A lot of business owners attribute their success to hiring the best--they work hard to attract people with great résumés and to keep them around. Not high-end deli Zingerman's. A majority of their work force is made up of the types of people most owners would run from, including ex-convicts, recovering addicts, and serial quitters.

Yet despite the unpromising backgrounds of so many of its employees, Zingerman's has been successful for more than three decades and enjoys a reputation for outstanding customer service (as well as truly massive sandwiches). How do the company's owners manage to turn out a high-quality experience despite such "low-quality" employees?

That's the subject of a fun and fascinating talk Zingerman's co-founder Paul Saginaw gave at Google. The 15-minute presentation is well worth watching in full (check it out below), but the essence of Saginaw's answer is radical employee empowerment.

"I have no right to ever expect that someone that works for us is going to give a higher level of service to a guest than I'm willing to give to them," Saginaw says, before explaining how the company's approach to employees inspires great performance in their people.

The power of radical transparency

Zingerman's, Saginaw explains, ascribes to an "open book" management philosophy, which extends beyond just sharing every financial detail of the business with everyone, from managing partners to dishwashers. Rather than have execs hoard the numbers and frontline staff hoard their knowledge about the reality of the business where the rubber meets the road, at each Zingerman's operation, there is a white board listing all the financial details. Each line belongs to an individual employee, who is responsible for presenting at regular meetings how the business is doing on that front and suggesting solutions when problems crop up.

The result is not only a high proportion of managers who started out working behind the counter, but also a profound sense of buy-in from staff. Saginaw tells a story from the 2008 financial crisis to illustrate. Obviously, it wasn't a great time to be selling $9 loaves of artisanal bread, so the employees at the company's bakery operation held a crisis meeting.

We're in danger of not making payroll, the managing partners explained. Then they asked employees: What should we do? Given the chance to weigh in, team members agreed to discontinue free meals for employees, and management accepted a 5 percent pay cut (with the promise they'd get the money back once the unit was once again profitable).

"What do you think would have happened if Amy and Frank [the managing partners] had walked in and said, 'We're cutting out your meal, and we're lowering your salary 5 percent?' Do you think the happiness quotient would have gone up?" asks Saginaw to audience laughter. But thanks to the company's radical approach to employee empowerment, in fact "the happiness quotient went through the roof because they were empowered."

That, apparently, is how you turn ex-cons into dream employees.

 

Published on: May 4, 2016
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.