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Bread company has goods on democracy

Great Harvest Bread Co. has been practicing workplace democracy before it became fashionable, says its president and CEO.

Mike Ferretti says the company, which was established in 1976, has been using democratic principles for about 25 years.

Great Harvest – based out of Dillon, Montana – is the United States’ largest franchiser of natural-ingredient, baked-from-scratch, fresh-milled, whole-grain bread. There are Great Harvest bakeries in 41 states and Ferretti says plans are in the works to open franchises outside the U.S.

The company is one of 34 worldwide selected as WorldBlu’s most democratic workplaces. WorldBlu is a Washington D.C.-based company specializing in organizational democracy.

What makes Great Harvest different from other companies which franchise, says Ferretti, is what is called freedom franchising. Freedom franchising is one of two main democratic characteristics used by Great Harvest.

The idea of freedom franchising is simple.

“If you think about how franchises work, the people who own and manage franchise businesses have very little say on how it’s run,” says Ferretti.

Things are different with Great Harvest. The bread company only has two rules franchisees must follow. The first rule is that franchisees must only use wheat which has been approved by the company. The second rule is that franchisees are only allowed to build stores in areas approved by the head office.

“Other than that, you can pretty much do what you want,” Ferretti says.

“What you want” includes allowing franchisees to set their own prices, create their own menus and keep their own operating hours.

The second major democratic characteristic used at Great Harvest’s head office is that it uses an elected board of franchise owners to help set company policy. The board is used to negotiate franchise agreements.

“We cannot change what we negotiated without their approval,” says Ferretti, noting that franchisees have collective veto power against policies from head office it does not agree with.

Ferretti admits this practice raised a few eyebrows with other companies in the franchising community.

“When we first did this, there was an awful lot of skepticism from the franchise world,” he says. “I don’t know of anyone else doing that.”

Ferretti says there are two major benefits of operating an organization using democratic principles: creativity and franchisee support.

“The creativity that we see flourish allows us to bring new products to market sooner, cheaper and more profitably,” he says. “The decision making reached through a democratic process is much more supportive than a centrally-controlled process.”

And what advice does Ferretti give to someone wishing to establish a democratic workplace?

“You really have to be committed to it,” he says. “You can’t be partially democratic. If you are, you’ll send mixed messages.”

Ferretti adds that democracy is often a word that’s misunderstood.

“Democracy doesn’t mean everybody gets their way,” he says. “It means that everybody gets a voice.”

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Deron Hamel's picture

Deron joined Axiom News in March 2007, having previously worked as a news reporter for print, online and wire services. He serves as Axiom News’ long-term care pod lead, after several years of writing stories and editorials for our clients in that sector. An award-winning advocacy journalist, Deron has seen first-hand the strengths long-term care brings to the greater health-care sector and through his work he seeks to share successes and best practices.