The Stanford Way

Ann Friedland

The assumption is often that schools in this league have generous revenue or subsidy streams that facilitate running their top-tier operations. At Stanford, that assumption is illusory.

Here, Stanford Dining (SD) operates as a selfsustaining auxiliary and competes on its “open campus” against a slew of alternate providers for catering, retail and some residential opportunities. At the same time, it also complies with Stanford policies regarding bargaining unit and “living wage” rates and benefits that outsource providers often do not offer. (This fall, the minimum wage on campus for part-time, non-union workers went up to $12.59 per hour!)

The complexities of operating in this environment can be just as challenging as Stanford’s admissions process is for prospective Stanford students. Further, Executive Director Rafi Taherian sees the department’s role as extending significantly beyond managing financially sound operations that exceed expectations for quality and value.

“We are also charged with supporting and maintaining the larger cultural and philosophical traditions of the Stanford community,” he says. “Decentralized residential housing is one of those traditions; so is the idea that there is no monopoly in terms of who can bid on foodservice business.

“We are passionate about providing our students with the best value for their food dollars. At times that means we are the operator of choice, and at times that means services are best run by others. Our goal is to achieve a sustainable balance while still providing that value.”

Achieving Sustainable Balance
In fact, one finds that Sodexho, Bon Appetit and Guckenheimer all operate various retail operations on the campus. So do nearly 20 local entrepreneurs, ranging from restaurants to mobile vending trucks to mom-and-pop operations selling soft drinks and sandwiches from folding tables along the access roads entering campus.

Outside catering firms are free to compete for event business as well, although Stanford Catering’s impressive resources and consistent track record have allowed it to retain the school’s big-ticket, traditional events and functions over the years. Dining also does a high volume of mid-range catering from some of its retail operations like Olives and The Café. Finally, when it comes to concessions at the new stadium, SD again has no guaranteed in, but must bid anew each contract period. (On the other hand, per capita concessions sales in the new stadium skyrocketed to $7.50 from $3.00 under Dining’s management, another mark of achievement).

The residential program, a financial mainstay at many universities, also faces unique challenges. In keeping with one long-held convention, each of the nine residence halls that SD operates maintains a separate kitchen and dining room despite the fact that some halls only house about 200 students each and are in close proximity to one other.

What’s more, only the 3,600 students who live in those particular residence halls are required to purchase a meal plan. Although 95 percent of the school’s undergraduates reside on campus, the rest elect to live in campus apartments or in one of many small, independent houses that hold 50 to 55 students, where foodservices are self-managed or contracted out, typically to a private chef.

Still, you don’t find Taherian complaining. He has earned the support of the Stanford administration and in particular that of Shirley Everett, Stanford’s vice provost for R&DE. Everett, a past Silver Plate winner who at one time operated SD herself, was the one who originally hired him away from the Culinary Institute’s Greystone campus back in the mid 1990s.

“Her vision was to change Stanford Dining to ensure that it produced restaurant quality food at an entirely different level than what was offered at the time,” Taherian recalls.

“In those days, we did not operate any retail venues on campus. It was Shirley’s leadership that enabled us to extend our residential program to include enough critical mass on the retail side so we are able to provide the full range of meal options students want for their dining program dollars.”

Taherian also relies on an able management team. This includes Eric Montell, senior associate director; Karen Andrews, associate director of student dining; Irit Tadelis, the department’s chief financial officer; and Dennis White, its dedicated construction and project manager.

Institutional Statesmanship
Taherian’s approach has focused on creating top quality food concepts and presentations while at the same time “staying lean and working smart.” The decentralized nature of the residential dining program means the department can not easily turn to a central production model to achieve efficiencies, as many universities do.

“We do not have and probably could not develop the infrastructure on campus to take that route,” says Taherian.

“Instead, we have turned to tightly controlled purchasing and distribution contracts, the use of technology and operational benchmarking to achieve our results.” He notes that, over a 10-year period, two years saw no rate increase in board charges and the others always bore an increase less than the rise in the Consumer Price Index.

It’s an environment where institutional statesmanship is essential, especially when operating realities make it necessary to “adjust” longstanding traditions without generating protest.

Residential Ownership
”You’ve got to enlist students as partners in your endeavors,” Taherian observes. “You go to your harshest critics and get them to be stakeholders. You need to bring them into the process and challenge them to help you find solutions. Then they have partial ownership when the solutions are put in place.”

Such was the case when students began clamoring for more late-night meal options. “We talked with students to say, ‘OK, we can provide more late night options without raising costs if we can reduce morning service.’”

Traditional breakfast service is now offered in just two dining halls, with continental fare available at the others. On weekends, one facility closes down. In exchange, two late-night, meal plan-accessible options offering fresh organic salads and fruit, pizza, grab-and-go snacks, smoothies and desserts stay open until 2 AM, five nights a week.

When sustainability (see sidebar) became a student cause célèbre, Taherian organized them to plant and maintain organic, community herb and vegetable gardens at each residence hall. Now, Dining Services uses many of the fresh herbs in its own culinary efforts, while students, under the department’s supervision, sell other bounty at an on-campus, outdoor Produce Stand every Friday.

Karen Andrews, associate director of residential dining, joined the department two years ago after working for many years with a large management company where she specialized in B&I accounts. She observes that “the fast pace of today’s students makes a very challenging customer base. They expect more variety in the menu cycle than the B&I community.

“There is also a strong educational component you don’t find in business dining. When we introduced our ‘Eat Local’ program as an extension of our sustainability efforts, it gave us the chance to introduce farmers and fishermen and other food producers to students and to celebrate their achievements in our dining experience.

“They visited dining halls for a week to talk about the source of food and its connection to the environment. Sometimes their interests were in conflict—it helped students see that, even among environmentally-concerned individuals, the answers are not simple.”

Transaction-based Benchmarking
Engaging and motivating staff is crucial to managing productivity, too. The department employs a wide-ranging system of metrics and weekly benchmarking reports to keep unit managers aware of their performance and to guide operational strategies.

“We have a wide variety of benchmarks for both residential and retail operations” says CFO Tadelis. A majority of them are transaction-based and focus on everything from food and labor costs per transaction to transactions per productive employee hour to inventory turnover at the unit level.

“These numbers are shared with every manager, individually and as a group, and we work with them on how to effectively use them in managing their operations,” she adds. “We encourage competition among them, much as if they were unit managers operating in a contract environment.”

Tadelis also oversees procurement and notes that the department has benefited both from participation in purchasing cooperatives as well as through its negotiation of direct purchases with a number of manufacturers.

Destination Dining
“The term ‘Meal Plan’ is a terrible one—it emphasizes the process of feeding rather than the dining experience,” Taherian says. “In some ways, ‘Retail Dining’ is just as limiting—it suggests that retail operations are somehow separate.

“The financials may be different, but we look at dining as taking place in a continuum of venues that operate in a symbiotic way. A resident student should see the retail operations as an extension of the board program and we try to manage all of our operations in that larger context.”

On the residential side, Taherian instituted a new tradition about two years ago. Instead of offering as-similar-aspossible meals among the nine dining halls, he decided to create a unique signature anchor at each site, an approach that became known as Destination Dining.

As a result, no two dining halls are alike. Most have an established cultural focus, and in that case, dining centers on that theme. At the Stern complex, for example, a focus on Latin culture is complemented by Casa Zapata.

At Wilbur, another complex, a focus on Asian studies is matched by the authentic Asian meal platforms and fromscratch cuisine of The Golden Dragon, prepared by an experienced Chinese restaurant chef recruited specifically for that location. A broader palette of Southeast Asian cuisines can be had at Tao Now in Branner and a variety of other cuisines extend this breadth at other serveries.

Each hall also offers abundant choices outside these themes, with grill stations, salad bars, express bars, pizza, and extensive vegetarian and vegan foods as well. “But if students get a craving for a particular type of ethnic food, there’s an onsite venue where they can find authentic fare every day—they don’t have to go off campus to get it,” Taherian says.

Balancing a combination of in-house and national brands, the department also offers a range of retail options (nine in all) that run the gamut from Peet’s Coffee and Tea and Subway to such in-house concepts as Olives, a Mediterranean-influence restaurant, and The Café, an airy, sophisticated venue that offers quick-serve sandwiches, salads and barbecue items.

Retail as a Linchpin
The department also operates a variety of quick-stop sites at Union Square in Tresidder Memorial Union, where selfbranded stations round out the mix. Three new concepts, slated to open this fall, include the Axe & Palm diner and Tomatillo’s, a Mexican-themed taqueria, along with Energy Zone, a smoothie and juice bar concept from Freshens.

Besides making the most of his retail outlets’ appealing concepts, decor and tempting food choices, Taherian exercises the advantage of Cardinal Dollars, students’ flex funds that can be used only in SD-affiliated retail sites, and not at those of competing providers on campus. Students receive varying amounts of Cardinal Dollar credit depending on the meal plan chosen and can also purchase them directly online. Last year, the department generated over $250,000 in additional revenue from such add-on Cardinal Dollar purchases.

Another advantage SD wields is the coordination between its retail sites and catering services.

“All of our retail operations—from the Schwab Center to Stanford Catering to the individual retail sites—work closely with each other,” says Senior Associate Director Eric Montell. “That means we can provide a one-stop shop program for any client, and move them up or down the ladder of service offerings as it is appropriate.”

For instance, if a client requests Schwab Center, but it’s booked or doesn’t match the event requirements, managers from each retail operation consult and determine which facility would best suit those needs; then the appropriate manager contacts the prospective client. There are a variety of other high-end venues on the campus where foodservice is overseen by Catering Executive Chef Andrew Mayne. He regularly—and seemingly effortlessly— plans and executes everything from a 10-course tasting menu to a BBQ event for 10,000. For less elaborate needs, other catering options are available from outlets like Olives or The Café.

“Tiered catering gives us the best opportunity to keep catering dollars in our system,” Montell says. In fact, catering makes up a substantial percentage of many retail outlets’ revenues. Says Montell: “In our retail settings, there’s basically one meal period—lunch. Margins are harder to achieve when you must rely primarily on store transactions. Having multiple levels of catering allows us to increase sales by using existing staff.”

“Whereas a single person can handle a catered event for 100 people, it takes many more hands to feed 100 coming through a retail store.”