Reference no: EM131276583

Assignment

Instruction

Conscious Capitalism Consultancy Project

The task of your team is to select a company to assess from the perspective of being a conscious business. The primary elements of "conscious capitalism" are: respect for private property, freedom of contracting, freedom of trade, and rule of law. The primary elements of "conscious business" are:

• Higher purpose beyond profits (the good, the true, the beautiful, the heroic)

• Enterprise managed to optimize value for all interdependent stakeholders

• Conscious leadership to the enterprise and stakeholders

Your task is to assess the business from that perspective and provide recommendations to senior management as to how the enterprise could become more of a conscious business.

The structure of your analysis should be developed by the team. Some of the elements should include:

History
Higher Purpose
Core Values
System
Stakeholders -split
Conscious Leaders
Culture

Is there any evidence that the purpose or system has co-evolved or changed over time?

When they started donating, how it came about

-history of conscious capitalism
- panera is committed to serving and sourcing high quality ingredients
- how their values have changed
- if thye have had contriversy around concsious capitalism Ecoli break out?

• Does the company have a higher purpose? How do you know? Is it related to the True, the Good, the Beautiful, or the Heroic?

4 tenants of concsious capitalism

• What are the core values of the company? Have they changed over time?

o How were they developed? Were stakeholders involved?

• Describe the system in as much detail as possible - that is, the specific stakeholders and how they fit into a synergistic system. Does the company prioritize any stakeholders?

• How are stakeholders involved and treated by the enterprise, including:

o Customers - e.g. customer feedback, involvement in product design
o Employees - e.g. range of benefits, 360 feedback
o Investors-e.g. returns and involvement
o Suppliers-e.g. selection, financial support
o Communities-e.g. philanthropy, engagement, global and local
o Environment-e.g. sustainability strategies

• How does the company develop conscious leaders?

• What are the ways that the company fosters a culture of conscious business?

The beginning of the report :

Since the Panera Bread Legacy began in 1981, the company has certainly changed. Previously known as, Au Bon Pain Company, today, Panera has 2,024 bakery- cafes across the United States and Ontario Canada. Since opening multiple bakery- cafes, the company has begun evolving over time. Panera has steered away from caring about their billion dollars in revenue a year to taking a broader approach, giving employees, guests, and host communities as much business decisions as the shareholders (https://www.ronshaich.com/pdf/da081bfdb3.pdf). The company has always been about capitalism according to Michael Simon, Panera CMO. Mr. Simon states, ""It's not always formally stated, but it's what Panera has always been about," says CMO Michael Simon. "How do we infuse more humanity into what we do? It's moving beyond our functional benefits, to our values, beliefs and philosophies" (https://www.ronshaich.com/pdf/da081bfdb3.pdf).

Panera has a higher purpose in what they do. They are not just a bekery-café. The company focuses on a kinder capitalism on four areas, food, setting, customers, and workforce. The company does good in many ways but one of the biggest ways they do good in the area of food is through the service they provide. They are improving health and the quality of their food at their own expense. The company changed the procedure as to how their lettuce was harvested and transferred. They spend more money on their lettuce in order to improve the health quality for their customers. With this new level of care over the company's lettuce, the cost to improve the lettuce would bring it to about $12 quality salad while before the change they were only about $8 quality. Instead of raising the price, Panera took it upon themselves to endure the costs and continue to charge the neighborhood price of $8. Panera recently updated their menu, putting out a list of more than 80 items they planned to eliminate from their menu to keep it healthier, including the artificial additives. Shaich, the company CEO stated that the company would not increase prices due to the healthier choices they are making pertaining to their menu (https://www.cnbc.com/2015/05/04/these-ingredients-are-unacceptable-panera-says.html).

When it comes to the true, Panera is a company that fully represents this idea. They strive for a deeper relationship with their customers. Panera works to find out what it is they need to improve on to make their customers happy in order to build an open and honest relationship and differentiating themselves. Panera's founder Ron Shaich, stated "We live in an oversold, over-hyped, over-commercialized society where people feel gamed and manipulated. Those [companies] that stand for something that consumers trust stand in stark contrast to the more mechanistic model." They help to give their customer's knowledge by giving them recipes or tips from their kitchen while also offering to set them up with other customers that enjoy cooking. Panera also puts a high focus on how their employees are treated. They say that their employees are expected to be treated by every member of the organization with just as much respect and kindness as their customers and guests. This also helps to offer a truthful workforce (https://www.ronshaich.com/pdf/da081bfdb3.pdf).

When talking about the cultural values of the company, CEO Shaich said ""Eighteen years later, that's still our vision," Shaich says. "People are always asking me, ‘What's new and different for Panera?' You know what I want to say? ‘Nothing. We're doing the same thing. We just want it to be better.'" This is why Panera is a heroic company (https://www.ronshaich.com/pdf/da081bfdb3.pdf). They want to do what is right and keep evolving as the world does. By doing this, they are doing what is right and necessary while helping to improve the world at the same time. Panera started a Day- End Dough- Nation Program where they give all of their leftover baked goods to people in need. They are committed to selling only freshly baked breads and for that reason, they do not let their products sit on the shelf for more than one day. They package up all perishable items and give them to different charity organizations in need. Instead of just throwing the products away, which would take much less time and energy than packaging the food up, the company takes the extra time to get their goods together and ready to move out of the store. The employees at Panera say it makes them feel good, almost like a hero themselves to help out those in need. Some companies sell their old products the next day at a discounted price, but Panera doesn't care about the money. They would rather take the price cut and help others (https://www.panerabread.com/en-us/articles/day-end-dough-nation.html).

By caring so much, and doing what they can to help, Panera is considered a beautiful corporation. They have strived hard to get their Panera Cares program up and running. It all started with what Panera called a beautiful question. They asked "What does the world need most and what are we able to provide" (https://amorebeautifulquestion.com/place-where-questions-bakedin/)? They have leftover bread and baked goods and have been a big contributor to community food pantries. Panera did not stop there though, they wanted to know what else they could do. They now have multiple Panera Cares programs around the world serving over a million people (https://amorebeautifulquestion.com/place-where-questions-bakedin/). They are taking care of people and doing beautiful things. Along with providing those in need with assistance, Panera offers what many consider a beautiful atmosphere at their different stores. They offer a calming, welcoming and comfortable atmosphere with free Wifi (https://www.panerabread.com/en-us/our-beliefs/who-we-are.html).

When it comes to the core values of Panera, they have evolved over time but they have never fully changed their beliefs. Shaich said, "Good strategy is continually changing. Strategy begins with where we think the world is going" (https://www.businessinsider.com/panera-bread-founder-ron-shaich-on-growth-strategies-2014-11). Panera's core values include serving food they would serve to their own families, giving back to the community, helping families, creating a diverse workplace, and associate groups and networks. Panera has used more and more conscious capitalism tactics over the years to help make it a better company overall (https://www.ronshaich.com/pdf/da081bfdb3.pdf). Over the years the company has added more opportunities for them to give back as a company. They have added different programs they do to their values as the years have gone on. Their Day-End Dough-Nation and Panera Gives have made significant changes and many improvements throughout communities since the company was formed in 1981. Panera donates their baked goods and or certificates to local non- profit organizations running different fundraisers. Ultimately, by continuing to grow as our society grows, Panera is and will continue to stay a frontrunner when it comes to their conscious capitalism, after all they are a values- driven powerhouse.

Panera was developed in 1981 by two men, Louis Kane and Ron Shaich, with a vision to start a bakery- café chain. They grew along the east coast and began spreading like wild fire (https://www.panerabread.com/en-us/company/about-panera/our-history.html). Once the company had established themselves as one of the leading brands in bakery- cafes in the nation, they began doing more for the community. They developed their company based on conscious capitalism, without even knowing those words (https://www.ronshaich.com/pdf/da081bfdb3.pdf). When talking about shareholders, Panera bread certainly has their fair share. "You often hear CEOs say that their first obligation is to their shareholders. I agree, but shareholders are served best when CEOs focus on serving the range of stakeholders involved in a company first,"Mr. Shaich stated. Mr. Shaich also talks about the importance of taking care of your stakeholders and they will take care of you. Customers, employees, investors, suppliers and the community all play such significant roles as stakeholders (https://www.ronshaich.com/pdf/da081bfdb3.pdf).

https://www.panerabread.com/en-us/our-beliefs/who-we-are.html
https://www.panerabread.com/en-us/articles/day-end-dough-nation.html
https://www.panerabread.com/en-us/error-page/404.html
https://amorebeautifulquestion.com/place-where-questions-bakedin/
https://kevinkauzlaric.com/conscious-capitalism-book-review/
https://www.ronshaich.com/pdf/da081bfdb3.pdf
https://www.cnbc.com/2015/05/04/these-ingredients-are-unacceptable-panera-says.html
https://www.businessinsider.com/panera-bread-founder-ron-shaich-on-growth-strategies-2014-11
https://www.panerabread.com/en-us/company/about-panera/our-history.html

Molly's part ends:

Panera Bread's System

Responsibility Strategy

Panera Bread operates based on a responsibility strategy which includes four pillars, craveable food, ally for wellness, everyday oasis, and relationships and warmth (see Appendix A). "In our opinion, good food has flavor and flair; it is well-crafted and curated, with nutritious ingredients; it is clean and simple; and it meets our quality and safety standards" ().

In order to make food that their customers crave, Panera values a respect for food and the craft of food, assure that the nutritional qualities are seen and appreciated and maintain high standards of quality and safety. Panera values the health of their customers and they understand that a healthy diet should be balanced and include nutrient-dense foods and they make a conscious effort to source and serve healthy choices of the highest quality. "As we look to the future, our goal is to establish a group of external expert advisors who can provide insights and perspective on our menu offerings, nutritional challenges, emerging issues and stakeholder expectations" (). Panera Bread puts a high priority on the quality and safety of the food they provide. One of the various practices that Panera utilizes is the use of eggs that are pasteurized in-shell because it eliminates salmonella bacteria. Panera has set a goal to ensure that all of their major vendors are certified by the Global Food Safety Initiative, currently, 92 percent of their vendors are GFSI certified or in the process. Panera puts a strong emphasis on providing high quality and safe food to their customers as well as healthy food to help foster a healthier community nation-wide.

Panera makes an effort to be an ally that empowers and enables their guests to choose their own path of wellness. In 2014, Panera announced their Food Policy which outlines their commitment to remove all artificial colors, sweeteners, flavors and preservatives from our food menu items in all U.S. Panera bakery-cafes by the end of 2016. In November 2015, Panera published a graphic visualizing their use of safe and sustainable food (see Appendix B). Panera Bread's commitments addressed in their food policy are outlined below:

To us, it's all about trust. To that end, we carefully evaluate ingredients and menu items against three core areas:

• Clean Ingredients: We are advocates for clean food. We're committed to sourcing and serving high quality ingredients without artificial additives including added MSG, artificial trans fats, and ingredients we don't believe need to be in your food.

•Transparent Menu: Our menu is diverse. We're committed to transparency to empower guests to choose how they want to eat.

•Positive Impact: We are committed to making a positive impact on our food system. We believe guests deserve to know not only what is in their food, but where it comes from and how companies are impacting the food system.

As the population grows and climate change becomes a more concerning issue, Panera has put a large focus on sustainable agriculture. They work with suppliers, farmers and fishermen to provide traceability to the source, and are actively involved in ensuring quality, taste and freshness. With stores located all over the country, it is impossible to source locally. Instead, Panera sources their core ingredients from ideal growing regions mostly within North America. In addition, Panera Bread committed to adopting and implementing new sustainable palm oil sourcing standards throughout their supply chain. As an ally for wellness, Panera believes that their guests deserve to know not only what is in their food, but where it comes from and how companies are impacting the food system.

"When it comes to cultivating an everyday oasis, our priorities are delivering an engaging guest experience, ensuring the guest experience is safe and secure and improving the sustainability of our operations" (). Everything Panera does as a corporation revolves around the 7.8 million customers that they serve each week. Their customers are prioritized as stakeholders. Panera views each customer interaction as an opportunity to deliver a quality experience in order to strengthen the trust of their guests. Panera Bread wants their guests to feel comfortable and at home when they are in our bakery-cafes as well as when they are utilizing their online platforms. Ensuring their guests safety and security is prioritized. Staff members are constantly on the look out for potential safety risks and ways to mitigate them. "With 925 company-owned bakery-cafes in 2014, 22 FDFs with distribution networks throughout the U.S. and Ontario, and three support centers, we recognize that our operational footprint has an impact on the environment" (). Panera works to better understand and measure their impact in order to establish the right goals, targets and strategies aimed at reducing or mitigating their most significant effects. All these actions are aimed at providing a better experience for their customers and to have a positive impact on the communities they are located in.

Panera Breads cultural values include: "No Jerks": fostering relationships based on respect and honesty, "Rule #1": forming a connection through authenticity and service, "No Shortcuts": getting the tough stuff done with optimism and mastery and "Profit Drives Possibilities": driving profit to sustain the growth of our concept and our people. In order to create a culture that is aligned with their values, Panera strives to create a warm, rewarding and inclusive workplace, spread warmth in our communities and build stakeholder relationships based on trust.

Panera Cares Community Cafes

Since opening in 2010, Panera Cares Community Cafes serve an average of 1 million guests each year. This donate-what-you-can model is based on the concept of shared responsibility, visitors are asked to donate any amount for their meal. It is estimated that 60 percent of guests leave the suggested donation amount, about 20 percent of guests pay it forward with an additional donation and the remaining 20 percent donate what they can. The nonprofit venture is operated by the Panera Bread Foundation and includes four community cafes located in Clayton, Mo., Boston, Mass.; Dearborn, Mich.; and Portland, Ore. The Panera Cares Community Cafes are designed to help raise awareness about the pervasive problem of food insecurity in our country. In addition, the cafes provide job training programs to address the need for economic opportunity in these communities and for long-term solutions to food insecurity through job skills.

Day-End Dough-Nation

At the end of each day, Panera bakery-cafes donate the unsold baked goods to organizations that provide hunger relief in their local communities. Donation partners are required to be a 501(c)(3) charitable organization, or a tax-exempt church or religious organization or public school, serving those who are food insecure. Panera partner organizations include Food for Thought Outreach and Craine House. In 2014, Panera bakery-cafes donated a retail value of approximately $100 million worth of unsold baked goods to those in need. Panera Bread values the communities that they are placed in and utilize the business they provide to assist these communities.

Panera Bread's Stakeholders

"To build trusting relationships with our stakeholders, we focus on three key areas: business integrity and ethics, governance and stakeholder engagement" (). Panera Bread's business integrity and ethics are formalized via their Standards of Business Conduct and provide a framework to support their core beliefs about the right way to do business. Their governance, overseen by their Board of Directors, ensures that they operate in ways that meet the expectations of stakeholders. Stakeholder engagement allows Panera to gather feedback from all stakeholders, understand and reach alignment on important issues, and build lasting relationships. Panera Bread believes that the relationships created with their guests are most important, making the customers the most valued stakeholder.

Customers
Employers
Investors
Suppliers
Communities

"At Panera Bread, we believe we're more than a restaurant; we're a member of each and every community we serve. As a member of your community, it's important to us that we do what we can to support you" (PaneraBread.com). Panera Bread makes an effort to benefit the community in many ways beyond Day-End Dough-Nation, where unsold breads, pastries and bagels are donated to local charities, and Panera Cares Cafes, the non-profit venture launched in 2010 with the objective of feeding anyone who needs a meal. "Giving back to our communities is something we are passionate about, and we're especially passionate about helping to feed those in need with high-quality, nutritious food" ().

Panera Cares Community Breadbox is another one of Panera's initiatives to support hungry individuals in our country. Through Panera's relationship with Feeding America participating member food banks are able to provide Panera soup to local food pantries. The program is supported by cash donations, half of which support to production of Panera soup and the other half which supports Feeding America food banks in their path to serving quality, nutritious food. "In 2014, donations raised through Community Breadbox provided 1.7 million meals to clients served by Feeding America food banks" (). While, Panera Bread focuses mainly on providing food to those that need it, they do many other things to help the community.

Organizations that are looking to raise money are able to set a date with their local Panera location and for one evening, the organization can receive a portion of the sales received from their supporters. This is a successful way to raise money for a school, nonprofit or community organization. "More than 1,900 fundraising nights were held in 2014, yielding more than $187,000 in funds donated back to these worthy organizations" (). Panera also makes an effort to donate "Bread-for-A-Year" and "Bagels-For-A-Year" certificates to organizations for them to auction off at their own fundraisers.

In an interview with _____, Panera CEO Ron Shaich spoke of the corporation's relationship with the community. Traditionally, "our higher purpose was very simple: To make a difference in the lives of our guests and our people," says Shaich. "Profit is not the end, but it is a byproduct." Overall, Panera believes that the "dollars-and-cents cost of any initiative is a lesser priority than its effect on guests and employees" (article).

Environment
Panera's Conscious Leaders
Panera's Culture of Conscious Business.