Gusto 54: Creating a Culture of Ownership and Accountability

The sole owner of the Gusto 54 Restaurant Group (Gusto 54), which owned and operated nine restaurant concepts in Toronto and Los Angeles, had grown the restaurant group into a huge success story. In a competitive, low-margin industry, Gusto 54 outperformed its peers and consistently achieved its desired profit margins. Gusto 54's strategy was grounded in innovative growth, the use of technology, and empowerment of all employees to take an entrepreneurial approach to their roles. The owner had grown the company strategically, making business decisions based on her belief that her most valuable resource was having the right employees. She focused on building culture, hiring employees who fit the culture, and investing in the employee experience to retain them. She also made efforts to keep the leadership team lean and to include all members in decision-making. While Gusto 54's strategy had fuelled its present growth, in 2020, the owner was concerned about the impacts of rapid expansion. She wondered how to balance growth plans with the need to hire and retain top talent and maintain an engaged, motivated workforce. How could she scale up without losing the family-style culture her employees valued?

This case can be used in undergraduate- and graduate-level courses on leadership, management, entrepreneurship, and organizational behaviour. Case A can be taught on its own, or Cases A and B can be taught sequentially, creating a uniquely powerful lesson on organizational culture, structure, and strategy during environmental changes and shocks. After working through the case and assignment questions, students will be able to do the following:<ul>Case A<ul><li>Define culture and consider how it can affect organizational growth.</li><li>Consider how a leadership team is built, the different leadership styles, and what makes a leadership team effective.</li><li>Outline how and way to ensure employee engagement.</li><li>Recommend strategies for overcoming the leadership and organizational challenges associated with rapid growth.<ul>Case B<ul><li>Explore “individual resilience” and “organizational resilience”.</li><li>Explain the concept of culture strength and the strategic benefits of culture work.</li><li>Explain the impact of environmental change and shocks on strategy and structure.</li><li>Identify and prioritize steps to take to survive an organizational crisis.</li><li>Articulate meaningful strategies that companies can adopt to enhance equity, diversity, and inclusion.</li></ul>

• organizational culture, HRM