The Mac and Cheese Millionaire | Erin Wade
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I had been coming home on a day that was just super depressing, and all I want to do is clear up in front of the television was just like a big bowl of macand cheese. But I realized that there was no place I could go to get really good making cheese, which is sort of nuts. I pulled out the rest that I had grown up making with my dad.

I made this delicious bull of mac and cheese, and i'm sitting on my couch and eating IT when I sort of have this oh moment, thinking there was no restaurant I could go to at this. This restaurant should exist. I think I should open IT.

And so fired. I was like, this is my moment to try this bizarre idea of of opening a mcgee restaurant. If I fail, i'll just be back to what I was already doing, which is my all to make a lot of money working as a layer. I realized that my worst case scenario, basically the life I was already living.

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Check out the link in the notes for more information. I guess today is iron wade, who turned mk. Chees into a multi million dollar empire. We talk about the mistake he made starting out as the first time bounder with no experience, industry empowering employees, open book management, unique and viral policy on harassment, how titles can be effective, dealing with this pointer, problems at where and how SHE focuses and reasons around a collective success model.

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Oh my god, surfing.

Where did that come from?

I've always love the ocean. Ever seen? I was a little kid after my son is born. He's currently about to turn ten. But my second child, and at the time I was running my company, so really busy, have like a hundred people reporting to me.

I have two little kids and i'm just not really sleep, you know, I just I feel like i'm just consumed by other people's needs. So I was a bit desperate to find something for myself, is something that could be just mine. And I realized that I had always loved the ocean.

I'd always wanted to learn how to surf. I set up a surf lesson in this town. It's like a half air from where I live and got in the ocean.

And honest, I wasn't really very good IT, but I just felt so happy the whole time and I made this promise to myself that I was going to make time for that once a week, for a year, and just sort of see what I did to my life, honestly, really changed my life. I was just the sort of magic time that was just for me. IT was really meditate.

And the following year I had to changed myself. I go come to try twice a week after that, as I going to do this three times a week. So I got a full on obsessive surfer today. Yeah, it's just my favorite thing. I consumes my vacations, my free time, my, you know, this was, yeah, I love watching IT.

Do you take go all in to whatever you're doing? Like that sounds like you like tried up well as you like that and then you like, boom.

i'm in food, i'm in restaurant. So I think i'm really motivated by things that my body responds to really positively. That could be a delicious taste.

That could be a beautiful you know space that you're sitting in the ocean was really something that just engaged all my senses. We're taught to do so much in our minds, and i'm a pretty like thoughtful person that can get last there. So i'd tend to try to pay attention to my body and see you know what feels good. And I think we know on some primary level of the things that feel right and the things that don't. And learning to follow the things that feel right has been pretty valuable for me.

What are the other ways that you shut off like that overthinking sort of side of your brain of god?

I mean, I think that's party obsessively. I don't have a lot of ways. I would definitely tried all the things that people tell you to like, I ve tried meditating many times.

Yeah, I feel like I really able to lose myself and things that encompass all my senses. surfing. Cooking, you know, is one of A, I think it's just such a creative practice.

Did cooking start when you were a kid?

My family really love food. Actually, me, in both of my siblings, we all own restaurants or bars like IT, which is so funny because I think to like my parents deep disappointment, that's true. But IT was were also different.

But the one thread that I really held my family together, my parents were very obsessed to both actually were entrepreneurs and have their own businesses. But every single night we would have dinner together as a family. And so I think cooking and food was a very central part of my youth, and certainly is something I still do with my kids today.

So yeah, i'd learned how to make things a mostly from my dad, who actually would only cook like five things. One of those things with macro onion cheese ended up serving me very well later in life. I've always felt like a deep connection to food as a source of not just like norrish ment from a physical perspective, but also from an emotional perspective, is like a way to bring like diverse family members together or a community together. I think it's really so much deeper thing than than just physical management.

If you close your eyes and imagine what IT smelled like back in the kitchen, what smells come to my is my mother.

actually physical, disabled, polio S A kid, and so he couldn't really do much cooking. So my dad was really the big cook of the house. And like I said, only made sort of five things.

But one of them was child chip cookies, which he made just all the dam time. Like, I feel like there was like, always cookies or Brownies. H in my house growing up. And so yeah, I have a really deep nest dole gia for sort of these, like american desserts. And the smell of them wafting through the houses, definitely like the smell of my childhood.

You didn't start running a restaurant, you want to law school and then became a lawyer, and you were fired from that job. What happened?

Yeah, I had a very circuited st. Route to to becoming a lawyer in the first place that had actually taken a detour in food. First, I had actually really tried.

I wanted to, to be a chef that I learned how to cook when I was an undergrad, and I worked in restaurants in new york. But honestly, I was a really dead and job. I was making minimum wage.

I really could barely afford to pay my rent. I looked around me and I just didn't see a future in the industry. And so I did what I think plenty of smart people with a complete lack of direction choose to do.

And I decided to go to law school. IT seemed like a print choice on the surface, but I was really not something that I felt passionate about. So I was working as a corporate attorney. So i'm getting paid you really an obscene amount of money, like an amount that seemed crazy when I had been cooking in restaurants like ten times what I would have made in a year, working in a beautiful high rise, very respectable, like I looked good at cocktail parties, but I really hate IT going to work every day. So I was a fired, and IT was a real wake up call for me because I had always been just a super over a and um IT was the first time that I was like, well, I can say the first time but I was probably the biggest time where I was like, wow, I am not doing well at this and it's not even because I I couldn't do well because I don't want to I don't care enough to to be good at .

yes and it's hard to excel at a job you say.

oh, my god. I mean, it's i'm so basic but I think a lot of us don't pay attention to that. You know IT, we're taught to you know do the thing that's going to you know pay the bills or or look good or that feels safe, but not necessarily to my early point about like what makes you feel good in your body.

We're not trying to be like all like what makes me feel no real joy inside every day. At least I was not what I was trained to to pay attention to. So when I got fired, he was like, I had this moment of, you know, asking myself, am I gonna keep doing this because I could have easily been hired, you know, somewhere else doing the same thing, like, am I gonna choose to get back on this wheel, or am I gonna choose to do something else?

A few months before that moment, I had been coming home on a day that was just super depressing, like I just had hated my workday. It's raining outside, and all I want to do is curl up in front of the television was just like a big bowl of mac and cheese. But I realized that there was no place I could go to get really good mac and cheese, which is sort of nuts.

I mean, I live in oakland in california, a major city seems like some place that you should be able to, you know, get a good ball that countries. But there wasn't when I pulled out the recipe that I had grown up making with my dad and went shopping and got the ingredients and made this delicious bull of mac and cheese. And i'm sitting on my couch and eating IT when I sort of have this moment thinking how there was no restaurant I could go to get this, this restaurant should exist, and I think I should open IT.

I had been sitting on that idea and sort of thinking about IT. And so when I got fired, I was like, you know, I think this is my moment, like, I think this is the moment to try this bizarre idea of of opening a making cheese restaurant. And the truth is, if I fail, or just be back to what I was already doing, which is, you know, have to sell my soul to make a lot of money. Working as a lawyer, I realized that my worst case scenario was basically the life I was already living. So, so what do I have to lose.

which give you some safety to sort of take a risk? The moment when you were fired, what was that moment? Like, would you like? Finally, they caught me.

I was slacking and I knew IT. Or you like, oh god. The moment I was fired.

I was like, oh god. I mean, I am so embrace to say this. I really hate IT what I was doing.

But I mean, I think I I think I start crying. You know, I just, yeah I felt lost. I think that the deepest part of that moment of failure wasn't so much losing the job. I think IT was realizing that I was doing something I didn't care about, that I wasn't good at IT because I didn't care about, and that I was spending sort of precious years of my life doing something that I hated also, Frankly, that I had had to rely on someone else to tell me that I think that felt bad, like I knew IT already for myself. And I didn't at the time have the courage to act on IT.

See.

decided to start home room. Yeah, pretty much right away. I decided to start home room. And, you know, and I was not just because I had this love of food and cooking, but I honestly look back about really your time that I had been cooking in restaurants and thought, you know, what would I be like to create the kind of place I wish I had been able to work where I could you see a future for myself, where I would love coming to work every day.

I was really sort of this personal autism to create the job that I had wanted to have, but also where other people would feel a similar, like, passion that I did. I don't know about you, but I had, I mean, I worked many jobs and not had that experience of being excited to. Up in the morning and go to work, and that feels like a sad way to live life. So I really, really wanted that for myself, but I also really wanted that for other people because I felt pretty empty if I created my dream job, but then other people felt like I was a slog.

So how did that work? Like walk through sort of the initial year of that? Like how do you find people who are excited by macan cheese? You do you hire differently? How does that .

look having an ideal of wanting to create an incredible workplace, an incredible restaurant, yet having never run one and also never worked in one that i'd want to you meant that everything I learned was really through trainor. And so IT means that the first couple years, if i'm honest, we're like a bit of a shit show.

talk me through some of those lessons and mistakes that you made early on that you're look oh like I had to figure this out because I didn't have the background. I'm coming from a law degree trying from a restaurant and there's people in my family who do. I don't want to .

run IT that way. I just kept thinking like, okay, what are the values but I want to live here. And I would try to take a step at what I thought I meant to live those values at work.

So I mean, an example would be, I felt like a lot of jobs I had had don't give you a lot of tony y, and it's something I had really dreamed of. I wanted to have a lot more trust in the system, and I wanted to be able to be myself at work. I thought, okay, let's do away with so many of the rules and structures that I had found so confining.

We had no dress code, no vacation policy. IT was very much like where what you want, like you take a vacation when you need to. And these ideas like honey ly, a lot of tech companies run that way.

But a restaurant is not a tech company like you actually can't have people gone just whenever they want all the time. It's a disaster. You need people physically there every day to serve customers.

And what was interesting as I was creating, you know, all this freedom, but IT was actually like just moving from on, destroy a which is, you know, so many rules that people can't be themselves to you. A very different disturbia, which is like, no one knows what to do. There is so much freedom that ah it's actually constricting in its own way.

You know, people didn't know, is that okay for me? Where this shirt is is gonna end. Somebody are these shoes that are acceptable and I can too much vacation like I might are people secretly resented like IT really created a lot of chaos and confusion.

And you know, I was not more beloved for the people were actually looking to me for for guidance. I sort of have had this after much trial and air breakthrough, that actually, I think the right kind of freedom for people is, I think, is your job as a leader to create the structures and boundaries that within which people have freedom. For instance, you know, if something is so, is like terms of guidance for what people can wear, have some structure round, like here's what you need for safety.

Here's what you need to not defend customers. You know, here's the basic rules. But within 啊， you know, assert your own independence.

We didn't have uniforms and things like that for our people who are out on the floor. And they love being able to express themselves. But knowing of if I wear this kind of thing, it's not going to offend people. My boss doesn't gonna, you know, be upset. And there is so much more freedom within the right kind of boundaries.

I found time and time again that actually, that was really my goal as a leader was just what kind of boundary should we create? Something i'm really proud of is actually how we do um customer service or like one of our of customer service rules at many restaurants, their scripts that would be like a highly constrained form of leadership. But you give people no the other would be to give them no guidance, which is something that um I was doing at the beginning and I actually had a really great team member.

That idea he came up with was great. I started talking him figuring, okay, how can we give Better guidance on service? He told me he was like a, i'm always trying to you be the best part of people's day, but I realized we serve thousands of people a day so I can really do a great job with like, five tables a shift, like I just go crazy, I do anything.

It's gonna for those five tables to walk away. Being like that was one of the best meals of my entire life. And he would do that to five tables a day.

This, so that became sort of a service chAllenge that we gave to people who were like, hey, our value is to be the best part of people's day. What that's gonna mean and how you're going to create that experience for someone can be your own creative journey and a part of expressing yourself at work. Our expectation is you need to be able to do that for five tables a day. Or if you're working hard to take out location for five customers a day, they should be able come in and leave. Being like this was the most magical experience of my life, and it's so cool, because within that i've seen so much creativity, anything from, you know, drawing art that they send home with people to sing them a song to, you know, camp their meal to know, doing some, like, really over the top birthday celebration, spelling out a special message with condemns on their mac and trees, I mean all sorts of funny stuff that I never could come up within a million years um that's really their own, a mark of individuality. There is a boundary and an expectation with which they .

are allowed to express that if someone .

a blank piece of paper, everyone's gna create art that's totally different. If you give people um you know a paint by number, everyone's gna create something that is exactly the same. And I think my goal is actually to be like a coLoring book where it's like, here are the outlines of what I expect from you, but within that you have complete creativity and freedom.

So everyone's page of a coLoring book is gonna look different, but you're gonna the same structures. And I think that's actually really the key to creating great culture within an organization. Is like and I handing someone of coLoring book um because I think that's what you should be doing.

It's interesting because when we're working for somebody else, we often feel if I only had autonomy only to gave me freedom, that I would be happy yeah you know that I could excel and then you end up with freedom. But there's almost like too much freedom in a workplace.

You don't ever really feel like you have complete freedom. To my point about the vacation policy, if you tell people they can take cover much they want, like studies have shown and actually take less than that companies where there's just a set amount of weeks. And it's because people actually afraid, like even though, in theory, they can take as much as they want, they are afraid that maybe they'll take too much. So I think in a workplace having so my guidelines and structures the right ones, the coLoring book is has the most freedom.

There is also an element of like paying attention, right? It's like if I have complete freedom initially, that started off as fun. But then you're like a look look at all these amazing things i'm doing a nobody y's noticing. What are some of the other lessons that you sort of like trial and r 点 way through？

I knew that I wanted us to have A A really collaborate work culture, which is a, again, a really fabula ideal, but can be harder to pull off in reality. Something I ended up learning about, which I thought was really fabulous, was open book management, which is you know basically where you open up your financials to your team and you teach financial literacy and then you engage people in improving those numbers and um and then you you know share the results with the team that was really such a game changer because you know business is really just just like a sport.

But the way that most companies are run is that like no one is really sharing with you how you're doing such an odd way to run a team or a company when you think about IT. But I think we're always afraid like people know too much, uh, you maybe we'll just want more for themselves, but I think it's hard for them to be a part of something bigger than themselves. And I think that's much more important than the rescue take by .

sharing information. At what point did you start this and what happened in the like following sort of like sixty and ninety days.

Um you know started using that a few years into um the business. I think first, I had to figure out some foundational things, you know, to my point about, like creating some really basic rules and structures. And I really wanted a way to engage people with growth, not just in the financial sense, but of all the things that we cared about, finding ways to measure IT and improve on them.

I study up, took my team to take a lot of classes on how you do open book management. And we just started using IT sort of fly. The way you do IT is like we would have a meeting every week where managers were required to attend, but they were open to all staff members.

So any staff member would be paid to come and just sit there and eat snacks and, you know, learn about numbers. And what you have is, is basically A P nl meeting, but different people within the company are watching those numbers. So instead of me as the CEO or A C running through those numbers, different people are responsible for tracking them.

So you know we would watch things like our food cost, but we would also measure um things that Normally people only measure maybe once a year, like our employee happiness. We measured literally daily and weekly and we d report on those numbers two and have people tracking them and talking about, uh, not just the number but what's behind IT. Why were those cells up this week? What did people notice? Uh, why was our employee happiness or satisfaction low or height? What's going on? What could we change? And then we'd send out like a little newsletter that would come out once being like, here's the suggestions we saw.

Here's the trends we're seeing, here's the ways we're going to improve. Here's the things we're doing. Here's the things actually also not going to act on.

And what's amazing is that then everyone is engage. They started knowing not just like what are the numbers, but why are they getting Better, worse. They see that the things that they suggest can. Become enacted. Staff members aren't attending that meeting, but are just you know filling out forms every day to serve, report back or seeing suggestions that they may be enacted.

I mean, we saw not just you know huge uh, financial gains, I mean, we were always in the sort of the top you know one percent of performance for the industry, but we saw that number go up and up and up and up every single year for the decade that I was a CEO. We so saw you know huge movements in staff happiness in restaurants in america. Anyway, the average tenure of an employees ninety days, our average tenure was two and a half years.

The work we do is monotask. We're making back and cheese every day. But when you get to be part of something that is bigger than yourself and like, see changes that you suggest ending, and see a place get Better and Better and Better every week, every day, like that's something that's really magical to be a part of.

I mean, this sounds great. I ve never done. But like I one, in a way, public companies all do IT right. They publish their financial statements, but they don't sort of work with their team to understand what that means and like how to control. I'm so curious as to like, okay, you're like food cost are going up as a percentage of sales, then what like I tell you that and like how how does that transfer into without me telling you what to do? How does that transfer into changing behavior that leads to increase profitability in the reason that, that's important is so that you can provide jobs, so that you can keep going, so that you can do all these things and people understand that as a system.

Yeah, I mean, I think actually the thing with the food costs is so great. Like if you think about the way even the public companies run, you're right, certain numbers might be public or all staff members could know them, but there's a difference between that information coming from the top and maybe trickling down and maybe not you know like I don't know how many like to public employees are like you know reviewing their financials on which they faces you.

But I think something that is really magical about this way of Operating is that it's much more flat. It's not hierarchical. And so you know, everyone is involved, to your point, about the food costs, but is actually issue that we did have happened. We watch not just our food costs, but we line at a ordinary cost because the biggest part of running a market, cheers restaurant, they were skyrocketing when you we could not figure out why our costs of like cheese and milk had not gone up. Substances we were just running through stuff were really, really quickly.

And so you know most companies, you would have someone sitting in office looking at that like i'm honestly not super sure how they were gotten to the bottom of because they are not there on the ground, but because we're looking at at at in the context of these meetings every week and having people who are on the ground and working, seeing this stuff know someone at the meeting suggested they're like, hey, i've been noticing we portion out cheese in every single mac and cheese. So each one gets exactly a quarter pound of cheese, which is a rather insane amount of cheese. And they were noticing that there had been some really like sloppy work on the part of folks who are coming in early in the morning to do this that didn't look like they are actually measuring IT to the anas.

They're supposed to be there throwing IT in there. And so we went down, we started measuring out like we pulled some of these, you know bages cheese out of a fridge and started measuring that are waiting them. And sure enough, they are off by like some pretty large amounts on of this, sometimes less than they're supposed to be ability totally.

But there shouldn't have been like we're paying people is hit there and like literally way out cheese portions so that everyone gets consistent um food but also so that our food costs remain stable and they were just not really doing IT. So that became something that we then started tracking and we started like pulling baggies out randomly every week now and measuring them. And sure and off when you start measuring IT, that number magically improves.

We never had to let go talk to people and discipline them. We're like, hey, these are not coming out. The we're going to start looking at IT. And like magically, the problem solves itself.

If we have each single machines es that we sell being over by, even like a tempt of ancient of cheese over the course of a year, we would have given away a ton of free cheese, like literally a ton. We've figured that out. Love that problem saved ourselves all of that money. I don't know how that would have ve gone solved in a bigger company. I think I would have been figured aren't not a bigger company, but one which works more herrick, icy IT would have been figured out, but IT would have taken a lot of time, a lot of effort. And I think what's more is the people on the ground we're able to feel in power because they were like, oh, I just made a difference like, I hot this problem, I just saved us, you know, tens of thousands of dollars for the year and I think that is really empower ing.

And he feels good IT feels like you're part of something larger than yourself too totally. What other problems have you solved? Sort of counter intuitively through radical transparency or open book management to sort of building on IT?

Like how was saying that we started out figuring like how do we create sort of the structure as upon which people can be success and then sort of built upon that, like open book management. I think when you start having a lot more transparency and a lot more collaboration, you also start to need honestly structures to serve, help you think about how to make good decisions.

And so we started to use um I call IT collective success, but it's basically just like a stakeholder analysis and we would start measuring decisions that we were making through um how is this going to benefit um the customer or in the community? How's gonna benefit the employees and how's gonna benefit the company? Because we're measuring all these different things all the time, it's pretty easy for us to tell, you know like biometrics s what are the effects gonna be? And we started making decisions by needing to maximize the largest degree of overlap for benefit to those three parties.

And I think that was that has been really, really helpful. Giving people like data and ability to improve IT is really helpful, but also giving everyone a framework for leg. How are we going to set decide what we're going to maximize is, is so important.

Is there a particular that comes to my when you think of that, that you're like, oh, this really helped me see or solve this problem in a different light. Looking through this collective success model.

one of the huge benefits of running a company that's very employee track and really empowers people is that you have all these empower people. And one of the downside is like you have all these are people you know you have a lot of folks who have a lot of opinions and um are very vocal. One example is we used to have a language on our menu.

We had a surface charge and they could leave an additional tip. And a number of servers came in and wanted to speak at one of the open book meetings because I wanted to propose a change to that language because they felt if there was different language on the menu, people would leave far bigger tips for them. Good suggestion.

But the problem is this group of people, servers within most restaurants, actually, people already making the most amount of money. And so having this language are actually really helpful because we didn't have to say like, oh, no, we don't want to know. No one had to be like, no, I don't want to do that.

I didn't become a battle. We actually just walk through the analysis. We're like, okay, if we're going to make this change, what is the impact on the employees? And they're like, well, and it'll be great for you know servers because um we'll make more money and then really OK well, great.

How about the folks in the kitchen who are not going to see a part of those tips? You know, what do you think that's gonna like to them? And they had to feel like, oh yeah, I guess maybe that won't feel great. We walk through and looked at the customer, okay, how's this gonna feel for the customer who's now paying more money? And there I go.

I guess that maybe not actually have a benefit them and they're like, all right, well, so far for the company, you know what's the impact there? And they're like, oh, well, I guess if the kitchen is this grant little and the customer is are paying more, maybe we won't ultimately make more money if you run things traditionally. And hercules people bring suggestions that um or perhaps self serving and your job is a manager is to be like no or maybe to explain why.

And IT creates like a pretty device of dynamic. We are at odds with each other but having people walk through this for themselves and understand, hey, okay, I might want this thing for myself, but I can see how this is not good for a system that's bigger than me that I care about and decide for themselves that this is actually not the right choice. I think that was really part .

yeah reasoning out loud to goes a long way, right? Which is like instead of saying yes or no, it's like let's walk through this problem and reason about IT totally.

And I think you know sometimes when I tell people about these various management practices, it'll be like a that sounds really time consuming and i'm like, well, that conversation I just described to maybe five or ten minutes and yes, that's more time consuming than saying, no, i'm just gonna not do IT but you know what would have happened if, like, I hadn't if we hadn't had that conversation as they were to spend months complaining like hurting more, being like this is wrong. It's really interesting .

because when you think about IT just from the time consumption, it's like, well, the visible time consumption, five or ten minute if I said no, it's like zero, but the invisible time consumption is huge and hard to measure. And so we don't tend to think about that.

And I think we don't think to tend to think about a lot of things that we maybe don't measure, you know. And how much does having that conversation contribute to someone sense of satisfaction, which contribute to their langevin? And how much money do we spend on things like turn over, like all those things add up to make a huge difference over time?

What would you say to a small business? Sooner right now is listening to this, thinking about a what would you mean for me to open my books? And you know, i'm scared to do that. I don't know what the next step is.

You could start really small. You know, you don't necessarily have to start by opening everything all at once. Maybe you just pick something that you really want people to work on. I would say pick a number that you care about improving that is dynamic and is the employees can make a difference on, start measuring IT and then set a benchmark, you know like that you'd like to reach and share the success. I mean, that is part of that is if you're going to do this, if you think that improving that number could make a difference to the two of, I don't know, ten thousand dollars that year, share a thousand dollars of that with the folks who helped make that happen, you'll still be nine thousand dollars a day. So you do have to teach IT involve people, but also, you know, share in the success.

Was there a moment with homework when you wanted to give up or you know when you're sitting on your kitchen floor at home the end of a long day and you're crying and you're just like a and do this.

I think that's the beauty of like having been quite unhappy in my work before doing homework is I think I knew that the alternative look like my worst days at home room. We're still Better than my best days as lawyer. I think that helped give me perspective that like, everything is hard.

Know what kind of hard do you want and i'll pick meaningful hard any day over meaningless hard. Most things in life is doing are hard. You know, I know you have kids as well, like, that's hard.

IT is really hard to be. Appearance studies on human happiness, like show that people who choose not to have children are, on average, happier because they can just like, do whatever they want. All that, you know, for me, my kids are also one of the most meaningful parts of my life. So I think things that are hard, often a company, things that are meaningful, and if something's hard and meaningless, like that was the worst thing. And I think for many people, unfortunately, work falls into that category.

I think the kids thing is interesting because i've a lot of people go through the cycle of I don't want kids and they're really happy. And then they hit late forties, early fifties and then all the sudden it's like， I kind of wish I had kids yeah because there is an element in the tail end of life what you really want to be doing. And maybe we don't you late this or maybe not everybody wants to do this. I'm not projecting, but it's like I really want to have dinner with my kids and I want to have dinner with the grandkids and I want to watch them play and I mean, I look at how much joy my kids bring to my parents. I think, wow, like I want that .

we all have an innate drive to have some kind of impacts bigger than ourselves. And for some people that comes through children, and for some people that comes through how we spend our days, you know, maybe at work, I preferred to do both. You know, I love my kids and I love my work, and I want everywhere that i'm living in my life to to be about, you know, creating meaning with more people.

Did your law background ever help you in business aside from like reading contracts in itself? But like was an element of like, oh, I approached this different because I have a legal background.

I'll give you one way that my legal background helped and one way that I hurt. And I guess we will start with the hurt one lad to overcome IT. First, think something with about whatever your job is, is you know, what is the world view of this profession? The legal world view is, at least in america, is an adversarial system.

Two people take very extreme positions. Um you're in fact duty bound to take only that side and they do IT out and someone wins at then. So there's no grey, there's no means the middle.

It's very destructive. Honestly, you're literally fighting. I found that quite demoralizing to do over time. It's certainly a good way to run a company.

I think that something I love about business is like literally, figuratively creative, like you make something, but you also to make something, you can't be fighting those people. You have to be generative. You have to create something with them.

Moving from this destructive mindset to this creative mindset was a big chef. So I think in that way, my legal background gave me something to to overcome. But a way that I really helped me was I was really struggling to understand how to do really lack of of a Better work.

Every company or organization has the issue of people misbehaving. And i've been the person misbehaving at various jobs of its, you know what? I got fired from being a lawyer.

He wasn't really doing my stuff. I have empathy for both sides. I feel like I hadn't really seen a system that worked very well, like places I had worked. If you weren't doing well, you'd get a ride up or some kind of punishment. Maybe you be you know like dog shifts at home.

You don't get a raise like there wasn't something that felt like IT was going to a meaningful ly change behavior except with punishment, which just didn't feel effective, to be honest. So I actually did draw my legal background for that. I had had some exposure to um my system called restoring justice which is not about punishing something. It's about trying to fix wrong or make IT right and um it's a really interesting system and so we started trying to use that in our discipline at home room. IT was incredibly transformative and and really effective.

Can you mean example like so makes IT tangible for me .

something really common in restaurants. In fact, pride, many workplaces, people showing up late. If you work at a desk job, maybe IT doesn't matter so much.

If you wear in a restaurant, if someone's late, again, you need people to actually physically be present. There's just less people to help customers to cook food that makes the experience for the guests worse. And you know, we have a hundred people, so it's a lot of people who could be running later.

And he given that traditionally, if someone was running late, you probably write him up. If they do IT a few times, maybe they lose their job, right? I had found IT was not effective at all with a restoration discipline approach.

What you do is you sit down for a conversation. You basically like, kate, you know what happened? Someone says I was late and then you talk about who is affected.

Well, turns out you sort of walk them through like who was affected. It's the, you know, servers that have to cover more tables. It's the cooks that have to cook more stuff.

It's the customer that has service. IT is the manager that is now wasting their time having this conversation with you. IT affects lots of people in a lot of ways.

And then you ask me the question, well, what are you going to do to make IT right? And I think that's like the most interesting part of IT because it's not about punishment, literally. Oh, shoot.

I think for many people's, the first time they're realizing that theyve actually caused harm versus they're like in trouble. And we'd have people come up with all sorts of creative stuff. Honestly, they could go over to the top like things that once the'd realized that they had like wrong their fellow members, they would try to like pick up their sidewalk or cover a future shift.

They go apologized that bring customers like, you know, little like gifts to say, sorry, IT took so much longer to get to your table today. IT generated all these creative things. And back to that point about paramon, that person now feels like, oh, okay, I made a mistake, but I can make that thing Better. That is so much more of a fun place to work to be a part of when you see people actually making things Better for each other rather than just getting in trouble. And then you maybe doing IT again.

maybe not. Do you have that conversation when they show up for work late? Or do you have sort of like the next day.

going to depend on someone's workplace? For us, often IT would be at the end of the shift because at the point they show, we really just want them yeah .

you need them on the floor, right yeah some people .

sometimes that takes a little while like uh, to get them to be insert of a calm space to like have that conversation. We found that was really effective because when most people fleck on the impact to other people that they hopefully care about, um you know they they tend to create change and when they don't then it's also Frankly and easier conversation to say, hey, you know uh you're not Carrying about a the welfare of your fellest staff member or the customer or the company and that's our culture and we're sorry, but you can be a part .

of IT is another example that comes to mind for this has been like really practical and meaningful changing behavior.

I can say it's certainly like on a personal level, it's even like change the way I am with like friends or or family.

And I think people would say that a law like this is a technique that they would bring not just into problems that we had within the company, but that they bring home because I mean, think about how many times like we've fight partners over, you know, how big of a deal was the thing, but when you take IT out of, like, right and wrong and should be punish, ed, how do you make? Like, but wins. Just like, oh, shoot.

Like, how do we do this Better? How do I help? right? wrong. IT builds you know closely and intimacy and accountability. And I think that something you can bring everywhere.

Do you have anything unique about your hiring process when you're hiring people?

I can't say, but I was like naturally good at hire ing people through a lot of like trial and error that i've learned to get Better at. You know IT IT.

The number one thing is really trying to have people actually do the position whatever IT is IT could if it's a management position or a ground level position, we will pay people to do like practice shifts or practice project, because talking is its own skill that has literally nothing to do with most people's job performance. And so I think we recognize that pretty early. And the goal is to figure out what is IT like, you know, to actually work with you as as quickly as possible and as inexpensively as possible.

Yeah, it's a sort of cheaper than going through that whole interview process. And then you go three months, you try to figure if we just paid this person for two ships. So we going to figure this out a lot senior.

And I think some are also like figuring out what the things that are absolutely red flags that you just won't hired for, like for me, if someone is going to speak negatively about a former room player, honest. I I mean, to talk about this in the book, I really think job interviewing is like so similar to dating in so many ways. And just like if you shop to a date and someone is like a should talking all their axes.

And all i'm thinking is like, what am I onna be one of these people there, you saying negative things about and so even though we all have employers or access, we could say plenty of that things about. I think it's a bad sign if someone is just saying that up run and being vocal about IT. So that's like something that definitely red flag I would would never hire for, something that we always try to be really clear about two or or we're hiring for.

Our values were also promoting based. Our values are evaluating. And so the point is, like many jobs, they're really only going to care about job performance. And so we're pretty clear that really only about twenty five percent of what we're evaluating on. And so also going to ask a lot about our values and how we think that you might be able to live them and looking for examples of where someone hazard hasn't been able to, to do those things in former jobs.

The restaurant industry is known for, uh, a lot of sexual harassment happen. So you came up with a novel system to deal with that. Can you walk us through when you recognize you needed to, to what the system is to the impact that is hard outside of home room?

I would love to I think that's actually something really, really proud of that our team has done and I think is a combination of a lot of the systems and values that we've talked about here today.

What happened is a number of years ago I started getting this garage of emails um from female employees saying, like emergency need to talk to you and I terrified I was like what's happening but to my point, we had a lot of systems of that allowed people to be more open and more transparent and not as heroical right we held a meeting and IT turned out that uh what they wanted to talk about is that one of them had been um sexually harassed in this really agreeable way where a customer had stuck his hand up her shirt and like while he was serving the table is just crazy. But I had Sparked all the women um to start sharing stories like, oh, I have something like that, I have something like that. I have something .

I didn't realize this was common in tol reading your book and I was like, oh my god, that's insane.

It's really common and not just in restaurant, I mean for lots of kinds of companies but it's particularly bad. And like you know customer service, I mean it's really like an epidemic um and not just affecting you know women.

So yeah they all started talking about IT and I mean I was pretty horrified because I thought, you know here we are writing this like you top be a beautiful place to work and meanwhile, like people are having, you know these like orrible ying incense of sexual harassment that I didn't even know about I mean, literally first time hearing about IT shoot to our values of of collaboration um we decided to try to brain stem like how are we going solve this? Because interestingly, like I had actually kind of corporate law had practiced with labor and employment. I had, I don't know, worked on these kinds of cases and stuff, and I knew what was out there.

And there just really weren't great systems. We tried, you know, a few different things that didn't work, landed on something that did. And IT was this color coded system that we call the color code of conduct.

The idea was that what we were struggling with wasn't that no one was reporting this, but that actually was being handled really differently by different kinds of managers. And particularly, we had a lot of male managers that basically we're thinking that certain things are being reported didn't sound that threatened to them. You know, all our experiences are different.

Maybe if something like this had happened to as a man you wouldn't feel thread by, but as a woman that feels quite scary. So what occurred as is that we need to cope with the system because everyone really liked our management team. IT wasn't like we have all these like you know insensitive men working for us.

Usually great guys that they love, they really love working with otherwise um but felt weren't able to really understand what was happening. The way the system worked is just that every situation just has a color that is connected to IT. For instance, a yellow refers to just a bad vibe. So let's say the servers on the floor, they can come up to manager and say, hey, I have a yellow at table one and then it's the service choice.

They can ask the manager to take over the table um or they can keep IT and just to serve the managers up to an orange just of like the next level up which would be you have a bad vibe but then an ambiguous comment so maybe something like I like you're sure if you know little kids says that to you, you're not going na feel threatened. But if someone who you feel like husbands are clearing at and checking you out and giving you this weird, you know, weird vives, I might actually feel like they're starting to come on to you, or I might feel threatening. So in that case, the staff member just goes up to the manager and says, hey, I have an orange table too and the manager is required to just take over the table.

And a red is sort of the next level up, which is sexually explicit, common. So like, you look sexy in that shirt or touching. And in that case, the staff member has to come up and say, hey, i've a reddit table three.

And in that case, the manager is required. Kick them out. What so cool about the system as we started using IT and we developed IT, just really like we just need a fast way to deal with this on the floor, make sure everyone gets treated the same.

We don't have to explain what's happening at all the tables like there's going to be no judgment calls about, is this serious? This is not serious. There's just a way to handle IT IT actually like dramatically reduce the red, the sort of highest level incident.

And the reason is like almost no one just walks into a restaurant and just sticks their hand of someone's short. They walking, they start checking that person or they start making some low level comments and then they escalate. And I just prevented low level incidents from escalating.

How do we need IT in .

the bud totally? Yeah because IT just changes the power dynamic at you know a really low level. And IT was great because like customers don't know we're using IT, they don't know.

We think that persons creep me just like they just know they just got a new server. And staff member, you know, everyone's gonna have a different definition of what feels threatening or bad to them. And they don't have to justify.

They can just get held. I wrote about IT and I got picked up by the washington post. And IT became just like viral article.

I testified about IT in front of the united states, ec, in washington. And IT became adopted as a best practice them. So IT is now currently used like restaurants and bars, literally all over the world. And, you know started in a little .

restaurants that's crazy, such a big impact to and its kills empowering for the employees of the they are trying to rationalize or a they're just like, you know what, I got a creepy via I don't want to serve this table.

You do IT. The reason that i'm so proud of that system is that IT really IT was developed because of all those other values and systems. And I think to me, IT really illustrates, like I think we all have the ability and power to make tremendous difference, truly like on a global scale if we want to.

And I think it's just the power of getting groups of people together and creating the systems and structures that really allow them to get creative, to solve their own problems and to thrive. And I think if every small business, you know, implemented some of the things that I read about my book, i'm excited to see like what what could we accomplish? What other things could we create? change.

I'm curious as on the side, just because I like stats, but like what percentage of tables get like a yellow card .

is going depend right on the business, i'm sure. But for uh, this is not like i'd say, the system definitely gets used weekly um but not not daily you know it's pretty low. I think when people hear about IT that's their biggest fear is like, oh, what happens if someone has reported every table is a yellow but I find people don't know don't yeah .

what went through your mind when you decided to sell home room? At this point, you're one of the most successful I mean, in terms of profitability, one of the most successful restaurants in the world on top of the world, right? Like you're making a lot of money. Yeah your employees, if you've done well for the community, you've done well for your employees, you've created the system that now used all over the world for harassment. You've had a huge impact.

Why sell part of IT was I had already been thinking to myself. So I guess for one, I had received offers many, many, many times over the years to sell home room. And I never even took a meeting with anyone like I was just disinterested. I had been a CEO running IT for a decade at that point, and I personally aspire to, like, turn IT into a dragani chain. I wanted to create this beautiful players for people to work where we loved coming there, where IT felt special, where IT was having an impact on the world.

And I think that original al vision had had been achieved if, and I was actually itching a little bit to be able to do, like new, new projects, like I had wanted to write this book for a while, I wanted to start getting our ideas into the broader world, because my dream wasn't just to keep growing home room into oblivion. IT was, I liked having this sort of single restaurant, so I think I had been already thinking, you know, what is this next chapter of my life gonna look like? Because this company already has leaders that can really run IT every day and systems that i'm proud of, that I really wanted spread into the world.

That was sort of the broader vision and goal grow the impact of all the great ideas that we've done. But you know, there is also really like. Personal parts of IT that had nothing to to do with all that. You know I just I was also getting divorced at the time the pandemic had head and that was so unclear, you know what the industry was was going to look like in the long term, like anything in life where just the like timing of a bunch of crucial pieces came together. I was like, you know what, this is the right time to write a new chapter.

And if you don't know of a lot of stories like that, right, like when you think of a great movie or something thing, it's about this singular thing like, oh, I just wanted to open a great restaurant and they are supposed to do that and like, be happy forever. But I think the truth is like dreams should evolve and trained. We don't talk that much about like what happens when you actually like us to achieve your dreams.

Do you do the same thing forever? You know, no. Like IT IT grows and IT changes as IT. Should I really think that that is .

what I was for me? How long good did you sell four years ago? Did you go through any russia after?

Oh my god. yeah. I was the dark moment in my life. Honestly, you know, for me, I felt like raising this child until they're like ten years old and then giving IT up for adoption to another family where I so good to like visit, to talk to them.

But I don't get to be responsible for sort of what happens to them. This really emotionally painful IT was also a time when IT was like, I think, if the world had been Normal since I sold when I was in during the pandemic, um you know, I would have traveled a lot. I would have was totally distracted myself.

But there was nothing, you know, like the world was a bleak, dark place in general. And I couldn't travel, I couldn't distract myself. So I was really this moment of like, oh my god.

Like, who am I without company? My work? Have I made a mistake? I think IT was really yeah a sad, hard time. How do you .

keep the company culture now that you've sold that? I mean, a lot of times when entrepreneurs who find 可以 的， like start create this company that is great culture is very personality driven by the entrepreneurs. Then when they sell, they have the best intentions about that's gonna continue. How do you think about what happens in the future?

Yeah I maybe this is like not a very inspirational answer, but it's a pragmatic and true un. I mean, I think I guess what I advise anyone whose thinking of selling a company is, I think I wanted to have the belief like I currently sit on the board of the company that purchased home room, I got to advise you know the other brands I get to like I think I was excited to have potentially a bigger impact.

But I do think the truth is you know um the person who's really on the ground running something is really the most deeply people for the culture and on all the people who are working alongside them, right? Like that's what creates the culture of that organization. I think I wanted to believe that I could have a bigger impact from a different seat, and I do in some ways.

But I think if you're gna sell your and you have to feel pretty comfortable with knowing that that culture is gonna change. When I think about, again, my original goal was starting home room IT was to create a job that I and many other people would love, and they would create a positive impact. And we did that.

And I think, you know, everyone who worked there during the decade I was running at know many of them were still there. Some have gone off to do the other things. I got to go and have the time to write a book about IT.

We're sitting here right now. I think that I was never about like calcify that culture in one organization for the rest of time IT. How do we make work that's worth doing for more people? And I think to that, and i'm very proud to have sold and been able to read the book and be able to influence more people.

I think what do you think same store sales are? You know, restaurant location cells are down for most restaurant changes, most restaurant brands. Where's small or large? I mean, they are all suffering through this. You're not what do you think is the cause of this?

This is honestly one of the hardest times that i've seen in the restaurant industry in all the years been in IT. I think we're sort of in the moment of of reckoning and change cause of ghana. I think people are rethinking the meaning of work and what's worth their time.

And most restaurants, like I said, are not inspiring places to work. And so I think a lot of people of that, I don't need to do this with my life. So restaurants seen in national are having really hard time staffing, really hard time making money.

Like the face of cities have changed in the face of like um you know a lot of work going remote. So I think it's just a moment of like reconfiguration and change. I think all industries go through IT, and I think it's just being particularly hard felt in the restaurant industry right now. There's a lot to be learned from the people who are like creative and trying new things and experimenting with new things. I think like the hardest moments are usually what give rise to sort of like lasting positive change because the only the best ideas sort of .

make IT and you said in your book that you manage for impact, not this .

idea of impact and intent is, I guess, to my earlier point about like the best lessons learn business you can take to, like all of your new relationships in your life. I think in tent. And impact is huge.

A lot of people think instance is what matters, but we would teach that actually its impact. An example would be, let's say, that I see someone walking down the street and they have, you know, like a big belly and i'm like, oh my god, congratulations. Like what you do and I are like, i'm not pregnant that is just so deeply embarrassing.

My ten might have been really positive. I might be trying like, make them feel good about themselves, congratulate them on, but the impact is super negative, right? Like turns out that not pregnant, they now feel like embarrass.

It's a totally awkward moment between us. Should I like not apologize to that person? Because I I meant something really positive with, you know, my compliment. No, like a of course I should like I I either hurt them or we had this award moment and we would teach that all threat the organza. I think most people really want to do good, but sometimes we are really, you know, negative impact.

I had a manager, he would go around and compliment people on their clothing like cool hat, love you sure you know if he's just just like very sort of enthusiastic, like puppy dog energy. I do think he had like a really, really positive intent. But I had um a staff member who came to me one day and was like, hey, this person told me that I have a nice smile and that like creep me out, make me feel uncomfortable.

That makes sense if a customer said that would would have been like an orange at the table, you know. But I also like, that's a really common like, you know, come on to women is like, oh like nice smile. I believe that that no manager had a really positive, tend to try to make her feel good, but had a really negative impact where he felt like he was being creepy and like bora using a line that someone else might used to hit on her.

So we uh, restorative conversation about IT and talked about IT and talked about why the intent doesn't matter but the impact does. And so then we just start talking about like how could you have a Better impact on people's work? IT was to honestly not talk about their appearance like they know no one cares like your manager, or thinks about your shirt or your hat, your smile, right?

Like they wanted. Know what you think about their word, tell them like you did amazing job with that table. IT helped him manage flic. He had this really positive intent that he could channel into more positive impact for the team.

As I was listening that and the smile thing is a pretty like innocuous comment like I was thinking, oh, you know what have what if he made fifty people feel really good and Better and happier about being work and then one person who yeah who didn't like, how do you think through that in terms of the impact is also like, oh, I like IT when you I feel happier when somebody recognizes that I put extra attention into my uniform today or I found this hat at the the vintage shop yeah I searched for hours and like I want to get noticed and I want to get some sort of the yeah validation over that.

I mean, managing for impact as hard, you have to ask yourself that question, if you have fifty, people are most gonna love IT. If you you know, compliment that, are sure are their hat or they are not going to care.

Some person are affected and is IT fifty fifty? Or is IT like eighty twenty or ninety ten? Like how do I determine? So then I would .

say that we should then have a conversation about this concept of collective success. And when we think about, like, how to create the most good for the most number of employees, is that the right angle? I was you probably because even if forty nine love IT and one hates IT, my guess is fifty out of fifty will like IT if you compliment their work. And so I think what does get a Better impact taking that same energy and tweak IT, you know.

whatever twenty five degrees is yeah, finally, you are advocate for titles. And I want to get this quote right. You say titles reflect how the world seize us, but more importantly, how we see yourselves.

Yeah, I I do think titles are incredibly important. I think, like most things I realized are important. I realized how important IT was by a sort of messing IT up the first time and learning over time sort of why IT matters. I guess I can illustrate that best just with, you know, my own journey with IT. I'm an owner of a small restaurant in the grand scheme of things as well as we do is still a singular business.

As I started gaining more prominence for you know um ideas about what were doing the workplace as a sexual harassment system, I start doing a lot more interviewing and I would always get asked OK, what's your title? I was actually um. In conversation with the support from the youth times.

And just like OK, are you the chef and not chef? After we got off the phone, I was like, god, why don't I consider myself a chef? Like, I literally, I made all the recipes.

I've published a cookbook. I own this restaurant. I mean, like if i'm not a chef, like who the heck is one? But you know, that's a bizarre thing to say.

But I had this vision in my head that a chef is someone who's like a really, really serious cook, like baseball all their days in the kitchen. And that wasn't me. IT was similarly with CEO.

I thought of CEO is like, you needed to be the head of, like some dragani company. You needed to have, like a full stack of people, you know, sea level titles beneath you. I just decided to start experimenting.

I was like, you know, what is IT gonna sound like in the new york times interview? If i'm not a chef, i'm not a CEO. Like, I think i'm gonna get taken as seriously for my food or for my business ideas.

And so I just decided to actually just embrace those titles and and see what happens. I started um speaking at conferences for CEO. There was like groups that I could not join previously because I did not consider myself A C E O that I now could be part of.

That created a lot of, like, you know, mentorship opportunity is for me. But I just really expanded my network that expanded my reach. IT really affected how seriously people took me. So I started encouraging everyone within the company. We started really just like a leveling up, you know everyone's titles and are so much pride associated with having like a title that is like, uh, more serious and you start you know acting like that like someone who cokes, where is someone who is a chef that is a very different level that you're going to think about cooking and food, someone who is a leader and someone who is a CEO. Same deal.

We talked a lot about the external impact in terms of like, oh, maybe the times reporter takes me here, maybe somebody reading IT is gna take IT here and to have a bigger impact outside. But what about the impact inside you? Just touch briefly, how did IT change you? Like, recognize yourself that way, just as IT changes a cook, maybe to a chef. And the pride that you take in your work.

if you like, someone who likes, likes to ride bicycles, which is your a cyclist, we're like someone who like to dicks around in the ocean or a surfer. I do think that there is tremendous power in saying something about yourself and saying, no, I am a surfer, I am a CEO, I am a chef. I just found that I felt a lot more pride in myself. You know, those identities meant something not just the external world, but to me, I found them personally empowering, something that, like, when I would get like a little loss, I could come back to and think, like, what does that mean to be the.

I often say the most powerful story in the world is the one that we tell ourselves. And if you tell yourself I am a runner, IT makes IT a lot easier to go for run. Then, if you think of yourself as a casual dragger.

one hundred percent, if you are a runner, you are going to create a training schedule for yourself. You're going to start like.

you know, part of your identity totally.

So if you don't do IT for a few weeks, it's gonna matter to you. You know, you're going to be in Better shape. You're going to have more pride. And what you do your times, you're onna be Better like gets a different thing. What success for you? Success for me is, I think just having meaningful relationships in my life, whether it's with work, with family and creating ways for other people to do the same.

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