12 Laws Of Building A Great Company From One Of America's Most Innovative Small-Business Owners

Ari Weinzweig, CEO and cofounder of Zingerman's gourmet food company, has made few traditional management decisions since opening Zingerman's Deli in 1982.

Zingerman's Community of Businesses is a collective of nine specialized businesses in Ann Arbor, Michigan. It's founded on a unique philosophy that forgoes the standard corporate hierarchy and emphasizes collective decision-making among its 18 partners.

Executive meetings are already open to all employees, and Weinzweig is figuring out a way to turn his company into a worker cooperative where every employee owns a stake in the company and has a voice in determining its direction.

It's an unorthodox approach, but it's worked well for the Zingerman's business collective. Its revenue continues to grow by 8% to 10% annually, Weinzweig tells Business Insider, and it is on track to bring in $50 million in revenue this fiscal year.

Zingerman's management style may be unusual, but it's based on the simple tenets of treating employees well and selling quality products.

In his 2010 book "A Lapsed Anarchist's Approach to Building a Great Business," Weinzweig details the 12 laws on which he and his partners have built Zingerman's. They are:

1. "An inspiring, strategically sound vision leads the way to greatness."

To Weinzweig, a vision is what the company will look like by a certain year - not a strategic plan on how to get there. "To be effective the vision needs to inspire the people who will be doing the work. It also needs to be strategically sound, i.e., while your goals should be ambitious, you want them to be realistic, too," he writes. Zingerman's outlined its vision for the year 2020 here.

2. "You need to give customers really compelling reasons to buy from you."

This may seem obvious, Weinzweig says, but it's important that business owners remind themselves that they need their customers much more than their customers need them. It's about finding a way to be more exciting than competitors. Zingerman's does this by offering food products that have stories behind them and offering exceptional customer service.

3. "Without good finance, you fail."

"Many businesses that are doing special things fail every year because they don't manage their money well," Weinzweig writes. He says it can be easy to forget that offering a great product isn't enough to guarantee profitability.

4. "People do their best work when they're part of a great organization."

For the past 30 years, Weinzweig has seen that the company's performance increases when employees' job satisfaction does the same. One of the ways Zingerman's engages its 600-plus employees is through the use of open book management, in which all employees are informed of the company's finances.

5. "If you want the staff to give great service to customers, the leaders have to give great service to the staff."

Weinzweig is a firm believer in Robert Greenleaf's theory of "servant leadership," which contends that the service the staff gives to customers is never going to be better than the service that leaders provide the staff.

6. "If you want great performance from your staff, you have to give them clear expectations and training tools."

The 1999 book "First, Break All The Rules" cites a Gallup poll of 1 million workers that determined the top two factors for staying with a job are "clear expectations" and "tools to do their work."

A more recent Gallup Business Journal piece explains: "Describe what each employee is supposed to accomplish, not how he or she is supposed to accomplish it. Don't explain expectations as a process or set of steps; explain them in terms of the outcomes the employee needs to achieve to reach organizational goals."

7. "Successful businesses do the things that others know they should do... but generally don't."

Weinzweig tells the story of how Zingerman's sent someone on a 45-minute trip to pick up an excellent rye bread from a Detroit bakery every morning up until Zingerman's Bakehouse opened. He says great organizations don't cut corners. "They stay open late, they open early, they thank a few more staff and customers, they pay a bit more to get better raw materials, they forgive loyal employees who err, they give a bit more to the community."

8. "To get to greatness you've got to keep getting better, all the time!"

The moment you start to coast, says Weinzweig, is the moment your business starts to decline. He thinks that it becomes harder, not easier, to manage a business well as it matures.

9. "Success means you get better problems."

It's a myth that progress eliminates problems, since there will always be challenges. It's the difference between having so few customers that you struggle to make your payroll and having sales so strong that you struggle to keep up. "The key is to pick the problems you want and then appreciate the chance to work on them, all the while working to get better problems still," Weinzweig writes.

10. "Whatever your strengths are, they will likely lead straight into your weaknesses."

Weinzweig suggests taking a look at your strengths and predicting how they may hurt you - and then plan accordingly. "I'm personally very focused, and I don't let go of something I believe in very easily. Certainly that quality has contributed positively to what I've been able to achieve over the years. But it's sort of inevitable ... that sometimes I'm going to stick with something longer than I should," he says. The same is true for organizations.

11. "It generally takes a lot longer to make something great happen than people think."

Managers should never expect a new strategy to start working immediately and need to give it a suitable amount of time to develop before abandoning it. For example, when Zingerman's adopted open book finance 20 years ago, it had a start that was "mediocre at best." But it started to notably improve the business after five years, and then another three or four to work optimally.

12. "Great organizations are appreciative, and the people in them have more fun."

Weinzweig stresses the importance of creating an enjoyable, positive work culture, where employees work hard because they know they are appreciated.