The Business of Hospitality

By Lisa McLaughlin

Danny Meyer has learned a thing or two about business since he opened the Union Square Cafe in New York City in 1985. The downtown eatery has become the cornerstone of one of America's most successful restaurant organizations, a culinary empire that runs the gamut from white tablecloth to outdoor hamburger shack. The common theme, as he explains in his new memoir-cum-business manual, Setting the Table (HarperCollins), is something he calls "enlightened hospitality," an idea he will happily apply to any business endeavor. He serves up quite a bit of advice in his book. A sampling:

GREAT SERVICE IS NOT ENOUGH

"We are in a very new business era" says Meyer. "I'm convinced that this is now a hospitality economy, no longer the service era. If you simply have a superior product or deliver on your promises, that's not enough to distinguish your business. There will always be someone else who can do it or make it as well as you. It's how you make your customers feel while using your products that distinguishes you." He points to companies like the Container Store, Timberland and Jet Blue, thriving enterprises that he claims share his philosophical approach to business. "Yes, they have an excellent product; yes, they know how to deliver, but that's not what bonds customers to them. It's the experience. Service is a monologue: we decide on standards for service. Hospitality is a dialogue: to listen to a customer's needs and meet them. It takes both great service and hospitality to be at the top."

THE CUSTOMER COMES SECOND

Meyer's business model intentionally inverts classic capitalist priorities. He believes that to be successful you must first meet the needs of employees, then guests, followed by the community, suppliers and finally investors, in that order. "If you are devoted to your staff and can promise them much more than a paycheck, something to believe in," he says, "you will then get the best service for customers, which will in the long run provide the best return to your investors."

ABCD--ALWAYS BE COLLECTING DOTS

Meyer collects as much information, or dots, as he can about his guests. If a diner is eating at one of his restaurants for the first time, the staff is alerted. If it's a repeat customer, preferences (likes corner table, allergic to shellfish) and any past errors in service (overcooked salmon on 7/16) will have been entered in a database. "The more dots you collect, the more chances you have to make meaningful connections that make people feel good and give you a business edge."

THE 51% SOLUTION

"You can teach technical skills, but you can't train employees emotionally," says Meyer. "But you can teach managers how to hire for a specific emotional skill set." When selecting new hires, Meyer looks for candidates whose strengths are divided 51%-49% between emotional hospitality and technical excellence. "I like to call them hospitalitarians. People who are naturally kind, empathetic and curious, along with having a strong work ethic. They get fed through the process of providing hospitality."