Individuals who’ve found head-turning success in the restaurant business often ask why stories like theirs aren’t kryptonite to the widely held perception that the industry is a career dead end.
If they were looking for someone to exemplify that myth-busting reality, they’d have an ideal candidate in Gene Lee, the lifelong leader who announced his retirement this week as chairman of Darden Restaurants, the industry’s largest restaurant operator. He had already stepped back from day-to-day operations of the Olive Garden and LongHorn Steakhouse parent by relinquishing the CEO’s post at the casual-dining giant in May 2022.
Lee is far from a publicity hound, so his story may not be widely known. But while receiving an award from Black Box Intelligence a few years ago, he aired details of how he rose from a busboy to leader of a company with annual revenues of nearly $10 billion.
Like many of the business’ outstanding successes, Lee drifted into a restaurant job because, hey, it meant a paycheck. In the recount he aired at the Black Box event, he referred to getting into some youthful trouble, without providing details. He sought an exit by taking a busser’s job at a York Steak House, a now virtually defunct budget-priced steak concept in the vein of a Ponderosa, Bonanza or Ryan’s.
He would move up from busboy to dishwasher to cook.
The irony is that York, which would grow to 200 units, was owned during most of its go-go years by General Mills Restaurants, which would eventually morph into what’s now Darden. General Mills’ biggest restaurant operation at the time was Red Lobster, but its restaurant portfolio also included a number of smaller regional operations, including Darryl’s, York and a handful of others.
Lee recalled that he liked the organization and found an affinity for the business. What he didn’t say, but others have, is that Lee had a particularly strong aptitude for operations. They’ve observed that the New Englander was able to read how a restaurant worked—and how it might function better with a tweak here and there.
In a talk Lee gave to an industry group a few years back, he shared a philosophy of having servers focus on the 6 feet encompassing their tables as their turf, the ground they can control to make the experience remarkable.
His attention to operational details led to a general manager’s post, and then the executive position of director of operations for York.
The York Steak House veteran recalled when accepting the Black Box award that he started taking classes at a local college while working for York, and he decided around that time that this crazy business might be a viable career path. Lee enrolled in York’s management training program. He later told the Bloomberg news service that his father wouldn’t speak to him for three months because he felt the younger Lee was aiming so low in his ambitions.
General Mills would eventually divest York Steak Houses. Five of the restaurants were sold to Uno Restaurant Holdings, the operator and franchisor of full-service pizzerias patterned after the landmark Pizzeria Uno and Due in Chicago.
The Uno concept had been co-founded by Ike Sewell, who became a mentor to Lee after the Yorks were absorbed. He would ruefully remember that the new parent company made him start his career climb all over again as a management trainee for Uno.
He would eventually earn an MBA from Suffolk University in Boston, and started thinking in terms of being a restaurant executive specializing in operations. He would eventually rise to SVP of operations for Uno.
He left the company in the late 1990s to become EVP of ops for Bugaboo Steakhouse, the family-focused steak chain, replete with talking automatons, that had been started by The Capital Grille founder Ned Grace.
Capital Grille and Bugaboo were subsequently acquired by LongHorn Steakhouse to form a mega steak conglomerate called Rare Hospitality. Lee was named EVP of ops for LongHorn, the company’s biggest division. He would be promoted to corporate COO in 1999, adding the president’s title in 2001.
As president, he worked hand in hand with CEO Phil Hickey, though fist-to-fist might be a better description. Their tendency to disagree, often very emotionally, was well-known, and even they acknowledged it was a fractious marriage. But they both professed respect and affection for each other, calling it a partnership that had its heat but ultimately worked superbly for the company.
Rare was acquired by Darden in 2007 for the then-unthinkable price of $1.4 billion. The buyer restructured, grouping Capital Grille and two Darden operations, Bahama Breeze and Seasons 52 into a Specialty Restaurants Division. Lee was named the group’s president.
He grew the division from 60 to 175 restaurants in part through the acquisition of Eddie V’s, a small group of fine-dining restaurants, and Yard House, a high-volume bar-and-grill concept.
According to Darden, the division’s sales grew by an average of 17% annually during that time, and restaurant profitability grew annually by 26%.
Lee’s leadership led to his promotion to Darden president and COO. When his boss, Clarence Otis, left under extreme pressure from a disgruntled investor that forced a turnover of the entire Darden board, Lee was named interim CEO, with the primary task of finding his permanent replacement. It was like being given a shovel and told to dig your own grave.
But Lee’s performance in the role convinced Darden’s newly reformulated board to drop the “interim” from the corporate leader’s official title in early 2015. He then choreographed a sustained corporate rebound through a back-to-basics crusade that pivoted on improved operations. Red Lobster had been divested, but Olive Garden was tweaked and nudged to become Darden’s new racehorse.
Lee also greatly expanded Darden’s restaurant portfolio by leading the acquisition of Cheddar’s Scratch Kitchen, now the third largest chain within the corporate fold.
He resigned the posts of CEO and president in May of last year, choosing as his successor Rick Cardenas, Darden’s CFO under Lee.
Lee’s base salary for his last year as Darden CEO was $1.3 million, with bonuses and incentive awards sweetening his cash compensation to more than $3.7 million, according to securities filings. Another $5.5 million came in the form of stock grants.
The onetime busser earned nearly $10 million in his last full-time year. Not bad for someone who was stuck in a dead-end career.