Gramercy Park Block Association - Neighborhood News #510 
Our dear Gramercy Park neighbor Danny Meyer

The evolution of Danny Meyer 
As Union Square Hospitality grows up, its founder tries to hang onto the small-company culture that keeps the business cooking.
Danny Meyer spends more time globe trotting as his culinary company expands internationally. 
Photo by John Carey/Camera Press/Redux. 
FEBRUARY 16, 2014 
Danny Meyer used to stroll through the Union Square neighborhood to visit all of his restaurants. These days, he has to hop on an airplane to keep tabs on his vast empire. Recently, he traveled to London, where he visited the first Shake Shack to open in the United Kingdom, one of 10 located abroad. 
But as the company he founded 29 years ago continues to grow rapidly, Mr. Meyer does not want to lose the values that have served Union Square Hospitality Group so well all this time. Late last year, he hired two executives to help promote his philosophy of hospitality-centered on superior customer service and a respectful workplace-throughout the 3,000-employee company. 
"I spend a lot of time thinking about how we can use our growth to advance our culture," Mr. Meyer said via email from London. "So many businesses grow for the sake of growing." 

One lesson Mr. Meyer has learned is that his corporate executives cannot simply sit in the Union Square headquarters and delegate. They are required to get their hands dirty, quite literally.

Union Square Hospitality Group's new executive hires Sabato Sagaria and Erin Moran have gone through months of training, taking on jobs like bussing tables and accepting meat deliveries in order to become more empathetic mentors and coaches. Photo: Catherine Gibbons

Call it the "ultimate internship," as one of his new hires, Chief Restaurant Officer Sabato Sagaria, described his experience recently.


Mr. Sagaria has spent the past two months working at USHG's nine full-service restaurants, trying on every job, including busing tables, serving diners and cooking.


"Danny said to me, 'I want you to understand what makes each restaurant unique and who brings it to life every day-just absorb it,' " recalled Mr. Sagaria, a veteran restaurant executive with a degree from Cornell University's School of Hotel Administration.


"We have found this approach works incredibly well and are replicating it with all senior leaders from our home office," said Mr. Meyer, adding, "I only regret our not having done this as effectively and thoroughly in the past."


Erin Moran, who became chief culture officer in December, is going through the paces now. Her training will last six months because she has never worked in a restaurant.


"As a newbie to the industry, there is a huge vulnerability that I had to put out there," said Ms. Moran, who was previously executive vice president of the U.S. division of Great Place to Work, a consulting firm. "I was asking some of the most ridiculous questions."


The training is more than an exercise in humility. "We want Sabato and Erin to have walked in the shoes of the very people who they'll be leading in order to become more empathetic and effective as mentors and coaches," said Mr. Meyer.


It is also an acknowledgment that USHG has become one of the five largest restaurant companies based in New York City, according to Technomic Inc., which estimates the privately held group's annual revenue at between $250 million and $500 million. (USHG would not comment on revenue.)


Its properties include fine-dining restaurants in the Big Apple, a catering division, a line of health juices, 31 Shake Shacks-which contribute a significant portion to the bottom line-and a consulting arm that coaches other organizations on how to improve customer service, in part by becoming a better employer.

Culture club

"The culture at USHG is something they take very seriously; they walk the walk," said Katie Grieco, managing partner of Craft Worldwide Holdings, who worked at USHG's Gramercy Tavern before leaving with the restaurant's executive chef, Tom Colicchio.


USHG's staff will soon swell even more, as the company hires seasonal workers in sports facilities such as Citi Field and full-time staff for several venues opening this year and next-including Porchlight at West 28th Street and 11th Avenue, eateries at King & Grove hotels and a restaurant at the Whitney 2.0 downtown.


The company declined to estimate how many employees it will be hiring.


Attracting and keeping top talent is a major priority. USHG's turnover rate for full-time employees is about 19% annually, compared with an industry average of 27%, according to the company.


"It becomes more of a challenge for us to find great people and keep [them]," said Mr. Sagaria, pointing to increased competition. "Five years ago, there weren't restaurants in Brooklyn or Queens or even other cities that could draw in graduates from the Culinary Institute of America."

Unusual titles

Mr. Sagaria's and Ms. Moran's unusual titles belie the importance of their jobs. In any other organization, Mr. Sagaria would be the chief operating officer. The restaurants' general managers and executive chefs report to him. Ms. Moran would likely be the director of human resources because that department reports to her. Both executives report to Jeff Flug, president and No. 2 at the company.


Mr. Flug, another industry outsider, who joined USHG five years ago after long stints on Wall Street at Goldman Sachs & Co. and JPMorgan Chase, also completed four weeks of training at the restaurants.


Part of Ms. Moran's focus will be to develop new tools by which USHG can measure itself based on her experience at Great Place to Work, where USHG was a client. About 18 months ago, USHG introduced an employee survey called the Trust Index, which tracks metrics like internal promotions and how long employees are in specific positions.

USHG offered health benefits to hourly and part-time employees long before they became legislated, and its hourly workers are eligible for a 401(k) program with a matching investment.


"Although we offer competitive compensation," said Ms. Moran, "I don't think people work here because of money. You can't buy people's loyalty." She points to her own hiring experience: "The company is investing in my education."


For the next four months, Ms. Moran will split her time between training in the restaurants and working at her desk in Union Square.


One of her recent assignments was at Blue Smoke in Battery Park City, where she showed up at 7 a.m. to receive the daily shipment of produce, meat and other fresh food.


Her training over the past couple of months has been a big learning curve. "At the end of the day," she said, "my muscles are sore."


A version of this article appears in the February 17, 2014, print issue of Crain's New York Business.


Click here to read the article on Crain's website.