Zingerman’s Community of Businesses: Broad-Based Ownership, Governance, & Sustainability

by: Wayne Baker

Publication Date: October 5, 2013
Length: 32 pages
Product ID#: 1-429-340

Core Disciplines: Leadership/Organizational Behavior, Marketing/Sales, Strategy & Management

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Teaching Note

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Inc. Magazine’s “coolest small company in America,” Zingerman’s Community of Businesses (ZCoB), is an exemplar positive organization known for its culture and award-winning food. This case covers the ZCoB’s decision in 2013 to migrate toward broad-based employee ownership and the iterative, inclusive process by which Zingerman’s Partners Group researched and crafted a new ownership design for the ZCoB. Should they use an ESOP, equity compensation, become a cooperative, or create their own model? As students learn about Zingerman’s culture (e.g., its progressive views on sustainability, commitment to open book finance, decision-making by consensus) and evaluate which model might be the best match, they grapple with questions that are top-of-mind for the partners: Who will own the ZCoB, and how will it be run when the founders (who own 30-67% of each Zingerman’s business) are no longer living? How can it foster a positive, thriving workforce that is the driving force behind a sustainable business?

Teaching Objectives

After reading and discussing the material, students should:

  • Describe how the culture, beliefs, and behaviors of an exemplar “positive organization” support it in fostering a thriving workforce
  • Assess existing models of broad-based employee ownership, with particular attention to how each model might incentivize employees and to what extent each model includes employees in governance of the organization
  • Evaluate employee ownership models against a company’s culture and goals to recommend which model—or combination of elements from various models—could effectively achieve those goals
  • Examine a new perspective on sustainability that pursues human and organizational thriving and views businesses as important parts of a broader ecosystem (of families, communities, suppliers, and the environment). Specifically, students will consider how a thriving workforce contributes to a sustainable business in our modern service- and knowledge-driven economy.