Moving America Forward

This Company’s Success Challenges the Ethos of Cutthroat Business

August 5, 2014
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This Company’s Success Challenges the Ethos of Cutthroat Business
Frank DiBona/Flickr Creative Commons
The owners of this Michigan deli want their employees to enjoy their work — and have an ownership stake in it, too.

Not all multi-million dollar businesses squeeze every last penny out of their employees. And while a five percent profit margin isn’t many businessmen’s dream, at Zingerman’s, the owners believe success comes with spreading the wealth.

Three decades after Paul Saginaw and Ari Weinzweig opened Zingerman’s Delicatessen in 1982 in Ann Arbor, Michigan, the brand has gone from a tiny shop known for big, creative sandwiches to a brand name with a dozen or so separate food businesses, 650 employees and $50 million dollars in annual sales. But the most impressive part isn’t their success — it’s where they find it.

At a time when Americans are so concerned — and affected — by the income disparity between owners and workers, Zingerman’s wants to blur the line between the two. Mr. Saginaw explains to Jennifer Conlin from The New York Times, “From the beginning…we wanted to invite everyone to help run the business and convey that each one of us was personally responsible for its success.”

And that’s exactly what they’ve done with Zingerman’s Community of Businesses, or ZCob. Employees (from busboys to managers) are encouraged to come forward with their own business ideas. These new partners generally need to provide 10 to 15 percent of the initial start-up investment, but Saginaw and Weinzweig contribute to help make the project happen. Out of ZCob, a bakery, a coffee shop and wholesaler, a creamery, a candy manufactory, and a working farm have come to fruition.

One such business currently being piloted is San Street, Ji Hye Kim’s vision for a Korean restaurant. Back in 2008, Kim started working at the deli and by 2010, Zingerman’s partners approved her vision statement for the idea. A year later, she was selling Asian dishes from a food cart. Sales are now up 50 percent from last fiscal year and are approaching $200,000.

Within each business, managers turn to their employees for ideas on work-flow improvement and sales goals. At a recent Zingerman’s Roadhouse employee meeting, the staff celebrated outperforming the previous week’s projections before offering ideas for meeting the head chef’s challenge to do even better the following week.

And while most companies hide their recipes for success, Zingerman’s couldn’t be more willing to share theirs. Zingerman’s Press has published almost 20 books about food and the food business — all aimed at spreading the philosophy and techniques behind their success in the industry they love. And ZingTrain provides consulting to other businesses and training sessions for Zingerman’s employees, who receive their normal above-average wage to take classes.

While serving sandwiches may be what they’re known for, Zingerman’s is clearly more than just a deli.

 

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