Yeah

...

in New York because when restaurants, when, when restaurateurs and when chefs know that any day a critic from The New York Times could come in and it's gonna matter, it ups your game, and it ups everybody's game, and I think that's good for the whole restaurant community.

I don't want a s- situation in this city, which has such a great restaurant scene, where we're just reliant on influencers.

Right.

And what I, what I learned in retrospect, it wasn't my plan, but I learned in retrospect that we were doing at Shake Shack, it was still the rule of two, but we were kind of going .65 plus .65 plus .70.

So compared to fine dining, we were using Pat LaFrieda beef and Valrhona chocolate f- you know, for our chocolate shakes, and all the best ingredients we could get.

We were, we weren't gonna be as, um, inexpensive as fast food.

Danny, what financial solutions could SMEs potentially access through this arrangement?

Well, I hope that this is going to shake up the financial services sector, that other entities, banks and funders will enter into partnerships, agreements, that then makes it It opens the doors for entrepreneurs because entrepreneurs generally, especially in the micro, small and medium sector, have felt frustrated.

There have been programs, equipment, grant schemes.

There's even a program, a national youth fund and so on.

But the offtake has not been so great because the rules have not really changed.

The game, maybe there have been more players in the game, but the rules haven't changed.

And I think this is a dynamic change.

Could this partnership eventually be expanded to other sectors beyond construction and infrastructure?

To what extent, I'd love to get inside this hiring process as the first stage of culture and how you think about it and how you'd advise someone to present or what they could change if they could change it.

One of my favorite chapters in my new book, What Could Possibly Go Right, is a chapter called Think Like a Winemaker.

And I made a metaphor that wasn't a sports team, but it was really thinking about how Any winemaker wants to make a great wine year after year after year, just like any business person wants to field a winning team year after year or sports team wants to field a winning team.

And it dawned on me that where it all starts for a winemaker is the quality of the soil.

They can get the best grapes in the world, but the best grapes are never going to taste any better than the health of the soil in which they're growing.

In fact, they're going to take their flavor from that soil.

Well, the soil is the culture and the grapes are the people we hire.

I wonder if you could give us your formula that you came to for culture and just explain how you came to it, really.

Explain what you mean by that.

So the idea of enlightened hospitality, in fact, occurred to me when I opened my second restaurant, which was Gramercy Tavern, almost ten years after opening Union Square Cafe.

It didn't feel right to me in there, and I couldn't figure out why.

For the first time in my career, I was not a hundred percent of the time at the front door in one restaurant, so I was going back and forth.

And if I've learned one thing about culture all these years later, culture is what happens when you're not in the room.

And half the time I was not in the room, and I had not done a good job of defining it.

There was one awful day, a Union Square Cafe regular dined at Gramercy Tavern, and she came up to me furious after her meal.

How do you indoctrinate people into the culture so that everyone is on the same page, and then also incentivize adherence to it?

Mm-hmm.

human beings who all wake up with different emotional feelings every single morning, and yet you're trying to make sure that they're all pulling in the same direction.

You can't systematize it to the degree that you're putting words into people's mouths because that reads as completely inauthentic.

And culture is very different than a cult.

Nobody wants to eat at a restaurant run by a cult.

So what culture is for me is that we all know what's expected of us in terms of how we make choices.

And I think that by being really, really clear with what behaviors are expected.

But looking back, what went wrong with hospitality included? Was it the wrong policy, the wrong moment, or just a structural change that one restaurant group couldn't make all alone?

Exactly right.

What does that leave you with? That leaves you with hospitality.

How did you make all of your stakeholders feel? Now, who are your stakeholders? And this is what enlightened hospitality means.

Every single one of us has the exact same five stakeholders, but each one of us also gets to pick in which order are we going to prioritize them.

And all my life growing up, from my family in St. Louis, I heard, "Customer's always right.

Customer's always first." And that, that got me kind of far.

Then I took a class, uh, I took one economics class in, in college, and we were studying this guy, Milton Friedman, from the University of Chicago, who said, "Nope, the investor's always first, because if you make every decision on behalf of the investor, everything works out." And I'm, you know, just completely conflicted in my brain because what I realized we were doing, when I sat down to write Setting the Table, I said, "We've screwed this up." We actually put the customer second.

And when you're dealing with those soft skills, how do you intervene when it's not where you want it to be?

(applause) (instrumental music plays)

I'll never forget the first time I finally figured out that almost every Roman trattoria has the exact same pastas on the menu, and every one of 'em is related.

There's the cacio e pepe, which is simply spaghetti with pecorino cheese, olive oil, and lots of black pepper.

Then, by simply adding guanciale, the bacon that comes from the cheek of the pig, it becomes spaghetti alla gricia.

Or by adding eggs, that same exact recipe becomes spaghetti alla carbonara.

And if you omit the eggs and add tomato sauce instead, you get spaghetti alla amatriciana.

Four different pastas, all related.

Hmm.

So if one of the goals was to even out the pay between the people cooking the food and the people serving the food, how much have you closed that gap?

Here's what I know, Steven.

The earning potential before we started Hospitality Included was 2.4 times more for tipped employees th- than for back of the house employees.

Today, it's 1.9 times more.

So that's big.

I can also say that the line cook wages, so the people who cook your food, have gone up 37%.

Front of house compensation for formerly tipped employees has gone up 8%.

A- and what's that mean in actual dollar terms...