Enlightened Hospitality

Eric Rosenfeld - Oct 2019

Danny Meyer came terrifying close to pursuing a career as a lawyer. In the early 1980s, Danny moved to New York City and took the LSAT exam. The experience of taking that test caused him to quickly decide that he really did not want to be a lawyer. His parents were not pleased. Instead, Danny took a job as a host at an Italian seafood restaurant. 2 years later, at age 27, he used all his savings to open his first restaurant: Union Square Café.

Over time he would develop a distinctive style of hospitality from conceiving and managing dozens of bold and innovative restaurants, cafes, and bars from Gramercy Tavern to Shake Shack. Danny Meyer’s restaurants, mostly in New York, but also worldwide, have collectively earned 28 James Beard Awards. Remarkably, only 2 of his dozens of restaurants have gone out of business.

Over his career as one of America’s most influential restauranteurs, Danny Meyer formed a set of guiding principles for business and life that he calls “Enlightened Hospitality.” Business, like life, is all about how you make people feel.

There’s a great Maya Angelou quote: “I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

A few of Danny Meyer’s principles for promoting Enlightened Hospitality:

Nothing is as important as how both employees and customers feel in any transaction. Service should be a dialogue, not a monologue. Enlightened Hospitality is doing something for someone, not to someone. Meyer heretically prioritizes his employees over his customers and investors. His premise is, if you hire naturally empathetic people – people whom workplace psychologist Adam Grant would call “givers” – and invest meaningfully in their personal and professional growth, then your employees will share their goodwill with your customers, resulting in increased loyalty and revenue. This yields more resources to invest in your employees’ personal and professional growth, resulting in a virtuous cycle of goodwill, loyalty, and revenue. 

Hire individuals with a high HQ, or hospitality quotient. When evaluating potential hires, Danny Meyer gives 51% weighting to emotional intelligence, and 49% to technical and professional skills. Some of the emotional skills that he looks for in employees and partners include:

• Being kind, hopeful, and optimistic

• Intellectually curiosity

• Having passion and a strong work ethic

• Empathy

• Self-awareness

• Integrity
  
  

Strive for shared ownership – when guests talk about a restaurant as if it’s theirs, they can’t wait to share it with friends.

Give your employees a higher purpose beyond a paycheck. Consider the thought exercise of treating your employees as if they were volunteers. Meyer’s restaurants have banned tipping. This helps reduce the demoralizing pay gap between service and kitchen staff and fosters a sense of teamwork.

Solicit criticism from your employees and customers at every opportunity.

Support your community. Create value for all your stakeholders, including local community-based organizations. Being generous can carry a high short-term cost, but almost always pays off in the long run. 

In 2017, Meyer organized a private equity fund to invest in restaurant innovators who share his values and approach to business and hospitality. The fund – Enlightened Hospitality Investments –

raised $200M and aims to select just 5 promising fast-casual restaurant concepts and support them in going national and global. Salt & Straw, our quirky Portland-based ice cream company, was selected as one of the 5. Earlier this year, Danny Meyer’s fund and the Salt & Straw founders invited the Oregon Venture Fund to join their investor group. Our investment is helping Salt & Straw expand nationally, while following the principles of Enlightened Hospitality Danny Meyer developed over his career.

At the Oregon Venture Fund, we are also striving to practice Enlightened Hospitality with our investors and the local entrepreneurs we back.  A few examples…

• We strive to be a purpose-driven organization. That is, to enable Oregonians to invest in Oregonians and to build a new generation of growth companies creating local wealth and local jobs.

• We strive for shared ownership and shared success. My 5 partners and I are equal owners of the Oregon Venture Fund, our cash compensation is nearly equal, and we share equally in our funds’ net profits. We only make money when our investors and entrepreneurs make money. 

• We solicit feedback at every opportunity from our investors. Additionally, we may be the only venture fund that regularly surveys and gauges the satisfaction of our entrepreneurs, including the use of a net promotor score. In case you’re wondering, we still have room for improvement in how we support the growth of our portfolio companies. Entrepreneurs are rightfully ruthless and exacting with their expectations.

• We believe in supporting our community. We help place our investors on the boards of our partner organizations, such as university advisory boards, economic development organizations, and non-profits and associations supporting local entrepreneurs. And OVF has established a community giving fund at the Oregon Community Foundation that enables our investors and entrepreneurs to donate a portion of each windfall for the benefit of our broader community. 

Perhaps there are ways for you to incorporate elements of Enlightened Hospitality with the businesses and organizations you are involved with. After all, your clients and customers may forget exactly what you said or did, but they will likely never forget how you made them feel.

Union Square Hospitality Group’s Family Values and How to Live Them

Excellence: Doing what needs to be done, as well as it can possibly be done

• I bring my personal best to my work for the purpose of helping my team achieve superior results.

• I demonstrate a hunger to learn even more about myself, my profession and my world.

• I actively solicit feedback to continuously improve and grow

Hospitality: Doing all that can be done for others – and more than is expected – in thoughtful ways that
let people know you are on their side.

• I am aware of, and own, how my behaviors impact others and make them feel.

• I consistently demonstrate warmth, care and courage to support and strengthen the team.

• I create memorable moments of hospitality for all of our stakeholders to power the cycle of Enlightened Hospitality.

Entrepreneurial Spirit: Seeing opportunities others haven’t, and creating solutions others wish they’d
thought of first.

• I take risks to continuously innovate.

• I add to the dialogue by asking the question “whoever wrote the rule…”

• I honor my mistakes as opportunities to grow and humbly share my lessons learned with others to fuel learning and innovation.

Integrity: Doing the right thing, always, using sound judgment, even when no one is looking.

• I use my best judgment to do what is fair and right, even when it may not be in my immediate self-interest.

• I courageously provide honest feedback to my colleagues to hold them accountable to our standards of excellence and their own growth and development.

• I actively build trust with my colleagues and stakeholders, one action at a time.