Will Guidara is most known today for his role in building Eleven Madison Park, one of the best restaurants in the world. (In 2017, EMP won the Best Restaurant in the World). Guidara was the General Manager of EMP for 13 years. But he wasn’t always the excellent restaurateur that we know today.
Back in 2001, Guidara was a fresh graduate from Cornell University with a degree in hotel administration. He began his journey at Wolfgang Puck’s Spago in Beverly Hills, before moving to Danny Meyer’s Union Square Hospitality Group (USHG). He was young and inexperienced … but so was USHG.
Today, USHG is a world-famous group of restaurants renowned for their service. But at the time, USHG was still a fledgling organisation, despite Meyer’s growing reputation. USHG consisted of four restaurants. As Meyer grew his company, there was little corporate infrastructure in place. (He did not even have a corporate office, with his ‘office’ being a room in the basement of Gramercy Tavern.) But Guidara thrived. He worked at Tabla, Meyer’s innovative and then-new Indian-cuisine restaurant. And during that period he was picking up on Meyer’s approach to hospitality. But when Meyer offered Guidara the role of Assistant General Manager at jazz barbeque restaurant Blue Smoke — at the tender age of 22 — Guidara turned him down. Why?
The short answer is that Guidara had a call with his dad. Frank Guidara was a lifelong restaurant man, and Will expected Frank to congratulate him on his impending promotion. Instead, Frank disagreed.
“Before you fall head over heels with this one way of doing things, make sure you understand there are different approaches out there” he said.
Frank Guidara had a very particular view on the shape of the restaurant business. He believed that there were ‘restaurant-smart’ companies, and ‘corporate-smart’ companies. Years later, Will would write, of the conversation:
[My dad] described the distinction between the two. In the simplest terms: Where do the highest-paid people in the company work? In the restaurants themselves, or in the corporate offices? That says a lot about how the company is run.
In restaurant-smart companies, members of the team have more autonomy and creative latitude. Because they tend to feel a greater sense of ownership, they give more of themselves to the job. They can often offer better hospitality because they’re nimble; there aren’t a lot of rules and systems getting in the way of human connection. But those restaurants tend not to have a lot of corporate support or oversight—the systems that make great businesses.
Corporate-smart companies, on the other hand, have all the back-end systems and controls in areas like accounting, purchasing, and human resources that are needed to make them great businesses, and they’re often more profitable as a result. But systems are, by definition, controls—and the more control you take away from the people on the ground, the less creative they can be, and guests can feel that.
Restaurant-smart companies can be great businesses, and corporate-smart companies can deliver great hospitality. But their priorities are different, in ways that fundamentally affect the guests’ experience.
Danny Meyer was one of the most restaurant-smart operators around. At the other end of the spectrum, McDonald’s was probably one of the most corporate-smart companies around. As Guidara listened to his dad, he realised that there was a whole different game in the restaurant business that he hadn’t yet been exposed to.
He turned down the promotion the very next day, and quit USHG shortly after.
Guidara then went to work for Restaurant Associates (RA), a company his father once worked at. This was not a sexy company. Guidara writes, later: “I’d gone from the front door of one of the most glamorous restaurant jobs in New York to the basement at one of the least.”
But he did it for good reason:
“My dad recognized that I was getting an incredible education in restaurant smarts with Danny’s company. But he wanted me to one day run a company that was corporate-smart and restaurant-smart. It was time to go get the other half of my education.”
The challenge to integrate restaurant-smart with corporate-smart would define Will’s career for the next decade.
At RA, he worked as the assistant for Ken Jaskot, the purchaser, and Hani Ichkan, the financial controller. In the mornings, he worked purchasing. Guidara learnt how to inventory a walk-in refrigerator, how to receive a delivery, how to calculate costs of goods sold, and how to order food and supplies. He writes:
“Oysters weren’t theoretical to me as a luxury line item or a cell in a spreadsheet—they were the valuable, ugly little rocks I’d counted by hand earlier in the day, packed in ice, and nestled into their fish tub.”
In the afternoons, he headed upstairs to the corporate office to run financial reports in the accounting department. To his surprise, Will found he was enjoying himself.
Working across purchasing and finance made for some pretty compelling education:
One afternoon, Hani flagged one of my reports—he’d noticed that food costs at a particular restaurant were way up, and for the second month in a row. He pulled another of my reports from the pile; the restaurant was selling a lot of lobster. Yet another report: lobster prices had skyrocketed. A quick call to Ken to confirm: yup—demand had outpaced supply, and prices had gone through the roof.
A call to the chef: Were we undercharging for the dish? Definitely, given what we were paying for the ingredient, but he couldn’t raise the price high enough to get costs in line without sticker-shocking our guests. So the path forward was clear: the dish, popular as it was, had to come off the menu, at least until lobster prices dropped. Luckily, the chef had been playing with a scallop dish he could replace it with.
Meanwhile, in our office: “Will! Figure out who else in the company is selling lobster.” Another series of phone calls. . . . Lobster season at Restaurant Associates was over.
Guidara found the thrill of the chase ‘infectious and exhilarating’. But the episode also taught him the power of the systems Hani had in place.
In a restaurant-smart company, this entire sequence might never have happened. First, a restaurant-smart company might not have had a financial controller. Second, even if they did, the financial controller might not have had the power to override a chef in the restaurant. Ichkan’s work was only possible because of the business systems that existed within RA. Guidara began to see the wisdom of his father’s advice — if you wanted to run a remarkable restaurant, you needed to be both.
Ichkan was a good teacher. In university, Guidara had learnt that the “Profit and Loss statement” was the “Big Picture—a snapshot of the business that tells you what you’re doing well, and what requires attention.” He begged Ichkan to show him the P&L — any P&L — of an RA restaurant, but was always rejected. Ichkan directed him to continue writing his daily sub-reports.
It was only after six months that Ichkan dumped a P&L onto Guidara’s desk:
“I’d hardly opened it before he started peppering me with questions, but he’d prepared me well; running those endless sub-reports meant I knew how to attack every problem that could possibly crop up. And because I was working upstairs and downstairs, I had an almost preternatural sense for what the spreadsheets were telling me.”
Guidara was gaining skills on the ‘corporate-smart’ side of the business. However, he soon saw the dangers of merely being ‘corporate-smart’.
After nine months, Guidara took over as assistant general manager and financial controller at Nick + Stef Steakhouse. Nick + Stef’s Steakhouse was an RA restaurant. One day, he decided to move a floral display on the bar, because it was blocking the bartender's ability to make eye contact with guests. RA corporate overruled Guidara a few days later — telling him, “Arts and Design are in charge; you can’t move stuff without asking them.”
These tensions came to a head when Guidara dealt with a difficult employee. This employee — we’ll call him Felix — was well-liked by the higher-ups and guests alike, even though he often disrespected his colleagues. Guidara decided to fire Felix after he was late to the dinner rush one night. However, the higher-ups decided to rehire Felix without consulting his opinion. Guidara was furious. It was one of the few times where Guidara felt disempowered, where he knew what was better for the business, but was ignored by corporate higher-ups who did not have complete information of what was happening on the ground.
Still, this experience helped him understand that balancing being restaurant-smart and corporate-smart was not easy.
Guidara had another stab at finding this balance when he became general manager of the casual food operations at the Museum of Modern Art (MoMA). By this point he had returned to working for Danny Meyer. Will writes:
“Every decision I made seemed to expose the natural tensions between improving the quality of the experience the guests were having and doing what was best for the business. Restaurant-smart meant leading with trust—including allowing the people who worked for me to do what they felt was best for the guests. Corporate-smart meant running a tight ship. Which was right?”
The question continued to haunt him when he began to design a gelato cart for the one-of-a-kind Sculpture Garden in the MoMA. But here Guidara discovered one way to achieve balance — something he called the ‘95/5 rule’.
What is the 95/5 rule?
It is to manage 95% of your financials down to the penny while spending the remaining 5% “foolishly”, and “splurging” the 5% on the guest experience to create an unforgettable experience.
The 95/5 rule came from … Guidara’s experience with gelato spoons.
Image Source: Will Guidara’s Instagram
If we take a step back, it’s a little ridiculous to say that a disposable spoon could be so impactful on the MoMA’s gelato cart. But Guidara’s instincts told him otherwise. It seemed obvious to him that the spoons were needed for the gelato cart to shine no matter what anyone had to say. The problem was that the spoons were terribly expensive. Guidara writes:
The first time my boss saw one of those spoons, she narrowed her eyes and asked me what they had cost. I told her, and her eyes got even narrower: “We’ll talk about this later.” But a month later, we sat down to review the first P&L for the cart, and I never heard another word about those spoons.
Guidara ensured that 95% of the cart budget was meticulously managed — he used MoMA’s name to get the gelato at a steep discount, and without needing to pay for the gelato cart. (The cart was paid for by Jon Snyder, owner of il laboratorio del gelato). Costs secured, Guidara went all-in on the spoons.
His gamble was an overwhelming success. One day, Guidara saw Glenn Lowry, the director of MoMA, buying gelato for a group of visiting curators. To Guidara’s deep satisfaction, the curators spent a moment admiring the spoons they held in their hands before digging into the gelato. These blue spoons have since become inseparable from the popularity of the gelato cart.
Guidara continued to carry the 95/5 rule with him in his journey in the restaurant industry. It eventually became one of the foundational pillars of his operating philosophy: “Unreasonable Hospitality”.