Weekly bestseller! I think you'll find it useful. Connect with me on Twitter/X: @RyanHawk12 Instagram: @RyanHawk12 Sign up for Mindful Monday (it's free): This is brought to you by Insight Global . If you need to hire one person, hire a team of people, or transform your business through Talent or Technical Services, Insight Global's team of 30,000 people around the world has the hustle and grit to deliver. My guest: Danny Meyer is the founder of Union Square Hospitality Group and one of the most influential restaurateurs of his generation. He built New York landmarks like Union Square Cafe and Gramercy Tavern, and Shake Shack... He's the author of the classic Setting the Table and the new What Could Possibly Go Right? Key Learnings "Business, like life, is all about how you make people feel. It's that simple and it's that hard." "Optimists and pessimists die the same way. They just live differently." Shimon Peres. Danny prefers to live as an optimist. Most people respond to hope. A few will come out of a dark closet hopping on a pogo stick and a few will walk on the shady side no matter what. Most people start the day intending to make it better than yesterday, and they'll follow someone who shows them how that could happen. A growing business needs funding and leadership. It also needs soil. Like a plant needs sun and water and still needs something to grow in. The soil is the culture, and it determines whether anything you plant actually grows. Be explicit about which behaviors you celebrate and which you won't tolerate. Then be relentlessly consistent about both. That's how culture survives you not being in the room. Everyone is watching who gets hired, promoted, and paid. Every time you compromise on either the skills or the character, you send a message that you didn't mean any of the words. Probably unwittingly, but you send it. Curiosity is the behavior Danny celebrates most. If you want a team that treats every day as a chance to be better than yesterday, someone has to actually wonder what could be done differently. Entrepreneurs are upsighted. Danny's word. They only see what's up, only see what could possibly go right, and they look at existing problems that would make the world better if solved. A bad salesperson answers questions you never asked. Danny remembers a shoe store that hauled out everything from the back room regardless of what he wanted. The only two questions that mattered were does it fit and do I like it. A great one gets into your shoes and asks what you'd want. Sometimes they help you get to the question you actually have. There's no job that doesn't benefit from good sales skills, and good writing skills. Entrepreneurial athleticism is the trait Danny looks for in every leader. Talent gets you in the door. Athleticism is dedicating yourself to train plus the mental and emotional mettle to find a way to win. Day one mentality. The day a restaurant opens, nothing is scratched, every door works, nothing is smudged, and you assume everyone might be a critic. Day one of year 10 should be better than the original, because you have ten years of learning. Without that, it only goes backwards. The hiring formula is 49 and 51. Forty-nine percent is how well he thinks you can do the job, which is mostly technical and different for every role. Fifty-one percent is who you are. That 51 percent is Hospitality Quotient. The composite of optimistic warmth, curious intelligence, determined work ethic, empathy, self-awareness, and integrity. Someone with a high HQ is happier themselves when they make someone else feel better. "Cooking a great piece of fish only gets you to the 49-yard line." You need all 100, and it isn't just the servers who need it. It's everybody. A high HQ is a liability in an interview. Danny sometimes has to park his own at the door, because his job isn't to make the candidate feel good. It's to assess how they'll make the staff and the guests feel. Never ask if someone is self-aware. They'll say yes. Ask instead: "What's the greatest misperception other people have about you?" You can't answer it without self-awareness, because you have to know both what you are and what you're projecting. When hiring a chef, Danny already knows they can cook. What he's testing is the feedback loop. Will they get defensive? Grateful? He may well be wrong in the feedback, and he still wants to know early what it's going to be like to lead this person. Caitlin took a reservation and saved a woman's life. She was getting a phone number when the caller's voice started halting. Caitlin sensed something was wrong, asked permission to call 911, and got the address. It was a hemorrhagic stroke. The woman survived and had to relearn how to speak. Caitlin was so moved that she went back to school to become a speech therapist for people with aphasia. When the woman died recently, she left Caitlin the money to pay for it. A good employee books the table accurately. A great one changes someone's night, or their life. Danny's point about Caitlin: nobody trained her for that. The culture did. Mind share is what marketing earns. Heart share is what hospitality earns. Mind share means people know you exist and think of you first. Heart share means they love you and tell everyone they know. The golden rule of hospitality is not the golden rule. Do unto others as you believe they would want done unto them. Service is one size fits all. Hospitality is one size fits one. The salmon that changed everything. Soon after Gramercy Tavern opened, a Union Square Cafe regular told Danny what happened was inexcusable. Her salmon came well done when she'd ordered it rare. Danny's first reaction was that an honest kitchen mistake didn't seem so bad. The mistake wasn't the problem. The response was. At Union Square Cafe, she said, the server would have noticed, quietly removed it, brought soup so her guests could keep eating, recooked it properly, and probably taken it off the bill. At Gramercy, nobody came over while she picked at it. A manager eventually took the plate, handed her a coat check, told her the rest would be waiting at the door, and left it on the bill. "If you don't have language, you cannot teach." For ten years Danny led one restaurant by embodying the behavior he wanted. With two, wherever he was, he wasn't at the other one. It was the first time he had to lead by using his words instead of just embodying what he wanted to see. Enlightened hospitality, in this order: Each other first. How the team treats each other, with generosity and charitable assumption. Then the guests. Then the community and the suppliers. Then the investors, who end up with more because of everything above. Break it anywhere, starting with how people care for each other, and it doesn't work. Lead with generosity. You're in business for tomorrow dollars, not today dollars. His staff charged that woman for the salmon because they were afraid she was working an angle. Danny's response: where is the charitable assumption that maybe we just overcooked it? Nice and kind are different. Nice isn't a bad thing, but sometimes nice is how you avoid addressing a problem. Kind means I'm on your side, which sometimes means holding up the mirror. If someone isn't measuring up and you let it go, that isn't kind and it isn't even nice. Kindness takes the courage to give honest feedback without demoralizing the person. Laying people off during the pandemic wasn't nice. Doing it one at a time was kind. Several hundred people, and nobody got laid off by tweet or mass email. Everyone was spoken to by their own boss. Shake Shack started because Danny asked what could possibly go right. An artist needed someone to run a hot dog cart under an installation in Madison Square Park. His team said they were too busy running four restaurants. Danny's argument was that the park was the front yard of two of them, and you take care of your front yard. They staffed it with their coat checkers and served Chicago-style on purpose. The coat checkers had no work until the weather turned cold, so this gave them a summer job. Chicago-style has eight toppings, which let them find out whether four coat checkers could remember how every regular liked it. The point was proving hospitality isn't only for fancy restaurants. They lost money two years running, and the community started calling it "our hot dog cart." Danny heard the word "our" and knew people felt shared ownership. Then he gave away the building. He built a $750,000 kiosk and donated it to the park, so the park owns the building and his company owns the business. A percentage of every sale goes back into keeping the park beautiful and safe. That first Shake Shack still pays just under a million dollars a year in rent to the park. Danny's champagne moment a year from now: that the book actually meant something to people. He wrote it to teach himself, because that's how he learns. If the lessons he picked up scraping his knees turn out to be useful to someone else, it was worth it. Reflection Questions Which behaviors does your team know for certain you celebrate, and which do they know you won't tolerate? If you asked five of them, would you get the same five answers? Look at your last promotion. Did that person clear the bar on both the 49 and the 51? What did everyone else learn from watching it? Where are you being nice right now when the situation calls for you to hold up the mirror? Podcast Chapters00:00 Apply for the Learning Leader Circle 01:36 Meet Danny Meyer 03:23 "It's That Simple, and It's That Hard" 05:15 Optimists and Pessimists Die the Same Way 08:47 Culture Is the Soil 12:53 Why He Celebrates Curiosity 15:44 What Sales Taught Him 19:48 Entrepreneurial Athleticism 23:15 The 49 and 51 Hiring Formula 26:10 "What's the Greatest Misperception About You?" 28:32 Testing the Feedback Loop in an Interview 29:44 Caitlin Saves a Life 32:51 Mind Share vs. Heart Share 34:33 The Golden Rule of Hospitality 35:33 If You Don't Have Language, You Cannot Teach 39:10 Enlightened Hospitality 41:35 Nice vs. Kind 43:10 Laying People Off the Kind Way 45:03 How a Hot Dog Cart Became Shake Shack 50:08 The Champagne Question 52:08 EOPC