Special Episode, Part 2: We Want to Talk to You About the Bread

Guests:

Brian Canlis is co-owner and president of Canlis restaurant in Seattle.

Karen Clark Cole is co-founder and CEO of Blink.

Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.

Dana White is founder and CEO of Paralee Boyd hair salons.

Laura Zander is co-founder and CEO of Jimmy Beans Wool.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Brian Canlis: “We did lose 10,000 guests that year. And we lost money for the first time as a company ever that year. And we got three negative reviews in the paper. And we were averaging about a dozen complaint letters a week about how much they thought Mark and I were destroying a family legacy. That was a low moment.”

Brian Canlis: “I would say about 90% of our regulars no longer come back, to this day, which is a big deal.”

Brian Canlis: “We realized what a bummer it is to make people do math at the table, so we switched to one price for the whole experience. There’s one price, no matter what you order, no matter what you get.”

Brian Canlis: “He was an early social media genius before social media. He claimed on the phones for the first few months that you couldn’t get in—like they would call for reservations, ‘Sorry, we’re full.’ We weren’t. It was empty, but word went around the city that you couldn’t get in.”

Brian Canlis: “We exist in a world of fine dining that is notorious for depression, suicide, alcoholism, broken families. Restaurants are rough, and it’s horribly ironic because we’re supposed to be in the business of restoration and serving, and yet we are some of the most broken people out there.”

Dana White: “The people who run my salons—the hair traffic controllers—are former restaurant high volume managers. I’ve worked in a restaurant, but the people who run the floor are the best. The best hair traffic controllers have run high volume restaurants.”

Full Episode Transcript:

Loren Feldman:
I’d like to call up our special guest, Brian Canlis, to join us here. [Applause] When I first told Karen that I had met you and wanted to invite you to do this, I knew this was stupid, but I did it anyway, for some reason. I said, “Do you know this restaurant, Canlis?” And she said to me—

Karen Clark Cole:
Oh my God, Loren. So embarrassing!

Loren Feldman:
That’s like if I said to you, “Have you heard of this building, the Empire State Building?” I’m from New Jersey.

Brian Canlis:
Stop! It’s been there a long time.

Loren Feldman:
Thanks for joining us here today. You and your brother took over the family business. It’s been around for 70 years or so now.

Brian Canlis:
We turned 70 this year.

Loren Feldman:
You took over more than 10 years ago, maybe 13?

Brian Canlis:
Yeah, we came back about 15 years ago. My parents stopped coming to work about 12 years ago.

Loren Feldman:
What I want to dive right into is, you and your brother had a vision, you made a bunch of changes. It didn’t all go exactly the way you hoped initially.

Brian Canlis:
No, it was terrible. People hated it.

Loren Feldman:
Your parents retained some ownership, they had made a loan to you to do the transactions. Your parents hated it too. What was the worst moment with your parents when things were not going well?

Brian Canlis:
The worst moment? We were sitting at table 54 in the bar, because my parents, they do this ominous thing where they say, “Can we just sit down for a little bit?” And my brother and I were both working the floor, but it was early, 5:30, so it was slow. In fact, that year, it was slow every night. It was 2009. We sat down, parents head down, and they said, “We want to talk to you about the bread.” We’re like, “Oh, awesome, great topic.” We just spent a lot of money building this new oven, it was about a $20,000 oven. We hired the best baker we could find in the city. We had been buying bread before. Now we were going to bake it ourselves. It was one of our steps into becoming a great fine dining restaurant. You have to make your own bread.

They’re like, “We hate the bread.” And we’re like, “Well, Mom and Dad, you’re wrong. Bought bread is not as good as our new fancy bread.” And they said, “We don’t care, and I don’t think your guests care that you bake your own bread if it doesn’t taste as good.” That devolved into a conversation of, “We think most of the decisions that you’re making aren’t the ones that the guests want.”

We did lose 10,000 guests that year. And we lost money for the first time as a company ever that year. And we got three negative reviews in the paper. And we were averaging about a dozen complaint letters a week about how much they thought Mark and I were destroying a family legacy. That was a low moment. [Laughter] Our ability to be profitable was our ability to pay back the loan to my parents to buy the company.

Loren Feldman:
Which represented their…?

Brian Canlis:
Retirement. That was their nest egg. They didn’t have a wad of cash, they had the restaurant, and they sold it to us. And our ability to keep it successful was their ability to grow old and retire. There was a lot on the line.

Loren Feldman:
Before you tell us how it worked out, let’s back up for a moment. Tell us a little bit of the background. Your grandfather started the restaurant. What was the restaurant like then? What restaurant did he start?

Brian Canlis:
He built that restaurant in 1950 in its current location. He built it as a home and a restaurant. The top level was his home. The bottom level was the restaurant. It was so far outside of town, on the road to Alaska. It was the highway that everyone took for the gold rush. He said, “If it’s within a $1 cab ride of downtown, people will come.” The paper, the Seattle PI, was like, “No one’s gonna go, it’s too far away.”

He was an early social media genius before social media. He claimed on the phones for the first few months that you couldn’t get in—like they would call for reservations, “Sorry, we’re full.” We weren’t. It was empty, but word went around the city that you couldn’t get in.

Loren Feldman:
That’s a ballsy risk.

Brian Canlis:
Yeah, he would go to all the social clubs and have himself paged. [Laughter] Like, wow, this guy, everyone’s trying to get ahold of him. He was a character, and he famously kicked out the Mayor of Seattle for not wearing a tie, which created a story, which created press. He famously started this rumor that I still hear about today, that if you don’t spend enough at Canlis, they’re going to slip you a card to ask you to never return.

Karen Clark Cole:
Is that not true?

Brian Canlis:
It is both true and not true. The person who tipped off the press on that rumor was my grandfather. He invented the story to get press. He loved the idea of being exclusive. He loved the idea of people talking about him. He offered a reward in the paper, a thousand [dollars] cash if anyone could produce this card, and it was this thing. Everyone’s like, “Find the card,” and he would angrily say, “No one has ever showed this card to me. Lies!” He built the entire thing. That was my grandfather. He was about being exclusive and about being the best, and about creating one of the world’s greatest restaurants. And he did that in the 50’s and 60’s.

Loren Feldman:
Your parents took over and ran it for 30 years.

Brian Canlis:
Yeah. My dad was a banker in California and my grandfather showed up at his bank, hadn’t seen my dad in years, and said, “I’ll be dead in a year. I’m leaving the whole company to you. You might want to move to Seattle and learn how to run a restaurant.” So my dad packed up our family, my mom was pregnant with me in our station wagon, and drove to Seattle and learned to run a restaurant. My grandfather was dead within six months and I was born two months later. That’s how my parents reluctantly took over.

Loren Feldman:
And what kind of restaurant did they run? What did they do with it?

Brian Canlis:
They did a great job. They kept it alive for 30 more years and flourished and gave me a wonderful quality of life as a kid. They turned my grandfather’s recipe a little bit on its head and they wanted to make the restaurant about being inclusive. They wanted to make it about being a good family member to the neighborhood and the community, and they were super involved in all these nonprofits, and then raising money, and then throwing events that generated a ton of money. They cared about humanity in a really beautiful way that my grandfather never did, and they ran a darn good restaurant.

The hard part was, in the 2000’s, Food Network came along and the birth of one of my least favorite words on Earth, the “foodie,” occurred. So restaurants did a hockey stick of evolution where fine dining didn’t change that much back in the day, and suddenly, chefs became celebrities and dining became something that was social. It wasn’t about being seen in a dining room as a regular. It was about telling your friends where you had been. It was about proving how cool you are and your taste and who you knew.

Loren Feldman:
Instagram.

Brian Canlis:
Yeah. The industry started rapidly evolving. You had restaurants like El Bulli in Spain just north of Barcelona doing things that people had never seen before and blowing people’s minds. And my parents were like, “I don’t think we have this in us. We’ve been running a great restaurant for 30 years, it was profitable the entire time, which is hard in our business.” My brother and I were both officers in the Air Force at the time. We had gone away. My parents wouldn’t pay for college, they made us pay for it, so we figured out how to do that through Air Force scholarships. And they said, “We’re thinking about selling the restaurant, because we’re tired, so if you want a crack at it, you might want to come home and try it,” so that’s what we entered into.

Loren Feldman:
When you took over the restaurant, before that difficult sitting at the table that you told us about, what was your vision?

Brian Canlis:
We didn’t really have one. We both started as dishwashers and we both worked in the kitchen. Back then, there were six people in the kitchen, plus the dishwashers. Now we have about 25, and we do almost half the covers. It’s a very different model now. We had been busboys. All we knew about fine dining was this restaurant. We knew we loved the history. We grew up going to sleep under dining room tables. That place was like a second home to us. But it was our version of the best fine dining there was.

On my Air Force money, I didn’t do fine dining very much, so we were pretty sheltered. We got nominated for a James Beard Award in 2005, right when we came back, for best service in the country. We thought that was pretty hot stuff. We went out to New York, and we dined at the four other nominees who were all in New York City, and all four of those restaurants were so much better than ours. It was a terrible, wonderful, frightening thing.

[To Laura Zander] It’d be like discovering wool that was so much better than your wool, like, what do you do?

We had no idea how behind we were when it came to what restaurants had become. That was when we got excited, actually, because it’s like, “Oh, we don’t have to run our parents’ restaurant. We can run something that we’ve never seen before in Seattle.” So we set out to become a restaurant that could compete with the greatest restaurants in the world, and that was the slow decline that led to table 54, bleeding money, and almost losing the entire business.

Loren Feldman:
So how did you and your brother respond at table 54 when your parents confronted you and told you, “This is not working”?

Brian Canlis:
Not as well as we could have. We disagreed. It took us a while to realize that they were right. It wasn’t as good, the bread, in their minds. I remember when we switched from Starbucks coffee in our dining room to this incredible, fancy, beautiful coffee that was grown just for us, and we flew down to Guatemala to meet our farmers and pick out our lot and make sure that it was sustainable. It was incredible, and we brought this new coffee back, and our pastry chef worked with it, and we did the roast perfectly to our liking. It was the perfect pairing with most of our desserts, versus the very roasted flavor of Starbucks, which isn’t necessarily great with food.

We were like, “Behold, it’s our new coffee.” Everyone hated it. And we said, “What are you doing? This is better.” And they’re like, just because it’s better, doesn’t mean it’s better. The bread, even though it was better, if you’ve been having the old bread for 20 years, you don’t want the new bread. We made that switch too abruptly. We said, “You’re wrong for not liking the coffee or the bread,” instead of being curious about why or what they were connecting to, or telling them the story. I’ll never forget this. They’re actually dining tonight, this couple who dines on table 26—

Karen Clark Cole:
You’re pointing at them. There they are.

Brian Canlis:
We brought them the new coffee and they’re like, “This is disgusting.” And we’re like…

Loren Feldman:
They said that to you?

Brian Canlis:
Oh, yeah, absolutely. “Take it away.” They dine every week, except in the middle there, they took a few years off, but the next time, we brought them the old coffee. And they were like, “Thank goodness, you’re bringing the restaurant back to where it should be.” And we said, “No problem.” And then the next time, we brought the old coffee to make sure, because it was a pattern, and then the next time we brought the old coffee and then we also brought the new coffee with dessert and said, “Hey, just for fun, we’re thinking about this new coffee. What do you think? There’s no pressure.” And they’re like, “Oh, that’s fun.” And then the next time, we brought both coffees, and then the next time they asked for both coffees, and then the next time—and it’s nice to have regular guests—they said, “You know what, this new coffee is super fun. We think it tastes better with the desert.” And we’re like, “You do? Oh, what a wonderful discovery.” And then the next time they said, “Just bring the new coffee.”

We did that with guests. We learned to take some of the older ones along for the ride, instead of telling them that they were wrong. We used to have all the silverware on the table. It was ridiculous. Why do you need the dessert spoon on the table when you sit down? It’s so dumb. What we did is what fine dining does today, which is there’s no silverware. You only get the thing that you need the moment that you need it. So why give someone a bread knife when there’s no butter on the table? It makes no sense.

Well, some of the guests were like, “We want our silverware back!” Instead of telling them, “That’s ridiculous,” which it is, we just set the table the old way. So you walk in on any given night, there were all these beautiful tables, and then three of them were covered in silverware. It made no sense. But it was a way to not tell people that they were wrong.

In that moment with my parents with the bread, it was a learning moment for us. It’s like, my parents aren’t making this up. They do like the bad bread better. We were making the restaurant better. The food that we were making with 25 cooks in the kitchen versus six was better. It was also more sustainable, more beautiful, more delicious, and more healthy. It’s better. But when you have a legacy that’s, at the time, 60 years going, better doesn’t mean better. We asked our parents to have faith in us. They raised us well. We said, “Hey, you raised us. Come on, have some faith.” We had a board at the time and the board was very successful in the restaurant business, and they were like, “Listen to your sons. I know they’re young and kind of stupid, but what they’re doing will ensure that Canlis is going to be around for the future.”

Karen Clark Cole:
Did you and your brother always see eye to eye?

Brian Canlis:
Yeah, it’s been a crazy gift that we are super aligned. We fight a lot, and we don’t always agree on little things, but the big things we’ve always agreed on.

Loren Feldman:
You won over your parents, apparently.

Brian Canlis:
Yeah, they’re big fans now.

Jay Goltz:
Yeah, they’re now living in a trailer park somewhere.

Brian Canlis:
No, their home is so much nicer than mine.

Loren Feldman:
How about customers? Did you have to turn over customers? Did you gradually lose the customers who liked the old way and bring in new people?

Brian Canlis:
I would say about 90% of our regulars no longer come back, to this day, which is a big deal.

Loren Feldman:
Did you have to go looking for those new ones, or did word spread?

Brian Canlis:
Well, yeah, we also redefined a regular. We now call a regular someone who dines twice a year. That’s a regular. Regulars used to be every week. That’s gone. Loyalty isn’t a thing anymore in that way. We threw ourselves a small pity party and then we moved on and figured out, what does it look like? Because at the same time, the world was changing, and dining tourism, which is still huge—it’s one of the first things people do—they make reservations before they make their flights.

Loren Feldman:
You made a lot of changes. You’ve told us about the coffee, baking your own bread, quadrupling the number of people in the kitchen, maybe halving the number of meals you’re serving—

Brian Canlis:
No, we removed tables. We decreased the amount of people that we allow at each table.

Loren Feldman:
So something else had to change. Your prices had to change, I’m guessing.

Brian Canlis:
Yeah, they’re a lot higher.

Loren Feldman:
How did you accomplish that? Was that difficult?

Brian Canlis:
Yes. One of the things that we did was, we had an experience at Disneyland where you realize you pay one hefty price upfront and then there’s this beautiful freedom to go on any ride you want. Every restaurant you go to, there’s this tyranny of choice of, “Do I want the salad or the lamb or the steak? Well, one’s $10 more than the other.” Why should that matter? And you start doing math at the table all the time of what’s more important: my desire in this moment or my budget? Then the valet was an extra $7 to get your car parked and then this was an extra…

We realized what a bummer it is to make people do math at the table, so we switched to one price for the whole experience. There’s only one price—you saw last night—on the menu. There’s one price, no matter what you order, no matter what you get. That price includes valet parking.

Karen Clark Cole:
And coat warming.

Brian Canlis:
And coat warming! So when we turned it into an experience—because before, we had to raise our prices. We changed our salad from $20 dollars to $22. And someone’s like, “The salad down the street is $16. What right do you have charging $22?” We’re like, “Well, the chair you’re sitting in cost $3,000,” which is true. But they don’t count those things.

Once we took the price out, and we started at $115—that was our opening price for a four-course menu. It’s now $135. Every price increase we’ve done in the last seven years, I don’t think we have a single complaint. Because it’s like, “Oh, the price of Crystal Mountain went up $5.” It doesn’t matter, you get to go wherever you want once you’re in.

Jay Goltz:
This is going to be odd, but the picture framing industry has gone through a similar thing where the bottom part of the market has been sucked off by the phony sales at the department stores and stuff and the people who are in business today got better and are appealing to the people who want better and nicer, and the prices have gone up and are more exclusive. My wholesale line, I sell better stuff from Italy and Spain. You changed customers. You went after a more stable market, which is people who want better and nicer, and the mass market people don’t do that.

Brian Canlis:
Well, they want an experience. No one comes to Canlis because they’re hungry. They come because tonight matters for some reason and they want to mark it. They want an experience, and to put one number to that experience is awesome.

Karen Clark Cole:
What I love about Brian’s story—that’s a user experience story. That’s exactly what it is.

Dana White:
Yeah, it definitely is.

Karen Clark Cole:
Right from when you pull up in your car, that’s a user experience. No tickets. There are no numbers in your restaurant. Wow, all you have to do is actually watch when somebody gets up and they’re about to leave. Wow, that’s amazing.

Brian Canlis:
Yeah, it’s one of my huge pet peeves that when you do valet or coat check, someone gives you a number, because all they’re saying to you is, “You don’t matter enough to me for me to remember you.” Like if Beyonce came, no one would give her a number, like, “Oh Beyonce, here’s your coat check.” Also everyone’s going to try on Beyonce’s coat in the coatroom. By giving someone a number, all you’re saying is, “You don’t matter.” And so by not giving someone a number, you are subconsciously telling them, “I care so much about you that I’m gonna remember you when you come.” And no, we don’t remember their face. We have systems secretly behind the scenes.

Karen Clark Cole:
Like what? Can you tell us?

Dana White:
I have the exact same system at Paralee Boyd. At Paralee Boyd, we have three hooks here, 10 hooks here, three hooks here, and the same above. Your coat is placed on when you came in, and so when we see you in the fourth station or the third station, we know which coat is yours. And if you have somebody with you, you’re on the second hook of that same group of hooks.

Loren Feldman:
Is that the idea?

Brian Canlis:
Almost exactly, yeah. We actually park the cars like the dining room is. Because you’re in the bubble when you’re dining, you probably don’t realize the valet walks by your table a dozen times a night. Did you notice?

Dana White:
[Gasp] I did not.

Brian Canlis:
The valet walks by your table a dozen times. They do laps around the dining room waiting for checks to get dropped. So as soon as the checks drop, they know they have—except for those evil guests who wait for an hour—what they do is they go back to the team and they’re like, “Okay, they’re in this table, which is this section of the parking lot.” And between the three of them, they can figure out, “Oh, I remember who that was.” Then what they’ll do is they’ll stand at the front desk and they’ll watch for you to stand up. As soon as you stand up, they go and get your car because they already know where it is.

Sometimes you go to the bathroom and your car’s waiting, and you’re like, “Why is…?” [Laughter] Sometimes we screw up. But that’s all it is. And you know what, it’s so much more fun because it’s challenging, and it’s relational. For those valets, it’s a magic trick, and the guests coming out can’t believe it. So you better believe that the valets want to work at Canlis. It’s harder, and because it’s harder, it’s so much more fun and more rewarding. Having someone take a ticket and put a number on it—a monkey can do that. That’s not difficult, but to challenge someone to say, “You want to deliver the greatest valet experience in the world?” That’s fun. People want to rise to that occasion.

Karen Clark Cole:
All of us, we got to go there for dinner last night, and all of our coats were there waiting by a person holding them by the fire and then they proceeded to put it on us. That actually takes a number of people though to be able to hold that many coats. And same with the valet, if you’ve got the cars exactly lined up on time, you have to hire enough people. I’m curious, is that rolled into your price? You talked about your kitchen staff being triple what it was and obviously you’ve got coat holders and valets…

Jay Goltz:
So for $135, you do get the coat heated.

Brian Canlis:
You do get the coat heated. But I’ll be honest with you: at 8:30, those coats aren’t getting heated. That’s the turn. Most of the guests, the second turn’s arriving, and the first turn’s leaving. It’s chaos, and we probably heat one out of 10 coats. But at the end of the night when you’re leaving, my entire staff is there and there are five tables left. Oh my gosh, every detail has to be perfect, or we’re idiots or we are just lazy.

So yeah, at the beginning of the night and at the end of the night, the details are what keep you engaged and excited and fun. But in that middle of the night? No, it’s not a rule that every coat has to be heated, because that would be a disaster. It’s when you have the margin. You do it because it makes people so happy.

Dana White:
What’s your reservation length now? How long does it take?

Karen Clark Cole:
It’s totally booked.

Dana White:
It’s totally booked for how long?

Karen Clark Cole:
Yeah, and I want to know if that’s really true.

Brian Canlis:
The first quarter is our slowest quarter, but weekends are always booked about three months out. For a weekday, you can get a reservation pretty easily if it’s not between the hours of six and eight. Six and eight you need to book a couple weeks out still, but like December, the whole month will book out a few months early.

Loren Feldman:
Brian, it was fun for me having dinner with these entrepreneurs watching the performance of your employees. They were amazed at the way the whole event was synchronized, the performance aspect of it, and the way the employees truly seemed to be enjoying themselves and putting their heart into it.

Jay Goltz:
I would say we appreciated it. We appreciated it. We knew what it took for you to get that to work like that, and we all appreciated the fact that you got it to work nicely, and it worked.

Loren Feldman:
But they also want to know how you found those people and hired them. What’s your hiring process like?

Brian Canlis:
You know, it starts with an unusual mission statement. It’d be hard to get out of bed every day if we were just serving dinner, for my employees too. I think that would get old. So our mission statement is, it’s kind of like yours, of changing the world. We’re literally trying to change the world. And I know that sounds big, but why not? Our mission statement is to inspire all people to turn towards one another in a world where everyone seems to keep turning their backs on each other, to have conversations. What can happen when you actually turn towards one another is magical, and that happens often beautifully at a table. But it also happens in the way that we treat our vendors, “What does turning towards look like?” or our neighborhood. What if we were to inspire people that it’s worth it, no matter who is across from you: class, race, color, whatever they believe, you turn towards, and that’s really powerful.

We exist in a world of fine dining that is notorious for depression, suicide, alcoholism, broken families. Restaurants are rough, and it’s horribly ironic because we’re supposed to be in the business of restoration and serving, and yet we are some of the most broken people out there. Then Food Network didn’t help because they celebrated chefs who [heap] abuse on people and you have so much sexual harassment that is glorified. It’s hard. It’s a bad industry.

We decided, okay, let’s exist. Maybe if we can do this thing, and we can inspire the world [about] how much more fun and more exciting it is to turn towards… and then, what’s our strategy for doing that? Become the best restaurant in America. Because no one cares if you’re the worst restaurant in America what you believe. No one listens to the Oscar acceptance speech of the loser. The reason we exist isn’t to become the best. That’s just our strategy to get there.

When we interview someone, we tell them that story, and we say, “Don’t come here if that doesn’t float your boat. If you don’t get tingles about trying to change the world through this thing, please go home.” Also, working here is really hard and most people quit. And so we make them work—

Loren Feldman:
Is that true that most people quit?

Brian Canlis:
Yeah. We make people stage for a night, which is do an entire shift before they’re hired. In the kitchen, they have to do two, and most people self-select out after because they don’t realize how much work it takes.

Jay Goltz:
You do have to pay them though, right?

Brian Canlis:
We do, but we pay less. You can make more money doing less work at most restaurants in the city. Because I have 115 employees for sometimes 115 guests. It just doesn’t work, the numbers. You have to want to be at Canlis for way higher reasons than making the most money. And so we tell people that you’re gonna work harder, you’re gonna make less money, you’re gonna change the world, and we make them work a shift.

We never let them accept the job that night, even if we want them. We say, “You have to go home and you have to ask the people who love you—you have to tell them all the worst things about working here—and you have to tell them, ‘If I work here, I’ll make less money and I’ll work harder and I might change the world but probably not. Do you think it’s the best thing for my life to work here?’ And only if the people who love you are totally behind it, then [we’ll] send [you] into battle with those people cheering you on.” So it makes hiring very expensive, very long, and very difficult, but you build a team of people who are totally on board.

Karen Clark Cole:
Once they’re on board, how long did they stay, on average?

Brian Canlis:
Not as long as I wished. Because the problem is we’re most often hiring people where they have much bigger dreams than working in a restaurant for the rest of their life. I think restaurant life is awesome. I’m doing it. The majority of my managers are tenure people. But that’s 15% of our company. The other 85% are hourly workers who want to run their own businesses. We hire the type of people with big dreams. Big Dreams are awesome, and if you fight them, then everyone loses. But if you embrace them…

The parties that we throw when people leave are some of our best parties, because if we’re going to change the world, and inspire everyone to turn towards one another, it means making our restaurant into a university that teaches a school of thought and sends out alumni across the world to change their restaurants. And so when we look at it that way, like, “Oh, you want to leave? Let’s throw a party, because that’s awesome.” That’s a hard switch, because it’s very expensive.

Loren Feldman:
I’m going to open this up for questions in a second. One last one, Brian, from me. How do you go about hiring a chef when your goal is to be the best restaurant in the world?

Brian Canlis:
Find the best chef. [Laughter] That’s my strategy.

Loren Feldman:
How do you hire a chef when your strategy is to have the best restaurant in the world?

Brian Canlis:
Well, you have to find a chef who agrees with the mission first, and who has the values first. That’s more important than his ability to cook. Because his belief won’t change over time and his ability to cook will get better.

Jay Goltz:
I have to tell you, you’re correct. Those cooking shows are shameful some of them where they’re screaming and humiliating people on national television. It’s really not right.

Brian Canlis:
It’s changing. Some of your most notorious shouty chefs are repenting and learning that, “You know, if I actually love my employees, the food tastes better.” There’s a movement, which is great. Maybe we were a small part of that, and that would be awesome. But in this particular case, when we found Brady, he was a 28-year-old child slinging pizzas in Brooklyn.

Loren Feldman:
How do you know that somebody who’s making pizza in Brooklyn is capable of running a fine dining restaurant?

Brian Canlis:
It was a risk.

Loren Feldman:
Did you make him cook for you?

Brian Canlis:
Absolutely. It was a restaurant called Roberta’s, but on the backside of Roberta’s was a little secret two-star Michelin restaurant, which has a 20-course tasting menu. He also was executive sous chef at that restaurant. He could do both. He could do volume—which we’re a big restaurant—and he could do tweezer food, and so we were inspired by him.

I had dinner with him in New York because I moved to New York to help open a restaurant. It’s a different story. I was pretty taken with this guy. He had started cooking really late because he was going to be a professional hockey player and blew out his knee and at the age of 20 had no career and nothing to do and started cooking. So he’d only been in the business eight years, which is nothing. He kind of blew my mind. We had another woman we were about to hire as executive chef. We were so excited. She was from New York. We had met her husband. She was the one. And then Brady was this dark horse late contender, and we flew him to Seattle with his wife and he cooked for us. That meal blew our minds. That meal felt like something… it was food we’d never had before. It was food that was five years into the future. One of the most exciting meals I’ve ever had was when he cooked, and we hired him that weekend. We’re like, “If you want it…” and they had plans to open their own restaurant in Brooklyn. It was a big deal that they chose to come out.

Loren Feldman:
Who’s got a question?

Audience Member #1:
Hi, my name is Avian. Thank you for being here. I really appreciate your time, your stories, and all of your wisdom. I have a question and it’s two-part. My question is: how do you optimize employee happiness and interpersonal slash professional growth? And what do you do to groom them for leadership? I’m especially interested in your answer just because you work in a really tough industry with high turnover and dealing with potentially really pretentious or really demanding clients.

Jay Goltz:
People always say to me, “How do you motivate people?” I always say, “Well, what are there, maybe six ways to motivate people? How many ways do you de-motivate people? About 150.” I’ve seen a lot of bosses and I’ve been in a lot of business groups and I have to tell you, treating people with respect and not yelling at them is an example. You talk to the typical entrepreneur, “Well, I yell once a while, but that’s because I’m passionate,” and I go, “No, you’re an asshole.” [Laughter]

When I was younger, I was out of control. I was growing like crazy. I find that if you treat people with respect, and you give them some room to do their job, they feel like it’s their own. They are motivated because they’re on the mission with you. Because just like you, we feel like we’re changing the world. I know it sounds silly, but someone brings something in to get framed. It’s really important to them. And we feel great that we’ve got something nicer and better, and we’re going to get it done on time and they’re gonna have it for their party, whatever. All of my employees are behind me. They’re all on the same page with being mission-driven. So I think if you treat people properly and respectfully and you hire carefully—which is incredibly important, you have to hire carefully. Nine out of 10 people who you interview are not right for the job. That was a long lesson I learned over the years. If you hire the right people and they join your mission, it’s not that hard.

Brian Canlis:
I think you’ve gotta have a lot of fun. I think it’s a betrayal of our values if we put more energy into the guests’ experience than we do in the employee experience. We [put] an inordinate amount of time and effort into doing things that are fun. Shutting down the restaurant late at night and throwing a laser tag party. We do costume parties for our staff all the time. They’re probably really tired of dressing up. We do something called Camp Canlis where we take everyone out into the woods and we camp and we play this crazy gun game in the woods and we drink lots of whiskey and we dream about the future of the restaurant.

Loren Feldman:
Who’s running the restaurant?

Brian Canlis:
We get back in time. We’re closed on Sundays. We’ll do late night poker tournaments until four in the morning. We’re always thinking about: why is this a place that I want to come to work? Because serving dinner gets old. You throw that kind of creativity into their experience and it’s so fun.

Laura Zander:
We do something similar that you guys do, and that’s everybody who works for us, I talk to them individually and find out where they want to be in 5, 10 years. What are your dreams and how can we use this business that has all these different facets? You can learn about inventory. If you want to be a doctor, let’s do some triage. You can work as a hostess or I’m sure there’s some biology we can teach you all about the different strains of wool or whatever it is. Or if you’ve got somebody who wants to be an accountant, okay, let’s figure out some accounting things.

I try with every person to figure out where they want to be and how we can build their resume. I tell them all the time, “I would love it if you worked here forever. But I’m the only one who has to. Doug and I really are. The rest of you guys are free, so tell me how I can help you get to where you want to go. And where do you want to go? Let’s work on getting you there.” A lot of them get kind of surprised.

Brian Canlis:
It’s sad how surprised they are, because they’re not used to their employer actually wanting what’s best for them.

Laura Zander:
But it’s fun.

Brian Canlis:
It’s really so much better.

Loren Feldman:
Jay, you’ve got something to say.

Jay Goltz:
They’re perfectly happy just coming to work and having a nice environment and security.

Laura Zander:
Some of them are, yes.

Jay Goltz:
The reality is, lots of people are perfectly happy going to work every day and doing the same thing for 30 years, getting a paycheck, being treated respectfully, having health insurance, having holidays, getting paid overtime, and having a boss that, if there’s a problem in their life, they’re supportive and give them some time off. There are plenty of people in this world who don’t have grand—

Brian Canlis:
No, but I think it’s common—I just had an employee, one of my best, come to me and say, “I have this artistic itch that for the last 10 years, I’m not scratching, and my dream is to open my own theatre company one day, and I’m thinking of maybe quitting my job and doing this internship for a year at this theatre to learn the skill of running a theatre company. What do you think?” At that moment, I have two options. I can say, “That is the stupidest idea. You’re gonna make no money, and that career is terrible, and we really need you, and you’re really good at your job,” and fight for her to stay. Or I can say…

Laura Zander:
“Why don’t we open on Sunday and do a theater event or have a special event that you could produce?”

Brian Canlis:
“What does it look like to throw the support of this entire restaurant behind you to make that dream happen?” Because it’s just worth it. It’s worth having people that are flourishing,

Laura Zander:
But to your point, I think where it gets expensive, if you will, if you’re thinking about it that way, is the time to figure out, “Okay, what’s important to you is flexibility. What’s important to you is money because you want to buy your first house. What’s important to you is you just want a place that’s less stressful than your home.” We have a lot of people who are like that. “What’s important to you is, blah, blah, blah,” and to tailor our approach to every single person who works there. And yes, there are some people who just want to show up, and that’s great. That’s awesome. Let’s make sure you have the best, you have what you need.

Brian Canlis:
I love those employees.

Laura Zander:
Yes, exactly. But the rest of them, I mean, everybody has different motivations. We’re all different. We have different DNA, so we treat them differently.

Loren Feldman:
Do we have another question?

Audience Member #2:
Thank you very much for being here. Very appreciative. My question is, particularly for Karen, I’m starting an IT consulting business and I’m stuck in doing proposals and marketing. Do you recommend a mentor to do something like that? Or do you want to be creative enough where you do it yourself?

Karen Clark Cole:
You mean, bring someone in to help you write those proposals?

Audience Member #2:
Correct.

Karen Clark Cole:
Honestly, if you’re getting going, in my opinion, it’s par for the course. I’ve done every job in this company. I remember when we first started, I spent day and night, weekends, evenings, you name it, writing proposals, formatting the footer, what kind of font are we going to use? Creating templates for this for that. And if I didn’t do that, I wouldn’t really understand it. I think particularly when you’re starting a business, you need to do every job there is so that you really understand your business. As you grow and you scale, you know what it looks like when you bring in somebody to help you. You know what you need them to do, you know what it takes.

Ideally, the main thing you want to start doing is hiring people who are smarter than you, that’s the best thing you can ever do, and then have them do really specific things that are not the best use of your time anymore, but this thing is the best use of your time. I’m always looking at, what am I doing, and is that the best use of my time? And if not, could somebody else do it and probably do it better? Because that’s their specialty. That’s the way to start carving things off, but you really need to do it yourself to understand how to do that, I believe.

Laura Zander:
Can I just be really clear about the “hire somebody who’s smarter than you”? Everybody will tell you that. I took that really literally. I hired a bunch of people who had much higher IQs. They sucked, for various reasons, and it took me about five years and probably hundreds of thousands of dollars to realize: it’s not that you need to hire somebody who has a higher IQ. Because who does, really? No, I’m just kidding. But it’s hire somebody who has done something that you don’t know how to do yet, or who has been somewhere that you haven’t been, so that they can teach you.

Karen Clark Cole:
Or somebody who’s just really good at—like, I don’t love details, so I hire people who are really good at detail. They love it. They’re way better at it than me.

Laura Zander:
That’s what I mean. There’s somebody who’s better at a certain skill, but I was really caught up on, “Okay, well, this person’s a PhD.”

Karen Clark Cole:
Did you actually have them take an IQ test?

Laura Zander:
Well, no, but you can tell. [Laughter]

Dana White:
It’s not, “Oh my God, you’re so smart.” No, I’ve done this job. I’ve taken it this far. I have found, Brian, that the people who run my salons—the hair traffic controllers—are former restaurant high volume managers. I’ve worked in a restaurant, but the people who run the floor are the best. The best hair traffic controllers have run high volume restaurants.

Jay Goltz:
I think you hire people who are better than you in areas, whether they’re better at sales, they’re better at running production. I used to hear that all the time and I never understood what that meant. And I realized, the entrepreneur has to wear 21 hats. That’s where the name came from. The entrepreneur is probably better at those 21 together than anyone else, but there are certainly people—I would say most of the people who work for me are better at their job than I would be, if not all of them. That’s kind of the point. But none of them could run my company. That’s the point. The entrepreneur is the best generalist, but you should hire people who are better at the job than you are.

Loren Feldman:
Next.

Audience Member #3:
Brian, you specifically called this out, but I’m sure all of you have mission or vision core values, things that help you make decisions in your company. You specifically said, “Our mission is not to be the best restaurant, but to inspire people to turn toward each other or toward one another.” And then the way you accomplish that is your strategy. You’re doing that by being the best restaurant in the world.

As someone who’s thought a little bit about mission and vision and core values and those kinds of things, it seems counterintuitive, but it’s almost harder to refine than you would think it would be. Can some of you speak to the process that you went through for defining your mission and identifying your mission, your vision, and your core values. And then possibly, how has that changed? Have you had to change your mission over time? What’s that process like? Thank you.

Brian Canlis:
I was in the Air Force, and it totally has defined how we think about mission statements, because we would get called in the middle of the night. They would say, “Come to base,” and you’d come to base. And you’d ask the question, “Why did you wake me up? Why am I here? What’s the mission?” And the mission answers the question, “Why am I here? Why did I wake up? Why am I getting out of bed? Why am I going to the office today?” That’s the mission, and it’s really hard to write. We’ve rewritten ours about six times, and we keep refining it to accurately reflect our hearts and our growth. I’m not afraid to change our mission statement.

I think what’s so powerful is people stop at the mission statement and they don’t think about a vision statement the way that the military does. If the mission is, let’s say when you get called in the middle the night to go to the base, is to rescue the hostages from the bad country—super easy. That’s the mission: rescue the hostages. Well whoever’s in charge, the general or whoever he is, can say, “Great. Here’s my vision. We’re going to go in, we’re going to strap speakers on the outside of the airplane, we’re going to blast Kid Rock. We’re going to drop down, we’re going to light fireworks, we’re going to kill everyone we see. We’re going to spray paint American flags everywhere. We’re gonna put the fear of God in this bad country and we’re going to rescue the hostages and bring them home.” That’s one vision. The mission was accomplished.

Loren Feldman:
Have you tried that at Canlis?

Brian Canlis:
We have not. Vision number two is, “We’re going to go super stealth. We’re going to use blow darts. They’ll never know we were there. [With] night vision, we’re going to drop in, we’re going to rescue the hostages, we’re going to get out. The bad guys are going to wake up the next morning and all the jail cells are empty. They’re gonna say, ‘Where did the hostages go? Who took them?’” In both scenarios, the mission is accomplished. So just defining a mission statement is not enough. It’s the joy of the entrepreneur, the leader of the company, to also define, “What is my strategy to accomplish this mission that is unique to me?” And so if we opened a hotdog stand, it could be to inspire all people to turn towards one another. It just so happens that we’re doing it through a fine dining restaurant. We tell that story a lot to our employees about understanding the difference.

Karen Clark Cole:
Brian did such a good job with that that I’m going to take that mission too. [Laughter]

Jay Goltz:
I think at the end of the day, in my case, I grew up from when I was six years old working in my father’s dime store, which is a variety store. Anyone know what a dime store is? Google it when you get home. I took care of customers my whole life. The reason why my business took off is because the people in the art business have “artitudes.” They think that the world revolves around them. The customer will say, “When will this be done?” “I don’t know, I’ll call you in three, four weeks,” and they didn’t care about the customers.

I think at the end of the day, our mission statement’s very simple. Make the customers happy, do the right thing, and treat employees properly. Sometimes it’s tricky with employees because sometimes the ethical thing is not the right thing and vice versa. You have someone who needs to be fired, they’re not doing a good job. They’re unwilling, they’re unable, or they’re unexplainable and someone in their family dies at night. Now is it unethical to fire them? It’s not unethical, but it’s not necessarily the right thing to do.

I think you have to navigate what’s the right thing to do. And in our case, every one of my employees knows this: we do what we need to do to make the customers happy. As much as that sounds simple, most companies don’t do that. They talk about it. They’ve got the mission statements. They don’t do it, they really don’t do it.

Brian Canlis:
I’ll piggyback on that and say that, when it comes to core values, you should have them in order, ranked. At Disneyland, I think they famously asked, “Our two core values are fun and safety and they’re equal.” And the consultant was like, “Great, so if there’s a little girl crying because she’s not having fun, and there’s someone falling off a roller coaster about to die, which way do you want the employee to run?” Like, “Oh, I guess safety is our number one value.”

If you have to rank your values, you have to have a few of them. I’ll steal from Patrick Lencioni, who said, “Your values are not your values unless they cost you something.” They shouldn’t be easy. They should be hard. You should wrestle and fight with them.

Karen Clark Cole:
You should be able to remember them. I got advice once that you should have one value and it’s the mother of all, so it’s the highest priority one. That way, it’s easy to remember.

Brian Canlis:
But it’s your compass! You run every decision through them. It’s such a gift once you do the work to define them.

Loren Feldman:
I think we have another question.

Audience Member #4:
My name is David. Thanks Brian and everyone for sharing all the great thoughts. It’s been a lot of fun to hear his story.

One question I had is, you talked about the importance of letting your customers co-create or be a part of your reinvention, and taking them along for the ride. I love the whole story of that. You all talked about how there’s no loyalty. So my question is, how did you define your most valuable customers or seek out those most valuable customers? And how do you involve them in your co-creation or remind them to come back today? It also sort of begs a bigger question, which is, there are a lot of businesses that are so focused on new customer acquisition that they start making compromises and working with customers, maybe folks who aren’t their most valuable customers or target customers. It strikes me that making no compromises, really focusing on your most valuable customers or target customers is really key as part of your strategy.

Brian Canlis:
I think for us, our most valuable customer is nothing financial. It’s relational. We are craving relationship. Customers are craving relationship. When we have a really good date, we both want a second date and a third.

It’s funny, you guys saw last night, we have these wine glasses. My grandfather started in the 50’s giving out wine glasses with people’s names on them that are beautifully etched, so then when you come to the restaurant and you sit at your table, it’s set with glassware with your name on it. It’s kind of cool. We’ve been doing it forever. We give away about five or six a year, that’s it. People have been buried with their wine glasses. It’s a thing.

Jay Goltz:
Not at the restaurant.

Brian Canlis:
No, not at the restaurant. We did have one guy die at table two. That was in 1957.

Loren Feldman:
What did he have? [Laughter]

Brian Canlis:
Food poisoning. I don’t know. [Laughter] We have people all the time ask, “How do I get a wine glass?” because they want it, because it’s status. “If I buy a $10,000 bottle of wine, can I have a wine glass? If I come every month, can I have a wine glass? Can I buy my way into a relationship?” And that is a surefire way to put them on the “never get a wine glass” list.

If I can make a regular twice a year guest out of a 25 year old brand new couple who are out—like last night on table three—on their first night away from their brand new baby, we get one chance to get that night right. It’s such a big deal to go away from your baby for the first time. They didn’t spend any money. They couldn’t even afford a bottle of wine. They’re my most valuable customer because I could turn them into a twice a year guest for the next 60 years. That’s how we define it.

Jay Goltz:
I do think there’s loyalty, and I think if you make the customer happy, and you give them what they paid for, they come back. I’ve had customers for 42 years at this point. I will tell you, though, the opposite of this is: you can’t be naive enough to think that you can make everyone happy. The fact is, as we’ve evolved and gotten into better framing and better stuff for my home store, there are some people who don’t want to pay for it. You have to grow up one day and realize that you just can’t be everything to everybody and the same person who used to come to dinner at your place for $40 is not going to want to spend $130, and that’s okay. But it’s about being loyal to your core base of people who work your business model.

Dana White:
We get this question a lot because we’re in and out, walk-in only. How do you have a relationship with somebody who’s there for an hour and 15 minutes? The relationship for your hair salon when you’re there all day is there. You’re there to talk to your hairstylist and they’re like your therapist. That element can be removed when you’re in a walk-in only, seven-day-a-week salon.

What we do is we build that relationship on the outside. The hair traffic controllers are also trained and listening. She’s standing with her iPad, going through the flow of the day: who to put where. But she’s also listening to what you’re saying on the phone. She’s also listening to what you’re saying to your stylist. If she just overheard that your father is in ICU, then you will probably get a call from our manager or assistant manager in a couple of days asking you, “How is your father?” And they’ll address it at the front desk. We’ve had guests come in who are on their way to an interview. They’re so excited. We will call you in a couple of days and say, “Hey, how did that interview go?” We have the relationship, but we also—as a part of our mission—respect your time and your dollar and give you the freedom of all of that back.

Brian Canlis:
I love that.

Dana White:
Do you?

Brian Canlis:
Yes.

Loren Feldman:
We’re going to have to wrap this up. But before we do, Brian, I just wanted to ask you… I asked everybody else about their attitude toward growth or aspirations for their businesses. How do you think about that? Do you want to open that hotdog stand? Do you want to open another restaurant? What’s growth for you?

Brian Canlis:
I don’t want to open another restaurant. Growth to us is: we want to grow our impact. I think we can do that by remaining one restaurant. We do silly things in our parking lot. We throw crazy parties.

Loren Feldman:
You guys party a lot.

Brian Canlis:
We do. Yeah, I won’t go into that…

Audience Member #5:
That’s my question.

Brian Canlis:
About parties?

Audience Member #5:
About your parties in the parking lot. I’m so excited about those and I am so intrigued. I’m a fan. I’ve been a customer and I live in the neighborhood. I’m so intrigued because I’m so excited about those.

Brian Canlis:
They’re not too loud?

Audience Member #5:
No, we love them! We love to see the cars parked, the people lined up. We’re so excited. But I want to know how you see converting those to your regular customers.

Brian Canlis:
It’s working.

Audience Member #5:
I’m sure it is, but the price point and everything.

Brian Canlis:
Price point, just really briefly, we’ve never been a more expensive restaurant than we are today. The average income of our guests has never been lower. I don’t believe that price has—

Loren Feldman:
How do you know that?

Brian Canlis:
Well, the credit card companies tell you because they give you information on your guests. You just know. When I first came back to the restaurant, the restaurant was full of people with silver hair with lots of money, and now it’s not. It’s full of young people who have saved up for that one perfect night out. Yes, we’re the most expensive restaurant in the city maybe. But we’re the same price as two times going to a bad restaurant. Don’t go two times to the bad restaurant. Go once to mine. A highest price doesn’t have to mean we’re saying no to people who can’t afford it. Our dining room is filled with people who can’t afford it, but they choose to save and make it worth it.

The parties are two things: it’s cross training for my staff. It’s like in Rocky where he does so much that’s not boxing that makes him a good boxer.

Jay Goltz:
Everything comes back to Rocky, I just want to tell you. [Laughter]

Brian Canlis:
The skills that my staff learns serving 1,000 people White Claw in a swimming pool and bikinis—that was a party we did last summer—it makes them a better server in a fine dining room. The creative muscles on: how do we throw a Hawaiian luau? The message it says, which is, “Canlis is a brand that is accessible and available to all people, not just if you have white hair and lots of money.”

Jay Goltz:
You’re picking on me now twice. [Laughter]

Brian Canlis:
It’s a win on every level. It’s so fun. It turned out to be profitable. Our plan was to lose money with that party. Profit is not something we ever focus on, and it shows often. Gosh, I’m glad you like them. We’re gonna do it again. This summer is going to be better.

Loren Feldman:
Karen Clark Cole, Laura Zander, Dana White, Jay Goltz, and Brian Canlis: thank you so much.

Jay Goltz:
Karen, thank you for having us in your wonderful space.

Brian Canlis:
Thank you. [Applause]