This is an excerpt from “Reimagining Capitalism in a World on Fire” by Rebecca Henderson. Copyright 2020 by Rebecca Henderson. Reprinted by permission of Perseus Books, an imprint of Perseus Books, LLC, a subsidiary of Hachette Book Group Inc, New York, N.Y. All rights reserved. The above is an affiliate link and we may get a small commission if you purchase from the site.
Purpose in practice
The way in which the combination of mission and the nature of work plays out in practice to support both architectural innovation and the generation of great jobs can be seen particularly clearly at King Arthur Flour (KAF), the oldest flour company in the United States. KAF’s best-selling product, the 5-pound bag of unbleached, all-purpose flour, is not a sexy product, and the market has been shrinking for years. Fewer and fewer people bake, and more and more flour is bought online, where brands often carry little weight. But KAF is thriving. Its customers love the company. KAF has over a million likes on Facebook and more than 375,000 followers on Instagram. (For comparison, General Mills, the current market leader with $3.9 billion in sales in “meals and baking,” compared to KAF’s roughly $140 million, has about 85,000 likes on Facebook and 3,000 Instagram followers.) Sales are growing in the high single digits annually — an unheard of growth rate for a commodity product in a 200-year-old industry.
KAF’s purpose is to “to build community through baking,” and the three co-CEOs (!) have a very clear sense of just why and how home baking can make a difference in the world. Karen Colberg, the chief brand officer and one of the co-CEOs told me:
Baking uniquely enables people to unplug. And as a mother of three teenagers, I’m constantly in this mode of wanting connection with my family and spending time together. And what we offer people is the ability to come together and do something.
Ralph Carlton, co-CEO and chief financial officer, put it this way:
When you think of baking as opposed to food, you give people gifts. The emotional connection people have, the notion of the smell of fresh baked bread, there’s something unique about baking that brings people together. And that inspires us … [E]verything we do is centered around the baking experience.
Suzanne McDowell, co-CEO and vice president of human resources, added:
Well, everyone can bake. So if you just start there, and you think about how baking can level the playing field — it doesn’t matter how smart you are, or how wealthy you are, or any of the things that separate us: We can all come together and bake together. And spending time with people, baking and learning a life skill, no matter whether you are young or old, can be a remarkably unifying experience. You can bake with family, coworkers and neighbors. Baking is an amazing opportunity to build community. And we need community building. It’s really important in our world, always has been, always will be.
As in the case of Aetna, the passionate embrace of this purpose has enabled KAF to identify a strategy that is classically architectural. KAF no longer thinks of itself as selling only white flour — instead it is selling an experience, and supporting its customers in becoming great bakers. In Ralph’s words:
One of the challenges of baking, but one of the great things about baking, is to bake well you do need knowledge. And often you need inspiration. Very few people bake without reaching for a recipe or some other guidance. And baking is not that forgiving. It isn’t like cooking, where you just go in there, and it doesn’t matter what you do, something relatively good comes out. In baking, you have failure. [So] we started providing information on the web. And it has really grown from it being a small part of what we do to us being one of the leading sources of knowledge and inspiration for bakers around the country right now.
And that’s a core piece of our strategy … We’re making a big bet that future generations of bakers, when they have to choose products, are going to choose the products from companies where they learn the most from and they trust the most. And it’s not going to be because I barked at you and told you to go buy King Arthur. It’s going to be because we had a great recipe, or we taught you a technique that you value very highly … [because] King Arthur is really a company that cares about me and cares about baking and cares about quality.
This strategy is enabled by a deeply participative, fully empowered workforce that embraces it as a reason for working that extends far beyond a paycheck — and that makes it immensely difficult to imitate. KAF’s Vermont headquarters — now a major tourist attraction — includes a retail store, where visitors can watch baking demonstrations and sample baked goods (made with KAF products, of course) and a baking school, where hundreds of passionate bakers arrive to take classes from King Arthur’s master bakers. The company also offers online recipes and baking classes, and a fully staffed baking hotline, where customers can get answers to their baking questions from employees with thousands of hours of baking experience. Everyone is passionate about baking. Everyone goes the extra mile to help the company succeed. The latest financial results are shared with every employee, and everyone is offered training on how to read income statements and balance sheets. The company is very careful about the people it hires, and then equally careful about how they are treated.
The culture is a very present part of the hiring process. So when we meet people, and we talk about coming to work for King Arthur Flour, we talk about it being participatory. We talk about it being collaborative. But what does that mean? I want people to show up and feel accountable for themselves, accountable to their teams, and to have a clear understanding of what they’re supposed to be doing. Also to be comfortable that they can challenge what it is they’re doing and challenge what others are doing. And ask us questions so we have a really productive dialogue around issues such as: Where’s the company going? Why did you decide to do that? Did you think about this?
Ralph adds the following:
It’s a culture where people reach inside themselves to do the right thing. Karen often gives the example, during our holiday season when business is crazy and we’re sending thousands and thousands of packages out of our distribution center every day. Word spreads around the building that there’s too much work down in Pick and Pack and the team needs help. And people just do it, they come downstairs to lend a hand, and not because the boss tells them to.
Suzanne also commented on the positive work environment:
People are engaged. They’re proud of our products. They are in it together. It’s not like you’re siloed, and here I am in my space. I’m going to do my job — it has no impact or effect on you. In fact (your job) has a lot of impact and effect on everyone. It’s fun. We love to celebrate. We love to bake. We generally are pretty psyched about coming to work every day.
KAF’s competitive success is thus intimately linked to its willingness to empower its workforce — and this empowerment in turn means not only that it’s fun to work at KAF but that the company can pay over the odds and offer employees who vest a chance to build retirement savings. (KAF is a completely employee-owned company, which has potentially important implications.)
Creating a strong shared sense of purpose in a relatively small firm like King Arthur Flour is one thing. Can it be implemented in much larger organizations? It can.