• by Dave Morgan , Featured Contributor, April 15, 2010

Several months ago, I attended Union Square Venture's Portfolio Summit, where the chief executives and operating officers of the firm's portfolio -- companies like Twitter, FourSquare, Zynga, Clickable, Boxee and Simulmedia -- met for the day to discuss some of the common issues we face running technology-driven start-ups. I felt very privileged to be able to listen and learn with so many great entrepreneurs, but one of the most memorable discussions revolved around food and running restaurants, not tech-driven startups. Our lunch that day -- and the luncheon speech -- was provided by legendary restaurateur Danny Meyer.

Meyer's restaurants are New York City institutions, with names like Union Square Café, Gramercy Tavern, Tabla, Blue Smoke -- and, most recently, the Shake Shacks. He has opened 20 restaurants over the past 20 years, and has never had to close even one of them, an unheard-of track record in the hospitality business. It was that track record -- and his "secret sauce" in starting and managing so many successful businesses in such a fickle industry -- that we were all excited to hear about over lunch that day.

His secret? Enlightened hospitality. Meyer talked to us about the importance of hospitality in all business contexts. He bemoaned that so many industry ratings services evaluate restaurants and other hospitality businesses according to their food, location, décor service and price, but almost never on their "hospitality index" -- what someone does for you, as opposed to what happens to you. His thesis is that consumer service businesses can control the delivery of hospitality, and that is something that can and should be perfected. How is his company able to do this? It all starts with how they hire.

Restaurants are certainly people-driven businesses, and managers at Danny Meyer's restaurants go beyond just hiring folks who are highly competent and have strong technical skills. Meyer's managers are maniacal about hiring people who express a spirit for caring for others, that have the emotional capacity to delivery extraordinary hospitality. Meyer's company has tests for measuring this emotional capacity in its hiring process, and managers constantly measure and help improve employees' emotional skills for delivering hospitality. When employees are rated, their emotional hospitality skills are weighted at 51% of the rating; their technical skills at 49%. This is Danny Meyer's "enlightened hospitality."

I believe this kind of approach is how virtually all businesses now need to be thinking. With the flattening of organizations and the ubiquity of channels for direct customer communication, all employees of most business enterprises today are now brand ambassadors. All employees now need to think about what they do for their companies' customers, not just what happens to those customers. We all need to be thinking like Danny Meyer -- always measuring and trying to improve our hospitality index.

What do you think? Aren't we all in the hospitality business now? If you want to learn more about Danny Meyer's philosophy and techniques, you should read his new book, "Setting the Table." I just got it and can't wait to read it.