19when no additional time or effort is required to serve it?· Why are customers expected to tip a bartender for opening or pouring a beer, but are barely even encouraged to tip a barista for preparing coffee?Tipping also doesn't have a great history. Back when most tips were paid in cash, tipping was a known tax dodge. Tipping in the US actually has roots in slavery, many of the earliest tipped jobs in America were designed so employers could avoid giving wages to former slaves. Recent studies also show that US system of tipping fosters racism and sexual harassment. Here's a pretty good summary from Jay Porter, a former restaurant owner who abolished tipping at his restaurant."Studies have shown that tipping is not an effective incentive for performance in servers. It also creates an environment in which people of color, young people, old people, women, and foreigners tend to get worse service than white males. In a tip-based system, nonwhite servers make less than their white peers for equal work. Consider also the power imbalance between tippers, who are typically male, and servers, 70 percent of whom are female, and consider that the restaurant industry generates five times the average number of sexual harassment claims per worker. And that in many instances employers have allegedly misused tip credits, which let owners pay servers less than minimum wage if tipping makes up the difference"Last year I learned that Danny Meyer, an innovative, thoughtful leader and the CEO of Union Square Hospitality Group (USHG) and Shake Shack, started an initiative called Hospitality Included. The program eliminated tipping at all of USHG's restaurants, including the famed Gramercy Tavern. USHG is known for its excellent culture and training programs, and Meyer felt that, in addition to the reasons above, tipping was not the right choice for his highly team-oriented business.USHG also had a hard time retaining important "back-of-house," talent--kitchen staff, bussers, and other staff--because those roles didn't have the same financial upside as working in front. Meyer believed eliminating tipping would ultimately provide more continuity of service and a better, more streamlined experience for customers.Because of all this, USHG made the change. Now their restaurants instruct diners not to tip and instead build server and bartender wages into their menu prices, resulting in a more equitable wage distribution.Recently, I met Erin Moran, USHG's Chief Culture Officer and had a chance to talk with her about the program and its progress. Like any major change, she admitted it had not been easy and has taken longer than expected to roll out to all the restaurants. Many of their employees weren't happy with the change, which led to initial turnover. Customers also had to adjust too as they were seeing higher menu prices that more accurately reflected the cost of their meal.In the long run, however, Moran said the initiative is having the desired outcome and may become a competitive differentiator for the business.What often separates great organizations and leaders from good ones is this: the perspective to have a differentiated point of view, the willingness to make a difficult change and the commitment to see it through.Making change takes vision and courage and leads to frustration along the way. But in the end, it's the only way to stay ahead. What changes do you need to make, but have been avoiding? Robert Glazer, Founder and CEO, Acceleration Partners.
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