Anarchy at the cheese counter: how a US deli overturned the business model

Anarchism would seem to be the antithesis to capitalism, and yet it is the very basis of the astounding success of Zingerman's, a tiny delicatessen in Michigan that has given the artsy, bookish city of Ann Arbor a large part of its identity in recent decades. Since it first opened in 1982, the deli has expanded to 10 interlinked food businesses with more than 750 employees, and more than $65 million (€58.5 million) in annual revenue.

How could anarchism lead to such multimillion-dollar revenues? That's what business executives and corporate leaders now flock to Ann Arbor to find out from the deli's co-founder, Ari Weinzweig, who is coming to Dublin in October to spread his gospel of business anarchism.

“First off, anarchism is not about chaos and violence, despite what people think,” he tells me over the phone from Michigan. “Of course, there were violent anarchists, just as there were violent Catholics, Democrats and Jews, but anarchism is actually about a belief in human dignity and creativity – the idea that every individual matters. It’s about tearing down hierarchy.”

In the Zingerman’s “community of businesses”, this equates to more than a third of staff having employee-owner status and sharing equity in the business. Their success is directly correlated with that of the business.

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"It started with just my business partner Paul Saginaw and me, then we expanded to 19 managing partners. We've been adding staff partners ever since, so that we now have about 190 employee-owners."

Free healthcare

Even the basic servers in some restaurants in the Zingerman's community receive a wage that is 384 per cent higher than Michigan’s minimum for tipped workers. There’s free healthcare, and a relief fund for employees who need sudden financial assistance.

To make sure this idealism is grounded in solid finances, all accounts are open, so profits and losses are accessible to everyone at all times. Employees are trained in how to actively participate in the finances. Employees who have completed initial orientation are eligible to purchase shares in the company, with dividends paid each year in which Zingerman’s exceeds a 2 per cent profit margin. It’s not quite a workers’ collective, more of a hybrid form of employee ownership.

“A key element of our success has been decision-making by consensus at the partner level,” says Weinzweig. “We purposefully took power away from Paul and me by adding three staff members to the 21 managing partners, who all have equal power to us.”

Every business and project should have a clear vision into the future

This might seem like a recipe for chaos and conflict, especially since all partner meetings are open to everyone, but Weinzweig insists that once a clear vision has been identified, and everyone is fully committed to it, there’s seldom cause for disharmony. It is this notion of “visioning” that he aims to focus on at his first-ever Irish workshop.

“Every business and project should have a clear vision into the future. A vision is not a mission statement, which is like the North Star that you are sailing towards. And, it isn’t a strategic plan – which is the map of how to get there. A vision is the actual destination. It’s a vivid description of what “success” looks and feels like – what you intend to achieve, and the effect it will have on your team.”

Clear description

Weinzweig suggests it should be a clear description of the dream you hold inside your heart. It should be inspiring, lucidly expressed and strategically sound.

“The way to truly manifest your greatest aspirations,” he says, “is to be bold, but realistic at this stage.” The next task is to communicate it clearly to your team and make sure that everyone is in agreement. Once these steps are in place, the anarchism can be let loose.

Zingerman’s anarchism is not about battling government or sporting a mohican (as negative pursuits lead to negative results). It is about every employee feeling free to break hierarchical rank, and to innovate and take ownership of projects, large or small. They can implement improvements without seeking permission, as long as it is in service to the overall vision. Employees are also rewarded for creating entirely new ancillary projects that benefit the central vision.

This is how Zingerman’s ended up with its own bakery to provide bread for its deli, and then began working with local farmers to grow ancient grains, and partnering with a local mill to produce specific flours. It’s how its creamery began producing traditional cow and goat milk cheeses using centuries-old techniques, and its coffee roastery was established, and its handmade candy manufacturer, and its 42-acre heritage farm.

If this was a regular company our shareholders would have revolted long ago

A cynic might regard this as the creation of a hydra-headed corporate conglomerate, spreading itself like a localised Walmart or Amazon through Ann Arbor. What chance does a competitor have in a small city with one business serving 500,000 customers a year?

‘Sharing and encouraging’

“Just look at the range of culinary places that have popped up all over town,” says Weinzweig. “The city is thriving. The old business model was to destroy the competition and grab everything for yourself, but our model is about sharing and encouraging others. We give 10 per cent of our profits to community organisations. We partner with local businesses to help them develop products and services that aren’t within the parameters of our vision. If this was a regular company our shareholders would have revolted long ago. Our aim is to improve people’s lives, not to maximise shareholder value.”

It all sounds idealistic and naive, but Weinzweig, who studied anarchism and Russian revolutionary history at the University of Michigan (which has the largest anarchist library in the US), says it's just standard anarchist thought, as outlined by "queen of the anarchists" Emma Goldman in 1910.

“[Our] goal is the freest possible expression of all the latent powers of the individual . . . [which is] only possible in a state of society where man is free to choose the mode of work, the conditions of work, and the freedom to work. One to whom the making of a table, the building of a house, or the tilling of the soil is what the painting is to the artist and the discovery to the scientist – the result of inspiration, of intense longing, and deep interest in work as a creative force.”

Weinzweig is hoping to convince some Irish people that such thinking can be the core of progressive, sustainable businesses.

[ thefumballystables.ie ]