Dan Sachs is president of Meerkat Restaurant Advisory a restaurant advisory group, and a professor of entrepreneurship, hospitality management, and service leadership at DePaul University. A restaurant industry vet with degrees from Harvard and École de Cuisine La Varenne, he owned the Bin36 restaurant group for 16 years, where he developed and operated several wine-focused restaurants. His work with legendary restaurateurs including Danny Meyer, Drew Nieporent, and Paul Bartolotta has informed his approach and in his current book, The Million Dollar Greeting: Today’s Best Practices for Profit, Customer Retention, and a Happy Workplace he shares details from a variety of different businesses including Lettuce Entertain You Enterprises, Union Square Hospitality Group and Nick’s Pizza & Pub. We spoke with him about keeping both customers and employees happy.
What’s the connection between a happy workplace and happy guests/customers?
Dan Sachs (DS): Respect for your internal side—employees— yields the kind of exceptional customer service that most places are looking for. It’s a way to differentiate, by caring for your internal people, by making them feel part of something bigger.
How do you make people feel respected and cared for?
DS: One example is at Union Square Hospitality and the art and dedication they put towards hiring. They hire more for mindset than skill set. They get people who appreciate what hospitality really means. A skill set can be taught more than the mentality. It’s how they think about themselves and their lives. Hospitality is all about how to empathize with guests. It starts with hiring the right people and the same goes for pretty much any business. How to set up the structure that can make a real difference in how employees think about the business. That’s how you act as a leader. Some infrastructure is important but really understanding the leadership traits is key, that includes being authentic and with a sense of vision. Even if you’re a fairly straight forward restaurant your employees need to follow your vision. When you nurture that kind of culture you can drive success.
How do restaurants “give a sense of purpose” to employees in their training?
DS: It’s an ongoing practice, it’s tough but you have to have consistency around your values. When you own your own business everyone should know what you’re thinking—but people who are working are not always as attuned to your thought process. Repeating what your goals and vision are is really important. Being engaged and authentic and accountable is crucial. Especially with millennials—explaining the “why” of what you’re doing keeps them engaged. It’s different from how a lot of people in the industry were taught and brought up through the system. Today’s workforce want leaders to be able to answer the question “why are we doing this?” When I was young I can remember a chef saying “peel 100 lbs of potatoes” and I just did it—today you have to make sure the employee knows why. If you can be consistent you can retain employees longer. If an employee feels engaged with the larger mission, they will solve a problem with a guest.
Is empathy something that can be taught?
DS: That is a complicated conversation—there is a big difference about how we think about empathy in personal relations and how I communicate it and that’s what we think about in the restaurant business. That is super important. In business there are lots of other factors that become confusing. If I have power I can afford to be more empathetic. If I’m competent I can use empathy in a different way both internally with other employees. People who stay longer build relationships and so they have a soft power around how they can use empathy. Leaders possess empathy as a tool to influence the employees to behave in a certain way. The restaurant manager can be empathetic because of their power and tenure, can model behavior. In all those cases, even though we want to think about it as god-given, it’s really a tool, and no different from any other tool.
How can restaurants create opportunity for employees if their organization is not expanding?
DS: 20 years ago someone told me, “the cemetery is full of indispensable people.” Leaders believe we can never lose our most valuable employees because they have great institutional knowledge. But the truth is what makes a restaurant successful is not an individual but the sum. You will create a bull pen of quality people coming up. It’s a healthy thing. As good people leave, there is opportunity and it keeps an organization vital. I don’t believe in expanding just to accommodate employee growing.
How do you handle the challenges surrounding wages?
DS: Wages are high and it’s tough, that’s a challenge but complaining about it is not going to change it. Investing in keeping people around pays huge dividends over the long haul because what costs money is not just wages, it’s the cost of hiring and rehiring and overtime. So, investing in leadership and understanding the value has benefits beyond the hourly pay. It’s hard to spend the resources that are required to sort of work through the concepts, but at the end of the day, financial robustness comes from keeping people around with a culture and community because you are an accountable leader and engaged with them.
How do you see technology impacting hospitality in the restaurant industry?
DS: What’s affecting restaurants is really around the cost of doing business and labor costs in particular. The push to utilize tech comes from companies trying to substitute employees. Can that work with hospitality? Can you maintain that while using tech to create efficiencies?. Self service is going to become more common. There will be more self-ordering and that’s already becoming a norm. Can you insert hospitality to create a unique identity for the business without sacrificing individuality? There is one person acting as a traffic cop—but they aren’t exuding the hospitality for a venue’s full service. We all want technology, but if we can’t maintain our unique identity we risk diluting of what makes our brand successful in the first place.
Who do you put first, customers or employees?
DS: I tend to believe it’s a little more nuanced than just who comes first, employees or customers. You have to have an eye on three stakeholders—employees, customers and shareholders/investors. You cannot diminish one to the benefit of another. All of those factors create the vision so if you’re not thinking about strategies around your customers while you are supporting your employees and looking at the sustainability of the restaurant, you’re going to have problems. Smart managers are thinking about all three at the same time. It’s not that the employees are more important, but as important as my customers.
Training, curiosity and learning seem to be a common theme in your book, what are restaurants missing in this regard?
DS: It presumes that restaurants are different from other businesses, the reality is that they are businesses like any other. Organizations across the board operate the same way. And people are the same. The basis for how we are engaged is whether the work is engaging—beyond just washing dishes. To the extent that any employer is providing an environment where that is not just nurtured but celebrated. The reality is the tools around leadership are common across all industries. Where employees are retained and loyal is when their curiosity and hunger for learning is nurtured.
For instance, we had mandatory wine classes every week at Bin 36. We built learning into our model because it kept staff engaged in what we were doing. Opportunities for advancement are important. Nick Sarillo of Nick’s Pizza & Pub developed a program around employee engagement and advancement so all employees have a mentoring network so they see the prep work, the training needed for advancement, so it’s almost a self-managing system. Ultimately employees have the opportunity to grow, even in a pizza place. It has nothing to do with size of the restaurant and level.