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Shake Shack chief executive talks crisis management
October 15, 2013
Randy Garutti’s career took him away from home and brought him back. Born in New York and raised in New Jersey, he left the East Coast after college for jobs with the Chart House restaurant chain that had him skiing in Aspen, Colo., and surfing in Maui, Hawaii. He was running the venerable Seattle restaurant Canlis when Danny Meyer, chief executive of New York’s Union Square Hospitality Group, dangled the prospect of returning east. In time, Garutti became general manager at USHG’s now-closed Tabla and then the company’s director of operations. When USHG’s Shake Shack began showing promise, Garutti shifted from fine dining to limited service. The chain now has 34 units in such cities as Boston; Philadelphia; Washington; Dubai, United Arab Emirates; Istanbul; and London. But when Superstorm Sandy came barreling up the eastern seaboard last October, the focus was on the chain’s home base. As the one-year anniversary of the storm approaches, Garutti recounted how his team managed the challenges.
What happened once the storm passed?
Everything in New York City, Connecticut and Long Island was affected. The morning after the storm — we had closed early the day before, and I live uptown and I never lost power — I got on my bike and rode the whole city, going to each Shake Shack and assessing the damage. And it was amazing because only one Shake Shack lost power: the original one in Madison Square Park. There was no power below 34th Street.
Battery Park had the greatest flooding, but that Shake Shack didn’t lose power. … I got a few guys and we got a truck, and the team redistributed food from the Shack that had no power to those that did. Most of [the restaurants] were open by noon the day after the storm. The ones in Westport, Conn., and in Madison Square Park were closed for a week.
How were you able to communicate with your team?
We were texting to communicate. If you could get uptown, you had cell service, and we would send out messages through Gmail. The server was down in Union Square, so through personal e-mail, we were able to communicate with our teams and with each other. We had people saying, “Who needs this?” and “Who needs that?” The leaders stepped up.
Now, we have an e-mail and operating system in the cloud, so if the server goes down, it doesn’t matter — and [we have] a backup for our data. It’s backed up outside. We’re just completing that now; it took it almost a year.
What were your biggest lessons from Sandy?
We’ve always had a good emergency plan, but we have really rethought all of that. We set up an 800 number for emergencies. I lived through 9/11; the first blackout, when the whole city had no power for two to three days; and then this. New Yorkers already are in the emergency mind-set — there’s a vulnerability that no one ever dreamed of.
Did you lose a lot of sales?
It was one of the busiest weeks ever because a lot of people weren’t going to work and kids weren’t going to school, so it became incredibly busy. We needed more staff. … We were paying for cabs and car services because a lot of [employees] had no other [transportation] option. … Ultimately, we had a better week that week because we were able to respond. Almost nobody opened the next day. We were doing a lot of social media, so we used social media [to reach customers]. Our marketing team was in a hotel lobby for a couple of days sending out messages from there.
What advice would you give others preparing for weather-related crises?
[Remember] the importance of backing up systems, having an emergency plan in place, having a transportation option in place, just … taking the time to set up the emergency plan. We’re all so busy, but at some point, something will happen, so it’s crucial to do.
Contact Robin Lee Allen at [email protected].
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