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Food For Future Organizational Thought

Sharing some background on our “Community Shares” program

black and white photo of a Zingerman's Community Shares owner's manual, a ballpoint pen, and a t-shirt that says "Own It"

On his new album All Round the Light Said, Irish singer songwriter Joshua Burnside sings about “A Man of High Renown.” Who we hold in high renown, who we learn from, who we admire, and who we aspire to emulate has a huge influence on how we live our lives. What follows is, I hope, a prompt for further conversation; a suggestion to consider shifting some of the stories that are told about the world of business. After all, as media scientist George Gerbner says, “[He] who tells the stories of a culture really governs human behavior.” 

To Gerbner’s point, we know what makes it into mainstream headlines—tales of tragedies and terrible truths revealed, a handful of heroes and a whole lot of villains, painful portraits of people who make a lot of money while doing bad things—would lead us to believe that those sorts of stories are the norm. Though what we hear and read can send our heads spinning off in destructive directions, it can still be hard to stop the “doom scrolling.” Like sugar, a small bit of studying scandals at the right times can be insightful, but a diet in which it’s the dominant “nutrient” is not good for us.

While there are many examples of businesses out in the world behaving badly, there are more collaborative constructs we could be studying. In his new book, Humankind: A Hopeful History, Rutger Bregman writes, “It’s time we told a different kind of story.” Bregman writes that Humankind “is about a radical idea. … that most people, deep down, are pretty decent.” As Bregman says, “The wonderful fact is that we live in a world where doing good also feels good. … The best deals are those where everybody wins.” Our Community Shares program at Zingerman’s is meant to be one of those sorts of deals, a different kind of business story, one that walks a path that’s not particularly well-trodden, but also one in which everyone involved comes out ahead. It’s a small step forward, but as we wrote in our Statement of Beliefs, “We believe small actions make a big difference.” In the long run, those small steps add up, as Bregman writes, “To stand up for human goodness is to take a stand against the powers that be.” 

If you’ve been reading stuff I’ve written here and elsewhere, you already know many of the names of those I hold in high renown. My list might include folks like Peter Block, Emma Goldman, bell hooks, Grace Lee Boggs, Robert Greenleaf, Peter Koestenbaum, Gustav Landauer, Gary Snyder, Rebecca Solnit, Murray Bookchin, Toby Hemenway, and of late, Gareth Higgins. One group that I haven’t written much about, but which has played a prominent role in my learnings over the past few years, is a community of cooperatives based in the Basque Country which is celebrating its 65th anniversary this year.

The organization that is now known as Mondragon was started in 1956, in the town of the same name. It was based on the vision of a young Catholic priest, José María Arizmendiarrieta, who had settled there in 1941, in the middle of WWI. Mondragon—the town—had about 7000 people living in it and was, like much of Spain, still suffering from the negative impacts of the Spanish Civil War. In the belief that he could make a positive difference, Arizmendiarrieta set up a school to train local workers, and then, in 1956, founded the first Mondragon co-op. Today Mondragon has the seventh-largest sales of any Spanish business; it includes over 250 companies in its community and employs collectively over 80,000 people. When we opened the Deli in 1982, I’d not yet heard of it. 

About a decade down the road, a writer by the name of Roy Morrison published a book about Mondragon. At that time, this Basque community of co-ops was roughly the same age the Zingerman’s Community is now. Here are a few things Morrison shares in the book:

Mondragon’s forty-year history is one of endurance and the triumph of human community; Mondragon provides practical hope …

The Mondragon system exemplifies the ability of new social choices to influence and shape the nature of the transformation away from an unsustainable industrial modernism.

Mondragon suggests that we can act creatively within our own communities to build social systems that embrace freedom, justice and ecological sanity.

I hope, over time, that when the story of Zingerman’s is told, these will be some of the themes that come up too. Like Mondragon, we are—and always will be—far from perfect. (See Natural Law #19: “Everything—and every one of us—is imperfect.”) The challenge is to figure out how to push ahead anyway. Taken from a statement by Father Arizmendiarrieta, Roy Morrison’s book title offers a way to frame that challenge: We Build the Road as We Travel. The story of our Community Shares program is merely one more piece of that road we’re building. In the ten-page document that is our 2032 Vision, we write about our future:

We built this model with the belief that power and ownership should be shared, not hoarded. Ownership is now spread more deeply and widely throughout the organization and into our community. Half our staff own Community Shares. Community Share Owners are more involved than ever in leading the ZCoB. In addition to their daily duties, they’re teachers, leaders, systems designers, and culture builders who enhance the collective wisdom of Zingerman’s.

Peter Block says, “The question of what we can create together is at the intersection of possibility and accountability. Possibility without accountability results in wishful thinking. Accountability without possibility creates despair, for even if we know we are creating the world we exist in, we cannot imagine it being any different from the past that got us here.” The work on Community Shares is one way we have attempted to answer Peter’s question. My point in sharing this is not to suggest that others of you ought to do exactly what we have done here—Community Shares is just one particular program that works here in our sort of strange organizational construct—but more to encourage you and I and others to consider some new questions as we build our respective roads into the future. Perhaps asking ourselves things like, “Why don’t we include more people in the ownership of the organization?” 

The story of spreading ownership more widely here began a couple of long term visions ago, in 1994 back when we rolled out our Zingerman’s 2009 Vision: 

We envision a Community in which each member business shares with Zingerman’s a common vision, a common road map toward the year 2009, a common set of guiding principles. Each is committed to the success of the other, committed to working in the best interests of the entire organization, linked financially and emotionally. Each is committed to the success of its staff and, beyond all else, the satisfaction of our customers.

But, significantly, each of these businesses will be owned and managed by someone who has chosen to be our partner in that particular venture. A partner with a passion for a particular food or service. A passion for creating an exceptional business that has a personality of its own, yet is grounded in the principles that have been such an important part of making Zingerman’s what it is.

In our 2020 Vision we took this story of expanded ownership further still. We couldn’t figure out exactly how to make what we wanted to have happen by 2020 work at the time we wrote the vision, but we knew we wanted to do something. Writing, as we do as an affirmative statement, we wove our uncertainty together with what we did know. Living like Marge Piercy says, as if we were “an experiment conducted by the future,” thirteen years down the road, we said: 

We’ve found a way to share the growth and financial opportunity of the ZCoB at an organizational level. While back in ’07 none of us could have guessed what the creative solution was going to be, it has worked out amazingly well. It supported the already high level of commitment from members of the ZCoB that we had fifteen years ago and enabled us to share big, company-wide wins.

Marjorie Kelly, author of Owning Our Future: The Emerging Ownership Revolution, is a woman who is on my list of folks held in high renown. As she says, “We need to begin talking about employee ownership in a bigger way.” Mondragon is one way to do it. Co-ops like Equal Exchange are another. Springfield Remanufacturing, the origin of Open Book Management, is another still. We are working now with a great group on the West Coast called Alternative Ownership Advisors about how to take this work even further here in the next year or two. I’ll write more on that project down the road—after we’ve figured out how to build it! Some of you reading already know much more about employee ownership models than I do—we count a goodly number of co-ops and employee-owned businesses amongst our clientele at Zingerman’s. I look forward to learning from you and with you for many years to come as we all figure out how to build our own roads forward in the best possible ways; the work is to figure out creative ways to make this work. As Roy Morrison writes, “We need more than words and ideas to change our lives and our communities. We need to understand, and we need to act.” The Community Shares program was one small, but significant, way we figured out how to do that.

Stephen Sondheim, who wrote the lyrics for the songs in “West Side Story” a year after Father Arizmendiarrieta founded the first co-op in Mondragon, describes his composing work as “free associations but within the rhythm I’d established.” Community Shares could be considered a riff on Sondheim’s statement—it’s something of a free association, but one that’s most definitely inside the rhythms of our history, values, and vision. And of our beliefs. The idea of sharing ownership, I’m happy to say, is all over our new Statement of Beliefs. These two in particular caught my attention:

We believe applying the spirit of generosity in every action benefits the business, everyone in it, and everyone we interact with.

We believe the more people we involve in ownership, the more effective the organization will be, and the more we can better the lives of everyone who is part of the ZCoB.

The details of the Community Shares program were worked out by a team of partners and staff over the course of five or six years. As per Natural Law #11: “It generally takes a lot longer to make something great happen than people think,” it took a lot longer to design this than I would have liked. But a holistic solution in the complex ecosystem that is Zingerman’s is rarely a quick fix. The common methods of employee ownership don’t work well for us. (I’ll spare you the details here.) What we came up with is creative, imperfect, and still, fairly effective. As we wrote back when we started the Community Shares:

It is a way to own part of the Zingerman’s Community of Businesses (ZCoB). 2We wanted to find some way for folks who were interested to be able to buy into the whole entity (as opposed to any of the individual businesses separately) and also find a way for people who weren’t managing partners to still become owners in the organization. To make that happen we have created a separate company which owns what is called the “intellectual property” of Zingerman’s. That might also be referred to in the business world as “the brand.” Previously, this was owned solely by Paul and Ari through their company called Dancing Sandwich Enterprises.

 

We believe that that model of real ownership, and the ownership mentality that go with it, that have worked so powerfully well with the managing partners will be extended with ever greater effectiveness as we spread ownership across the ZCoB. Bringing hundreds of staff members at Zingerman’s—people who are so important to the work that makes the ZCoB what it is—into real ownership positions fits perfectly with all of that work. So many great ZCoBbers have been acting like owners in their work for so long. This plan will bring them the real ownership that will be congruent with the great work that they’ve already been doing for so many years now. In the process hundreds of good people who might not have had the chance to be owners of a business now have access to ownership with a manageable way to make it happen. Our hope is that as hundreds of ZCoBbers become Community Share owners, we’ll sink ever-deeper leadership roots in the ZCoB. People will be more connected than ever across ZCoB lines. Every day a few little extra things will get done to help another ZCoB business or department.

So, what are the details of what we came up with? Community Shares is essentially like a co-op. Each share costs $1000. I own one, as do 181 staff. The share value doesn’t really change—instead, we pay out a share “bonus” that’s based on how the entire Zingerman’s Community has done for the year. We already have long had “gainsharing” plans (sort of like profit sharing with some twists) within each business—part of our hope with the Community Shares was that while the business that one worked at might have had a bad year, you could still “win” if the greater ZCoB, collectively, did well. The way the program is set up, there’s really almost no risk for front line staff who buy a share—if folks leave, they get their money back. And, yes, we finance the $1000 buy-in at a very low cost. Five out of the six years we’ve had it, the share program has paid out, and the folks who paid in their money have gotten a great financial return. There are also some increased discounts on food, and a fair few free “gifts” of products and services from the various Zingerman’s businesses. To share more decision-making power, as part of the program, we added 3 Staff Partners (selected from the Community Share Owners) to our Partner Group consensus.

Has Community Shares fixed all our problems? No. Has it turned total cynics into top notch performers? No. Has it tripled our profitability in five years? No. So why would we do it? Let me flip the question around: Why not? As I’ve said already, it fits our values, vision, and beliefs. It’s a meaningful but still affordable way for people who work here to enter ownership without having to cosign on million dollar loans. It helps encourage people to think like owners. It rewards folks for the good work of the community of which they’re part. As I said all along, the idea of this is just to live one more smallish but still significant reason to do the right thing; one more reason to come work here; one more reason to stay a bit longer. Over time, I believe more people acting and thinking like caring owners is likely to help the communities of which they’re a part as well. As John Abrams, founder of the South Mountain Company on Cape Cod, which has now been a worker co-op for 34 years, says, “When people feel like they have a voice that will be heard, they express themselves more freely – great stuff comes from that. Spreading ownership amplifies those voices. Experiencing the power of shared ownership in business, employee owners learn that they can make meaningful change in other parts of their lives too. In the long run that leads many of them to become more active in community advocacy and activism beyond the boundaries of the business, thereby increasing the overall impact of the company.”

Here’s what a few of the 181 current Community Share owners here have to say about the program.
 
Zach Milner, a Manager at the Roadhouse, says:

Community Shares is the natural, and inevitable, byproduct of what’s growing in the soil of the Zingerman’s ecosystem. What sets us apart from any traditional business is that we desire ALL our staff, from the dishwasher to the cheese maker to the catering manager, to act as owners. We show them all the numbers, share 100-percent of the responsibility for their training, and ask for them to lead fundamental changes in the running of each business. So, crazy idea, if our staff members actually internalize all of this and really take being an owner seriously, they naturally will end up thinking, as I did, “I don’t want to just act like an owner, I want to BE an owner.”

Josh Pollock, Project Manager at the Bakehouse, framed his response around our three bottom lines:

Great Food: you get additional discounts and special offers, making it easier to enjoy our great food.
 
Great Service: you feel even more attached to your business and to the others, willing to offer advice, take constructive feedback, and call out great service when you receive it.
 
Great Finance: Even with some down years and a pandemic the return on investment (ROI) on a Community Share is through the roof! And the investment is heavily protected, so your initial investment is extraordinarily safe.

Eric Wolff, Accounting Manager at the Coffee Company, writes:

From a purely financial point-of-view, it’s the BEST $1,000 investment you could ever make. You will never find another (legal) place to invest $1,000 that is almost entirely risk free with such a dependable return history.

Jordan Sharp, Accountant at Zingerman’s Service Network, shares:

It’s like an extra benefit that goes with the total compensation offered by the ZCoB. It gives you even more reason to root for and support all of the businesses. It’s a good learning opportunity, a safe investment that can help you understand how investing works and the time value of money and an incredible return on investment.

Megan Gabriel, who works as a Support Specialist in IT, says:

It inspires us to be more invested in our businesses as a whole. The more we help each other the better the business may perform and the better rewarded we are for doing so. You realize how the Community Share owners are a mixture of people all committed to Zingerman’s.

And Teri Laeder, our in-house Process Improvement Coach, adds:

Community shares is exactly as it is described, promoting a community that shares; shares knowledge, shares ideas, shares processes, shares successes, and shares failures. Allowing any member of our Zingerman’s team to invest in, not just one business, but the whole community, binds us together. We are a team, and we help motivate, inspire, promote, and encourage our fellow Zing businesses. Since purchasing my share in the second year working in the organization I have felt a keen sense of pride in our organization. Not just for the business where I’m employed, but for the success of our Community of Businesses as a whole. I feel honored to have invested in the long term success of this organization and my actions reflect that responsibility and privilege. 

There are many resources to tap into if you’re interested in starting your own discussion about ways that the folks you work with could own a piece of the pie. I’ve listed a few down below. I know that I’m still a novice, nowhere near an expert, but I have long believed what Michael Shuman says when he writes that, “Our economy, like our love, when it comes from a place of community, can grow without limit.”
 
I’ll close out with this bit from Courtney Richards, who just started last week at ZingTrain in the role of Office Coordinator:

I’ve only been with the company for a very literal 4 days, but I am continually impressed with the emphasis on community and shared responsibility. Part of what drew me to the ZCoB was hearing about the openness and integrity surrounding the financial side of things; that all employees, from dishwasher to partner, truly have a voice. Not only do they have one, but they are encouraged to use it to make suggestions, voice concerns, etc. for the betterment of the company, both in parts and as a whole.

The Community Shares program is one more way to give employees the opportunity to participate in the operations of the ZCoB. I’ve been in other organizations that were not open book and had no greater expectations of their staff than to “get in, do your job, and get out.” While that culture is not “wrong,” per se, I’ve seen some of the negative effects it can have on morale, workplace integrity, and community outlook. There is something special about the openness of everything at Zingerman’s that really promotes a sense of pride, ownership, and excitement.

I think most people pull back at the word “responsibility.” It’s daunting, and heavy, and can be a little scary. “With great power comes great responsibility,” and all that. But it’s also humbling, knowing that any one individual has the potential to make a difference in big and small ways. For the first time in quite a few years, I’m excited to come to work again. 


*** This post is an excerpt from Ari’s Top 5, a weekly newsletter from Ari himself. Sign up to receive Ari’s Top 5 here!

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