Ron Shaich is the founder and former CEO of the Panera Bread and Au Bon Pain restaurant chains. Shaich is credited with defining the $100 billion fast-casual segment and is known for continually disrupting industry norms to build company value. As part of People + Strategy articles editor Adam Bryant’s “Art of Leading” series on LinkedIn, he sat down with Shaich to discuss his insights on leadership, transformation and entrepreneurship.
People + Strategy: When you mentor and coach executives, what are a few themes that come up most often?
Ron Shaich: One is trust yourself. When people are in new positions, they want to do so well that they often bring a level of insecurity to the role. I can’t tell you how many issues in my career and in my life I’ve obsessed about, sometimes for years. Only in retrospect do I realize that all I needed to do was trust myself and believe in myself and take risks based on my thinking and my gut at the time.
I also share a framework that I use for a lot of things—“Means, ends and byproducts.” We often get confused about them. In business, we are so focused on value creation. But we don’t “make” value creation. We can’t “make” numbers. They come out at the other end.
What we can make is a better competitive alternative, a better-run company. And so, the focus should be on delivering a better alternative for your target customer. That’s where your competitive advantage comes from, and that should really be the goal of every enterprise.
And I always advise people that one of the most powerful exercises is to write the article that you would want The New York Times or The Wall Street Journal to publish about your enterprise five years from now. What are they saying about it? What’s the headline? What’s the first paragraph? What are the two or three things that you got done that made the biggest difference? In leadership, you’re always going to be remembered for those things.
Once you are clear on those two or three things, then you have to use your calendar to focus on what really matters. We often schedule our time in reaction. But everything should flow out of your two or three key priorities.
My view is that when you’re running a company, you can only get about 80 percent of what you commit to done. And the reality is that most companies get a lot less than that done. I’m often blown away by how ineffective companies are in actually getting done what they say they’re going to do, rather than just reacting.
P+S: Why do you think that is?
Shaich: It’s because they’ve never been trained in what I call the “doing of the doing.” And frankly, a lot of companies just do what everybody else does. And they don’t ask the question, “What’s going to actually matter and make a difference?”
The ability to understand those few key things that will make the biggest difference took me a long time to develop. But wisdom comes from experience, and experience comes from banging your head against a wall. But I have always been trying to understand, “What are the unifying themes? How do you bring everything together?”
P+S: Let’s shift to early influences. Where does your drive and stamina come from?
Shaich: From early on, I always wanted to make a difference, to have an impact, to be able to say, “Wow, we did that.” That’s a powerful feeling. I started out as a social activist, and I took a year off before going to college. I was probably going to become a lawyer.
But I discovered that business was the most creative thing I had ever been involved with. It forced me to broaden, to figure out how to integrate everything, whereas so many other pursuits narrow you.
That [business] interest started when I was attending Clark University. I was tossed out of a convenience store across from the university, supposedly for shoplifting. I didn’t do it, of course, but I said, “Let’s open up our own nonprofit convenience store.” Because I was treasurer of the student council, I campaigned to tax the student body to raise $60,000 to open the store. I stayed that summer, built the store and ran it. I loved the process of figuring things out.
Early on, I always was pulled between business and politics. I helped run political campaigns as part of a consulting firm. In business, the work felt very similar—a business is like a campaign that never ends. It’s the same process of figuring out who your target customer is and delivering what they want and need in a consistent, solid way.
P+S: I’m sure you meet with a lot of young people who want to start their own businesses. What advice do you give them?
Shaich: I always try to talk them out of it. I’ll say, “If you’re starting a business for the glory of it, for the financial rewards, you’ll never get there.” You have to love the work itself, the doing of the doing. I’d rather hang out with the people who are running my restaurants than investment bankers. Frankly, I never worried about the money and I made a lot of money. I knew that if the company did well, I would ultimately be fine.
Going public is a whole other discussion that I’ve had with people. I’ll ask them, “Why are you doing it?” About 90 percent of people who take their companies public end up regretting it, because you’re bringing in a whole other universe of constituents and much more complexity to your life. You have to meet yet another set of standards. And those outside interests have a much more short-term focus.
When I first went public in 1991, the average shareholder held the stock for four months. By the time I sold the company, the average investor was holding it for four weeks.
There’s a pervasive short-termism in our capital markets. There was a time when the long-term money was in the public markets and short-term money was private. Today long-term money is private and public money is short-term.