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Capital Allocators · June 3, 2024 · 55m
Danny Meyer: Enlightened Hospitality as an Investment Philosophy
Shake Shack founder Danny Meyer explains his philosophy of 'enlightened hospitality' to Ted Seides — the idea that taking care of employees first creates a cascade: happy employees create happy customers, happy customers create happy investors. Seides draws parallels to institutional investing.
Canon
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Meyer's enlightened hospitality is essentially the relationships-predict-life-satisfaction Canon applied to business: the quality of the relationship between restaurant and employee, and between restaurant and guest, determines every business outcome.
Highlights
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Enlightened hospitality: the hierarchy of stakeholders should be employees first, customers second, community third, suppliers fourth, investors last — and investors end up best served
Meyer argues that most companies serve investors first and employees last, which produces mediocre results for everyone. By inverting the hierarchy (employees first, investors last), Union Square Hospitality Group created better employee retention, better service, more loyal customers, and ultimately better returns.