The Great Game of Business:

1. Live the spirit of generosity

More than ever, I believe, this is the time to give of ourselves.  Warren Buffet wrote a nice Op Ed piece in the Times last fall, right in the depths of the stock market malaise, about why it was a good time to buy stocks, to stay calm and focused on, and for, the long haul.  “A simple rule,” he wrote, “dictates my buying: Be fearful when others are greedy; and be greedy when others are fearful.”   I’ll adapt that here—“Be generous when things are good; be even more generous when times are tough.”  While the world contracts and tightens and starts to slip into being more selfish and more cynical, giving in small ways—whether a smile, a sense of appreciation, a small donation, an extra mile for a coworker, opening the door for a guest, a bag of brownies for the guy on the dock that we deliver bread and pastry to in Detroit, or a thank you card for a customer—can make a big difference for the better.  Paul Newman, who just passed away last year, once said, “I don’t think there’s anything exceptional or noble in being philanthropic. It’s the other attitude that confuses me.”  I’m with him.  Let’s give more, not less.

2.  Push for ever greater, ever more exceptional service experiences

This is a place that the specialty food world is probably better positioned than many industries—the importance of giving amazing service isn’t new news around here.  Certainly pushing ourselves to deliver great guest experiences isn’t really any different today than it’s always been for us here in Ann Arbor.  But I feel strongly that in challenging times it’s even more essential than ever, and more important to do it better than we ever have.  On top of which, no matter what’s going on economically, giving great service to customers really costs very little, or often nothing other than a bit o f extra effort.

By contrast it’s not hard to slide into giving poor service if the energy, leadership and culture don’t drive for a high standard.   One morning while I was writing I took a break to go to the Post Office to pick up a box.  There were two guys working when I went I entered and started to walk towards the service windows, but I was the only customer there.  One fellow raised his head slightly and said, matter of factly, without any emotion showing other than maybe annoyance, “Go back out and push the buzzer by the window.”  No greeting ,no nothing.  Honestly I had no clue what he was talking about but I did go back out the door, and I did come upon a closed up wooden “window” to my right with a sign that said “Package Pickup Here.”  I pushed the buzzer and waited.

About a minute and half later the same guy who’d just told me to go push the buzzer came and opened the window which was . . . at most ten feet from where he’d been sitting.  He said nothing. I handed him the package delivery slip and my ID (he didn’t ask, I just know that they always do so I figured I’d beat him to the punch.)  He stared at the stuff for a minute, said nothing, handed me back my ID and closed the window.  I waited a couple minutes.  He came back with the boxes, handed me a slip of paper and said, “Sign here, and write your name here.”  No smile, no salutation, nothing.  As I was signing I decided to make a stab at turning the tide.  I asked with a modicum (didn’t want to overdo it) of enthusiasm, how his day was going.  “Fine,” he mumbled.  He handed me the boxes, waited ‘til I cleared the window then shut it.  No “Thanks!,” no nothing.

I hate to share this as a negative story.  But it’s in my mind because it happened in the middle of my working on this piece. And because it’s such and extreme example of where a nice connection would have taken really no work, and could have completely altered the experience at no cost.  That said, before anyone might (understandably) start getting on this situation and blaming the government I’ll just say I’ve had equally awful experiences in all sorts of for-profit businesses, non profit community based organizations, big corporations and small family owned shops. The point here, is, quite simply, that it doesn’t have to be that way and it doesn’t cost anything to make the whole interaction about a thousand times better.  Connecting on a personal level, going the extra mile, having fun, showing care for people’s personal circumstances, learning their tastes make lasting impressions in really good ways.

Continuing on this note, I talked to Tony Cox, the man who started and runs the 5^th Food Group, an on line and Mail Order consulting business based in Dallas.  We’ve been working with Tony and his team for nearly ten years now and I think he has a great sense of the specialty food world.  He and I are usually in synch on our sense of the business world, so it didn’t really surprise me that our take on what to do during difficult economic times is very much the same.  When we were sharing thoughts on all this stuff the first things he suggested was that one should, “Raise the bar on customer service.”  I asked him to elaborate a bit.   “When times are tough,” he said, “it’s easy and tempting to scale back on doing what we are here to do as a business—serve the customer.  But one bad or unresolved problem can lose you a customer for life.   On the other hand, if we continue to exceed customer expectations, we can win them for life.   Short-term operators and companies in trouble may not have the guts to do what’s right and service the customer at all cost and that can be our gain.”

To state this explicitly service quality scores (we measure our service here very regularly) should NOT be following Wall Street’s downward trends.  In fact, I’ll posit than when stocks and consumer confidence fall is actually the most important time to push the quality of our service higher.   While most of the world will be cutting back, losing energy, feeing trapped and then trimming away at its training budgets and enthusiasm levels, we want to build the bonds we have with our customers (at retail, wholesale, on line and in town) stronger than they’ve ever been. Why?  Because we know that loyal customers will likely stay with us and will speak positively about us in the community through thick and thin.  By pushing to get better, not to just stand pat, we take that base of loyal customers and drive ourselves harder than ever to make them want to spend their time and money with us.

3.  Make the services better

To me, this one is huge and, in honesty, I think the exact opposite approach to what takes place in most of the business world in times like these.  I have no way to prove that I’m right—hindsight will of course be 20/20 for all of us.   But I’ve really, really strongly come to believe over the years that when times are tough we need to drive quality UP, not to let it come down.  By contrast most of the business world will work to find ways to cut corners, eliminate training and reduce the price of their products in the belief that will make them more accessible. I think that’s a strategy that’s doomed to failure (more on this in a minute.

By contrast, I’d say this is the time to put more space between us and what others are doing; to take great products and make them even better; to come out with new foods (and services) that are more special than we’ve ever done.  I think the worst thing we could do would be to allow the emotional pressures of the moment push us in ways that lose our differentiation.  If you’ve thought about ways to make your products better, now’s a great time to push for that improvement!  A slight step up in technique, a bit better of a raw material, a little bit more care in quality checking cost little but yield noticeable and meaningful results.

4.  Guard the margins

When I talked to him earlier this year Bo Burlingham, author of “Small Giants,” co-author (with Jack Stack) of “Great Game of Business” and editor at large for Inc. Magazine, put this margin maintenance at the top of his list for tough times.  To his view, margin erosion is the most common cause for otherwise successful businesses trending into trouble in these sorts of economic settings.  Sales may slide up and down but if we don’t hold our key margins—here at Zingerman’s that’s food cost and labor cost—in line, we’re going to be in trouble.  Which is why, although it’s a tough thing to do during times like these, it’s extremely important to raise prices when we need to.

I know that there’s lots of pressure to “find midrange alternatives,” or to offer lower end options, or to avoid raising prices even though costs have gone up a lot because “people won’t pay.”   And although that’s a very understandable response, I think it’s a sure fire recipe for long-term failure.  Tony Cox, our above-mentioned long time and very insightful catalog consultant, told me much the same thing.  “Don’t let food cost creep up.  The last thing you need in this environment is to have higher than expected/planned food costs.  He added (and I agree), “Keep variable labor costs for food prep and fulfillment in line with sales.  If these costs historically run 12% of sales, and sales take a dip, or don’t materialize as planned, management needs to be ready to keep costs in line.”

What’s the alternative?   Businesses get gun shy and they start to back away from what they need to charge because everything they read tells them that times are tough.  But dialing down what we charge, I think, generally leaves us “high and dry” at the same time—specialty foods aren’t ever going to be cheap, so we’re still way more expensive than the average fare folks can buy in the supermarket. And yet, we’ve trimmed our margins back enough to leave us short of cash.  To avoid getting into that situation, I remind myself of what I heard a long time ago from Jim Hightower (the very progressive, very smart, very much ahead of his time and very funny former Sec. of Agriculture in Texas a few years back), who said something along the lines of, “There ain‘t nothin’ in the middle of the road but a couple yellow lines and a lot of dead armadillos.”

Given that I have no interest in being either a yellow line or a dead (or even wounded) armadillo, the last place I want to be is in the middle of anyone’s road.  Full flavored, well-made artisan food just isn’t middle of the road fare.  And letting margins erode isn’t really going to make it any more accessible than it is when we have our costs in line.  An expensive pastry, sandwich or entree that’s priced 5% lower than we should be charging to hit our target food cost, isn’t going to be any more affordable to people having a hard time making ends meet than it would be at 5% more.   By contrast, as you know in the food world, 5% is often the difference between a business that’s losing money and one’s that’s profitable.   And to be sustainable, to be here for another twenty-seven years (our 27^th anniversary will in the middle of March this year), and help keep our community solid, we need to be profitable.  So let’s charge what we need to charge—allowing us to stay generous as per #1 above—regardless of what emotional winds are swirling in the press.

5.  Go for greatness

While it’s hard to fight the mood of the moment, we’re working hard here not to let ourselves ever slide towards pessimism or any sort of losing mentality.  To the contrary, this is the time to strengthen our efforts to take an active approach, not to wait for someone else to fix things and to go for greatness.  To quote Shawn Askinosie of Askinosie Chocolate in Springfield, Missouri, “We must take personal responsibility for recovery.”  Last month I was sitting in on a class on our approach to open book finance.  It was being taught by a woman named Billie Lee, who’s main work here is she’s our web designer (which will tell you a lot about open book finance).  She was doing a great job of teaching.  About half way through the class she was talking about how sometimes during the year, unexpected things happen that throw one’s budgets from fine into seeming freefall (sound familiar?).   Billie told the class the story of how, right around the time our new fiscal year that was just getting going back in August of 2000, about two weeks into our new fiscal year, we lost the fairly sizeable dinner roll business we’d been getting from Northwest Airlines for a few years.  Not shockingly, since their financials weren’t great, they were trimming out a high quality product they figured they could do without (see point – above for how well that works.)  For our Bakehouse, that was a big loss of sales we’d planned to have.  Billie asked the group what they would do to respond if they found themselves in a similar circumstance.  “Would you just lower your end of the year numbers?”  The group sat there quietly for a minute or two, and then Rehan Siddiqui who works in the payroll part of our central staff and has been here only a few months, raised his hand and said, “No.  We get our butts out on the streets and look for new customers!” Rehan is right on.  When times get tough, it’s time for us to get going. Victims wait, but we need to keep moving.

6. Invest more in people

I know that when money’s tight it seems like that last thing one might wan t do is spend more of it.  But seriously, if at all possible there are two ways that I think that small amounts of money can help bring big benefits later on.  One is to invest—even a little—in more training.  Because while others are floundering and the employees in other businesses grow less focused and feel ever worse about their work, we have a chance to help our feel and do better!  An inspiring and informative one-hour training class can elevate the level of effectiveness of our entire staff for days, weeks and months to come.

In the spirit of going for greatness, it’s important to recognize too that there’s an opportunity right now to bring great people—who are very talented but have been let loose by other businesses—into our organization.  If there’s any way to bring them on board—even in part time positions—we have a chance to get some skilled folks on our team that will help us get to ever greater heights going forward when the economy comes around as it eventually will.

-Ari Weinzweig, Zingerman’s

ZingTrain shares the “Zingerman’s experience” with forward-thinking organizations from around the world. ZingTrain’s managing partners, Maggie Bayless and Stas’ Kazmierski, use their experience in training and organizational change to help clients understand and apply the real-life systems, tools and techniques used at Zingerman’s, helping clients make meaningful, bottom-line-enhancing changes in their own organizations. ZingTrain, shares Zingerman’s expertise in training, service, merchandising, specialty foods, open book finance and staff management with the public through seminars and customized workshops. More information on ZingTrain, can be found at www.zingtrain.com or by calling 734.930.1919