Management | Industry News & Trends
We chatted with Erin Wade for the latest episode of The Garnish. Here are some of the highlights from that conversation.
Content warning: This post contains discussions of sexual harassment.
In 2010, attorney Erin Wade found herself craving mac and cheese after a long day at work. After throwing together her dad’s recipe, she had an “ah-ha” moment: She was ready to leave behind her law career, and her next move would be to open a restaurant centered around mac and cheese.
A year later, Homeroom was born. But, as any restaurateur could guess, the path to opening was bumpier than Wade expected.
The hurdles Wade faced were largely financial. “I had gone to banks to try to get a loan, and, at least at the time, following the financial crisis, there was no bank that would loan money to me. And I was someone with an almost perfect credit score,” she said. “But it's because it's such a volatile industry, and such a risky one to enter, banks just will not loan to people that don't at the very least have experience. But generally, they just won't loan to first-time restaurateurs, period.”
Wade was shocked at the level of risk required in opening a restaurant – she ended up using her life savings and taking on a lot of credit card debt. “It’s a really scary way to finance a restaurant, because if you go under, you're going to at some point get hit with pretty gigantic amounts of interest.”
And even though Wade and her husband built chairs, chandeliers, and anything else they could build instead of buying, Homeroom still opened with only two weeks of operating expenses in its bank account. “If it had not immediately been successful, it would have immediately failed,” said Wade.
Luckily, the restaurant, located in Oakland, CA, was a hit – turns out that serving everyone’s favorite comfort food made to order is a pretty great business model. But it wasn’t enough for Wade to open a restaurant that just served world-class mac and cheese. She also wanted it to be a safe, enjoyable place to work for people from all walks of life.
Homeroom’s commitment to building an inclusive restaurant starts at the beginning of the hiring process – starting with where they look for employees. “We seek out people with diverse life experiences. And I'm not talking just in terms of race or gender. We also work with organizations that place refugees, we hire people who are formerly incarcerated, and former foster youth. We're really looking to have a company that's as diverse as [Oakland, CA], the city that we live in, which is one of the most diverse cities in America.”
Once a new employee is hired, they’re given a two-hour cultural orientation, run by Wade herself, to emphasize the company’s commitment to inclusion and to teach it as a core value. “We talk about it, and we train for it, and then we really try to try to live it. I mean, more than 70% of our leadership team are women and people of color. We just feel like that's really important. We work in an industry where honestly, women and people of color comprise most of who is in the lowest paid positions in the industry. But once you started going up that power ladder, you start seeing a lot less women, a lot less people of color.” said Wade. “So we feel really committed to honestly just saying that that's important to us, so lots of different people raise their hands whenever we have leadership positions open up. We promote from within pretty much exclusively.”
One of the ways Homeroom is changing the status quo is by creating a more democratic work environment that strays from the traditional, hierarchical parent-child, boss-employee relationship. For example, when issues of customer harassment started popping up, staff turned to Wade to report it, but she gave them the agency to develop an anti-harassment system themselves.
“I know I've written a lot about our anti-harassment program, but our staff developed it,” said Wade. “Unfortunately, almost four years ago, a number of female staff members emailed me with the topic saying ‘Harassment.’ And I was like, ‘Oh God, what is going on?’ And you know, it turned out that we weren't having internal harassment, which I know has been in the press a lot lately. But actually what they were experiencing was harassment from customers. And you know, pretty much every woman who worked for us had a story, which was super sad. I had no idea. I was shocked. It was the first time anyone had ever reported it. So it was like, gosh, this is a pretty big deal – let's get together and have a problem-solving session. And so we did. Maybe 15 to 20 women on our staff showed up for that meeting and came up with this system that we use to this day to deal with harassment.”
The system is simple but extremely effective. “What we came up with is this color-coded system where a yellow refers to behavior that is nothing more than a vibe, just a creepy vibe that you get. An orange is creepy vibe plus ambiguous language. Something, for example, like ‘I like your shirt’ – depending on how someone says it, it could be super gross or completely benign, right? And then a red is overtly sexual language – ‘You look sexy in that shirt’ – or touching.”
During a shift, the affected staff member reports the color to their manager — they don’t have to explain what happened right away. “In the case of a yellow or an orange, the manager just goes in and takes over the table. And in the case of a red, and the manager goes in, takes over the table, and asks the guests to leave.”
It’s an approach that cuts off harassment at the source, blocking it from escalating. “What's been so amazing is that we came up with it as a way of dealing with the problem, but what it's actually done is really help curb the problem,” explained Wade. “No one really walks into a restaurant and sticks their hand up someone's shirt, which is the incident that set this off. But what they do do is they start by checking that person out. And then they lob low-level inappropriate comments at them. They're testing the waters. So when you change the power dynamic at that [point], it tends to stop it from escalating into a bad situation.”
Implementing the system has shown a marked reduction in incidents of harassment in the restaurant. “When we first held that meeting, sadly, every woman had a red story,” said Wade. “Now, they're happening maybe once a year. It's really uncommon. And it's a really elegant system ‘cause it's super easy to use. It's not complicated. You can use it on the floor of a busy restaurant. And, most importantly, it doesn't rely on managerial judgment of ‘is this harassment/is this not.’”
Wade wrote an op-ed in the Washington Post about this system, believing that by getting it out there and showing how to implement it, she could immediately help solve the problem in other restaurants. However, she realized that the implicit trust she has in her staff is not present everywhere, and this level of trust is a crucial ingredient in the system working. She’s working on a training piece for other restaurants to help them get there. “We do just generally believe our staff, you know, and the system is set up to do that, and a lot of restaurants are not really based on a model of trust and transparency. But I want to get restaurants that maybe aren't based on that model to still use this, because I think it can make a huge, huge change our industry if more restaurants picked it up.”
The framework is also applied internally, said Wade, for identifying internal harassment issues, though it’s not as easy to manage because you can’t kick out an employee in the same way that a customer can be asked to leave. That being said, Wade explains “it's still a helpful framework for putting people's behavior into buckets, but what a company wants to do with behavior in each of those buckets is very individual to each organization.”
When it comes to compensation, Homeroom also goes beyond industry norms to make sure staff feel appreciated. There’s a weekly meeting where management discusses the restaurant’s finances with the staff, but that’s only the beginning. “We're a mission-driven company that talks about our values and our purpose at work, because that's really what makes work interesting and exciting every day. But I think that we also check some of the other boxes – we pay really well,” said Wade. “Our starting wage is close to $17 an hour. If they’re here for more than a year, we do annual bonuses based on our profit – it's a form of profit sharing.”
High-level positions are filled from within, which is a great way to keep turnover low and signal to new staff they have a reason to stick around. “If you know that you're working somewhere that you’re valued, where you have a future, that has a purpose and a mission, you know, I think you’ll always have great employees, no matter what the market looks like.”
In this low-margin, high-stress business, it can be tough to decide to do things differently when it comes to restaurant management and all it encompasses – from hiring to compensation to training and beyond. But learning about restaurants like Homeroom is a great first step.
You can learn more about how Homeroom is challenging the status quo in Erin Wade’s episode of The Garnish, which you can find wherever you get your podcasts.
Management | Industry News & Trends