Executive Insights | April 2012 | By Blair Chancey

You Can’t Stop Shake Shack

The wildly popular burger concept isn’t letting its success change what it’s all about.

Randy Garutti works with the team at Shake Shack in Brooklyn.
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Hundreds of children file past the floor-to-ceiling windows at the newly opened Shake Shack at the corner of Fulton Street and Boerum Place. It’s late January and all are bundled up as best they can to keep out the wintery gusts and freezing temperatures. It’s a clear, cloudless day, which makes it colder, but the school children seem to be happy adventuring away from their lessons and out to a protest of some sort.

See, it’s not the sheer number of kids that’s most surprising, it’s that they’re all holding peace signs, ones with messages like “Love People, No War” and “World Peace, Please.” This is Brooklyn, New York, after all, where some of the biggest names in art and letters, including Spike Lee and Arthur Miller, got their start.

But they’re only kids and, as they file past the warm burger joint that serves frozen custard shakes and cheese fries, it’s obvious where their activism ends and their appetites begin.

Inside, about a dozen Shake Shack employees are at “pre-meal,” a team meeting that gets everyone hyped and on the same page before the store opens at 11 a.m. They’re discussing “Ana,” who works at the Bank of America nearby, and explaining to Shake Shack’s CEO that she comes every day and orders the same thing.

Despite the fact that the store has only been open a month, there are already regulars at lunchtime. Randy Garutti, chief executive officer of Union Square Hospitality, is visibly pleased, calling the crew “rock stars” and kicking off the morning’s meeting with a casual pep talk that seems more like a winning coach prepping his team for the big game and less like an executive from an ivory tower coming to shake hands with the rank and file.

Garutti takes a relaxed approach with the staff, introducing us (a reporter, photographer, and fur-vested publicist waiting in the wings) and promising to show them the article once it’s in print. “This is a big deal,” he tells them. He obviously doesn’t care about our presence, however, when his talk becomes more serious.

“What can we improve on, guys?” he asks the group. Shy at first, they eventually admit to him that the dishwasher was broken the entire first week the store was open.

This is disappointing news for any operator, and Garutti is genuine when he says, “Oh man, I’m sorry about that.” But it’s not any operator who has the mayor of the biggest city in the country at his opening and a line 75 deep of devoted fans waiting to devour their first bite of the company’s signature ShackBurger.

“It’s not your average burger joint that gets to have the mayor cut the ribbon—the mayor of New York City,” Garutti says once we’re seated at a high-top table made of recycled bowling-alley wood for the interview requested nearly four months before.

Garutti joined Union Square Hospitality Group, the Danny Meyer–owned company that created Shake Shack in 2004 in Madison Square Park, New York, 12 years ago. Since then, the company has expanded to 14 stores, two of which are in the Middle East. In the meantime, Meyer has become a poster child for the restaurant industry, opening 8 new fine-dining concepts throughout New York, penning a book on hospitality called Setting the Table, and taking the better-burger category by storm with a brand that started as a simple hot dog stand next to an outdoor art installation.

“The artist’s idea was to put taxis on stilts,” Garutti says. “We created an accompanying hot dog stand to raise money for the park it was in, and it took off. Then, three years later, we created Shake Shack and even then we couldn’t have dreamed that it would become this.”

“International sensation” is overused in the restaurant industry, but this is perhaps the segment’s truest example in recent years. New York City–based Shake Shack has expanded to cities including Dubai, Miami, and Washington, D.C., where a customer’s live tweet from the line on opening day even caught the attention of the city’s biggest news sources.

In fact, the line is part of the company’s appeal. In New York, a town known for its intern culture in the summers, “Shack Sherpas” swelter in line for their bosses, placing orders and learning the soft skills that will surely help them in their future Wall Street careers.

“One day I’m walking through the park and there’s a mariachi band playing in line,” Garutti says. “These are things that we never organize.”

Instead, the company focuses on what’s happening inside the store, where customers are encouraged to know their orders before they get to the counter.

The menu is simple: burgers, fries, and shakes.

“It’s our version of the old road-side burger stand,” Garutti says.

“If nothing else, what we’ve created here is a community of people, an experience of coming together. We have a great burger. We have a great value. We have great hospitality. But people come here just to be a part of the experience.”

The Shake Shack experience includes a generous serving of “charitable assumption.” From cashiers to the CEO, it’s essential for the company’s employees to buy into its golden rule that assumes the best of employees and guests alike.

“That’s believing that we’re on your side,” Garutti says. “In every interaction, if my team is talking to a guest or my managers are talking to a late employee, how am I treating you? It will feel a lot different than a lot of the other fast-casual or fast food transactions that happen. They’re transactions; we’re creating relationships.”