‘Mom, I Am Not Taking the LSAT’
Introduction:
This week, in Episode 249, we bring you a conversation recorded at our recent 21 Hats Live event in Ann Arbor, Michigan, with Ari Weinzweig, co-founder of one of America’s most influential small businesses. Starting 43 years ago with a highly successful college town delicatessen that they could have replicated all over the country (including for Disney), Ari and co-founder Paul Saginaw have instead built Zingerman’s Community of Businesses, a collection of 12 Ann Arbor-based, collaboratively run businesses each with its own leadership and ownership structure. Together, these businesses produce $80 million a year in revenue. They include a bakery; a coffee company; two event spaces; a roadhouse; a Korean restaurant; a mail-order operation; an international food-tour business; a publishing house that publishes, among others, Ari Weinzweig; and a training center—ZingTrain—that has shared the Zingerman’s approach to business building with more than 10,000 businesses.
In 2003, Bo Burlingham pronounced Zingerman’s “The Coolest Small Company in America.” Bo’s article became the foundation of Small Giants, his book about companies that are more intent on being great than being big. The last thing we did at 21 Hats Live was to sit down with Ari to talk about that philosophy. In his passionate responses to our many questions—reponses, I should note, that include a few F-bombs—Ari explains how the Zingerman’s team decides whether to start a new business, how he and Paul made (and re-made) an especially difficult decision about expanding, how he and Paul have managed to sustain their partnership for more than four decades, how they chose a succession plan, how they know if they’re charging enough, why for many years Ari’s mother continued to believe he was a failure, and a whole lot more.
— Loren Feldman
Guests:
Ari Weinzweig, co-founder of Zingerman’s Community of Businesses.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Where do the ideas come from, and what’s the process for deciding you’re going to create a business?
Ari Weinzweig:
Well, it’s evolved as we do more. We’re not McDonald’s, so we don’t open 20 a month where it’s literally the same. But we have a path to partnership that’s imperfect, but basically gets adapted every time something goes wrong, and then somebody tries to improve the process to preclude that from happening. But the businesses are the idea of the prospective partner.
Loren Feldman:
Is that someone from outside the company or inside the company?
Ari Weinzweig:
It’s more from inside. It’s not that it can’t be from outside. The ideas are cheap. I’ll give you 40 right now in the next five minutes. The hard part is doing it. And although startups are a lot of work, the real hard work is 10 years later, when the glamor is long since gone and the problems are the same, mostly.
And so it’s: Who’s going to keep working to make the croissant better 25, 30 years later—not: How do you get open? And when it’s somebody else’s idea, in our experience, it doesn’t last that long, because they’re excited for a year or two. And then they get a good deal to move to Phoenix or move to Australia or whatever, and then they’re gone, and then I’m here doing the work, and I didn’t want more work.
So when it’s their idea, there’s a lot more energy around it. So, like, where you’re standing right now is because of Maggie’s passion for training. And that’s why it is where it is. That doesn’t mean the rest of the organization hasn’t been part, or me and Paul haven’t been, or whoever hasn’t been part of it. But it’s really because of her love for training and deep desire to make it happen.
Loren Feldman:
But if somebody comes to you with an idea, and you go through the process and decide to do it, do they get an equity stake?
Ari Weinzweig:
They have an equity stake. If we were to open a Polish restaurant and we go, “Loren, you’re a really good sous chef. We want to promote you to be the key manager of this, and you’ll get a bonus on profit,” if you’re good, somebody else is going to offer—you know, it’s easy to offer a lot of money to recruit. Whether it’s sustainable or not is a different question, just like in baseball or basketball, where they pay a shitload of money and then they’re freaking out two years later that they overpaid.
So some hotel group’s gonna open, and they go, “Jay, man, you’re awesome. We’re gonna triple your pay to come out here, and we’re gonna pay for your family to move and buy you a house.” And two years later, the place is closed, but meanwhile, that doesn’t help us. So, yes, the point was they have equity, and more than the financial equity is the emotional equity. I mean, the financial equity matters, but it’s not enough.
Loren Feldman:
Have you started businesses that failed?
Ari Weinzweig:
Yeah, we had a produce market many years ago that didn’t work out.
Loren Feldman:
Did you have a brewpub?
Ari Weinzweig:
No, not that I remember. [Laughter]
Loren Feldman:
Was it really just one then? That’s a remarkable record. You have 12 businesses, and only one failed?
Ari Weinzweig:
Well, yeah. I mean, I guess those are, like, the macro failings that get in the news. I’m far more focused on the small failings that are happening right now while we’re sitting here. No, they don’t get in The New York Times, and they don’t get in Inc. or whatever. The failings are bad conversations. The failings are a seven-and-a-half espresso instead of a nine espresso. The failings are the server who didn’t quite go back to the table enough. And they don’t get in there. It gets in there seven years later when your business went broke because of those things. That’s what I’m always looking at, are the tiny parts.
Loren Feldman:
One of the other things you told us the other night was that a big part of deciding on your vision and your culture was deciding what you will not do, as opposed to what you will do.
Ari Weinzweig:
Yeah, it’s implicit in what you decide that you will do is what you won’t do.
Loren Feldman:
And you gave us an example, which is it took you 15 minutes to decide not to—
Ari Weinzweig:
Might have been 25, but yeah.
Loren Feldman:
I think it was a Deli for Disney. That was an easy decision, apparently. It was very quick.
Ari Weinzweig:
For me, yeah.
Loren Feldman:
Give us an example of a hard one. Was a no that you and Paul—
Ari Weinzweig:
Yeah, the hard one example is the airport. So this was 25 years ago. Paul really wanted to do something in the airport.
Loren Feldman:
A Deli?
Ari Weinzweig:
Something. I really didn’t, because I feel like it’s too far, and it’s a different culture. And it’s hard enough to get people to go from here to the Deli or the Deli to the Roadhouse—let alone a half an hour away and you gotta park and you gotta go through security. And I’m like, “It’s a fucking half a day to check the espresso.” Like, no exaggeration. By the time you drive there, get through all that stuff, say hi to three people, and get the espresso to see if it’s okay and drive back, literally your whole morning is going to be gone. But he really wanted to do something, and we went back and forth. And you know, in his mind, it was going to be a really good financial thing, too, and a lot of exposure.
And you know, finally, I was like, “Okay.” We agreed, and it was going to be called Zingerman’s Land of a Thousand Flavors. So it wouldn’t be a replica of the Deli. It would be something different. And then 9/11 happened, and I would say not because of 9/11, but they used 9/11 as an excuse—because it’s not even your business. You license into the airport. So it’s really not even your own employees. It’s somebody else with your name. Anyway, they pulled out after 9/11—the company, Compass Group, I think it is. So that saved my ass. Then, again, when they redid the terminal or whatever, it came up again. And then I was like, “I don’t want to do it.” And so, what we finally settled on was we wholesale to the people in there, but it’s not ours. But because Plum Market likes to promote that it’s us, whose product they sell, it often looks like us.
Loren Feldman:
Does that cause problems for you?
Ari Weinzweig:
Everything causes problems. [Laughter] Yeah, it does, but not life threatening ones. Well, it’s just, you know, whatever, you’re a partner. You’re trying to make a reality, a future that he feels—it’s all compromise.
Loren Feldman:
So you and Paul have been partners for 40—
Ari Weinzweig:
43 years, and we’ve been working together for 47 years this month.
Loren Feldman:
That’s pretty remarkable on its face.
Ari Weinzweig:
Seems like it, yeah. Even being alive that long is an achievement.
Loren Feldman:
Why did it work?
Ari Weinzweig:
Well, I don’t think there’s any one reason. I mean, I think it’s a lot of things, but shared vision is absolutely part of it. And we got lucky because we didn’t write it down in the beginning, but in our heads, we had a reasonably shared vision, certainly shared values.
And then now, in the context of having done all this work on beliefs, which you now have the book, I would say shared beliefs also, which are not about ethics, but they’re just beliefs. And then, you know, all the other things that go into any healthy human: emotional resilience, both of us working to improve our self-management a lot over the decades, luck, the fact that we’re both still alive and have survived and gotten through whatever health issues that we’ve had.
Loren Feldman:
If an entrepreneur came to you and said, “I’m thinking about doing this project. I’m thinking about doing it with a partner,” what’s the best advice you could give them about working with a partner?
Ari Weinzweig:
I mean, the natural laws of business, one of them is, strengths lead to weaknesses. Whatever you’re good at also tells you what your problems will be. So, for us, our biggest differentiator in the marketplace is maybe what you just said: really amazing food. What’s the inevitable weakness? It’s expensive. Like, you can’t make what you had for cheap. It just costs more to put better butter in. It costs more to make the bread the way we make it. It’s just the reality. So it’s the same with partners. I prefer the problem of having frustrating conversations around things like the airport, because I would rather not do this alone, and that’s coming from an introvert.
So for people who just want to make decisions and don’t want to fucking deal with anybody else’s opinion, it’s much easier to do it on your own. And there’s nothing wrong with that. I mean, it’s just: Which problem do you want? Do you want to be alone and your significant other gets sick of hearing you talk about it? Or do you want to have people who, when things come apart, that you call in that they’re going to be there with you working?
Loren Feldman:
You referred to that the other night, as well, talking about the difference between voting on a decision versus reaching a consensus on a decision. What happens when you don’t get a consensus? How do you deal with that?
Ari Weinzweig:
You just keep talking.
Loren Feldman:
You always get consensus?
Ari Weinzweig:
Well, sometimes you consent to not do something, because you can’t get consensus. But it’s really what Paul and I were doing informally as partners from the beginning. So that’s one of the reasons the partnership worked, is that informally we did that. Now it’s formalized. So the backstory is, when we opened the Deli, you might remember, Paul had Monahan’s Seafood Market. So the original thought was that the fish market was going to be bigger than the Deli, because it was already pretty busy, and five years, four years established—and that Paul would come help me open the Deli in the beginning, and then he would go back to the fish market where it was going to be bigger. But of course, that’s not the way it played out.
But so in the beginning, the ownership was—I owned half because I was the one who was going to work there all the time. And they owned half together, each a quarter. Then Paul came a day or two a week. Then it was three days a week. Then it was four. But the fact that I own more just never came up. It didn’t come up from me, and it didn’t come up from him. So it wasn’t relevant to our decision making. So in that sense, we just used consensus, even though the typical model would have been, in a tense situation, “Well, I own more. We’re going to do it my way.”
And then when we rolled out the 2009 Vision, which is ‘94, and as we were working on it, some resistance from outside and people who we would ask for input were like, “Well, why would anybody like Maggie want to be a partner in ZingTrain? If you’re going to own more of it, you’re just going to outvote them. Why would they want to be the partner?” And so we just intuitively said, “Well, we like consensus. We’ll just do that with them, too.”
So we still use consensus at the partner level. So if it’s at the Roadhouse, it’s me and Lisa and Paul, let’s say. As Maggie always says: It’s implicit consensus. So it’s not like ZingTrain calls every time they want to change the color of the name tag, but I like the way she described it, which is, in her gut, she goes, “I feel like Paul and I aren’t gonna like this, they better pick up the phone,” which I think is accurate.
So anyway, we did that. And then the other really, really big thing that we did, sort of on instinct, but in hindsight, it’s one of the best things we ever did. It wasn’t just consensus between the managing partner of that business and me and Paul, but from the rollout of that Vision ‘94, the whole group was charged to run the organization by consensus. And the charge was, when you make a decision in that group, you always need to make it wearing the hat of what’s best for the whole, not representing your own business.
So, the opposite of the American governmental system. Instead of what we have, which is, this sucks for Iowa, so I’m blocking it, even though it’s clearly better—no offense, Iowa—but clearly it’s better for everybody else. But for Rhode Island it’s bad, so we’re going to stop the whole country from doing this. It needs to be, “Well, for my business, it’s not great, but clearly it’s better for everybody else.” Now, it’s hard to do that, but at least you know you’re supposed to do it. And so from the beginning of that Vision in ‘94, every managing partner is part running the whole organization.
Loren Feldman:
Can you explain, as briefly as possible, what an employee ownership trust is and why you chose it?
Ari Weinzweig:
Yeah, so as you’re already extracting from our conversations, we created a fairly complex model—not trying to make it that way, but it’s just how it played out. From the beginning, we had buyout insurance on each other. Fairly common. So like, if I would die, if I remember right, then he gets the benefit, and then he’s obligated to buy out my heirs—because we didn’t want to end up working with each other’s heirs, which was fine. And then, 15 years ago, he goes, “Well, what happens when the second one dies?” I’m like, “I don’t know. We got the insurance. Like, it pays out the heirs.” But he goes, “Who owns the shares?” I’m like, “I don’t know.”
Anyway, I couldn’t even really understand what he was saying. But it was an obviously good question, which is: We’re both dead, who owns the business? And so there were managing partners in each business already, but there was the intellectual property, the brand that we owned alone. And so that started, whatever, 15 years of conversations, which we’re 90 percent done with. And so, it went all over the place.
And you know, me for sure, and really him too, I’ve never been driven to have this giant inheritance. And you could say it’s because I don’t have kids, but also, I want to leave Tammie some money, but socially, I think that a big problem with the wealth gap is not the person who worked their butt off and made it. It’s the next and the next and the next and, you know, 20 generations down the road where they didn’t do the work, because the people who did the work are like you. They’ve got a work ethic. No offense, there’s some kids that bust their ass, but then you get a kid who inherited $6 billion dollars and never did anything.
So anyway, I wasn’t trying to max it out. And then also, every company that I’ve looked at that sells—not every—almost every company that I look at that sells, of my friends, it goes down the tubes. They get a lot of money. Most of them become unhappy because they don’t know what to do, and they spend the rest of their life in existential wanderings. And then the company starts with: “This is awesome. We share all your values.” And maybe the CEO at the time did, but then they get an offer to move to Australia. And then they’re gone, and the next CEO is like, “Why are we wasting all this money on Zingerman’s? It’s barely profitable. Screw this shit. Get rid of all these products!”
So, I didn’t like that. Anyway, long story short, about five or six years ago, I was reading E.F. Schumacher’s book Small Is Beautiful, which was written in, I think, 1973, but for some reason I didn’t read it till five years ago. And it’s an awesome book. But anyway, in there, it’s only like three pages of the book, but he tells the story of the Scott Bader Commonwealth in England. And Scott Bader was an immigrant from Switzerland to the U.K. right after World War I. He got a job as an hourly worker, didn’t really like being an hourly worker—I don’t blame him—and started his own business, I think in the chemical industry, and did very well. And they built it up. And then, in the early ‘50s, so like 30 years after he started it, he converted it into what they call a commonwealth, what here we would call a perpetual purpose trust.
So, basically, he gifted the company to itself so it could never be sold. The employees get the profit from it, but they don’t really own it, and then if it is sold for whatever catastrophic reasons—I’m trying to go from memory—but three quarters of the proceeds from the sale would go to charity, so that they weren’t incented to sell it the second time. So when I read that, I’m like, “This is what I’m looking for.” Because we spent all these years making Zingerman’s into this integral piece of the community. The last thing I need is Kroger buys it, and then it’s all over the country, and it’s nothing.
So anyway, then everybody said that was ridiculous, and it would never work, which is the same story we’ve heard on everything meaningful we’ve ever done. And five years later, we have one, and I believe it will become a bigger and bigger succession path. It’s not for everybody—so there’s no judgment—but in a nutshell, it’s me and Paul gifting the brand to itself so it can never be sold. Our construct is a little different than other people’s because of the complexity of what we have, but it can never be sold. And then each year, we pass more and more ownership share in that to our employees who own a share so that by our 2032 Vision, half of the brand will be owned by the staff.
Loren Feldman:
Half of the brand meaning they own the intellectual property?
Ari Weinzweig:
Correct.
Loren Feldman:
Not the actual business.
Ari Weinzweig:
Well, they’re all separate entities, but ZingTrain can’t be ZingTrain unless the brand lets it be ZingTrain. So there’s quite a bit of—
Loren Feldman:
But in theory, the ownership council of one of those businesses could make the decision to sell the business, but they would have to do it without the trademark and intellectual property?
Ari Weinzweig:
Well, right now they can’t, because me and Paul own part of it, and the last piece is: Who owns that last little part? And we’re working on that.
Loren Feldman:
Are you happy with the way it’s gone so far?
Ari Weinzweig:
Very happy. But I started to look at succession in three broad categories. I like simple. I like the framework. It doesn’t tell you what to do. It gives you guidance on ways to think about it. So I started to look at succession, which in 1982, I didn’t imagine living past 30. I wasn’t that worried about succession. It wasn’t high on my list of concerns. But clearly, it’s a good problem. Here we are. So in no particular order, there’s governance succession, there’s cultural succession, and then there’s financial-slash-legal succession. That’s what Paul was asking me about 15 years ago. Here, because we have 30 years of governance that works by consensus of our partners group—it’s well ensconced in the organization, everybody’s used to it, we know how to make it work—we didn’t have that problem.
Most organizations, not saying this judgmentally, are still run like monarchies. And most people, of my friends, they’re benevolent monarchs, so they super care about the subject, but it’s still most of the decisions run through the King and Queen. [Laughter] Well, it’s true. It’s not a judgment. It’s just the reality here. We weren’t doing that. So we are far from perfect, but we created a more democratic way of working that was more inclusive. So governance wasn’t a big issue. Cultural is never perfect, but by teaching everyone to think like a leader, by being open-book management, by having whatever we’ve got—60, 70 internal classes—by all these different things that we do, I feel like we have a fair shot at that. But where we didn’t have it was the legal/financial, and that’s where the trust came in.
Loren Feldman:
Who’s got a question?
Michael Russo:
Have you ever seen the show, The Bear?
Ari Weinzweig:
No.
Michael Russo:
There’s an episode—
Ari Weinzweig:
I know all about it, but I don’t—
Michael Russo:
There’s an episode where one of the guys works at a sandwich shop. He goes to a fancy restaurant, and they try to train him into doing different things. Part of the episode is they make him clean spoons for a week, and he hates it. He doesn’t understand why. The maitre d finally breaks it down and says, “This matters. This is the beginning of bigger things.” And you mentioned—like, the espresso, that matters to you.
Ari Weinzweig:
I just sent a note to Zach at the Roadhouse. He does a weekly note to the staff, and he asks the managers every week for input on what he should put in there. And I included one of my pet peeves, which is keeping the server side of the dish line and the floor super clean. Because for them, it’s where they dump the dishes. But I’m like, “The whole restaurant starts there. So if it’s sloppy on the dish where you put the dishes, it’s going to be sloppy everywhere else.”
Michael Russo:
Well, that was my question. Your details aren’t in the bigger picture of things—like, “I want to be this successful,” or, “I want to get this much money.” You’re like, “I’m worried about these day-to-day details,” which is amazing and shows why you’re successful, I think. But how do you infuse that into every team member? Is it through training? Is it through culture? Is it through hiring? Is it through all of the above?
Ari Weinzweig:
Yeah, it’s not that I don’t think about the big stuff. I think my belief is we need to think big and we need to think small. If you think small in everything, it’s micromanaging. If you don’t think small in anything, it doesn’t make sense, because you got to where you are by thinking about things that most people aren’t going to notice. In the food world, the salt level is super important. And I wrote an essay years ago called, “Salt Makes Cents”—with a “c”—because one under-salted dish could cost you $300. Because people, their belief is, it’s tasteless and terrible. And actually, all it was was slightly under-salted, or conversely, over-salted.
So, you need that. But at the same time, thinking about the perpetual purpose trust and how we create this community institution that, in 2082, when Zingerman’s has its 100th anniversary, I’m not going to be there, but the fact that it could still be ensconced in the community as this amazing old-growth forest instead of one more industrial-model replication is awesome. So it’s a combination of the two. How do you get it in there? Yeah, all of those systems, for sure.
So in a restaurant, they’re supposed to quality check. They should taste the line. Each person should taste their station. The sous chef or the chef tastes their station. I randomly taste stuff if I’m wherever, and then it still could go wrong. So that’s the system. Then there’s the culture. Do people take pride in what they’re doing? Do they care about it? Will the server say something if it’s not right? Because most restaurants, like in The Bear, they get yelled at, and then they’re never gonna say a word again.
Jim Kalb:
Jim Kalb, Triad Components Group. So if compromise is a way of no one getting anything that they really want, it’s a compromise between two parties. And the tradeoff is really someone getting something they always want some of the time, how do you fit consensus into that?
Ari Weinzweig:
Said with respect, that’s a negative belief about compromise, because it depends on how you do it. So I guess I don’t look at it as just horse-trading. It’s: How do we get to where, as much as possible, everyone gets what they want? So what I’ve learned over the years is it actually can create healthy win-win, creative outcomes that nobody thought of on their own. And so what Congress does is compromise in horse-trading, and it doesn’t work. But the visioning process—because it’s Stephen Covey’s “start with the end in mind”—is super conducive to, like, “Well, what do you really want out of this?” And so it allows for much better, like, “Oh, well, what about this?”
So here’s a true story. So Paul loves Las Vegas. We have a lot in common, but not a lot that’s not in common. He loves Las Vegas. I’ve never been, and it’s one of my negative life goals never to go—no offense, if anybody’s from there. It’s just not my thing. It seems like the antithesis of Ann Arbor. So he loves gambling. I’m anxious just to go out of the house in the morning. [Laughter] So, we’re different. So, I don’t know, six or seven years ago, he really wanted to do something in Las Vegas. And, I mean, there’s reasons why. Like, his grandfather was in the Jewish gang mob in Detroit, and he used to take him to gamble, you know, whatever.
So, like, I really don’t want to open outside the Ann Arbor area. So it’s sometimes just like, “Why don’t you just go open your own thing?” Like, I don’t care. You could have a solo album after 40 years. It’s fine. The organization succession worked out. We created that stewardship council of five people that I’m on, which is the meeting I just had. And we’re all still working well together. It’s not a story. There’s no drama.
Loren Feldman:
I hate to correct you, Ari, but on this point, that’s a story. It’s just a matter of whether the press is diligent enough to find out about it. If they know about it, they would want to write about it.
David Billstrom:
David Billstron, Flashing Red Light. So Ari, this is my first time here. I’m a long-time admirer.
Ari Weinzweig:
Where do you live?
David Billstrom:
Asheville, North Carolina.
Ari Weinzweig:
Oh, yeah. Ann Arbor in the mountains.
David Billstrom:
Yes. And so one of the things that’s just so comprehensive and unrelenting is the vertical integration. And Chris pointed out the sign in the restroom that says, “We make signs.” So my question is from that “strengths are also weaknesses,” what are the weaknesses or the challenges of that level of vertical integration?
Ari Weinzweig:
What’s vertical integration mean, that we make different things at different levels? We make bread, and then we sell bread?
David Billstrom:
You make the card. You make the badge. You make the sign. You make the food.
Ari Weinzweig:
Oh, no wonder I’m confused. Okay, well, there’s no right answers. I mean, your vision tells you what you care about, number one. Number two, there’s an essay in the beliefs book, that’s about what we call one-plus-one work. So even if you hire for diversity, which I’m all for, most companies that have good diversity hiring work, which is important, then put people into non-diverse jobs. So we hire a more diverse workforce that we put in the same fucking box that they were in when it was a non-diverse workforce, which is not that helpful. It’s better than hiring homogeneously, but it doesn’t really—so the reason for diversity, yes, there are historical reasons that replicate enormous inequities. And it’s also because the healthiest ecosystems in nature are the most diverse. It’s just true. You don’t have to like it. It’s just true.
We have an ecosystem in our head too. So the industrial model was created on getting rid of as much as possible and simplifying everything, which isn’t inherently evil, but the weakness is it’s boring as shit. Like, who wants to ratchet a screw for 40 years? Just the thought of it… Now, if you try to train everybody on everything, that won’t work either. But having people doing more than one thing creates a chance to tap the diverse skill-set in their brain and give them different things. So I’m not saying making that sign alone is that answer. But like Mara from ZingTrain, who’s out there, also runs a food tour. She’s not the partner, but she runs one of the Irish food tours. Kirsten, who’s out there, is very active on the diversity committee. So if they want, they’re doing something else. So I don’t know, we don’t have to do it, but I think that there’s value to it being handwritten as opposed to printed.
David Billstrom:
Yeah, so maybe the sign’s a poor example. So I was thinking in terms of a business model. And if I’m going to open a restaurant, and I make really good spaghetti, I’m probably not going to make the rolls. I’m going to outsource that to someone who’s really great at making rolls. But this is clearly the opposite of that.
Ari Weinzweig:
No, it is that. It’s just doing that within the organization. So the Deli doesn’t make the roll. The Roadhouse doesn’t make the roll.
David Billstrom:
The Bakehouse does.
Ari Weinzweig:
Yeah, that was exactly the point.
David Billstrom:
And so is there a weakness to that?
Ari Weinzweig:
Yeah. I mean, there’s strength in McDonald’s. The staff’s not worried about anything—except when they get off work, and hoping they don’t get yelled at. But, I mean, it’s the same. So it’s all decided at corporate, you know? And there’s big advantages to that. I mean, it’s a lot less stressful in the moment. You don’t really have to abstract.
Mars Chapman:
Mars Chapman, Casey’s New Orleans Snowballs, Austin, Texas.
Ari Weinzweig:
Do they have Austin snowballs in New Orleans?
Mars Chapman:
You know, I don’t know, but I should probably go and investigate. [Laughter] Ari, what is a restaurant?
Ari Weinzweig:
You asked me the other night.
Mars Chapman:
And what do you make?
Ari Weinzweig:
So, I still teach the new-staff orientation class. I’ll be teaching it Sunday. If you’re still in town and you want to come, you can. There’s an essay in the beliefs book about why I believe one of the best uses of owners’ or leaders’ time is to teach the orientation class. When I teach that class, and I will tell them again on Sunday, if they take only one thing away from the class—and I hope they take more cause it’s a long fucking class for one thing—it’s to understand that we’re ultimately only at work for one reason, and that’s to bring people a great experience, and that everybody here is 100 percent responsible for the quality experience they give to every other human being. Period. That’s what we do. So I mean, that’s the nutshell.
What’s a restaurant or any business? I mean, it’s an ecosystem. The next pamphlet I’m working on—well, I’m working on two pamphlets at once—is on this organizational ecosystem metaphorical model that started in the beliefs book, and it’s evolved a lot. And so it’s an ecosystem. Do you want to have a healthy ecosystem? Or do you want to have an ecosystem that somebody strip-mined, and they got a lot of wealth out of it, but they left a mess behind. Or do you want to have a healthy ecosystem where all the parts of it are healthy? It creates beauty. It enhances the day of the person even who drives by the garden, because they get beauty, even though they didn’t even go in? So it’s all of that. Does that help?
Jay Goltz:
Jay Goltz. Artists Frame Service, Jayson Home, and Bella Moulding. You have partners in all these different things. I don’t have a partner—not because I want to make all the decisions, because I absolutely used very much the same thing as you, but I don’t want to get stuck, like I realize, “Oh my god, I’m stuck with this person.” What have you done with—
Ari Weinzweig:
You and I have had this conversation before.
Jay Goltz:
Yeah, what have you done with people who you did a partnership with, and you realize, “Yikes, they’re over their head.” Or, “They’re the wrong person,” and now they’re your partner. How much has that happened? And how do you unwind that and how much damage does it do?
Ari Weinzweig:
It’s hard. It’s happened. I don’t know how many times. I mean less than 10, more than two. It’s hard. But that’s where the practice of learning to work with consensus and have conversations is super helpful, because you learn how to, as Paul always says, “learn how to disagree without being disagreeable.” And it’s just trying to keep coming back to the table until we can figure out, why is it not working? And what does the other person really want? And often, there’s ways to get them what they want that isn’t necessarily ideally what we wanted.
Jay Goltz:
But legally, if you got to the point where you realize they need to move on, how, legally, I mean—
Ari Weinzweig:
Well, you gotta get them to agree. But that’s what consensus is anyway. So, in a confrontational, hierarchical setting, it’s very problematic, because they’re used to this. And now they’re like, “Well, I have this so you can’t”—and you know, everybody has those feelings, I think. But here, it’s just like, try to keep coming back to the table with humility. Try to keep figuring it out.
Jay Goltz:
So, no lawsuits in all these?
Ari Weinzweig:
No.
Jay Goltz:
Okay, good for you.
Ari Weinzweig:
So far.
Jay Goltz:
No, no. Good for you.
Ari Weinzweig:
As of 11 this morning.
Loren Feldman:
You’re able to achieve a consensus where the person that you’re referring to agrees it’s time for them to leave?
Ari Weinzweig:
Yeah, I mean, there’s partnership agreements and all that. But you know and I know, you could sue me right now because the cup is too big, or I don’t know.
Jay Goltz:
Or because you have no urinal in the bathroom.
Ari Weinzweig:
Well, you might—yeah, that wasn’t my idea, but… [Laughter]
Jay Goltz:
I just wanted to hear you say that. Thank you.
Ari Weinzweig:
It’s not a bad thing. It’s just that this is what women have got to deal with every fucking day. When you have a business that’s 90-percent women, and they’re like, “Why do you need a urinal?” It’s good humility learning. And you don’t really need one. You don’t really need one. [Laughter] Well, it’s true. It’s true. Why do they gotta read a book that’s always saying “mankind” all day? You know, like it’s not—
Anyway, I mean, in a culture where people are trying to get to agreement and trying to not dominate, it’s not perfect, but you can recover more effectively because culturally, people have a lot of practice at it. Most places, they don’t have any practice at it. The news is filled with stories of domination. The video games are all about domination. The sports stars are domination. And then you want them to work well together. And it’s a chasm.
Jay Goltz:
Excellent answer. Thank you.
Ed Leventhal:
Ed Leventhal, Valco Industries, Springfield, Ohio. I’m curious how you’ve kept so passionate about what you do in your organization in your community, for 47 years that you still want to come in every day and be better today than yesterday?
Ari Weinzweig:
Well, the green book is on managing ourselves, and that’s a lot of what I learned. Everybody’s different, you know, but whether you write it down or not, what’s your vision? Like, the writing down helps, but it’s not critical. But what’s your vision of your life? What do you want to do? Most people fulfill some part of their life’s vision, but then they don’t have a new one. And you know, self-management. Like, are you learning? I like to learn, so I’m always learning. I really, mostly, don’t do things I don’t want to do. And then there’s an essay in the third book about free choice, which really comes out of my anarchist stuff, but realizing going to therapy 30 years ago that it was all my choice and that I don’t need to do anything.
And once I embraced that, it was really freeing. Because it’s like, I don’t need to go to work. And I don’t mean because of money. I just mean, I don’t need to be nice to you. I could walk out of the room right now. And so it’s when I realized it was all free choice, it really shifted my energy a lot. I choose to deal with difficult customers. I could ignore them. I choose to have the difficult conversations, even though I don’t want to. At one level, I choose to engage. And then a lot is around energy. So my friend Anese Cavanaugh is who I learned the energy stuff from. She lives in Sacramento. Her work is very good, and we’ve adapted it here.
So on a base level, energy management is a job expectation here. That’s a huge thing that also doesn’t get written up a lot, but it’s a job expectation that you bring positive energy. There’s a lot of focus in the world on time issues. And I did write an essay on time management that’s in the managing ourselves book, which for some people, works a lot. But what they don’t talk about is energy management. So they’re trying to spend less time at work. But that’s not the issue. The issue is, what energy do you get from what you’re doing?
So I have this vivid memory from many years ago now: Fourth of July, we’re open. I live with a farmer. We have dogs. I’m not religious. I’m an introvert. I don’t care what date it is. I try to treat them all well. I don’t want to go to a Fourth of July picnic. I’d rather bus tables. Anyway, I was at work, but I’m at work on a nice day like today. I’m sitting outside at one of those tables. I’ve got a good pot of First Flush Darjeeling tea, which is awesome. I’m working on some stuff about Emma Goldman, and I’m having a good day. And I know some people say not to, but I jump back and forth between multiple things all the time. So I’ll be working on something, look at email, and I flip back and forth. And it might not work for others, but for me, it works.
Anyway, so I flipped to my email, and there’s this note from this friend of mine. You know, “How’s it going?” And I said, it’s going good. And she goes, “Where are you?” And I’m like, “I’m at work.” And I’m like, “Where are you?” She goes, “I’m at my in-laws. We’ve been here all weekend. You know, I’ve got to get out of here. We’re about to get in the car with the two little kids and drive six hours.” I’m like, “Wow, sounds fucking fantastic.” [Laughter] So like, by the world’s standards, she’s got the weekend off, and I’m like, “Okay, but I’m calm and learning at work, sitting in the sun, drinking really good tea, learning something, working on something I care about, and she’s sitting at her in-laws trying to self-manage around that and about to get in the car with, whatever, a three-year-old and a six-year-old for five hours.” I’m like, I don’t know, I’d rather be at work.
So I’m not saying that’s right for everybody, but for me, it’s good. And so, I try to manage my life so that I have very few energy drains. And almost everything I do increases my energy. So if you look at it like that, it’s regenerative. So I’ve been tired for decades. It just stopped bothering me. I self-manage to raise my energy all the time so that I leave with more energy than I went in with. Does that help?
Ed Leventhal:
Yes, thank you.
Sarah Segal:
Sarah Segal, Segal Communications, San Francisco, California. I like asking simple questions that are open-ended, that are open to your interpretation.
Ari Weinzweig:
That’s a very good interview technique.
Sarah Segal:
I used to be a reporter. My first question is: What do you regret in your career so far? And what’s that—
Ari Weinzweig:
Let’s do one at a time, because it’ll be easier. I don’t know. I try not to regret much. Like, what’s done is done. And I come from a worrying family, but that’s super unhelpful, and it is what it is. Like, I just try not to—it’s over.
Sarah Segal:
Any missed opportunities?
Ari Weinzweig:
Oh, a million. I mean, I’m probably missing 20 by sitting here right now. Yeah, every time I’m here, I’m not reading a book and learning something. I mean, every time I go running, I’m not checking the salt level. We’re always missing stuff. But when it’s free choice, then it’s like, I did the best I could. I mean, other than the obvious—like, I picked what pants to wear today or whatever—we really don’t make decisions here alone.
So in the moment, you might need to deal with a customer situation, like Nathan was talking about at the Roadhouse the other night, but beyond that, it’s all collaborative. So, when we have something that didn’t go well, it wasn’t just me alone. It was five of us, or three of us, or 12 of us, who arrived at that decision. And if it was the wrong one, I’m responsible, but it is what it is. So I try to train myself out of it.
Sarah Segal:
And the second question is a question I asked my table at dinner last night, and it’s: Are you successful? Do you consider yourself successful? And if you do, when did you decide that?
Ari Weinzweig:
I don’t consider myself successful. It’s the opening of the chapbook, which, if you grab it, I could read it for you. Would you grab one of those little orange chat books? They’re outside on the bookshelf, and I’ll just read you the line, because it’ll just tell you the whole thing.
So in the hierarchical model, success makes sense. In an ecosystem model, it doesn’t make any sense. Like, is a forest a success? No, it’s healthy, but there’s failure in a healthy forest every five seconds. Like, there’s plants dying. Birds fall out of the nest, baby birds, and die. Trees are dying. It’s always happening at the same time, and I think that’s true in life. So whatever I’ve done—oh no, it’s a little tiny thing. Sorry, I wasn’t specific enough. Those are good, too, though. Nice job. [Laughter]
Ari Weinzweig:
They do, but my mother considered me a failure for many years. Because I wasn’t a lawyer. Because I was wasting my education. I mean, every year, my mother used to say—I mean, this is how hard it is to be who you are, right? So here’s me, anarchistic, blah, blah, blah. Every year, I don’t know when you take the LSAT, but my mother, I think in August or something, my mother would say, “Why don’t you just take the LSAT this year?” This is after we opened the Deli. And I would go, “Not this year, Mom.” And she’s like, “Well, just take it in case you want to go.” [Laughter] “I don’t know, not now, not now.”
So finally, I mean—I swear this is true—we were, like, 10 years in business. We’ve been in the fucking New York Times, Gourmet, blah, blah. We have 150 employees. We’re doing $5 million. My mother goes, “Why don’t you take the LSAT. I just feel like you’re wasting your education.” I’m like, “Mom,”—we have 150 employees—”I am not taking the LSAT.”
So, that’s other people’s judgment of you. And this goes with whatever—it goes around sexual preference. Like, you’re a failure because you like men or you like women. You’re a failure because you didn’t make enough money. You’re a failure because you didn’t do X, Y, and Z. And I mean, it’s judged on external—I don’t really care about awards. It’s nice for PR, for the company, but I’m not any better or worse the day before we get it or we didn’t get it. Ji Hye was a—I don’t know, I’ve lost track—finalist, quarter finalist for James Beard. The restaurant’s no fucking better if she got the award or no worse if she didn’t get the award. And I’ve been to plenty of them that get awards, and they’re not that good. So it’s really not connected. Anyway, I’ll just read you this.
Loren Feldman:
What is this a response to?
Ari Weinzweig:
This was: Am I a success? Just a good answer for your question: “Every once in a while it happens. In the middle of a conversation about the struggles of leadership or the challenges of running a small business, a curious person will shift gears and ask me something along the lines of: How does it feel to be such a successful entrepreneur? I usually smile and deflect the compliment with a bit of heartfelt humility. ‘Thank you. You’re very kind.’ Time and mental space allowing, though, I might answer the question in a bit more depth. To be honest, I don’t really think of myself as either a success or an entrepreneur. The typical response, then, is something akin to, ‘Really? How do you see yourself?’ For years, I fumbled around for an answer. Eventually I realized I could just tell the truth. I feel like a line cook who’s doing pretty well.” So, not that there’s anything wrong with being a line cook.
Channon Kennedy:
I’m Channon Kennedy, The Morgan Square, out of Hayward, California. So my question to you is, you’ve been at this for 47 years? Is that what I’ve been hearing?
Ari Weinzweig:
47 years since I started washing dishes somewhere else. 43 years since we opened.
Channon Kennedy:
Long enough. So my question to you, given where you are right now, what is a piece of advice that you would give your younger self?
Ari Weinzweig:
Well, I’m not that big on advice, but what I write about is all the things that I learned that I would have done differently if I would have known them. So it wasn’t like we thought it was a bad idea to write a vision. I never knew you could. It’s not like we said, “We’re never going to be open-book management.” I just never heard of it. It’s not like I thought I shouldn’t be mindful of my beliefs. I just didn’t know you could be.
So, what I try to write about is what I wish I would have known. Like, I’m not beating myself up about it, because I wouldn’t have learned it without going through what I went through, but those are the answers. And there’s a lot more. Even if I give you all those books, and you read them all before you open, you’ll forget 80 percent of it on the first day when the dishwasher breaks and six things fall through the bag and you know, whatever, but at least it’s there. And that’s what I would say.
Loren Feldman:
Ari, you mentioned that one of the challenges of serving great food is that it’s expensive. It costs money to produce. You have to charge for it. What have you learned about charging and pricing that allows you to do that?
Ari Weinzweig:
Well, what I learned is, especially in our industry, there’s a lot of people who are understandably afraid to charge what they need to charge. Then they don’t make any money. Then they burn out. They can’t pay. And the customer still thinks you’re charging too much anyway. One of the best pieces of advice or insight that Paul and I got, we went to a seminar at Washtenaw Community College, right up the road from where I now live, like 35 years ago. And this guy, Tim Connor, who I think is still going in North Carolina, and we learned a number of things from him, but it was about catering. He just said, “If you’re at the top of the market and quality, and you’re not getting 20 to 30 percent complaints about your price, you’re not charging enough.”
No, it’s true, because you can’t hit it perfectly. And if you charge so little that no one complains, then it doesn’t work. And so the public perception is, the prices are made up based on what you can get for it. And that might be true like with some high-tech thing where they’re just like, “We could charge this,” and they do. But in our industry, those who work in it know it’s mostly based on your food cost and what the cost of goods is, and then there’s a little bit of flex, but not really that much. So, I mean, I heard you with tariff stuff. It is what it is, man. If the chocolate goes up $1, we’ve got to charge more. Like, when they say they’re going to absorb it, “Dude, you must make a lot more money than we make.”
And what I learned is—back to your question—if the experience is great, the price is not the main issue. And also, if we’re making things that are not available everywhere, then it’s also easier. If we’re making stuff that everybody else makes at the same quality level, then we shouldn’t be charging more. But that’s our work, is to keep getting better all the time—to your question—so that we’re always improving what we do not based on complaints. Not that we don’t improve based on complaints, but if we’re waiting for the complaints, we waited too long. Did you have the biscuits at the Roadhouse?
Everyone:
Yes, we did!
Ari Weinzweig:
Okay, good. So they’ve always been good. So I’ll tell you a quick story, because this is also about being in business for a long time. When we opened the Roadhouse in 2003, it was still the norm—those in the food business will be able to relate to this—that you got free bread on the table. You got a basket of rolls, or you got whatever. And we have a bakery, which makes awesome bread. So it only made sense that we would do that. But the industry has changed. Over the years, it became less and less common that you got free bread. And as more and more artisan bakeries were opening—and we were one of the early ones—then people start charging for bread. And then as gluten-free stuff became more an issue, and celiac, then some places don’t even have bread anymore.
Meanwhile, you sit down, we bring you a basket of bread, and it’s not cheap, because we’re, whatever you said, integrated. And we pay a good price to the Bakehouse, like triple what they would pay if they were buying from a mediocre bakery that made dinner rolls. So we’re putting down a $3, $4, $5 cost, whatever, $3 cost of bread on your table, and half the people don’t eat it. Half the people are like, “This is great. I’ll have a glass of water and an order of fries.” So we’re like, “But what do we do?” Because we have a commitment from the Roadhouse to the Bakehouse to support the Bakehouse’s work. We’re already trying to serve higher-quality stuff. It’s already expensive. You could build it in, but it’s a couple bucks more, whatever. What do we do?
So we spent a lot of years agonizing over how to start charging. And then that would piss the Bakehouse off, because it’s going to reduce their wholesale sale, because when it’s free, you go through a lot. Anyway, we were kind of getting close. Then the pandemic came. It wasn’t the number one worry. Then we stopped bringing the bread to the table, because we’re avoiding contact. So then there was no bread going out unless they asked for it, but it was still free. Anyway, long story short, after many years of trying to figure it out, we finally, two years ago this summer, agreed we would switch to charging. And we improved the bread service by going from a standard butter from the distributor, which customers liked but actually wasn’t that great, to butter from Vermont Creamery. That’s old, cultured butter, so it’s how they made butter 150 years ago. You let the cream ripen like yogurt or cheese, way better flavor, local cream to where they are, much higher butter fat, French sea salt, whatever.
So of course, there’s some pushback, but mostly the pushback is from people our age, because they’re used to free bread. We did a lot of roll-out with the staff, and then every time there would be a complaint, I’d go, “I’ll go over there, but I can guarantee you, they’re my age, right?” And they’re like, “Yeah.” Because nobody under 40—under 40, of course, you pay for bread. Duh. It’s like expecting free cocktails, like nobody would expect it. So anyway, now it’s ensconced in the way that they serve, and the butter is awesome. But meanwhile, we’re still using the regular butter in production. So then we made the switch to raise the price, a little switch to use the cultured butter with the pancakes, the oatmeal, on the table. Then we’re like, “Okay, well now we really should raise it in the kitchen, too, because we’re still using commercial butter in the biscuits,” which everybody loves and nobody complains about.
So three weeks ago, after six months of working on how to buy direct and not buy through the distributor so we could get it at a better price, we switched in the biscuits to make what was already highly valued even better by switching to that butter. So my point is, it came out of internal drive to improve. Zero complaints. No one was bothered by how it was. We raised the price because it costs more. But we continue to differentiate ourselves in the marketplace. And what was really, really good before will now become a signature item that people come there just to get.
Loren Feldman:
Along those lines, Ari, coming out of the pandemic, which you told us the other night was very tough on your business, there was a lot of talk about how the basic restaurant model just doesn’t work. The margins are too thin. People don’t want to pay what it costs.
Ari Weinzweig:
Those are beliefs. [Laughter]
Loren Feldman:
Employees don’t get paid enough.
Ari Weinzweig:
No, they’re self-fulfilling beliefs. We opened when people said—they said nobody would pay for what we were selling.
Loren Feldman:
Do you have a better business model? Or do you just charge what it takes to make the model work?
Ari Weinzweig:
We just try to charge what it takes to make it work. And I’m like, “If people don’t want to pay, then we’ll go out of business. But I’d rather go out of business charging what we need to charge than go out of business under-charging and never knowing whether they would pay what we need to charge.” [Applause]
Ari Weinzweig:
So, I mean, here’s another story from there from 10 years ago. The beauty of pouring water is you have these conversations that nobody would have with you. So I’m pouring water, and I don’t know, there’s a guy at that first little table—everybody in restaurants can remember exactly where you sat seven years later and what you had for dinner. I don’t know why, but anyway, so they’re at that first little table, and I’m pouring water, and I’m like, “Can I get you anything? How’s it going?” And the guy’s like, “Oh, it’s really good, but the burger’s too pricey”—like that, you know, kind of dismissive. And I’m like, “I’m sorry. Is it good?” He goes, “Oh, it’s awesome.” [Laughter] I was like, “Well, I feel bad, but that’s what it costs for that burger.” And he goes, “Yeah, but it’s way too pricey.” And I’m like, “Well, here’s how it works.”
And I kind of knew him. Now it’s more, but at the time, it was like a $16 burger. I’m like, “I could get you a $14 burger, and it won’t be quite as good. And I can get you a $12 burger, and it’ll be a little less good. And I can get you a $10 burger, and it’ll be less good still.” And I go all the way down to a $4 burger. He goes, “No, I want this burger.” I’m like, “Well, if you want that burger, that’s what it costs.” And that’s what it is.
And you know, open-book helps, because the staff understand the numbers. And so, if you have staff who don’t understand the numbers, they’re going with the public and not Loren but the press’s general perception, which is worse now, as people aren’t really trained journalists. So they’ll write stuff like, “Zingerman’s makes $80 million a year.” No, we don’t fucking make $80 million a year. We could have lost $8 million last year. You have no idea. Our sales were $80 million. So the public’s perception is we’re making all this money. And so if the staff doesn’t know anything about business, then their perception is we’re making all this money. So when the customer goes, “How could you charge $20 for that?” The staff’s like, “Oh, yeah, you’re right.” And that’s what happens in a lot of places. Well, when they see the numbers, they know what’s going on. And at $20 we might be losing a little money still. So it changes their whole energy around it.
And then over time, it’s not like we promote the numbers to the community, but customers’ kids work there. And so one time, I was pouring water, and this guy who worked there, his family, his parents, were in. And I’m pouring water, and they’re like, “How’s it going?” And they’re like, “Yeah, we heard you guys had a really good week last week.” And I’m like, “Oh no. The customer knows our numbers.” And I’m like, “Why not?” They want us to stay in business. You know, it’s healthy. And so changing the whole belief around it and that people will pay when they have a great experience—and that includes the food, it includes the service, and the energy.
Loren Feldman:
Ari, I came here this week with very high expectations for a lot of things, and once again, you’ve exceeded them.
Ari Weinzweig:
Thanks for coming, man. You could have gone out anywhere—I mean it, you could go anywhere. And it’s an honor to have you all here.
