Zingerman’s Delicatessen

Think Local First of Washtenaw County, MI

Paul Saginaw and Ari Weinzweig opened Zingerman’s Delicatessen in March 1982 in an historic building near the Ann Arbor Farmers’ Market. It began with a limited menu of specialty foods, traditional Jewish dishes, and sandwiches and grew to become one of Ann Arbor’s most popular restaurants and retail businesses.

And Zingerman’s goes beyond the food by aiming to present it in an entertaining, educational, and service-oriented setting. Inc. magazine called Zingerman’s the Coolest Small Company in America, and you’ll soon see why.

Great food and good fun have been the engine for Zingerman’s growth. However, instead of opening more delis or even a  Zingerman’s chain, Paul and Ari chose to grow into other food-related businesses (what traditionally would be called vertical growth).

Zingerman’s is now a community of seven businesses—a delicatessen, a full-service sit-down restaurant featuring regional American food, a catering business, a bakery, a coffee company, a cheese-making company, and a training and consulting business. The Zingerman’s community of businesses has become a highly effective system for partnering with employees and turning many of them into managers and even owners. Each business has at least one managing partner on site, and the community has 15 partners with 400 employees and generates $29 million in revenues.

This growth strategy fits nicely into Zingerman’s mission of providing well-paying and fulfilling jobs to people in the community. The plan is to grow in a relatively slow and sustainable way that enables Zingerman’s to hire new employees while giving staff members opportunities to develop their careers. Zingerman’s long-term objective is to start one or two businesses a year, resulting in 12 to 15 food-related companies by 2009, all located in the Ann Arbor area.

The leaders of Zingerman’s operate as partners with their staff members and highly value employee participation and full engagement of staff. They know the business needs full buy-in by employees, and they are consistent in their message that every member must take responsibility for business success.

These innovative leaders also know that management cannot ask for employee responsibility without providing complete company information and including staff in the decision-making process. At Zingerman’s, employee empowerment is not just a buzzword, it’s an integral part of the company culture.

The community of businesses is managed by a partners group that meets twice a month and includes 15 owners and executive officers. The meetings are open to all staff members, and all finances are open too. The partners make great efforts to create a culture where everyone’s ideas are heard and seriously considered.

Employees are asked to participate in decisions affecting them, and decisions are made based on what is the best solution for the whole community.

Training programs are a critical part of the Zingerman’s culture, and classes clarify the company’s mission and reason for existence and emphasize the principles that guide what Zingerman’s does. Every employee is required to take a class on open-book management, which teaches how the business works and how to read profit and loss statements and balance sheets.

All partners teach classes and are involved in other aspects of staff training. The superior training given to Zingerman’s employees not only helps staff members advance within the company but gives them skills to make career changes outside the company as well.

As the reputation of Zingerman’s legendary customer service grew, other businesses became interested in how the company did it. So it started Zing Train, a new business that trains the managers and employees of other businesses. Building partnerships with employees and creating entrepreneurs inside and outside the Zingerman’s community of companies has become one of its many trademark practices. In fact, 12 of the 15 owners came up through the business.

Zingerman’s staff guide is an impressive and colorful handbook outlining the company’s vision and guiding principles and specific ways to share the Zingerman’s experience. On page 1 is the Zingerman’s Mission Statement:

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 caring in all our actions
to enrich as many lives as we possibly can.

Zingerman’s donates 10 percent of profits to community nonprofits, and each Zingerman’s business also contributes substantial in-kind donations. In 1988 Paul, with the help of Zingerman’s, founded Food Gatherers, a food rescue program that collects leftover food from local restaurants and distributes it to the hungry.

Zingerman’s also played a major role in the development of the Delonis Center, a collaboration between a number of organizations in Ann Arbor to feed and shelter the homeless. Now housed in a brand-new building, it teaches homeless people how to cook and prepare food for other homeless people.

From Growing Local Value, by Laury Hammel and Gun Denhart, Berrett-Koehler 2007. Photo by Tom Pidgeon for the New York Times.