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FROM ZERO TO $16 MILLION WITH TONI MORELL
by Kristen Domingue
Our conversation with Toni Morell, one of three Zingerman’s Mail Order managing partners, reminded us of the importance of not only following our passions but paying attention to where they intersect with our strengths. Morell oversees the managers running the day-by-day operations of this $16M business with 90 year-round staff and over 400 people during the holiday time. Here’s how she got started, and how she’s keeping it all going.
FOLLOW YOUR BIG IDEA, EVEN IF IT’S HARD AT FIRST.People often ask, “When you got started, were you nervous?” The truth? I wasn’t. My husband and I were doing this together so I knew if we messed up it’d be fine, we would figure something out. But I got really nervous when we hired our first team member. If we made bad decisions and crashed and burned, we’d take our family down and hers. At that point, I wrote all the checks and wondered if we would make it payroll to payroll because we were so new, and the biggest expense we had was our internet connection — $1,200 per month! I remember having a small panic attack every time I wrote that check. I also remember making decisions about when to pay it so we could make payroll and afford internet without running out of money. I laugh now because we’ll spend that on one shipment of something, and spend $250,000 on just paper!Though I had a business degree, I wasn’t initially trying to start a business. I was just looking for work after my husband and I moved to Michigan. I saw a job for the retail manager at Zingerman’s Deli and applied.
What’s unique about Zingerman’s Community of Businesses is that if you decide you want to become a partner in a new business within the Community, the company’s response is to teach you how to go for it. At the time I became a partner, I was trying to figure out my next step during the dotcom boom and was considering a move to San Francisco. I went to a conference about running an online business, and I heard something that completely surprised me:
“If you’re going to do a website for your brick-and-mortar food business, create it as a separate business. Don’t try to make it a department, you have to look at it as a business in its own right, which needs all facets of your brick and mortar.”
I thought, “We can create a Zingerman’s mail-order business website.” Before pitching it to Zingerman’s founders, my husband and I agreed — if they’re in, we’re in: we’ll stay in Michigan and build this company. Since the Zingerman’s catalog company started in 1995, it meant the mail-order company had a built-in fulfillment mechanism. In the beginning, we’d literally print orders from the website, enter them into the mail-order system, and they’d ship it. At some point, we grew to be the same size as the catalog business, and it made sense to merge them.
HOW WE DO 50% OF OUR YEAR’S BUSINESS IN 6 WEEKS.
After a few years of being in business, it was clear that we weren’t going to change the seasonality of the mail-order food business, and we just needed to embrace it. Half of the year’s business is done in the six weeks before the year ends, so we realized early we needed to be good at ramping up, ramping down, and onboarding people.
Over the years, we’ve perfected an approach to manufacturing called “Lean” (a method developed by engineers studying the Toyota car manufacturing company’s methods for increasing profits and productivity through waste minimization.) We use a Lean technique called One-Piece Flow that ensures we get it all done without having excess at the end of the season. (Author’s note: The One-Piece Flow technique is when one piece is completed before production of a second piece is begun, requiring pieces be made-to-order with high efficiency rather than made and held with moderate efficiency.)
One thing we’ve learned by implementing the Lean processes is that the person doing the work is the best person to improve the work and create efficiency. The reality is, I can’t create the most efficient way to pack a box if I’m not packing 100 boxes a day. But the person who is doing that will have the right answers. Sometimes we don’t have the answers in the office, so we have to go to where the problem is to solve it rather than making decisions at the leadership level. We don’t often think of all the things that affect that decision because we’re not where the work is. I’d rather someone come up with an idea, run it for a week or two, and come back with real information than have the team get analysis paralysis.
WE DIVIDE AND CONQUER LABOR; WE COME TO CONSENSUS ON DECISIONS.
When it came to figuring out what each partner does, we started with what we’re each passionate about and what our strengths are. In the last few years, we’ve focused on the strengths of everyone in the organization. Our thinking is that someone could be terrible at public speaking and work for years on getting better, only to go from terrible to mediocre.
But if this isn’t that person’s strength, it’s really not what they should focus on; they should work where their strengths are. Over the years, the three managing partners haven’t always seen eye-to-eye, and when we have disagreements, it can sometimes trickle down to the managers and frontline staff, leaving them feeling like things aren’t in alignment. However, the more we’ve defined each of our roles and trusted each other with what we’re doing, the better it has been. When we all work on the same things, it doesn’t work as well as when we’ve clearly defined our roles.
At present, the three managing partners and eight managers meet on a weekly basis and discuss everything. We’re an open book about the numbers, but also an open book about decisions. We use the weekly forum to bring issues to the table and hope to come to a consensus between the eleven of us. I want to make decisions together, so we’re all invested in the direction of the organization. There’s so much power in the group, we’re not command-and-control partners, and the people here want to be a part of the organization. Having their say and being heard provides people with a sense of ownership.
WE EMBRACED OUR CHALLENGES, AND THEY BECAME OUR STRENGTHS.
The biggest realization we had as we grew is that there was nothing we could do about the seasonal nature of our business. So, we embraced it and made a list of the things we’d need to get good at for it to work for us. We’re always going to hire hundreds of people in the busy season. Because of that, we spent years streamlining our hiring process to make it an amazing experience for the applicant and the managers. We also spent time streamlining our training so it could be effective. One of our goals was 80% effectiveness in the first 30 minutes a seasonal staffer begins work.
It took us years to get there, but we knew things would never work if it took weeks of knowledge transfer to train them — they were only with us for six weeks of every year. Another challenge we’ve experienced is that given the nature of our business cycle, we sometimes lose great people, at times, to other businesses within the Zingerman’s Community of Businesses. But at one point, I realized my job is to create great leaders, and if I’m doing that well, they won’t always stick with us. So we have somewhere between 10-20 people who’ve left our organization to work elsewhere within the associated business community.
At first, this was hard to experience. But then I realized it’s actually a great thing; we encourage people to write visions and be passionate about what they’re doing in their lives. If they’re doing what they truly want, sometimes they won’t stay with us. Before I changed my mindset about this, it felt like they left me. After I really embraced the fact that my job is to create great leaders, I felt proud when I looked out at community-wide events and saw how many people started in the mail-order business. What’s also great about this is that now we have advocates for our business within the wider organization, and other business units are starting to ask for more information about how we do things.
THE REALITY OF WORK-LIFE BALANCE: EVERYTHING, ALL THE TIME.
I have heard people say work-life balance is important. I’ve accepted that it’s more like work-life integration. I work the standard nine-to-five but will get business calls at 9 o’clock at night sometimes. I know that’s part of what I signed up for, so if that’s when I need to be available, I’m there. It also means I can take the time in the mid-afternoon and do something too. My business allows me this flexibility; I don’t keep track, I just try to make sure I’m doing both, all the time.
ADVICE TO THOSE JUST STARTING OUT — IT TAKES MORE THAN PASSION
There’s power in knowing your strengths and knowing what they are not, and then figuring out how to have people in the organization or resources out of the organization help you where you struggle. In the beginning, we had to do everything because it was just two of us, but we tried to keep in the back of our minds, “What’s the first thing we’re going to give up because we know we can’t do it all or be good at it all?” It’s hard in the beginning because we held it all so dear, but we couldn’t have grown without a team.
it doesn’t mean you can’t ask everyone around you what they think or ask for help. We practice a consensus decision-making model, and sometimes that’s at cross purposes with why people want to be entrepreneurs — they want to be the boss, the final decision-maker, the person in charge. If we all make decisions together, I’ve found that we make better decisions and create more investment from everyone in the organization. Whether you know your passion or not, after speaking with Morell, we’re convinced following your strengths will lead you to where you’re meant to go. Morell had many advantages when she got started — a distribution unit built into the business community she was a part of, a solid partner, great training from Zingerman’s, and a business degree. Leveraging not just your strengths, but also your advantages and even your challenges will help you create the right business and grow it, no matter your starting place. Here’s to making the most of what you have!
Kristen M. Domingue is a copywriter and content marketing consultant in the New York City area. When she’s not delivering on client projects, you can find her cooking up something gluten-free or in an internet rabbit hole on entrepreneurship or astrology.