Where did all that money go . It disappeared in the air. All the warehouses are down, people are not getting paid. They are 120 days behind getting their money back for doing services. Everything in this whole administration has been a smokescreen of lies. You have a Bloomberg News thing every day about the fake unemployment number. Why dont they tell us how many people have been dropping out of work . Guest longterm unemployment is a major problem that is not captured in the unemployment number. That does not include a lot of number of people who have to opt out of the labor market after months and months of searching. A lot of newspapers have reported on it. It is expected to be in the millions. Your point about the debt is an important point. Something that states are grappling with too. These longterm entitlement programs. Pensions are big, medicaid is big and these are two things at the state level and federal level that are making it hard to budget in the longterm because it is growing and growing and then the states have less and less room to maneuver around them. Host catherine up next from ohio. Democrats line. Caller good morning. My question is very simple. Red versus blue states, what states paid the most federal taxes and what states go home with the most federal money . It has always been we northern states pay the most, but we dont get the most out. As an ohio an, im sick and tired of supporting the people of the south. They cry the loudest, but we always get the short end of the stick. Could you tell me why . Guest that is a good point. It might be worth noting that a lot of those red states are not taking money that is available to them in the medicaid expansion. A lot of those governors are passing up on it. A few of the red states have taken up the extension. As some of them have argued, this is john kasich argues this is money we are paying in. We want to take it back out. You do bring up a good point on the other hand some governors are passing on what democrats argue is free money. Host 31 republican governors after the november elections. 18 democratic governors and one independent. 68 republican state legislators 30 democrats. What is it like with a rash of new governors elected . How has the landscape changed . Guest it has consolidated for republicans. 23 have republican control of the state legislature. Public and control 16 state legislative chambers. That republicans control 16 state legislative chambers. They are in a great spot to pass policies they believe in. There are struggling to make their case in kansas. Governor brownback has cut taxes. It has not boosted the economy. He argues, we just need some time in this will trickle down eventually. It has only been two years. Host there was a story this morning about the Wisconsin Legislature passing the right work. Guest right to work has been big. Host from ohio, this is richard, go ahead. Are you there . Lets move on to joe. Joe is in rochester, new york. Caller good morning. My comment has to do with new york. That is where i live. We have a 140 billion budget we get a lot of money from the federal government. We have a governor that runs a bunch of smokescreens. Our utility rates are the highest in the country. Our gasoline taxes are the highest. With everything we have to put up with here, including bad weather, my concern is the government as a whole doesnt seem to have a lot of answers on how the population is going to lift. Guest the northeast is not growing as fast as some of these other places. A lot of states are dealing with the gas tax. The federal government is about to take up the highway transportation bill in a few months. They are talking about it right now. At a state level, gas taxes fund roads and businesses need to get from point a to point b. Those gas taxes have not been keeping up with the needs of the state. A lot of states are talking about raising gas taxes. We have seen a lot of different versions of this. Governor haley has said we will raise that tax but we better cut taxes elsewhere. These taxes have not kept up with relation. You are able to travel farther unless gas. Unless gas. Host you talk about fracking and north dakota. Our other states capitalizing . Guest you have texas, alaska. The states either have or are trying to build a Strong Energy economies. The last great example of how it can backfire the decline in oil prices is about half of what it used to be. Consumers can spend that money elsewhere. For a handful of states, especially alaska were 90 of their general fund comes from gas taxes, it has put they were planning to spend 6. 5 billion this year. There are 3 billion short of that. The have reserve funds. If those low prices are sustained, it will be a big issue for them. Host kathy from california up next. Caller i was wondering if you could give us information about the im sure gary brown is concerned about that. Jerry brown is concerned about that. Host that affects the states who want to put from chicago rudolph. Good morning. Caller good morning. This seems the United States department of justice does such a great job in attacking these things. Now we are getting there. This is actually pretty good for us on a saturday morning. Welcome. Great to see so many friends who i have not had a chance to see in the meeting so far. As nga chair come i want to take this opportunity to welcome everyone to the 2015 nga winter meeting. We have an exciting weekend ahead of us. Very glad to see all of you here. I appreciate the effort you have all made it to get here. Part of the rules requires that any governor who wants to submit a new policy or resolution for adoption at this meeting will need a three fourths boat to do so vote to do so. It is a longstanding rule. Please submit any proposal in writing by 5 00 tonight. Also want to take this opportunity to welcome the new governors who were able to make it here. I think they are all here. Maybe one or two had earlier meetings. Stand up and wait if you are here. Bill walker, doug ducey there we go. [applause] asa hutchison. [applause] david e larry hogan. [applause] charlie baker. Tim wolf. Tom wolfe. Not here . Gina raymundo. You can tell who had a good evening last night. The Virgin Islands governor. Congratulations to all the new governors we are delighted to have you here. We want to recognize our guests from the white house thank you both for being here. They are here somewhere. [applause] there they are. We also have a Significant International presence. I want to take a moment to recognize our guests, governor the master of mexico to the United States. Ambassador of mexico to the United States. [applause] we also have paul davis from newfoundland. [applause] the ambassador from canada to the United States. [applause] they have a delegation from canada as well. David sullivan, ambassador of the European Union to the United States. [applause] and delegations and representatives from chile japan, new zealand, peru and singapore. Thank you all for coming. At this time, we want to recognize several companies, as we always do, that have maintained the sustained commitment to governors participation in the corporate fellows program. It was established in 1988 facilitates the exchange of expertise and knowledge between governors and americas leading companies. With their annual contributions they provide crucial Financial Support to the center for best practices. Ngas relationship with private sector leaders are invaluable in helping the center achieve its mission of providing governors evidencebased ideas. We recognize several fellows who have reached major milestones in their tenure as members. Join me in recognizing the following companies. If you would have a representative of your company come up and join me at the podium [applause] just in case you doubted there was a reason to remain a committed partner come after 25 years you get these remarkable weights. [laughter] there you are. You bet. [applause] General Electric has been with us for 25 years. [applause] trey happens to be one of the best squash players in all of the world of government relations. [laughter] a pretty narrow universe. Roman with Prudential Financial and again, with us for 25 years. [applause] last, Richard Buckley with astrazeneca. They have been with us for 20 years. [applause] please, give one more hand to all these companies for their outstanding support. [applause] i want to take a minute to talk about the chairs initiative when i became the chair last july, we began the yearlong initiative, delivering results. The goal of this initiative to make State Government work in the most effective, cost efficient way possible. State government touches lives in so many ways. Its scope and skill today is wider and further reaching than ever before. Its more important than ever to ensure the State Governments are using tax dollars effectively to deliver on their promises. Delivering results the initiative continues to focus on improving the efficiency and effectiveness of cores the government functions out the state can hire how the state can hire and develop talented teams and use the stateoftheart systems for making sure that we not just higher talent, but retain it. Improve Management Practices that use data and evidence to improve processes and policies. Thirdly, engage stakeholders and constituents to improve regulations and requirements to protect the public good. Make sure we have a level Playing Field. At the same time, getting rid of onerous regulations and rules from State Government. Those are the core tenets of delivering results initiative. We spent a lot of time in colorado working on these efforts. Governors are achieving the chief executives of their states. We have a unique ability and responsibility to improve the way government works. We often say we can argue about whether government should be larger or smaller, but we all believe that government has to work. Many states are adopting innovative practices used by businesses or universities or others to address the fundamental issue of how we deliver better governmental results. In michigan, there is a new website that provides information to the public on performance in key areas such as economic growth, economic strength, health, education, public safety, things people care about. In washington, have instituted results washington, effort to ensure all of the State Government is achieving priority goals. In colorado, one of the things we did immediately after taking office four years ago was traveling around the state and engaging communities and Business Leaders to see what they thought they should be doing and create an Economic Development plan for the state. Again and again in every part of the state, get rid of and terry this get rid of unnecessary rules and regulations. We have reviewed over 16,000 rules and regulations and more than half of them were either eliminated or significantly modified and supply. We have adopted process Management Systems in the state capital. We have over 120 lean processes now. Our government processes are costly trying to be constantly trying to be more efficient, faster and less troublesome for the citizens we are serving. Delivering results is an initiative to shining spotlight on these cuttingedge practices and so we can learn from each others work and be able to implement it more easily into her own state our own states. Had an experts roundtable to learn about management hiring practices, government process improvements and corporate regulations. We had a thought leaders from around the nation and from different states sharing Lessons Learned and making suggestions. The experts identified several key roles governors played in delivering results come including setting clear goals and priorities for the states, helping to ensure state agencies stay focused on these goals creating a real culture of excellence. I use the word culture intentionally. Problemsolving and Continuous Improvement are the norm. And commuting this commuting priorities and successes with stakeholders on april 23 and 24th, i will host a summit on the initiative in denver and i hope many of you will be able to get there. If your schedule does not permit your attendance, hopefully you can send a representative or a team to attend. The summit will be able to spotlight innovative processes that states are already using to deliver results. And continue to share information with new governors and your teams about how we can put those ideas into practice. Our priority for this initiative is to provide all governors with examples of best practices and tangible resources to help save taxpayer money, use resources in the best way possible. I hope this initiative will leave you with new ideas, tools, information to help you achieve your goal. Today, i get to introduce our speaker. I wanted to make sure we had as much time as possible for our speaker. We dont often get a chance to hear people like danny meyer. Some will say, who is danny meyer . I would not say that. [applause] [laughter] if you are not in new york, a lot of what he is achieved, you might not be aware of. He is the chief executive officer of a Company Called union square hospitality. He really is one of the greatest restauranteurs in America Today and one of the great restauranteurs weve ever had in this country. At the tender age of 27, he launched his business with you here square dish with union square launched his business with union square cafe. Going back and retaking part of the city and using hospitality to transform it. He is pioneering a new breed of american eateries with imaginative food and wine enveloped in real caring hospitality and making sure the surroundings were comfortable and they delivered real value. Unlike so many restaurants, he went a number of years before he opened a second restaurant and made sure everything was right. He has always been a thoughtful very intentional person about how we extended his company. In 2004, he launched shake shack. Since then, new shake shack locations have sprung up along the east coast and internationally. Late last month, shake shack became a Public Company worth 12 billion. Congratulations on that. We invited him before the public offering. Even before i knew that shake shack was even going public. He is also an author. He wrote a book called setting the table. One of the best works on hospitality that i have ever seen. He examines the power of hospitality, not just in restaurants, but in business and life. The Customer Service really is a key to success in life. Many of you have heard the james beard award, one of the most prestigious awards at the same level of difficulty as the nobel peace prize. Danny or his restaurants or chefs have 125 james beard awards won 25 james beard awards. [applause] i am so grateful for taking we had a wonderful dinner last night. The meal was good enough for me to plug it right here. Im so grateful for him to take time out of his life to share his experiences in his perspective on the world with us today. We will talk about his focus on innovation, quality, Customer Service and how that how he has worked those into his life and businesses over these years. Without further do, let me introduce danny meyer. [applause] thank you, governor hickenlooper and thank you to the National Governors association and all the governors who minded their business last night so they could wake up this morning and be here today. Im very honored and grateful to be her. Test to be here. You must be within normal means to say what is a restaurant guide doing up here speaking to us governors . Im just about as fascinated by what you do as i could possibly be and i want to say that as an american, im so grateful to this organization, because of what you are doing to restore faith in government works. It feels great. I believe in government. I grew up in the midwest in st. Louis, missouri. I grew up an interesting family because my mothers family were democrats and my fathers family were staunch republicans and i was the middle child of three. My head was going left and right every night at the dinner table. We were having real debates. This was during some 12 swiss times in the 1960s and 1970s. Walter tumultuous times. We went to the harrington hotel. I got to be in a film with tom eagleton at the age of whatever i was and i got to work in the United States capital as an elevator boy when i was 18 years old. When i went to Trinity College as a Political Science major, i got to work in the state capital for the speaker of the house at that point. Because i wanted to be you when i grew up and im so glad i did not [laughter] the very first job i had after college was with my centrist leanings working for a fantastic president ial candidate in 1980 that most of you are too young to remember by the name of john anderson. This was in chicago. I got to be the field coordinator because the democrats and republicans got all the guys with experience. I love what you do and i honor what you do and i want to say thank you as an american for what you are doing to restore faith that government can work. [applause] one of the things the governor and i were speaking about last night, as another restaurant guy , we are constantly running for office when we run restaurants. We are trying to get as many votes as we can possibly get. A city like new york has 26,000 restaurants. Fair enough, it a 2000 when you eliminate the pizza parlors that only 16,000 when you eliminate the pizza parlors. It is not enough any longer to say this is the best restaurant because they had the best roast chicken. There are 60 incredible chefs who could argue they have the best roast chicken. In the old days, it was good enough to do that. Now, we have the internet. The internet was to level the Playing Field in terms of being a leader based on being the best at what you did. You still have to be the best at what you do. S s the word got out that this smf the word got out that this restaurant has the best roast chicken, anyone who wanted to figure out the recipe for the rustic and or design for the flyers or getting open tables, just copy it. Everything is knowable. Everybody in the world is Walking Around as a reporter with their camera, plagiarizing every good idea on earth. That is good, anyway. The level of quality goes up everywhere. What we have learned this is just about applicable to any organization. You guys are all see ceos. You have an organization that relies on good employees great employees pay you have to please request were scum just like i do. Please customers just like i do. We have investors. Every organization on earth has the exact same five stakeholders. I want to give you one thing and this is not for any kind of round of applause, just to make a point. If you were to open up the 2015 is a gap survey zagat survey for new york city, you wouldnt notice that, of all the restaurants they cover in new york city, there is a category called new yorks favorite restaurants, which is separate from the list of who has the best food and the core and service. If you looked at this years guide, you would see three of the top six of new yorks favorite restaurants are our restaurants. In a city of 26,000 restaurants. Including our 20yearold restaurant and number 6, 30yearold restaurant, union square cafe. We do not have three of the top six food scores. We have good food, but we did not make the top six for food or service. We did not even make three of the top 100 thedecor scores. Our places our joints. What did we learn from that . We learned the recipe that has worked time and time again and is the reason that people come to our restaurants time and time again and love them. We are in politics as well. At the end of the day, is there a higher compliment that someone he could pay you or a restaurant or your state or a hotel then to say that is my favorite fill in the blank . If i were to say that is my favorite professor or this is my favorite dry cleaner, i could not pay at a higher compliment. You cannot be somebodys favorite without being really, really good at what you do. You also have to be good at how you make people feel. Nobody can argue with me if i say this is my favorite watch. This is my 39 timberland watch. It would not be my favorite watch if it did not keep good time. It has to work. It also would not be my favorite watch if for whatever personal reasons i have it didnt make me feel good. Because of the internet, we are at a time where this equation works for every organization on earth. We have all these recipes that are hard to cook in our restaurants. Here is a real simple one. Two ingredients only. 49 parts performance and 51 parts hospitality. You will say to ourselves, what does hospitality have to do with government . We grew up hearing about it. We go to our grandmothers for thanksgiving, its a nice hug one of those feelgood kind of words but it doesnt really historically have an organizational application. I want to argue the opposite. Today, being the best in the world at what you do, which is so critical, will only get you 49 out of the 100 points you need if you want to be summit is favorite anything somebodys favorite anything. If you want to be an essential part of peoples lives. The minute a great idea gets out , it gets shared. Thats a good thing. Thats what youre doing this weekend. You are not holding back on really good ideas in the hopes that other people dont embrace those ideas and put them to work. You all stand for good government, which is what i started im saying that im so grateful for but im saying thats not enough to get reelected. What we have learned is that 49 parts performance and within performance in my business did we get the right food to the right person at the right temperature at the right time . Did we get your coat back to you . Did we have your table ready on time for your 8 00 reservation or not . You expect that. Service, the word i grew up hearing my whole life, one thing my family can agree on, you have to have good service. Service is often misused because it service belongs in the 49 category. Service is a way to describe the technical delivery of the product. Did the product or organization or restaurant do what you expected it to do . If i rent a car, my family goes to a vacation and we want to have a minivan, did we get the minivan . That is good service if we got the minivan. Did it smell like smoke when we asked for a nonsmoking minivan . Did it come with a gps . Thats what service means. Its a lot like airconditioning. Nobody raves about it when it works anymore. The only time you hear about service and performance is when it doesnt work and you all know that. You have constituents, a whole lot more constituents than i have. Today, we will probably serve in our restaurants about 50,000 people. That doesnt include shake shack. Shake shack, we will serve close to 200,000 people today. We will be making mistakes left and right. Every time we make an honest, human mistake, it will diminish our 49 points. Thats ok. I have gotten about two 100s on tests in my life. Lets talk about the 51 real quickly. The 51, the hospitality is the part that elevates any organization into best, favorite breed. Hospitality. Hospitality is something that exists when the person on the receiving end of your performance truly knows you are on their side. That you are doing things for them. If i do get the right food to the right person, cooked the way the person asked for it, did i do something for them . I did what was expected. Governor hickenlooper likes to have his salmon cooked medium rare and i remember that, and i acknowledge that when he comes in or i knowledge his favorite table or a remember you came in last time and it was your birthday, now im getting into the realm of doing something thoughtful for somebody. The preposition for is always present when hospitality exists. The more and more hightech we get in life, the more people need high touch in their lives and the more your constituents my constituents need to know that we are agents and not gatekeepers. For too long, whether its City Government that has regulations i remember how hard it used to be to try to open a restaurant in new york city. It was almost as if they did not want us to be out there employing hundreds of people. Today, 4500 people throughout seven of your states. Government was acting as a gatekeeper and not an agent. Gatekeepers have no place in the world of hospitality. I told a story in my book that impressed me so much when he was governor, jeb bush in florida, a good friend of mine had just set up a brandnew business in the state of florida. And did not make any fanfare about it whatsoever but because somebody was tracking every business that had been incorporated and how many employees that business was going to have, my friend got a call from governor bush my friend was ohio from ohio. He said, i want you to know how welcome you are in this state. If you need additional dish and additional exit from the highway for your 6000 employees, i cant promise we will do it but i will want to know about it. Thats called being an agent and that is called hospitality. I will end my remarks very shortly. What im most excited about is to welcome your questions. So that we can stir it up just a bit here. What i do want to say is this we have named what we do. Enlightened hospitality. Not that we are a bunch of gandhi people strolling through the avenues of new york city. Thats not what i mean at all. When you prioritize your stakeholders come in any organization in the following order, you can create a Virtuous Cycle that is the most sustainable engine for both excellence and hospitality and making an organization perform at its highest peak and creating a situation where for every one of those stakeholders, you become somebody that made their lives better which i know is all of your missions. Everyone in this room would probably solve the problem differently if everyone were asked how can i make my constituents lives better. Theres always wonderful room for debate. Thats what i grew up with. I dont think anyone would disagree if you have the opportunity that at the end of your term, everyone who worked for you, everyone of your constituents, everyone of your communities everyone of your suppliers and every one of your investors set by virtue of that governor being my governor, my life got better. I think everyone would have to agree with that. What we have learned time and time again is to create this Virtuous Cycle, we begin each and every time by saying something i did not learn growing up in st. Louis. We put our employees first because whatever metric there is to suggest how much our customers love coming to any of our restaurants, that metric will never be any higher and cannot be any higher than the degree to which our employees love coming to work because they cannot fake it. You go to a Government Agency or a restaurant and its clear to you that the employees are not well trained, not well hired not enjoying their jobs, you can be sure that you are not going to have a great experience yourself. To the contrary all i look for when i go to and you restaurants any of our restaurants are two things. Our people performing up to Peak Performance . Are they doing what they do as well as it can be done . Are they having fun with each other as they are doing it . If we hold our Staff Members accountable for the 49 , we will train you, hold you accountable if you are not doing it, you dont get to be on this team. You will only get promoted if in addition to what you do as well as it can be done youre doing it in a way that makes the rest of your team feel great. What is awesome about setting that cycle in motion is that our guests feel it and they have a great time when they come in. Thats why unleashing our Staff Members hearts and minds whether its fighting hunger i want to thank, many of you have invested your time and resources. Whether its supporting or building a park or working for a hospice unit. When you hire the right people, they not only want to use their heads, they want to use their hearts. Finally, we take great care of our suppliers. We dont wield our incredible financial muscle. We bring byuy more portrait than most other restaurants in new york city. We dont say what you need to do is to do everything we say. We offer that same hospitality to the suppliers. We needed them to be rooting for our success. Was awesome about this Virtuous Cycle is at the end of the day our investors by virtue of putting them last we did not put them last because we want to make last one could think each leading to something better. When we have happy investors guess what they do. They reup. We have wonderful opportunities to promote both financially and professionally the people on our team by virtue of opening new restaurants after that. I want to say thank you very much. A huge honor for me to be with you all today. Thank you. [applause] we start with governor walker. Thanks for your comments. We are all very inspired by that. Thank you for having a shake shack over at the spy museum. It makes me think of midwestern custard stands. I spent seven summers of my life and your great state, going to the dairy queen in wisconsin. Thats what the shake shacks alike and thats why we love them. Just a question for all of us, we are interested in all that you said but when you talk about the 49 points versus the 51 points, you talked about training. Could you go deeper for us i get the training and i think the analogy is perfect. Its exactly what we talk about with all the services we provide. You can have all the great people at the top but if the frontline person is not doing it, thats where everyone everything breaks down. How do you take the people that are interacting directly with your customers and train that 51 points you need for hospitality . How do you get to that magic spot . I think its a great question. I will start by saying that the 49 performance is very trainable. You can come to work every day and probably incrementally get a bit better. Some people cannot get better and its important to recognize that. On a 51 parts of hospitality that is a harder place to improve if you are not innately someone who has a heighigh hospitality quotient. Everybody in this room has an iq. It is not going to change for the rest of my life. I can read the encyclopedia tonight and my ability to learn information is not going to change. Somebodys hq, defined as the degree to which anybody actually feels better themselves when they make somebody feel uplifted in life the key thing is this. It is hard to go retroactively in organization that was not thinking about both sides of the recipe than to say now we are going to start reviewing you, 49 for your Technical Skills and 51 how well you made other people feel it is hard to do that retroactively but you have to start somewhere. Nobody can convince me if you know this secret that you would say because it is hard i wont do it. What we do i was going through an afternoon of this yesterday. In addition to having 360 degree reviews, those reviews are focused on what i said. You will get points for how many of the 49 Technical Skills he showed that you showed an points which leads to your bonus. 51 dependent on your emotional skills. Here is what you can do. Most organizations in the world im not talking about your states, but most organizations are basically highly transactional. If it were a restaurant, you give me money and i give you food. Thats not what we are interested in. We dont think our employees are interested in a job that i do what is what i was told and you get me a paycheck. We want to be champions. It is fun to be on a championship team. Picture your Favorite Baseball Team or foot bill team this Football Team and look at the championship dugout. Visualize that and say why cant we be that. By naming it, what we have learned is like almost anything else in life, among people with hqs, it is a bell curve. You can shine the sun on them for ever and they are not going to have a high hq. There are people you could keep in a closet forever and after five years, how can i help you. Most people lie somewhere in here. When you begin to prioritize in an organization, even to reward behaviors behaviors that promote hospitality, most people already have this in their heart. It was never something properly embraced by anybody they worked for. When you interview prospective employees, other certain things you look for are there certain things you look for that is an indication of where they would have that high hq . Absolutely. There are six emotional skills we are intentional about looking for. When you hear them, you will go, that is the second great stuff but you would be surprised that if you make it intentional, your batting average goes way up. The first one is somebody who is kind and optimistic. It doesnt really help an organization if the guy you are working next to is relying upon other human beings. Everybody has a job and a role. If somebody is not nice and you dont enjoy working with them, that is not a good thing. The optimistic part is also huge. Somebody who sees the glass as being halffull believes their actions can make an impact on the world. You would not be governors if you didnt think you could actually make things better. People who are pessimists are skeptics dont help our organization to much. The second emotional skill we look for is curious intelligence. People who look at each day as an opportunity to learn something new. They like to share what they learned with the rest of the team. Other members of the team love coming to work when the people they work with our nice, optimistic and from whom they can learn new things. The third work ethic. Is work ethic. You can have an organization that is awesome that you can have the worlds best training but if the teammates dont have the emotional skills to say not only do i know how to do it but its important to me to do it as well as i can be done it can be done. The fourth one is empathy. We want people on our team who when they go through life, it matters to them how their behavior makes other people feel. That doesnt mean that you cant be tough and roll lines but you control lines in a way that does not diminish some reason selfesteem. Somebodys selfesteem. We call that the wake of the vote. If you imagine each one of us is a motorboat or a canoe going through life, we are leaving our wake in our path and we need to take responsibility for what that wake does. If its doing something for other people, we have hospitality. The next emotional skill is integrity. Having the judgment to do the right thing even when nobody else is looking and even when it is not in your own self interest. We hold people highly accountable to that. People either have that or they dont. Selfawareness, people who know what makes them tick. Every day i wake up, my job is not to feel chipper every day. Some mornings i wake up tired or anxious. Just like the weather outside. Some mornings it is hot and humid, some mornings it is beautiful. Being aware of what if you are going to be on this Team Hospitality is a team sport and you need to be aware that you are having an impact on everybody else. The last thing we want is to work with skunks on our team. They skunks breezy when its afraid or angry and everyone within five miles gets to spell it. Gets to smell it. Those are the six emotional skills we look for. We named them, we interviewed people we dont say do you have integrity. Yes, i do. [laughter] we ask questions that can help us understand it. Tell us about a time when you really had to use your integrity to make a tough choice. Thank you. Welcome. We are honored to have you with us and congratulations on your great success. My question has to do with your journey. I dont know of your background or Humble Beginnings but for most governors, our number one issue is developing the economy and our states. Tell us about your journey. Did you find opportunity . What were the roadblocks you had to overcome as not to be nor as an entrepreneur . Do we still have upward mobility in this country . We hear talk that opportunities are gone and we have stagnation. Tell me about upward mobility and your progress and your success and tell us, what should we be doing . What are we doing right and what should we be doing better . Thank you. You need to eat at more restaurants and everything will be ok. Another fantastic question. Governor hickenlooper promised me i would begetting a lot of good questions today. You are absolutely right about that. My beginnings, just to be as candid as possible, were not that humble. My family instilled an amazing work ethic. But we never had to wonder about when our next meal was going to be put on the table. We never had to worry about would we be able to have a Family Vacation as springtime. I just want to be as candid as i possibly can about that. But, like other families who did not have to struggle, we were imbued with the kind of valleys that said your job is to care for your community. As i said, one grandfather ran in st. Louis and one supported democratic candidates, never ran for anything himself. The goal was not this policy or that policy. Thats why i think with our restaurants, typically, we try to go to neighborhoods and communities that are not developed yet. We try to go to places where we can use restaurants as a community maker. Furthermore, what we try to i would say that 80 of the hourly employees we have at shake shack have never even had a job before. Nobody talks about how it is almost a Job Training Program and behold these people too high standards and pay above the minimum wage. After you have been with us for six months, we share 1 of our sales with you as a bonus. Which means we are letting our hourly workers know what the sales are at that particular restaurant. We create a stairway to success because it is not enough to say that whatever hourly rate youre getting, is not nice isnt that nice . The American Dream is about climbing. We create a stairway that makes it very, very clear what skills you need to get to the next rung on the ladder. I am very proud to say that an enormous number of our managers, including general managers, started off as early workers hourly workers. When we had our ipo three short weeks ago, we made not only 100 of our managers options in the company, which is kind of what they have been doing in the tech world on the west coast for quite some time now, but furthermore, every single employee, including hourly workers, was given an opportunity to buy stock at the ipo price, rather than using it as an opportunity to rewards friends and family. There are ways by the way im going to back off shake shack and remind you that the first restaurant, union square cafe, is now three years older than when i opened it. It will be 30 years old this year. That is not stop me from asking two questions. Whoever wrote the rule that you cannot yet 30yearold startup . The second question i would ask what would it take for us to become the company that if only it existed, would actually put us out of business. . That is what i mean when i say that we are running for office every day. We are running as if we are 20 points behind and we are running as if every time we do something, someone is going to want to each us for lunch. We know there is Nothing Better we can do that to provide jobs for the right people, the right kind of training, the right kind of culture. I think culture is everything. Im going to make a quick metaphor and then i will be done with this question. We sell a lot of wine in our restaurants and it is the metaphor. You will never have a bottle of wine or glass of wine that will ever taste any better than the worst route stock of the grapes. That is where it starts, with the grapes themselves. You can get the best stock some guy from california can grab fines from burgundy and plant them in sonoma, that is still not enough. The next thing is to make sure that the soil, also known as the culture, is as healthy as it can possibly be. Our job is to constantly enrich our culture. Culture is another way of saying how we do things around here. You can get the best root stock and put it in toxic soil, no good. The grapes are not going as his to tasted good. The fourth thing that impacts all of us are things that we cannot control. Ident know how you deal with the kind of natural and manmade disasters, Macro Economic forces, that are going to impact everything looked than you do. But i will say this. What we know about great winemakers because they have the greatest root stock soil, and know how to train their that is the kind of thing we are about. It is really about enriching human beings and not doing it ever you have to earn it. You dont get to be on our team if youre not accountable for what is expected for you. I just have to ask you about the concept of tipping which i find to be very confusing. I was always brought up, if his services good, you tip more. If the service is bad, you to blast. The friend of mine told me that in most restaurants, all the gratuities are thrown together and at the end of the evening, all the waiters and waitresses basically divide up the tips anyhow. Is that even does that even mean anything . In europe, 10 is considered a good trip. In the United States, 15 is a minimum tip who decides these things anyhow . Some people dont payment amount wage because they feel they can count the tips as compensation. That is a big issue. And then all the business about people not paying taxes on the cash tips, and that is the really good part. That was not a question i was anticipating today. [laughter] i will do the best i can, as briefly as i can. I dont know who makes these rules up. Their customs and they are often customs country to country, even statebystate. What is frustrating is that they are also different federal laws excuse me, the federal law is often very different then each and every state law. It leads to cultural confusion operational confusion. I will tell you that one category of people who win in this confusion are the kind of lawyers love to make money by finding the gap between federal laws and state law in the confusion. Even businesses who intend to do the right thing are often in trouble because of that. As a consumer, was i will tell you is that it is reasonably clear to me, watching the tea leaves that this country at some point will beginning up tipping the giving up tipping. I think it will be a good thing when that happens but it is going to be difficult to see that happen piece by piece. Why . We have a huge disparity in income from people who work in restaurant kitchens and people who work in restaurant dining rooms. If you go back to the 30 years i have been in business, prices on many as have gone up probably to and a half times just the check average alone, over the course of 30 years. If you are a tipped employee your percentage during that same time, the u. S. Dinner tip has gone from 15, to 17, 18, 20 a higher percentage of a check average means it is a good deal to spend a few years as a waiter as youre waiting or as a profession for the rest of your life. As a cook, the hourly rate over those 30 years has basically remained completely unchanged. The gap between what a cook can make, having spent all kinds of money to go to coowners school and not be able to pay that back, and was a waiter is making, is great. Restaurants and organizations, every Business Owner would say the sales team often makes more than the manufacturers. That is what waiters and cooks are. But that should not be growing and growing. What you are starting to see our restaurants that would like to say, in the same way that the 24 you are paying for your entree relies upon me as an operator to determine how much of that should go to the floors and how much to the grill cooks and the dishwasher and reservationist and maitre d why did we single out this group of people and say you the consumer know how much the waiter should make . You dont know and you dont the fact that the reason your food was late had nothing to do with that waiter put all kinds of things out of her control. What were would like to do is to find one price the covers everything. Everyone becomes a taxpayer i would not say that waiters do not pay their taxes. It is kind of the uber syndrome. There is no tipping with uber. You pay one price and you have an opportunity for both the driver and the passenger to rate each other. Imagine what happens when there is just one price in a restaurant and you can pay with your phone because that is mama the innovations that is happening. Open likes to have that moment where they really want to leave but they cant find their waiter to get their tech or the waiter shows up too soon with their check and the guest feels rushed. In the next five years the situation in this country hopefully with federal and state laws meeting i ties that there is number confusion meeting i to i so there is no more confusion, you can use your phone to pay. At was and i answer and thank you for joining us. As all his troubled me in my state. I know the folks doing the hard work pushing the food are working for tough wages and often the folks who are serving and are doing a good job are making a lot that her money. Are making a lot more money. And sometimes it is taxfree. I wanted to ask you another question. You mentioned care for community. We governors are governing at a time where congress has never been, at least in my memory, least able to address real challenges. We are doing tough decisionmaking that sometimes congress arent making. One issue we are struggling with in vermont, the president raised it in his state of the state address, is the issue of compensated sick leave. Particularly in the hospitality industry. Lowwage workers, who are really sick and cannot go to work, cannot pay their rent and get the kids to school. I would be curious how you feel about us legislating sick leave when folks really cant be working and frankly we would not want them to work because we have to eat the food they would make and be at the receiving end of their illnesses. Where are you on that . In vermont, it is a robust debate. As a business person, is this communities often go, do not go do that. Common sense says yes, yes, yes, do it. I struggle sometimes to answer when something i believe in should be come a law. It is up to you to decide whether this rises to the level of being in the public good. For example, in 1990, soon after my own father died from lung cancer i was so upset about that that we eliminated smoking at our restaurant units. I was andriy with smoke angry with smoke and coming home every night smelling like an ashtray. As also angry about remember the old days when there is smoking on airplanes and there is that last rule of nonpoking in the first row smoking and no neither were happy . When mayor bloomberg wanted to make that law in york city, there was an enormous outcry from the whole industry saying that if you eliminate smoking in restaurants, we are all going to gladys business. Go out of business. The mayor asked if i would testify that our business had only increased because we had cut smoking. In that year, the two top restaurants in terms of you new york favorites were those two restaurants. But what i will not testifies that i think that will become law. Im not a politician, and they are, a governor. A mayor, a governor. I know there is a lot eliminating trans fats. I understand why that became law. You cannot see a trans fat in your food so you are not making a choice. You can do something not good for you without knowing you are doing it. With regards to paid sick leave we absolutely do it in our company and we do it because there are so many i think we do it selfishly. We use our template of hospitality and say is this doing something for our team . To say, if you feel sick but still need to pay your rent, you must come into work . It is not doing anything for that individual and it is not doing anything for the rest of the team that now make ity get sick. It might not be doing anything for community. The kinds of strains of things that are out there can be really difficult. One quick story that is what we do, i dont know honestly, all of the pluses and minuses youre up against. But i will say that we get better employees because of it. Were not just competing for customers, we are competing for the best employees and theyre going to want to come to our organization over someone elses. This is going to sound crazy to you but when i first learned about obamacare, i was upset but maybe for a different reason that other people in this room i took been upset. I was upset because we were already doing more than that for employees and i was upset this law is going to level the Playing Field and we were going to lose the advantage we had as recruiters. That is where we are at on that. We have time for one more question. Congratulations on all your success. You said that more hightech means more high touch. People dont really think of the business you are in as a Technology Business but a lot of what you talked about today is how technology is affecting your Business Model and the delivery of both the product and the style you do it. What did you learn over the years . And look forward to trendlines on how technology is going to affect our services and businesses as we look forward . Thank you and thank you for taking good care of my mom in your state. She is still in st. Louis and loves it. Our industry has completely pence formed itself tech wise and thankfully, to my knowledge even 3d printers cannot make your cheeseburger for you, yet. We will see what happens. [laughter] with respect to restaurants, what technology has really done the most for is what everybody in this world wants. I want what i want and i want to now. Everyone is Walking Around with their smartphones. They look at asit as the Remote Control for the desires and their lives in their lives. I have the great pleasure and privilege of going on the board of directors of a Company Called opentable, a private Company Based in San Francisco in 1999, company that went public in 2008, that pretty much illuminated the handwritten reservation book eliminated the handwritten reservation book. A phone call was come in and you didnt know if the book was in the basement or on the balcony or at the front desk and you are yelling trying to see if we have a table for six at 7 30 p. M. Next saturday night. What opentable did for consumers was to give them a chance wherever they were, on the telephone or computer desk, in paris, he didnt have to wait for Business Hours to find out not only the table was available or where they could each of the World Without making one phone call. It gave us an opportunity to apply more hospitality because embedded in it is a record of every guest experience. We know your favorite table, allergies, etc. That was shot number one across the bow. Today, in our industry, there are so many restaurants people go to in what is called fast casual or fine casual. Chipotle is a great example of that. Rather than waiting until they get to that restaurant to place their order there is now Great Technology where you can push a button and it will sense when you get to the and your pet re paying for it and your order is cooked and you skip the line. That restaurant does not know the you are because you dont make a reservation to go to chipotle or shake shack. That restaurant knows what your preferences are and they can add more hospitality. There is more technology, where the entire world is a restaurant critic with the camera. So the amount of feedback that we have capacity the whole world is run by wordofmouth, heavily since you could go to the piazza in rome. What smartphones have given everybody in the World Everybody wants to know what everyone else is thinking. Whether it is social media, it is out there. What it does for all of a sister give us the opportunity to listen to that wordofmouth and respond in real time and make things better to hear what people are thinking on the spot. We even have a technology where you have probably heard of a Company Called foursquare. You could know who is commenting in your restaurant at best moment. And you can intervene. I have gotten messages that say cant believe the bartender is taking 20 minutes to make my drink. And we can actually get right on that and fix that problem and turn it into a rave at that moment. I dont know if answers your question but i do believe that technology is absolutely here to stay and what i meant by my comment is that the more time we spend either behind a computer or using our thumbs on our smartphones, it doesnt obviate the need for a hook. The last thing i want to say about hospitality is that the metaphor for hospitality is a hug. The only way to give one is to get one and the only way to get one is to give one. Human beings, whatever century they are in, they want to hug. Is might not be a literal hug. There are people who dont like being touched. The people want to know from the organizations that they do business with, that the act of providing the service or the product, is as pleasurable as the act of getting it. Think about the last time you ordered a pizza and the joy you get when the person brings that pizza to your table and you go, thats going to be great. It will taste even greater if the person delivering it is delivering it with the same kind of joy you are receiving it. Thank you so much for this great opportunity. [applause] [applause] i dont think i overpromised. I wont say that his dennys book, setting the table when i read it, he wrote my book before i had a chance to write it. The six qualities he described it is really useful. I would urge everyone to get it and read it and give it to your chief of staff. Lets its whisper down the wind. The other thing we want to talk about is whether you are running a state or a restaurant, three things are the same. You never have enough cash, never have enough capital, you have a Diverse Group of people you need to make into a team and to the public is always angry about something. [laughter] now i want to introduce i want to ask governor tomlin to give a few words about the upcoming summer meeting in West Virginia. Thank you very much and i am honored to be here and talk about one of my favorite rings, the state of West Virginia. While most of us have been thinking about the snow and below zero temperatures, we only have five months and two days until the 2015 nga meeting in West Virginia. I want everyone to get your thinking caps on and make your reservations. The meeting this year will be from july 23 through the 26th. We encourage you to come a couple days early and stay a couple days late. If you have not experienced greenbrier, it is known as americas resort. We have great programs lined up for this meeting at the greenbrier. You will experience great food. Mr. Myers, you ought to come to the greenbrier along with us. There are several professional golf courses, a worldclass law flyfishing, white water rafting, the lining, just a few zip lining just a couple of the things we have in West Virginia. We would love to have you this summer. Were going to do our very best. Thanks for the opportunity and please be in West Virginia in july. Thanks. [applause] one more little thing. These little brown boxes there is a family in West Virginia that makes salt. It is a gourmet salt produced in West Virginia and the little salt dish. I am personally looking forward to getting there. Ive heard nothing but great things and i hope that we can get as great a turn as we have had for this session. When governor fallin was the chair last year, she had this look of radiance and gratitude. Thank you all for being part of this. I feel that same sense of radiance. I cant express the same kind of radiance that governor fallin can but i feel the same pleasure and gratitude for you guys. Thank you again to danny meyer and his wife audrey for coming down and sharing their time with us. Our morning session is now finished and we will head over to lunch. Thank you. [applause] [crowd noises] the National Governors association as taking a break after its first session of the day. We will bring you another session that will focus on the jobs and economy. That is scheduled for 3 p. M. Eastern time, live on cspan. A reminder, if you miss any of todays nga meeting, each in it you can view the entire thing on our website. This go to www. Cspan. Org. The cspan cities tour travels to u. S. Cities to learn about their history and literary life. This weekend partnered with Time Warner Cable for a visit to greensboro, north carolina. Most of the seats were empty. I remember when i got there. Except for college students. Most everybody else was like, im not going down there, because anything might happen. There are these empty seats and it is quiet and we go and sit down and wait. You know to see what was going to happen. A waitress came by the tray of knives. She was so nervous the knives were rattling. I was so nervous that i wasnt sure what she was going to do with those knives. But i could tell that she was scared. She was a scared as i was. We sat there with her textbooks, trying to study. I remember her saying, we cant serve you, we cant serve col ored. Im going to have to ask you to leave. Dont say anything just