January 29, 2007
Book Short: Virtuous Cycle
Danny Meyer’s Setting the Table: The Transforming Power of Hospitality in Business is a fun read if you’re a New Yorker who eats out a lot; a good read for entrepreneurs around scaling leadership skills as the business grows; and a great read for anyone who runs a serious customer service-oriented organization. I’ve eaten at all of his restaurants multiple times over the years except for the new ones at MOMA (perhaps a few too many times at the Shake Shack), and while I like some more than others (perhaps the Shake Shack a bit too much), they all do have great hospitality as a common theme.
While there are a lot of good lessons in the book, Meyer talks about something he calls the Virtuous Cycle of Enlightened Hospitality that matches the general hierarchy of constituents or stakeholders in a business that I refer to at Return Path: employees, customers, community, suppliers, investors. His general point is that if you have happy employees, they make for happy customers, and returns for investors will follow. While the specifics may or not be true of all businesses, I bet the first and last item are — especially for service-oriented businesses in any industry. I wish we had a better handle on the Community aspect at Return Path, but we at least do an OK job at it, especially given the geographic diversity within the company.
(Note this was one of Fred’s favorite parts of the book as well from his review — nice to see a professional investor in agreement!)