Ronald Shaich is the cofounder and chairman of Panera Bread Company, and was the CEO until 2010. He has grown the company from a mere $24 million in 1993 to revenues of $1.8 billion per year, with 1550 locations in 40 states. Today, Panera is one of the best-performing stocks in the restaurant industry, and is even beating Nike, Starbucks and Nordstrom over the last decade.
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If you are an MBA graduate, there are many things that Ronald Shaich can teach you from his great success with Panera Breads:
#1 Taking Risks Is Often Worth It
Shaich spent 10 years after graduating from Harvard Business School building Au Bon Pain, a bakery chain. That company begun to go under in the early 1990s, and Shaich decided to dump Au Bon Pain and focus on Panera. Most thought it was a long shot at best and very risky. However, it turned out to be a great bet.
Why? Because Penera, Shaich says, has managed to become successful by focusing on food quality, design and people. The brand has found an unusual niche: something between fast food and casual dining. Customers do not seem to mind paying a bit more for fresh bread, higher quality ingredients, premium coffee, and a family friendly environment.
#2 Spending More On Store Design Pays Off
If you spend much time in a Panera, you will notice things that make it stand out from a fast food restaurant. The tables and furniture are higher quality. There are lounge areas, open lay outs, fireplaces and free Wifi. People are encouraged to hang out there and to even hold meetings there. The obvious benefit to Panera and its shareholders is that people spend more money the longer they stay. MBAs should remember to try to make their businesses as pleasant and approachable as possible, and even spend a bit more to make that happen. You can often be rewarded with more in sales.
#3 Don’t Be Afraid To Take On All Comers
Another unusual aspect of Panera is that it has been positioned to compete against restaurants in many segments. Its coffee, bread and pastries take on Starbucks, McDonalds, and Dunkin Donuts. Its sandwiches compete against Subway and Chipotle, and at dinner time, they even are up against Friday’s and Chili’s. While this might sound intimidating, MBAs should take note that Panera is able to pull in customers all day long with its varied breakfast/lunch/dinner menu. It is therefore able to keep foot traffic steady all through the workday.
#4 Never Be Satisfied With Success
Even with all of its success to date, Shaich never takes Panera’s great performance for granted. He remembers that there have been many restaurant failures over the years, even those that were once very successful. He never believes that past success guarantees future success. Shaich is never satisfied with any recipe, and he always is thinking about the future.
In any of your ventures as an MBA graduate, you should remember to always be looking for new improvements and ways to grow your business. Never sit on your laurels.
#5 Growth Is Possible in a Recession
Panera Bread is one of the few restaurant businesses that managed to grow its share price from 2007-11. It did so by an impressive 189%. Shaich continued to focus on executing the long term strategy of investing in the company to benefit customers. Panera never cut prices or slashed its menu in response to the down turn. It actually added expensive options to its menu, such as a $17 sandwich.