the people in Portland, Oregon get it.

Everywhere I go in this country people get it and they come to me and they go thank you

for coming here; and that to us is so gratifying that Americans really understand quality

and understand something that really is worth going out of their way for.

>> Even for sole proprietors, business is a team effort.

Somebody creates the mission, usually based upon the perception

that there's a need to fill in a particular market.

Someone else then has to develop all the little steps that make the mission happen;

and still other people have to take the individual actions

that will bring all that planning to fruition.

When Ron Shake created Panera Bread he was most interested in developing a restaurant chain

that served nourishing food with the speed of a fast food restaurant

and the engaging environment of a sit-down venue.

But along the way he and his team proved the modern model of business management.

From a sound organizational vision to management educated to lead rather than dictate,

to front line employees empowered to make great customer service choices,

Panera is a unique experience both for its customers and its staff.

The formula has taken a quarter of a century to perfect.

>> This company was originally formed as Au Bon Pain in 1981.

In 1991 we went public; in 1993 we bought a small company in St. Louis, Missouri,

19 stores doing about 1 million dollars a year called the St. Louis Bread Company.

In 1994 and 1995 we really studied it but didn't change it.

Excuse me ladies, I'm Ron Schaich and I'm the President

of Panera and we're just wandering around.

>> Ron is great.

I actually met him two years ago when I opened this store and I was not expecting the CEO to be

so involved with not only the customers but the people.

>> When Ron started Panera he and his team set long-term goals laying strategic plans

to set the company in the direction of being unique, competitive and successful.

Breaking the goal into steps they set some short term objectives

and developed tactical plans to achieve them.

In 1996, we began to make changes in the concept.

We added bagels, our average unit volumes began to grow, they grew 25%.

In 1997 we added yet another business to our platform, our gathering place business

and our volumes popped to a million 750,000

which was essentially a 30% increase in one year.

>> Changing the business required tough decisions.

Realizing they were spread thin over a host of businesses, Ron and his team collected data

on each; agreed that some had to go and decided that one concept beat the others.

Sales figures assured them they had made the right choice.

We made the decision to sell all of our other businesses including our original namesake

business Au Bon Pain.

Since then we have grown it from the 180 stores in 1999 to what is today north of 700 stores.

>> Ron's whole purpose as CEO is to plan and control Panera's growth.

Along with his executive management team he leads rank and file employees

by helping middle management organize the steps necessary to achieve Panera's goals.

But to be successful that kind of control requires not only planning

but measuring achievement against an established set of goals and values.

>> Other than the most powerful piece to the Panera story,

is a document that we prepared and wrote to the cafe in 1994.

We call that document Consilvescence [phonetic] and what it is,

is a vision for how we compete in the marketplace.

And the interesting thing to me is people ask me all the time what are you doing new

and different.

The truth is I tell them not a lot.

What we're trying to do is get closer and closer to that vision that we wrote in 19994

and to be frank we're probably 80% of where we wanted to get to in 1994;

but it forces us to stay in the future and it forces us

to look at where we're trying to get to.

>> But a plan is only half the battle.

Without a great picture of how Panera fit into the overall landscape,

Ron and his team would be flying blind, so they periodically do what's called a SWOT analysis;

that stands for strengths, weaknesses, opportunities and threats.

It helps management to focus on the most important challenges

that face Panera at any given moment.

>> The greatest risk for a high growth company like Panera is to choke

on the extraordinary opportunities that we have before us.

A lot of people have gotten in trouble in this business

because they didn't understand how to grow.

They chose the wrong partners, they chose the wrong markets, they chose the wrong real estate.

You won't see Panera selling out the country;

you won't see Panera rushing to international markets.

You'll see Panera staying disciplined.

To assure that Panera is meeting all those established goals, Ron stays in touch

with his customers and solicits feedback and new ideas.

>> Thank you.

Thank you for your help.

Hey guys I'm Ron Schaich and I'm the President of Panera.

What is Panera known for?

>> The people that have heard of it know it makes great bagels.

>> I love the Caesar salad and the French Onion soup.

>> My favorite drink at Panera is the Icy Caramel Coffee drink.

>> The sandwich I just had was really good.

>> But some of the greatest feedback that Panera has gotten has come

from within its own industry.

>> You can take any one of the major studies in the food industry,

whether it be Sandelman Associates where we were ranked number 1 out of 110 concepts;

you can take JD Powers, you can look at the T and S research

where we had the highest brand loyalty of any concept; or you also can look

at restaurant institutions choice and chains were 6,000 customers were polled and then

when we came out with the highest food quality.

It is those results that say to us that we are touching a cord

with the American consumer in its deep and fundamental way.

They get it, they appreciate it, they vote with defeat and they vote with their pocketbooks.

>> To empower Panera teams to make dynamic decisions, Ron imparts them with the core value

of recognizing every stakeholder in the business from teammates to businesses.

>> It's such a great environment.

Our customers tell us that when you're in the bakery cafe you feel it;

and it's a place that at the end of the day when you look

at what you're doing here you can feel proud of the work that you're doing.

>> Size and scale are counterproductive in a people business.

People work for people, they don't work for companies.

So we spend a great deal of time focusing on how do we execute and how do we execute well

through local franchisees, local joint venture partners, and highly skilled

and committed people at the local level.

>> Though the original vision for Panera created autocratic goals, the implementation

of those goals depends a lot upon the commitment to excellent Ron earns

from every member of the Panera family.

That starts with quality hiring.

>> What I like best about this job is definitely the people; not only just the customers

but all the wonderful associates that I have and managers that I work with every day.

It's a second family.

The company that we have really works on trust and building trust

and great relationships with our customers.

It's a great company to work for; they really take care of your people.

>> Top management including executives like Ron have

to have great conceptual skills while excelling at Human Resources Management.

Front line managers like Kelly have to have great human relations skills

and master the technical skills required to run the restaurant.

Middle managers like Julie need a great balance of these skills.

Of course having a really great product

that customers love makes things easier for the whole team.

>> Everywhere you go when you mention for Panera Bread, people say,

"I love your cinnamon crunch bagels; I love your bread;

oh you know I had a party the other day and we got your sandwiches."

You can't help but become jazzed up and passionate about it because it's

such a great product; such a great environment.

>> Though managers like Julie certainly help execute strategy at Panera,

it's the vision of entrepreneur Ron Schaich that gives the company focus and direction

by establishing company values and risking fundamental changes.

Ron inspires frontline employees like Kelly Goodwin to feel free to make the kinds

of dynamic decisions that keep Panera Bread a brand recognized

for great products and friendly service.

>> Panera is a place where there's a lot of warmth, there's a lot of opportunity,

and there's a lot of challenges that really are approached as a team.

It's a place where people grow and people learn and people bring their ideas in order

to ultimately provide our customers with the best experience that they can have at a Panera.

>> I look at my one year old daughter and my six year old son and I look at my wife, Nancy,

and I mostly want them to be proud and I want to feel that sense of pride.

I want to feel like we made a difference, that we really genuinely delivered something

that was special for our consumers, and I cannot tell you the gratification that comes in looking

at this thing and saying we did it when other people couldn't.

And having been able to have been a part

of that is truly an extraordinary and rewarding experience.

[ Music ]