SlideShare a Scribd company logo
1 of 40
24
TECHNOLOGYREVIEW.COM
MIT TECHNOLOGY REVIEW
VOL . 120 | NO. 2
S
A
M
D
’O
R
A
Z
IO
Upfront
Eyeing a Dropbox IPO
Can the tech unicorn cash in on corporate users?
Of the big IPOs expected to occur this year,
Dropbox’s could be one of the most intrigu-
ing. When Dropbox last raised money, in
2014, it was valued at a hefty $10 billion.
But large investors such as Fidelity and T.
Rowe Price slashed the value of the Drop-
box shares on their books by as much as 50
percent in 2015. The key concern: could
a company whose free file storage service
is used by hundreds of millions of people
find enough paying customers to make a
great business?
Investors may be in for a pleasant sur-
prise. According to the company, sales
are now running at more than $1 billion
a year, up from around $400 million in
2014. That’s thanks in part to growing
sales of Dropbox Business, a souped-up
version of the free app that costs $150
per employee per year. The company has
been cash-flow positive since early 2016,
even as it has made heavy investments in
engineering, sales, and IT infrastructure.
Now CEO and cofounder Dre w
Houston is leading a new strategic charge.
In addition to selling utilities to keep dig-
ital files safe and accessible, Dropbox
intends to offer software that businesspeo-
ple use for hours each day to create con-
tent and get work done. “This is a mature,
very, very powerful software company,”
says Bryan Schreier, a partner with ven-
ture capital firm Sequoia Capital, which
was an early investor in the company.
That doesn’t mean Dropbox will live
up to that heady $10 billion valuation,
which even at the time was widely seen
as a sign of a bubble about to burst. Even
at an annualized revenue of $1 billion,
investors would need to think the com-
pany is worth 10 times its current sales
on the day it goes public. These days, the
average cloud software company trades
at just 4.7 times revenue, according to
Bessemer Venture Partners.
Still, Schreier and other investors
insist they are no longer worried about
MA17_upfront.indd 24 2/6/17 3:58 PM
25
TECHNOLOGYREVIEW.COM
MIT TECHNOLOGY REVIEW
VOL . 120 | NO. 2
Dropbox’s fundamental business model.
About 10 million new people start using
the free consumer product every month.
An increasing percentage of those users
sign up for the $100-a-year Pro version,
which offers more storage and sharing
features. Many of those Pro customers
use Dropbox at work, and once their
employers realize how popular it is, they
are more likely to step up to Dropbox
Business, which is designed for use by
teams rather than individuals. So far
more than 200,000 companies have
signed up for Dropbox Business, up from
50,000 in 2014. While most are small and
medium-sized companies, a few big com-
panies such as Expedia and News Corp.
have more than 10,000 seats.
A successful push into productivity
and collaboration software could give
corporate customers much more to buy
from Dropbox. The first example is Paper,
which provides a kind of virtual white
space where employees and contractors
can share Excel spreadsheets, Google
Docs, and other digital assets regardless of
what device they are using. The idea is to
tie together scores of different productiv-
ity tools and fold in management tools to
help teams keep projects on track. Paper
has been in beta since late 2015 and offi-
cially launched in January. “In five years,
you could start a business on Dropbox:
that is something we aspire to,” says chief
operating officer Dennis Woodside, who
declined to comment on IPO plans.
Dropbox is far from the only com-
pany looking to change the way work is
done. Google offers G Suite, which con-
tains business versions of apps such as
Google Docs and Gmail. Facebook has a
collaboration service called Workplace.
Microsoft is improving its cloud offerings
as it seeks to defend the massive mar-
ket share earned with its Windows and
Office monopolies. Box has strong trac-
tion with companies in highly regulated
industries like health care and financial
services, while younger providers such as
Asana, Atlassian, and Slack already han-
dle elements of what Dropbox aims to
do. According to Gartner analyst Karen
Hobert, there are 130 companies just
in the electronic file storage and sync
market.
Yet even rivals see Dropbox as a likely
survivor of the inevitable consolidation.
The overall market opportunity for pro-
ductivity and collaboration tools is $30
billion, if you replace all those PC disk
drives and traditional Windows or Mac
programs with cloud-based alternatives.
“That’s an order of magnitude more than
the combined revenue of all the players
today,” says Box chief executive officer
Aaron Levie. “As everything moves to
the cloud, there’s going to be plenty of
opportunity.”
Dropbox has been bulking up for this
opportunity since 2014, when Houston
hired Woodside. A former McKinsey con-
sultant, Woodside joined Google in 2003
as an operations expert before running
U.S. sales and then the Motorola Mobil-
ity cell-phone division. At Dropbox, he’s
hired more than 200 salespeople, up from
zero when the company relied solely on
Internet clicks. The engineering team has
more than doubled to more than 1,000
members, large by any measure. And he
has overseen a massive, risky IT overhaul.
While most companies are moving more
of their business onto public cloud plat-
forms like the one run by Amazon Web
Services, Dropbox has shifted billions of
its U.S. customers’ files away from Ama-
zon’s platform to three of its own data
centers. That way, Dropbox can tweak its
network to cut the time it takes to store
and sync traffic.
The result is more of a traditional
enterprise software company than the
hyper-efficient app maker Houston
founded in 2007. The idea for the com-
pany came when Houston realized dur-
ing a long bus ride that he’d forgotten the
USB drive with his work files at home.
The resulting cloud-storage app was a
sensation with people who felt his pain.
By 2012, Dropbox had 100 million reg-
istered users.
Then things got difficult. Giants such
as Amazon, Apple, Microsoft, and Google
began giving away cloud storage capacity
as a way to sweeten other offerings. As
prices collapsed, cloud storage specialists
faced an existential threat.
A successful move by Dropbox into
the huge market for productivity and col-
laboration software could brighten the
outlook, but it will require the company
to pull off two tough transformations at
once. Dropbox is still evolving from a
maker of a free consumer app to a cor-
porate IT infrastructure company. Now
it must also move from selling technol-
ogy that’s designed to be as invisible as
possible to making products people use
throughout much of their day. Its com-
petitor Box provides a cautionary tale.
It introduced a Paper-like product three
years ago called Box Notes. But Levie
admits that its reception has been less
than overwhelming. Box relaunched
Notes with new features earlier this year.
Woodside responds that few com-
panies have the scale, the technical
expertise, and the brand to pull off its
ambitious plans. “There’s close to two
billion knowledge workers in the world,
and I know this much: the tools they’ll be
using in five years are not the ones they’re
using today,” he says. “Is the number 500
million? A billion? I don’t know. But we
have a shot.” —Peter Burrows
The tools workers will use
in five years will be very
different from today’s.
MA17_upfront.indd 25 2/6/17 3:58 PM
Copyright of MIT Technology Review is the property of MIT
Technology Review and its
content may not be copied or emailed to multiple sites or posted
to a listserv without the
copyright holder's express written permission. However, users
may print, download, or email
articles for individual use.
Marketing/~$estions Text.docx
Marketing/1,2 and 3.jpg
Marketing/4-5.jpg
Marketing/Case Guidelines.docx
MGT 124 Case Writing Activity Guidelines
1- Prepare by keeping current on text topics since the selected
case article will reflect recent discussions; however, an article
may cover a range of topics. For example, an article that
focuses on quality or lean manufacturing (later topics) may
discuss issues like strategy, process selection, work design, etc.
Some examples from text and lecture are reinforced by the case!
2- Read the article ahead of time and take note of some key
points such as organization strategy, target customer, and
process decisions already made to fulfill their mission. List
examples that illustrate these points. For example, if an article
discusses customer research during product design, list the
activities such as holding a focus group and visiting the target
customers for direct observation. Do not come to class cold!
Class time is limited, so it is not the time to become familiar
with the article.
3- Read all questions before answering any. Some examples
may seem to “fit” more than one question, but are usually best
applied to particular questions. Take a bit of time to organize
responses (on separate paper) before writing.
4- Then, write out a concise, focused and carefully considered
response to all questions remembering a single question may
ask for several things. So address everything in the question,
but not other related topics because these may be covered in a
different question.
5- Finally, write neatly and respond with complete sentences
that refer to the particular point and then discuss examples from
the case. Do not list examples or respond with “bullet points.”
If a suggestion or opinion is requested, please be specific and
avoid catch-all buzz words like “technology.”
6- Rubric; 6 points per question and points reduction for writing
issues.
Marketing/McD Quarter Pounder Innovation-6.pdf
HTTPS: //W W W .F ASTCO MP AN Y. COM /90205288/MC D
ON AL D S -
TR AN S FOR M AT IO N -Q U AR TE R -POU NDE R - FRES
H -
BEEF? UT M_SO UR CE=PO ST UP& UT M _MEDI U M=E M
AI L & UT M_C AM P AI G
N= F AS T %20C OMP AN Y%20W EE KL Y& POSITIO N=1
&P AR TNE R= NEW SLE
TTER & C AM P AI GN _D AT E=0 8 1 7 2 0 1 8
15.18
The inside story of how McDonald’s
innovated the Quarter Pounder
In a change that has been as seismic for McDonald’s as
the drive-through window in 1975, McDonald’s has
reintroduced its signature burger with fresh—never
frozen—beef. And that’s just the start.
[Photos: Joel Stans; Prop stylist: Taylor Horne at MHS Artists]
BY JON ATH AN RINGEN LONG READ
A cryptic missive went out last spring to all 3.6 million people
who follow
McDonald’s on Twitter. The tweet read, simply: “100% Fresh
Beef + John
Goodman = ASMR(ish)” and included a link to a video. In the
split-screen clip,
the Big Lebowski and Roseanne star stares into the camera
and—somewhat
unnervingly—whispers a carnal ode to the fast-food giant’s
Quarter Pounder
burger, accompanied by the sounds and visuals of an appetizing-
looking patty
sizzling on the grill. “Hey, you,” Goodman murmurs intently.
“McDonald’s new
fresh-beef Quarter Pounder is hotter and juicier. It’ll leave you
speech-less. I
can almost feel that juice sizzling. . . . Oh baby, the melted
cheese is hugging
every corner of that grilled patty. . . . That cheese is so hot, so
melty.”
ASMR videos, named for autonomous sensory meridian
response, typically
star carefully primped young women tapping on objects and
whispering into
high-end microphones with the intent of creating a pleasant
frisson in
viewers, whereas this one featured a large man waxing near
pornographically
about a burger. But the spot was a viral hit, quickly racking up
more than 3
million views. It was timed to the arrival—at every one of the
restaurant
chain’s 14,000 U.S. outposts—of fresh, never-frozen beef
patties in its
signature Quarter Pounder burgers, a change that execs say has
been as
seismic for the company as the introduction of all-day
breakfast, in 2015, or
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-
beef?utm_source=postup&utm_medium=email&utm_campaign=
Fast%20Company%20Weekly&position=1&partner=newsletter&
campaign_date=08172018
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-
beef?utm_source=postup&utm_medium=email&utm_campaign=
Fast%20Company%20Weekly&position=1&partner=newsletter&
campaign_date=08172018
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-
beef?utm_source=postup&utm_medium=email&utm_campaign=
Fast%20Company%20Weekly&position=1&partner=newsletter&
campaign_date=08172018
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-
beef?utm_source=postup&utm_medium=email&utm_campaign=
Fast%20Company%20Weekly&position=1&partner=newsletter&
campaign_date=08172018
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-
beef?utm_source=postup&utm_medium=email&utm_campaign=
Fast%20Company%20Weekly&position=1&partner=newsletter&
campaign_date=08172018
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-beef
https://www.fastcompany.com/90205288/mcdonalds-
transformation-quarter-pounder-fresh-beef
https://www.joelstans.com/
https://www.fastcompany.com/user/jonathan-ringen
https://vimeo.com/271539135
even the drive-through window, which McDonald’s began
experimenting with
in 1975. (The new patty is also available in the chain’s more
premium
Signature Crafted Recipes line of burgers, but not yet in Big
Macs or its basic
ones.)
Over the course of interviews with five top executives, I never
once heard
anyone mention Shake Shack (110 U.S. locations) or In-N-Out
(334
restaurants) by name, but McDonald’s has clearly been studying
these
chains—both of which serve fresh beef—along with their
millennial customers
who don’t find frozen patties appetizing. “We were hearing
from consumers
that our burger wasn’t good enough, and we’ve seen a lot of
trends around
expectations of high quality,” says the company’s new chief
marketing officer,
Morgan Flatley, who arrived at McDonald’s from PepsiCo a
year ago. “To be
able to deliver that at the speed and scale of McDonald’s was a
unique
opportunity for us,” she says.
Fresh beef is just one element of a massive transformation
underway at
McDonald’s. Steve Easterbrook—a McDonald’s veteran who
had also run
British casual-dining chains PizzaExpress and Wagamama—was
elevated in
2015 from chief brand officer to CEO at a time of real crisis.
The chain had
been suffering losses for six straight quarters, with net income
down 15% from
the year before. The iconic billions served signs didn’t quite
start rolling
backward, but between 2012 and 2016, McDonald’s forfeited a
stunning 500
million transactions in the U.S., both to its typical competitors
and a new wave
of fast-casual spots like Shake Shack and Sweetgreen. “We’d
lost a
meaningful connection with customers,” says Easterbrook, who
sounds a bit
like a younger Michael Caine. “They weren’t excited about what
we were
doing, and that would be fairly universal on a global basis. So
we rallied
around a turnaround plan.” McDonald’s stock is up 60% since
Easterbrook
took over, but it has listed downward for much of 2018 as same-
store U.S.
sales growth has cooled from 4.5% to 3%. Consumers and
investors alike are
demanding more.
Now the company and its franchisees—owner-operators who
typically sign a
20-year agreement for each restaurant and control more than
90% of the U.S.
chain—are embarking upon its biggest innovation test in years
with the rollout
of the new Quarter Pounders. Can a company that’s famous for
its
predictability succeed in selling a fresh-beef hamburger—with
all the logistical
and food-safety risks that entails—at the scale, speed, and price
its customers
expect?
The brand-new headquarters of McDonald’s, a nine-story open-
plan
office tower, are in the rising Chicago neighborhood of the
West Loop.
From 1971 until this past June, the company operated out of a
park -
like campus in suburban Oak Brook, Illinois, 20 miles outside
of the
city. Now it’s on a stretch of West Randolph Street that is
currently
Chicago’s hottest restaurant row. “We felt like it would get us
closer to
our customers, closer to the competition, closer to the trends
that are
shaping society,” says Easterbrook. Plus, he notes, it’s good for
recruiting: “The talent tends to be living downtown.” The young
corporate employees toting Sweetgreen bags back across the
street to
their office during a recent lunch hour—because who can eat
McDonald’s every day?—demonstrate that Easterbrook’s plan is
already taking hold. Several told me excitedly about the
expanded
lunch options the new HQ will provide.
The McDonald’s café in the lobby of the building has one
feature you
won’t find anywhere else: a rotating selection of regional items
from
outposts around the world, including a spicy-chicken sandwich
from
Hong Kong. The limited availability of these items has turned
out to be
a canny marketing move, sparking a flood of social media
interest and
press coverage, but the space is also, clearly, a test lab. Menu
chief
Linda VanGosen, who joined McDonald’s from Starbucks last
year,
works closely with chefs and food scientists at McDonald’s
suppliers
and keeps a close eye on food trends, which have to reach a
certain
level of mass appeal to make sense for McDonald’s. She and her
team
also conduct ethnographic research, including shadowing
customers to
see how McDonald’s fits into their lives, and take what
VanGosen
refers to as food safaris, eating their way across America. “If
we want
to find great coffee, we’ll probably go to the West Coast,” she
says.
“For burgers, it’s probably somewhere in the South.”
A key insight she’s learned is that what consumers say they
want, and
what they actually buy, are two different things, which presents
an
interesting challenge. “That’s kind of the secret sauce,”
VanGosen
says. “What’s an emotional need you can answer?”
The company had been receiving consistent feedback from a
wide
range of consumers in recent years—both via focus groups and
from
unsolicited comments—that its beef patty, the cornerstone of its
business, was subpar. But figuring out exactly what customers
found
unsatisfying took time. Eventually, McDonald’s determined that
the
burger was too dry and didn’t arrive hot enough, and executives
discerned that the culprit in both cases was the flash-freezing
process
the patties had been subjected to. “We looked at a lot of things
—raw
material, fat content, grind—for the right taste and textural
elements,”
VanGosen says, noting that this work began well before her
arrival.
They found that the patty itself didn’t have to change, just the
way it
was handled. Keeping the meat fresh and cooking each burger to
order
improves the eating experience immensely. “The game changer
turned
out to be serving it hot off the grill,” she says, adding that the
never -
frozen patties cook in 60 to 80 seconds—about a minute faster
than
frozen ones—which also helps offset the added time it takes
restaurant
workers to start cooking each burger as soon as it’s ordered.
McDonald’s declines to reveal the costs associated with the new
patty,
beyond saying that it is not appreciably more expensive to
produce
than the frozen version, and that consumers won’t see an
increase in
price. “I haven’t seen data on this, but if I had to guess based on
other
restaurants, I’d say it costs McDonald’s a little more,” says
industry
analyst Mark Kalinowski, of Kalinowski Equity Research. “But
we’re
getting a lot of evidence that they are selling well.” Kalinowski
says that
the average McDonald’s does twice the business of an average
Burger
King or Wendy’s. (Wendy’s, which has long served never-
frozen
patties, recently took the opportunity to mock its bigger
competitor on
Twitter: “Hey @McDonalds, heard the news. Happy
#NationalFrozenFoodDay to you for all the frozen beef that’s
sticking
around in your cheeseburgers.”)
McDonald’s began testing fresh-beef Quarter Pounders nearly
two
years ago at restaurants in Tulsa, Oklahoma, and Dallas,
markets
selected because they are serious burger country. The response
was
conclusive: More than 90% of customers distinctly preferred the
new
burger. It’s been a hit with critics too. “The meat was tender, it
tasted
fresh and delicious, with that classic whiff of black pepper McD
onald’s
uses,” said one Food & Wine review. “To boot, there was a nice
bit of
char around the edges. Simply put, there was no disguising the
fact
that this meat is a fairly significant upgrade from McDonald’s
as usual.”
In addition to taste, today’s restaurant-goers increasingly care
about
the provenance of the food they consume. At Sweetgreen (91
locations), for instance, an employee writes the names of the
farms
that supplied the season’s ingredients on a chalkboard in the
restaurant. Shake Shack published a cookbook last year that
highlights
its local purveyors. While moves like these are impossible at the
scale
of McDonald’s, the chain has been taking gradual steps in these
upstarts’ direction. The company committed in 2015 to using
exclusively cage-free eggs by 2025. Its chicken is now free of
most
antibiotics, which has been the policy in the U.S. since last year
(though the Humane Society thinks these changes don’t go far
enough). McDonald’s also recently announced it would stop
using
plastic straws in the U.K. by 2020 and begin testing alternatives
in the
U.S. Generally, the company has become more transparent about
its
sourcing in the post–Fast Food Nation era, distancing itself
from the
industrial food processes it formerly employed that had so
disgusted
consumers, including incorporating “pink slime”—beef castoffs
treated
with ammonia—into its burgers.
But fresh beef is many orders of magnitude more challenging
than any
menu update thus far, and more significant to the company
overall.
“We thought, How do we make the biggest difference to the
most
customers in the shortest possible time?” says Easterbrook.
Rather
than playing defense against critics by adding a healthful—and
potentially unpopular—option to the menu, the company has
homed in
on its essential product: a hamburger, the biggest, burgeriest
hamburger McDonald’s sells.
On a late-spring Tuesday, not long after the new patty began
being
served nationwide, Christa Small, one of the company’s top
operations
executives and the person whose team was responsible for
coming up
with the procedures that make fresh beef possible, visits a
McDonald’s
near the old campus in Oak Brook. It’s hard to imagine anyone
you’d
trust more with the task of making sure the biggest restaurant
chain in
the world can safely sell a potentially pathogen-carrying
product to
millions of customers a day. Small is friendly but intensely
focused,
with a tiny Golden Arches pin on her lapel. She’s worked for
McDonald’s her entire career, beginning with a “crew member”
position
at a restaurant in suburban Chicago, followed by a corporate
internship
the summer before her freshman year at University of Michigan,
where
she studied electrical engineering (she also has a master’s in
computer
engineering). She has served in a wide variety of roles at the
company,
from the IT department to helping develop the automated
beverage
machine.
Food safety, especially in the wake of Chipotle’s disastrous E.
coli
outbreaks in 2015 and 2016, which hurt both its business and its
brand, is clearly a priority for McDonald’s. The company’s
suppliers
have spent around $60 million to enhance equipment and s
ystems,
including new refrigeration and food-packing technology.
(Lopez
Foods, which supplies restaurants in the Texas and Oklahoma
region,
led the pilot program to develop a process to produce, pack, and
ship
fresh patties.) The distribution centers and cold trucks were also
revamped, to ensure that the patties would be kept appropriately
cool
yet at no point be exposed to freezing temperatures, rendering
the
whole fresh-meat initiative moot.
The main equipment investment McDonald’s franchisees have
had to
make for the fresh-beef switch is a squat, two-drawer
refrigerator. (“Do
[franchisees] like writing big checks?” Easterbrook asks. “Of
course
they don’t! But if there’s a strong business case behind it,
they’ll
naturally want to invest.”) Small’s group also developed new
“small
wares” for the process, including trays and tongs that are only
used
with the new patties. Most crucially, she and her team
developed a
mandatory curriculum for the handling, cooking, and serving of
fresh -
beef patties. “It’s the most intensive training process we’ve ever
done
for a new product,” she says. “We really want to make sure we
maintain our reputation in regards to food safety.”
In crafting the new Quarter Pounder, McDonald’s has made
subtle
improvements to the entire sandwich, adjusting grill time and
the bun-
toasting process, for example. But the biggest change is in the
labor
process to prepare it. McDonald’s switched from batch cooking
to
preparing each Quarter Pounder when ordered. This required
fundamental shifts in kitchen culture and training. “It takes
them a
minute to understand that I want them to react as soon as a
customer
orders,” Small says of employees. “I want you to get the patty
down, I
want you to act with a sense of urgency. When you have to
change the
behaviors of hundreds of thousands of people, that’s not a small
thing.”
To demonstrate, Small takes me to the other side of a
McDonald’s
counter and asks an associate for a Quarter Pounder. As soon as
the
order enters the system, a cowbell sound—unique to the new
burger—
alerts the grill cook, who pulls on a fresh pair of blue gloves
and grabs
a patty from a sterile bag contained in a blue tub in the special
fridge,
which is labeled raw fresh beef only/solo carne. fresca cruda.
(The
combination of the plastic bag and the plastic tub provides two
lines of
defense against the escape of “purge,” which is the unappetizing
word
for the juices that the raw burger releases in the packaging.
“That’s
where your main risk of cross-contamination is,” says Small.)
As the
grill cook’s burger hits the grill, he lowers a clamshell top,
which
flattens the patty and allows it to cook on both sides at the same
time.
In another area of the kitchen, the prep team pops a bun in the
toaster
and, as soon as it’s ready, applies condiments. When the patty is
done,
the clamshell automatically floats open. The grill cook seasons
the
burger with salt and pepper and passes it on a tray to a short
conveyor
belt, where the prep squad unites the patty with the bun and
condiments and packs it all in a cardboard box. The whole
process
takes less than two minutes. And the finished product? It is,
indeed,
hotter and juicier. John Goodman’s whispers are not lies.
The new beef patties have a 14-day shelf life from the time they
are
formed at one of the company’s meat purveyors until the
moment
they’re served. But there are many factors that could prevent
them
from getting to a customer at all. The refrigerated trucks
McDonald’s
uses, for instance, are constantly temperature-monitored: If the
interior
temperature goes even one degree too high or low, the entire
load is
discarded. There’s also, for the first time, a question of supply.
After all,
ground beef is a seasonal agricultural product, and even if you
are one
of the biggest purchasers of it on the planet, as McDonald’s is,
you still
need to plan ahead for the arrival of barbecue season. “We’re
competing with retail on fresh beef, and we need to make sure
we can
access the supplies we need,” says Marion Gross, the head of
the U.S.
supply chain and a 25-year veteran of the company. “This is
new for
us, and we’re coming into our first grilling season and it’s
going to test
the robustness of our supply chain. But so far, so good!” To
better
anticipate purchasing needs across the entire business, Gross’s
group
is making significant investments in computer learning and
researching
emerging technology like the blockchain. “We’re looking at all
those
kinds of things seriously,” she says, “so we can better manage
the data
we have.” She adds, laughing, “We have a lot of data.”
McDonald’s has put all of this energy into fresh beef because it
really
needs the burger to succeed. The chain’s stalwartly low prices
are the
result of razor-thin margins and massive sales volume, so
keeping
costs down and getting more customers through the doors—or
onto its
highly regarded ordering app—is paramount. To this end, the
company
announced another step in its ongoing restructuring in June,
closing
regional field offices and further shrinking the management
structure.
All told, it plans to reduce expenses by $500 million by the end
of 2019.
And it’s begun looking into a host of potential new offerings,
from plant -
based meat alternatives (like the Impossible Slider that White
Castle
has begun testing in certain markets; see sidebar) to restaurants
that
recognize diners upon entering and prompt them with their
favorite
orders. “Customer expectations are ever increasing,”
Easterbrook
notes. “What used to be convenient 10 years ago, those rules get
rewritten based on the Amazons and Ubers and the Netflixes.
Just
because we’re large doesn’t mean we have to be slow.”
About a month into the fresh-beef rollout, things are definitely
bustling
during the dinner rush at a McDonald’s on Manhattan’s Upper
West
Side. A few minutes after a touch-screen-kiosk order for a
Quarter
Pounder with Cheese is placed, a young female employee brings
it to
my table. Have things been busier since the rollout? “Oh yeah,”
she
says, already speeding back to the counter. “Everybody tells me
how
much they love this burger.”
A version of this article appeared in the September 2018 issue
of Fast
Company magazine.
https://www.fastcompany.com/magazine/issue-226
Marketing/Questions Text.docx
Marketing/ShakeShackArticle.docx
How Shake Shack Leads The Better Burger Revolution
How Shake Shack has customers (and many investors)
salivating for its burgers and unique brand of hospitality.
Rob Brunner 06.22.15 6:00 AM
"I bet no CEO of a company has said this to his team," Shake
Shack leader Randy Garutti tells a roomful of employees. "I
want to challenge you to put us out of business."
It’s less than 30 minutes before the 11 a.m. grand opening of
what will be the 66th Shake Shack—a gleaming, multimillion-
dollar outpost located in a Victorian brownstone on Newbury
Street, in Boston’s gold coast shopping district. The assembled
workers sit riveted, but this last-minute dare is probably not
what they were expecting.
Garutti, the company’s CEO, has been up since 3 a.m. He came
to Boston on a late-arriving early-morning Amtrak train, and he
plans to hit three other Boston-area Shacks before heading home
to New York. It has already been a long day. Is he having some
kind of stress-induced, Howard Beale–style meltdown? Well,
no. He’s just passing along a bit of the wisdom that has made
his company one of the hottest restaurant businesses in the
country.
Shake Shack has been inspiring excitement since it opened in
New York’s Madison Square Park 11 years ago. Created by
revered New York restaurateur Danny Meyer, it has since grown
from a humble burger stand into a global chain with 41 U.S.
outlets and 29 overseas franchises in cities such as Moscow,
Dubai, Istanbul, and London. Fans line up for its signature
ShackBurgers (flavor-packed beef patties served on squishy
Martin’s potato rolls and wrapped in nostalgia-triggering wax
paper), hot dogs (Chicago-style or with beer-marinated shallots
and cheese sauce), concretes (frozen custard blended with
artisanal local ingredients; each Shack has its own unique
creations), and house beer (ShackMeister ale, made by Brooklyn
Brewery). The company went public in January, raising $112
million in an IPO that valued it at around $1.6 billion. At the
time Shake Shack announced its impressive first-quarter
earnings in May, its stock price had more than tripled.
That IPO was the highest-profile moment yet for what’s known
as the "better burger" category: fast-casual restaurants that
crank up the quality on the old hamburger-and-fries concept,
targeting savvy diners who care more about how their food
tastes and, crucially, where it comes from. Better-burger
successes include Five Guys (over $1.3 billion in revenue last
year from more than 1,200 locations), Smashburger ($270
million), and Habit Burger ($175 million), which also went
public recently. Although these chains are still small—last year
they brought in just $2.7 billion out of the $76.9 billion
generated by hamburger restaurants in the U.S. overall—they’re
having an outsize influence on the burger business, which
remains by far America’s largest dining-out category. Shake
Shack’s approach in particular—sourcing high-quality natural
ingredients, cooking food to order, and placing a major
emphasis on the happiness of its customers and employees—
both reflects and is driving real change in the marketplace.
Shake Shack founder Danny Meyer sports a burger-eating grin,
thanks to the growth and popularity of his fast-casual
restaurants.
Garutti’s prelaunch pep talk outlines the key elements of his
company’s style of radical hospitality. He urges his workers to
trust customers and try to be on their side—to always make the
"charitable assumption" when dealing with people, and to look
out for each other as much as possible. And then there’s that
thing about bankrupting the company.
"What do I mean by that?" asks Garutti, who’s dressed CEO
casual in a gray blazer and dark blue jeans. "Put us out of
business because you are so damn generous with what you give
the people who walk in this door. If there’s a kid crying, who’s
going to walk over with a free cup of custard? I challenge you
to put us out of business with how generous you are. Go do it.
Give away free stuff." This is not merely about the occasional
gratis dessert: It’s part of a larger effort to empower employees
to do whatever it takes to make customers feel loved.
It’s now just a few minutes before 11, and the Newbury Street
team, clad in Shake Shack’s unadorned black uniforms, start
taking their stations: cash, bun, grill, prep, custard. Napkin
holders: filled. Ketchup cups: stacked. Entryway: Swiffered.
"This is a crazy day, man," says Garutti, a once avid skier and
surfer who occasionally drops words like dude into casual
conversation. "Crazy day. But we’re good, we’re good." Then
suddenly it’s time, and actual customers are eager to order. As
cashiers ready their registers and a grill cook prepares to slap
patties onto the kitchen’s Miraclean cooking surface, it’s
clear—from the thoughtfully designed space, carefully sourced
food, and palpable high spirits of the staff—that nothing here is
like what you’ve ever experienced at a fast-food burger
establishment.
A manager stands at the head of the room, giving everything a
last nervous look-over. "Front of house, are we ready?" she
yells.
"Woo-hoo!" comes the reply.
"Back of house, are we ready?"
"Yeah!" everyone yells.
"Okay," she says. "Let’s do it."
Wandering through a Shake Shack with Garutti, you come to
appreciate how much care goes into every detail, seemingly in
service of a single question: How do you bring a high-end
dining experience to fast food?
Shacks are built to feel more modern and grown-up than the
cartoony, red-and-yellow-decorated junk-food joints that hawk
value meals and 40-ounce sodas. You see it in the quiet color
scheme (green and black); the slick graphic design (the brand’s
clean, modern signage and logo were created by Pentagram’s
Paula Scher); the room layout (an open kitchen up front rather
than hidden in the back); and the way each outlet is localized to
some degree (the Newbury Street store’s reclaimed-wood walls
are made out of materials from an old Boys & Girls Club in
nearby Watertown).
Garutti makes the rounds at Newbury Street with Zach Koff,
Shake Shack’s VP of operations, and Mike Iaia, a regional
director of operations, showcasing his obsessive attention to
detail. He points to an empty spot on a wall: "Mike, we need a
TV there, dude," he says. "That’s the focal point." Koff and Iaia
make a note for later, even though they aren’t sure it will be
logistically possible. Still, Garutti is right: Once you notice it,
the space is begging for decoration. "Randy’s really good at
walking in and understanding what will create energy," Koff
says. Later, Garutti still can’t let it go. "You’ve gotta do a TV
there," he says, walking past the space again. At another
Boston-area Shack, he zeros in on an errant condiment splotch.
"A ketchup stain pisses me off to no end," he says. "There are a
million little things that we can do better."
At the center of Shake Shack’s mission is Danny Meyer’s
philosophy of "enlightened hospitality." In essence, it’s a set of
priorities: the idea is to create a welcoming atmosphere first for
employees, next for customers, and then for the outside
community, suppliers, and, finally, investors. The notion echoes
Johnson & Johnson’s 1943 mission statement, which espoused
the same priorities and was at the time a groundbreaking
corporate credo that led to decades of earnings and dividends
growth.
Since opening the Union Square Cafe in New York in 1985,
Meyer has perfected a brand of relaxed but highly polished
service. Still, applying that concept to a spot that offers cheese
fries in cardboard boxes rather than $120 tasting menus is a big
leap. "Business, like life, is about how you make people feel,"
Meyer writes in his 2006 book, Setting the Table. "It’s that
simple, and it’s that hard." Shake Shack has taken advantage of
the burger industry’s traditional emphasis on speed over
customer care. "You go to a fast-food restaurant, your
expectation is generally low," says Garutti. "You are almost
always dreading what’s going to happen. So, cool, thank you for
creating such a low bar for us. We’re going to go way above
that. We’re going to make it so that everybody who walks out is
saying, ‘I can’t believe what that guy did at Shake Shack!’"
As the principle of enlightened hospitality dictates, it starts
with employees. Entry-level Shake Shack workers make $10 an
hour in New York and $9.50 everywhere else, which is better
than minimum wage but short of the $15 an hour that activists
are pursuing for the fast-food industry. The real financial
incentives are designed for employees who stick around. The
company has created a profit-sharing program called Shack
Bucks that can, Garutti says, add as much as $2 an hour to
paychecks. And every full-time employee was given the chance
to purchase stock in the IPO. "We believe we’re going to pay
the market rate to get a great employee," Garutti says, "and then
our job is to promote that person and show them how they can
make a lot more money if they choose to be a leader." Many of
Shake Shack’s executives have been groomed from within, and
it’s not uncommon for hourly employees to get bumped up to
manager, general manager, and beyond.
Opportunity, then, is a big part of the pitch to new workers: Be
excellent, be genuine, be friendly and eager and human, and you
might have a real future with this company. "We’re not going to
program you to be some kind of Shake Shack robot," Garutti
says. "That’s not to say that we don’t give you the guardrails.
We have boundaries and we’re very serious about what they are.
If you go outside of those, you can’t be here. But within those,
there’s a lot of freedom to create and lead in the way that you
want."
"The younger generation is not all of a sudden going to say, ‘I
want less quality food,’" says CEO Randy Garutti. "No way."
Later, at a Shack in suburban Chestnut Hill, Garutti shows how
this works in practice. After ordering lunch (two hot dogs,
cheese fries, two frozen custard concoctions), he sits down with
a manager for a check-in. Garutti is keen to have Shake Shacks
feel as lively on the outside as they are inside. He’s been
experimenting with Ping-Pong tables and bocce courts at some
locations in an effort to connect with surrounding communities
and encourage customers to hang out. Should they install an
outdoor foosball table here? he wonders. The manager has a
different idea. How about a Shack-sponsored music series? "I
have access to a lot of bands," she says, noting that she used to
play in one. "If we had interesting, hipper bands that were akin
to what we’re doing here, this could be more of a summertime
scene."
"Done," Garutti says. "All right, we’re off. Thank you for your
leadership."
Danny Meyer’s sixth-floor office looks west across New York’s
Union Square Park, the busy downtown crossroads that gave his
first restaurant its name. Afternoon light spreads over an
expansive bookshelf next to his desk as he pours water from a
glass pitcher etched with the name of his company, Union
Square Hospitality Group, which operates beloved New York
institutions such as Gramercy Tavern and The Modern. Taking a
sip, he shows off a framed photo of the 2004 opening of the
first Shake Shack, an outdoor kiosk located a quick walk
uptown in Madison Square Park.
"It’s really cool to know that there isn’t pressure to just make
money," Garutti says. "If we build this brand right, we’re all
going to benefit."
Shake Shack’s headquarters occupy the floor right below this
one, and though the thoughtful, soft-spoken Meyer is no longer
involved with the burger chain’s day-to-day operations, he
remains chairman of the board and continues to help steer its
overall strategy. Meyer is also the guy who dreamed up the
concept back in the early 2000s, when neither he nor anyone
else imagined that a little concession stand in the park would
ever be more than a fun, one-off novelty.
It started with an urban-revival project. In the 1990s, Madison
Square Park had fallen into disuse, and Meyer—who was
planning to open a pair of restaurants on the park—was at the
center of an effort to turn it around, helping to lead a group
called the Madison Square Park Conservancy. One initiative
involved hosting sculpture exhibits, and when an artist wanted
to incorporate a working hot-dog cart into his installation,
Meyer volunteered. "I figured, what if we could use something
as mundane as a hot-dog cart to prove that enlightened
hospitality doesn’t only work in white-tablecloth restaurants?"
he says. "This is where the whole vision starts: that the park be
beautiful, safe, and used." Meyer hired off-season coat-check
workers from his restaurants to operate the place and donated a
percentage of any profits to the park.
Though it lost money, the stand attracted crowds, and Meyer
decided to bring it back for the next two summers. When New
York’s parks department approved a full-time food kiosk in the
park, he was the clear choice to run it. "I was obviously not
thinking about an ongoing business," he says. "It was never our
vision that it would turn into more than one Shake Shack. I was
thinking about what it could do for the park."
Meyer sketched out a quick menu based on places he loved
growing up in St. Louis: Fitz’s Root Beer, Steak ’n Shake, Ted
Drewes Frozen Custard. (That handwritten list of offerings,
which is remarkably similar to Shake Shack’s current menu,
now hangs on the wall of Garutti’s office.) The kiosk opened on
June 12, 2004, offering a high-gloss take on burgers, hot dogs,
and milkshakes with a focus on quality ingredients and
extraordinary service. It was an instant local phenomenon, and
soon Shake Shack, as it had been named, was as famous for its
epic lines as for its food.
Over the next few years the crowds kept coming, undaunted by
wait times that could stretch to an hour or longer. (A few years
ago, the company installed a "Shack Cam" so people could
monitor the line via the web.) But Meyer—who had waited nine
years to open his second high-end restaurant—resisted the
obvious next step. "People were saying, ‘You’re crazy not to
build another one of these things,’" he recalls. Eventually he
relented, figuring another location might help alleviate the
crowds in Madison Square. But he was busy with his restaurant
empire and didn’t have time to steer the hamburger expansion.
One day, Meyer asked Garutti, then head of operations for the
entire Union Square Hospitality Group, to chat. Garutti quickly
realized that Meyer was asking if he’d walk away from one of
the restaurant world’s plummier positions to open a
neighborhood fast-food joint. The Cornell University School of
Hotel Administration graduate says that "it took about 10
seconds."
It was a real gamble. "Is it just the park that made this thing
what it is?" Garutti remembers thinking. "Is it just a fluke?"
That second Shack—which opened across the street from the
American Museum of Natural History in October 2008—would
become the template for the entire chain: the design, how the
kitchen operated, even the kind of music they played in the
dining room. "We really thought about every part of that one
restaurant," says Shake Shack culinary director Mark Rosati,
who left a job cooking at Gramercy Tavern to become one of the
original managers of the Upper West Side location. (Seven
years later, that Shack’s entire management team remains with
the company.) "We literally changed the place 100 times until
we had that perfect vibe. In fine dining, you really are trained to
think about all those details."
Shack 2 was a fast hit. "The first year it did as much as Madison
Square Park," says Garutti. "We said, ‘Oh, my God, we’ve got
something special here.’ That’s the moment where we said,
‘Okay, let’s start to build a company.’ "
From there, things moved fast. The New York Mets asked to
include a Shake Shack in their new ballpark, Citi Field, which
opened in 2009 (Shake Shack now has seven such stands in
airports, train stations, and sports venues). The following year,
the company opened two additional Shacks in New York and the
first outside the city, in Miami Beach. When a Kuwaiti
developer approached the company about licensing the brand for
a string of restaurants in the Middle East, Shake Shack went
global. Suddenly, Garutti found himself at the helm of a serious,
fast-expanding business.
In one important respect, though, that second outpost was a
failure. "It was almost as if excitement over the second Shake
Shack kindled even more interest in the first," Meyer says. "The
line got longer."
CEO Randy Garutti left one of the best gigs in fine dining to
build the Shake Shack business.
The gleaming metal heart of the whole Shake Shack operation
lies behind a pair of swinging red doors inside an immaculately
clean, 35,000-square-foot facility not far from the Lincoln
Tunnel in northern New Jersey. This is the headquarters of Pat
LaFrieda Meat Purveyors, New York’s premier wholesale
vendor of fine-dining beef. When Shake Shack started, Meyer
and Garutti tapped LaFrieda to create a blend specifically
tailored to their unusual cooking method, which involves
caramelizing thin patties on a flat top rather than grilling or
broiling them. Much like the Coca-Cola formula, the secret
recipe is only known to a handful of Shack executives.
LaFrieda’s custom-built patty-shaping machine—there are three
of them, with two on reserve in case of malfunction—is roughly
the size of a small Zamboni. Meat goes in the top and perfectly
formed pucks come out the side, ready to be boxed up and
shipped out, unfrozen, to Shacks from D.C. to Boston. The
machine cranks out about 80,000 of them every night.
Shake Shack’s beef is at the center of its identity, both because
of how the burgers taste and because of their pedigree:
humanely raised, antibiotic- and hormone-free, ground fresh
from full-muscle cuts rather than scraps or what has become
known as—shudder—pink slime. "I don’t know anyone who’s
ever taken a patty out of a McDonald’s burger and said, ‘Wow,
this meat is great,’" says LaFrieda, sitting in a lounge area
above the warehouse. "You could certainly do that at Shake
Shack. We’re making beef fresh every night. It’s going to the
restaurant the next day. There’s no better experience that you
could possibly have."
Increasingly, a segment of American diners, especially those
between the ages of 18 and 34, is looking to spend its dining-
out dollars at restaurants that focus on natural ingredients and
sustainability. "Whether it’s Whole Foods or other companies
like [ours], we are creating an expectation of excellence,
transparency, sustainability," Garutti says. In keeping with
these principles, Shake Shack has worked with its bun supplier
to omit genetically modified organisms and has removed corn
syrup from its burger sauce and custard. "The younger
generation is not all of a sudden going to say, ‘I want less
quality food, I want to know less about my food like my parents
did,’" says Garutti. "No way." Nowhere is this mandate more
imperative than with the meat inside that GMO–free bun. But
there’s a problem: The supply of humanely raised, drug-free
beef remains limited.
Making sure Shake Shack doesn’t run out of beef is a big part of
Jeff Amoscato’s job. As VP of supply chain and menu
innovation, he’s responsible for sourcing the company’s meat—
along with its bacon, buns, pickled cherry peppers, and every
other ingredient that goes into its offerings. One of his biggest
challenges is ensuring the Shacks never encounter the sort of
shortages that have plagued Chipotle. Earlier this year, the
burrito purveyor stopped selling pork in around a third of its
stores after it decided a major supplier wasn’t meeting its
standards. When Garutti heard about the situation, he asked
Amoscato and culinary director Mark Rosati to talk. "He was
just like, ‘By the way, guys, where are we at with this stuff?’"
Rosati says.
Amoscato has developed relationships with both ranchers and
large natural-meat processors, such as Kansas-based Creekstone
Farms. "I’ll get in the truck with their cattle buyer and go
around to some of the ranchers," says the former manager of
Meyer’s restaurant The Modern, who looks like he’d be far
more at home sipping rioja than roping steer. "We get to
understand what they’re doing. We’re working to convince more
farmers that this is a better way of growing cattle."
Chipotle has more than 1,800 outlets; Shake Shack has fewer
than 70. As the company grows, it may face challenges
maintaining such a pristine supply. But Garutti feels good about
what Shake Shack has accomplished so far, with its forward-
looking commitment to purchasing high-quality, antibiotic- and
hormone-free animals—often before they’re even born. "We
say, ‘Hey, we’ll buy x amount,’" he explains. "‘You raise them
the right way, we’ll buy them.’ It’s traveling the country,
having contracts in place, and understanding the global beef
supply chain to make sure that we’re ready for the growth we’re
going to have." The company also has backup plans in place
should something unexpected go wrong with its supply.
Naturally raised meat is still a small percentage of the market,
but consumer demand for better beef is having an impact.
Amoscato says that he shows ranchers photos of Shake Shack’s
infamous crowds to drive home how excited customers are for
this kind of meat. "Look at this Shake Shack in Madison Square
Park," he tells them. "There’s a line of people waiting for our
burgers. They want that better product."
After leaving the Chestnut Hill Shack, Garutti sits in the back
of an Uber car, thumbing through emails on his way to visit
another one of his Boston-area outposts. The driver, it turns out,
loves Shake Shack. His family waited in line to eat at the first
Boston Shack the day it opened in March 2013, and now they’re
fans. "Every now and then, you’re going to give your daughter a
burger," Garutti tells him. "Not every day. But when you do,
you want to know that it’s good. Where are you going to take
her?" The driver glances back at him in the rearview mirror.
"We’re not going to McDonald’s," he says. "That’s for sure."
That attitude has a lot to do with Shake Shack’s success—and
illuminates McDonald’s recent woes. Its revenues have been
slipping in dramatic fashion, with sales down for six straight
quarters, including an 11% revenue dip in the first three months
of 2015. In March, the company appointed a new CEO, Steve
Easterbrook, who has implemented changes that seem directly
aimed at the sort of customers who are increasingly turning
towards Shake Shack and other fast-casual spots. Less than a
week into Easterbrook’s tenure, the company announced it
would phase out the use of certain antibiotics in its poultry over
the next two years. Recently, McDonald’s has also been
experimenting with a line of larger, pricier, all-sirloin burgers.
But while McDonald’s problems get a lot of attention, Shake
Shack is far from toppling the company and its $27 billion 2014
revenues any time soon. And other leaders in the quick-serve
hamburger category—Burger King, Wendy’s, and Sonic—are in
much better shape than Mickey D’s. "I don’t think there’s any
doubt that fast-casual and the [better-burger] guys have had
some impact," says Sonic CEO Clifford Hudson, whose fast-
growing company saw a 3.5% increase in same-store sales in
fiscal 2014 and plans to open 1,000 new outlets over the next 10
years. "But we’ve got positive momentum in a way that you
might not expect, given the competition from them."
With its January IPO, Shake Shack now faces the same intense
public scrutiny as those long-established burger barons.
Investors are the last constituent in Danny Meyer’s enlightened-
hospitality hierarchy, but early reactions on Wall Street have
been mixed. Though it has beaten earnings estimates for its first
two quarters as a public company, some analysts remain
skeptical. For a business with a relatively high market cap, it
has a small number of locations, modest revenue ($118.5
million in 2014, a 43.7% increase over the previous year), and
intense competition from other better-burger chains, fast-casual
peers like Chipotle and Panera, and those global down-market
behemoths with their Big Macs and Baconators.
Yet Shake Shack says it will hew to its long-held plans to grow
slow. This year the company expanded to Baltimore and Austin,
and by the end of 2015 there will be additional Shacks in
existing markets such as Chicago and Orlando. The first
California Shack is scheduled for 2016, in West Hollywood.
The goal, for now, is to open 10 a year, with the aim of
eventually reaching 450. They’ll also continue to license the
brand overseas; the first of 10 planned Japanese Shacks will
open in Tokyo next year.
In a world where McDonald’s boasts more than 14,000 stores in
the U.S. alone, those ambitions seem modest. But Meyer and
Garutti have seen what happens when outlets expand too fast.
"Danny thinks long-term dollars better than anybody," Garutti
says. "It’s really cool to know that there isn’t pressure to just
make money, make money, make money. If we build this brand
right, we’re all going to benefit."
And Shake Shack is having a big impact. "What’s exciting is
that they are testing a theory that food that is good, that is
clean, that is fair, can be integrated into a fast-casual template,"
says Richard McCarthy, executive director of advocacy group
Slow Food USA. "Will people spend extra for food that is in
line with their values? Is this an esoteric niche, or is it
something that can break through to everyday people?"
Danny Meyer believes it can break through—and that it already
has. "It takes companies like Shake Shack, like Chipotle, like
Whole Foods to make those tougher, more expensive choices,"
he says. "I want to buy food that makes me feel good to be
buying it. I want to do business with companies that make me
feel good to be doing business with them. I care about the earth
and my family and my own body. We’ve reached a critical mass
where there’s just no going back. And I think that’s awesome."
It’s 3 p.m. when Garutti arrives at his last destination: a brand-
new Shack in the Boston suburb of Dedham, which opened to
the public the previous day (he missed that launch because he
was coaching his son’s Little League game). Located in a high-
end outdoor mall called Legacy Place, it’s a relatively low-key
outpost tucked next to a Uniqlo. This is the kind of Shack the
company will need to nail as it expands—a casual local spot
where people want to hang out, have a ShackBurger and a
concrete, and spend time with their friends.
It’s the busiest of the locations Garutti has visited on this chilly
Monday afternoon in early March, full of teenagers from a
nearby high school who are giddily digging into salted-caramel
ice cream and hopping from table to table to gossip and laugh.
These are some of Shake Shack’s most dedicated customers:
tech-immersed young people who are here as much for the aura
as the cuisine. "You just know when a Shack feels good," says
Garutti, looking around approvingly. "This is what you want to
feel. When people talk about better burgers or whatever, this
generation of kids is going to eat here. Like, kids are going to
break up over a milkshake today. That’s what Shake Shack is!"
Still, not everything is perfect. While Garutti is debriefing a
manager, a couple of high schoolers alert a staffer to a problem,
and she immediately shares it with the CEO. "They just tried to
Snapchat-tag us," she informs him, "and we’re not on it. They
were telling me, ‘Oh, my God, you have to get this
immediately!’" Garutti is not happy. "That’s so lame," he says
as he pulls out his phone to notify someone back at Shack HQ.
"I’ll find out what’s up. I’m very surprised. We’re pretty huge
in social media." (Shake Shack has more than 170,000
Instagram followers.)
In the real world, though, things seem to be running smoothly.
The Dedham staff—which includes veterans from other
locations and a number of local high school students—is relaxed
and cheerful, and fresh-smashed LaFrieda pucks are sizzling on
the Miraclean in waves of eight. "The vibe in here is so strong,"
Garutti says. Though the place is busy, it isn’t the madhouse
you might find at a Manhattan Shack, and there is no sign of the
sort of snaking line that remains a Shack signature. But just
wait. "Get ready," Garutti tells the manager, a knowing smile
breaking across his face. "Because this weekend is going to be
mental."
24TECHNOLOGYREVIEW.COMMIT TECHNOLOGY REVIEWVOL . 120  .docx

More Related Content

Similar to 24TECHNOLOGYREVIEW.COMMIT TECHNOLOGY REVIEWVOL . 120 .docx

10 Disruptive Cloud Companies We’Re Excited About Venture Beat
10 Disruptive Cloud Companies We’Re Excited About   Venture Beat10 Disruptive Cloud Companies We’Re Excited About   Venture Beat
10 Disruptive Cloud Companies We’Re Excited About Venture BeatGregory Pence
 
DropboxDigitalModelAngeloNortonFINALpdf
DropboxDigitalModelAngeloNortonFINALpdfDropboxDigitalModelAngeloNortonFINALpdf
DropboxDigitalModelAngeloNortonFINALpdfAngelo Norton
 
Final IDC report - The Business Value of Dropbox for Business
Final IDC report - The Business Value of Dropbox for BusinessFinal IDC report - The Business Value of Dropbox for Business
Final IDC report - The Business Value of Dropbox for BusinessMadeleine Mackway-Jones
 
Bvp 10 laws of cloud computing 2012 release
Bvp 10 laws of cloud computing 2012 releaseBvp 10 laws of cloud computing 2012 release
Bvp 10 laws of cloud computing 2012 releaseEd Cushing
 
20090402 Nmtc Keynote V1.1
20090402 Nmtc Keynote V1.120090402 Nmtc Keynote V1.1
20090402 Nmtc Keynote V1.1azjohna8350
 
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docxdanielfoster65629
 
2010 Content Technology Predictions
2010 Content Technology Predictions2010 Content Technology Predictions
2010 Content Technology PredictionsReal Story Group
 
Dropbox it just works case study analysis
Dropbox it just works case study analysisDropbox it just works case study analysis
Dropbox it just works case study analysisSindoor Naik
 
Dropbox - stratigies and business policies
Dropbox - stratigies and business policiesDropbox - stratigies and business policies
Dropbox - stratigies and business policiessooraj yadav
 
Mongo db better_faster_leaner
Mongo db better_faster_leanerMongo db better_faster_leaner
Mongo db better_faster_leanerDrew LaMonte
 
Cloud Foundry and the Rising Tide
Cloud Foundry and the Rising TideCloud Foundry and the Rising Tide
Cloud Foundry and the Rising TideEMC
 
Cloud computing: A Simple, Cost-Effective Solution for K-12?
Cloud computing:  A Simple, Cost-Effective Solution for K-12?Cloud computing:  A Simple, Cost-Effective Solution for K-12?
Cloud computing: A Simple, Cost-Effective Solution for K-12?Johan Koren
 
The Expanding Role of Chatbots in Enterprise Collaboration
The Expanding Role of Chatbots in Enterprise CollaborationThe Expanding Role of Chatbots in Enterprise Collaboration
The Expanding Role of Chatbots in Enterprise CollaborationCognizant
 
What you need to know about collaboration in office 2016
What you need to know about collaboration in office 2016What you need to know about collaboration in office 2016
What you need to know about collaboration in office 2016Idan Hershkovich
 
Online productivity tools - SILS20090
Online productivity tools - SILS20090Online productivity tools - SILS20090
Online productivity tools - SILS20090is20090
 
VARS - the way we make money as independent entrepreneurs...
VARS - the way we make money as independent entrepreneurs...VARS - the way we make money as independent entrepreneurs...
VARS - the way we make money as independent entrepreneurs...Gordon Kraft
 

Similar to 24TECHNOLOGYREVIEW.COMMIT TECHNOLOGY REVIEWVOL . 120 .docx (20)

10 Disruptive Cloud Companies We’Re Excited About Venture Beat
10 Disruptive Cloud Companies We’Re Excited About   Venture Beat10 Disruptive Cloud Companies We’Re Excited About   Venture Beat
10 Disruptive Cloud Companies We’Re Excited About Venture Beat
 
DropboxDigitalModelAngeloNortonFINALpdf
DropboxDigitalModelAngeloNortonFINALpdfDropboxDigitalModelAngeloNortonFINALpdf
DropboxDigitalModelAngeloNortonFINALpdf
 
Forrester
ForresterForrester
Forrester
 
Final IDC report - The Business Value of Dropbox for Business
Final IDC report - The Business Value of Dropbox for BusinessFinal IDC report - The Business Value of Dropbox for Business
Final IDC report - The Business Value of Dropbox for Business
 
Bvp 10 laws of cloud computing 2012 release
Bvp 10 laws of cloud computing 2012 releaseBvp 10 laws of cloud computing 2012 release
Bvp 10 laws of cloud computing 2012 release
 
20090402 Nmtc Keynote V1.1
20090402 Nmtc Keynote V1.120090402 Nmtc Keynote V1.1
20090402 Nmtc Keynote V1.1
 
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx
[COLLABORATION]SuperheroIn theCubicleNew collaborati.docx
 
2010 Content Technology Predictions
2010 Content Technology Predictions2010 Content Technology Predictions
2010 Content Technology Predictions
 
Dropbox it just works case study analysis
Dropbox it just works case study analysisDropbox it just works case study analysis
Dropbox it just works case study analysis
 
Dropbox - stratigies and business policies
Dropbox - stratigies and business policiesDropbox - stratigies and business policies
Dropbox - stratigies and business policies
 
Mongo db better_faster_leaner
Mongo db better_faster_leanerMongo db better_faster_leaner
Mongo db better_faster_leaner
 
Web 2.0 presentation
Web 2.0 presentationWeb 2.0 presentation
Web 2.0 presentation
 
Cloud Foundry and the Rising Tide
Cloud Foundry and the Rising TideCloud Foundry and the Rising Tide
Cloud Foundry and the Rising Tide
 
Cloud computing: A Simple, Cost-Effective Solution for K-12?
Cloud computing:  A Simple, Cost-Effective Solution for K-12?Cloud computing:  A Simple, Cost-Effective Solution for K-12?
Cloud computing: A Simple, Cost-Effective Solution for K-12?
 
Designing for Employee Experience
Designing for Employee ExperienceDesigning for Employee Experience
Designing for Employee Experience
 
The Expanding Role of Chatbots in Enterprise Collaboration
The Expanding Role of Chatbots in Enterprise CollaborationThe Expanding Role of Chatbots in Enterprise Collaboration
The Expanding Role of Chatbots in Enterprise Collaboration
 
What you need to know about collaboration in office 2016
What you need to know about collaboration in office 2016What you need to know about collaboration in office 2016
What you need to know about collaboration in office 2016
 
Market Trends Report
Market Trends ReportMarket Trends Report
Market Trends Report
 
Online productivity tools - SILS20090
Online productivity tools - SILS20090Online productivity tools - SILS20090
Online productivity tools - SILS20090
 
VARS - the way we make money as independent entrepreneurs...
VARS - the way we make money as independent entrepreneurs...VARS - the way we make money as independent entrepreneurs...
VARS - the way we make money as independent entrepreneurs...
 

More from vickeryr87

COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docx
COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docxCOLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docx
COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docxvickeryr87
 
Collins did not understand the events that led to the reasoning .docx
Collins did not understand the events that led to the reasoning .docxCollins did not understand the events that led to the reasoning .docx
Collins did not understand the events that led to the reasoning .docxvickeryr87
 
Define discrimination, victimization and affirmative actions; .docx
Define discrimination, victimization and affirmative actions; .docxDefine discrimination, victimization and affirmative actions; .docx
Define discrimination, victimization and affirmative actions; .docxvickeryr87
 
Define data mining. Why are there many names and definitions for d.docx
Define data mining. Why are there many names and definitions for d.docxDefine data mining. Why are there many names and definitions for d.docx
Define data mining. Why are there many names and definitions for d.docxvickeryr87
 
Define culture. How can culture be conceptionalizedDiscuss at l.docx
Define culture. How can culture be conceptionalizedDiscuss at l.docxDefine culture. How can culture be conceptionalizedDiscuss at l.docx
Define culture. How can culture be conceptionalizedDiscuss at l.docxvickeryr87
 
Define cultural relativism and how it is used by anthropologis.docx
Define cultural relativism and how it is used by anthropologis.docxDefine cultural relativism and how it is used by anthropologis.docx
Define cultural relativism and how it is used by anthropologis.docxvickeryr87
 
Define cost control and provide several examples of how it affec.docx
Define cost control and provide several examples of how it affec.docxDefine cost control and provide several examples of how it affec.docx
Define cost control and provide several examples of how it affec.docxvickeryr87
 
Define corporate governance.Discuss the events that led up.docx
Define corporate governance.Discuss the events that led up.docxDefine corporate governance.Discuss the events that led up.docx
Define corporate governance.Discuss the events that led up.docxvickeryr87
 
Define communication in your own words. Identify and distinguish amo.docx
Define communication in your own words. Identify and distinguish amo.docxDefine communication in your own words. Identify and distinguish amo.docx
Define communication in your own words. Identify and distinguish amo.docxvickeryr87
 
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docx
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docxDefine Civil Liberties. List 5 Civil Liberties. How do they differ.docx
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docxvickeryr87
 
Define civilization. Do we really need it in order to survive and pr.docx
Define civilization. Do we really need it in order to survive and pr.docxDefine civilization. Do we really need it in order to survive and pr.docx
Define civilization. Do we really need it in order to survive and pr.docxvickeryr87
 
Define case management and care management and compare the dif.docx
Define case management and care management and compare the dif.docxDefine case management and care management and compare the dif.docx
Define case management and care management and compare the dif.docxvickeryr87
 
Define Bureaucracy.  Government at all levels has grown enormously, .docx
Define Bureaucracy.  Government at all levels has grown enormously, .docxDefine Bureaucracy.  Government at all levels has grown enormously, .docx
Define Bureaucracy.  Government at all levels has grown enormously, .docxvickeryr87
 
Define and explain how the Twitter search function works to search f.docx
Define and explain how the Twitter search function works to search f.docxDefine and explain how the Twitter search function works to search f.docx
Define and explain how the Twitter search function works to search f.docxvickeryr87
 
Define and relate these different terminologies and Information Gove.docx
Define and relate these different terminologies and Information Gove.docxDefine and relate these different terminologies and Information Gove.docx
Define and relate these different terminologies and Information Gove.docxvickeryr87
 
Define and provide examples of-Basic probability- Bayes the.docx
Define and provide examples of-Basic probability- Bayes the.docxDefine and provide examples of-Basic probability- Bayes the.docx
Define and provide examples of-Basic probability- Bayes the.docxvickeryr87
 
Define and discuss the phrase Manifest Destiny. Explain how this b.docx
Define and discuss the phrase Manifest Destiny. Explain how this b.docxDefine and discuss the phrase Manifest Destiny. Explain how this b.docx
Define and discuss the phrase Manifest Destiny. Explain how this b.docxvickeryr87
 
Define and discuss the differences between vision and mission stat.docx
Define and discuss the differences between vision and mission stat.docxDefine and discuss the differences between vision and mission stat.docx
Define and discuss the differences between vision and mission stat.docxvickeryr87
 
Define and discuss the four types of innovation. How might these.docx
Define and discuss the four types of innovation. How might these.docxDefine and discuss the four types of innovation. How might these.docx
Define and discuss the four types of innovation. How might these.docxvickeryr87
 
Define and discuss the data wiping process.Discuss how a cloud.docx
Define and discuss the data wiping process.Discuss how a cloud.docxDefine and discuss the data wiping process.Discuss how a cloud.docx
Define and discuss the data wiping process.Discuss how a cloud.docxvickeryr87
 

More from vickeryr87 (20)

COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docx
COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docxCOLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docx
COLLEGEPHYSICS LAB REPORTSTUDENTS NAME.docx
 
Collins did not understand the events that led to the reasoning .docx
Collins did not understand the events that led to the reasoning .docxCollins did not understand the events that led to the reasoning .docx
Collins did not understand the events that led to the reasoning .docx
 
Define discrimination, victimization and affirmative actions; .docx
Define discrimination, victimization and affirmative actions; .docxDefine discrimination, victimization and affirmative actions; .docx
Define discrimination, victimization and affirmative actions; .docx
 
Define data mining. Why are there many names and definitions for d.docx
Define data mining. Why are there many names and definitions for d.docxDefine data mining. Why are there many names and definitions for d.docx
Define data mining. Why are there many names and definitions for d.docx
 
Define culture. How can culture be conceptionalizedDiscuss at l.docx
Define culture. How can culture be conceptionalizedDiscuss at l.docxDefine culture. How can culture be conceptionalizedDiscuss at l.docx
Define culture. How can culture be conceptionalizedDiscuss at l.docx
 
Define cultural relativism and how it is used by anthropologis.docx
Define cultural relativism and how it is used by anthropologis.docxDefine cultural relativism and how it is used by anthropologis.docx
Define cultural relativism and how it is used by anthropologis.docx
 
Define cost control and provide several examples of how it affec.docx
Define cost control and provide several examples of how it affec.docxDefine cost control and provide several examples of how it affec.docx
Define cost control and provide several examples of how it affec.docx
 
Define corporate governance.Discuss the events that led up.docx
Define corporate governance.Discuss the events that led up.docxDefine corporate governance.Discuss the events that led up.docx
Define corporate governance.Discuss the events that led up.docx
 
Define communication in your own words. Identify and distinguish amo.docx
Define communication in your own words. Identify and distinguish amo.docxDefine communication in your own words. Identify and distinguish amo.docx
Define communication in your own words. Identify and distinguish amo.docx
 
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docx
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docxDefine Civil Liberties. List 5 Civil Liberties. How do they differ.docx
Define Civil Liberties. List 5 Civil Liberties. How do they differ.docx
 
Define civilization. Do we really need it in order to survive and pr.docx
Define civilization. Do we really need it in order to survive and pr.docxDefine civilization. Do we really need it in order to survive and pr.docx
Define civilization. Do we really need it in order to survive and pr.docx
 
Define case management and care management and compare the dif.docx
Define case management and care management and compare the dif.docxDefine case management and care management and compare the dif.docx
Define case management and care management and compare the dif.docx
 
Define Bureaucracy.  Government at all levels has grown enormously, .docx
Define Bureaucracy.  Government at all levels has grown enormously, .docxDefine Bureaucracy.  Government at all levels has grown enormously, .docx
Define Bureaucracy.  Government at all levels has grown enormously, .docx
 
Define and explain how the Twitter search function works to search f.docx
Define and explain how the Twitter search function works to search f.docxDefine and explain how the Twitter search function works to search f.docx
Define and explain how the Twitter search function works to search f.docx
 
Define and relate these different terminologies and Information Gove.docx
Define and relate these different terminologies and Information Gove.docxDefine and relate these different terminologies and Information Gove.docx
Define and relate these different terminologies and Information Gove.docx
 
Define and provide examples of-Basic probability- Bayes the.docx
Define and provide examples of-Basic probability- Bayes the.docxDefine and provide examples of-Basic probability- Bayes the.docx
Define and provide examples of-Basic probability- Bayes the.docx
 
Define and discuss the phrase Manifest Destiny. Explain how this b.docx
Define and discuss the phrase Manifest Destiny. Explain how this b.docxDefine and discuss the phrase Manifest Destiny. Explain how this b.docx
Define and discuss the phrase Manifest Destiny. Explain how this b.docx
 
Define and discuss the differences between vision and mission stat.docx
Define and discuss the differences between vision and mission stat.docxDefine and discuss the differences between vision and mission stat.docx
Define and discuss the differences between vision and mission stat.docx
 
Define and discuss the four types of innovation. How might these.docx
Define and discuss the four types of innovation. How might these.docxDefine and discuss the four types of innovation. How might these.docx
Define and discuss the four types of innovation. How might these.docx
 
Define and discuss the data wiping process.Discuss how a cloud.docx
Define and discuss the data wiping process.Discuss how a cloud.docxDefine and discuss the data wiping process.Discuss how a cloud.docx
Define and discuss the data wiping process.Discuss how a cloud.docx
 

Recently uploaded

Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentInMediaRes1
 
Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Celine George
 
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...M56BOOKSTORE PRODUCT/SERVICE
 
Hierarchy of management that covers different levels of management
Hierarchy of management that covers different levels of managementHierarchy of management that covers different levels of management
Hierarchy of management that covers different levels of managementmkooblal
 
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️9953056974 Low Rate Call Girls In Saket, Delhi NCR
 
Final demo Grade 9 for demo Plan dessert.pptx
Final demo Grade 9 for demo Plan dessert.pptxFinal demo Grade 9 for demo Plan dessert.pptx
Final demo Grade 9 for demo Plan dessert.pptxAvyJaneVismanos
 
MARGINALIZATION (Different learners in Marginalized Group
MARGINALIZATION (Different learners in Marginalized GroupMARGINALIZATION (Different learners in Marginalized Group
MARGINALIZATION (Different learners in Marginalized GroupJonathanParaisoCruz
 
Introduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher EducationIntroduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher Educationpboyjonauth
 
Types of Journalistic Writing Grade 8.pptx
Types of Journalistic Writing Grade 8.pptxTypes of Journalistic Writing Grade 8.pptx
Types of Journalistic Writing Grade 8.pptxEyham Joco
 
Meghan Sutherland In Media Res Media Component
Meghan Sutherland In Media Res Media ComponentMeghan Sutherland In Media Res Media Component
Meghan Sutherland In Media Res Media ComponentInMediaRes1
 
EPANDING THE CONTENT OF AN OUTLINE using notes.pptx
EPANDING THE CONTENT OF AN OUTLINE using notes.pptxEPANDING THE CONTENT OF AN OUTLINE using notes.pptx
EPANDING THE CONTENT OF AN OUTLINE using notes.pptxRaymartEstabillo3
 
Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)eniolaolutunde
 
भारत-रोम व्यापार.pptx, Indo-Roman Trade,
भारत-रोम व्यापार.pptx, Indo-Roman Trade,भारत-रोम व्यापार.pptx, Indo-Roman Trade,
भारत-रोम व्यापार.pptx, Indo-Roman Trade,Virag Sontakke
 
Capitol Tech U Doctoral Presentation - April 2024.pptx
Capitol Tech U Doctoral Presentation - April 2024.pptxCapitol Tech U Doctoral Presentation - April 2024.pptx
Capitol Tech U Doctoral Presentation - April 2024.pptxCapitolTechU
 
Pharmacognosy Flower 3. Compositae 2023.pdf
Pharmacognosy Flower 3. Compositae 2023.pdfPharmacognosy Flower 3. Compositae 2023.pdf
Pharmacognosy Flower 3. Compositae 2023.pdfMahmoud M. Sallam
 
Presiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsPresiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsanshu789521
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxOH TEIK BIN
 
How to Configure Email Server in Odoo 17
How to Configure Email Server in Odoo 17How to Configure Email Server in Odoo 17
How to Configure Email Server in Odoo 17Celine George
 
Proudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxProudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxthorishapillay1
 

Recently uploaded (20)

Alper Gobel In Media Res Media Component
Alper Gobel In Media Res Media ComponentAlper Gobel In Media Res Media Component
Alper Gobel In Media Res Media Component
 
Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17Computed Fields and api Depends in the Odoo 17
Computed Fields and api Depends in the Odoo 17
 
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...
KSHARA STURA .pptx---KSHARA KARMA THERAPY (CAUSTIC THERAPY)————IMP.OF KSHARA ...
 
Hierarchy of management that covers different levels of management
Hierarchy of management that covers different levels of managementHierarchy of management that covers different levels of management
Hierarchy of management that covers different levels of management
 
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
call girls in Kamla Market (DELHI) 🔝 >༒9953330565🔝 genuine Escort Service 🔝✔️✔️
 
Final demo Grade 9 for demo Plan dessert.pptx
Final demo Grade 9 for demo Plan dessert.pptxFinal demo Grade 9 for demo Plan dessert.pptx
Final demo Grade 9 for demo Plan dessert.pptx
 
MARGINALIZATION (Different learners in Marginalized Group
MARGINALIZATION (Different learners in Marginalized GroupMARGINALIZATION (Different learners in Marginalized Group
MARGINALIZATION (Different learners in Marginalized Group
 
Introduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher EducationIntroduction to ArtificiaI Intelligence in Higher Education
Introduction to ArtificiaI Intelligence in Higher Education
 
Types of Journalistic Writing Grade 8.pptx
Types of Journalistic Writing Grade 8.pptxTypes of Journalistic Writing Grade 8.pptx
Types of Journalistic Writing Grade 8.pptx
 
Meghan Sutherland In Media Res Media Component
Meghan Sutherland In Media Res Media ComponentMeghan Sutherland In Media Res Media Component
Meghan Sutherland In Media Res Media Component
 
EPANDING THE CONTENT OF AN OUTLINE using notes.pptx
EPANDING THE CONTENT OF AN OUTLINE using notes.pptxEPANDING THE CONTENT OF AN OUTLINE using notes.pptx
EPANDING THE CONTENT OF AN OUTLINE using notes.pptx
 
Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)Software Engineering Methodologies (overview)
Software Engineering Methodologies (overview)
 
भारत-रोम व्यापार.pptx, Indo-Roman Trade,
भारत-रोम व्यापार.pptx, Indo-Roman Trade,भारत-रोम व्यापार.pptx, Indo-Roman Trade,
भारत-रोम व्यापार.pptx, Indo-Roman Trade,
 
Capitol Tech U Doctoral Presentation - April 2024.pptx
Capitol Tech U Doctoral Presentation - April 2024.pptxCapitol Tech U Doctoral Presentation - April 2024.pptx
Capitol Tech U Doctoral Presentation - April 2024.pptx
 
Pharmacognosy Flower 3. Compositae 2023.pdf
Pharmacognosy Flower 3. Compositae 2023.pdfPharmacognosy Flower 3. Compositae 2023.pdf
Pharmacognosy Flower 3. Compositae 2023.pdf
 
Presiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha electionsPresiding Officer Training module 2024 lok sabha elections
Presiding Officer Training module 2024 lok sabha elections
 
Solving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptxSolving Puzzles Benefits Everyone (English).pptx
Solving Puzzles Benefits Everyone (English).pptx
 
ESSENTIAL of (CS/IT/IS) class 06 (database)
ESSENTIAL of (CS/IT/IS) class 06 (database)ESSENTIAL of (CS/IT/IS) class 06 (database)
ESSENTIAL of (CS/IT/IS) class 06 (database)
 
How to Configure Email Server in Odoo 17
How to Configure Email Server in Odoo 17How to Configure Email Server in Odoo 17
How to Configure Email Server in Odoo 17
 
Proudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptxProudly South Africa powerpoint Thorisha.pptx
Proudly South Africa powerpoint Thorisha.pptx
 

24TECHNOLOGYREVIEW.COMMIT TECHNOLOGY REVIEWVOL . 120 .docx

  • 1. 24 TECHNOLOGYREVIEW.COM MIT TECHNOLOGY REVIEW VOL . 120 | NO. 2 S A M D ’O R A Z IO Upfront Eyeing a Dropbox IPO Can the tech unicorn cash in on corporate users? Of the big IPOs expected to occur this year, Dropbox’s could be one of the most intrigu- ing. When Dropbox last raised money, in 2014, it was valued at a hefty $10 billion. But large investors such as Fidelity and T. Rowe Price slashed the value of the Drop- box shares on their books by as much as 50
  • 2. percent in 2015. The key concern: could a company whose free file storage service is used by hundreds of millions of people find enough paying customers to make a great business? Investors may be in for a pleasant sur- prise. According to the company, sales are now running at more than $1 billion a year, up from around $400 million in 2014. That’s thanks in part to growing sales of Dropbox Business, a souped-up version of the free app that costs $150 per employee per year. The company has been cash-flow positive since early 2016, even as it has made heavy investments in engineering, sales, and IT infrastructure. Now CEO and cofounder Dre w Houston is leading a new strategic charge. In addition to selling utilities to keep dig- ital files safe and accessible, Dropbox intends to offer software that businesspeo- ple use for hours each day to create con- tent and get work done. “This is a mature, very, very powerful software company,” says Bryan Schreier, a partner with ven- ture capital firm Sequoia Capital, which was an early investor in the company. That doesn’t mean Dropbox will live up to that heady $10 billion valuation, which even at the time was widely seen as a sign of a bubble about to burst. Even at an annualized revenue of $1 billion, investors would need to think the com-
  • 3. pany is worth 10 times its current sales on the day it goes public. These days, the average cloud software company trades at just 4.7 times revenue, according to Bessemer Venture Partners. Still, Schreier and other investors insist they are no longer worried about MA17_upfront.indd 24 2/6/17 3:58 PM 25 TECHNOLOGYREVIEW.COM MIT TECHNOLOGY REVIEW VOL . 120 | NO. 2 Dropbox’s fundamental business model. About 10 million new people start using the free consumer product every month. An increasing percentage of those users sign up for the $100-a-year Pro version, which offers more storage and sharing features. Many of those Pro customers use Dropbox at work, and once their employers realize how popular it is, they are more likely to step up to Dropbox Business, which is designed for use by teams rather than individuals. So far more than 200,000 companies have signed up for Dropbox Business, up from 50,000 in 2014. While most are small and medium-sized companies, a few big com-
  • 4. panies such as Expedia and News Corp. have more than 10,000 seats. A successful push into productivity and collaboration software could give corporate customers much more to buy from Dropbox. The first example is Paper, which provides a kind of virtual white space where employees and contractors can share Excel spreadsheets, Google Docs, and other digital assets regardless of what device they are using. The idea is to tie together scores of different productiv- ity tools and fold in management tools to help teams keep projects on track. Paper has been in beta since late 2015 and offi- cially launched in January. “In five years, you could start a business on Dropbox: that is something we aspire to,” says chief operating officer Dennis Woodside, who declined to comment on IPO plans. Dropbox is far from the only com- pany looking to change the way work is done. Google offers G Suite, which con- tains business versions of apps such as Google Docs and Gmail. Facebook has a collaboration service called Workplace. Microsoft is improving its cloud offerings as it seeks to defend the massive mar- ket share earned with its Windows and Office monopolies. Box has strong trac- tion with companies in highly regulated industries like health care and financial services, while younger providers such as
  • 5. Asana, Atlassian, and Slack already han- dle elements of what Dropbox aims to do. According to Gartner analyst Karen Hobert, there are 130 companies just in the electronic file storage and sync market. Yet even rivals see Dropbox as a likely survivor of the inevitable consolidation. The overall market opportunity for pro- ductivity and collaboration tools is $30 billion, if you replace all those PC disk drives and traditional Windows or Mac programs with cloud-based alternatives. “That’s an order of magnitude more than the combined revenue of all the players today,” says Box chief executive officer Aaron Levie. “As everything moves to the cloud, there’s going to be plenty of opportunity.” Dropbox has been bulking up for this opportunity since 2014, when Houston hired Woodside. A former McKinsey con- sultant, Woodside joined Google in 2003 as an operations expert before running U.S. sales and then the Motorola Mobil- ity cell-phone division. At Dropbox, he’s hired more than 200 salespeople, up from zero when the company relied solely on Internet clicks. The engineering team has more than doubled to more than 1,000 members, large by any measure. And he has overseen a massive, risky IT overhaul. While most companies are moving more
  • 6. of their business onto public cloud plat- forms like the one run by Amazon Web Services, Dropbox has shifted billions of its U.S. customers’ files away from Ama- zon’s platform to three of its own data centers. That way, Dropbox can tweak its network to cut the time it takes to store and sync traffic. The result is more of a traditional enterprise software company than the hyper-efficient app maker Houston founded in 2007. The idea for the com- pany came when Houston realized dur- ing a long bus ride that he’d forgotten the USB drive with his work files at home. The resulting cloud-storage app was a sensation with people who felt his pain. By 2012, Dropbox had 100 million reg- istered users. Then things got difficult. Giants such as Amazon, Apple, Microsoft, and Google began giving away cloud storage capacity as a way to sweeten other offerings. As prices collapsed, cloud storage specialists faced an existential threat. A successful move by Dropbox into the huge market for productivity and col- laboration software could brighten the outlook, but it will require the company to pull off two tough transformations at once. Dropbox is still evolving from a maker of a free consumer app to a cor-
  • 7. porate IT infrastructure company. Now it must also move from selling technol- ogy that’s designed to be as invisible as possible to making products people use throughout much of their day. Its com- petitor Box provides a cautionary tale. It introduced a Paper-like product three years ago called Box Notes. But Levie admits that its reception has been less than overwhelming. Box relaunched Notes with new features earlier this year. Woodside responds that few com- panies have the scale, the technical expertise, and the brand to pull off its ambitious plans. “There’s close to two billion knowledge workers in the world, and I know this much: the tools they’ll be using in five years are not the ones they’re using today,” he says. “Is the number 500 million? A billion? I don’t know. But we have a shot.” —Peter Burrows The tools workers will use in five years will be very different from today’s. MA17_upfront.indd 25 2/6/17 3:58 PM Copyright of MIT Technology Review is the property of MIT Technology Review and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
  • 8. may print, download, or email articles for individual use. Marketing/~$estions Text.docx Marketing/1,2 and 3.jpg Marketing/4-5.jpg Marketing/Case Guidelines.docx MGT 124 Case Writing Activity Guidelines 1- Prepare by keeping current on text topics since the selected case article will reflect recent discussions; however, an article may cover a range of topics. For example, an article that focuses on quality or lean manufacturing (later topics) may discuss issues like strategy, process selection, work design, etc. Some examples from text and lecture are reinforced by the case! 2- Read the article ahead of time and take note of some key points such as organization strategy, target customer, and process decisions already made to fulfill their mission. List examples that illustrate these points. For example, if an article discusses customer research during product design, list the activities such as holding a focus group and visiting the target customers for direct observation. Do not come to class cold! Class time is limited, so it is not the time to become familiar with the article. 3- Read all questions before answering any. Some examples may seem to “fit” more than one question, but are usually best applied to particular questions. Take a bit of time to organize responses (on separate paper) before writing. 4- Then, write out a concise, focused and carefully considered response to all questions remembering a single question may ask for several things. So address everything in the question, but not other related topics because these may be covered in a
  • 9. different question. 5- Finally, write neatly and respond with complete sentences that refer to the particular point and then discuss examples from the case. Do not list examples or respond with “bullet points.” If a suggestion or opinion is requested, please be specific and avoid catch-all buzz words like “technology.” 6- Rubric; 6 points per question and points reduction for writing issues. Marketing/McD Quarter Pounder Innovation-6.pdf HTTPS: //W W W .F ASTCO MP AN Y. COM /90205288/MC D ON AL D S - TR AN S FOR M AT IO N -Q U AR TE R -POU NDE R - FRES H - BEEF? UT M_SO UR CE=PO ST UP& UT M _MEDI U M=E M AI L & UT M_C AM P AI G N= F AS T %20C OMP AN Y%20W EE KL Y& POSITIO N=1 &P AR TNE R= NEW SLE TTER & C AM P AI GN _D AT E=0 8 1 7 2 0 1 8 15.18 The inside story of how McDonald’s innovated the Quarter Pounder In a change that has been as seismic for McDonald’s as the drive-through window in 1975, McDonald’s has reintroduced its signature burger with fresh—never frozen—beef. And that’s just the start. [Photos: Joel Stans; Prop stylist: Taylor Horne at MHS Artists] BY JON ATH AN RINGEN LONG READ
  • 10. A cryptic missive went out last spring to all 3.6 million people who follow McDonald’s on Twitter. The tweet read, simply: “100% Fresh Beef + John Goodman = ASMR(ish)” and included a link to a video. In the split-screen clip, the Big Lebowski and Roseanne star stares into the camera and—somewhat unnervingly—whispers a carnal ode to the fast-food giant’s Quarter Pounder burger, accompanied by the sounds and visuals of an appetizing- looking patty sizzling on the grill. “Hey, you,” Goodman murmurs intently. “McDonald’s new fresh-beef Quarter Pounder is hotter and juicier. It’ll leave you speech-less. I can almost feel that juice sizzling. . . . Oh baby, the melted cheese is hugging every corner of that grilled patty. . . . That cheese is so hot, so melty.” ASMR videos, named for autonomous sensory meridian response, typically star carefully primped young women tapping on objects and whispering into high-end microphones with the intent of creating a pleasant frisson in viewers, whereas this one featured a large man waxing near pornographically about a burger. But the spot was a viral hit, quickly racking up more than 3 million views. It was timed to the arrival—at every one of the restaurant chain’s 14,000 U.S. outposts—of fresh, never-frozen beef patties in its
  • 11. signature Quarter Pounder burgers, a change that execs say has been as seismic for the company as the introduction of all-day breakfast, in 2015, or https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh- beef?utm_source=postup&utm_medium=email&utm_campaign= Fast%20Company%20Weekly&position=1&partner=newsletter& campaign_date=08172018 https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh- beef?utm_source=postup&utm_medium=email&utm_campaign= Fast%20Company%20Weekly&position=1&partner=newsletter& campaign_date=08172018 https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh- beef?utm_source=postup&utm_medium=email&utm_campaign= Fast%20Company%20Weekly&position=1&partner=newsletter& campaign_date=08172018 https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh- beef?utm_source=postup&utm_medium=email&utm_campaign= Fast%20Company%20Weekly&position=1&partner=newsletter& campaign_date=08172018 https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh- beef?utm_source=postup&utm_medium=email&utm_campaign= Fast%20Company%20Weekly&position=1&partner=newsletter& campaign_date=08172018 https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh-beef https://www.fastcompany.com/90205288/mcdonalds- transformation-quarter-pounder-fresh-beef https://www.joelstans.com/ https://www.fastcompany.com/user/jonathan-ringen
  • 12. https://vimeo.com/271539135 even the drive-through window, which McDonald’s began experimenting with in 1975. (The new patty is also available in the chain’s more premium Signature Crafted Recipes line of burgers, but not yet in Big Macs or its basic ones.) Over the course of interviews with five top executives, I never once heard anyone mention Shake Shack (110 U.S. locations) or In-N-Out (334 restaurants) by name, but McDonald’s has clearly been studying these chains—both of which serve fresh beef—along with their millennial customers who don’t find frozen patties appetizing. “We were hearing from consumers that our burger wasn’t good enough, and we’ve seen a lot of trends around expectations of high quality,” says the company’s new chief marketing officer, Morgan Flatley, who arrived at McDonald’s from PepsiCo a year ago. “To be able to deliver that at the speed and scale of McDonald’s was a unique opportunity for us,” she says. Fresh beef is just one element of a massive transformation underway at McDonald’s. Steve Easterbrook—a McDonald’s veteran who had also run British casual-dining chains PizzaExpress and Wagamama—was
  • 13. elevated in 2015 from chief brand officer to CEO at a time of real crisis. The chain had been suffering losses for six straight quarters, with net income down 15% from the year before. The iconic billions served signs didn’t quite start rolling backward, but between 2012 and 2016, McDonald’s forfeited a stunning 500 million transactions in the U.S., both to its typical competitors and a new wave of fast-casual spots like Shake Shack and Sweetgreen. “We’d lost a meaningful connection with customers,” says Easterbrook, who sounds a bit like a younger Michael Caine. “They weren’t excited about what we were doing, and that would be fairly universal on a global basis. So we rallied around a turnaround plan.” McDonald’s stock is up 60% since Easterbrook took over, but it has listed downward for much of 2018 as same- store U.S. sales growth has cooled from 4.5% to 3%. Consumers and investors alike are demanding more. Now the company and its franchisees—owner-operators who typically sign a 20-year agreement for each restaurant and control more than 90% of the U.S. chain—are embarking upon its biggest innovation test in years with the rollout of the new Quarter Pounders. Can a company that’s famous for its predictability succeed in selling a fresh-beef hamburger—with
  • 14. all the logistical and food-safety risks that entails—at the scale, speed, and price its customers expect? The brand-new headquarters of McDonald’s, a nine-story open- plan office tower, are in the rising Chicago neighborhood of the West Loop. From 1971 until this past June, the company operated out of a park - like campus in suburban Oak Brook, Illinois, 20 miles outside of the city. Now it’s on a stretch of West Randolph Street that is currently Chicago’s hottest restaurant row. “We felt like it would get us closer to our customers, closer to the competition, closer to the trends that are shaping society,” says Easterbrook. Plus, he notes, it’s good for recruiting: “The talent tends to be living downtown.” The young corporate employees toting Sweetgreen bags back across the street to their office during a recent lunch hour—because who can eat McDonald’s every day?—demonstrate that Easterbrook’s plan is already taking hold. Several told me excitedly about the expanded lunch options the new HQ will provide. The McDonald’s café in the lobby of the building has one feature you won’t find anywhere else: a rotating selection of regional items from outposts around the world, including a spicy-chicken sandwich
  • 15. from Hong Kong. The limited availability of these items has turned out to be a canny marketing move, sparking a flood of social media interest and press coverage, but the space is also, clearly, a test lab. Menu chief Linda VanGosen, who joined McDonald’s from Starbucks last year, works closely with chefs and food scientists at McDonald’s suppliers and keeps a close eye on food trends, which have to reach a certain level of mass appeal to make sense for McDonald’s. She and her team also conduct ethnographic research, including shadowing customers to see how McDonald’s fits into their lives, and take what VanGosen refers to as food safaris, eating their way across America. “If we want to find great coffee, we’ll probably go to the West Coast,” she says. “For burgers, it’s probably somewhere in the South.” A key insight she’s learned is that what consumers say they want, and what they actually buy, are two different things, which presents an interesting challenge. “That’s kind of the secret sauce,” VanGosen says. “What’s an emotional need you can answer?” The company had been receiving consistent feedback from a wide range of consumers in recent years—both via focus groups and
  • 16. from unsolicited comments—that its beef patty, the cornerstone of its business, was subpar. But figuring out exactly what customers found unsatisfying took time. Eventually, McDonald’s determined that the burger was too dry and didn’t arrive hot enough, and executives discerned that the culprit in both cases was the flash-freezing process the patties had been subjected to. “We looked at a lot of things —raw material, fat content, grind—for the right taste and textural elements,” VanGosen says, noting that this work began well before her arrival. They found that the patty itself didn’t have to change, just the way it was handled. Keeping the meat fresh and cooking each burger to order improves the eating experience immensely. “The game changer turned out to be serving it hot off the grill,” she says, adding that the never - frozen patties cook in 60 to 80 seconds—about a minute faster than frozen ones—which also helps offset the added time it takes restaurant workers to start cooking each burger as soon as it’s ordered. McDonald’s declines to reveal the costs associated with the new patty, beyond saying that it is not appreciably more expensive to produce
  • 17. than the frozen version, and that consumers won’t see an increase in price. “I haven’t seen data on this, but if I had to guess based on other restaurants, I’d say it costs McDonald’s a little more,” says industry analyst Mark Kalinowski, of Kalinowski Equity Research. “But we’re getting a lot of evidence that they are selling well.” Kalinowski says that the average McDonald’s does twice the business of an average Burger King or Wendy’s. (Wendy’s, which has long served never- frozen patties, recently took the opportunity to mock its bigger competitor on Twitter: “Hey @McDonalds, heard the news. Happy #NationalFrozenFoodDay to you for all the frozen beef that’s sticking around in your cheeseburgers.”) McDonald’s began testing fresh-beef Quarter Pounders nearly two years ago at restaurants in Tulsa, Oklahoma, and Dallas, markets selected because they are serious burger country. The response was conclusive: More than 90% of customers distinctly preferred the new burger. It’s been a hit with critics too. “The meat was tender, it tasted fresh and delicious, with that classic whiff of black pepper McD onald’s uses,” said one Food & Wine review. “To boot, there was a nice bit of char around the edges. Simply put, there was no disguising the
  • 18. fact that this meat is a fairly significant upgrade from McDonald’s as usual.” In addition to taste, today’s restaurant-goers increasingly care about the provenance of the food they consume. At Sweetgreen (91 locations), for instance, an employee writes the names of the farms that supplied the season’s ingredients on a chalkboard in the restaurant. Shake Shack published a cookbook last year that highlights its local purveyors. While moves like these are impossible at the scale of McDonald’s, the chain has been taking gradual steps in these upstarts’ direction. The company committed in 2015 to using exclusively cage-free eggs by 2025. Its chicken is now free of most antibiotics, which has been the policy in the U.S. since last year (though the Humane Society thinks these changes don’t go far enough). McDonald’s also recently announced it would stop using plastic straws in the U.K. by 2020 and begin testing alternatives in the U.S. Generally, the company has become more transparent about its sourcing in the post–Fast Food Nation era, distancing itself from the industrial food processes it formerly employed that had so disgusted consumers, including incorporating “pink slime”—beef castoffs treated with ammonia—into its burgers.
  • 19. But fresh beef is many orders of magnitude more challenging than any menu update thus far, and more significant to the company overall. “We thought, How do we make the biggest difference to the most customers in the shortest possible time?” says Easterbrook. Rather than playing defense against critics by adding a healthful—and potentially unpopular—option to the menu, the company has homed in on its essential product: a hamburger, the biggest, burgeriest hamburger McDonald’s sells. On a late-spring Tuesday, not long after the new patty began being served nationwide, Christa Small, one of the company’s top operations executives and the person whose team was responsible for coming up with the procedures that make fresh beef possible, visits a McDonald’s near the old campus in Oak Brook. It’s hard to imagine anyone you’d trust more with the task of making sure the biggest restaurant chain in the world can safely sell a potentially pathogen-carrying product to millions of customers a day. Small is friendly but intensely focused, with a tiny Golden Arches pin on her lapel. She’s worked for
  • 20. McDonald’s her entire career, beginning with a “crew member” position at a restaurant in suburban Chicago, followed by a corporate internship the summer before her freshman year at University of Michigan, where she studied electrical engineering (she also has a master’s in computer engineering). She has served in a wide variety of roles at the company, from the IT department to helping develop the automated beverage machine. Food safety, especially in the wake of Chipotle’s disastrous E. coli outbreaks in 2015 and 2016, which hurt both its business and its brand, is clearly a priority for McDonald’s. The company’s suppliers have spent around $60 million to enhance equipment and s ystems, including new refrigeration and food-packing technology. (Lopez Foods, which supplies restaurants in the Texas and Oklahoma region, led the pilot program to develop a process to produce, pack, and ship fresh patties.) The distribution centers and cold trucks were also revamped, to ensure that the patties would be kept appropriately cool yet at no point be exposed to freezing temperatures, rendering the whole fresh-meat initiative moot. The main equipment investment McDonald’s franchisees have had to
  • 21. make for the fresh-beef switch is a squat, two-drawer refrigerator. (“Do [franchisees] like writing big checks?” Easterbrook asks. “Of course they don’t! But if there’s a strong business case behind it, they’ll naturally want to invest.”) Small’s group also developed new “small wares” for the process, including trays and tongs that are only used with the new patties. Most crucially, she and her team developed a mandatory curriculum for the handling, cooking, and serving of fresh - beef patties. “It’s the most intensive training process we’ve ever done for a new product,” she says. “We really want to make sure we maintain our reputation in regards to food safety.” In crafting the new Quarter Pounder, McDonald’s has made subtle improvements to the entire sandwich, adjusting grill time and the bun- toasting process, for example. But the biggest change is in the labor process to prepare it. McDonald’s switched from batch cooking to preparing each Quarter Pounder when ordered. This required fundamental shifts in kitchen culture and training. “It takes them a minute to understand that I want them to react as soon as a customer orders,” Small says of employees. “I want you to get the patty
  • 22. down, I want you to act with a sense of urgency. When you have to change the behaviors of hundreds of thousands of people, that’s not a small thing.” To demonstrate, Small takes me to the other side of a McDonald’s counter and asks an associate for a Quarter Pounder. As soon as the order enters the system, a cowbell sound—unique to the new burger— alerts the grill cook, who pulls on a fresh pair of blue gloves and grabs a patty from a sterile bag contained in a blue tub in the special fridge, which is labeled raw fresh beef only/solo carne. fresca cruda. (The combination of the plastic bag and the plastic tub provides two lines of defense against the escape of “purge,” which is the unappetizing word for the juices that the raw burger releases in the packaging. “That’s where your main risk of cross-contamination is,” says Small.) As the grill cook’s burger hits the grill, he lowers a clamshell top, which flattens the patty and allows it to cook on both sides at the same time. In another area of the kitchen, the prep team pops a bun in the toaster and, as soon as it’s ready, applies condiments. When the patty is done, the clamshell automatically floats open. The grill cook seasons the
  • 23. burger with salt and pepper and passes it on a tray to a short conveyor belt, where the prep squad unites the patty with the bun and condiments and packs it all in a cardboard box. The whole process takes less than two minutes. And the finished product? It is, indeed, hotter and juicier. John Goodman’s whispers are not lies. The new beef patties have a 14-day shelf life from the time they are formed at one of the company’s meat purveyors until the moment they’re served. But there are many factors that could prevent them from getting to a customer at all. The refrigerated trucks McDonald’s uses, for instance, are constantly temperature-monitored: If the interior temperature goes even one degree too high or low, the entire load is discarded. There’s also, for the first time, a question of supply. After all, ground beef is a seasonal agricultural product, and even if you are one of the biggest purchasers of it on the planet, as McDonald’s is, you still need to plan ahead for the arrival of barbecue season. “We’re competing with retail on fresh beef, and we need to make sure we can access the supplies we need,” says Marion Gross, the head of the U.S. supply chain and a 25-year veteran of the company. “This is
  • 24. new for us, and we’re coming into our first grilling season and it’s going to test the robustness of our supply chain. But so far, so good!” To better anticipate purchasing needs across the entire business, Gross’s group is making significant investments in computer learning and researching emerging technology like the blockchain. “We’re looking at all those kinds of things seriously,” she says, “so we can better manage the data we have.” She adds, laughing, “We have a lot of data.” McDonald’s has put all of this energy into fresh beef because it really needs the burger to succeed. The chain’s stalwartly low prices are the result of razor-thin margins and massive sales volume, so keeping costs down and getting more customers through the doors—or onto its highly regarded ordering app—is paramount. To this end, the company announced another step in its ongoing restructuring in June, closing regional field offices and further shrinking the management structure. All told, it plans to reduce expenses by $500 million by the end of 2019. And it’s begun looking into a host of potential new offerings, from plant - based meat alternatives (like the Impossible Slider that White Castle has begun testing in certain markets; see sidebar) to restaurants
  • 25. that recognize diners upon entering and prompt them with their favorite orders. “Customer expectations are ever increasing,” Easterbrook notes. “What used to be convenient 10 years ago, those rules get rewritten based on the Amazons and Ubers and the Netflixes. Just because we’re large doesn’t mean we have to be slow.” About a month into the fresh-beef rollout, things are definitely bustling during the dinner rush at a McDonald’s on Manhattan’s Upper West Side. A few minutes after a touch-screen-kiosk order for a Quarter Pounder with Cheese is placed, a young female employee brings it to my table. Have things been busier since the rollout? “Oh yeah,” she says, already speeding back to the counter. “Everybody tells me how much they love this burger.” A version of this article appeared in the September 2018 issue of Fast Company magazine. https://www.fastcompany.com/magazine/issue-226 Marketing/Questions Text.docx
  • 26. Marketing/ShakeShackArticle.docx How Shake Shack Leads The Better Burger Revolution How Shake Shack has customers (and many investors) salivating for its burgers and unique brand of hospitality. Rob Brunner 06.22.15 6:00 AM "I bet no CEO of a company has said this to his team," Shake Shack leader Randy Garutti tells a roomful of employees. "I want to challenge you to put us out of business." It’s less than 30 minutes before the 11 a.m. grand opening of what will be the 66th Shake Shack—a gleaming, multimillion- dollar outpost located in a Victorian brownstone on Newbury Street, in Boston’s gold coast shopping district. The assembled workers sit riveted, but this last-minute dare is probably not what they were expecting. Garutti, the company’s CEO, has been up since 3 a.m. He came to Boston on a late-arriving early-morning Amtrak train, and he plans to hit three other Boston-area Shacks before heading home to New York. It has already been a long day. Is he having some kind of stress-induced, Howard Beale–style meltdown? Well, no. He’s just passing along a bit of the wisdom that has made his company one of the hottest restaurant businesses in the country. Shake Shack has been inspiring excitement since it opened in New York’s Madison Square Park 11 years ago. Created by revered New York restaurateur Danny Meyer, it has since grown from a humble burger stand into a global chain with 41 U.S. outlets and 29 overseas franchises in cities such as Moscow, Dubai, Istanbul, and London. Fans line up for its signature ShackBurgers (flavor-packed beef patties served on squishy Martin’s potato rolls and wrapped in nostalgia-triggering wax paper), hot dogs (Chicago-style or with beer-marinated shallots and cheese sauce), concretes (frozen custard blended with artisanal local ingredients; each Shack has its own unique creations), and house beer (ShackMeister ale, made by Brooklyn
  • 27. Brewery). The company went public in January, raising $112 million in an IPO that valued it at around $1.6 billion. At the time Shake Shack announced its impressive first-quarter earnings in May, its stock price had more than tripled. That IPO was the highest-profile moment yet for what’s known as the "better burger" category: fast-casual restaurants that crank up the quality on the old hamburger-and-fries concept, targeting savvy diners who care more about how their food tastes and, crucially, where it comes from. Better-burger successes include Five Guys (over $1.3 billion in revenue last year from more than 1,200 locations), Smashburger ($270 million), and Habit Burger ($175 million), which also went public recently. Although these chains are still small—last year they brought in just $2.7 billion out of the $76.9 billion generated by hamburger restaurants in the U.S. overall—they’re having an outsize influence on the burger business, which remains by far America’s largest dining-out category. Shake Shack’s approach in particular—sourcing high-quality natural ingredients, cooking food to order, and placing a major emphasis on the happiness of its customers and employees— both reflects and is driving real change in the marketplace. Shake Shack founder Danny Meyer sports a burger-eating grin, thanks to the growth and popularity of his fast-casual restaurants. Garutti’s prelaunch pep talk outlines the key elements of his company’s style of radical hospitality. He urges his workers to trust customers and try to be on their side—to always make the "charitable assumption" when dealing with people, and to look out for each other as much as possible. And then there’s that thing about bankrupting the company. "What do I mean by that?" asks Garutti, who’s dressed CEO casual in a gray blazer and dark blue jeans. "Put us out of business because you are so damn generous with what you give the people who walk in this door. If there’s a kid crying, who’s going to walk over with a free cup of custard? I challenge you
  • 28. to put us out of business with how generous you are. Go do it. Give away free stuff." This is not merely about the occasional gratis dessert: It’s part of a larger effort to empower employees to do whatever it takes to make customers feel loved. It’s now just a few minutes before 11, and the Newbury Street team, clad in Shake Shack’s unadorned black uniforms, start taking their stations: cash, bun, grill, prep, custard. Napkin holders: filled. Ketchup cups: stacked. Entryway: Swiffered. "This is a crazy day, man," says Garutti, a once avid skier and surfer who occasionally drops words like dude into casual conversation. "Crazy day. But we’re good, we’re good." Then suddenly it’s time, and actual customers are eager to order. As cashiers ready their registers and a grill cook prepares to slap patties onto the kitchen’s Miraclean cooking surface, it’s clear—from the thoughtfully designed space, carefully sourced food, and palpable high spirits of the staff—that nothing here is like what you’ve ever experienced at a fast-food burger establishment. A manager stands at the head of the room, giving everything a last nervous look-over. "Front of house, are we ready?" she yells. "Woo-hoo!" comes the reply. "Back of house, are we ready?" "Yeah!" everyone yells. "Okay," she says. "Let’s do it." Wandering through a Shake Shack with Garutti, you come to appreciate how much care goes into every detail, seemingly in service of a single question: How do you bring a high-end dining experience to fast food? Shacks are built to feel more modern and grown-up than the cartoony, red-and-yellow-decorated junk-food joints that hawk value meals and 40-ounce sodas. You see it in the quiet color scheme (green and black); the slick graphic design (the brand’s clean, modern signage and logo were created by Pentagram’s Paula Scher); the room layout (an open kitchen up front rather than hidden in the back); and the way each outlet is localized to
  • 29. some degree (the Newbury Street store’s reclaimed-wood walls are made out of materials from an old Boys & Girls Club in nearby Watertown). Garutti makes the rounds at Newbury Street with Zach Koff, Shake Shack’s VP of operations, and Mike Iaia, a regional director of operations, showcasing his obsessive attention to detail. He points to an empty spot on a wall: "Mike, we need a TV there, dude," he says. "That’s the focal point." Koff and Iaia make a note for later, even though they aren’t sure it will be logistically possible. Still, Garutti is right: Once you notice it, the space is begging for decoration. "Randy’s really good at walking in and understanding what will create energy," Koff says. Later, Garutti still can’t let it go. "You’ve gotta do a TV there," he says, walking past the space again. At another Boston-area Shack, he zeros in on an errant condiment splotch. "A ketchup stain pisses me off to no end," he says. "There are a million little things that we can do better." At the center of Shake Shack’s mission is Danny Meyer’s philosophy of "enlightened hospitality." In essence, it’s a set of priorities: the idea is to create a welcoming atmosphere first for employees, next for customers, and then for the outside community, suppliers, and, finally, investors. The notion echoes Johnson & Johnson’s 1943 mission statement, which espoused the same priorities and was at the time a groundbreaking corporate credo that led to decades of earnings and dividends growth. Since opening the Union Square Cafe in New York in 1985, Meyer has perfected a brand of relaxed but highly polished service. Still, applying that concept to a spot that offers cheese fries in cardboard boxes rather than $120 tasting menus is a big leap. "Business, like life, is about how you make people feel," Meyer writes in his 2006 book, Setting the Table. "It’s that simple, and it’s that hard." Shake Shack has taken advantage of the burger industry’s traditional emphasis on speed over customer care. "You go to a fast-food restaurant, your expectation is generally low," says Garutti. "You are almost
  • 30. always dreading what’s going to happen. So, cool, thank you for creating such a low bar for us. We’re going to go way above that. We’re going to make it so that everybody who walks out is saying, ‘I can’t believe what that guy did at Shake Shack!’" As the principle of enlightened hospitality dictates, it starts with employees. Entry-level Shake Shack workers make $10 an hour in New York and $9.50 everywhere else, which is better than minimum wage but short of the $15 an hour that activists are pursuing for the fast-food industry. The real financial incentives are designed for employees who stick around. The company has created a profit-sharing program called Shack Bucks that can, Garutti says, add as much as $2 an hour to paychecks. And every full-time employee was given the chance to purchase stock in the IPO. "We believe we’re going to pay the market rate to get a great employee," Garutti says, "and then our job is to promote that person and show them how they can make a lot more money if they choose to be a leader." Many of Shake Shack’s executives have been groomed from within, and it’s not uncommon for hourly employees to get bumped up to manager, general manager, and beyond. Opportunity, then, is a big part of the pitch to new workers: Be excellent, be genuine, be friendly and eager and human, and you might have a real future with this company. "We’re not going to program you to be some kind of Shake Shack robot," Garutti says. "That’s not to say that we don’t give you the guardrails. We have boundaries and we’re very serious about what they are. If you go outside of those, you can’t be here. But within those, there’s a lot of freedom to create and lead in the way that you want." "The younger generation is not all of a sudden going to say, ‘I want less quality food,’" says CEO Randy Garutti. "No way." Later, at a Shack in suburban Chestnut Hill, Garutti shows how this works in practice. After ordering lunch (two hot dogs, cheese fries, two frozen custard concoctions), he sits down with a manager for a check-in. Garutti is keen to have Shake Shacks feel as lively on the outside as they are inside. He’s been
  • 31. experimenting with Ping-Pong tables and bocce courts at some locations in an effort to connect with surrounding communities and encourage customers to hang out. Should they install an outdoor foosball table here? he wonders. The manager has a different idea. How about a Shack-sponsored music series? "I have access to a lot of bands," she says, noting that she used to play in one. "If we had interesting, hipper bands that were akin to what we’re doing here, this could be more of a summertime scene." "Done," Garutti says. "All right, we’re off. Thank you for your leadership." Danny Meyer’s sixth-floor office looks west across New York’s Union Square Park, the busy downtown crossroads that gave his first restaurant its name. Afternoon light spreads over an expansive bookshelf next to his desk as he pours water from a glass pitcher etched with the name of his company, Union Square Hospitality Group, which operates beloved New York institutions such as Gramercy Tavern and The Modern. Taking a sip, he shows off a framed photo of the 2004 opening of the first Shake Shack, an outdoor kiosk located a quick walk uptown in Madison Square Park. "It’s really cool to know that there isn’t pressure to just make money," Garutti says. "If we build this brand right, we’re all going to benefit." Shake Shack’s headquarters occupy the floor right below this one, and though the thoughtful, soft-spoken Meyer is no longer involved with the burger chain’s day-to-day operations, he remains chairman of the board and continues to help steer its overall strategy. Meyer is also the guy who dreamed up the concept back in the early 2000s, when neither he nor anyone else imagined that a little concession stand in the park would ever be more than a fun, one-off novelty. It started with an urban-revival project. In the 1990s, Madison Square Park had fallen into disuse, and Meyer—who was planning to open a pair of restaurants on the park—was at the
  • 32. center of an effort to turn it around, helping to lead a group called the Madison Square Park Conservancy. One initiative involved hosting sculpture exhibits, and when an artist wanted to incorporate a working hot-dog cart into his installation, Meyer volunteered. "I figured, what if we could use something as mundane as a hot-dog cart to prove that enlightened hospitality doesn’t only work in white-tablecloth restaurants?" he says. "This is where the whole vision starts: that the park be beautiful, safe, and used." Meyer hired off-season coat-check workers from his restaurants to operate the place and donated a percentage of any profits to the park. Though it lost money, the stand attracted crowds, and Meyer decided to bring it back for the next two summers. When New York’s parks department approved a full-time food kiosk in the park, he was the clear choice to run it. "I was obviously not thinking about an ongoing business," he says. "It was never our vision that it would turn into more than one Shake Shack. I was thinking about what it could do for the park." Meyer sketched out a quick menu based on places he loved growing up in St. Louis: Fitz’s Root Beer, Steak ’n Shake, Ted Drewes Frozen Custard. (That handwritten list of offerings, which is remarkably similar to Shake Shack’s current menu, now hangs on the wall of Garutti’s office.) The kiosk opened on June 12, 2004, offering a high-gloss take on burgers, hot dogs, and milkshakes with a focus on quality ingredients and extraordinary service. It was an instant local phenomenon, and soon Shake Shack, as it had been named, was as famous for its epic lines as for its food. Over the next few years the crowds kept coming, undaunted by wait times that could stretch to an hour or longer. (A few years ago, the company installed a "Shack Cam" so people could monitor the line via the web.) But Meyer—who had waited nine years to open his second high-end restaurant—resisted the obvious next step. "People were saying, ‘You’re crazy not to build another one of these things,’" he recalls. Eventually he relented, figuring another location might help alleviate the
  • 33. crowds in Madison Square. But he was busy with his restaurant empire and didn’t have time to steer the hamburger expansion. One day, Meyer asked Garutti, then head of operations for the entire Union Square Hospitality Group, to chat. Garutti quickly realized that Meyer was asking if he’d walk away from one of the restaurant world’s plummier positions to open a neighborhood fast-food joint. The Cornell University School of Hotel Administration graduate says that "it took about 10 seconds." It was a real gamble. "Is it just the park that made this thing what it is?" Garutti remembers thinking. "Is it just a fluke?" That second Shack—which opened across the street from the American Museum of Natural History in October 2008—would become the template for the entire chain: the design, how the kitchen operated, even the kind of music they played in the dining room. "We really thought about every part of that one restaurant," says Shake Shack culinary director Mark Rosati, who left a job cooking at Gramercy Tavern to become one of the original managers of the Upper West Side location. (Seven years later, that Shack’s entire management team remains with the company.) "We literally changed the place 100 times until we had that perfect vibe. In fine dining, you really are trained to think about all those details." Shack 2 was a fast hit. "The first year it did as much as Madison Square Park," says Garutti. "We said, ‘Oh, my God, we’ve got something special here.’ That’s the moment where we said, ‘Okay, let’s start to build a company.’ " From there, things moved fast. The New York Mets asked to include a Shake Shack in their new ballpark, Citi Field, which opened in 2009 (Shake Shack now has seven such stands in airports, train stations, and sports venues). The following year, the company opened two additional Shacks in New York and the first outside the city, in Miami Beach. When a Kuwaiti developer approached the company about licensing the brand for a string of restaurants in the Middle East, Shake Shack went global. Suddenly, Garutti found himself at the helm of a serious,
  • 34. fast-expanding business. In one important respect, though, that second outpost was a failure. "It was almost as if excitement over the second Shake Shack kindled even more interest in the first," Meyer says. "The line got longer." CEO Randy Garutti left one of the best gigs in fine dining to build the Shake Shack business. The gleaming metal heart of the whole Shake Shack operation lies behind a pair of swinging red doors inside an immaculately clean, 35,000-square-foot facility not far from the Lincoln Tunnel in northern New Jersey. This is the headquarters of Pat LaFrieda Meat Purveyors, New York’s premier wholesale vendor of fine-dining beef. When Shake Shack started, Meyer and Garutti tapped LaFrieda to create a blend specifically tailored to their unusual cooking method, which involves caramelizing thin patties on a flat top rather than grilling or broiling them. Much like the Coca-Cola formula, the secret recipe is only known to a handful of Shack executives. LaFrieda’s custom-built patty-shaping machine—there are three of them, with two on reserve in case of malfunction—is roughly the size of a small Zamboni. Meat goes in the top and perfectly formed pucks come out the side, ready to be boxed up and shipped out, unfrozen, to Shacks from D.C. to Boston. The machine cranks out about 80,000 of them every night. Shake Shack’s beef is at the center of its identity, both because of how the burgers taste and because of their pedigree: humanely raised, antibiotic- and hormone-free, ground fresh from full-muscle cuts rather than scraps or what has become known as—shudder—pink slime. "I don’t know anyone who’s ever taken a patty out of a McDonald’s burger and said, ‘Wow, this meat is great,’" says LaFrieda, sitting in a lounge area above the warehouse. "You could certainly do that at Shake Shack. We’re making beef fresh every night. It’s going to the restaurant the next day. There’s no better experience that you could possibly have." Increasingly, a segment of American diners, especially those
  • 35. between the ages of 18 and 34, is looking to spend its dining- out dollars at restaurants that focus on natural ingredients and sustainability. "Whether it’s Whole Foods or other companies like [ours], we are creating an expectation of excellence, transparency, sustainability," Garutti says. In keeping with these principles, Shake Shack has worked with its bun supplier to omit genetically modified organisms and has removed corn syrup from its burger sauce and custard. "The younger generation is not all of a sudden going to say, ‘I want less quality food, I want to know less about my food like my parents did,’" says Garutti. "No way." Nowhere is this mandate more imperative than with the meat inside that GMO–free bun. But there’s a problem: The supply of humanely raised, drug-free beef remains limited. Making sure Shake Shack doesn’t run out of beef is a big part of Jeff Amoscato’s job. As VP of supply chain and menu innovation, he’s responsible for sourcing the company’s meat— along with its bacon, buns, pickled cherry peppers, and every other ingredient that goes into its offerings. One of his biggest challenges is ensuring the Shacks never encounter the sort of shortages that have plagued Chipotle. Earlier this year, the burrito purveyor stopped selling pork in around a third of its stores after it decided a major supplier wasn’t meeting its standards. When Garutti heard about the situation, he asked Amoscato and culinary director Mark Rosati to talk. "He was just like, ‘By the way, guys, where are we at with this stuff?’" Rosati says. Amoscato has developed relationships with both ranchers and large natural-meat processors, such as Kansas-based Creekstone Farms. "I’ll get in the truck with their cattle buyer and go around to some of the ranchers," says the former manager of Meyer’s restaurant The Modern, who looks like he’d be far more at home sipping rioja than roping steer. "We get to understand what they’re doing. We’re working to convince more farmers that this is a better way of growing cattle." Chipotle has more than 1,800 outlets; Shake Shack has fewer
  • 36. than 70. As the company grows, it may face challenges maintaining such a pristine supply. But Garutti feels good about what Shake Shack has accomplished so far, with its forward- looking commitment to purchasing high-quality, antibiotic- and hormone-free animals—often before they’re even born. "We say, ‘Hey, we’ll buy x amount,’" he explains. "‘You raise them the right way, we’ll buy them.’ It’s traveling the country, having contracts in place, and understanding the global beef supply chain to make sure that we’re ready for the growth we’re going to have." The company also has backup plans in place should something unexpected go wrong with its supply. Naturally raised meat is still a small percentage of the market, but consumer demand for better beef is having an impact. Amoscato says that he shows ranchers photos of Shake Shack’s infamous crowds to drive home how excited customers are for this kind of meat. "Look at this Shake Shack in Madison Square Park," he tells them. "There’s a line of people waiting for our burgers. They want that better product." After leaving the Chestnut Hill Shack, Garutti sits in the back of an Uber car, thumbing through emails on his way to visit another one of his Boston-area outposts. The driver, it turns out, loves Shake Shack. His family waited in line to eat at the first Boston Shack the day it opened in March 2013, and now they’re fans. "Every now and then, you’re going to give your daughter a burger," Garutti tells him. "Not every day. But when you do, you want to know that it’s good. Where are you going to take her?" The driver glances back at him in the rearview mirror. "We’re not going to McDonald’s," he says. "That’s for sure." That attitude has a lot to do with Shake Shack’s success—and illuminates McDonald’s recent woes. Its revenues have been slipping in dramatic fashion, with sales down for six straight quarters, including an 11% revenue dip in the first three months of 2015. In March, the company appointed a new CEO, Steve Easterbrook, who has implemented changes that seem directly aimed at the sort of customers who are increasingly turning
  • 37. towards Shake Shack and other fast-casual spots. Less than a week into Easterbrook’s tenure, the company announced it would phase out the use of certain antibiotics in its poultry over the next two years. Recently, McDonald’s has also been experimenting with a line of larger, pricier, all-sirloin burgers. But while McDonald’s problems get a lot of attention, Shake Shack is far from toppling the company and its $27 billion 2014 revenues any time soon. And other leaders in the quick-serve hamburger category—Burger King, Wendy’s, and Sonic—are in much better shape than Mickey D’s. "I don’t think there’s any doubt that fast-casual and the [better-burger] guys have had some impact," says Sonic CEO Clifford Hudson, whose fast- growing company saw a 3.5% increase in same-store sales in fiscal 2014 and plans to open 1,000 new outlets over the next 10 years. "But we’ve got positive momentum in a way that you might not expect, given the competition from them." With its January IPO, Shake Shack now faces the same intense public scrutiny as those long-established burger barons. Investors are the last constituent in Danny Meyer’s enlightened- hospitality hierarchy, but early reactions on Wall Street have been mixed. Though it has beaten earnings estimates for its first two quarters as a public company, some analysts remain skeptical. For a business with a relatively high market cap, it has a small number of locations, modest revenue ($118.5 million in 2014, a 43.7% increase over the previous year), and intense competition from other better-burger chains, fast-casual peers like Chipotle and Panera, and those global down-market behemoths with their Big Macs and Baconators. Yet Shake Shack says it will hew to its long-held plans to grow slow. This year the company expanded to Baltimore and Austin, and by the end of 2015 there will be additional Shacks in existing markets such as Chicago and Orlando. The first California Shack is scheduled for 2016, in West Hollywood. The goal, for now, is to open 10 a year, with the aim of eventually reaching 450. They’ll also continue to license the brand overseas; the first of 10 planned Japanese Shacks will
  • 38. open in Tokyo next year. In a world where McDonald’s boasts more than 14,000 stores in the U.S. alone, those ambitions seem modest. But Meyer and Garutti have seen what happens when outlets expand too fast. "Danny thinks long-term dollars better than anybody," Garutti says. "It’s really cool to know that there isn’t pressure to just make money, make money, make money. If we build this brand right, we’re all going to benefit." And Shake Shack is having a big impact. "What’s exciting is that they are testing a theory that food that is good, that is clean, that is fair, can be integrated into a fast-casual template," says Richard McCarthy, executive director of advocacy group Slow Food USA. "Will people spend extra for food that is in line with their values? Is this an esoteric niche, or is it something that can break through to everyday people?" Danny Meyer believes it can break through—and that it already has. "It takes companies like Shake Shack, like Chipotle, like Whole Foods to make those tougher, more expensive choices," he says. "I want to buy food that makes me feel good to be buying it. I want to do business with companies that make me feel good to be doing business with them. I care about the earth and my family and my own body. We’ve reached a critical mass where there’s just no going back. And I think that’s awesome." It’s 3 p.m. when Garutti arrives at his last destination: a brand- new Shack in the Boston suburb of Dedham, which opened to the public the previous day (he missed that launch because he was coaching his son’s Little League game). Located in a high- end outdoor mall called Legacy Place, it’s a relatively low-key outpost tucked next to a Uniqlo. This is the kind of Shack the company will need to nail as it expands—a casual local spot where people want to hang out, have a ShackBurger and a concrete, and spend time with their friends. It’s the busiest of the locations Garutti has visited on this chilly Monday afternoon in early March, full of teenagers from a nearby high school who are giddily digging into salted-caramel
  • 39. ice cream and hopping from table to table to gossip and laugh. These are some of Shake Shack’s most dedicated customers: tech-immersed young people who are here as much for the aura as the cuisine. "You just know when a Shack feels good," says Garutti, looking around approvingly. "This is what you want to feel. When people talk about better burgers or whatever, this generation of kids is going to eat here. Like, kids are going to break up over a milkshake today. That’s what Shake Shack is!" Still, not everything is perfect. While Garutti is debriefing a manager, a couple of high schoolers alert a staffer to a problem, and she immediately shares it with the CEO. "They just tried to Snapchat-tag us," she informs him, "and we’re not on it. They were telling me, ‘Oh, my God, you have to get this immediately!’" Garutti is not happy. "That’s so lame," he says as he pulls out his phone to notify someone back at Shack HQ. "I’ll find out what’s up. I’m very surprised. We’re pretty huge in social media." (Shake Shack has more than 170,000 Instagram followers.) In the real world, though, things seem to be running smoothly. The Dedham staff—which includes veterans from other locations and a number of local high school students—is relaxed and cheerful, and fresh-smashed LaFrieda pucks are sizzling on the Miraclean in waves of eight. "The vibe in here is so strong," Garutti says. Though the place is busy, it isn’t the madhouse you might find at a Manhattan Shack, and there is no sign of the sort of snaking line that remains a Shack signature. But just wait. "Get ready," Garutti tells the manager, a knowing smile breaking across his face. "Because this weekend is going to be mental."