Question: Inside the People Business at Finagle A Bagel

People are a vital ingredient in Finagle A Bagel's recipe for success. As a quick-serve business, the company strives for high turnover in food, not employees. In fact, careful attention to human resources management has enabled Finagle A Bagel to continue expanding its market share without spending money on advertising. Low workforce turnover means less money and time spent on recruiting and training-an important financial consideration for a fast-growing business. It also means that Finagle A Bagel has the human resources strength to combine super service with fresh food for a distinctive competitive advantage in a crowded marketplace.

THE RIGHT PEOPLE IN THE RIGHT PLACE

"We depend on our crew at the store level-who are interacting with our guests every day-to know their jobs, to understand the company mission, and to communicate with the guests," says Heather Robertson, who directs the company's marketing, human resources, and research and development. "And once we get them on board, people don't leave our company. They just stay. They realize that it can be a career for them." A sizable number of Finagle A Bagel's managers and employees (including Robertson) were hired years ago and became so excited about the product, the company, and the customers that they simply stayed. Many remain with Finagle A Bagel because they prefer the more personal atmosphere of a 320-employee business over the relatively faceless anonymity of a gigantic corporation. "It's really unusual to have one-on-one interaction on a daily basis with the president of the company or any senior executive member of the company," Robertson states. "Our cashiers, our café attendants, our bakers, and our managers know they can pick up the phone at any point and call anybody here and say, ‘Here's my problem. How do I fix it?' or ‘I need your help.' The size of our company allows us to do that, and the culture of the company encourages that." Because bagels are an integral part of every menu item, employees who join Finagle A Bagel must "love" bagels, regardless of any other skills or experiences they bring to their jobs. When Robertson advertises to fill an open position in Finagle A Bagel's headquarters, for example, she always mentions this requirement. As résumés come in, she sorts them according to whether the candidates indicate a fondness for bagels. Those who fail to mention it are automatically disqualified from consideration.

DIFFERENT KINDS OF MANAGERS FOR DIFFERENT LOCATIONS

Alan Litchman, Finagle A Bagel's copresident, says that selecting a candidate to manage one of the Boston stores is easier than selecting one for a suburban store. Given the inner-city location of the company's support center, he or another executive can get to the Boston stores more quickly if a problem arises. Moreover, the city stores compete by providing speedy, accurate service to busy customers who have little time to waste waiting in line. Paulo Pereira, general manager of the Harvard Square store in Cambridge, has become an expert at squeezing inefficiencies from the city stores so that customers are in and out more quickly. By increasing the number of customers served each day and slashing the number of bagels left over at closing, Pereira boosts both sales revenues and profits. When selecting a manager for a suburban store, Litchman looks for people with an "owner-operator mentality" who have the drive, initiative, and know-how to build business locally. His message to a potential general manager is: "If you want to be a franchisee but don't have the capital, or if you want to own your own business, we're going to put you in business. You don't have to give us any money to do that. And if your store achieves more than a certain level of sales or profits, we'll start splitting the bottom line with you in a bonus program." Consider Nick Cochran, who worked his way up from assistant manager to general manager of the store in Wayland, an affluent Boston suburb. Cochran's enthusiasm for quality and service has drawn a highly loyal customer following and contributed to the Wayland store's success.

HIRING AND MOTIVATING STORE PERSONNEL

General managers such as Cochran and Pereira are responsible for recruiting, interviewing, hiring, training, motivating, and evaluating store-level personnel. They assign job responsibilities according to the skills and strengths of each manager and employee, but they also expect everyone to work as a team during extremely busy periods. In addition to motivating general managers by offering bonuses based on meeting revenue and profit goals, Finagle A Bagel encourages crew members to take advantage of extra training and internal promotions. "In a company our size," stresses copresident Laura Trust, "there is always opportunity. You just have to find the right fit for the individual." In fact, says her husband, "The best supervisors, coordinators, assistant managers, or managers in any unit-by far-are the ones who have started with us at a lower level and worked their way up."

DIVERSE WORKFORCE, FAMILY BUSINESS

Finagle A Bagel has an extremely diverse workforce made up of people originally from Latin America, Europe, western Africa, and many other areas. Over the years, the company has served as a sponsor for new Americans who need government-issued work permits so that they can legally remain in the United States for work reasons. Despite diversity's many advantages-including creativity, flexibility, and the ability to relate to a broader customer base-it also can create communications challenges when English is not an employee's native language. To avoid confusion, Litchman and Trust insist that employees speak only in English when addressing customers. As a small, family-run business, Finagle A Bagel sees its workforce as a group of unique individuals, not interchangeable cogs in an impersonal corporate machine. Trust feels strongly that "there's a responsibility that you have to your employees and to your colleagues. These people work for you-they work hard to try and move your company forward-and their efforts need to be recognized." Because the business is still small, she adds, "the people who have become a part of the management team are very much like family to Alan and me. If you run your company that way, then you'll be successful because everybody believes that you care about not only the work they do but everything they do, and every part of their lives affects their job."

1. What effect has diversity had on Finagle A Bagel?

2. If you were the general manager of a downtown Finagle A Bagel store, what job description and job specification would you prepare for a cashier? Based on these, what kinds of questions would you ask when interviewing candidates for this position?

3. Which of Herzberg's motivation factors are Trust and Litchman emphasizing for general managers?

4. Would it be feasible for Finagle A Bagel to apply the concept of flextime to store employees? To senior managers at the headquarters facility? Explain.