Friday, January 30, 2009

Great Harvest

For one of my classes, we had to examine Great Harvest Bread Co. as a business model/managerial model. It was cool--I had no idea that it was such a great company. What's great about a nuanced managerial model like this is that it does very little to dilute the company. And, as we know, from authors/journalists such as Barbara Ehrenreich, it absolutely pays off to keep your employees happy, healthy and contributing to a grander purpose (well, in a sense, giving them purpose to their work). There is transparency and little disconnect inbetween levels of the (almost nonexistent) hierarchy. People that work for them are treated well and the company thrives. Coincidence? Here's a brief description of the company from INC Magazine online:

Best Practices: Great Harvest Bread Co.

From: | November 2000 By: Michael S. Hopkins

The company: Great Harvest Bread Co., headquartered in Dillon, Mont.
Business: Franchisor of retail bread bakeries that make soft-crust bread from Montana whole wheat that's freshly milled in each bakery.
Size: 137 franchised bakeries; franchisor has 28 employees.
Sales systemwide: $60 million
Management: Pete and Laura Wakeman, 48 and 47, respectively, cofounders and copresidents; Tom McMakin, 39, chief operating officer.
Founded: 1976
First franchise sold: 1978

Balancing Work and Life
"We believe strongly that a business is in service to our lives, not the other way around," says COO Tom McMakin. The Wakemans established that philosophy from the start and reaffirm it by their own annual travel and periods of reduced weekly hours. In Great Harvest's headquarters, all employees are salaried but are prohibited from working more than 40 hours a week. "We ask people to work hard when they're here," says Laura Wakeman, "but hard is not the same as long."

"Sweet Spots"
"We think there are sweet spots in business," says McMakin, "collectively-arrived-at practices that you can usually put a number on and that keep everything in a kind of running harmony." He names three: the thickness of the bread slices given away as samples to everyone who walks into a Great Harvest bakery (one inch, not more or less), the number of hours employees and bakery owners work (about 40), and the pretax net margins a healthy income statement should reveal (17% or 18%; anything lower or higher could signal problems).

Picking Great Harvest Franchisees
By year-end, Great Harvest will have received more than 5,000 inquiries about buying a franchise and more than 150 formal applications for ownership. The company will sell franchises to only 5 or 6.

"We're a community," McMakin says. "Of course, we want people who we think can run a business, but maybe more than that we want people who will make our learning community stronger, who'll bring new skills that the rest of us don't have, and who'll be eager to share them. But most of all we want people we really, really want to work with, who more than anything else are generous. We want people who are nice."


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