March 18, 2019
Danny Meyer with Blackrock’s Andrew Ang, PhD., provide bridge between Factor Investing & the Ingredients Behind a Successful Restaurant
The parallels that I have written about between restaurants, hospitality and financial service continue with a sponsored advertisement from Blackrock’s Andrew Ang, Phd with famed founder of Shake Shack (SHAK), Danny Meyer. In the opening interview, Danny Meyer defines the recipe for his restaurants as having “49 parts performance and 51 parts hospitality”. The point of interview is to help define investment factors in the context of a business person’s approach to investing, but while it is important that clients understand factor investing this interview further highlights the common traits between financial service and the restaurant/hospitality industries. https://sponsored.bloomberg.com/news/sponsors/features/blackrock/defining-factors/?adv=21086&prx_t=q40EA-IwyAUt8PA
From an investment perspective it is constructive to compare how Danny Meyer breaks down the ingredients of building a successful restaurant. Specifically, Danny Meyer formula includes 49 parts performance i.e. taste, timing, light and sound and 51 parts hospitability. Financial Advisers can look at the financial plan in terms of setting the table and framework for their customer experience, but his comments about hospitality highlight the need for knowing the client. Noteworthy is the fact that 51% of his recipe focus on the need to “make your (the customer) feel that we’re being thoughtful – that we are combining our thinking and our feeling to do things for you.”
Restaurant Entrepreneurs should listen to the section of the interview “On Excellence: The Salt Shaker Theory” and expect their adviser to pay as much attention to detail as they do to how centered the salt shaker is on a round table. As advisers, if we don’t know where the center is how can we know the core?
Advisers feeling the pressure from ROBO solutions should focus on their client experience. Customers who are looking at robo services are probably those who have not experienced the benefits of an adviser who knows them and who is willing to pay attention to details. AS I have said before – kind of like Quick Serve vs Full Service.
Enjoy the interview.
P.S. Similar points have been made through articles/comments:
