Steve Palmer founded The Indigo Road hospitality and consulting group in 2009, and in the last eight years his company’s portfolio has expanded to include some of the top lounges and restaurants in Charleston, S.C., Atlanta and Marietta, Ga. The well-regarded concepts include The Cocktail Club, Indaco, The Macintosh, Oak Steakhouse and O-Ku, among others. He recently talked about the importance of staff development to ensure great dining experiences.
How did you get into the restaurant business?
I started at 13 years old. I started washing dishes, which I think was illegal at the time, to be honest. They paid me $3 an hour cash, under the table. I was at a Chinese restaurant and I was the only American in there. I had no idea what they were saying every week. But then I quickly got into cooking. I grew up in Atlanta and I opened the first Fuddruckers in Atlanta. I was 16 and a grill cook. Then I worked the first Houston’s that ever opened. After a few burns and scars, I could see through the smoke that all the pretty girls were out front (laughs). I figured out that I needed to get out there and wait tables, and that this angry chef screaming at me was not the road I wanted to go down.
I’ve been very fortunate. I ended up in Charleston in 1990. I was 21 years old and I opened Magnolia’s. I met my first mentor, Chris Goss, who was the visionary behind Magnolia’s. That was the first time that I had somebody take me under their wing and say, “You know, Steve, people don’t go out to eat to eat food. They go out to eat to have an experience, and we’re here to create that experience.” That was a light bulb moment for me. It was the first time I saw dining as something more than just the mechanics of serving somebody a plate of food. I immediately fell in love. At that point, there was no Food Network, there were no Top Chefs. The restaurant business was still considered what you did until you figured out what you were going to do. Everybody was always saying, “I’m just doing this until I get a real job.” It always felt like a real job to me. I was working 70 or 80 hours a week and loving every minute of it.
Then I sort of fell in love with wine. I fell in love with every aspect of it. The craft cocktail thing had not happened and craft beers had not yet happened. Wine was really the thing that you learned about. From there, I opened Blossom Café in ’92. Since then I’ve opened 35 restaurants and nine hotels. I’ve just always loved the idea that we were there to take care of people. I’ve never lost that enthusiasm for creating a moment for somebody that they would remember.
What goes into creating a great experience?
We talk about the experience all the time. Sometimes it’s tangible and a guest will leave the restaurant and go, “God, that waiter was just amazing. They just knew the menu and they seemed so excited.” As the ambassador, if you will, of the restaurant, we put a lot of energy into our service staff about creating that experience. But sometimes it’s intangible. Sometimes it’s just a feeling you have. I think people have varying degrees of how much they pay attention to the details. Some people will say, “God, how did they cook that rack of lamb?” For other people, going out to dinner is a social experiment. Oftentimes, it’s a business dinner. Sometimes it’s a first date. Sometimes it’s old friends who have gotten together. There are so many different scenarios that bring people to the restaurant. And we talk about that all the time. What kind of experience is that particular table looking for? Businessmen are probably looking for efficiency and to be seen and not heard. There are so many different experiences. But, I think it kind of breaks down into tangible experiences, where people go, “That was the best pasta I’ve ever had in my life.” Or the intangible, like, “God, what a great evening. It just felt good in there.”
That comes from the people who work inside the four walls. We say this all the time. I think we build good-looking restaurants. But it’s people who make a restaurant. It’s our responsibility first to create and then to nurture staff that want to create that experience for guests. You can have the coolest restaurant in the world, but if you’ve got a server with a bad attitude waiting on you, you’re not going to overcome that. The one that really gets me is when you get a server who is indifferent and you can tell that they’re just going through the motions. “Hi, how are you tonight? Do you have any questions? Okay.” And the food comes and maybe it’s even technically correct. The food comes at an appropriate time, it tastes good, the bill comes. But you just kind of go, “Eh, well, it was pretty good.” It’s that intangible. There was just was nothing memorable about it. Then there’s the server who says, “Hey, have you dined with us before? Thank you so much for being here. Let me tell you a little bit about our menu.” You just have this feeling that “Wow, this person is really engaged in our experience.”
The same goes for cooks. They may not interact directly with the guest, but we have a saying that happy cooks cook happy food. If we don’t have a spirit of hospitality in the kitchen, then I think ultimately the food’s not going to taste as good. So, we spend a lot of energy with our chefs.
We don’t have the old school. What I grew up with was the yeller-screamer chefs. That’s just not a culture that we allow. We talk about our priorities and the number one priority in our restaurant, believe it or not, is not the guests. The number one priority in the restaurant is the employees. Because if the employees aren’t hospitable, if they’re not coming to work in a positive environment, if they’re not feeling inspired every day, then what kind of experience are they going to give the guest? They’re going to give the guest an okay experience.
I get stopped by people who say, “Of all your restaurants, Indaco is my favorite.” But they don’t really say, “because I think the food’s the best” or “because the service is the best.” They don’t know why it’s their favorite – they just know it is their favorite. Oftentimes, they’ll say it just feels good in there. And that has to do with the people, ultimately.
Is it fair to say that if you put your primary focus on the employee, a great guest experience is the by-product?
Yes. A guest is going to naturally have a better experience by somebody who is enjoying their job. We have to hire that, by the way. We do manager retreats three or four times a year. I get everybody in the room. We’ve gone from one to 13 restaurants in seven and a half years, so it’s been a rapid growth. There are decisions to be made about ways of doing things. I’m very collaborative in nature. Whenever I think we need to refine how we’re doing things, I get everybody in a room and I let them be a part of the discussion. We’ve identified qualities, emotional qualities, that somebody really needed to have to work with us, that had nothing to do with what their resume said. We talk about the technical and the emotional. I can teach you how to ring a check up. I can teach you how to clock in. I can teach you how to put the right silverware in the right place. But I can’t teach you to genuinely care about the guest experience. We figured out that if people are our secret sauce, if you will, then we need to be sure we’re hiring the same kind of person. We’re not perfect. We get it wrong sometimes. We’re in an era where the labor market in the restaurant is terribly anemic. There’s a lot of talk in the industry about living wages for the kitchen and work conditions and all of those sorts of things. So, we feel all that more compelled to have an environment that people want to come to. Because the truth is today, especially in a city like Charleston where there’s restaurants on every corner, if a server’s not happy they can walk out the door and within two hours they’re going to be hired somewhere else. It really is incumbent upon us to do it right, and create an environment where people love coming to work, so our guests are just naturally going to get a better experience.
Do you think if you’re doing it right then the people who leave were probably not the right fit in the first place?
Yes. I would say 90 percent of the people who leave us, whether they choose to leave us or we choose to part ways, didn’t have those emotional qualities that I mentioned. And this is true of executive chefs and general managers too. It’s usually not because the server just can’t seem to ring the orders in right. It’s usually because they’re not a team player, or in the kitchen the way they’re speaking to people is just not okay. I would almost say 100 percent of the time we’ve let somebody go in a senior leadership position it’s because their internal hospitality is not where it needs to be.
It’s incredibly hard to find great people. At The Macintosh, the chef has been nominated five times for Best Chef Southeast James Beard. We were nominated by the James Beard Foundation as “Best New Restaurant” in 2011. That is a restaurant that five to 10 years ago would have had servers with a minimum of five years’ experience. They would have had a vast knowledge of wine. Well, we just don’t have that. We’re not seeing those resumes anymore. So, we’re having to hire to the emotional qualities and just accepting that we’re going to have to spend more time training them. But if they’re the right person, they’re going to get it. It requires more work as a restaurant owner. But, it’s the new world order. Our steakhouse, Oak, is 11 years old. We’ve got those older servers who know the wines. But in all of our other restaurants, we’re hiring 21- to 25-year-old people, and they don’t have a ton of experience. We just have to accept that if they’re the right person, though, they’re going to respond to our environment. They’re going to go, “Man, I love this.”
I do an orientation for new hires. Anybody that’s been hired within two months comes and sits. It’s really very informal, but we just talk about our culture. The best thing I can hear is when somebody’s been working two or three weeks at one of our restaurants and they say, “Man, I’ve never worked in a restaurant like this. I just love it so much.” Or if somebody has been there a week I’ll say, “Well, why did you want to work at O-Ku or Indaco?” and they say, “I just always heard that your restaurants are a great place to work.” That’s the ultimate compliment for me.
It is incredibly hard to find and keep people. I worked for Ritz-Carlton Hotels a long time ago, and I heard something in a manager training program who said that people don’t leave jobs, they leave managers. I have found that to be universally true. In our case, there might be another restaurant down the street where the tipped employees can make more money, but if the environment’s right, that’s what they’ll stay for. There might be five percent of the people who say, “Hey, I love working here, but I need to make more money somewhere else.” But the vast majority of people quit because they’re unhappy with their manager.
Are people looking at your restaurant group as a long-term opportunity, since you are growing so fast, which gives them opportunities to grow their career as well?
I think so. I tell our servers, or whoever’s sitting in that meeting, “Listen, if this is the career for you, if you have a light bulb moment, maybe you walked in the door because you didn’t know what else to do, maybe you quit. But if the light bulb comes on for you, you don’t ever need to work with any other group again, because we have different cuisines, we’re always growing, there’s always an opportunity to be promoted.” We’re making people partners that were waiters five years ago. Kimball Brands, our managing partner for all three of the O-Kus, was a waiter at Oak Steakhouse and then he became the GM at O-Ku in Charleston and he just really made the restaurant what it was. So we said, “You know what? We want to do more of these and we want you to be a part of it.” Jeremiah Bacon came in as a partner at Oak. We opened The Macintosh and I said, “I’m going to split every dollar I make with you.” We have to do it right. We have to be all of the things that I say we are. We have to live up to our own expectations and the employees’ expectations. We’ve had two or three people in the last year leave that we just hated to see leave. They’ve all come back. That’s environment, that’s not compensation. That’s a 100 percent environment.
What happens when somebody you’ve influenced wants to start their own restaurant?
Some of our superstars want to own their own business. I’ve told them all I’ll be there on opening night cheering them on. That’s what people did for me, and I feel a responsibility to do that for the next generation. We talk a lot about mentoring the next generation. There’s so much talk about the millennials and the lack of work ethic, and I’m not going to say that we haven’t found that to be true at times. But, if I can take somebody who’s in that age group who doesn’t really know how wonderful this industry could be and turn that bulb on for them, and then they go on someday to open their own restaurant, well I’ve got a half a dozen names that did it for me over the last 20 years. It’s kind of like I’m paying it forward.
Am I right that if some millennials aren’t inclined to work very hard, the ones that do have a significant career advantage?
Some of my managers are in their 40s, and at times they’ve kind of struggled with the millennials — struggled to connect. What I keep saying is, “Listen, guys, they are the workforce.” It’s that old saying, “adapt or die.” I see other restaurant owners and they don’t feel the way I feel. There’s this constant sort of “God, they suck.” I keep saying, “Find the one who is willing to work hard. Let’s create a life for them and try and build some loyalty with them.” What I have found is when that generation feels like they have a voice — which is why I believe in collaborative environments — and when they’re valued, then they really prosper. Now, some of them have unrealistic expectations and having a voice doesn’t mean that you always get to give them everything they want. Sometimes that gets a little confusing when we say, “Hey, we want to hear from you,” but can’t do everything they want us to do.
We have a 26-year-old general manager at O-ku in Charleston. He’ll tell you, “I grew up spoiled. I didn’t know what work ethic was.” He’s had his moments. There have been some moments where we’ve had to sit him down and go, “Listen, this is the real world. I’m sorry that you’re working 55-60 hours a week. I don’t know what to say.” I just keep trying to find ways to connect and keep communicating a message of, “Listen, there is a career here for you. But, we’ve got to have a mutually beneficial relationship. It can’t be one-sided. It can’t be all about what you want and what you need. The business has needs, too.”
We will spend the next decade navigating that with these folks. But, again, they are the workforce. They’re not going anywhere. And the restaurant business is hard. I have worked nights, weekends and holidays for the better part of 30 years. I wouldn’t have it any other way, but it’s a real tricky time for our business. More restaurants than ever before are opening. But if you look nationally, attendance at culinary schools is flat. The statistics are not in our favor, which is all the more reason why we have to create an environment that people want to stay in.
What are the pros and cons of being in such a competitive market like Charleston?
It’s forcing us to think more creatively. I’m paying a lot of attention to the 28- to 30-year-olds who are opening their own restaurants. I looked at Jeremiah Bacon, who’s our chef-partner in two restaurants and is my age, and said, “Listen, in two or three years we’re not the ones that need to be coming up with the creative ideas. We’re just not. We need to be listening to the generation behind us.” I’m paying a lot of attention to the young kids who are opening restaurants much earlier than my generation. I was 40 before I was a partner in my first restaurant. Now they’re working two, three, four years in a restaurant and then opening their own. I’m watching them both for what I don’t want to do, because the servant-heart mentality isn’t there as much anymore. That’s a nonnegotiable for me. I will never compromise on serving others.
When I see these hipster restaurants where you feel like you’re privileged just for them to be serving you, I learn a lot about what I don’t want to do. I think people will tire of that. I think when the cool factor wears off, what you’re going to be left with was how you were treated. And I do believe that’s a phase in our industry. It might be a 10-year phase (laughs), but I do believe it’s a phase. We just opened O-Ku in Charlotte and it’s very, very busy, and people are, over and over again, talking about the service, the service, the service. I’m starting to see where people are starting to go, “Hey, we want to be treated nice again.” I don’t care if the chef has a bunch of tattoos and they’re playing rap music while I’m eating. Yeah, the space is cool and it’s packed and everybody wants a beer, but I want to at least feel like the people are glad I’m there.
On the other side of that, I see a lot of very creative ideas and things that I wouldn’t have thought of. It’s fun to watch. There’s something to be learned, concepts that five, six, seven, eight years ago, people would not have resonated with. There’s a restaurant here called Xiao Bao Biscuit. It’s an Asian restaurant that was opened in a gas station. The chef is American and his wife is from Vietnam and they opened this small plate Asian place. They’re in a huge spread in Bon Appétit Magazine this month. From a cuisine point-of-view, the lines have gotten really blurred. There are people that are opening Southern restaurants and they’ve got kimchi on the menu. There’s this blurring of the lines, and the food press seems to love those kinds of places. It’s a very interesting time in our business. But good service is timeless. I think people will come back for it over and over again. It’s what makes people feel good. And I don’t think that’s going to go out of style. I hope it doesn’t.
What do you love most about this business?
The most rewarding thing for me is our people. There’s nothing more rewarding for me than an employee that loves coming to work every day. There’s just not. Having them genuinely like and notice and care and say, “I just love being at this restaurant.” It’s creating opportunities for people. At the end of the day I’ve never lost the enthusiasm for just taking care of people. And when people stop me and say, “Man, we had the best meal at so-and-so the other night,” I just I love it. There’s no more rewarding feeling for me.
What would you tell somebody looking to get into the business?
I would say to somebody who wants to own a restaurant, “Go work in one first.” No matter if it’s for six months or a year, just go wait tables. Even if you’ve been successful in some other business. There are two kinds of people who get into the business that haven’t come up through the ranks. There’s pure investors — and I have those and they leave me alone to run the day-to-day. So, that’s one kind of ownership. They see it as a business opportunity and I think all of the folks that have been kind enough to invest in me have some level of romanticism about the industry. But then I see people who had never been in it and they have put their money in it and then they want to be hands-on with it, with no experience. I’m not going to say that you can’t be successful, because I know people that have been. If you’re going to get into the business with no previous work experience, make sure you’re hiring the right people, the people that have been at it a long time, and then allow them to do their job.
The restaurant business from an investment point of view can be a very painful one. Our failure rate is still pretty darn high. I see people who have invested in a restaurant and for whatever reason, they didn’t do their homework on what kind of concept the market needed, or they hired the wrong chef or general manager, and it’s a very painful, bitter experience for them. You absolutely have to love the business. The restaurant business is a business for people that love it, period. Because it is hard and you go through economic downturns, saturation or lack of staff. You better love it because it is a demanding, high-maintenance girlfriend. If you don’t love it, it can be really tough.