Great Harvest Bread Co. is a franchisor of retail bread bakeries (137 in all) headquartered in Dillon, Mont. The basic business looks simple: Bake and sell bread made from milled-in-the-shop Montana wheat. Loaves of bread go for $3 or so apiece, and a franchisee has to sell a lot of them to gross the $450,000 that the typical Great Harvest bakery takes in each year. (Systemwide, Great Harvest's revenues exceed $60 million. The parent company in Dillon grossed $3.5 million last year.)

What Great Harvest does isn't franchising as we know it.

While most franchisors dictate everything about their franchisees' operations in order to ensure a predictable experience for customers everywhere, Great Harvest doesn't even require that its franchisees use the same bread recipes. Or paint their stores the same colors. Or use the same promotions. Instead, Great Harvest sets its franchisees free after a one-year apprenticeship to run their stores in the time-honored mom-and-pop way. Be unique, the company tells them; be yourselves, and experiment. And therein is Great Harvest's fundamental philosophical principle: the conviction that command-and-control is wrong, that the company's real product is its offer of freedom to run a bakery as the owner sees fit -- but with "handrails," as Chief Operating Officer Tom McMakin calls the help that's available if wanted. Further, in Great Harvest's view it's only by putting freedom first -- including the freedom to fail -- that an organization can fully tap the magic of human creativity.

In other words, Great Harvest says to its bakery owners, Do whatever you want. Except in one respect, which makes all the difference: Every owner in the chain is encouraged to be part of Great Harvest's "learning community." Those who join (and most have) must share information, financial results, observations, and ideas. If asked questions, they must give answers. They must keep no secrets. They must, as McMakin describes it, "let things go." The result is what academics would call an intentionally created "complex adaptive system." A learning organization.

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