The Idea: In 2003, Inc. Magazine named Zingerman’s Deli “The Coolest Small Company in America”. A two-floor deli on the outskirts of Ann Arbor, MI, Zingerman’s had just turned twenty-one when it received its praiseworthy award. Ten years later, when President Obama came to dine at Zingerman’s, its legacy as a brilliant business was solidified. As Bo Burlingham wrote in his book, Small Giants, they “chose to be great instead of big.” What was their secret?
Zingerman’s has been a case study for brilliant branding, a company that has held steadfast to their story and remained authentic. But their internal structure is what is truly amazing. When Zingerman’s decided to expand their business practice, they expanded into independent businesses and services, rather than the typical franchise expansion model. They have an Open Book Management philosophy, and it works so well that one of their many corporate limbs is a consulting group that teaches the secrets of their culture.
Open Book Management requires every employee to think, lead and act like owners of the company. Each person individually, harmoniously, and purposefully uses their expertise within the broader Zingerman’s company. All associates are trusted and shown all financials underpinning the company. That’s right, all financials.
Open Book Management expects everyone in the organization to actively participate in running the company – building their financial literacy – taking initiative, assuming the risks, and owning the consequences. According to research done by Denison Consulting Group, companies using Open Book Management are the in top 10 percent of corporate cultures. It is daring and it works.
Open-book management embraces three ideals:
- Every person in the company is taught the rules of the company’s success, including the most important financial metrics.
- Every person manages and monitors the performance scorecards and is given the freedom to take actions to improve the company’s performance.
- Every person has a financial stake in the company and is compensated for improving performance and eliminating risks.
Zingerman’s Guide To Good Leading states it perfectly, “If you want the staff to give great service to customers, the leaders have to give great service to the staff.” That is the heart of Open Book Management.
When founders Paul Saginaw and Ari Weinzeig erected their vision of a New York style deli in a quirky building just outside of Ann Arbor in 1982, they did so with “three bottom lines” as the tenants of their business: great food, great service, and great finance. They would never settle on the quality of their ingredients, the value of their customers, and the integrity of their open book management company.
And though the menu selection has changed, and Zingerman’s has continued to evolve as a hub of businesses, one thing still remains: Zingerman’s creates flawless experiences, enjoys amazing growth and gets the best out of their associates by practicing transparency and chooses to be great instead of big.