Cold Call / Episode 188

Planning the Future for Harlem’s Beloved Sylvia’s Restaurant

Listen | 27:27

The grandson of the founder of a longtime soul food restaurant must determine what’s next for his family’s business.

November 15, 2022

Sylvia’s Restaurant, which celebrated its 60th anniversary in August 2022, is a testament to the values instilled by the founder and matriarch, Sylvia Woods. She cultivated a strong community around her soul food restaurant in New York City’s Harlem neighborhood that has continued to thrive, even after her passing a decade ago.

Amid business expansions and succession planning, the legacy of Sylvia Woods continues to live on. But as Sylvia’s grandson takes over the business, a new challenge faces him and his family: what should the next 60 years of Sylvia’s look like?

Harvard Business School senior lecturer Christina Wing and Kenneth De’Sean Woods, chief executive officer of Sylvia Woods Inc., discuss the case, “Sixty Years of Sylvia’s.”

BRIAN KENNY: Warning, this episode of Cold Call might make your mouth water. That is if you like biscuits and gravy, or fried chicken, or candied yams, or collard greens. In other words, if you like soul food. According to Epicurious, soul food is one of the most popular food categories in the world. It originated in the Deep South where enslaved workers, desperate to find ways to nourish their families, prepared the meager rations they were given, using cooking techniques from their West African heritage. When freed slaves migrated North after the Civil War, they brought along their recipes. Generations later, the food that became synonymous with the Black American experience has found its way into kitchens everywhere. Today on Cold Call, we’ve invited senior lecturer Christina Wing and case protagonist Sean Woods, to discuss the case entitled, Sixty Years of Sylvia’s. I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents Network. Christina Wing is a senior lecturer at Harvard Business School and an expert on topics surrounding families in business. She even created the course titled, “Demystifying Families in Business.” Kenneth De’Sean Woods is CEO of Sylvia Woods, Inc., owner and operator of Sylvia’s Restaurant in Harlem, Sylvia Woods Food Company, and Woods Real Estate Group. Thank you both for joining me today.

CHRISTINA WING: Thank you.

SEAN WOODS: Thank you.

BRIAN KENNY: Yeah, I’m hungry after reading that introduction.

SEAN WOODS: You and me both.

BRIAN KENNY: I went to your website, Sean, and I looked up the menu so I could make sure that I was citing items that you have on the menu. And boy, did it look good. What a great menu. So, it’s great to have you both in on the conversation because oftentimes we invite the protagonist in. And I think people will really enjoy hearing firsthand from you, Sean, about some of the challenges and opportunities you’ve encountered along the way here as you stepped in to lead the family business, this history business. And we’re going to hear more about Sylvia and how this came to be. And Christina, you and I have done cases before about some of the things that you’ve written about with regard to the intricacies of family business, and it’s never straightforward. There’s always a lot of nuances and wrinkles and things that need to be considered. So, why don’t we just dig right in. If you want to start, Christina, can you tell us what the central issue in the case is and what’s your cold call to start the discussion?

CHRISTINA WING: So, my cold call is: Is Sylvia’s a monument to Sylvia, or is it a business? And the central issue here is surrounding the fact that this wonderful family business has been created. However, as family members grow, the number of people that can work in a family business needs to change. And also as times change and you want to have growth, is there growth that needs to happen in addition to the restaurant Sylvia’s?

BRIAN KENNY: So, I’m wondering how you heard about this and why you decided to write about it. I know it relates directly to some of the things that you think about and even your past experience. But how did you find out about Sylvia’s?

CHRISTINA WING: I was fortunate enough to find out about Sylvia’s by experiencing it, and eating there a long time ago. But it was brought back to my attention by two students of mine who did a field project on Sylvia’s. One of them had gone to college with Sean. Once I heard the story, I knew I had to write about it.

BRIAN KENNY: It’s funny because I’ve told several people in passing that we’re going to be talking about this case today. And I told maybe four or five people and four of them had been to Sylvia’s. I haven’t, Sean, I’m going to have to make the pilgrimage there and check it out because it looks great. Maybe you could just tell us in your words, how would you describe the restaurant and how important is it in the community of Harlem?

SEAN WOODS: I would describe the restaurant as being, one, my grandmother’s child, her first child. So, it’s very personal to her. And in regards to what it represents in Harlem, it represents one of the last remaining hallmarks from the Great Migration from the south to the north. And there were several restaurants and businesses that were started by people who came up from the south. Unfortunately, Sylvia’s is really one of the only remaining ones that are still here in Manhattan. It’s definitely family oriented. It’s community oriented. And it was made in the image of my grandmother. That’s high level how I would describe it.

BRIAN KENNY: Yeah. That’s awesome. Can you tell us a little bit about Sylvia? What was her background like?

SEAN WOODS: She’s originally from Hemingway, South Carolina, small town. People are familiar with Myrtle Beach. We were talking about golfing, big golfing destination, but about 45 minutes inland from Myrtle Beach. She was a beautician. And she was raised by, essentially, sharecroppers and she always had aspirations to do more. And one thing she would always say was, when people would ask her why she came up to the north, why she came to New York in particular, she had said that the cotton fields of Hemingway were chasing me away and the bright lights of New York City were calling me. She had a tendency to say things like that all the time. So, basically she came up to New York, still trying to figure it out. Obviously as a beautician, she thought about doing hair. But she got a job at Johnson’s Luncheonette who owned three luncheonettes in Harlem. And she worked as a waitress for him. And when he was prepared to leave New York, he wanted to go upstate to start a resort, a skiing resort. He was actually a Black man ahead of his time as well. When he was making preparations to go upstate, he had asked my grandmother if she would like to purchase the luncheonette, the one here on Lenox Avenue. And she was unsure as to how she would go about it from a financial perspective and that also just owning her own business. But she went to her mother, my great-grandmother, Julia Presley, and asked her for a loan. And my great-grandmother took out a mortgage on her farm for about $19,000 and gave it to her. And she purchased the luncheonette.

BRIAN KENNY: I think this is pretty remarkable actually, that an African American woman some 60 years ago was able to make this deal happen. So, this is happening in what, the 1940s?

SEAN WOODS: Yes, this is the forties. She came up to New York in the late forties and the purchase of the luncheonette was made in 1962. So, she was in New York for some years before she made the purchase. She had a fair amount of experience as a waitress. From what I’ve heard, obviously this is far before my time, but her and Mr. Johnson had a very tight connection, obviously. It’s noted that he offered her the opportunity to purchase a restaurant. He saw something in her ability to work and actually run a business. So, probably saw something in her that she may not have seen in herself.

BRIAN KENNY: Let’s talk a little bit about Sylvia as a business person. She did some really interesting things early on to sort of stabilize the business so she wasn’t just relying on the restaurant, which we all know can be a dicey affair. If you’ve ever worked in the food business, it’s really hard to make that work. What were some of the things that she did?

CHRISTINA WING: Well, I think what, what’s amazing about what Sylvia’s did, Sylvia did is that she understood that she needed to own the real estate. That the way she was going to lose her business was by not literally owning the building where she was operating. And so, she quickly went down a path of stabilizing all the things she could control. She was a great negotiator of prices. She was frugal beyond frugal. She kept hand ledgers of everything that she did. And she also had family work in the restaurant, which probably means they weren’t really getting paid unless there was a profit. But she built a business to sustain a business. She didn’t build a business to change the lifestyle of her family. The business became their lifestyle.

BRIAN KENNY: And how much, in your estimation, how much did the business become Sylvia? Did she become the cult of personality around the business?

CHRISTINA WING: From everything I can see, and when you go in there, you still feel her presence. You feel that this is a magic spot where she’s still probably sitting in the back cooking. Or she’s sitting there shaking her head at what some of her kids and grandkids are doing in the restaurant. And the people in there feel like they’re eating in Sylvia’s home. It feels like you’re eating in somebody’s home. It’s pretty special.

BRIAN KENNY: Sean, would you agree with that? What’s your take on that?

SEAN WOODS: I completely agree. And the way it was created, people would ask me, “How’s your grandmother, outside of the restaurant?” I’m like, “She’s exactly the same.” So, your experience in the dining room is my experience in her dining room in her home. So, she was very authentic and she was just herself. And I think that’s why people gravitated to her and to the restaurant.

BRIAN KENNY: Yeah, that’s great. Tell us a little bit about your background. So, we know now you stepped into this leadership role and I want to talk more about that. But this was not an obvious easy decision for you. Is that right?

SEAN WOODS: If you asked me 10 years ago, I would not have predicted that I would be here right now, in this office, at this restaurant. Obviously, I grew up in the restaurant, just like my siblings, my cousins, all of us did. I always wanted to go into business in some way, shape, or form. But in terms of working within the family business, I didn’t really have an interest in running a restaurant. I went to Cornell University, who has a great hospitality program. And everybody would ask me like, “Oh, are you going to study hospitality?” I was like, “No, I don’t want to study hospitality.” Now thinking back, I should have taken more hospitality classes, but I studied industrial labor relations. I thought I wanted to be a lawyer. Then I ended up in policy. I was working, had an internship in Congress. I was a bit like all over the place, navigating as a young person. And I ended up studying information systems and public policy in grad school. And I went into basically a data privacy track at IBM. And I was there for about six years. Where it transitions into Sylvia’s, I mean I was helping my dad, along the way, in terms of just trying to be a sounding board, trying to give him some insight in terms of what I’m learning in my career, and just trying to help him navigate as he was getting older, from a financial perspective. He basically asked me when I had the opportunity to take my parents out to, they came to visit me in London, where I was working, and we went to Rome, which was an amazing experience. We went to Rome for Easter. And my dad officially asked me what are my plans for the next few years? And always had this, in the back of my mind, I planned things like three to five years at a time. And I thought about making a pivot. I wasn’t necessarily content where I was. And a lot of people who were hired with me in my cohort, they were making moves and I wanted to do the same. I had a few job offers on the board internally and externally. But I really took a step back and I thought about what my dad was asking me and I thought, “Why would he ask me this?” Obviously he wouldn’t ask me this if there were better options. The preference would be for family to run it. I thought that there was, one, an opportunity to grow the business. And then, two, from a professional perspective, I thought that, wow, maybe I could kind of chart my own course within my own family. And I basically made the decision. Sometimes I think I did it a little too quickly. Maybe I didn’t think about it enough. I had a lot of people in my family, including my own mother, which I told Christina about, who were adamantly opposed to it. They weren’t opposed to me helping the family, but they didn’t want me to leave my own path to enter the family business.

BRIAN KENNY: Let me pause on that for a second. Cause I think that’s a pretty interesting dynamic. Here’s your dad asking you to step in and take over. And your mother among others are saying, “Well, no, we’re not sure you want to do that.” So, Christina, let me come back to you. I’m wondering about this dynamic and how it plays out in your experience. You’ve got the founder, and then you’ve got the next generation, and now Sean is a one generation removed from that. Is it common to have this kind of reluctance?

CHRISTINA WING: Oh, this is very common. So, Sean is G3, and typically G2 sees the first generation create a business, and they want to assimilate to how the first generation operated. And so, typically spouses of that generation are hesitant to see their children go in and have this predictable future where you are always doing things a certain way. And so many families are divided about children entering the business because they want children to be entrepreneurial and innovative, and they might have seen, from the past, that that wasn’t allowed. They also see a lot of arguing, and tensions, and family members asking for things. And it becomes, many times the person in a family that runs the family business becomes the head of the family. And that is a huge weight. What I mean by that is, many families really put that person on a pedestal, and that person is suddenly making all the decisions for the family. And so, it’s important to separate the two roles.

BRIAN KENNY: Yeah, for sure. And then it becomes, I would imagine it becomes awkward. In Sean’s case, he has to now manage his siblings and his cousins, and he has to give direction to people that were his peers before. That’s got to be difficult.

CHRISTINA WING: Yes. But he also has to manage his aunts and uncles who are older than him, which is even more difficult. And so, there’s, the cross-generational management of managing up, and managing sideways, and managing down is very hard. And in business you need somebody that has a vision and then creates a team that can execute that vision. The other hard part is there might be people more capable than family members to work in this business. And that becomes a challenge.

BRIAN KENNY: And is it also a challenge, in a case like this, where Sylvia is still in the picture, right? Is it hard, in this case, to be able to not get overshadowed by that and to still be innovative and come up with ideas when you know might be veering away from the original vision?

CHRISTINA WING: Well, Sylvia’s in the picture in spirit because she’s passed on. But she is in the picture in that what the core asset is, is something she built. But the growth from now is going to be assets that she never built or dreamt of, but it’s going to be built on her brand. And so, there’s a big leap of faith that Sean is going to both be a custodian of Sylvia’s brand and her legacy, but also create a brand that could be greater than what it is right now in Harlem.

BRIAN KENNY: Sean, have you felt any sort of hesitation on your part to diverge in any way from your grandmother’s vision? Does that make you pause when you have ideas?

SEAN WOODS: No, actually my perspective is pretty much aligned with hers. I think that the time I spent away allowed me to really have a different perspective than my family, who’s really been in the business forever, including some of my cousins. This is the only job they’ve had. Even the ones who went to college, immediately after graduation, they’re right back into the business. So, my time away gave me a different perspective. And it made me more cognizant of the fact that the reason why the restaurant still exists, 60 years later, is solely because of my grandmother. I’m not discounting anybody’s inputs. I think people worked really hard. I commend them. And that goes for the second generation, the four of them, and even my cousins, siblings, who have been in management and operations. But I know, as time goes along, the stories I hear, the anecdotes, these are all very, very casual interactions that people have had with my grandmother that make them want to come back. The stories they tell. The stories I tell. They all relate back to one person. And it’s her presence, and her ability to really touch people, and make them feel at home. So, if anything, I feel like I’ve diverged from the family in terms of doubling back to a time that has passed already, in a person who’s no longer there. Where I know people want to get innovative, and try new things. And “Oh, we have to adapt to the new climate of Harlem,” which is significantly different than the place I grew up in. But at the end of the day, the thing that still holds true is the feeling which she provided. So, I’ve been trying to double back and get back to that place.

BRIAN KENNY: The case makes mention of the fact that you’ve had to do some menu changes over the years, to your point about having to adapt to where the world is headed, and people are looking for healthier food options, and that kind of thing. But there was a little bit of tension even around doing something like that, like changing the menu. How does that play out?

SEAN WOODS: Yeah, it’s tough. Because, one, you have customers who have 60 years of experience with the business. Some people will literally come to me and say, “I’ve been coming to this restaurant since 1962.” I know several people like that. Some of them who have passed on, but still. So, it’s always difficult to try to manage, obviously, the changes in tastes and dietary, just the restrictions people have. We have a lot more vegans now. We have a whole bunch of vegetarians. But at the end of the day, there’s still staples of the menu which are going to remain there. And we’ve add grill items, for obvious reasons, and diversified the menu. But at the end of the day, people come to Sylvia’s for a reason. 70% of food sales are still going to be fried chicken, chicken and waffles, macaroni and cheese, candied yams. But that other 30%, yeah, we have some flexibility there to try new things.

CHRISTINA WING: One of the things I think we’d be remiss if we don’t point out is that what Sylvia’s has represented for all these years is consistency. And so, consistency doesn’t mean continuity of products. It means consistency of a safe place to go with good food, with nice people, and the people that are going to take care of you in the restaurant really care. And she not only did what she had to do, but she became a Black business owner of not just a restaurant, but real estate, in a time when that just wasn’t happening. And to do that, and then still be around is truly amazing. And if you separate and you think of all the restaurants we’ve all seen over our lifetimes, that are now gone, it’s much more likely to have a restaurant fail than to make it. But to make it this many generations and still have the consistency of warmth and safety is, it’s a miracle.

BRIAN KENNY: Yeah, it’s really remarkable. And the case has some great exhibits in it. It shows a lot of pictures of the family. Big family by the way. Really, that’s awesome. Also shows pictures of your grandmother with presidents and celebrities. And so, the bright lights of New York might have been calling her, and I’m happy that she got the opportunity to stand in that light for a while. Sean, you mentioned earlier that you plan things in two and three year increments, which makes you far ahead of me in terms of planning. So, I’m wondering, as you stepped into this role, and you assessed the situation, now you’ve got to look at it differently because you’re not just there to help out, you’re there to lead. What were some of the strategic choices that you made early on? What were some of the things that you wanted to focus on?

SEAN WOODS: I’ll be honest, I was extremely aggressive in my thought process in terms of what I would be able to change immediately coming into the business. And now in hindsight, I was very naive to think that I would be able to accomplish all those things in a short period of time. At a high level, I wanted to consolidate the businesses. As we are, we have a food company that has been somewhat run by a third party, even though it’s owned by the business. I wanted to bring that back in house. From a restaurant perspective, I wanted to double back down on hospitality and that feeling that I’m chasing, that people experience when my grandmother was there. And then from a real estate perspective, I wanted to redevelop the property on Lenox Avenue and then buy some more real estate. Because the real estate has been one of the main reasons that this restaurant is still existing to this day. I have a very large family. As the family grows, the reliance on the business is something that made me nervous. That’s one of the reasons why I moved back to New York and left my job. Because I didn’t think it was sustainable. And I didn’t think that the family necessarily had preparations in place for worst case scenarios. And then a pandemic happened. But still, I thought that the fluctuations in the restaurant business, the industry, which constantly changes, and the over reliance on the business to employ people, feed them, house people, was just unsustainable. So, I just wanted to diversify essentially.

BRIAN KENNY: So, let’s talk about the pandemic, because the pandemic was decimating to the food industry, the food service industry in particular. And you guys survived. I’m wondering, what did you learn about the business and its capacity for weathering the storm during the pandemic?

SEAN WOODS: I knew it, but I got to see it up close, how loyal people are to the restaurant. The amount of customers who would literally come to the restaurant three days a week, even when we were only doing takeout and delivery, and purchased their same items. We had these family packages that we created for people to obviously be able to feed a household. And the people just kept coming back, coming back. They were so appreciative. And they were loyal. And I knew that that was something extremely unique because I’m a consumer as well. I’m not loyal to any restaurant in the same way these people are loyal to this restaurant. I don’t go to places 125 times a year. We have customers who actually do that. So, the pandemic was further proof like, “Wow, this place is really,” it is a part of the community, and it’s needed, and it’s necessary for it to still exist. Because even outside of that business aspect of us staying afloat, with just through the brand loyalty and people continuing to be patrons, we had a full pantry here that we were feeding people, every Sunday, giving away a thousand meals. And it’s just that give and take, which was always a part of the brand and a part of what my grandmother would do. And I don’t think she even did it, it was just who she was. I don’t think she did it like, “Oh, wow, this is going to be good PR,” or “This is going to get our loyalty up.” It’s like, “No, if I can help you, I will.” And all those things reverberate all these years later and people still show appreciation. Even the people who came to me when we were doing the pantry, it’s like, “Your grandmother would be proud of you.” And I just really, I’m thankful that she showed me those things.

CHRISTINA WING: You know what’s so funny about that, Sean? It reminds me of the stories that your father told me about how people would come to her for loans all the time because she was the person that didn’t overspend. And she’d go back into the back room, and give somebody some cash, and keep a detailed record of it. But she lent more people money in Harlem, over the years, with zero interest, by the way, just to help them out. And food is also, food is love. And she would do that. She really was quite amazing.

BRIAN KENNY: And the case talks about the fact that having access to capital for minority-owned businesses is always a challenge. We know there are systemic issues with that. And in Harlem in particular, during the pandemic, many, many businesses didn’t survive.

CHRISTINA WING: No, they didn’t. And it’s very sad. And Sylvia’s didn’t survive based on any government help or anybody else. It survived based on good management and their customer base. But what bothered me a little bit, when I was writing this case, I kept thinking, “Who cares about Sylvia’s?” So, the family cares about Sylvia’s. The customers care about Sylvia’s. But New York City really cares about Sylvia’s. They have tour buses that go by into Harlem and go by the restaurant. And you would think for a city that cares so much about it, and talks about it, that they might have even helped Sylvia’s in a way, and they didn’t.

BRIAN KENNY: Yeah. This has been a great conversation. I’ve got one more question for each of you, and I’m going to start with you, Sean. I’m wondering, as you think about three, four, five years down the road, maybe even longer, because Sylvia’s has been around for 60 years. What will success look like under your leadership in the future?

SEAN WOODS: Success will mean the successful transition from second generation to third generation, which I’m at the forefront of right now. It’s an interesting dynamic because, traditionally, I would assume that the succession planning would be planned by second generation, but essentially I’m the one planning it. So, it’s a weird dynamic that I’m in. And that successful transition will be me being able to provide a healthy retirement to the four owners, and for the business to be able to basically operate as a business. It’s more than just a family business. And I’ve said it in different ways, but I’m transitioning the family into ownership. My job is to make sure that the business operates effectively and profitably. And obviously staying true to the legacy. So, having the right people in the right positions, family or not, and being able to provide financial support to my family. That’s, in my perspective, that’s what, I would be successful if I’m able to do that.

BRIAN KENNY: I’ve got a two-part question for you because I’m actually want to key off something Sean just said. In your experience, how does succession planning work in a family owned business? When should he start thinking about who will be his successor?

CHRISTINA WING: Sean should start thinking about his successor right now. The day you take the job, you should start thinking about who would be next. Because by the way, there’s no guarantee that Sean’s going to be here tomorrow or the next day. You always have to have a plan. The problem is most families wait until the time when the person that is holding the role should leave right now to start discussing succession. And it becomes this elephant in the room where everybody’s been looking for 20, 30 years wondering. So, with succession there, really, if you can plan it, there needs to be a date when the succession’s going to happen. You name your successors, so everybody else in the family can go pursue other lucrative careers and have a great life. If everybody’s waiting for the announcement, everybody kind of becomes mediocre.

BRIAN KENNY: And so, now my real final question for you, Christina, because you get the last word on this one, is if there’s one thing you want people to remember about the Sylvia’s case, what is it?

CHRISTINA WING: I want people to remember that family is family, and families can own businesses together, and it’s great when they do. But they really need to have a distinction between being an owner and an operator, and an owner and an investor. You can’t have every family member be an operator. You will never move forward. And so, you have to have responsibilities for ownership. But responsibilities for being an investor — be happy to be an investor, and cheer the business on. You don’t have to be an employee of the business to support it. Businesses like Sylvia’s will stand multiple generations if this family continues to put the best people in the best roles, and not every family member working in the business.

BRIAN KENNY: That’s great. Christina Wing and Sean Woods, thank you so much for joining me on Cold Call to talk about Sylvia’s.

CHRISTINA WING: Thank you.

SEAN WOODS: Thank you.

BRIAN KENNY: And Sean, I’m definitely going to come. So, I’m going to look you up when I get there, next time I’m in New York. I got to come by and check it out.

SEAN WOODS: I’ll hold you to that.

CHRISTINA WING: You got to put some syrup on that fried chicken. It’s good. Thanks, Sean.

SEAN WOODS: Thanks, Christina.

BRIAN KENNY: If you enjoy Cold Call you might also like our other podcasts: After Hours, Climate Rising, Skydeck, and Managing the Future of Work. Find them on Apple Podcasts or wherever you listen. Be sure to rate and review us on any podcast platform where you listen. If you have any suggestions or just want to say hello, we want to hear from you. Email us at [email protected].Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School, brought to you by the HBR Presents network.