How Shake Shack Drives Innovation
Five-time tech entrepreneur, hyper-growth CEO, NY Times bestselling author and venture capitalist.
Do you prefer the crispy mozzarella, tempura watercress, and black garlic mayonnaise cheeseburger or the pumpkin mustard, bacon, cranberries, and sage hot dog? For something sweet, would you rather try the black sesame milkshake, the pancake and bacon frozen custard, or stick with a cold brew float? What sounds like a scene from the Culinary Institute of Paris is actually playing out at the Shake Shack over on Varick Street in Greenwich Village, Manhattan.
These strange dishes are not on the burger chain's permanent menu. Instead, they emerge from the Shake Shack Innovation Kitchen located in the basement directly underneath the bustling restaurant. Opened in 2018, the underground kitchen is a culinary playground, equipped with a cornucopia of high-tech gear, unusual ingredients, and the ethos of creative experimentation.
The Innovation Kitchen is the brainchild of Shake Shack's culinary director, Mark Rosati. He explains, "One of the biggest things any company has to think about as it grows is how to stay nimble and able to push boundaries. We ask ourselves, if we started Shake Shack today, what would we do differently?"
In fact, the company looks nothing like it did when it got its start. In 2001, high-end restaurateur Danny Meyer launched a hot dog stand in Madison Square Park, adjacent to one of his swanky upscale restaurants. It was fun for him to offer his signature culinary playfulness at a lower cost and faster speed compared to his far pricier dining options at the Gramercy Tavern, Union Square Cafe, or Maialino Mare. As the hot dog stand grew in popularity, Danny added burgers and crinkle-cut fries to the menu, eventually changing the name to Shake Shack in 2004. A long way from its humble roots, the burger chain has expanded to more than 250 locations around the world, enjoys more than $600 million of annual revenue, and boasts a market value of more than $3 billion. The company's per-store sales are more than double that of an average McDonald's location, and its growth rate is giving Ronald McDonald some serious heartburn.
Despite their runaway success, the Shake Shack team works hard to maintain the creativity of a startup. At corporate headquarters, a prominent sign hangs on the wall reinforcing their entrepreneurial roots: "The bigger you get, the smaller you have to act." To drive the principles of creative exploration, Shake Shack's wild success comes directly from a core principle of everyday innovators: open a test kitchen.
From regional restaurants to global conglomerates, food industry leaders rely on test kitchens to drive innovation. The industry's equivalent of a scientific laboratory, they're designed to provide a safe, well-equipped environment for inventive thinking. Recognizing it would be impossible to dream up a complex new dish during the Saturday evening dinner rush, test kitchens provide the time and resources required to invent a delicious future. From unrestricted ideation sessions to rigorous testing and measurement protocols, test kitchens drive growth while reducing risk.
With a live restaurant only a flight of stairs away, the five-person crew at Shake Shack's test kitchen has access to immediate feedback from real customers. This allows the team to cook up wild ideas, test them quickly, and then have customers play a crucial role in the invention process. "There are risks when you bring customers into the testing process," Rosati explains, "but in the end, their feedback will always make the food better."
Inside the Innovation Kitchen, the chefs are cooking up a wide array of Big Little Breakthroughs. In addition to running experiments on new menu items, the team also spends time innovating on process improvements, training upgrades, and customer experience enhancements. How will customers respond to a digital self-serve ordering kiosk? What would happen if we used 4 percent more seasoning during the burger prep stage? How could we shave just five seconds off the cooking process? Ideate, experiment, refine. Rinse and repeat.
Shake Shack's remarkable success is directly tied to their experimentation mindset. Whether they're exploring something really odd, like the time they created a hot dog poached in sparkling wine and topped it with caviar, creme fraiche, and crumbled potato chips, or they're investigating a more efficient way to clean the countertops at the end of a shift, the company's test kitchen approach has helped them become one of the most beloved restaurant chains in the world.
Luckily, you don't need to be in the food business to open a test kitchen. Lawyers conduct mock trials to test out their arguments in a safe environment before making their case to a live jury. Surgeons now hone their skills using augmented reality goggles as they practice experimental procedures on robotic patients. Car companies prefer to bang up test dummies rather than real customers, while life insurance sales professionals conduct simulated presentations so they can optimize their approach before stepping in front of paying customers.
Your test kitchen may be a designated physical space like Shake Shack's Innovation Kitchen, or it could be a metaphorical one that lives only in the hearts and minds of your team. The common thread is a safe, well-equipped environment where you can invent, test, and refine.
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