Why this restaurateur believes in “foolishly spending” 5% of their budget
Years ago, a family of four from Spain spent the last night of their New York City vacation with us at Eleven Madison Park, at the height of the holiday season. It was a pretty typical winter night–you could see snow falling over the park from our massive dining room windows. The children were freaking out, in the best way. It turns out, that was the first time they had ever seen snow. Their excitement inspired us. We asked ourselves–how can we treat them to the most magical experience and allow them to enjoy that snowfall?
We decided to procure four shiny, brand-new sleds. A chauffeur-driven SUV greeted them after their meal was over and whisked them away for a night of revelry in Central Park. When we witnessed the look of the children’s faces–an almost parody of joy–we knew that our spur-of-the-moment effort was worth it. Those looks stayed with us, and it’s those expressions that bring us the greatest joy.
The 95-5 doctrine
That story illustrates a central company philosophy that I’ve since named “The 95-5 Doctrine.” Back then, it was just a belief that had started to form my thinking and the thinking of my business partner, Chef Daniel Humm. Despite how it sounds, it’s not a term coined by an economist or a politician–all it means is that 95% of the time, we manage our business down to the penny. The other 5%, we spend foolishly.
When I share this concept, most people immediately home in on the last part, because to them it sounds irresponsible and careless. But think about that for a second. We’re so conditioned to be so serious when it comes to financial matters that we don’t allow ourselves to be silly every once in a while. But this is a basic human need. When we treat somebody to something unforgettable, we’re providing them with that experience.
Providing fun is serious business
But before we get into the 5% side of the equation, let’s look at the other 95%. To the general public, Eleven Madison Park is known as a standard-bearer for fine dining, for earning four stars from the New York Times, and three stars from the Michelin Guide. But those who have dined with us, at Eleven Madison Park and our other restaurants, know that we are also surprisingly fun. We don’t just present good food–we bring an element of showmanship and entertainment to the dining experience. You can see some of this in our parties, like the Halloween Masquerade Ball and our Kentucky Derby celebration. But behind that irreverent veneer is a dead-serious approach to budgeting and bookkeeping. If you join one of our weekly business meetings, you’d see some of the same people who “host the party” every night in our dining rooms breaking down the bottom line with Terminator-like efficiency. The meetings are more lighthearted in tone than what you might expect, but only because our team is serious enough about the work that they’re free to report their numbers however they want.
Because we take such a disciplined approach, from time to time, we go a little crazy. But even when we do, we make sure to do it in a way that helps define and distinguish our restaurants. For example, at Eleven Madison Park, we employ two “dreamweavers,” whose job it is to create experiences comparable to what we did for that Spanish family. They’ve turned the private dining room into a rock-and-roll theater for a Nick Cave-loving fan, and have created a faux seaside scene with a kiddie pool and beach chairs for a couple whose flight to an island vacation was suddenly canceled. It’s moments like these that people will remember for the rest of their lives (and probably tell their friends about), and it’s moments like these that inspire us to provide even better experiences.
Now, those are pretty dramatic examples of the 95-5 Doctrine in action. There are less outlandish variations playing out every day, and in many ways. Say a guest orders a wine pairing to accompany their meal. Rather than serve a steady procession of wines pitched at the average appropriate price-point for the cost of the pairing, I’d prefer that our sommeliers use their expertise and the diversity of our cellar to deliver an outstanding selection for slightly less through most of the meal. At the end, they can wow our guests with a rare, shockingly expensive pour to accompany a particular course.
We adopt this approach when it comes to people too. We minimize overtime and turnover and eliminate redundancies wherever possible–but then we spend the money we save on our team. That might involve closing the restaurant for a day to host a team-building retreat, or to throwing the most over-the-top staff party we could possibly imagine.
Do everything with intention
There’s a word we use a lot in our company: intentionality. It means that every decision, from the most obviously significant to the seemingly mundane, matters. To do something with intentionality means to do it thoughtfully, with clear purpose and a desired result.
I’ll tell you a secret about the 95-5 Doctrine: When I say that we spend that last 5% foolishly, I don’t really mean it. It might look foolish, but in reality, it’s intentional. In fact, it’s some of the smartest money we spend, because it delivers a substantial, if immeasurable, return on the investment. It’s that 5% that makes memories, and inspires people to rave about us. It’s that 5% that allows for spontaneity in the workplace. It’s what makes our restaurants and our company such fun places to serve and be served. And at the end of the day, that’s what running a hospitality company is all about.
Will Guidara is the co-owner of Make It Nice, a hospitality group that currently includes Eleven Madison Park, the NoMad restaurants, and Made Nice.