I was able to spend about 5 hours interviewing 4 Zingerman’s team members live in Ann Arbor, MI in July, 2015. The first was with the man himself, Ari Weinzweig, Co-founding partner of the Zingerman’s Community of businesses.
This community has grown over the last 30 years to include 10 businesses, 750 employees and $55 million in revenue. He’s a manager, a writer, and speaker who loves to share his ideas on raising the energy levels in the workplace, running a more financially solid business, and creating a clear vision that will inspire your teams.
Join me as I chat with Ari the Zingermans way of doing business, creativity in designing your organization, and the top areas of business that should be at the top of your team’s minds.
I’m going to attempt to break down my first few interviews into 3 episodes each because I’m convinced more people want short episodes rather than longer ones. I’m shooting for 20 minutes followed by a series of questions for the listeners to ponder and to help get you moving.
Episode 001 Questions
- He talks about being as creative in managing his business as he is in creating a sandwich. What’s an area of your business have you “let happen” without much thought to how it affects the energy level/engagement of your team? For example, how do you orient and train your new hires – is this system designed to simply teach them how to get their check deposited and learn basics of their job? Or, have you thought about how it can also begin engaging them into buying into the vision you’re trying to achieve?
- Openness – He says people make up stories in a vacuum. In what areas of your business could you look at opening up to begin building trust?
- He doesn’t say this but it’s important to not adopt what Zingerman’s or any other company does well, but to adapt them to fit your culture, vision, and company.
- How can you begin to appeal to your teams’ natural desire to learn, improve and be around good people working toward a shared vision?
- Are your people thinking about how they affect sales, profit and cash flow?
Comment and share your answers below, on Facebook or on LinkedIn.
Remember, you can get hold of Ari by emailing him at firstname.lastname@example.org.
Ari Weinzweig: That’s one of the problems in closed book management. People are making up a lot of stories and their mostly incorrect. By putting the numbers in front of them, it’s like, well you might think we’re winning by twenty but here’s the score. We’re down three.
Todd Reed: My first series of interview episodes are with Ari Weinzweig, co-founding partner of the Zingerman’s Community of Businesses, most notably Zingerman’s Deli.
This community has grown over the last three years to include ten businesses, seven hundred fifty employees and fifty-five million in revenue. He’s a manager, a writer and a speaker, who loves to share his ideas on raising the energy levels in the workplace, running a more financial solid business and creating a clear vision that will inspire your teams. Join me as I chat with Ari at ZingTrain in Ann Arbor, Michigan on the Zingerman’s way of doing business, creativity and designing your organization. In the areas of business that should be at the top of your team’s minds.
What is the Zingerman’s way or model of running a business?
Ari Weinzweig: Well, I think the key of it is that’s there’s not really any one particular short answer. It’s really a holistic approach. As you know from your reading it and coming from the seminar, I mean we’ve sort of pieced together a lot of things over the years, which have become, thirty-three years later our unique model. I mean it started with just me, Paul and two employees in 1982, trying to do the right thing. Have really great food, sandwiches in particular but other breads from other bakeries, a little olive oil, a little cheese, a little charcuterie or salami, a little smoked fish, that sort of stuff. Give really amazing service, just because we believed, I don’t know, intuitively or whatever that if we didn’t do a really great job, people weren’t coming. I mean it’s sort of obvious. There’s a lot of businesses that don’t take that approach. Even then, there’s people who sort of look at it like they’re doing the customer a favor. We always looked at it the other way. The same for staff. It was our job to make the customer want to come back. It was our job to make the employee want to come back.
As we have grown, I guess we realized relatively early on, I can’t tell you what day it was, but that if we didn’t get as good at managing the business and leadership, as we were at making the food, we were not going to last. I think that’s a stage that a lot of people get to but they don’t make that decision. I think it’s fairly common that people grow but view leadership work, organization design, etc. as sort of this pain the butt, excuse me, that they need to deal with. It becomes a self fulfilling prophecy., which is it becomes a pain in the butt. I guess over the years, I’ve sort of realized that building a great organization is art. It takes the same creativity as cooking, painting, sculpture or anything else. You know, here we are thirty-three years later, where as you know from part one of the book, I mean, Essay Twelve Natural Laws of Business, it’s not like we set out to live those. It’s more looking back and what did we do? What commonalities are there with all successful organizations? I think, hopefully we’re essentially living in harmony with those. Which means that we’re living in harmony roughly with nature and human nature being a big part of that.
Todd Reed: Right. Well, so I was going to ask, it sounds like so have you always run the Zingerman’s way? Have you made intentional, sounds like you made intentional decisions to maybe … I don’t know.
Ari Weinzweig: Well, we’ve you know, it’s like have you always been Todd Reed? Yeah, you have. It’s just the way you manifested in the world when you were nine is hopefully a little different that you are now. Although there’s still commonalities, right?
Todd Reed: No.
Ari Weinzweig: You know, there’s nothing that we do now that’s completely out of sync with what we we’re doing then. You know, we had two employees and it’s thirty-three years ago. We’re always, it’s in our intuition or in our gut. Then was written into our guiding principles, ten years after we opened on paper. We’re always trying to improve. It’s one of the natural laws too. It’s not unique to us. You can call it continuous improvement or the Toyota way or whatever but it’s not new. It’s just that most people don’t do it. We’ve continued to look for ways to get better. We’re big learners and obviously I read a lot. We go to other people’s seminars. We’re just always looking for things. That’s where Open Book Management came from. That’s where Servant Leadership came from. Our approach to personal energy management, which I learned from Anise Cavanaugh, who’s become a good friend. Divisioning work, which came originally through the research of Ron Lippet at University of Michigan Institute of Social Research, in the late fifties, sixties and seventies. We learned from Stash Kazmerski and we learned it from him. It’s really piecing together a lot of stuff that really was out there but not necessarily being used that well or certainly not around here. I guess what we do is all these pieces that we didn’t really make up but that together have created this eco system. Which operates in a somewhat unique way.
Todd Reed: Okay. I think, so you brought up open book management. That’s one I’m most familiar with. Just because I’ve read Jack Stack’s book.
Ari Weinzweig: Yep.
Todd Reed: At what point did you decide to open up your books? Was that an intentional decision or have you always done that from day one?
Ari Weinzweig: No, we didn’t do it from day one. It’s not like we were adamantly closed book. We never knew there was any other way. I mean, there was only way of doing accounting and that’s what we did. It’s not like we said, now we’re never showing anybody the numbers. It’s not like they came everyday and they denied them. They never asked. We never thought about it. It just wasn’t done. When I read that book, whatever it was, 93, 94? I went to open, for us it was sort of a no brainer. It was already totally aligned with our values and our approaches to the work world. It was just sort of like, oh good idea, hmm never thought of that. I would say or I do say, in hindsight, it probably took us six, seven, eight years to get good at it. Today we teach it through ZingTrain so that we could spare people some of that pain. It’s a big change. It’s not an overnight switch.
Todd Reed: Right.
Ari Weinzweig: Like when we teach customer service stuff, if you send fifty employees for training, three could implement it, the rest could ignore it. Those three can improve. The problem with open book is that, or the challenge of open book and the opportunities just it’s not just three people changing, everybody has to change. The leaders need to behave and work differently. The front line people need to become more engaged, pay attention, and take responsibility. The accountant becomes a teacher instead of a guardian. Really everybody’s needs to alter and adjust the way that they work. When it’s working it’s a fabulous thing. It’s not like in two days you’re going to change a lifetime of people’s learning.
Todd Reed: Right. Let’s talk about openness. Some people use transparency and I think I just heard in a webinar, you prefer openness.
Ari Weinzweig: Yeah. Well, I don’t know, transparency always sounded so, like I’m not opaque or anything. I’m not transparent, I’m opaque. Yeah, I think also there’s somethings that aren’t appropriate to share everything. Personal stuff around people’s performance or whatever might not be appropriate. The idea is to just be up front about what’s going on. Just like with the financials stuff, it just actually came up in a conversation the other day. I can’t remember who I was talking to, they’re like, well our … You know. Companies are publicly traded so they say they open book already. I’m like, well it’s not about like you have access to this seventeen page financial document that you can’t understand. That’s not helpful. It’s really just about trying to be up front with people and let them know what’s going on. It’s evolved over the years. All our meetings are open, which is not true of a lot of open book businesses. It’s not like we adamantly keep people out, it’s just the same thing, it never comes up. Like this is the managers’ meeting so only managers come. We’ve tried to really move away from that to where, you know what, you want to come? Let’s go.
I think by doing that it takes most of the mystic away. People make up stories when they don’t know what’s going on. That’s one of the problems in closed book management. People are making up a lot of stories and they’re mostly incorrect. By putting the numbers in front of them, you might think we’re winning by twenty but here’s the score. We’re down three. Whether you think we are or not, we’re still down three. Actually, I was just yesterday, chatting with a woman who works the counter at the bakery shop just up the block from where we are now. She had came to our partners’ group meeting last Thursday. I just said, “Thanks for coming.” She goes, “No, I really like it. It’s really interesting.” I’m like, “Well what do you like about it?” She’s like “Well it’s just I learn so much about the businesses and it’s just interesting to hear all this dialog. Everybody’s energy and to hear what everybody’s having a hard time with or what they’re working on. What’s going well. It’s actually really interesting.” I was like, “Well thank you.” I don’t know how hold she is, early twenties. She’s not an MBAA, she’s not here to take over the company. She’s not the next CEO, maybe down twenty years, maybe but not tomorrow. Yet, it’s just common sense. It’s just most people are smart. Most people want to learn. Most people are interested in what’s going on.
The old model would be where she sort of chained to the counter. Just keep your mouth shut and do what we tell you. The reality is, it changes the way she works on the counter, when she understands what’s going on and where the challenges are. Whatever, for conversations sake, if she knows that the candy company is trying to close out the year with really good sales, don’t you think it’s going to increase the odds of her selling a candy bar to a customer when they come in the shop. It’s not like she would convince them not to buy it. There’s a big difference between neutrality and active engagement. It just really helps. She feels more grounded and it makes a big difference.
Another, just last night, a buser at The Roadhouse, who’s late teens maybe. He just grabbed me. He’s not perfect and neither am I. I just got to tell you, it’s so wild to work in a business where the customers are fascinated with the way we work. They’re like asking me all these questions about the organization works. It just feels really great to be working somewhere that people are interested in. What’s happening is just in my belief that we’re appealing to human nature in a positive way. That as per in the second book, The Essay on the Energy Crisis in the Workplace, I think so many people are operating in violation of human nature. That they’re taking the natural curiosity, this natural desire to learn, a natural desire to be a part of something cool. This natural desire to improve all the time and be around good people. That’s all getting crushed. Then instead of that, you get apathy, disengagement. It becomes survival mode, like how do I get through the next six hours, not how to I get to greatness. Which would be the equivalent of whatever, playing a basketball game and just counting down the minutes instead of trying to win.
Todd Reed: Interesting, wow. Let me ask a question a lot of my listeners would probably ask. Oh my gosh, do you share salaries?
Ari Weinzweig: We don’t. I mean we chose early on not to. I don’t know that we really feel that strongly about it one way or the other. I think the reality is it’s not that hard to figure them out, if you have freshman algebra. If you have all the other numbers and you don’t have a couple, it’s not that hard. I guess my experience is A, if we can’t justify what the salary is, we shouldn’t be paying it. If you need to hide it, there’s something wrong. B, when you give people all the numbers and involve them in running the business, salary’s not the number one thing that they worry about. It’s just when they have no numbers, the only number they have is their own pay. Then getting another person’s pay becomes the natural thing you want to talk about.
Todd Reed: Interesting.
Ari Weinzweig: You know, the same way in sports. They all go and fight for a big contract but I guarantee you at half time, they’re not discussing, well wait a minute man, you made more than I did and I have more rebounds so I’m going to slow down now. It doesn’t work like that. People want to make a living. I don’t mean it never comes up or is never an issue, that so and so makes more than I do. I think we try to focus it on the positive. How much do you want to make? What do you want to do? Write a personal vision and tell me where you want to go. Okay, let’s talk about how we can get there. I can’t say it never comes up but I would say it’s a far smaller issue when people are focused on building sales profitability. Having enough cash to buy equipment. What is depreciation mean? Stuff that’s really more big picture relevant.
Todd Reed: Right. You said that salaries isn’t always the first number they think about necessarily. What are a couple of the numbers that they do think about?
Ari Weinzweig: I think the two key ones are sales and profit and then cash, depending on the health of the business. All of our businesses have lost money some years. All have made money some years. Counter to the customers’ or the public’s popular perception, it’s not a gold mine. Most businesses are not making loads of money in any field. Even if they are today, they weren’t before and they might not be again. Then what our employee’s understand which is the public doesn’t understand in general. Which I certainly didn’t understand when I was growing up. Is that profit doesn’t mean that you just get the money. It means you have the money to pay your taxes. It means you have the money to buy new equipment. It means you have the money to pay loan principle and or investors. Maybe after all of that, if there’s anything left, you get some. In that partners’ group meeting on Thursday, just everybody presents their what’s going on and what’s coming up.
The bake house partners went over, they started rattling off all big capital expenditures they have coming up. It was like two hundred and fifty thousand dollars in capital expenditures. Well if you’re doing really well and it’s a ten million dollar business, they’re running five percent profit. That’s roughly, they’re doing quite well but that’s five hundred thousand dollars. Out of five hundred thousand a third goes to federal taxes, which is fine. Now you’re down to, that’s a hundred seventy off the top so you’re down to three thirty.
Todd Reed: Right.
Ari Weinzweig: That doesn’t … Two fifty coming out, well that’s eighty. Then you got to pay bank payments, etc., etc. People perceive that there’s this profitability and it’s just goes directly to the bank account loan but it’s a great fantasy. At least in my thirty-three years, I’ve never experienced that.
Todd Reed: Right. I think that’s going to cover it for the first week. I thought of five questions that hopefully will inspire you over the next week to think about your business. Question one, He talks about being as creative in managing in your business as he is in creating a sandwich. What are of your business have you just quote/unquote, let happen, without much thought as to how it affects the energy level and engagement of your team? For example, how do you orient and train your new hires? Is the system designed to simply teach them how to get their check deposited and learn the basics of their job? Have you thought about how it can really also being to engage them into buying into your vision that you’re trying to achieve? Is it an ongoing process? Number two, openness. He says people make up stories in a vacuum. In what areas of your business could you look at opening up to begin building trust? Number three, How can you begin to appeal to your teams natural desire to learn, improve and be around good people working towards a share vision? Number five, Are your people thinking about they affect sales, profit and cash flow?