Profitable Employee Participation Business / Economy / My Business / Uncategorized

Making all workers part of the executive team pays off

Unless your company is in Silicon Valley and everyone on your “staff” is working in exchange for a piece of the VC, IPO, M&A or Google buy-out cash, you’re probably struggling to keep your employees motivated and happy. Hell, you’re probably struggling to find ways to get them to show up every day. Such is the challenge of the small-business owner in today’s economy. Granted, a lot of the small-business owners today are really in over their heads when it comes to managing people; many are displaced workers themselves who started companies because they lost their salaried jobs. Many were never meant to be managers. But the truth is that the employee-employer relationship has been obliterated. The perks and bennies for all but the uber-execs at a handful of multi-nationals have gone the way of the Great Auk; and with them have gone employee loyalty and commitment. So the big question for small business today is: how the hell do you motivate and keep employees? Zingerman’s Roadhouse Deli may have come up with an answer.

“From the beginning,” Mr. Saginaw said, “we wanted to build an extraordinary organization – not the biggest, not the most profitable – but an organization where decisions would not be based on who had the most authority but on whomever had the most relevant information.” Mr. Saginaw along with his partner Ari Weinzweig, co-founded Zingerman’s Deli in 1982. Ten years later, it was a hit with long lines forming every morning and companies like Disney and some of the Vegas casinos looking for franchises. Back then, when times were good and the little guy had a real shot, they could afford to say no to all of that – and they did. In fact, their success and the attention that it earned them brought them face-to-face with some soul-rattling questions; questions that dealt with growth, future, fortunes and destiny.

Ultimately, they decided that they wanted to build a “business family”; to invest in and empower their employees by opening up their books, sharing the financials and asking the staff, from the dishwashers to the chefs, to help make the business as profitable and successful as possible. In 1994 the owners wrote a vision statement that would ultimately change the course of their company. They created the Zingerman’s Community of Business (ZCoB and pronounced ZEE-cob) which at its core was an anti-franchising plan. Instead of going wide and shallow with a chain of restaurants run by a corporation, they went narrow and deep. They settled on a creating a handful of restaurants supported by a vertically-integrated and wholly-owned collection of companies. And at every possible juncture, they made a partner out of a manager and invited them into the business operation.

The process was not without its challenges and it worked for many but not all of the employees. In the 20 years since developing ZCoB the deli has grown from 1,300 square feet to an over 30,000 square foot deli-campus. Deli revenue went from $5 million to over $14 a year with that number representing less than a third of the company’s total revenue.  They have developed nine other businesses to service the restaurant and make a profit.  Mr. Saginaw is fighting for a higher national minimum wage and believes that happy and successful workers make successful companies.

“We’re comfortable with the notion there’s such thing as enough. Others may be wealthier than we’ll ever be, but I wonder if they’ve lost a certain amount of joy in their work.” In these days of under-challenged, under-compensated and under-appreciated workers, maybe this is a program whose time has come.


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