If ever a town needed a Penera Bread it's Galva, Illinois. They don't need it for the food, mind you. I'm sure the Garden of Eat In restaurant and Gus' Taco House keep the 2,600 or so resident of Galva fed in fine style. Rather, it is for the example of what a business leader can be. In that area, Galva is in short supply and Penera Bread – their founder Ron Shaich more specifically – is re-writing the book.
In a recent HBR post, Shaich wrote about the "notion of a conscious and long-term approach to value creation — when put into proper application — serves long-term shareholders extraordinarily well and has the capacity to favorably reshape the public’s perception of corporate America. It is built on the fundamental premise that every business has a deeper purpose than merely short-term profit maximization and, more importantly, a responsibility to all of its stakeholders (customers, employees, vendors, investors, community). With such a model, profit is merely the byproduct of delivering something that serves society and a broad range of stakeholders."
Shaich does more than talk, however. Penera expects to feed a million people this year in three 'pay what you can afford' restaurants. They started them up because Shaich thinks Panera has the unique ability to leverage their scale and food business know-how "to affect positive — heck, lasting — change in the communities in which it served." Shaich says, "We have to spend less time figuring out how to extract economic value from our stakeholders and more time creating what is valuable to them. Doing so is what ultimately creates long term value."
Galva needs Shaich and Penera because, without it the folks there might come to believe that All Feed Processing and Packaging represents what business leadership is like. If that happens, the whole town may join an Occupy Galva movement, leaving no one to help Gus at his taco joint.
I am fully in support of efforts to drastically reduce government regulation, but having Tim Anderson, CEO of All Feeds, out in front of the crusade sets the effort back by decades.
All Feeds seems to feel quite victimized by OSHA – so victimized as to have an OSHA page on their web site with the American flag upside down. As the father of an airborne soldier with two tours in Afghanistan and one in Iraq, anyone who puts the flag he risked his life to defend upside down for any reason is a jerk in my book, but these guys are particularly galling.
All Feeds is unhappy with the series of fines OSHA has levied against them – a half million bucks in 2009, another $167K in 2010, and $758,000 this year. Prior to the 2010 fines, "All-Feed Processing and Packaging had been inspected by OSHA nine times since 2000, resulting in a significant enforcement action on four occasions. The nine inspections led to citations for 42 serious, 15 willful, five repeat and 10 other-than-serious violations." Feeling quite the victim of OSHA harassment, a few months ago All Feed refused to let OSHA inspectors do their job and it took a court order and $500 a day in fines to force them to do so.
So what makes me so sure Anderson and All Feed are not the victims of harassing government over-reach? Well, in levying the half million dollar fine in 2009, Nick Walters - the OSHA guy - said, "We've seen stark evidence of the tragedy that can occur when uncontrolled dust ignites."
Sure enough, three months later the All Feeds plant exploded. Said Tim Anderson, "Ultimately, it was still set off by a dust explosion." – just like the OSHA guy warned. Said injured employee Dustin Williams, "I had just got to the door when the explosion knocked me on my butt and I just slid across the parking lot." The employees were laid off – twenty of them still are. Twenty familes without work is tough medicine in a town the size of Galva. (This in spite of Anderson's touching assertion that his "heart is heavy for our employees. We really consider them our primary reason for being here.")
Penera Bread just reported earnings – sales up, profits up, business growing. That profit, as Ron Shaich said, is merely the byproduct of delivering something that serves society and a broad range of stakeholders. I have no idea if All Feed made any money, but they made at least a million and a half less because of their opting to run the place in a manner that left employees, their families and the community up the creek.
It's 32 miles from All Feed to the nearest Panera Bread location in Moline. The management team might want to start holding their meetings there. They just might learn something about leadership, business and the value of their stakeholders – not to mention how to avoid millions of dollars in fines and legal costs.
Steve H says
Ugh, this makes me think of the ignorant “us vs them” type of management mentality.
Makes me sick the way some managers think about safety (and quality). It’s 2011. There is no reason to be ignorant about either. You can read evolving excellence and get a clue just like the rest of us.
Donna Sink says
Bill your posts piss me off regularly but this one is well nigh perfect.
Bill Waddell says
Thanks Donna. Glad to know I finally got one right.
Sam Hoskins says
Seen on “The Office” last night.
Supervisor: It’s time for our warehouse safety meeting.
Warehouse employee: Meeting? We usually just sign the paper.
Mark Welch says
“We have to spend less time figuring out how to extract economic value from our stakeholders and more time creating what is valuable to them. Doing so is what ultimately creates long term value.”
In other words, focusing on what we can contribute as opposed to what we can take… Why is this so hard for many businesses??? The truly ironic thing is that those who focus on value for customers often wind up “getting” more in return than those who focus on what they can take.
A little insight from someone, unlike you bill, that knows the facts.
It was after being rapped repeatedly that allfeed put up a website as a last ditch effort when congressman Hare would not return our phone calls for help
The web site is what finally brought osha to the negotiation table and when they asked it to come down in order to facilitate negotiations we took it down
It was not I who put the sweat and hours into the web site it was the veterans that worked for our company that were sick and tired of the abuse the were receiving from the OSHA. I only gave them the platform from which to speak
The flag will continue to fly upside down in desperation as we “hang on” waiting for reinforcements to come over land sea and sky.
I would begin to believe what you say bill if the 500 per day had not been thrown out.
I would begin to believe what you what you say about if the fines were not punitive.
I would believe what you say if we had any serious injuries
I would believe what you say if 20 people still were on layoff
I would believe what you say if the Federal osha attorney had not been introduced to me as the “flame thrower” and said the fine was Monopoly money
I would believe what you say if the fire were from a dust explosion and not an office fire in furnace
I would believe what you say if we were not at pre fire numbers
I would believe you I had said it was a dust fire just like the osha guy said
I would begin to believe what you say if it were not true that allfeed economic impact on Henry County is 8 million and $2 million direct payroll through Galva alone.
I would believe you if Dustin Williams had not left the building then went back in for his phone which was where he burned his hands and never was blown to the ground
I would believe you had we not put our employees back to work immediately after the fire using insurance money to pay labor to help clean and run production in areas of the plant not affected by the fire.
As far as making money …. We work hard – we pay top scale in our area – we have grown as the rest of the economy slid because we felt a moral obligation to expand because our market could and people needed jobs.
I would believe you Bill…… but I just can ….. and your getting this unbelief from a pretty optimistic conservative Ron Paul suportin, gun totin , Jesus freak …..
God uses us because of our flaws not in spite of them – and we survived in business not because of the Federal help but in spite of them…..
Proudly representing the All Feed Team
I would believe you Bill…… but I just can ….
meant to say “i just can’t”
Read more: http://www.evolvingexcellence.com/blog/2011/11/this-town-needs-a-panera.html#ixzz1clQQvo6v
at Evolving Excellence
Bill Waddell says
As info Tim, if you see something in the blog post that is blue and underlined, click on it and it will take you to news sources with direct quotes and statistics. Every quote and fact I cited is sourced via one of those sites.
You are saying that all of the news sources cited incorrect data, misquoted you, your employee and the OSHA people? Seems odd that the Galva News would be in cahoots with the federal government to do you in, doesn’t it? Any idea why they would lie about you?
When you put the blame on your employee who got hurt when your factory exploded it told the whole story. It’s not your fault for having his work place explode – it’s his for going back in to get his phone.
Despite the fact that your factory exploded, OSHA and the United States of America are corrupt for asserting that your workplace is unsafe.
Taking responsibility doesn’t seem to be a big part of the management culture at All Feeds, does it?
Bill Waddell says
This from Jesse Anderson from All Feed to my email with a request that I post it:
You forgot to mention a number of things:
1. CEO, Tim Anderson is the founder of a non-profit organization http://www.servantsgift.com which has been helping feed the poor in the Quad Cities area, funding an orphanage in Haiti (which started before the earthquake hit there) and fill LP tanks for families in the poorest place in America (Wounded Knee,SD) so that they may have heat in the harsh winters there…and much more. If he had the resources to feed a million people as Panera plans to he might do that too but he does what he can with what he has. Kind of ironic as you seem to be drawing a contrast between good guys and bad guys.
2. One of the “jerk(s)” you, a civilian, mentioned is a U.S. Marine who wrote a letter (which now accompanies the flag on the All-Feed website) explaining why All-Feed flies a flag in distress. I hope you post it or at least comment on it publicly. A 2nd U.S. marine sits at the desk across from the first U.S. Marine. Both hired within weeks of their 4 year duty completion. Both deal with OSHA/safety related issues, and both feel that OSHA has put their employer in a position of duress through cruel and unusual punishment and excessive fines. All feed also employs an active Army Reserve who is doing so after already serving 4 years in the Navy. He also, agrees that OSHA has over-stepped its bounds. He was publishing a documentary on youtube that put all the cards on the table until OSHA blackmailed us to take it down. They said it showed them in an unfavorable light (it sure did-because they were caught on camera harassing and lying to us). Maybe you would like to get together with the 3 of them and hear their side of the story before passing judgement on people that you have never met.
3. The fire that All-Feed had in 2009 started with an air-handler (what many would know of as their air conditioner) motor that went bad the evening of the fire. Two 3rd party fire investigators have documented this. The fire started in the offices and spread to the production floor. A dust explosion may have occurred just as something might explode in a house if a raging fire started. It is estimated that the fire was burning in the ceiling for quite some time without any visible signs to management (just as happens in home attics – ask any firefighter). It was accidental, unavoidable and experts have documented this. OSHA does not specialize in fire forensics but you can take their word over the experts if you’d like.
4. OSHA regulation is a beast to comply with. Especially National Emphasis Programs (NEP’s) which are by nature on the cutting edge. The recent NEP on COM DUST has affected more industries than any in OSHA’s history. Moreover, the technological advancements that mitigate this issue are broad and deep, they are mostly mechanical, and many companies (like All-Feed) have been made to basically re-engineer their entire operation. Some simple google searches will yield more information supporting this than you could read in a lifetime. You, OSHA, or anyone else can call it negligence or anything you’d like but the fact remains that a company can only spend as much as they have in a given time. This is a concept that the Federal Government seems to take for granted. The national debt and congresses failure to pass a budget for 2011 (which is almost over) is testament to that. Unfortunately, the private sector doesn’t own a money printing press like D.C. does and credit (not to mention the economy and inflation) is tight. If you have other suggestions to raise revenues to meet All-Feed’s needs faster I’m sure they would be welcomed.
5. OSHA has started using press releases as an attempt to assassinate character and shame businesses. Don’t take my word for it…Dr. David Michaels, Assistant Secretary of Labor for OSHA, recently used the words “regulation by shaming” and you can find references that will prove that these ad hoc press releases have increased by double digits in the past two years. The problem is that this method dumbs down the debate and avoids facts. OSHA has said All-Feed has a history of non-compliance. In reality All-Feed had three investigations in the 90’s which were corrected and fines were paid. All-Feed therefore has a history of compliance. However OSHA has cited All-Feed 3 times in as many years with some of the highest fines in relation to revenues in OSHA’s history and it has become a revolving door for OSHA to come in and lay fine on top of fine amounting to over $2million dollars. All-Feed does not have $2million dollars to give to OSHA and if they did they would have no money to spend on safety improvements. Do you see the conundrum? In reality All-Feed has dumped every extra dime it has towards safety. If you don’t see that as “good enough” please refer back to point #4.
6. All-Feed is not greedy. I know because I have worked there for just shy of 3 years now. I am Tim Anderson’s son and I can testify that the pay for administrators is relatively modest and the pay for labor is competitive and continues to rise across the board. We offer benefits and 401k (with employer contributions) and I will share that almost half of our revenues goes directly towards labor. Directly into the community. I am not going to justify these in real numbers to you because it is none of your business but if you would like to come meet us you will see that there are no golden parachutes here…no one living “high on the hog”. We are just a small, family owned business lucky to find ourselves in an industry that has not been crushed in the recent economy and since the 2008 market crash we have created about 30 new jobs (doubling our work force) in this small community.
Your blog post was snide, sarcastic, and emotional but certainly not very factual or balanced. Your ability to regurgitate OSHA talking points is not impressive and your creative ability to juxtapose a one-sided story in an apples to oranges comparison between a small manufacturing employer and one of the largest food chains in the country is beyond my comprehension.
The distress flag flies under the OSHA heading on the website because they have attacked us and we are no match for their might. However, this does not define all that we are or all that we stand for. If you would like to know more you would have to ask. Your failure to do so in the first place is your failure.
OSHA has threatened our freedom of speech, lied on search warrants, and spit in the face of the 8th Amendment which deals with cruel and unusual punishment and excessive fines. They seem to be far more concerned with making money than making people safe. We’ve tried to work with them and they have continued to deny our offers. If that’s not profound enough for you to justify our frustrations than you’ll probably never understand.
Last thing. We don’t have stake-holders like Panera. Our stake-holders are our employees. Our employees have watched us put money towards safety improvements and increase our production wages. We don’t have a spotless record and every business is going to have unhappy employees but I know that All-Feed does what it can to provide a safe, healthy, and prosperous working environment.
Peace be with you, and good luck with your creative writing endeavors.