Learning From the Best

Good: Learning best business practices by working for a legendary company. Better: Applying that knowledge to a business of your own.

In genetics, the apple usually doesn't fall too far from the tree. In the corporate world, the same rings true at times. The names of companies like Starbucks, Lettuce Entertain You Enterprises, Hewlett-Packard and Charles Schwab may instantly conjure up deeply ingrained images of certain products in the minds of consumers, but for Jody Hall, Michael Ryan, Dave Deasy and Stacy Blackman, there's much more to these companies than just the products or services they sell. As former employees, they each gained far more than their paychecks. They learned lessons that proved invaluable when they left their proverbial nests to launch their own businesses--businesses that bear some striking resemblances to those of their mentors.

Coffee 101
Looking to satisfy your caffeine fix for the day? Just walk outside. There's sure to be a Starbucks on the corner, thanks to Howard Schultz, the man behind the ubiquitous brand. Jody Hall, 39, also has reason to give thanks, even though the coffee giant is now her competitor. At Vérité Coffee, the Seattle-based coffeehouse Hall opened in 2003, the brand's a little stronger and business is a little better because of the 12 years Hall worked at Starbucks, during which she watched Schultz brew his company to perfection. Says Hall, who worked her way up to Starbucks' head of promotions and events for new stores, "I learned a lot about the coffeehouse experience through [Schultz] and his vision."

The fact that the Starbucks brand has become synonymous with coffee is far from accidental. From the outset, Schultz pushed the brand with creative and untraditional marketing. To achieve her own creative marketing edge and set herself apart from the crowd, Hall launched a cupcake bakery, Cupcake Royale, inside Vérité Coffee. The cupcakes have attracted the press, tempting the Los Angeles Times and Food & Wine to write articles on the sweet creations. The treats have also inspired some attention-getting marketing strategies. During the 2004 elections, for instance, Hall gave a free cupcake to voters, advertising the offer in a local paper using such catchy phrases as "I'm Pro-Cupcake and I Vote" and "Legalize Frostitution."

Schultz always encouraged community involvement at Starbucks, and Hall has continued that tradition at Vérité Coffee & Cupcake Royale. Whether it's participating in an elementary school auction or donating 1,000 cupcakes to the local zoo for its elephant's birthday, Hall makes sure her business is adding to the fun--and to the community. "It's important to me to be involved," says Hall. "And it's something I learned at Starbucks, for sure."

Hall often heard Schultz stress the importance of under-promising and overdelivering, and to this day, she is careful to do the same. In the beginning, she planned for the worst, hoped for the best and didn't talk openly about the success she believed her business would become. Today, with two thriving locations, 2005 sales over $1 million and gourmet grocery stores asking to carry her brand, Hall continues to speak cautiously about the future.

Something's Cookin'
"Study trends, find something that's successful, and just turn it up 10 percent. If you can turn it up and not overcomplicate it, you'll have a hit." In 2003, Michael Ryan took this key lesson he learned from his former employer, Richard Melman at Lettuce Entertain You Enterprises Inc., and ran with it. Teaming up with friend Spiro Baltas, 36, Ryan launched Starwich Inc., a quick, upscale salad and sandwich lounge in New York City. Serving up a sophisticated menu in an equally sophisticated setting equipped with Wi-Fi connections, cell phone chargers, fax machines and leather couches, the duo turned the standard sandwich restaurant concept up a notch. And just as Melman's advice promised, it has been a hit, with 2006 sales expected to reach $10 million.

Ryan, 39, clearly remembers the knowledge he gained during the four years he worked under Melman. Chicago-based Lettuce Entertain You is home to more than 50 unique restaurant concepts, and dishing out the goods is Melman, who, for more than 30 years, has been able to make American consumers hungry for restaurants including Big Bowl, Maggiano's and Shaw's Crab House.

Key to Melman's success is the trust he fosters among his staff. Ryan recalls the breakfast meetings that were regularly organized to empower employees and give them a chance to voice their opinions without managers present. Guided by the same principles, Ryan gives his own staff the authority to respond to customer concerns or critical situations without the presence of a manager. The employee feels respected, the customer satisfied. Says Ryan, "Trusting your staff to make the right decisions and giving them leeway and a lot of trust goes a long way."

The staff at Lettuce Entertain You Enterprises doesn't have the opportunity to interact with Melman on a regular basis, but the relationships he fosters among his staff--and ex-employees--are solid. For example, Melman made it a point to attend Starwich's grand opening, where he continued to serve up crucial advice. Focus on one thing at a time, he advised Ryan. Since then, that's all Ryan has been doing. "You get overwhelmed with so many of the details. You have to realize that you can only do so much--just one thing at a time."

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This article was originally published in the March 2006 print edition of Entrepreneur with the headline: Learning From the Best.

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