The Idea in Brief It’s good that a recession forces businesses to operate more efficiently, but many panic and make damaging trade-offs. Alice Waters runs a thriftier kitchen these days at Chez Panisse, but she still gives top priority to quality and sustainability, both indispensable to the brand. In contrast to the many business owners who are cutting investments in staff, Waters continues to devote resources to employee engagement, which has long been critical to the restaurant’s survival. For instance, Chez Panisse has job-sharing chefs who use their extra days off to visit markets, create menus, and maintain work/life balance. The economy won’t matter if we can’t feed ourselves. Supporting local farmers is critical, Waters says, because they’re taking care of the land for the next generation. Chefs at even the highest-end restaurants were still using frozen meat and produce in 1971, the year that Alice Waters founded Chez Panisse, in Berkeley, California. It was the perfect moment to break culinary ground with her fresh, simply prepared food. Influenced by dishes she had tasted in Europe and Turkey, and featuring local ingredients, her style of cooking became known as California cuisine. Waters went on to launch a sociopolitical movement based on her ideas about food and community, fueling her own commercial success and making room for others in the industry to follow her example. These days her support of organic practices and her close relationships with area farmers and other suppliers have put her in sync with the business world’s focus on sustainability. Even so, her critics wonder whether her expectations for consumers and for the food industry as a whole are realistic, given the state of the economy. Indeed, Waters’s unwavering commitment to quality presented some steep business challenges in the past. She often gave management authority to people who were more financially minded than she, only to veto them when they tried to prevent her from spending so extravagantly on, say, the perfect cardoon. Bankruptcy was right around the corner more than a few times. How, then, has Chez Panisse managed not only to stay afloat but to become regarded as one of the best restaurants in the world? And what are its prospects for survival in and beyond the current recession? Waters shares her thoughts about these and other questions in this edited interview with HBR. You’ve always given top priority to high-quality ingredients. Have you had to change your mind-set now that we’re in a full-blown recession? Not one bit. I believe more than ever that we need to buy real food from those who are taking care of the land. We need to support them and to feed ourselves in a wholesome, delicious way. I think that’s going to be the basis for rebuilding an economy that takes care of the land for the next generation of people, who will be making their own decisions. And I hope they will decide it’s more important to nourish their families than to buy extra cell phones and pairs of gym shoes. Many people would call Chez Panisse a luxury business. What sorts of things are you doing to survive the downturn? We’ve been in business nearly 38 years. We have customers who consider us family, and we consider them family. I hope they will continue to support us. So far, they have. For our own financial protection, we’ve tightened up in ways that are very good for the running of the restaurant. When a person leaves the staff, we’re trying not to hire somebody else—we’re trying to make it work with fewer people. We’re thinking about every little thing that we have ever used in excess. We’re becoming a thrifty kitchen, which we always should have been. It’s also about recycling—we’ve always done it, but we’re doing it with more energy and enthusiasm right now. So you’re responding mostly by becoming more efficient and cutting here and there? That’s really the main thing we’re doing. We need to support our suppliers—we’re continuing to do that. Fortunately, the numbers at the restaurant aren’t really down. We are still successful in that sense, knock on wood. What were some of the business challenges you faced when you started the restaurant? I wasn’t professionally trained at all. I’d just been a waitress during college. I didn’t have any framework, so I was shooting from the hip. But I was empowered, certainly, by the Free Speech movement in Berkeley. There was a change in the world. It wasn’t only about stopping the Vietnam War but about big, big vision. I was very idealistic. I completely believed that if I opened a restaurant that was good enough, people would just come. And I thought I didn’t need to know anything more. I didn’t want to borrow money from the bank, because I didn’t want to be beholden to that institution. I borrowed from my friends. My parents mortgaged their house. I paid the bills, but I still never paid any attention to money. It absolutely wasn’t about that—it still isn’t. But fortunately we made some along the way. Why did Chez Panisse succeed against financial odds in the past? Well, I think it was about quality. I wanted people to like it, and I was not willing to compromise that under any circumstances. I’ve been like that all along. If it takes that much olive oil, it takes that much olive oil. I was simply not willing to compromise. If it takes that much olive oil, it takes that much olive oil. Another thing that helped was that we went right to the doors of the people who were taking care of the land. We met them and became friends with them, and we knew we couldn’t live without them. We needed their food, and they needed our money. I’ve never argued over price. They do the hardest work, and they need to be paid, whatever it costs. It’s quicker and easier if I use a computer and get the vegetables delivered to the back door of the restaurant, but I like talking to Bob Canard. He’s an eccentric farmer up in Sonoma, and his wife used to be a cook at Chez Panisse. I want to hear what they think I should cook from their farm. I want their opinion about what is best. It’s not a waste of my time. We have a lot of customers who trust us to have this engagement. You’ve mentioned some ways that sustainability might help you with the bottom line. Are there also ways it’s making profitability more difficult? I can’t imagine doing things any other way. It’s a pleasure to do business with people who care about the same things you do. We and our suppliers are a good extended family, and customers get that. We’ve never done any advertising, but I’ve been out there talking the talk and writing about it and thinking about it for many, many years, and that has encouraged people to come and taste. And once they taste, they seem to come back. How has your role in the Slow Food movement affected the restaurant’s performance? It’s really hard to say, because we have a very small place that’s pretty much been full since the beginning. We serve 500 people a day. Maybe my social involvement brings in more customers at an off time of the year, and maybe it continues to bring them during this recession. But I think that people who want to feel that they’re part of this bigger movement know that we’re connected to it and for that reason want to support us. The work I’ve done in the public schools in Berkeley through the Edible Schoolyard lunch program has not necessarily brought more people into the restaurant, but it has brought people into the ideas of the restaurant, into its philosophy. So it’s all part of a big picture of what I would like to call success. How do you keep your staff motivated and loyal? I’ve done some really unorthodox things. We have two chefs I wanted to have work at Chez Panisse who have other interests. I thought that maybe I could persuade them to join us if I let them share the job. The main chefs downstairs each work six months on and six months off, but I pay them for the whole year. Not as much as a superstar chef, but pretty well. When they’re not working at Chez Panisse, they’re in France. One teaches in Bordeaux, and the other goes to Paris. They travel and then come back to the restaurant. I also have the chefs upstairs, in the café, sharing a job. We’re open six days a week. Well, there are always at least two days you don’t have any ideas—that’s human nature. So I hired the two café chefs. They each come to work three days a week but get paid for five. On the other two days they go to the markets, they work on their meals, they do whatever they do. They stay with the restaurant for a very long time, because they have time to have a life with their families. Will you preserve the job sharing despite the economy? Oh, yes. I don’t think I’ll ever change that. I really believe in it. It adds life to the restaurant, and that energy is important. People who are excited about their jobs communicate that to the customer. When your employees have been with you for 20 or 25 years, you need to find ways to reinspire them, and I think the job sharing does that very effectively. How have your leadership skills helped you survive difficult times? I have absolutely changed from my shoot-from-the-hip style in the early days. Now I see the importance of diplomacy. Not of compromise—I haven’t done that. But I’m trying to be much more inclusive. I’ve had people who are very good diplomats do that work for me in the day-to-day operations. I’m too impatient. I know what I don’t do well, so I have someone else take care of it, because I know that it’s essential. Every year, when we come to the birthday of the restaurant, I ask myself, “Do I really want to do it anymore?” This work takes so much from you, and you want to like it. I think the attitude of improvisation and a willingness to change have given the whole organization a kind of nimbleness. I always say things like “Let’s pack up and go to Rome.” We’ve gone around the country and done a lot of dinners because we want to feed people ideas rather than talk to them in a conference hall. So I bring a team with me, and we collaborate with people who live there, and we try to come up with something that’s greater than the sum of the parts. Those dinners have been very successful. And so I think the restaurant could lift itself up and move, adapt to the needs of the times. We could transform ourselves into a soup kitchen or move to a farm. There’s a lot of flexibility in the big vision of what Chez Panisse is.
