Making the decision in 1998 to sell the main divisions of Au Bon Pain and focus all resources on the company’s lowly Panera brand became the most stressful year and a half ever for Panera founder and former CEO Ron Shaich.
The lesson is to stand up against the pressure when you know your decision is right. Ultimately, Shaich says, even though there was “blood on the floor” initially, the stock is up a hundredfold.
The Moment of Truth and Self-Reflection
Along the way, I had many moments of truth and many moments of self-reflection. But one of the most powerful moments was the moment when I made the decision to ultimately sell all of our original businesses. It was 1998 and I was in the Caribbean. It was Christmas time and I was kind of bummed.
We had four divisions in a large public company. I was looking at those four divisions and I understood that one of those divisions, the Panera division, had the potential to be a nationally dominant company. But it was the third largest of our divisions and it was really buried. This gem was buried under our three other divisions, Au Bon Pain, Au Bon Pain International, and Au Bon Pain manufacturing.
There I was on the beach in the Caribbean and I thought about it for a second. If I had any guts, if I had any strength, I would monetize every other asset in the company so we could take the financial resources and put it against growing Panera the way it needed to be growing. I would take our limited human resources, most importantly myself, and make that Panera business grow into what it was meant to be, and what it had the destiny to be.
Frankly, There Was Blood on the Floor
What that led to is over the next year and a half, the worst year and a half of my life. I had a Board that was disagreeing with me. My Board said we invested in Au Bon Pain, w
One of our Board members looked at me and said, Ron, I think you’re crazy. I think you’re washed up. I think probably the problem is you and not what you perceive it to be. I had team members all of whom saw their careers affected. Frankly, there was blood on the floor in our corporate headquarters. Everybody was trying to figure out how it would affect them.
You Must Have the Fortitude to Go Through With It
That year and a half was the most stressful year and a half I’ve ever experienced. It was a stress in every sense of what stress meant. It was with me while I was sleeping. It was with me while I was driving. If I were honest with you, I would tell you there wasn’t a day I didn’t go in and say to myself is this really the right thing?
The truth of the matter is nothing is proven until it’s done. But you need to have the fortitude to go through it. You need to have the strength to make those bold leadership decisions. You need to have the wisdom to be right about 80 percent of the time on those decisions.
Ultimately, the Stock is Up a Hundredfold
The result, in the end, was all good. Everybody who was on the Board ultimately saw this as a very positive thing. I didn’t lose my job. We completed the transactions. Ultimately, the stock is up in the range of a hundredfold since that time. The people that were sold with these Au Bon Pain divisions, many of them ultimately came back to Panera when their non-competes were over.
I will tell you that in retrospect this may look brilliant. But when you’re going through it it’s so powerfully difficult and it’s so powerfully rooted in uncertainty. So much of it is about making the decision to go forward and to stick with it and to bring your organization along with it despite the uncertainty you may feel within you.