Shake Shack Founder Danny Meyer: Profit Funds Hospitality, Not the Other Way

Shake Shack founder Danny Meyer says profitability and hospitality don't compete — "You can offer so much more hospitality when you're profitable." The founder and executive chairman of Union Square Hospitality Group made the claim in a sit-down interview at Bourbon Steak in San Francisco, a Michael Mina restaurant that opened early for the conversation, to discuss his new book, What Could Possibly Go Right?

Meyer once believed that focusing on the financial side of his business could get in the way of caring for people. Life experience changed his mind. Financial strength, he argues, lets a restaurant do more for its employees, guests, community and suppliers.

Where does profit become a problem?

For Meyer, the trouble starts when owners take away what guests value or what employees need to serve them. He warns against cutting resources to chase higher profits, and he puts it in physical terms.

"You don't get more profitable by cutting muscle," Meyer says. "You get there by strengthening your muscle."

A smile, he likes to point out, has never been the expense that ruined a restaurant's financial statement.

What did his grandmother teach him about employees?

Meyer's approach to managing great people comes from a gardening lesson. As a child visiting Grandma Louise in St. Louis, he learned to identify and pull weeds. As he grew older, he kept reaching for them even as the flowers grew. His grandmother suggested a different approach.

"Let's feed the flowers," Meyer recalls. "When the flowers are flourishing, they are going to create so much shade that the weeds are gonna die anyway."

Years later, Meyer saw the same pattern in his own leadership. He was spending too much time trying to fix employees who caused problems, while overlooking the people who excelled at their jobs and made teammates better.

Watching a field of sunflowers gave him another frame. The flowers turned toward the sun, and he realized leaders were the sun.

"We want the gravitational pull for all the sunflowers to be in the right direction," Meyer says. "So that's where we need to shine our light."

Why does he tell owners to 'collect the dots'?

Meyer also teaches restaurant owners to remember the details that matter to people. The principle comes from his earlier book, Setting the Table: always collect the dots so you can always connect them. The dots are information about people that can become opportunities to care for them.

"The people who are greatest at the game are the people who care the most about making human connections," Meyer says.

He pointed to longtime colleague Richard "RC," whom he met when RC managed Wolfgang Puck's Postrio in San Francisco. Meyer's Union Square Cafe regulars wanted tables at Postrio; RC's guests wanted reservations in New York. Helping each other's guests led to friendship and nearly 30 years working together. RC read constantly, noticing new jobs, marriages, divorces and other details he could use to make someone feel better.

The interview itself became a case study. The interviewer handed Meyer an iPad showing barbecue legend Mike Mills speaking about his admiration for Meyer in an interview recorded years earlier. "Thank you for bringing him back," Meyer said. It closed with a custom hat bearing the letters "WCPGR" — short for the book's title — after a passage quoting the Stephen Sondheim musical Sunday in the Park. "That's incredible. Thank you," Meyer said before putting it on.

The through-line for operators: profitability gives owners more capacity to care for people, and hospitality requires them to use that capacity well — starting with the employees who make guests feel welcome.