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Leadership Development

Leadership Lessons From 2020

The Value of Strong Organizational Guideposts

Remember March 2020?  What were you doing a year ago–in the “before” time? Personally, I was spending a lot of time on the phone.  We were interviewing prospects for a newly available position as a ZingTrain Trainer. Someone who could help pick up the load at the end of July when I would be stepping out of my full-time position as ZingTrain’s Co-Managing Partner.  We’d had a slew of great applicants and my partner, Katie Frank, and I were looking forward to narrowing down the list and meeting the top candidates in person.

One week later, we were announcing that the job search was suspended, we were preparing to furlough ZingTrain’s existing staff of 13 and we were wondering if our 26-year-old company was going to survive.  The business model that had brought us modest but consistent success was, at least in the moment, untenable.  When would people again want to get on a plane, fly across the country and spend a couple of days in a room full of strangers in order to improve their leadership skills? Certainly not soon. The future seemed bleak.

ZingTrain’s situation in March of 2020 was in no way special or unique.  Every business leader, in fact every person, has their own version of the dramatic changes brought on by Covid-19.  I imagine we will be telling those “where were you when . . .” stories for the rest of our lives.  Now, coming up on a year later, I feel incredibly fortunate that ZingTrain has survived (albeit with a much smaller team) and the future, while by no means assured, feels much brighter.  As someone who has spent the past two and a half decades studying and teaching how to be a better leader, I can’t help reflecting on what helped us get through to this point–when many other small, independent businesses did not.

As I look back to the spring of 2020, I realize that although I wasn’t always conscious of it at the time, Katie’s and my actions were driven by some foundational elements of Zingerman’s organizational culture that had been in place for years.  Always important, this scaffolding became especially crucial in helping us see our way through the crisis.  While many aspects of organizational culture contribute to creating a strong foundation, three of them stand out to me as especially significant over the past year:

  1. 1. Our Mission Statement
  2. 2. Our organizational Vision 
  3. 3. Our practice of Open Book Management

Recognizing the value of these three Organizational Guideposts during this time of crisis has deepened my commitment to actively teaching and using them in our own organization and also to sharing our experience in hopes that others can benefit.  There’s no doubt in my mind that our belief in these tools, reinforced by years of teaching about them, both to Zingerman’s staff and to other organizations, was a key reason they were our fallback last spring.

Guidepost #1: Zingerman’s Mission Statement

What is a Mission Statement?  A Mission Statement is a short paragraph that explains an organization’s purpose.  Mission Statements are intended to answer four questions: 

  1. 1. Who are we?
  2. 2. What do we do?
  3. 3. Why do we do it?
  4. 4. Who do we do it for?

Ideally, a Mission Statement is timeless and remains relevant as long as the organization is in existence.  Zingerman’s Mission Statement was developed back in the early 1990s, is taught as part of our new staff orientation and is referred to regularly in our day-to-day decision making.

We share the Zingerman’s Experience
Selling food that makes you happy
Giving Service that makes you smile
In passionate pursuit of our mission
Showing love and care in all our actions
To enrich as many lives as we possibly can.

One of the key take-aways from Zingerman’s new hire orientation class is that every staff member’s job is to bring a great experience to everyone they come in contact with–whether paying customer, co-worker, or random person who wanders in the front door or calls on the phone.  We think of the Mission Statement as our “north star,” providing direction when we’re feeling lost, always shining the way forward towards a destination that we’ll actually never reach.

As I think back to those first shell-shocked days when Katie and I tried to figure out what the pandemic was going to mean for our business and, more importantly, what we could do about it, it is clear to me that we were focused on minimizing the negative impact on our clients and on our staff.  We knew we could no longer deliver the experience that they were expecting–the seminars they had registered for or the jobs and workplace that they’d been hired into, but what could we do?

We always want any customer or client to be glad they chose to do business with us and any staff member to be glad that they have chosen to work here.  When we can’t meet someone’s expectations–as was certainly the case in March 2020–we immediately default into complaint handling mode, which includes acknowledging the problem, apologizing and taking action to make things right. What it means to “make it right” differs based on the situation, and we’d never been in a pandemic before.  However, the Mission Statement responsibility of delivering a great experience led us to explore what was the best we could do in this definitely not great situation.

When it came to clients, this translated into making personal contact with everyone who had registered for an upcoming event or contracted with us to do a private training event. By talking to each client individually we were able to customize our responses to meet their specific needs. For example, some clients were under extreme financial pressure themselves and requested that we refund their registration fees and/or deposits ASAP.  Others preferred to keep their planned events on the calendar and wanted us to figure out how to deliver the training content virtually. Some were convinced that things would be “back to normal” by the time their event rolled around and didn’t want to take any immediate action.  Whatever the customer wanted, we followed their lead, keeping in touch over time as the situation developed.

Bringing a great experience to our staff was harder.  We are a collaborative organization and even when the partners make the final decision, there is typically a lot of opportunity for input and discussion. With revenue dropping to zero literally overnight, Katie and I felt enormous pressure to cut expenses to the bone in order to hold onto enough cash that we could resume operations at some point in the future.  As much as we wanted to keep paying everyone, if we paid them when we had no sales–and no immediate way to begin generating sales–we wouldn’t have the operating cash to bring people back once we had a plan in place.

So, again, how to make a bad situation better–knowing that the best we could do wouldn’t be as good as we, or anyone on our team, wanted?  As with our clients, open, clear and frequent communication was key.  In an initial all-staff meeting we announced that everyone would be furloughed for at least a month, which we hoped would provide enough time to get a better sense of what the economic, social and health impact of the coronavirus was going to be. 

We reiterated our desire to keep the team together and that making it through this crisis was our top priority. We let people know when we’d update them on next steps.  After the group meeting, we met one-on-one (either in person or via Zoom) with everyone.  In those meetings we answered questions and provided specific information about furlough status, and we reiterated our belief that this immediate action was needed in order to have the flexibility we’d need to survive later.

At a point when our heads were spinning and it was truly hard to get a sense of which end was up, the simplicity of focusing on “how can we make this the best experience possible” was both a relief and a godsend.  I’ve never felt the power of our MIssion Statement so dramatically.

Guidepost #2: Organizational Vision

Vision, as we use the term at Zingerman’s, is a description of success at a particular point in time in the future.  Unlike the Mission, which is timeless, a Vision is time bound.  Visions are useful for any situation in which the preferred future is something different than what exists right now.  We write visions for projects, new products, a work shift, one’s personal life, a vacation–as well as for the short or long-term future of a business or department.

We have found that there are 4 Elements to an Effective Vision.  An effective vision is:

  • 1. Inspiring 
  • 2. Strategically sound
  • 3. Documented
  • 4. Communicated

Zingerman’s as an organization documented our first long-term vision back in 1994. That vision was for the year 2009, laid out the idea of a Community of Businesses, and was the inspiration for me to start ZingTrain.  In 2007 a new vision was written for the year 2020.  And in 2020 we finalized and are now in the process of rolling out, the ZCoB (Zingerman’s Community of Businesses) vision for 2032–a date chosen because it will be the Deli’s 50th anniversary.  Zingerman’s 2032 Vision is about 10 pages of prose, describing in quite a bit of detail the organization we are working together to create.  (If you would like to see Zingerman’s 2032 Vision, email [email protected] and we’d be happy to get you a copy!)

In addition to the ZCoB-wide vision, each Zingerman’s business has a vision (the current ZingTrain vision is for 2025) and many individual partners and staff have personal visions as well.  My personal vision for the year 2025 was written in 2015 and includes the milestone of my stepping out of a full-time Managing Partner role at the end of July 2020.

So – all of those visions were documented and had been, or were in the process of being, shared when our business was shut down last March, and one of the first questions that came to everyone’s mind was “how does this impact the vision?”  In particular, many, many people asked me “so, does this change your plans to retire?”  

After taking the time to reread each of those visions and reflect, the clear answer was that each of these visions still represents where we wanted to go.  The tactics–what it takes to get from here to there–needed to change somewhat (more on that in a minute), but the “destinations” did not change. This, I believe, is where the vision showed its true power–a guidepost in the sands of the future, there to remind us of our hopes and dreams even as we were living through a nightmare.

At the same time that we confirmed our desired destination, it also became clear that we needed to rethink our plans for how to get there.  For example, ZingTrain’s 2025 vision had anticipated a relatively slow ramp-up into virtual course offerings, while focusing on our thriving in-person training model.  When in-person training suddenly became impossible, we  needed to bring virtual course development to the front burner and turn the flame up high in order to generate revenue in the months until in-person training was possible again.

To get us focused as a team, ZingTrain worked together to develop both an 8-week vision and then a 1-year vision of success, with a full court press on virtual training.  The 8-week timeframe reflected the period in which we needed to spend the PPP funds that we received in April of 2020, and the 1-year vision was for our Aug 2020-July 2021 fiscal year.  The positive energy and focus that these “interim” visions generated led to many tangible results, including the development and delivery of more than 140 virtual workshops to over 2,000 participants by the end of calendar year 2020.  Not bad for a team that had not led a single virtual workshop ever until May!

Guidepost #3: Open Book Management

Open Book Management (OBM), as we learned it from the folks at the Great Game of Business,  is the practice of creating business transparency by sharing financial information with employees so that they can see how their individual efforts contribute to the company’s success.  There are 3 Steps to Great Finance as we teach it at Zingerman’s:

Step 1: Know and Teach the Rules of ZCoB Finance

1. Begin with a Plan
2. Profit is Good
3. Cash is King
4. Building Value is Essential
5. The DOR is the ZCoB Scorecard
6. It’s Gotta Tie Out
7. A Dollar Today is Worth More Than A Dollar Tomorrow
8. Follow the 80/20 Rule
9. We Speak the Same Language
10. Success Starts with Each of Us

Step 2: Keep Score

Step 3: Share the Success

People often think that OBM is especially useful when the financial health of the organization is strong, and there is no doubt that sharing the winnings with employees who have contributed to a business’s success is inspiring.  Equally important, however, is the support that OBM provides during financial hard times.

We’ve been practicing OBM at ZingTrain (and throughout Zingerman’s) for more than 20 years, which meant that everyone on our team already understood Rule #3 “Cash is King” because only cash gives us the ability to pay our bills.  An understanding of financial realities also meant that our team already knew that, as a professional services/training company, salaries and rent are ZingTrain’s biggest expenses.  With a 5-year lease in place, we were able to negotiate delaying some rent payments but couldn’t make that obligation go away.  Salaries were the only real lever to pull in terms of reducing the outflow of cash.

There were many, many hard financial decisions to be made as a result of the pandemic, and none so challenging as how to manage ZingTrain’s payroll expense.  And as hard as those decisions were for Katie and me to make, the active input and insights from the rest of the ZingTrain team helped us feel confident that we were making the best decisions possible.

ZingTrain’s Sales target for Fiscal year 2019-2020 (August 2019-July 2020) was $2.2 million and through the end of February 2020, revenue was running just slightly behind but we were optimistic that we’d catch up by the end of the fiscal year.  Instead, thanks to the Covid-related shutdown of in-person training, we ended the fiscal year with only $1.4 million in sales and an operating loss of $367K.  As bad as that was, the prospect for 2020-2021 was even worse as it became clear that in-person training would not be possible for the entire fiscal year.  

As we worked to put together a reasonable Sales target, the fact that ZingTrain practices OBM meant that Katie and I weren’t trying to figure this out all on our own.   We were very involved and we created frameworks for the rest of the team to react to and build on, and ultimately we had the final say.  But getting everyone involved in the discussion was incredibly important.

Having the whole team involved meant that a whole group of smart people, who know ZingTrain’s customers, products and systems inside and out, were actively engaged in finding solutions.  While none of us could control the virus itself, we all had the opportunity to figure out how to respond–as individuals and as an organization.  Because we had all worked together to write a vision for the new fiscal year, we were in agreement on where we were going.  And now we were digging into what it would take to get there–the roadmap to our preferred future destination.  And with everyone engaged, there was a level of ownership of the forecasts that there would not have been if Katie and I had just come up with the numbers on our own.

There was a point in July when, as a group, our team realized that the level of sales needed to reach breakeven with everyone receiving 100% of their current salaries wasn’t strategically sound.  Noone was happy with the ultimate decision to cut everyone’s salaries and hours back to 80% for the fiscal year, and yet everyone understood that the alternative would have been additional layoffs.  While recognizing the need for the reduced hours and pay for the current fiscal year, a key element of the vision that ends in July 2021 is that sales have recovered to the point that everyone is back to full-time and full pay as the new fiscal year begins in August 2021.

As I write this, ZingTrain has not yet returned to consistent profitability, although we have enough cash on hand that we’re feeling much more confident about the future. We’ve been regularly hitting our sales forecasts for the past several months and we have continued to add new virtual workshops as well as some computer-based training and full-day virtual events.  The team’s energy remains high and we’ve found ways to make Zoom meetings more engaging than we would ever before have thought possible.

By focusing on living our Mission, making progress towards our Visions and using the discipline of Open Book Management, ZingTrain is slowly but surely coming through the pandemic tunnel.  Equally important, we know that we will be using these Guideposts to get us to our 2032 vision–and beyond!