#21: The Playbook for Turning Around a Restaurant Group | Alistair Levine

Daniel Tsentsiper (00:01.776) Also welcome to the show. How are you doing today? Alistair Levine (00:04.45) doing well. It's a little gloomy outside but you know it's such as life in NorCal right now. Daniel Tsentsiper (00:11.805) Yeah, absolutely. I just came back from Southern California, got a chance to escape for three to four days and now we're back. But I'm super excited to have you on the show. I think I ran into you on LinkedIn, actually, one of your posts. And you seem like a very meticulous and very outspoken person. And I really just wanted to kind of get your perspective on the industry and also hear how you've been, it seems recently you've been back into the game. You want to tell our audience a little bit about yourself. How did you get into the food industry and what are you currently working on? Alistair Levine (00:47.606) Yeah, thank you. Excited to be on. I think for me, we have nine restaurants in the San Francisco Bay Area. I took over as CEO at the end of October last year and our focus on really rebuilding the group into something more innovative, exciting, so that we can enable future growth of the group. you know, previously to that, worked, for, companies called fine solutions and then kitchen sink, which are sort of outsourced back office companies in the restaurant space. so sort of a hybrid company approach between restaurant tech, and, surface. so we did, you know, outsource bookkeeping and HR and all of, as I sort of refer to them, all the, all the nasty bits that most restaurant operators really don't want to spend a ton of time doing cause they don't. Daniel Tsentsiper (01:42.341) Right. Alistair Levine (01:46.51) They're not like, oh, you know what sounds awesome? Dealing with HR compliance issues today. That's not something most people enjoy, right? So I think, you know, for us, it allowed me to have an incredibly diverse view of the industry. And I tend to read and learn a lot. You know, a huge passion of mine is just sort of consuming information and then synthesizing it. But, know, ultimately ended up in the industry because my family... you know, started restaurants 30 years ago and, you know, have operated restaurants for 30 plus years. And so, you you kind of forget how much you learned via osmosis of like, like, Hey, what's the dinner table discussion or what's, what's going on? And, you know, I think to me, there's sort of a beauty in the fact that for a long time, it didn't work in the industry. You know, we can so often, and this is true for every industry, we can so often sort of end up in the, well, we've always done it that way or. this is the way that we think about it. And I think that this industry oftentimes ends up with sort of blinders on where there's so much chaos, there's so much to be done on a daily basis that it's not always easy to stick our, pull our heads up and look around and see, what... What's happening with retail? went under, a digital transformation 15, 20 years ago. What can we learn from that? How do we bring some of those learnings back to our industry, et cetera? So, you know, think that's very much my focus is how do we, how do I synthesize information I learned working in other industries, you know, experience, still experientially driven industries, but how do we, how do I take some of that stuff, bring it back to, to restaurants ultimately to serve as a competitive advantage and, know, hopefully slingshot us kind of. up into great future growth. Daniel Tsentsiper (03:40.439) Absolutely. And I like what you said. It's that a lot of operators and I'm not an operator myself, so I can't really empathize. But from someone that works in technology and has talked to a lot of operators up until this point, you make a, you make a very strong case that people sometimes are very heads down. So it's a business that's very demanding. And oftentimes if you're kind of into weeds all the time, you miss the bigger picture. And what I like to talk to about for operators like yourself that are coming back into the business with a lot of experience elsewhere, you start to kind of bring in your background in technology, your background in operations, your background in back office management to the table. And that brings a very unique perspective to the work that you're doing and to the restaurants you run. From going back to your career with Kitchen Sink and all the other companies you've been at, how do you think that has prepared you kind of going deeper into now taking the helm of this restaurant? Alistair Levine (04:44.684) You know, I think most people end up sort of working in, you know, oftentimes if you're working in restaurants, you're working for six, eight, 10 restaurant, you know, individual, whether they're individual restaurants or restaurant groups, whatever that might be. Right. So you've gotten to see how six, 10, six to 10 different groups operate, right? Hey, what's their, what's their, what's, what's their sort of, you know, je ne sais quoi that they do that no one else does. You know, what's, what, what is that? How, how, how are they differentiated? Right. You know, I think the benefit of, of, of working on the back office side is I got to see how 200 groups operated. Right. And that's, it's just not some, not, now I wasn't in their day-to-day operations, but I could see their financials. could, you know, understand what were they struggling with, right? What you start to notice trends and patterns when you're having conversations with, you know, two to 300. Daniel Tsentsiper (05:22.701) Interesting. Alistair Levine (05:42.798) 500 different, you know, GMs. And I obviously didn't talk to all 500 of them, but, you know, as we were having discussions internally and, or, you know, as we were going through the sales process on the front end side, you end up talking to so many different people and you start to identify, hey, what are the common challenges and struggles that the industry is undergoing? And are those... universal or are those, you know, by, well, all the QSRs have this type of challenge or all the casual dining units have this type of challenge. And there are challenges that like, well, no, doesn't matter if you are a Michelin star fine dining restaurant or a QSR operator who's slinging burgers and fries. Like there are those challenges that exist across the spectrum that are more of sort of an industry wide challenge. Right. And so, I mean, I think like Daniel Tsentsiper (06:34.168) Give me one of those, give me one of those. What was one of those struggles? Alistair Levine (06:38.498) I mean, staffing, driving guest counts. Like there's a bunch of them that like, know, our, you know, technology in general is, I think there's a huge amount of frustration across the industry of, Hey, I have all these systems, but they don't work that well to each with each other. They don't integrate nicely. How do I get my data? How do get the data to the right people? Right. Like there, there, there is a myriad of, of, of cross industry challenges. Right. And then there's the ones that specifically sort of affect like the segment we operate in and sort of full service fine dining or, you know, hey, casual dining or whatever, whatever, whatever those segments might be. They have some of their own nuanced challenges. so being able to see that breadth and have conversations with, you know, many restaurant tech providers, many operators, you start to get a much more. Filled in view, I would say. of, okay, what does this world look like? Where are there things that are sort of structurally broken in terms of, you know, the operating model for most restaurants hasn't substantially changed until COVID in 50, 60, 80 years, right? Like, okay, hey, when did the drive, you know, if you're QSR, when did the drive-through get invented? That was sort of the last, right? Like, okay, and then the next major thing was like online. Daniel Tsentsiper (08:00.057) Like 70s, yeah. Alistair Levine (08:05.08) delivery, like online ordering and delivery, like the rate of innovation, at least on like the fundamental business side thing, not, in terms of flavors and, and, food and Hey, know, Soracha, nobody had heard about 20 years ago and now, you know, you can get it at Jack in the box or whatever, right? Like those types of things, but fundamentally how the restaurant is managed and run. It changes incredibly slowly. Daniel Tsentsiper (08:23.395) Right, right. Daniel Tsentsiper (08:29.037) Hmm. Alistair Levine (08:31.308) And I think we're, we're interestingly enough, right at one of those major pivot points that COVID just sort of throw through gasoline on the fire. Right. So it wasn't like, it wasn't like any of the things that we're encountering now or have encountered since COVID or during COVID weren't present prior to COVID. They just weren't, the rate of change was slowed and COVID basically was like, Nope, we're going to accelerate right. Yeah, exactly. Right. And so I think that. Daniel Tsentsiper (08:31.384) Hmm. Daniel Tsentsiper (08:53.781) Yeah, pivot or die. Pivot or die, basically. Alistair Levine (08:59.244) That's, you know, having an incredibly broad base of understanding and seeing, no, this is a universal problem means that, you know, when you're starting to think about time allocation, resource allocation, you know that, Hey, no one's really nailed this problem. No one's really nailed a solution for this thing. Okay. It's worth spending significant time and energy and resources, assuming that's a problem you've identified as one you want to solve. Right. And you know, from a broad base piece that it's not like, hey, there's no like, you know, normal solution that, that, that'll just solve this problem. You're going to either have to build it or you're going to have to go and figure out a way to sort of cobble something. Daniel Tsentsiper (09:42.813) Absolutely. Yeah, absolutely. What was what was day one like? I know you've been with the restaurant group for a while. I believe you sat on the board right before you took over. What was day one like and what was your what was your mandate when you took over took over the group? Alistair Levine (09:59.512) I mean, it was really to save the group and turn the business around, right? It wasn't, we weren't stepping into an awesome situation. Oftentimes you're not, right? When you take over as CEO, those are usually not decisions entered into lightly. you know, I think it's interesting. was at Prosperous Forum last year. and was listening to the guy who was the head of Subway at the time, who I think has since retired, talk about, and he sort of specialized in restaurant turnaround. So he'd done three or four or five of them throughout his career to great success. And he was talking about how, you know, the only way to do them is to do them how you want to do them. Like the worst thing you can do is you can fail, right? But that's actually the worst outcome. And the reality is if you don't put, do it every, you know, work as hard as you possibly can, do everything you possibly can and do it the way that you believe will be most successful, you're going to end up with regrets at the end of that. Because whether you succeed or fail, you know, if you end up in failure, which is always a potential for anything we do as humans, If you haven't done it all your way, you're going to have a lot of regrets about, I could have done this or if I hadn't listened to this person or whatever that might've been. and, I, it just sorta, was a, the right thing to hear at the right time just was, sort of happenstance was right over right before I took over. B like it spoke to me in a way where it's like, look, we can only be ourselves, right? It's really expensive to be non-authentically yourself. And to me, turnarounds are always hard. Change is hard. Humans inherently like aren't massive fans of change. They're not like, yeah, I can't wait for more. Right. At least most, most people aren't that way. Right. so knowing that that's hard and knowing that we had a ton of change management to manage, like understanding that like, Hey, the best way to do this is just the way that I believe it should be done. Daniel Tsentsiper (12:04.162) Yeah. Absolutely. Alistair Levine (12:22.304) And that doesn't mean that I won't make mistakes along the way. That doesn't mean that I won't have bad decisions. Owning those decisions with the team is incredibly important for me. but the only way we can move is forward, right? And we will undoubtedly not be perfect along the path, but as long as we're constantly moving towards a clear goal and target, we, you know, we will be way more successful. in that approach, then if we sort of to worry about, what might this look like? who might second guess this thing? Or any of those other pieces, right? Like, are fundamentally going to be simply a distraction to, hey, how do we actually move forward? And I think for us, the key focus was how do we build a foundation? that allows us to ultimately enable future growth, right? If we're gonna go in and clean and fix something, we may as well clean and fix it in a way that it's extraordinarily resilient. we've sort of laid that cornerstone, laid that foundation so that as we get things clicking and growth opportunities come our way, we are well positioned to capture those growth opportunities. Daniel Tsentsiper (13:32.682) Mm-hmm. Alistair Levine (13:48.31) And sort of, that's why I sort of think about it as a slingshot, right? You go down and then you kind of like rock it back up. I think that's, that's very much the way sort of we look at it. And, know, it really, it all starts with getting aligned, getting culture clear, you know, getting people to understand, okay, why are we making changes? What are we making the changes for? Where do we want to end up? What does this look like? And where do we go from? Daniel Tsentsiper (13:53.553) Absolutely. Yep. Daniel Tsentsiper (14:13.524) Yeah. And we talked a lot last time we spoke about the culture element of it, right? Like this is a people business and the people that you work with at your restaurants are almost as important, I believe as important as, you know, the guests that you're serving. So on the culture piece and on the operation side of things, like what was something that, you know, whether it was a conversation you had and if you're okay with sharing it or maybe a strategy that you implemented to align the culture element across the brand. Did you do anything specific there or did you have to let some people go? What was that process like? Alistair Levine (14:48.974) I mean, we unfortunately had to let some people go, but I think the reality is... Alistair Levine (14:59.424) Nobody shows up, in my belief, very few people show up wanting to do a bad job daily, right? As leaders, oftentimes we fail our people by not clearly outlining for them what a good or great job looks like, and then how do they get there, right? Daniel Tsentsiper (15:14.121) Right. Alistair Levine (15:16.47) We, we oftentimes like, well, everybody knows exactly where we're going. And I've already told everybody once or twice exactly what the plan is. Right. The reality is if something really matters to you, you've got to reinforce it all the time. It's not a, Hey, we had this conversation once. They may not care about that thing as much as I care about that thing because they may not see that, hey, three years down the road, if we do these three things, all of a sudden we're going to have this incredible transformation, right? People want to be led, they want to not, they don't want stuff done to them. They want to do stuff with them. Right. So there's like an element of like, in role, like, Hey, I need you to tell me what the plan's going to look like. I want to be able to at least provide a little bit of feedback on that way. And then we're all going to get on the bus and get rolling in that direction. Right. So, so the first real step to me is like, where do you want to go? Right. And. Daniel Tsentsiper (15:58.952) Right. Alistair Levine (16:19.318) And that can change over time, but shouldn't change that often because otherwise you'll confuse the team. But then the second piece of that, and I think this is the part that's, I would say, just a perpetual work in progress is getting the team enrolled into, hey, here's where we want to go. Here's why we want to go there. Here's how we align interests across the organization. Because I think, It's really easy to just be like, well, of course they should care about being wildly profitable at the restaurant level. Well, why? Yeah, they should. I agree. I would be awesome if everybody was just all day thinking about how do we make this thing as profitable as possible. But we've got to show them what's in it for them. Why does that ultimately benefit them? And how do we create a cohesive alignment? Daniel Tsentsiper (17:05.254) Exactly. Alistair Levine (17:11.628) between all stakeholders. Cause to me, it's not just simply our employees, our customers, it's also, you know, investors and suppliers. Like ultimately the more clear we are about where we want to go, the easier it is for people to choose. Do I want to be on that train or that bus or do I not? And whether they want to or not is totally okay. Right? That doesn't make them a bad person or a good person. It just, look, some people want to, want to be on this path. And other people don't. I think, you know, I look at like a lettuce, entertain you or a book, restaurant group. think they've both been incredibly successful union square hospitality as well at building these cultures. High accountability, high buy-in, but they've done it in a way where they've aligned incentivization around, Hey, if, if, if, if the ownership and investment team absolutely crushes and wins the Daniel Tsentsiper (17:54.292) you Alistair Levine (18:08.908) chef partner or the partner in the business who oftentimes was previously the director of ops and the GM or maybe even started just as a food runner or bartender or line cook or whatever it might be, gives you the ability to have a career rather than just simply a job and creates this extra level of ownership and accountability. that is transformative for the best performing organizations. But at the same time, they're also building a robust amount of process and systems to set those people up for success by clearly defining, hey, you're here today, you want to be over here tomorrow, here's three or four or five things we need you to do that's going to ultimately make you a better leader and a better partner in the business. We need you to be sort of. clicking through those guard, know, signposts, guardrails, whatever you want to sort of think of them as on that journey. And they're providing a fair amount of support and documentation and process so that it is really clear. And then those who embrace those opportunities get to grab the ball and run with it, right? There's a time, I'm sure they have some people, ideally probably even some before they ever onboard them, who just aren't a fit for the culture that they've built. And so just never even end up taking a job there because they're not willing to do the things that that culture requires, right? And the more that you can have it be peer level driven as opposed to management level driven, the more powerful and impactful it's going to be, right? When coworkers are holding coworkers accountable, hey man, that's not how we do that. No, that's not how we bus a table. No, that's not, that plate doesn't look good enough for our guests, right? The more you can build that culture of that excellence and that true hospitality in the thing and incentivize that culture, the easier those restaurants are to run, the more successful they are because you no longer have a manager that needs to sit there and try and watch 30 to 50 people and tell them every single one, hey, don't do it this way or do it that way. You now have a team that's working in that way. Daniel Tsentsiper (20:30.547) On that point, do you think it's easier to create that engine, for lack of better words, this engine of accountability and high performance and strong culture in a fine dining and a casual dining environment versus something like a FSR or QSR? Alistair Levine (20:51.348) No, I mean, I think, I think there are more people who are more interested in potentially doing that within sort of fine dining and even beyond where we're at. Right. If you look at like, it was just on the unreasonable hospitality conference last week in Nashville, you know, like well, well, and the MP team obviously would like, you know, fully exemplify a lot of what we're talking about. Right. And obviously they're going to, they're going to have nothing but, Daniel Tsentsiper (21:00.402) Right. Daniel Tsentsiper (21:07.717) Nice. Daniel Tsentsiper (21:15.439) Absolutely. Alistair Levine (21:22.284) mostly nothing but high performers on their team because that's sort of the expectation and the expectations that's said from the job. But I don't think they accidentally ended up there. That took a lot of work and a lot of effort. when they took over that property, it was just simply a brasserie. There was a breakfast, lunch, dinner spot, and they built it into the number one restaurant in the world. That took a ton of energy and effort and building the right team, selecting the right team, developing the right team. Daniel Tsentsiper (21:31.666) Mm. Alistair Levine (21:50.968) But I also look at the opposite end of the spectrum. You look at like what Chick-fil-A and In-N-Out have built, like incredibly successful teams that really care on a deep level about hospitality, service, and a culture of excellence. I don't think that their operating results are an accident, that the fact that they are a center in terms of their financial results. But I think the problem with a lot of this stuff is incredibly hard to measure an ROI. Daniel Tsentsiper (22:10.492) No, that's true. Alistair Levine (22:20.194) to measure, we're spending this money on this thing. How is it driving our bottom line? Like it's very hard to measure. And, you know, there's the classic, you know, you measure what matters, right? But I think that there, there is a bunch of stuff that we cannot measure as an industry that still really, really matters, which is like, how are we making guests feel? What's the experience we're providing? I don't know. Sure. We can run some surveys and hope to get some feedback from guests. that might give us some idea of that, but there's a lot that's not easy to measure there. And I would argue the same is true for back of the house. A part of the reason that front of the house gets so much more attention than back of the house is a lot of the stuff, sales per hour per server, right? All of those efficiency metrics are relatively easy to generate. Hey, what is your attach rate on alcohol sales? What is your total number of items sold, right? There's a whole ability to measure a lot of performance metrics for servers in front of the house team members. What's a great line cook look like? What are the metrics or KPIs we should be thinking about for what a world-class line cook looks like or a dishwasher or a prep cook, right? I think we oftentimes know who those people are. Oh, that's my number one line cook. That's the best prep guy. He can chew through an entire case of onions. Daniel Tsentsiper (23:42.127) Yeah, right. Yeah. Alistair Levine (23:46.028) like you wouldn't believe, right? Or whatever those things might be, but the reality is they're really, we lack a lot of metrics to measure what success looks like for those people, which means that oftentimes we forget that we need to incentivize and encourage them as well. And I think it's why there's such this gaping chasm in so many restaurants between front of house and back of the house is, Daniel Tsentsiper (23:48.323) Okay. Alistair Levine (24:13.378) Front of house metrics are really easy to measure. We've spent a lot of time figuring out how to measure them. We've spent a lot less time figuring out how to measure back of house metrics. And then the sort of overall hospitality metric is one that's really hard to measure for us as an industry. Again, I think these are all problems that are going to be solved. Technology will certainly play a role, but I don't think that... They're not like, man, here's the answer tomorrow, like we're done, right? it's, they're hard problems to solve is is partially why they haven't been solved yet. Daniel Tsentsiper (24:48.625) hospitality piece if you don't mind I'm gonna read a small excerpt from your tweet or your LinkedIn post. Hospitality is about humanity. People's favorite restaurants very rarely are the ones that serve the absolute best food. They bias far more towards the experience that they are creating for the guests including the service vibe and the recognition of what the guest wants and needs. And then you say the food you said at the end here so many technology solutions take away from the hospitality via humanity that we can provide when implemented poorly. QR code ordering is a huge one that so many dislike strongly, but a small portion of the guests actually enjoy more. So when we're talking about humanity and hospitality, the front of the house side of things, it seems like from this, you're a little bit more skeptical on the way that technology can be embedded to make the guest experience better. Is that a fair assessment? You want to extend on that a little bit more? Alistair Levine (25:42.424) I'm sick. I wouldn't say that's totally fair. think hospitality technology has a huge role to play in delivering exceptional hospitality. I think the way that it currently exists in the marketplace is poor and, and, oftentimes wildly overlooked, right? Um, it can provide exceptional, you know, I think AI is going to be hugely transformative on this side where, Hey, if I have an AI agent that goes and grabs information on my guests. Sounds kind of creepy, right? Hey, like, no, Steve Smith is coming in for dinner tonight. The more I can learn about Steve, the better an experience I can provide. And the more that I can distill that data down into one or two, two or three key nuggets for the server, who's ultimately got eight tables, ideally two to three terms a night, you know, they're seeing 24 to 30 tables a night. How do we set them up to provide that? memorable experience, you we've all heard the sort of EMP stories around, my God, know, somebody, somebody mentioned they hadn't had a hot dog yet and they ran and grabbed the hot dog and played it up. And it was that ultimately that table, I'm sure has a memory of that hot dog more so than any of the other 12 to 16 courses at EMP that they had, which I'm sure all of them are fantastic. Daniel Tsentsiper (26:58.76) Yes, yes, yes. Alistair Levine (27:13.55) For me, those are where that's where humanity and technology have a room to overlap. Right. Is, Hey, what's your birthday? Who, what are your kids' birthdays? Right. Like how do we, how do you, when did you, where did you graduate school from? Like what, do you have allergies? Are there, do you have preferences on like what type of wine you like to drink? Right. The more that we can be. incredibly hospitable and provide these exceptional experiences, the more growth we're going to have around that. Because again, like to me, the food is a critical portion, but it's, it's, you have to have everything in balance. If you have any, you know, the, two most memorable experiences that anyone has from any experience. So this is all sort of like, you know, been studied, is What's the best or worst portion of the experience and what's the end of the experience? Those are the two data points we remember as humans. We don't actually remember as much as we think we do. Right? So if there's an awesome experience that had, and then the server like tells you your steak's overcooked or you're wrong about how your steak's cooked, would you say, Hey, this is medium rare and you wanted medium or whatever the answer might be. they're like, no, that's actually cooked medium. Like you're just wrong. Like that's what they're going to remember. Daniel Tsentsiper (28:14.503) That's true. Alistair Levine (28:37.464) Do you think they're going to come back? Absolutely not. Right. Now, Hey, if we could know that, frequently you order your steak medium rare and what you actually want is a medium steak. then that's the perfect note. This is where technology should be able to provide that where if we had guest notes in a system that worked exceptionally well, that integrated with point of sale or order management system. Now when that order gets placed, it automatically gets bumped knowing that, you know, Steve Smith is in seat number one. And it's now a medium cooking instruction on your KDS or however you're, communicating that to your kitchen. And the guest is going to not be any, any the wiser, but they're going to get exactly what they wanted. Even if that's what they wanted, it wasn't exactly what they said. Right. I, and the same is true for employees. Like you think about. how hard technology is to use for so many of our employees because it's, well, some information's here and some's here and you're playing this lovely game of whack-a-mole to try and figure out how to do your job. Like that's to me where technology fails, right? And if we look at like how easy a Shopify store is to set up or how easy it is to order something on Amazon and then they shoot you some like little suggestions about, we think you'd love blah, blah, blah, blah, blah, blah, Like whatever that might be. they're doing a better job of hospitality on those things than we are as an industry. And we're in the hospitality industry. Like that's the part I think more what my post was about is like, look, we've got to reorient what problem are we solving for? So that we don't spend a lot of time solving for a problem that doesn't actually lead to a business outcome as an operator that's going to materially move the needle for me. Right? If I'm spending money on technology, what is the problem I'm solving and how are we making things better for my team, for my guests, for any of the stakeholders, right? For not solving an actual problem. We're just adding more noise to the overall experience and likely one more distraction that actually will impede the team's ability to get the job done successfully. Daniel Tsentsiper (31:00.007) Absolutely. And there's a lot of takeaways for me and what we do. think that in the name of trying to create cool technology, we get distracted about who we're serving and what's important to them. Take this new technology, you just want to fit it into any sort of puzzle. But oftentimes it requires a lot more focus. It requires actually understanding what hospitality means and bringing that element into, into the product and just thinking about it at every step of the way. If I could download your brain and put it into my large language model prompt, I think it would do a lot better than what it currently does. But there's a lot there that we can, we can unpack and I would love to have you on maybe in a year from now to kind of track to see how you've been, track to see how you've followed through with some of your initiatives. I wish you all the best in your new journey and, Yeah, continue, continue putting out amazing content out into the world. Cause I think it's, it's very powerful. I think a lot of people can learn, learn a thing or two. So thank you so much, Alistair for joining us and we'll definitely be chatting soon. Alistair Levine (32:11.544) Thanks so much, Daniel. Daniel Tsentsiper (32:13.123) You take care. Bye. Alistair Levine (32:14.392) Cheers.