Revamping Your Workforce: How Michael Lennox Transformed Employee Care in Hospitality

You know, they say revenue cures all ills, but if that's true, that doesn't necessarily mean that the problems have gone away, does it? Sometimes it just makes them hidden. And then when something happens like pandemic and shutdown all those systems come crashing down.

I. And so to find out we invited the founder and c e o of Electric Hospitality, Michael Lennox from Atlanta, to join Jim Taylor and me to take a sobering collective look into the hospitality industry mirror to see if there's anything that we could do to make this business better, for everyone concerned. Welcome to another episode of Turning the Table. My name is Adam Lamb and I'm here with my co-host Jim Taylor.

We're dedicated to bringing you solutions to the hospitality industry's most persistent challenges in this episode, we'll discuss real world examples of what's working in the hospitality industry and give you three actionable ideas to help restaurant owners, managers, chefs improve employee retention rates. And we'll get into all of that conversation right after these messages.

Welcome to Turning the Table, the Most Progressive Weekly podcast for today's food and beverage industry, featuring staff centric operating solutions for restaurants in the hashtag new hospitality culture. Join Jim Taylor of Benchmark 60 and Adam Lamb as they turn the tables on the prevailing operating assumptions of running a restaurant in favor of innovative solutions to our industry's most persistent challenges. Thanks for joining us and now onto the show.

This episode is made possible by e vocalize. E vocalize makes complex local digital marketing push button easy for anyone. Empower your franchises with programs that automatically optimize performance and program spending across Google, Facebook, Instagram, and TikTok. All from one easy to use collaborative marketing platform. To find out more, go to turning the table podcast.com/e vocalize, and we'd like to welcome Michael Lennox to the show.

So I'm wondering if you can kind of give us a thumbnail sketch for anybody who's living under, a rock and doesn't know anything about electric hospitality.

Also outdoor oriented concept that is an all day brand. So we have three day parts, morning, noon, night, and have coffee, breakfast tacos, and then go into kind of a light lunch with toast sandwiches. We've got a Southern California surfer burrito, chip salsa the, whole nine and full bar. And that's a really fun brand that we're actually starting to grow. We've got two new con two new locations we're working on.

Then we've got a cocktail bar called Ranger Station above Ladybird, and we also have an events and catering arm that we started last year called Electric Events. And we've got two pretty fun event spaces in town. We've got a rooftop space on the west side called the Electric Room. And then we've got another venue that is just a few months old called East Side Swimming Social Club. On the east side of town that is in an old car garage. It's got a big outdoor space and a swimming pool.

And it's it's a super fun electric hospitality in a nutshell.

When Covid hit and, regrouped for a few months, and once we reopened it, it really never got backed up beyond 20, 30% of pre covid revenues. So we made the tough call to close it in 2021. It was built in the same building as the original Mu Chacho location, which was much smaller at the time and only had daytime hours. So we ended up.

Closing Golden Eagle, expanded mu chacho into the golden eagle space and expanded the hours and really just built up the brand some more for, mu chacho and it's, taken off like a, bottle rocket set. So great. We, and it was bittersweet, but it, definitely was the right business move. All, things considered. Nice

I it, kind of takes over my brain for a few months while I'm figuring out, you know, the brand and the experience and, all of that. And so I usually have a name that jumps off the page that I've already come up with and that I start just building like a narrative around it and sort of an identity that. To me, it makes a lot of sense and, but builds sort of a persona and a character and, I just kind of imagine, hey what, would a person be that represents this brand?

What are they into, what are they like? What are they, yeah. What do they listen to? Like all, just everything. And I, suppose there's an outdoor bent. Yeah. Though I, if I'm being completely honest, I. I, you know, my wife and I have two young boys, nine and six in between them and the restaurants. I'd love to have a parallel life where I'm, you know, rock climbing or having Everest or whatever, but don't, get out as much as I might otherwise. Well, the interesting thing about

Right. So anyway, I just think that's really cool, ranger station and outdoor spaces and National Geographic as you on the radar. So that's cool.

This, idea of incorporating the outside with the inside, I think is a very powerful thing. And so to get back to the topic of the show, which is is there anything like, can the restaurant industry be changed for the better? Previous to going live, you were mentioning some of your backstory of which, you know, you spent some time as as a lawyer, but always held this idea of that you wanted to get into the hospitality business.

And so looking to you as being someone from outside the industry that came in and is now forced from within the industry, can you speak a little bit to that? Yeah,

I'm, sure most folks, it takes a while to find your calling or your path it and, that's just the lucky ones that even find that at all, right? But yeah, growing up I was told from an early age my, you know, my mom was a lawyer. My uncle was a lawyer. My grandparents and other folks in my family would always say, Hey, you'd make a great lawyer one day. I have no idea what that means. I still haven't cracked the code on, what that's all about, but Right.

I, had a pretty narrow view of what the range of options were. As a kid, you know, Hey, I thought you could grow up to be a pro athlete, maybe. But then I, ruled that out after I realized that was not gonna happen. And then I thought, all right, you gotta be a doctor or a lawyer, or maybe like work in business, whatever that means. And so all the while I, got really big into food and cooking and the restaurant world became my, my, my sort of passion and fascination from an early age.

Just my, parents got divorced when I was 12, and that led to me needing to basically figure out how we're gonna put food on the table for me and my, brothers a lot of days. And that led to, you know, cosing around in the kitchen and eventually getting decent at food. And one thing led to another. So but it wasn't until I was maybe 25, 26 and had already been practicing law for a little while that I. It dawned on me that I, this was really my, this is where I needed to spend my time and energy.

And it's not doing contracts and legal documents. It's 'cause I was working with Starbucks as a lawyer and working with them. That was literally the first time that it dawned on me, Hey, you can actually start your own business. Like entrepreneur. Being an entrepreneur is a path. And so immediately after getting into that role or position, I started brainstorming, Hey, I don't like this at all. I'm not at best. I could be a, mediocre lawyer if I worked 80 hours a week for the rest of my life.

I'd rather put that time and energy into doing something I'm passionate about. What am I passionate about? It's, food, cooking, restaurants, and just like the, hospitality experience. So started hatching plans. The BeltLine in Atlanta was. Starting to become a thing. And it's since, I think, fundamentally changed the trajectory of the city in a really positive way. But I was obsessed with it. They had just opened it. I walked it up and down.

First day they cut the ribbon, walked past this space where Ladybird is now, and it was a pretty banged up warehouse with an art gallery in it. And I'm, using that term pretty charitably. Five person red in-ground jacuzzi that you'd see in like a, cheap Vegas motel in one of the rooms. And it was pretty jacked up. But in any event I, could see it plain as day. I was like, man, there's a big outdoor space. It's right in the belt line. This is gonna be huge.

I've wanted to do an outdoor oriented concept on the belt BeltLine for a long time. Let me figure this out. Connected with the landlord. One thing led to another, signed the lease and. It, you know, 18 months later we ended up opening it. So, and I haven't, looked back ever since. Wow.

And, it's very cool that you're and, you know, we can get into this a little bit, I think, but I think it's very cool that you're able to see a space and right away be able to go, okay. Here's what needs to happen here. Here's what I like, a really strong vision in advance. Right. Because, you know, that's a big part of being able to put something together that people are gonna enjoy and come to. And it's not just about how much foot traffic

Yeah. I, can't really explain where that comes from, but I mean, that's definitely something that I've, sort of took it for granted for a while, and then it took. A while for me to put words to it that like, oh this is more of a skill and this is vision and this is there's a sort of creative aspect to it that and, not every space, it's not like I walk into any room and I'm like, wow, this could be a put a circus stent here and like away you go.

But when in the right place at the right time I, do have those light bulb moments where it's like, oh wow I can totally see it down to. What the tables and the plates and the glassware just right then and there and what happens. I just, I kind of listen to what the space tells me. 'cause it's always just, it's gonna tell you what to do if you listen close enough. And I think we've been really fortunate to, I. Stumble on.

So the, all the spaces we have honestly are pretty like funky, unique, and have a patina on character. And it's, har it's hard for me to imagine nothing against it, but just like we've been pitched a lot of new build, new construction, white box, mixed use, end cap kind of stuff. And it's like, Hey, that's great. Maybe we'll do that one day. But I, it's, my imagination is never gone hog wild. Just looking at like a gray square. So, I don't know.

It, usually requires something with, a personality and then more character. We, kind of take it from there.

And I think to a certain extent, there's a lot of us in the restaurant industry that are the frogs and the beakers. Like we think that things need to go back to the way that they were because that's really what. That's really when we felt like we could control things or we were successful then. And then Covid comes and hits, and some of us have to rethink everything that we're doing.

So I'm just curious from your standpoint, Michael, when you first got into the industry, say pre Covid and you're looking around, did it seem like a healthy environment or a healthy industry,

I think pre covid to me that it was always clear that a huge opportunity, and this was frankly one of the reasons that pulled me into the restaurant industry. I mean I, naively perhaps at the time thought that, I was like, man, I could do this. There's a lot of people out there that are not doing anything special, and I'm pretty confident I can figure this out.

And I just had strong conviction that one of the foundational ways to do that is if you are just genuine, real and do everything you can just bend over backwards to, support your team and give them a chance to succeed that people feel that like you, there's no way to fake that. And I, was not, I mean, I was a lousy manager. I. Not in a malicious way, just like I didn't know what the hell I was doing when I first started.

So I've, grown quite a bit in that regard, but that has always been just a general North Star is like, when in doubt, do right by your team and that'll, take you where you need to get to. But the, blocking and tackling of, Hey, what does that look like? And you know it's, everything from comp to benefits to training to the, soft skills of, listening and talent development and all this.

And I, think Covid has absolutely, there was a lot of, places just kind of taking their teams for granted and hey, you know, as long as we're hitting our numbers, like who caress and you can just kind of do whatever you want and kick back and, relax and. That's, to me just very shortsighted. And the party will be over. And, it's just, it's not fair to the, people that are choosing to work with you, like they could work anywhere and we're not investing in them.

I mean, we're kind of missing the point. So yeah. Covid, in a weird way has, forced more internal reflection, I think with a lot of organizations to really Yeah. And, refocus on the most important things, which is your team. Well, interesting though.

I mean, you guys did incredible things outside of your team just to help support the industry through the pandemic and beyond, right? So, I mean, that to me is I, mean, I couldn't agree with you more about taking care of your team and protecting people and do right by 'em and all of that type of stuff that you're mentioning. But tell us a little bit more about what you guys did outside of the company. 'cause that's, you know,

And there was like, you know, a little bit on the news here and there, but I think people were brushing it off and he, we had a long conversation and, he was telling me about what was happening in China. And he was like, look, I don't know anything about the restaurant industry, but you guys need to do something now. 'cause it's coming here and it's gonna be bad. He was like, every place is closed. It's, really not a good situation.

And so that hit me like a ton of bricks and I immediately started brainstorming like, Hey, what are what, the hell are we gonna do? And so where my head immediately went, was there. We're at the time about 350,000 hospitality workers that were in the metro Atlanta area. And 85% of that cohort are paycheck to paycheck. And so that certainly represents a, subset of, some of our hourly staff. But that's just a, that's a shitload of people. I mean, that's a, crazy amount of folks that Yeah.

If they're out of work for any meaningful period of time, I mean, we're talking, you know, nobody's paying their bills, nobody's eating food. I mean it's, bad news, so. I was like, Hey, I, how can we help? Well, if we're closed, the only thing that we can really do is we, have some infrastructure in the form of our kitchens. We've got talent in the form of our. Our teams, we've got vendor relationships. If everything's closed, like everything we can sort of recalibrate our model.

And so instead of making food to to, serve our customers, our guests, we need to take food in, put it out the door, just like we normally do, but we need to route it to, folks that have lost their jobs. So that led to starting this nonprofit called a t l Family Meal. And we launched it March 16th when we closed our restaurants, tons of restaurants all over the country. Closed it in 2020 and four to 5 0 1 C three. We got a board, worked closely with the Georgia Restaurant Association.

Ended up developing a, tech driven delivery platform and partnered with Lyft on, that. The Rideshare Company.

Yeah. And. And basically came up with this meal program where we would batch out a week's worth of meals for folks in, in our industry who had lost their jobs and their families, got their addresses, and then set up a, like a mail delivery route where they would, where had drivers come, pick things, pick up the meals from us at our restaurants, they would take it to addresses all over the metro area. And we raised about two and a half million dollars to support. A t l family meal and the meal.

Oh, work. And, then the restaurants that participated ended up getting reimbursed $5 a meal for each, meal they produced. Awesome. So we ended up putting out about 250,000 meals from that, part of 2020 on through

the end of 2021, and worked with about 15 other restaurants and, food businesses to. To feed a lot of folks that were in a tough spot in our industry. So really proud of that and it definitely saved our, teams and gave us a sense of purpose and, kind of kept things afloat for us and, a lot of other businesses that were involved.

Are trying to get back into, restaurants, but a lot of folks have just left the industry outright and there's a lot of just festering issues that are left over from before Covid in terms of people not having the tools they need to succeed, being underpaid, et cetera, et cetera. So we were like, yeah, we develop some programming that can upskill folks that are trying to get back into the industry. So take hourly talent.

Build them up into managers and then place them into good organizations that, that, that do good work with their people. And I think the, vision for that program was spot on. We just ended up, it had some, various things that didn't go in our favor as we were trying to pull it off and, worked with a few, like different organizations. It was honestly a little more complicated and it probably needed to be. So it. It ended up not working.

And that was hard to be like, Hey, we're doing the right thing. We've got the right idea, but this just isn't clicking for whatever reason. And so I ended up trying to recalibrate again and after, you know, four or five months we, kind of just ran outta steam and it became, it was like, Hey, I'm, we got a lot going on with our restaurants. We've done some really good work with the nonprofit. I'm super proud of it, but the time is just not now.

So we've talked a. And part of our long range vision for electric hospitality is to have like an in-house nonprofit or foundation that's, that is meal oriented and, hunger oriented. And it's jumped something I'm, definitely passionate about because I mean, to your point, there were a lot of hungry folks in our industry before Covid, and to me there's, that's just a. That's still there's a lot of unfinished business there.

And it's gonna take a pretty, you know, far reaching holistic array of solutions to, to kind of get it to the right place where that's just in the rear view. But we're not there yet. So I, definitely see some opportunities to do more in that general zone.

of go over general compensation program for electric hospitality. And I just want to use that as an illustration of what that long-term vision can look like. And some of these things probably cost. You know, more than your average, you know service, bottom line. But some of these things are also accessible right now. So, you know, you talk about compensation back of the house starts at $15 an hour. Payday is every week on Friday. Good job, paid time off.

All hourly employees are eligible for P T O after 60 days of employment. And you accrue one hour p t o for every 30 hours. Worked with an annual cap of 30 hours per pt, so you're basically giving 'em one week of vacation paid. Per year, or they can use it however they want it. So it's P T O health insurance. Full-time employees are eligible for health insurance coverage the first of the month after 30 days of employment.

We offer three different tiers of coverage through UnitedHealth Electorate Hospitality pays an equivalent of 60% of the lowest tier for single coverage. Employees are able to add immediate family members and will be responsible for the additional premium cost. 4 0 1 K. After one year of employment, full-time employees are eligible to enroll in our 4 0 1 k plan. You can elect to save up to 6% of your pre-tax wages, and electric cost will match a hundred percent up to 4% and 50% up to 6%.

Man, you guys, that's awesome.

Rewards never expired. And the last one is za Zune, which allows employees to instantly access a portion of their earned wages on demand. It's a voluntary benefit that reduces financial stress, really to cash shortfalls between paychecks and the fact that you're paying them every Friday. Again, these are very, well thought out. Additions to what would normally be a package, and I can point to quite a few restaurant companies that don't do half of this or a third of it.

You know, it's like here's your check, here's your check. See you later. Don't bother me for

You're, a hospitality guy. I've doing this longer than anything else I've done in my entire life, so, exactly.

The, we have the 4 0 1 K, but the p t o, you know the, p t O piece that you were talking about is for hourly staff. We've got a P T O program for salary managers. We also offer a $1,500 annual continuing education stipend if you're salaried. And that's mandatory, by the way. So it's like, Hey, you gotta, this is like, use it. You gotta use it. So yeah, it, some of this also too is like we. Did the, implemented the weekly payroll process. Probably four years before Covid.

And, some, a lot of this has like, grown organically over the years. It wasn't, Hey, oh shit, we gotta do something because covid just happened. What, do you do? But at, the end of the day Why, are we doing this? There's definitely a cost associated to it, right? But it's not as high as you honestly think, and it's a lot of little

stuff that I think in the aggregate adds up to significant value. And there's only the way to show people that you care. There's lots of ways to do it. Money just unfortunately, is a way that you can express that and, benefits are as well, so. I would definitely encourage any, other operators to view not, view ours as like the holy Grail. 'cause we're always, trying to make it better. But it's like, Hey, this should be an annual quarterly thing.

Like, how can we take as good of a, good care of our team as possible and know that they're gonna return the favor by sticking with you if you invest in them. Which ultimately to me, pencils out. Because it does cost money to, hire and replace people. That's what I was gonna say is that, you know, there's a bit of cost associated to what you're doing,

But yeah, it's like you gotta have all the table stakes up and perks and benefits, but you've, also gotta invest into the skills and the. The sort of career development of your, teams, and we're trying to be best in class and, the only way to do that is to, really throw it out the and, do what you gotta do.

I mean, all those critical skills that you know, The associates are telling us that's what they want. Right.

It's not, you know, some industry consultant saying, Hey, you should really do this if you wanna be best in class. Like our people are telling us what they want. And whether or not we're listening is up to us.

coming in probably doesn't have enough. Security in their own right to be able to stand for themselves and say, Hey, this is what I'm worth. And that's just me theorizing. But I do know that Amazon has kind of set that up in motion. So to me it's incredibly exhausting to have to continually turn around and train people as opposed to having a solid group of folks. And yet, you know, how do you, well, let me ask you this, Michael. So what do you do to kind of help stall complacency Yeah.

Amongst tenured staff?

One is that we've been growing quite a bit. We're working on a few new restaurant properties right now, and we're, not huge. I mean, we're bigger than a, one-off mom and pop, but we've got about 160, 170 staff across the org. So, I mean, I think growth is huge. It's just if you're not growing you're, dying in my opinion. And so having, things to grow into and look toward is just a forced opportunity to say, Hey we've got a lot of we things coming. We've got some big opportunities on the board.

How are we gonna get there? And that's, created a lot of permit from within opportunities with us. So that's one, two. Our core values are creativity, connectivity, positive energy, and that anchors, you know, virtually everything that we do. And that's we, talk about it a lot. It flows into bonusly, the staff recognition platform that we have. And it's just embedded in how we do things. And so how does that manifest itself?

Creativity, connectivity, positive energy, we, that honestly is always something that we're trying to view through the lens of continuous improvement. Like