1: “Imagine we’re floating in a clear blue ocean—somewhere warm like Hawaii or Mexico,” Ron Shaich writes in his terrific book Know What Matters: Lessons from a Lifetime of Transformations.
“Waves are breaking and rolling toward the white, sandy beach,” Ron notes. “We know that’s where we are headed, so our ultimate destination is clear. And we know that any wave will take you to shore.
“But not just any wave will do,” he observes.
Rather than ride the first wave that comes along, we take some time to scout the best wave.
“And if that wave doesn’t get us all the way there,” Ron shares, “we rest and wait for another opportunity to come along.”
Yesterday, we examined Ron’s decision to acquire the St. Louis Bread Company for $24 million. Seventeen years later, after transforming it into Panera Bread, he would sell it for $7.5 billion.
“St. Louis Bread Company looked like a beautiful wave,” he recalls, “but I couldn’t yet see how far it would take me. So, I let it carry me forward. . . I felt confident the magic was there in my newly acquired company. But I also knew that I didn’t fully grasp it yet.”
2: What’s the first thing many companies do after they acquire another company at a high price?
They “immediately try to change them,” Ron writes.
“I want to know what I’ve got before I try to make it into something else,” he explains. “I knew we had limited time, but we had to take some time to learn what magic needed to be respected and protected. So I put walls around the company and elected to study it.”
Of course, he saw things that needed to be fixed or improved. “The St. Louis Bread Company didn’t even use the same typeface for its signs or the same decor in its stores, let alone run streamlined production processes.
“But I wasn’t ready to rush in and fix what didn’t work before I understood what did work,” he writes.
As the CEO of Au Bon Pain, which was flourishing in the large cities of the Northeast, Ron’s initial thought was that St. Louis Bread Company could provide a path to serve “the suburban market, while Au Bon Pain could go on serving the urban market.
“I imagined growing it to perhaps three hundred to five hundred stores across the Midwest,” he explains, “taking the pressure off Au Bon Pain to adapt to territory that wasn’t its natural habitat.”
But he wasn’t yet convinced. So, he took his time. At least for a while.
In prior posts here and here, we explored Ron’s “Future Back” philosophy where we “envision the future we want to reach and then plan backward and define the steps we will need to get there.”
Does Ron’s decision here to pause for a moment before taking action contradict his philosophy?
Yes. And, “sometimes, in business and in life, we can’t force it,” he writes.
“If the future we’re heading toward isn’t clear yet,” Ron observes, “we just need to take a step in the right direction and then pay attention to what unfolds.
“That doesn’t mean we’re drifting aimlessly—I knew my ultimate destination, my end,” he notes. “I knew that I was aiming to achieve competitive advantage and build a great company that provided our guests with an experience they couldn’t find anywhere else.”
3: There is an underlying principle at play here: “Be rigid in vision but flexible in execution,” Ron suggests.
“Sometimes we can’t see all the steps that will get us where we want to go,” he notes. “But if we keep the vision clear in our minds, we can allow opportunity to unfold and adapt along the way.”
Not acting right away required some courage.
“The pressure to find new avenues for growth was building,” Ron shares. “The monster was hungry and impatient. Just a couple of months after the acquisition, Au Bon Pain’s stock reached a new high.”
Six months after acquiring the St. Louis Bread Company, Nation’s Restaurant News awarded Ron and his partner at Au Bon Pain, Louis Kane, the prestigious Golden Chain award, which honors excellence in leadership and achievement in the food service industry.
“I was honored,” Ron remembers, “but I knew that the work we were being recognized for was already in the rearview mirror.
“Ironically, even as we accepted the award,” he writes, “Au Bon Pain’s growth rate had begun its slow but inexorable descent. A lot was riding on the St. Louis Bread Company.”
More tomorrow!
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Reflection: How willing am I to pause and let opportunity unfold rather than forcing action when the path forward isn’t yet clear?
Action: Clarify my long-term vision this week, then identify one area where I can loosen control and allow flexibility in how we move toward it.
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