Living the core values of a company goes a long way in establishing an awesome company culture. Joining Cameron Herold in this episode is Alex Taylor, the COO of Upward Projects, a restaurant group that thrives on creating authentic and inspiring experiences for the communities they serve. Before becoming COO of Upward Projects, Alex started his career as a Phoenix-based regional manager for Starbucks. Today, Alex shares his experience in Starbucks and how their scaling shaped his personal growth. He also talks about the Upward culture, and the importance of caring for your people.
Alex Taylor is the Chief Operating Officer of Upward Projects. It’s a Phoenix-based hospitality group with a cult-like following. He was previously serving as the senior vice president for the Kimpton Hotel & Restaurant group overseeing a $400 million Restaurant and bar division with 80 unique concepts in 22 states and three countries. He graduated from Duke University and also earned an MBA from the University of Texas at Austin. He started his career as a phoenix based regional manager for Starbucks before relocating to Las Vegas to serve as the director of food and beverage for the Mandalay Bay Resort. He was named the executive director of food and beverage for Wynn Resorts Encore before leaving to launch his own two-unit restaurant concepts in Las Vegas and Austin, all of which gave Alex invaluable experience in the power and perils of company culture. Alex, welcome to the show.
Thanks for having me. It’s great to be here.
I’m looking forward to this. I love every single brand you’ve been affiliated with, with the exception of none. I had a mentor years ago who was being groomed as COO at Starbucks and I’ve always been fascinated with that brand. I’ve loved the stuff that Steve Wynn and his group did and I love what you guys are doing with Upward. I’ve known a couple of the founders, one more well than the other and I’ve eaten at one of your brands Postino many times I know the menu called. I am looking forward to learning all about this.
That’s great to hear. I’ve been an experiential-based person my entire adult life and I think that the companies I’ve worked for reflect that attitude that I have as far as I pursue jobs not for escalating responsibility or title or pay but because of how it’s going to enrich my life and my family’s life beyond the obvious. That’s why I’ve been drawn to brands that are unique and special, in terms of why I’m here in Upward.
I love the combination of your entrepreneurial experience, some of your corporate experience and then even combining it with some of your MBA. The only college basketball game I’ve ever seen was the Duke Blue Devils playing against UNLV Rebels in Las Vegas.
What a great rivalry that was. As a UNLV fan prior to going to Duke, I was heartbroken when my Duke Blue Devils destroyed the greatest basketball season and greatest basketball team of all time when they beat the undefeated Runnin’ Rebels in 1991.
That was around when I was there. I was there around ‘92 or ’93 because I had never heard of Duke and I bumped into a friend traveling and backpacking around the world and he was wearing a Duke Baseball cap and he told me all about Duke and that’s how I got enamored with the team. Legendary schools and legendary brands, first off, tell us a little bit about Upward and what the restaurants are that you guys oversee or what the brands are within that group, so we understand. Maybe even give us some scope in terms of the number of employees and the number of locations so we can understand what you’re running.
Upward has been around for years. It started with Postino and Arcadia, which was the old Arcadia post office. Craig Demarco, one of our two founders, was returning from a trip from Italy walking down the street, talking to his wife Kris about how much they enjoyed the easy wine cafe lifestyle that they enjoyed in Florence. They were walking by the post office and said, “We should do that. We should do it right here.” They bootstrapped it and made it happen at that one location and then had a lot of success with some other restaurants as well that are not part of the Upward family. It was in 2008 that one of their most dedicated and hard-nosed employees, Lauren Bailey, inquired about buying the old tables and chairs that they were switching out for new FF&E packages. That led to a conversation between her and Craig about how Lauren wanted to start her restaurant. They partnered on the second Postino, which opened in 2009 on Central Avenue and the rest is history. From there, they went on to do multiple brands with Windsor and Joyride Taco House and Federal Pizza. Continued to open more Postinos across Arizona and our first outside of the state of Arizona and Denver, expanded to Texas and opened our second there as well. The big event beyond the original formation of a partnership in 2009 and that growth was our purchase in partnership with Brentwood Capital out of California, which is a private equity fund that has supercharged our growth is what’s pushing us to grow into new states.
Lauren, did she come in as originally the COO or as a partner with Craig to help expand it?
I don’t know what her title or if they even cared about titles at that time. She was a partner in the second restaurant, on the second Postino. Craig was successful with the first one and then had some other partnerships and some other restaurants. LGO, was the big one right next door to Postino Arcadia, but that was a different partnership group. It was Lauren saying, “I’d love to buy these tables and chairs.” Craig said, “Why?” “I want to start my own restaurant company.” Craig, being who he is about spreading good vibes and it wasn’t about keeping all for himself and he had a lot of things going on said, “Why don’t we do another Postino together instead?” Lauren was surprised that he would invite that partnership not just because why share and they created this incredible partnership that has endured and gotten incredibly strong and built this phenomenal culture here Upward. Lauren was an employee, she was one of their badass bartenders and someone that they counted on and wanted to continue to do business with.
I’ve been fortunate to have lived part-time in Scottsdale. I’ve been able to meet Lauren and Craig both over the years and both are extraordinary people, both seem to be strong in culture and caring about people, both on the customer and employee side. It’s not like they’re doing it for profit, it’s who they are. It’s how they’re wired. Is that accurate?
Yes, the profit will come, especially in the business we’re in because we’re not selling food. A lot of people are talking about the experience that that’s ultimately selling, that’s true, but you’re trying to create an emotion in people. When people come to eat and dine in any restaurant, you want them to come in feeling more positive energy when they’re walking out the door than they came in. We want people to feel better and more positively about the world and themselves when they walk out of our restaurants. That’s an easy directive. That’s our mission is we make people feel good.
That’s our guiding light is, does this make people feel good with everything we do, then we’re going to be doing a great job and ultimately people are going to want to come back and they want to spend more time with us because we make them feel good and they do spend time. It’s an easy mission to follow. It’s an easy guiding light, often lost in some of these complex and convoluted missions of all kinds of different companies. For us, for Craig and Lauren especially, what they cared about was making people feel good and that’s translated throughout our company culture into our guest.
I want to go back to almost the beginning, your MBA, we’ll start there and then I want to go into Starbucks a little bit. I’m going to guess, were you finishing your MBA around the mid-90s, ‘94, ‘95?
No. I graduated from Duke in ’97. I thought I was going to be an attorney because all my life, I had thought to myself and been told I was going to be an attorney and then judge and ultimately, my mother decided I was going to be a Supreme Court judge. I went to work for a law firm in Washington, DC. After I graduated, I worked in white-shoe law firms there as a legal assistant. The idea being that I want to take a year off and enjoy myself at the same time, get ready for the LSATs. I had heard that doing research and writing briefs was the hardest thing about your first year of law school. Understanding the language and methods so I could get paid to learn how to be successful in law school and have some fun while I was in DC.
It was a great year, I enjoyed it. I liked the work a lot, but I realized that I did not want to be in the industry primarily because the industry was full of passionless people. Meaning that there were some people that enjoyed the law and wanted to dedicate their lives to it, but quite frankly, the majority were people that fell into it, didn’t know what to do with their lives. I often make a joke that a lot of people are lawyers because they weren’t smart enough to be doctors. There are people that truly love the law and are great and then, unfortunately, a lot of people that fell into it because they didn’t know what else to do and they want an advanced degree.
I grew up in an era before you. I graduated from college about ten years before that or eight years before that and I was always being told to be a lawyer as well. It was a lot of my entrepreneurial skills, a lot of my leadership traits that were pointing towards law mostly because being an entrepreneur wasn’t cool then. Being an entrepreneur almost didn’t become cool until around ’99, 2000. I almost wonder whether if you’d been five years younger, if you have been pointed in the entrepreneurial zone with all the skill sets that you’ve got.
I might have. I had some great mentors at the law firm and I was talking about my frustrations with what I was seeing in the industry. It was one of the juniors associates at the time, a guy named Kelly Doran, we’re talking an hour conversation and he talked about one of his classmates from undergrad who went and got his MBA, “You should think about that because it sounds like you have a lot of ideas and a lot of drive to do different things, it doesn’t mean that you have to do law.” He said he had a lot of guys that did a law that ended up in the business field. I had some great mentors. I was fortunate. I was able to realize what I did not want to do. It was a year well-spent in Washington, DC.
What do you think you use from your MBA program that you still use? What did you pull from that that would still be useful and what do you think you would throw away from your MBA program that may have bogged you down?
I don’t know what I would throw away. The nice thing was that I did have a good four years between my undergrad and my graduate. I worked at Starbucks right before my MBA. Certainly, what I take with me every day and I was on an entrepreneurial track at Texas when we had a fantastic entrepreneurial school at the time and it was all case-based. You went to battle every day in those case classes and you had to have your ducks in a row. You had all your analysis done. Your spreadsheets are ready. You would maybe get to make one comment. You were scored in the class on the validity not whether it was right or whether it wasn’t incisive, whether I move the conversation forward, whether I’m back with data, and you knew what your score was.
You read comments and it was a big deal, but you could also get scored down. If you spoke three times but they were not additive, then you could lose points for the semester. It was a hand to hand combat every day and it was not theoretical. It was real. You had to have your stuff together and you had to think critically and I leaned into it. I had a natural tendency to draw towards that type of thought and discussion but I liked it. It helped shape me as far as cutting through the clutter and being able to problem-solve. It honed that skill for me.
You were at Starbucks in a regional manager role right in the heyday of the startup of the growth of Starbucks.
I was a roving manager. We were developing a southwest region and at the time when I got there it was in Arizona, it was 8 or 10 stores and then we grew it and we were growing a store a week. It was Nevada, New Mexico and Arizona was the southwest region that they were growing so I would get tossed around to different stores when first problem solving and then help open the store, they got placed to the store. Our largest bill that we had done in all of Arizona was at the Kierland Commons. When Kierland was first getting built, it was us at PF Chang’s and Crate & Barrel and that was fine to me and that’s what I opened for them.
Did you bump across one of my mentors? This is the guy who mentored me every month for eighteen months, a guy named Gregg Johnson at Starbucks?
That sounds familiar.
He was SVP operations and at one point, ran all of the operations globally for Starbucks. He might have been more northeast or California. It might have been his regions back in the mid ‘90s.
I had a district director, Eric Brewer, who is still here and since I’ve been back, I have not gotten back in touch with him. He’s still with Starbucks. My regional vice president, Randa, she oversaw all the southwest region that was being developed at the time. I loved my time at Starbucks. In all honesty, I would still consider being with Starbucks, but the end result would be in Seattle. You could tell, if you looked at the weather to where I lived, I like warm weather. The coldest I’ve gotten is DC and I would go no further north than that. I like sunshine and I don’t like gray skies or rain.
I noticed that trend. That was when I met Gregg originally. I was dating Howard Schultz kid’s nanny and ‘94, when I was living in Starbucks in Seattle and Gregg, was living in Seattle at the time as well. That was a decade or a lifetime ago. The biggest skill that you pulled out of Starbucks other than, clearly the openings and that crazy fast pace, what skills do you think you pulled from that that you carry with you?
The most obvious skill and the reason I was drawn to Starbucks prior to my first real big professional job in hospitality which was in Washington, DC. After I left the law firm, I ran a sushi club and lounge, which we opened in ‘98, it was fantastic. We got paid back in three months. It was bananas balls, busy all the time and making money hand over fist. It was owned by club owners and they had no systems, no ways of stamping things out and saying, “How can we replicate this and make more money?” That’s what I learned at Starbucks. The number one skill was how do you systematize, replicate, maintain a company culture all at the same time. Scaling a system or way of doing things is easy. Scaling culture is difficult, their ability to do that and get participation and buying across the company. In 2000, you still had a phenomenal culture and I would say even now if you considered the size, it’s virtually impossible to think that they could keep the quality of the culture with the size of the company. That’s the number one thing I took from it.
Number two is that they learned so much from the store level. It was all about systems and it was heavily regimented but they never shut down creativity from stores. That’s where the biggest innovations came from. The most obvious, the most famous is the Frappuccino, which was invented at the store level in 1996. Frappuccino was invented in Southern California by a barista that broke the rules and went against the grain and did it on the DL. Ultimately, the district manager stopped complaining when they got feedback from the guests who said how incredible it was. They went from pariah to panacea because it was the Frappuccino that solved the seasonality issue and launching it to the stratosphere. Without solving seasonality on coffee, it would have never been where it is now.
It also bridged the age gap. It also took the age gap from the parent down to kid when the twelve-year-olds were going in there trying for a Frappuccino when their mom was getting their double latte, right?
No doubt. We were right at the start where at first the decaf Frappuccinos didn’t launch at the same time that regular caffeinated Frappuccinos did and you would see it where kids would come in and it was weird. It was not culturally acceptable for kids to come in and have coffee and it was the Frappuccino that made it culturally acceptable and expanded that demographic.
Last Starbucks question before I leapfrog right up to Upward again, am I imagining things or do I remember this correctly that around ‘93, ‘94, when you went into the store to order your latte, it was based on what you ordered? It was the way they turned the cup upside down, frontwards, backward, two cups. It was how they remembered what you’d ordered. Do you remember that?
No. That was before my time. I can tell you that our point of pride in the Arizona market is that we were the ones that came up with the idea and piloting saying people’s names. If you remember in those mid-90s, late ‘90s, they would say, “Double tall latte.” Two people would go up and grab the drink and say, “Whose is this?” We were allowed to pilot in the Arizona market of asking people their names and you got pushed back, it was interesting, “Why do you need my name?” There some people that were a little bit off to it, that’s obviously gone away. It’s part of everyday life, whether that Starbucks or Chick-fil-A, they want your first name.
It’s interesting because they lost that system for about 7 or 8 years and then when Howard came back in around 2009, 2010, to rebuild after the crash again, he insisted that we get the names back in again as a way to connect with people.
A lot went away from the founding culture and vision as they scaled and moved into airports and supermarkets and everywhere else. They took away a lot of those personal touches. I’m sure it made more money but they had definitely started to lose their way. It’s nice to see the reinvestment in that. It might make you a little bit slower, slightly more costly or take more training but it’s worth it.
At Upward, I love where the genesis was, Craig and his wife walking through Florence and going to the cafes and loving that meandering lifestyle and the relaxed environment and the real connection with food. How do you keep that as part of what you’re doing as you grow because it’s still there? When you go into Postino, as one of your brands that I know the best, how are you focusing on keeping that core?
How do we do it now is we muscle through it, for lack of a better term. I am on-site. My right hand, Eric Henderson is on-site. Lauren Bailey is on-site during training, doing orientations, interacting. We’re in touch with the hiring process to make sure that we’re hiring people that embrace our culture that can get and appreciate what we’re about and why we’re about it. What we’re figuring out and what we’re going through the processes is how do you scale that culture? Muscling through it is unsustainable when you’re opening 5 to 6 stores a year. It’s not something that we’ll be able to do.
Our focus has been finding out how do you institutionalize those cultural touchpoints and write them down and communicate them in a way. It’s not like it can’t be done. It has been done well whether you’re talking about Costco or Starbucks. There are these places that have been able to continue this culture, whatever their culture is and scale it, but it takes thoughtfulness about where do you invest, what traditions do you invest in. It goes way beyond benefits and it goes towards traditions, training and all the things that are the sacraments of what makes your culture truly special.
Do you train the employees on that at Upward when they come in each of the individual restaurants? Do you train them on the core DNA of the company as well or do you focus on each of the individual brands?
The first three days of training are culturally-focused before you get into the actual nuts and bolts of how to do your job. The first two are virtually all cultures and what we’re about. We have our five values. We don’t sit in a book or on a wall somewhere. We talk about them constantly. We’re driven by them. We talk about leaning at one of our values, authentic and humble. When people aren’t saying what they’re feeling or you can tell that they’re holding back, I say, “I need you to lean into being authentic and humble right now and tell me what you’re thinking.”
When someone’s making promises that they’re not keeping, we’ll reference act with integrity because you might have the highest level of integrity, but when you’re not hitting a deadline, there’s another value called getting extraordinary results. It’s not that you’re failing to get extraordinary results, you’re failing to act with integrity because you’re not following through on a promise that you made. It’s part of our daily discussion. It’s in our executive meetings. It’s in our management meetings. We’re constantly referencing our values.
Not because we’re telling ourselves, it’s because those values truly resonate with us and it’s a great way to keep us focused and help us make decisions. I’ll give you one specific example. We were a few months back. The whole of Michael Jackson, HBO thing came out. There was a great discussion and it quickly made its way to the executive table, “What are we going to do?” There’s a lot of Michael Jackson music in our restaurants. We love music. It’s positive and upbeat. It’s cool. It makes sense with a lot of our brands. The whole part about that, we’re big patrons of the art, Lauren in particular. We have a lot of art in our room.
We’re struggling with censoring art over the artist and did we want to get into that. At the end of the day, while there was a discussion on both sides of that, the decision was made based on our mission and it’s like, “People will start talking about that documentary, that documentary does not make people feel good. We should not play that music.” Even if you’re a fan of the music, eventually that conversation will come up. Based on our mission statement, we make people feel good. We’re not going to play that music in a restaurant. That mission statement helps guide our decision on it.
You’re right. Even if you’re a huge Michael Jackson fan, you love his music and I grew up in that era, so I still have that feel good to it. If someone else brings up the negative side that they’re feeling from it, it then takes me into the wrong place even if I love it.
As soon as you start talking about that, you will say, “I don’t want to talk about that.” That’s how we made the decision. We make decisions like that all the time based on our values and that trickles down into the training. That’s what we talked about during training. That’s what we reference. When we reference why we do things, we will reference how it’s rooted in one of our values.
I’ve always said that you have to have a maximum of 4 or 5 core values, you nailed out with five. I’ve always said that core values have to be short, easy to understand phrases, not single words, you nail that. I talked about the fact that you have to fire people if they break them. I want to ask you about that, but I’m sure you do. Where you guys take it to the next level is you’re always talking about them. You’re referring to them. You’re pointing to people in the direction of it. When you’re giving people constructive criticism or praise, you’re aligning those with the values consistently. That was a fairly Starbucks thing too, was it not?
Absolutely. The thing about Starbucks is that the mission was rewritten a few times early on. I went through two mission statements. You have to understand that Starbucks, not only do they have a great culture and treat people well and invest in training, but they were the first to offer benefits at twenty hours. A lot of their culture and competitive advantage in the labor market was based on the benefits package. They have two different stock programs. There was a stock-buying program and there was a stock grant program. What has become commonplace in the market, was not at all.
Single mothers that could drop their kids off and work five hours, four hours, five days a week, while the kids were in school and then come back, she was getting benefits for herself and she can buy benefits for the kids. To be doing that in 1996, ‘97, it was unheard of. No one was doing that. There was a tuition reimbursement program. They were early to the game on using benefits to differentiate and drive or culture and communicate how much they cared. People caught up with that eventually. Companies caught up with that eventually. They had already been entrenched in to help add to everything else, they were doing culture.
I don’t want to talk about food. The food at Postino is amazing. Your wine selection is amazing. The environment is great. I’m curious about the people side of that business wherein the restaurant space you’re hiring a lot of Gen Y, who are not transient but they’re loyal six weeks to six months at a time for their job and often even in the work that they’re doing, they’re doing 2 or 3 shifts a week. How have you guys worked around that? How many staff, roughly, would one of your locations have?
It depends on the size, but 80 to 100.
Eighty to 100 employees for a business is huge. Most companies never get past ten. Eighty to 100 is huge at one location. How many would you have on a shift, 30 or 40?
At most, we would have 30. The roster count is high because of what you described.
How do you manage that? How do you recruit for that? How do you retain them? I could sit and ask questions on this for a year.
It’s neat when you get to work for these incredible companies and Upward Projects is a fantastic, enriching opportunity. You get to learn so much about what draws people to the different companies in which you work and each one was different. I was surprised as I was doing my training and getting to know the operations at the line level. One of the things that our line-level employees reference the most certainly on the hospitality side is that they love that they can wear their own clothes. They love it. From an operating standpoint or finance standpoint, like, “I don’t have to buy uniforms. I don’t have to clean uniforms. That’s great.”
They can wear hats and a lot of people, “You can wear your own clothes but you can’t wear a hat. You can’t wear this. You can’t wear a vest to conform to these strict uniform guidelines.” Beyond safety, we don’t have a whole lot for our employees to wear what they want and express themselves. I didn’t realize how much they value it, but it wasn’t 1 or 2 employees that said it. It is always in the top two reasons our hospitality side works for us. That ability for self-expression through their clothes allows them to express themselves in service. We don’t have any cam language, there is no, “Hi, my name is John.”
If you want to say, “Hi, my name is John.” Go say, “Hi, my name is John.” That’s fine, no problem. If you don’t want to, don’t say it. They’re loose guidelines on how you talk about the menu. We want you to talk about it, but we want you to talk about the menu and what makes you happy about that. There’s no, “Hi, have you ever been to Postino before?” You don’t have to say that if you don’t want to say that. If you read the table and that’s the vibe and they look like they’re trying to figure it out, you should ask them that question, but express yourself.
As long as you’re a positive human being and you’re empathetic towards the guests, we have loose guidelines and nothing is scripted for our people and they react well to that and they want to be here because of that autonomy that we give them and the service experience. It’s not a normal restaurant gig. The other big thing is obviously we’re team service. Team service allows us to hire on culture more than we’re hiring on skill because the team will help you figure it out if you don’t have a tremendous amount of dining experience.
How do you hire for that ability to bob and weave where they can read the tables, read the room, figure it out on their own, stay within rough guidelines? What do you look for? What are the behavioral traits? What are you specifically looking for in the interviews to find those people?
If I had to think of two things that you need to have, it is curiosity and empathy. You have to be curious about people. You have to be enthused about them as they walk in and enthusiastic about why they’re there and what they hope to get, what their story is. You have to have a natural curiosity and excitement about people in general and then you have to be an empathetic human being. If you’re not, then you’re going to be terrible in any service industry. Whether you’re calling a cable company or anyone that you call in a call center, the lack of empathy is what frustrates you the most. Sure, a telephone trait frustrates you or the whole time frustrates you, but ultimately, what truly makes someone’s blood boil in service experience is the lack of empathy. Those are conversational interview questions. You can tell me about a time where you felt like this, tell me about a time where you made someone feel like that. If it doesn’t come naturally or they’re struggling and say, “I can’t think of anything.” They don’t have that empathy. Those are not hard personal traits. He’s out during an interview process.
I would be completely remiss if I did not ask about your experience working with the Wynn Group and Mandalay Bay. By the way, I apologize for your food costs. My brother used to eat at the buffet there at Mandalay Bay and I’m sure your average food cost was up extraordinarily when he would walk in. What was it like working within that organization? Steve Wynn is known for being a complete perfectionist and demanding perfection amongst the entire organization. I don’t think that would escape on the food side.
The food and beverage traditionally and his career in Las Vegas were traditionally for Steve because there are so many variables. Inevitably, as opposed to say, table games or turning hotel rooms, there are a lot more variables in food and beverage and restaurants than some of the other areas of expertise within a hotel and casino resort. Oftentimes, that will draw Steve’s eye and also, you’re passionate about and it’s visceral, food and beverage and how you connect with people through that hospitality experience, specifically in food and beverage are that people, in general, have a visceral reaction. You take someone like Steve and it’s even more amplified.
My experience with Steve was phenomenal. I ran to work once I parked my car, not because I was scared, “I got to get to the office.” I ran to work because I was that excited to get my day started and I mean it. I walked fast. I sprinted but I walked fast when I parked my car. I couldn’t wait to get into the office. I couldn’t wait to start my day. It was 10,000 volts every single day. I had a dotted line to Steve because we were building on for him. I did a lot of meetings with him and a guy named, Roger Thomas, who’s still the head of design and development while we were building on for him, those interactions.
If you had your stuff together, if you knew what we were talking about like we talked about earlier, you’d go in for a case class and all of your ducks in a row and you have all your information. If you interact with Steve, even if you’re delivering him bad news and even if you’ve made a mistake or misjudged something, it was no big deal. Some people describe him as a vicious leader and I’ve worked with him for a long time, decades. I never found them to be that way. He didn’t suffer fools and I enjoyed my time in that organization. I enjoyed it. There was a flip side. That organization was full of a lot of yes men who were conflict-avoidant and didn’t want to challenge Steve. It ultimately led to the downfall of his leadership there. No one checked him. Not no one but unfortunately, it was not enough and it led to his downfall. My experience was truly phenomenal. He is one of my favorite bosses I’ve ever worked with.
He’s a legend in the whole Las Vegas scene from the number of hotels that he built is extraordinary. Has a biography been written on him?
There are a couple of unauthorized ones out there that are good reading.
Any good one?
No. There hasn’t been. Based on the situation, there will be one, at least not anytime soon. It was difficult for me to leave MGM resorts because they had been good to me over five and a half years of my career and had treated me well. I’d always had friends in the Wynn organization. It was always a lateral move whenever they made an offer and it was a global win. That wasn’t enough for me, but the opportunity to design, build and open with Steve, the greatest innovator in the history of that city, possibly the greatest resort innovator in the history of the world, was too much to pass up. It’s something that can never be taken away. It’s an experience that was once in a lifetime and I’m glad I did it.
Were you part of opening Mandalay or opening Encore?
Did you sell a portion to private equity or to VCs? What was the transaction?
It’s a brand new entity. The transaction was a sale and then of course, the way the existing investors either got cashed out for the percentage of cash to equity. People are still in it.
I’m curious about that transition. How has the company changed because you came in right as that was happening? Has it been good? Has it been hard? Both?
It’s been phenomenal. We have a phenomenal partner in Brentwood that trusts us. The fact that the numbers are good, the comps are great and we’re doing what we said we’re going to do helps that. If we weren’t performing then perhaps it would be a painful relationship. Nothing that I can tell or that I’ve been told has changed. Things have gotten better. We’ve been supercharged with our ability to grow. We have more clear development paths for leaders from line level to entry-level management, management to general management, general management to multi-unit, multi-unit to do the lab or headquarters that clear development paths, which perhaps weren’t as well defined before we’re investing. We’re able to invest in our training, invest in scaling our culture. It’s been phenomenal.
We’ve retained the entrepreneurial spirit and rote nature of what we’ve always done and how we’ve always been. There’s always that feeling low they’re dealing in corporate. There’s nothing that we’ve done at the store level to restrict the ability to be creative for or how we interact with our line level and our employee satisfaction surveys and what we call our Net Promoter Score reflects that and our turnover reflects that. Our turnover is beating the industry average in every single category of an employee for the first time since we’ve tracked it. Even in our heyday, we’re the coolest place, the best place to be and we’re the cool kids on the block. We’re beating the industry turnover rate in every area.
Brentwood was, unless it’s the same Brentwood Capital, traditionally technology VC, were they not?
I don’t think so. They have quite a bit in the service industry, whether it’s dental offices that they have. It’s one of the largest owners of Orangetheory franchises in the country. They own a few others on Blaze Pizza. They were the original investor in Zoe’s Café. They own Veggie Grill.They also own Lazy Dog. They have a nice footprint in hospitality and service and then they have a little bit of retail. Those have certainly not been as strong as some of their hospitality positions that they’ve taken. They’ve been phenomenal. They understand the business and they’re great to work with. They have a phenomenal board with highly value added from our board. I’m getting spoiled. This is my first job where I’m answering private equity. My CFO partner tells me, “Don’t get used to this because this is not how it normally goes.”
Is it Brentwood Capital?
It’s Brentwood Partners. There’s another Brentwood.
That’s why. That’s what it is. There’s a Brentwood Capital and Brentwood Partners. That makes sense. How do you balance your time? How many total locations are you guys operating?
What’s open is we have fourteen locations. We’re opening quite a bit. We’re opening Colorado, a second in Colorado. We’re opening Tucson, which is a new market for us. Hopefully, we’ll be opening another in Houston. We’re looking at the rest of Texas and we have quite a few LOI to sign and leases to be finalized. Texas is a big area of growth for us. We’re opening a third in Colorado, for sure. That is signed and under construction. Our focus is on the Arizona, Colorado and Texas markets. Texas will be a major focus. It could represent as much of a third of our growth or our total store count by the end of 2024, 2025. We continue to grow throughout the southeast and midwest.
You’re running probably 900, 1,000 employees?
We have north of 1,000 employees.
What do you focus on in terms of training and ongoing development? Is that situational?
Because we’re scaling, we’re putting a lot of effort and money into building up that training program. We have phenomenal training. We have a great learning management system. It’s a one-man band for a while and then it was a two-man band, it was a duet. We’ve shifted that structure around a little bit and moved some people around and some seats and created an org and are structuring an organization that’s going to help us scale. The systems are easy. How you do things, manage and figure out. We can build the buildings but training this many people and maintaining the culture, attitude and feel for who we are and what we’re about, that all comes down to training and that takes the right people to train, the right investment, the right systems. We’re taking what we have and we’re working on and lead to with that. We aren’t scrapping it. We’re bolting on enhancing and then doing a full scrub for tone and look and feel to make sure that’s consistent with where we are as an organization.
What LMS are you running?
We use World Manager. It’s a white label and we call it The Mosh.
Were you guys excited to hear that the Fox Group and another restaurant chain in town, are you excited to hear that they were purchased by, was it Kara foods?
They were purchased by Cheesecake Factory.
That’s got to help you attract some employees.
We were thrilled for them. We have a great relationship with them. Our head of learning and development was the head of learning development at Fox Group and got added to our team. That was a huge gift because when she took over Fox with their twelve stores and she took it to 80 and was part of the sale of True Food and part of the sale of Flower Child, some other brands and ultimately part of the sale to the whole Cheesecake Factory. She’s an incredible add. The ironic part about it is that we interviewed her right before she took this and she wanted to join us right before she took the Fox Group job but we weren’t big enough at the time. We didn’t have an employer, so we couldn’t afford her in our G and A budget. Now the timing was right. We’re excited to have her, but we’ve always had a positive relationship with Fox. Sam has been a great mentor to Lauren and a friend of Craig. The best practice is sharing. They’re good friends in the industry and we couldn’t be more thrilled for that organization, to Sam, to get a well-deserved reward and the rest of the team as well for what they’ve built. We’re excited to see them grow. We’ve never emerged like that. There’s some fallout ability for an employee to react.
It’s good timing because you’ll get a couple of their key people if they’re not happy with the transition. It’s amazing to watch two strong restaurant groups happening in the same city. You don’t see strong restaurant groups in cities and two of them are merging quite nicely with multiple brands. It’s easy to have one brand and expand it, but to do it with multiple brands is difficult. You guys are doing an amazing job. Alex, if we were to go back to your 22-year-old self, you’re graduating from university, what word of advice would you give yourself when you were graduating that now you know to be true but you wish you’d known earlier on?
Take a breath, I would say, and walk not run. When you think about the things and how you changed as a leader and I have changed over time. I don’t regret some of the mistakes and some of the evolution that I made. It was necessary at that time. The easiest example I can give is up through being a general manager, I used what I call the hammer. It was getting stuff done. You’re either on the bus or under it. I don’t need diversity of thought because I need people that think like me, that are aligned with me. That’s how we’re going to get to where we’re going fast and beat the world. That was the mentality in Las Vegas for a long time. It was an arms race in food and beverage if you think about it when I got there in 2002.
My first job in the MGM resorts group was with Tom Colicchio and Craftsteak and opening up his first restaurant outside of New York. Before Tom was famous, his first venture was Craftsteak in the MGM. The way I made a name for myself and the way I moved up quickly was by kicking butt and absolutely doing whatever it was I had to do to be successful. It was only until I took over Mandalay Bay in 2006 that I was aware and I recognized that I could no longer use the hammer. I might need it once in a while, but I needed to diversify my skillset on how I lead people and how I get results because you can’t use that when you’re managing general managers. They’re not going to react well to it.
Also, I’ve embraced diversity of thought for two reasons. First, for me, the evolution was I recognized it was practical, meaning that now with the number of people I have to work with and the number of supervisors I need, there weren’t that many people out there available to me that were fully aligned with who I am and how I thought. That’s how it started. Over time, once I came to realize that, I started realizing the benefit of the diversity of thought and look at how supercharged we are now because we have all these different ideas. It might slow us down a bit because we need to take more time to get fully aligned, but this diversity of thought was important.
It’s tough when I think back to that 22-year-old self because if I were the leader then, that I’m the leader now, would I have outperformed everyone because I was moving as quickly? Was it necessary to behave the way I behaved, to lead the way I led in order to get where I needed to go? That’s something that I always struggle with. As much as I look back and I recognize, I empathize with general managers that I lead and I see myself in them. I see them struggling with that transition of only using a hammer. I know how they got there. I know how they got to the position they’re in where they’ve got my attention because they’re top performers because that’s all they knew.
Some of that learning has to come from experience and reflective observation, not from the future. Alex Taylor, the COO for Upward Projects, I appreciate you sharing. This was amazing.
I enjoyed it too. Thank you so much. I look forward to seeing you here in Scottsdale at Postino or Joyride.
I’ll be down there and say hi to Lauren and Craig for me as well. Do you work out of the Arcadia or near the Arcadia location at all?
I live right next to the Arcadia location. I live right at the base of Camelback Mountain. I’m right around the street. I work right next to Postino Central. The next time you’re in town, Cameron, I’ll make sure to show up and have a glass of wine with you.
I’ll be over there for sure. Thanks, Alex. I appreciate it. Take care.
About Alex Taylor
Alex was previously serving as the Senior Vice President for the Kimpton Hotel and Restaurant Group, overseeing the $400M restaurant and bar division with 80 unique concepts in 22 states and three countries.
Alex graduated from Duke University and also earned an M.B.A from the University of Texas at Austin, started his career as a Phoenix-based regional manager for Starbucks, before relocating to Las Vegas to serve as the Director of Food & Beverage for the Mandalay Bay Resort. Next, Alex was named the Executive Director of Food & Beverage for Wynn Resorts’ Encore, before leaving to launch his own two-unit restaurant concept in Las Vegas and Austin. All of which gave Alex invaluable experience in the power, and perils, of company culture.