Union Square Hospitality Group: Customer Service Case Study


By John Gifford

I. Overview

Danny Meyer started his first restaurant, Union Square Cafe, in 1985, and has since gone on to have 11 highly-rated restaurants in New York City. Each of the restaurants calls upon his passion and creativity. They must add something new and compelling, such as in his Indian-inspired Restaurant, Tabla, which utilizes the unique flavoring of Indian spices blended with French culinary technique and American hospitality.

In fact, Danny won’t start a new restaurant (others are in the works) unless these several criteria hold:

1. “I am passionate about the subject matter (i.e., early American folk antiques, modern art, jazz, barbecue)”

2. “I know I will derive some combination of challenge, satisfaction, and pleasure from the venture.”

3. “It presents meaningful opportunities for professional growth for my colleagues and me.”

4. “The new business will add something to the dialogue in a specific context, such as luxury dining (Gramercy Tavern), museum dining (The Modern, Cafe 2, and Terrace 5 at the
Museum of Modern Art), Indian dining (Tabla), barbecue (Blue Smoke), or burgers and frozen custard (Shake Shack)”

5. “Financial projections indicate the possibility of sufficient profit and returns on our investment to warrant the risk we’re undertaking”

Adhering to this formula has paid off for Meyer as three of the five “Most Popular” restaurants in the 2011 New York Zagat Survey were part of his Union Square Hospitality Group, including Union Square Cafe, which has held the #1 spot nine times.

Crucial to Meyer’s success has been his vision of hospitality, something that started as an intuitive feel and has since been articulated into a systematic approach that he infuses into each of his restaurants. The distinction between service and hospitality has been crucial to the passion with which New Yorkers embrace Meyer’s restaurants. Meyer sees service as “the technical delivery of a product. In contrast, hospitality is how the delivery of that product makes its recipient feel.” Meyer characterizes service as a monologue, but hospitality is a dialogue. Union Square Hospitality Group makes sure that the service is top of the mark, but hospitality has been the ingredient that has pushed their restaurants to the top.

2. Focal Strategy: Hiring by the 51% Solution

Pivotal in delivering top-of-the-line hospitality for its customers, as well as service, is Meyer’s concept of hiring talent by the 51% solution, in which emotional skills of a potential employee are weighted higher than technical skills. To achieve excellence, employees must have both strong emotional and technical skills. In the hiring process, the emotional and social skills for hospitality are given a 51% weighting, while technical skills count for 49%. The “people skills” must be there in the employee or Meyer is unlikely to hire them, no matter how good their technical expertise may be. When he has deviated from that rule, he has gotten into trouble, because these individuals didn’t fit with the company culture or the customer’s expectations.

Meyers initially developed his approach to hiring intuitively, but has been able to articulate it more clearly as he has developed additional restaurants.

Meyer identifies five core emotional skills that a “51-per center” possesses:

1. Optimistic warmth (genuine kindness, thoughtfulness, and a sense that the glass is always at least half full)
2. Intelligence (not just “smarts” but rather an insatiable curiosity to learn for the sake of learning)
3. Work ethic (a natural tendency to do something as well as it can possibly be done)
4. Empathy (an awareness of, care for, and connection to how others feel and how your actions make others feel)
5. Self-awareness and integrity (an understanding of what makes you tick and a natural inclination to be accountable
for doing the right thing with honesty and superb judgment)

The process by which Union Square hires is longer than most and involves a probationary period in which “trailing” is a key procedure. In this procedure both the emotional skills and technical skills are evaluated by their behavior in the real environment as they trail current workers who provide feedback regarding the prospective worker as well the manager’s observation of how the worker has done.

The arduous, overall protocol for hiring involves:

1. Manager(s) interviews prospective employee
2. Manager(s) arranges for pertinent trails in the actual restaurant setting
3. 4 to 6 trails conducted (with cook, waiter, etc., as appropriate)
4. Manager(s) aggressively pursues candidate’s references
5. Manager(s) ranks candidate on 5 emotional skills – one to five on each
6. Manager(s) considers candidate in 3 hypothetical situations
A) Would a keen judge of character see the candidate as a good fit with Union Square?
B) How would you feel if a rival restaurant hired them out from under you — feel like you lost out on a winner or that you just missed a bullet?
C) How would you feel if this candidate was interacting with a top media restaurant critic — confident or terror-stricken?
7. Will he be one of your top three performers in his/her given category?
8. Danny Meyer interviews candidate and then seeks consensus across other managers, evaluators

With this carefully articulated system in place (albeit there is still an art in interpreting the social skills of the prospective employee), Danny Meyer’s restaurants have a consistent, highly selective approach to building their restaurant talent team.

3. Action Plan for Your Business

For your business or any other business these days, an adoption of the 51% Solution would not be a bad idea; in the face of pervasive poor customer service and poor employee attitude, “51%-ers” will stand out.

To sketch out the action plan that can be emulated, let’s consider a personal concierge company whose goal is to provide the very best for the very best. They are aiming to be the very best concierge business in their local market. This company has two types of business, personal clients and corporate clients (such as providing VIP service to top echelon customers of local sports teams — those leasing loges, etc.).

To maximize hiring success, the concierge business can base its steps for evaluating talent using Meyer’s proven assessment structure:

1. Adopt the 51% Solution
2. Use the five core emotional skills as standards to embrace for employee hiring
A) Optimistic warmth
B) Intelligence (not just “smarts” but rather an insatiable curiosity to learn for the sake of learning)
C) Work ethic
D) Empathy
E) Self-awareness and integrity
3. Implement the rigorous hiring process:
A) Interview prospective employee
B) Arranges for pertinent trails in the actual concierge setting
C) Several trails conducted
D) Aggressively pursue candidate’s references
E) Rank candidate on 5 emotional skills – one to five on each
F) Consider candidate in 3 hypothetical situations
1) Would a keen judge of character see the candidate as a good fit with your company?
2) How would you feel if a rival concierge company hired them out from under you — feel like you lost out on a winner or that you just missed a bullet?
3) How would you feel if this candidate was interacting with the owner of the local NFL franchise — confident or terror-stricken?
G) Will he be one of your top three performers in his/her given category?
H) Seek consensus across other managers, evaluators

Similarly, if you are aiming to be the best in your category, go and choose your talent likewise. The time-intensive hiring process outlined may seem daunting and you really need that additional worker today, but if you want to be at the top in your business niche, you need to aim for the top in the people that you hire. If you do not hire top talent, especially tops in the social skills realm (the 51%’ers) you will never be able to achieve the top echelon in hospitality.

4. References:

Book: Setting the Table, Danny Meyer, 2006

http://en.wikipedia.org/wiki/Danny_Meyer

http://ushgnyc.com/_pdf/meyer_bio.pdf

http://www.nytimes.com/2011/08/07/magazine/danny-meyer-is-on-a-roll.html?_r=1&pagewanted=all

Danny Meyer, CEO http://roycecarlton.com/beta/speaker/download-pdf-press-kit/Danny-Meyer.html

http://online.wsj.com/article/SB10001424052748703580904574638144209646408.html

Union Square Hospitality Group and Metropolitan Museum of Art http://press.moma.org/images/press/PRESS_RELEASE_ARCHIVE/DannyMeyer.pdf