Food and Family: The Rewarding Impact of Family Business

Ignoring the “Opening Soon” sign on the door of Ramen Nagi restaurant in Palo Alto, California, two curious pedestrians try the handle. The door opens, but not far.

A bleary-eyed but smiling man at the threshold dashes their hopes of tucking into bowls of rich broth, steaming noodles, and tender pork. “Sorry,” he says, “we’re not open yet.”

The hungry diners don’t know it, but the man who has gently turned them away is Ramen Nagi’s publicity-shy co-owner, Stan Ko ’99. Ko leads a growing 750-employee hospitality business that includes everything from casual ramen noodle houses to overseas franchises of Ruth’s Chris Steak House to buzzy Michelin-starred eateries.

Unlike Satoshi Ikuta —Ramen Nagi’s founder, celebrity ramen master, and Ko’s business partner —Ko prefers to operate behind the scenes. He travels the globe overseeing the family business, the Ko Hospitality Group, which was founded in 1989 by Ko’s father, William, and includes 35 Ramen Nagi restaurants in Asia. Ko, the president and chairman, keeps an exhausting schedule, logging as many as 200,000 miles a year in the air.

A recent trip —on which he bounced from Taiwan to China to California to New York and then back to California —has left him incredibly jet-lagged; yet he is gracious, and sits down with us for an interview, punctuated by sips of hot black coffee from a café two doors down from Ramen Nagi.

Food and Family

The sleek 60-seat noodle shop is the first foray into the US market for the Ko Hospitality Group and chef Ikuta. Executives spent three years considering sites before choosing Palo Alto, which boasts a small but vibrant downtown where Silicon Valley entrepreneurs, Sand Hill Road financiers, and Stanford students and faculty rub elbows at sidewalk café tables. “Depending on who you speak to, it’s the center of the universe, right?” Ko says, grinning. “It’s a good starting point.”

Ko knows the San Francisco Bay Area well. The oldest of three brothers, he was born to Taiwanese immigrants in the seaside town of Monterey. His mother, Rosalinda, joined the Gap’s accounting department when the clothing chain had just eight stores. She eventually ran the company’s buying offices in Hong Kong and Asia. Ko’s father was employed by Pan Am airline, and the couple owned and ran a Chinese restaurant. “My dad worked basically every day, 24/ 7,” Ko says.

William Ko’s gregarious personality and business skills made him well suited to the restaurant industry. He eventually left Pan Am to focus on restaurants, opening a franchise of San Francisco–based Swensen’s Ice Cream in Taipei in 1982. The time was right for family-style restaurants that served American food and breakfast all day, Ko says, because the growing middle class was eager to spend its disposable income on dining experiences. His parents were “ahead of the curve,” he says, in anticipating Asian customers’ desire to patronize restaurants.

Ko joined the family business after graduating from the University of California San Diego with an economics degree. After spending five years working with his father, he enrolled in Columbia Business School. He took a job with the Coca-Cola Company after graduation but quickly became disenchanted. Compared with the vital hands-on role he’d held in the restaurant business, Ko realized he exerted negligible influence on Coca-Cola’s vast operations and decision-making processes. Six months later, he returned to the family business.

“That’s why a lot of younger people gravitate to startups,” Ko explains. “Besides working for a salary, you want to give meaning to your life. Having some impact on what’s going on is very rewarding. Not being able to see your impact is kind of discouraging.”

Ko, a member of the School’s Family Business Program’s advisory board, credits his classes in entrepreneurship and business management with helping him guide the Ko Hospitality Group’s transition to professional management. He also says that what he learned in those classes helped him position the company for growth as it added Asian franchises of American restaurants.

A World of Dining

In 2008, Ko became president of the Ko Hospitality Group and its subsidiaries, Hasmore Ltd. and the Hasmore Restaurant Group. His father died in 2014, and his mother is still involved in the business. Ko and his brothers work together, each in a leadership role. Edward Ko ’14 is executive vice president of corporate services, overseeing accounting, human resources, construction, marketing, and information technology. David Ko is executive vice president of casual dining concepts, such as Ramen Nagi.

At the Ramen Nagi in Palo Alto, diners have been queueing up on the sidewalk for up to 90 minutes for the hearty soups that have earned rave reviews on Yelp. A second location is opening this fall in a mall in San Jose, and the company is scouting locations for a third site, possibly in San Francisco. “We believe in controlled, sustainable growth,” Ko says. Because the business is privately held, the brothers don’t have to answer to stockholders. “You’re not chasing quarterly profits,” he says, which frees them to make long-term, strategic decisions.

On the other end of the dining spectrum, the Ko Hospitality Group’s holdings include two Michelin-starred restaurants. One is RAW in Taipei City, where chef André Chiang and his staff meticulously craft eight-course tasting menus showcasing “bistronomy,” which the restaurant’s website describes as “a new wave of cooking style born in Paris, offering experimental haute cuisine at a reasonable price.” The New York Times recently featured the restaurant, which has also been recognized for its unique architecture and design. The 60-seat restaurant’s sole drawback, foodies say, is the near-impossibility of securing a reservation, though students on a Chazen Global Study Tour had a chance to dine there, thanks to Ko’s hospitality.

Equally challenging to book—and in the same building—is Shoun RyuGin Taiwan, a two-starred Michelin restaurant whose chefs craft Instagram-worthy dishes using seasonal, local ingredients.

Ko shuttles regularly between the company’s holdings. He has no trouble sleeping on flights, a boon to his schedule. His days are packed with meetings and reviews of architectural plans, plus sampling menu items, and providing feedback to chefs (Ko demurs diplomatically when asked to name a favorite cuisine or restaurant but is quick to praise the vibrant restaurant cultures in Tokyo, San Francisco, New York, Paris, and Taipei), squeezing in a workout, devoting “hours and hours” to answering emails, reviewing financial reports, and when he’s home in Taipei, spending time with his wife, Annabelle, and sons, Owen, 17, and Henry, 15. “I don’t see myself as a top executive,” Ko says with a shrug. “I’m doing the best I can, like everybody else.”

That humility and work ethic aren’t lost on his staff. “When he sets a goal, he will try everything in his power to reach it,” says Eric Wang, Hasmore’s senior vice president, who is based in Taipei. “If he does not succeed the first time, he will try again and again until the goal is reached. If you need to practice 200 times to be perfect, he will be there with you to make sure you can deliver the perfection every time, because that is how he does it himself. Sometimes you can really hate it, but once you understand it, you will try your best.”

When Ko returned recently to Palo Alto to check on operations at Ramen Nagi, he took the role of maître d’, graciously greeting queued diners and assuring them, apparently unnecessarily, that the food would be worth the wait. He consistently models hospitality for his employees and executives, says James Young, Hasmore’s culinary director. “He’s not one of those owners who comes in and stands in the back. He likes to be hands-on.”

Like Ko, Young is a Bay Area native and the son of Chinese restaurant owners. A Hasmore employee for 12 years, Young worked his way up from a line cook to an executive role. Ko has been an excellent mentor, exemplifying hard work and modesty. “He’s very low-key and humble,” Young says, “and that’s how I like to operate too.”

A Gracious Host

To Ko, running the family business means ensuring that meticulous care is lavished on every patron and that every dish meets exacting standards. And Ko is a master at it, says Young, who watched his boss in action at Ramen Nagi in Palo Alto and wasn’t surprised to see Ko take the initiative to greet guests and thank them for their patience.

Restaurants should always make diners feel like treasured visitors, Ko says. Whether customers eat at the family’s Michelin-starred restaurants or slurp up a $14 bowl of noodles, they deserve the same quality ingredients and attention to detail. Ko praises In-N-Out Burger, a family-owned West Coast chain beloved by its devotees, for its consistently stellar attention to its customers. “It’s not like ‘We’re really busy so we can be curt with you at the register’ or ‘Don’t bother me, I’m really busy and my apron is dirty.’ It’s like the Michelin of fast food,” he marvels. At his own dining places, Ko says, “whether you’re a young student couple or the CEO of Samsung, we’re going to give you the same service.”

But then he changes his mind. “Actually,” he clarifies, “I want to show the student couple greater hospitality, because they can’t afford to come here every day. I hate those restaurants where you have to earn the respect of the staff. We’ve all been to one of those restaurants. I’m sensitive to that. It defeats the whole feeling of what a restaurant should be like.”

Restaurants are in a class of service all their own, he muses, because unlike retail, they take on production and service simultaneously and in the same location. “In a restaurant, you are manufacturing a product, but you’re also manufacturing an experience,” Ko says. “It takes a unique skill set to do both well.”

Read the original piece on Columbia Business School’s Ideas and Insights blog.