People Over Profit: Leading with Intention, Customer Transparency, and the Timelessness of Breaking Bread

Mark Canlis is the co-owner of Canlis, a 70-year-old fine dining restaurant located in Seattle. In this episode, we discuss the true essence of hospitality and how it is translated into the restaurant industry today, important questions restaurateurs should ask themselves throughout their careers, how Canlis pivoted business models throughout the pandemic, and what it takes to become a business that withstands the test of time.

Key Takeaways

1. It’s critical to take time to reflect and ask yourself the right questions in order to align your restaurant’s mission and purpose. 

2. Don’t be afraid to take risks, make pivots, and run into mistakes. Be open with your guests about your business’ shortcomings. It will build a trusting relationship with your guests in the long run.

3. A restaurant will always succeed if it has the ability to connect to the people who walk in their front doors.

Transcript

Mark Canlis: We closed on March 14th and then reopened 471 days later and 18 business models later.

Matt Levin: Inspirational stories, actionable business tips, and real-world strategies.

Join us as today's guest shares how you can make your business more resilient in an unpredictable world.

Hi everyone. I'm Matt Levin and you're listening to The Resilient Restaurant podcast.

Today I'm joined by Mark Canlis, Co-owner of Canlis, a 70-year-old, fine dining restaurant located in Seattle. We discuss the true essence of hospitality and how it is translated into the restaurant industry today, important questions restaurateurs should ask themselves throughout their careers, how Canlis pivoted business models throughout the pandemic, and what it takes to become a business that withstands the test of time.

About Canlis

Matt Levin: Mark, thank you so much for joining us today.

Mark Canlis: Matt, I am happy to be here.

Matt Levin: Can you tell us a little bit, to kick us off, just a little bit around your background and a little bit of the history of Canlis?

Mark Canlis: Yeah, I grew up in this industry. Canlis is a 70-year-old restaurant that my grandfather started. My parents ran it for a long time. I've been doing it for the last 18 years with my brother. So, this is a family thing and I didn't think I'd end up here interestingly enough, but we did and I've been loving it. Especially recently it's been pretty exciting, pretty dynamic.

Canlis Pivots during COVID-19

Matt Levin: Absolutely. So I want to talk a little bit about some of the struggles and adversity that you had, particularly at the beginning of COVID. Could you take us back a little bit in time to your first thoughts that you had in mid-March 2020 when you realized you had to shut the business down?

Mark Canlis: Yeah. I remember -- we had friends in China -- I remember them dining on Table37, showing pictures on an iPhone and us just sort of being shocked at like, we'd seen the headlines and whatnot, but it's suddenly made real when you're talking to someone in person about it, and it just dawned on us like, hey, all of the rules to the game are about to change and they're going to change while we're playing it.

We really need to think about what it is that we want our company to do. What is the mission of this place and what happens if really we can't be a restaurant, then we just fold up and sit this one out, or can we stay on mission? So at Canlis we're into hospitality and that kind of thing. But I think of it as a by-product of what we're trying to do with the mission and that's to inspire people to turn toward one another. All people.

I remember talking to a guest and using the word ‘social distancing’, and they looked at me like, “What, what is that?” All of these new terms are coming out and people are starting to just wrap their minds around what would it look like if this thing in China turned into a pandemic that would impact each of us personally. And we just thought, Hmm, this could be a horrible time to run a restaurant, but an amazing time to continue to inspire people to turn towards one another. So it's really kind of how it went. We started looking at this as a game like we're playing a game and the referee is changing the rules while we're playing it. And we just need to understand what those new rules are and adjust the way that we play.

And pretty quickly that major adjustment was to shut the restaurant down. We closed on March 14th and then reopened 471 days later and 18 business models later. The same restaurant, but obviously very different people. We didn't know we were getting into it for that long, nobody did, but we just took it a day at a time.



It’s been fairly documented at this point, but we opened up two days later as a burger restaurant, right? A drive-through burger operation and then a bagel shed and then a delivery service and then a bingo show and so on and so on. So, to me, that was just an effort to stay on mission. I don't think we needed a fine dining restaurant to do that, we just needed to keep our head in the game.

Matt Levin: Like you said, some of the pivots you've made have been well-documented in the restaurant press, but I just want to get into some of the psychology. I think it helps people understand a little bit how you think and how you operate. When you made these changes, were you thinking, we're just going to throw stuff at the wall and see what sticks, or was there some sort of master plan with it? Were some of the pivots the natural thing to do because it fits in the mission, or was it like, you know, the referee’s changing the games, we're just going to go crazy and pull stuff out of a hat?

Mark Canlis: You should see the wall. We threw a lot of stuff at it. Sometimes that was brainstorming, sometimes that might've been out of frustration. I think our restaurant is doing that all the time. So let's just back up a little bit. If you're a 70-year-old fine dining restaurant, this is not the first time you've had to sort of look at the mirror and say, alright, who am I?

You know, that sort of Zoolander and the puddle moment. We do that a lot and this was that exercise. I think it's this understanding of self a little bit. I think, by the way, most of hospitality comes from an understanding of self and like, who is Canlis? What is this restaurant? How does the city perceive it? What relationship do we have with our guests, with our neighbors, with the companies and organizations in this town? And if this is the way they see the world, if this is what they're going through right now, and our role is to serve them, well then we need to serve them in that place.

It was just the exercise of saying, “What are they going through, and how can we meet them in that way?” We've got 110 employees for 33 tables. Sometimes I think it's the model of inefficiency. There are people everywhere and it just dawned on us: well, wait a second. We're not serving anyone by doing that. So we were one of the first restaurants in the country to shut down. There was great disagreement at that time on whether or not that was a good idea.

Some places, our country's still wrestling with that. It's not an easy decision. But it certainly wasn't easy to be in Seattle and no one had done this yet. And just to say, “We're going to shut our company down. We're going to essentially cancel hundreds and hundreds of reservations.” I mailed $450,000 of deposits back to my guests. I guess we don't mail them anymore, you can do that with a button.

But it was contentious and it was risky. And yet at the same time, it just seemed like that was the very best way to serve them. And that's what fine dining is. Fine dining is the most considered form of hospitality and so it made complete sense then. If we can't be a restaurant, if a pandemic is a really bad time for a fine dining restaurant, what's it a good time for? And as it turns out, it was a good time for drive-throughs. People can stay in their cars, they can just drive on through the restaurant and we'll just come out and greet them with a burger.

So, I'd love to tell you that like, oh, we were so strategic and prescient in the way that we -- but, no we were completely going about this just sort of in a series of if-then statements. If this is the case if this is true, then how do we respond to it?

And I don't know if that's any different than any other relationship. If this is the way that my wife is feeling, then how do I respond to that? If this is the way I'm feeling today, then what is a good way to honor that and to have that be a new truth for me? So a company operates the same way that a person does, and I just think you have to allow it to be real and to be honest in that way.

If anything, the whole pandemic thing taught us that, that it's actually safe to be seen and known for who you really are. And that's what Canlis did in the pandemic. It just allowed itself to be seen as a restaurant that didn't have it all put together, but it’s still going to do its best to just stay in the game somehow.

Finding Your Sense of Self and Identity in a Restaurant

Matt Levin: So you mentioned something that I think is really interesting around knowing your sense of self and identity. That's obviously important on an individual level to determine how you want to operate, but also as a business, it's really critically important.

There's something incredibly challenging at the same time, you have to be very vulnerable and look inward to be able to discover this both on a personal and business level. To do that, you really have to pull away from the day-to-day grind and engage in a different mode of thinking, and answering really deep questions about who you are and what you want to be.

Is this a process that you do on an annual basis? Is it something that's set in motion 70 years ago and you just continue to operate on those principles?

Mark Canlis: Yes is the answer. We don't do it on an annual basis in our company, it's near-weekly. To answer that we have to back up a little bit and just look at hospitality in general.

I feel like when we say that word, it isn't necessarily about the guests all the time. It is about doing work inside yourself. The most beautiful forms of hospitality come when we are making space for others. Carving out space for whoever that is the capital O other, right? The stranger, the person that's not like you and doesn't think like you, doesn't act like you, doesn't believe the same things that you believe.

And that work is internal work. That's looking in the mirror and saying, “Wait a second, I want to be the kind of person that still stays present with, still stays turned towards this person, even though they are different than me. Maybe even because they're different."

It means that we ourselves have to be the kind of people that say, I need this. I need something, someone to pull me outside of my own perspective. And it's healthy for me. What it is is a certain level of humility. If we look at it, the reciprocal of it, the inability or the unwillingness to do that is a remarkable level of pride that I would never want to say out loud.

Like I would never wear a t-shirt that says, “I refuse to consider anyone else. I am right,” right? You're essentially saying “I'm God,” right? So you wouldn't put that on a t-shirt and yet sometimes we find ourselves and societally, certainly we see this in culture all the time, acting that way. So hospitality first and foremost is an attitude within that says, “Hey, I want to be the kind of person that will embrace the other.”



If you look at where the thing comes from, right? Like we're talking about two or 3000 years ago. We're talking about before hotels and restaurants. We're talking about people traveling on roads between villages and tribes and towns and countries.

It comes from a place of vulnerability. You're a traveler, you're on the road. Maybe you run out of something, maybe it's daylight and you need a place to stay for the night. Whatever it is, these travels were knocking on doors and the outsides of towns and stuff, and saying, “Hey, I'm kind of in a hard way here. Could you help?”

And this is a remarkable thing about hospitality. So, in order to take me in, you have to make space for me. And hospitality at its core is this moment when your mind says, “I don't know about that. I don't understand this person. I've never met a person like this. This doesn't seem wise and safe.”

That's your mind. You would need your mind; it's what kept you from getting eaten by saber tooth tigers and stuff. But your heart, the thing that makes you human, is saying, “It doesn't feel right to turn them away. Like in another day, in another story, if the chips had fallen differently, I could be that guy needing help.”

All of hospitality is the heart saying, “You know what? Take a risk because you want to. Because you believe that that's the person that you want to be.” You were in a place of power. You're in your home. And I'm in a place of vulnerability. And hospitality is you exchanging your power, your authority for my vulnerability. That's what's going on.

That's what we're talking about when we say the word hospitality. So let's not pretend that it's something else.

If you fast forward into the pandemic, what Canlis was saying is, how do we maintain this relationship we have with one another as a staff and with Seattle? How do we be trustworthy?

And it seemed like the most trustworthy thing we could do on day one of the pandemic was to create jobs for our staff. It's before PPP and the Restaurant Act and all the other things that came along. We just thought, “We're going to make up jobs here.” Like, that is now the most important thing I can do. We just started making stuff up, but that wasn't different than what Canlis was, that was Canlis being even more Canlis.

We were just producing something different. Burgers instead of fancy meals. It is all the same conversation. It starts from a place of saying, what do we believe in, what is our mind telling us, and then what is our heart telling us, and then just acting out of that new truth. The truth of the matter is, is that if we don't do something here, we're going to lay off 110 people, and they're going to be at a hard spot going into a very difficult season. That doesn't feel good to me. So, let's figure something else out because I don't want to go down that road.

Defining Your Restaurant's Identity and Purpose

Matt Levin: If you were to advise newer operators or people who may not have crystallized a sense of true identity around what their business is or what they stand for, how do you recommend people do that? Like, are there tactics or techniques or behaviors that you would suggest to people?

Mark Canlis: I would have recommended they do that before they started in the restaurant. So I know that's not the answer that he was looking for. Like wait, no, I'm already here.

So for us, the most defining thing was just to say, what's the point of this company? And maybe that was forced on us a little bit because my brother and I, we’re third-generation, we’re taking over this thing, and anytime you're in generational transfer with business, it's just helpful to be really clear about, Hey, what are we all doing this for?

So the whole family who's involved is on the same page. We had the opportunity to buy the land that the restaurant is sitting on in year 57 of this company's history. And incredibly, it's worth way more if the restaurant burns down than it is if we actually operate the restaurant. So we had a bunch of appraisers come out and be like, “Hey, you know you guys like barely beat inflation here with the whole profitability thing. If this thing just went away, you could build condos.”

So it was like, alright, well, does this exist to make money? Or does it exist for something else? In whatever your life's work is, it's a worthwhile exercise to say, what am I really doing here? You're not just making a paycheck. Paycheck is just a rule to the game.

When we bought the land, we were like, if there's something higher than making money here, then let's be really specific about what that is. And if we go down doing that thing, then maybe that's okay. Our whole thing is to inspire people to turn toward one another. If we fail doing that, how glorious would that be? And I didn't want to turn around one day and feel like I'd spent my life's work doing something I didn't believe in because I was pursuing a paycheck, I was pursuing some lifestyle that at the end of the day was less important than some of the other things.

The number one thing you can do, I think particularly when you're running a company, is be crystal clear about why that company exists. So at Canlis, we think of profitability as just a kind of a rule to the game. It's like, hey, you got to make some money or you're going to foreclose on your loan and mortgage, and people are gonna take your stuff. But after that, it's a rule you can break.



And we thought, well, maybe the pandemic is a year where we break that rule. Maybe this is not the year to make money. So our whole goal was just, what if we could just break even and hire our staff? And that kind of clarity is helpful. It allows you to say, okay, well this seems really reckless, but let's do it anyway. Like it's really on-brand for us. It's really allowing us to be the kind of people we want to be. Not in spite of our work, but because of our work and that's a really important distinction to make. I don't believe that your work has to be a distraction from your life. I don't believe that your work has to keep you from becoming the kind of human being you hope to become.

You got to start with, like, what is the point of the company? And personally, you have to start with what really matters to me? Who am I becoming as a human being?

How Canlis Withstands the Test of Time

Matt Levin: And my next question kind of builds off this a bit, could be related to some of those things or not. Why do you think that Canlis has been around for 70 years continuously operating in an industry that has a 90% failure rate in the first year?

Mark Canlis: Frankly at the mercy and the behest of the people of the city, I think they still want it. The restaurant is in a relationship with its people. The reason people dine at Canlis is not for any other singular reason that's more important than this: they trust it.

Think of how vulnerable you are walking into a fine dining restaurant. It's not going to be cheap. It's expensive. And you're often going for a special occasion. Last night, there was a woman coming in who was planning on having a baby in the next week or so.

And she was celebrating her birthday early before the rest of her birthdays are sort of, you know, they have a kid. And you don't get that night back. Again, like there's that one night before we had our first child and we got to celebrate together, it was just the two of us. You bring in your daughter for her 16th birthday. There's only one of those, she doesn't get it back. So you want to spend that really carefully.

And in a restaurant, you're bringing these moments, these snapshots in time that only get to happen once. So, you're really in a place of vulnerability. And I think when we're going out to eat, there's something inside of us. It's like, Okay, well this is what the night means to me, what's the right spot for this occasion? It's almost like a wine pairing like you're thinking about yourself and your own family and sort of your needs.

At the end of the day, we go to the places that we trust. The people you spend time with, the ones that you really gravitate towards, it's because they're safe to you. You trust them. They've earned that. And a business is no different. Any business is no different. I believe that Canlis is here because the city still trusts it. And that's like any relationship. It takes a lot of work and it's so worthwhile.

Earning Your Guests' Trust

Matt Levin: There’s this classic business comment: if there's one business you shouldn't do is to try to open a fine dining restaurant in a major U.S. city because the likelihood of profitability is basically lower than anywhere else, and the competition is basically infinite. And for you to have maintained that trust and not violated the city's trust, how much of that is up to operational discipline, staffing ratios, processes that you've developed, the way you do table touches, quality standards, etc., and how much of that is from a softer, cultural, emotional aspects of how you operate?

Mark Canlis: Those are rules to the game. Again, like profitability, like the rules you gotta follow and you can break. There’s a rule in restaurants that says your bathrooms should be clean. They don't have to be. People might forgive that, but it's a good, general rule to follow.

There’s a rule that says you shouldn't kill people by serving them pickles if they're allergic to pickles. Like that's a good rule to follow, you know? Those are all rules, those aren't strategies for winning the game.

Those are just general rules, like hey, pay attention to service it matters to people, right? Those kinds of things. So we don't focus on the rules. No good team ever won anything great by focusing on the rules. You gotta focus on the strategy, and those strategies are particularly in restaurants, but I think most of business is this way, I think most of it is about relationships.

That strategy is how do we build, grow, nurture, maintain a relationship? And to your point, we break that trust all the time. We're letting people down constantly. So then how honest are we? Canlis is an amazing restaurant. But the bottom line is, I guarantee you last night, I guarantee you, we let someone down.

Are we willing to say, “Yeah, we could have done that better and we're bummed and we're sad that we didn't. That’s Canlis. Canlis is sad with you. It's sad that it wasn't as good as you had hoped it to be. That's brilliant hospitality. So I think in any relationship you've got to honestly just say to yourself, like, yeah, shoot, man, empathetically aware of the person in front of me that says, “I see you. I hear you. I celebrate with you and I grieve with you and I'm along for this journey.”

You're doing that for your staff and then your staff is doing that with your guests. And you follow some of those rules and sure enough, if you're lucky, people keep coming back to eat, and you haven't burned the place down, and trust me, we've almost done that also a few times.

We feel really fortunate. Sometimes it's like strictly by God's grace that I think we are still even here. But you work your ass off and show up, honestly every day. I'm like, “Okay, here we go. What is today going to bring?” And this last year and a half, it’s brought a lot.

Changes in the Restaurant Industry

Matt Levin: That's fascinating. So kind of taking a piece of that and zooming out, if you were to extrapolate some sort of universal rules for hospitality, what are the things that you think will change around those rules in the future and what are timeless things and will just absolutely not?

Mark Canlis: What is yummy will change. The way to source, I hope, will change. It is changing, needs to change more. What is beautiful will change. The art on your walls to the way you plate a dish to the dish itself, to the fabric that it's sitting on. If you have a tablecloth or wood under the table, all of those things will change.

What is consistent to human nature will not. Our desire for relationship, our desire to be together, our desire and need to break bread. All of those things are not new. They've been around forever. So as a company, you want to be aiming for satiating those things that are not changing. The rest of the stuff just kind of comes and goes and you’ve got to pay attention to it, but, that's not super difficult to do.

I think what's difficult is to build a team that is aware of, conscious of their own humanity and who they are becoming. And so a restaurant will always succeed if it has the ability to connect to the people who walk in the front doors. And what is it gonna take to connect? It's always going to be different person to person, generation to generation.

We'll modify the way that we connect, but we're doing the same thing: allowing ourselves to be seen or allowing ourselves to be known. And we're hoping to see and know the other and make no mistake like that is what's happening in a restaurant. At the core level strategically, that's what's happening.

Outro

Matt Levin: Mark, thank you so much for joining us today. This was incredible. I've been listening to you this whole time and it's made me start to think about evaluating how I want to approach my business in my life as well. I really appreciate you spending this time with me.

Mark Canlis: I'm so happy to do it, and it's an honor to get to talk through this stuff and work through it out loud with you. So, thanks, thanks for going there.


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