Guiding Principles

Organizations with authenticity and integrity need to know their soul.  They need to know the bedrock convictions that create their identity, that guide every decision to true north.   We’ve all known outfits that started great and then eventually deteriorated in quality and service as they grew. At the first hint of our farm’s success, we articulated principles that we hoped would protect us from common business temptations and trajectories. What follows are ten practical principles, with supporting explanation, that we ask ourselves when presented with offers and opportunities:  “Does this fit who we are?” Some of these would be endorsed by most outfits; others are violently contrarian to common business practices. Wrestling with our aspirational distinctives yielded these commitments.   Polyface doesn’t want to be common; we want to be a shining light of innovative, unorthodox product and service.  Please enjoy these ideas as ways to safeguard everything that is noble and sacred about Polyface. NO SALES TARGETSSetting sales or marketing targets makes a business look at its employees differently, its products differently, and its customers differently. It’s kind of like a church that sets membership goals: the message is no longer as important as getting sign-ups. What we’re willing to compromise to “make the sale” is much greater when a sales target beckons. And how we treat our employees is directly related to achieving that sales target.Polyface has never had a sales target, marketing plan, or business plan. And yet we’ve seen steady progress over several decades. If the product and service are good enough, customers will come and sales will increase automatically.Setting goals with soul may sound counterintuitive, but it follows directly the idea that the best things in life are free. Would anybody argue that financial success is better than a happy marriage? And yet where do you see a happy marriage on a balance sheet? We all intuitively understand that salamanders with four legs are better than ones with three, and yet chemical companies selling pesticides or herbicides measure success only in terms of sales volume. Their accountants don’t ask for salamander legs.In your business, set goals that are bigger, more noble, and more sacred, than sales targets. How about eliminating employee turnover, or customer complaints? Or the number of employee children failing school? What really are the most important things in business? I challenge us all to think bigger than sales. Big causes attract young people. Here’s the question I have to ask myself: “What goals are noble enough to justify my life?” It seems like when I really strive to be good, growth takes care of itself.NO TRADEMARKS OR PATENTSThis idea comes directly from community building and transparency. I have personally invented several concepts and terms: salad bar beef, pastured poultry, egg-mobiles, pigaerators. Nothing makes me happier than when people use these words and duplicate the concepts. I hope they become household words.“But what about competition or copycats?” you ask. I figure that if I can’t stay ahead of the copiers, then I don’t deserve to stay ahead. If you study innovation, the ones who are out in front have already gone through a learning curve. While copiers can shorten the curve or change its trajectory, they still have to go through it. This attitude keeps me lean and learning rather than bureaucratic and superficial. Imagine if everyone had to depend on their own cleverness to stay ahead of the competition. Talk about innovation immersion.At Polyface, we have a 24/7/365 open-door policy. Anyone can come anytime to see anything anywhere. We share our techniques, our models, everything. Is that foolish? By some counts, thousands of farms now copy what we do. Are we scared? No, because every business that copies our model will heal another few acres. We’re much more concerned about healing than competition. A business devoted to healing tends to preserve its patron base. And what a great story.Yes, we’ve had numerous people misuse or abuse our concepts. But I’ve learned that what goes around comes around. And when a person begins taking credit for someone else’s achievements, the market will eventually reward the innovator—unless the innovator becomes a graspy, paranoid, close-to-the-chest protectionist who tries to decapitate the competition.Bottom line: the vulnerability that this notion creates also offers a magnanimous spirit that viscerally manifests Stephen Covey’s plenty vs. scarcity habit in his 7 Habits of Highly Effective People. Most people tend to say they believe in openness but in actuality spend a lot of time protecting their stash.CLEARLY DEFINED MARKET BOUNDARYFifty years ago you could not buy a boneless skinless breast . . . anywhere.  Then people wanted more convenience, and the market obliged.  Polyface did not.  But eventually, we heard too often:  “I’d buy chicken if you’d offer breasts.”  Sales were trending down.  We began cutting up and sales went up and we took market share (yes, tiny) away from the big boys and factories.  Awesome.Chipotle came to us and wanted pork.  We began supplying the two local restaurants.  Then two years ago after all their sanitation and pathogen issues they kicked us out.  We lost $100,000 because we had the pigs in the production chain but suddenly no market.We went to 31 pork barbecue vendors within 50 miles offering GMO-free pastured pork at match price (whatever you’re paying from the industry, we’ll match it until our inventory runs out); not one single outfit was interested.We thought we had an arrangement with UVA dining services last fall; it fell through.  We’ve worked with countless outfits over the years; some are gone.  Relay Foods was one.  We’ve watched them come and go; we don’t plan to be one that goes.We started hearing from local folks that they no longer would drive on dirt roads.  Adios, amigos.  And why come to the farm or a drop point when Amazon delivers to your doorstep?  So we began a doorstep delivery service this spring, within 50 miles.  Fizzled.The market has changed so dramatically in my lifetime that I hardly recognize it anymore.  Anyone opposed to this change, let me ask one question:  How many Amazon boxes arrive at your doorstep each week?If your business was making buggy whips in 1915, what would you have done?  You see, nostalgia is real cool until it becomes obsolete. Business leaders know that they must re-invent their business about every 8-10 years.  Because what got you here won’t get you there.Forty years ago a “no ship” policy made sense.  Amazon did not exist and Polyface was the first game in town.  Today, Wal-Mart is the largest purveyor of organics (industrial junk organics, to be sure) and that has flattened sales at farmers’ markets, Community Supported Agriculture, and direct farm sales.In Staunton, our nearest city, only a couple of restaurants buy Polyface; some say we’re too big and refuse.  Others buy a pittance and don’t even put it on the menu.  Constant struggle.  I’m not whining; I’m stating life as we know it.  All of us assume we know the other person’s situation, and that’s always wrong.  Meanwhile, our sales are pinched by factory organics via Amazon and Wal-Mart.For decades we’ve been sending people to their local farmers but too often we hear back “Their stuff isn’t as good as yours” or “they won’t scale up big enough to supply a consistent demand.”As distribution logistics become more efficient and market dynamics morph, Polyface must decide what new hills to die on.  We can’t die on every one.  Some become silly to die on, and with people a mile away from our farm getting factory organics from Amazon, it’s time to realize the no-ship nostalgia is now obsolete.  We are still as committed as ever to local food systems and our prices will always be the cheapest and loyalty to local customers always highest here at the farm and in our community.  But as production compromise envelopes the organic sector, it’s time to go toe to toe, head to head, with an authentic alternative.  And yes, every customer, regardless of where you live, is still welcome at Polyface 24/7/365 anytime to see anything anywhere unannounced.  Who do you know who dares to accept that transparency?INCENTIVISED WORKFORCEWe do everything possible to not have employees. I don’t mean we’re against help, or against teams. But I’m a fan of bonuses and commissions. I don’t even believe in child allowances—nobody should get paid for breathing.Most farms going through a growth phase similar to ours would simply hire minimum-wage workers. But we have attempted, and for the most part succeeded, in building in a commission-based package for every position. When our daughter-in-law took over restaurant sales, we put her on a commission. Our delivery driver receives a commission per pound delivered, above a guaranteed floor. Both of those positions, therefore, receive a reward for watching for new customers and taking care of existing ones.We use independent growers who are on a per piece pay scale. That way they can work hard and or more conscientiously, and earn more. When we hired an apprentice manager, he also took on the tour guide role and we share 50/50 in that income. Yes, he gets a floor salary, but also enjoys building an independent business within this framework. The income-earning potential is open-ended.Can you imagine what would happen in America’s public schools if graduates who had been out for, say, ten years, could rate their teachers and the top ten percent received a $50,000 bonus check? And the bottom ten percentile were fired?I suggest that rather than spend a bunch of money on trendy advertising and catchy PR firms, why not redesign job descriptions to create such an enthusiastic workforce that we wouldn’t need to hire ad agencies or PR firms? We live in a culture that loves minimalism and just-get-by-ism. I think too often we create that spirit by being too timid to innovate our compensation packages so that eager beavers get more than a pat on the back. I have no wage or salary aspirations, and keep my remuneration just a few percentage points above the heavy lifters in our business. What would I do with all that money, anyway? I’d rather go the grave a pauper but loved by my people than go wealthy and unloved. Perhaps if more CEOs were less materialistic, their workforce would also show more noble values.NO INITIAL PUBLIC OFFERINGS (IPOs)While this may sound like sacrilege and we all know how growing businesses are starved for cash, consider how many have lost the edge of their good qualities after suddenly becoming flush with cash. I’ll be honest that I haven’t figured out how all this looks yet in a capitalistic society, but I know the danger of huge cash infusions.At Polyface, we’ve been starved for cash more years than not. And yet that is exactly what makes us innovative—we’re hungry. And when we’re hungry, we’re much more creative. When we need some capital, we appeal to our patrons to give us short-term no-interest loans and they love to invest in something noble. It’s more satisfying than just writing a check to Nature Conservancy. We helped our little Amish feed mill get up and going with a two-year no-interest loan several years ago. Best investment we ever made. You can’t ask someone else to do something you’re not willing to do yourself, so this established a precedent of caring investment rather than just interest-return investment.If your product or service is good enough and your mission noble enough and your cause life-changing enough, you can find other ways to raise capital besides an IPO. This slower, more relationally oriented, pay-as-you-go growth is inherently more organic. Growing from the inside out rather than the outside in follows the natural pattern. Plants and animals can’t grow beyond their ecological resource base. When we violate that principle in nature, we get lots of growth and no quality. Chemical-fertilized hybrid corn contains way less protein and 7 fewer enzymes than open-pollinated, compost-fertilized varieties. You just get more bushels of junk.Being satisfied with organic growth keeps us real. If this one principle were used across America’s business landscape, we would probably have fewer corporate scandals. Meteoric rises usually result in meteoric falls, so beware of fast cash and the imbalance it usually creates. My dad had a saying for it: “Overrunning your headlights.” He also said to beware of people “born with a big auger.”NO ADVERTISINGAmazingly, even the largest companies in the world still receive more than 50 percent of their business by word-of-mouth recommendation. That’s quite astounding when you think about $1 million 30-second Super Bowl ads.At Polyface, we’ve built our customer base on rewarded customers. Whenever we get a new customer, our first question is not: “What would you like to buy?”, but rather: “Where did you hear about us?” We reward our evangelists with free products. Our culture is starved for appreciation. If we would shower our good customers with gratitude, they will hand-pick our next patron base, prescreened and motivated.Word of mouth may not be flash-in-the-pan patron building, but it always gets the best quality customer. Only good customers are good for business; bad customers are a drain. If new customers aren’t coming, I don’t assume advertising is the answer. I assume my product or service aren’t where they ought to be; they aren’t compelling another wave to join us. I assume if we’re in a slump, our marketing offense is probably poor quality and service, not an anemic advertising budget.By now, some of you may be either livid with these ideas or taking on air in disbelief that somebody this radical would dare address you—especially if you run an ad agency. Not to worry. Only 1-3 percent of businesses are on the lunatic fringe—that’s me. And only 10 percent innovate, so your future is assured serving the 90 percent of businesses who will dismiss me as a lunatic. To those 90 percent, I simply say: thanks for giving me niche and value security.STAY WITHIN THE ECOLOGICAL CARRYING CAPACITYNumerous people have encouraged Polyface to become the Tyson of pastured poultry. But one of the distinguishing characteristics of an environmentally friendly farm compared to one that doesn’t care about the environment is how it handles the waste stream. In Concentrated Animal Feeding Operations (CAFOs), including large processing plants, the waste stream overpowers the surrounding ecology, and the landscape. That’s why they stink to high heavens.But beyond that, waste must be carted all over the countryside to get it spread out because the nearby land simply cannot metabolize all that waste. In many places, feedlots, hog factories, and chicken houses generate 10 times the waste that can be ecologically metabolized on the land where the CAFO is located. Manure, guts, blood, feathers and whatever enter the global trafficking channels rather than staying where they were generated. Imagine if every time you swept your house and emptied your trash, you had so much that it spilled out of your yard and cascaded into your neighbor’s yard. Now you see why the industrial-sized butcher, baker, and candlestick maker have been kicked out of the village and banished to highly rural, out-of-sight areas.As we’ve expanded at Polyface, we’ve carefully defined the ecological carrying capacity and refuse to haul manure or waste anywhere. This forces us to decentralize, stay divested across the landscape, and remain aesthetically and aromatically attractive.We provide a habitat that allows each plant and animal to fully express its physiological distinctiveness—i.e. the pigness of the pig. In our Graeco-Roman western linear reductionist compartmentalized fragmented individualistic systematized disconnected paradigm, plants and animals are just inanimate piles of protoplasmic structure to be manipulated however cleverly the human mind can conceive to manipulate them. I suggest that a society that disrespects and dishonors the pigness of the pig to that extent will also view its citizens with an equivalent egocentric manipulative mindset—and other cultures. It’s how we respect and honor the least of these that creates an ethical, moral foundation upon which we honor and respect the greatest of these.The beginning of civilization is civil, or civility. The hog industry right now is using our tax dollars to figure out how to pull the stress gene out of pigs so that we can abuse them more aggressively but they won’t mind. Talk about being uncivilized. The local ecology includes the workforce. When industrial processing plants overpower a community with low-paid foreign workers, it destroys the community ecology. A business that can’t or won’t hire its neighbors due to poor working conditions, low pay, repetitive motion sickness, or anything else, is not neighbor-friendly. Redesigning the business to fit, to nest into the local ecology takes innovation, but anything less will create social, environmental, and pathogenic upheavals.This principle is one of the reasons why those of us in the healing food movement say our food is the cheapest on the planet: because we don’t externalize costs to society. Ours may carry a higher sticker price, but all the costs are figured in. We’re not destroying groundwater, giving someone food borne illness, or stinking up the neighborhood. Appreciating our landscape and people resource ecology and staying within those parameters is simply foundational to being a good citizen.PEOPLE ANSWER THE PHONEThis may seem nitpicky, but how many of you love talking to a robot? After being on the phone with a robot and starting over the fifth time, I can’t help but wonder if it wouldn’t be more efficient to just hire an incentivized neighbor to answer the phone and deal efficiently with the transaction. I’m convinced that if businesses put their money into people instead of the latest techno-gadget, maybe they wouldn’t have to advertise. To be clear, I’m not talking about voicemail; I’m talking about robots.I answered the phone the other day and a lady on the other end stuttered: “Oh, is this a real person? I didn’t expect to talk to a real person.” If I were king for a day, I would outlaw all robot phone machines. Be honest. Does anyone here enjoy hearing: “Press 1, press, 2, press 3?” We all hate it, and yet we succumb to some sales pitch and the seeming efficiency and buy into anti-human treatment. And most of us are in business to deal with humans.If Westerners are starved for appreciation, they are also starved for human contact. While I may be a farmer and technically in the food business, really I’m in the relationship business—and so is everyone in this room. Shame on me if I shortcut this human touch and force my patrons to talk to a robot.A well-trained, pleasant-voiced, empowered person can handle my frequent flyer miles redemption ten times faster than the robot. If the airlines would offer a human transaction instead of a robot, I’d gladly give an extra 5,000 miles a transaction for the efficiency and warm fuzzy. At Polyface, we’re committed to never having a robot answer the phone.STAY SEASONALAt Polyface, we only raise meat chickens in the summer because that’s when they can be out on pasture. We work in the woods in the winter because that’s when the wood is better since the sap is down. And the rattlesnakes aren’t around, either. This ebb and flow in the work cycle feeds our emotions with down times and sprint times. Enjoy this flow.Industrial animal operations, in contrast, run full bore all the time. No breaks. Consequently, workers get burned out, owners get burned out, and the children don’t want any part of it. In fact, most farm parents don’t want their kids to farm. That’s why the average American farmer is now almost 60 years old. The business axiom that puts age 35 as the median for any thriving economic sector is real.In the winter we spend days just lounging around the fire reading books and playing board games. Yes, we sprint in the spring, summer, and fall, but we always have that light at the end of the tunnel to look forward to. We’re excited to see the last broiler go into the freezer in the fall because we’re rich and tired. We’re just as excited to see the new chicks arrive in the spring because we’re rested and poor.We have many customers who push us to defy the seasons, build a confinement poultry house, and go into year-round production. But that would not only compromise our pastured product integrity, it would put us on a treadmill. Are you on a treadmill?I recently visited a large e-corporation and all the employees I talked with were frustrated that they could never get breathing room. The pace became faster each month; expectations higher. Schedule some downtime. Some R&R. And let the business enjoy cyclical movement. It will energize everyone’s batteries. The assumption that scaling up the corporate ladder requires us to sacrifice our families and marriages is an unrighteous, evil axiom in America. Our frenetic, work-aholic lifestyles, contrary to popular opinion, are highly abnormal in the continuum of human history. The times of our lives will always trump the paychecks of our lives.QUALITY MUST ALWAYS GO UPFinally, as we grow, we must never compromise quality. Plenty of great small businesses grow up to be ho-hum big businesses. Whatever growth occurs, it can never happen at the expense of quality. With a clear conscience, I can honestly say that at 20,000 broilers they are better quality than when we did only 300. For sure, our beef at 500 head is better than it was at 20. That’s because our goals are not about sales; they are about quality.One of our primary goals is that every year, we must have more happily copulating earthworms. Kind of the ultimate agronomic shindig. If the earthworms are happy, everything else falls into place. That goal drives how we handle manure, where we put animals, and how we handle the landscape. It drives everything.Is your business encouraging earthworms? Or a worthwhile counterpart? Change is inevitable. But change can be detrimental or positive, depending on what direction it heads. Too many great little businesses grow up to be bad big businesses. I desperately don’t want to be one of those.As we grow, our suppliers should be happier. Our team members should be happier, and more enthusiastic. Our customers should be more loyal. Our water should be purer. Our service should be better in every way. And our products should last longer, cause less pollution, and stay out of landfills easier. At the end of the day, does any facet of our business require us to do some fancy talking? Maybe pull up a partition to hide something. Maybe keep us from full disclosure. Embarrassed? Require cleverspeak?I’m reminded of Tyson claiming “Raised without antibiotics” on chickens when they figured out how to inject antibiotics in the chick before it hatched. Talk about cleverspeak. Same as those bucolic pastoral scenes on industrial organic eggs when the chickens are actually confined in a 10,000 bird house. Better is not cheaper. Better is not shortcuts. Better is not doctored reports. Better is just better.As I close, let me confess that much of this wouldn’t fly very far on Wall Street. But if you look at it closely, none of this is anti-business. It just puts ethical and moral boundaries around human cleverness or human capital. And ultimately, that has to be good for business.As we consider what this level of philosophical innovation means, let’s be big enough to appreciate that Western business thinking has not always been moral or ethical. A little Easternism would do us all some good, realizing that the sum is bigger than the parts, it’s about holism, and everything is related. True innovative synergism occurs when we strike a balance between the parts-oriented Western discovery and Eastern moral, and ethical thought. When we find the sweet spot, we’ll be able to SCALE UP WITHOUT SELLING OUR SOUL.