Off-Centered Leadership

The Dogfish Head Guide to Motivation, Collaboration and Smart Growth

Sam Calagione

• Publisher: Wiley
• Year: 2016
• ISBN:
  9781119141716
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Find out whathappens when companies stop competing and start collaborating.

Off-Centered Leadership considers an innovative approach to business by exploring what happens when companies stop competing and start collaborating — both externally in the marketplace and internally in building a culture of communication, trust and alignment. Brimming with lessons on entrepreneurship and culture from the founder of Dogfish Head Craft Brewery, one of the fastest growing independent brewery in the country, members of his leadership team and external mentors from the worlds of business and art, this game-changing text turns competition on its head by showcasing how competing organizations can work together—and with other local businesses—to reach a common goal. The text dives into how Dogfish Head has blazed a new trail through the development of a revolutionary business model that has called upon musicians, community organizations, and even other breweries to keep product development fresh and create engaging customer experiences.

This book documents and addresses the growing pains a company experiences as it evolves from the awkward early start up years into a mid-sized sustainable company with hundreds of co-workers. Calagione is candid in sharing his personal leadership challenges and success and calls on other seasoned vets inside and outside the company who inform and influence the journey of growth and creative expression Dogfish Head is on. This book is rich with practical information entrepreneurs and business people can apply to their own professional journeys.

Competition has long been the name of the game in the business world, but what if there was a different way to approach business? The collaboration over competition approach to business has been proven to foster positivity, productivity, and, ultimately, success.By partnering with your competition instead of trying to outsell them, you could actually create a memorable customer experience that will have people coming back for more!

Internally as well the dogfish approach has evolved and is not traditional org chart driven top down leadership. Calagione shared the challenges of evolving from a founder-driven entrepreneurial company where he was the sole creative and strategic director into a more collaborative collective where he is now one of many creative and strategic voices in the company.

• Discover the methods and approaches dogfish head has used to grow a rich diverse leadership team and evolve from a company basing decisions on the gut and whims of a founder to one with a more robust wholistic strategic approach in a way that allows them to stay creative and maintain their irreverent off-centered culture.
• Discover how ditching your competitive nature and embracing collaboration can allow you to better serve your customers
• Explore innovative solutions to the challenges that today's businesses face
• Consider how your company can grow through the collaboration over competition business model
• Leverage the experiences of other companies to truly understand how collaboration can contribute to your businesss success

Off-Centered Leadership is a groundbreaking book that explores the power of collaboration within the business world.

Chapter 1
From Entrepreneur to Leader

Since the day Dogfish Head started back in 1995, we've been lucky. That's not to say that we haven't worked hard for our success or that we haven't had to learn to roll with some punches. All in all, though, a lot of good things keep happening to Dogfish Head. We try to do good things every day. I used to believe you make your own luck. I now think that is only partially true. Karma is a close relative to luck. And as Joseph Conrad said, “It is the mark of an inexperienced man not to believe in luck.”

Within the first year of launching the company, we had a consistent positive cash flow to build on at our original brewpub. Few entrepreneurs can say that. What's more, we achieved this early success in the particularly brutal world of the restaurant industry, where most new establishments don't survive past their third year. The company opened up as Dogfish Head Brewings & Eats, a pub in Rehoboth Beach, Delaware, where we brewed and sold our beer. The decision to launch as a brewpub, a brewery business within a restaurant, was a gamble, but I figured that I could reduce the risk of the brewery failing by supplementing it with revenue from the restaurant. That proved to be a good bet, but it was never a sure thing.

When I say lucky, though, I'm not talking about monetary good fortune. As I mentioned previously, “being lucky” to me means being well served by good karma, which is something we consciously try to cultivate. The hallmark of our culture, what I'm constantly emphasizing with our coworkers, is that Dogfish Head is not a company that sells beer (or food or whatever) but rather is a company that creates high-quality, valuable, innovative experiences based on fairness and respect for our customers and community. This is our exploration of goodness.

From day one my main goal was to satisfy beer drinkers like me, eager for an experience much more flavorful, adventurous, and satisfying than the Corporate Industrial Lager that dominated the landscape and consumer perception of American beer in the mid-nineties. I went into business more with the idealism of an artist than with ambitious financial aspirations, so I like to think that this focus on creating positive energy—enriching people's lives by making unique, authentic, off-centered beer—was my prime motivation. Not making money. Perhaps this sounds self-serving, but it's true. Money may be the fuel of a business, but at Dogfish Head it's not our soul.

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We encourage free expression and nonconformity.

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Another reason so many of our most valuable coworkers have stayed at Dogfish Head is the generous compensation program we implemented even as we were just getting our feet under us. Sharing the fruits of success has been our priority since our earliest days. We have a great insurance package including health and dental, a free case of beer for all brewery coworkers every paycheck, a weekly happy hour with complimentary beer and snacks for all coworkers and their families, and half-price food and drink for coworkers at our pub and brewery. The loyalties and talents of the people who have joined me to grow the company have played a tremendous role in our company's success.

By the year 2000, we had become sufficiently established so that I no longer woke up each day wondering whether Dogfish Head was going to stay in business. There had been plenty of existential doubt before then, super-stressful times when we revved hard on the revenue growth engine to buy additional equipment and brewing systems. I'd mask my concern during such moments with a confident game face and lead by example. “Sure, we're not perfect,” I'd tell my coworkers, “but let's fix one small thing every day, try hard, fail forward, learn from each mistake, and we will be closer to perfect tomorrow than we are today.”

In the year 2000, the production brewery we built separate from our Rehoboth location became profitable in the same way the Brewings & Eats restaurant was from the start. Profitability in our business was meager early on, so I never take it for granted. Our brand has to stay relevant to our customers; our products have to remain distinctive. But from that year forward, five years into the life of the company, I didn't have to worry about the cost side of the business. Other smart leaders at Dogfish keep costs under control, and I focus on creating new projects and products to increase revenue, competitive differentiation, and brand recognition.

We remain a frugal company, as we have been since day one. A bootstrapping mentality is hardwired into our DNA, stemming from our entrepreneurial beginnings. We still approach every project and capital expenditure with an eye toward vetting efficiencies as if we were a start-up. We're not trying to be cheap or beat up our vendors or pay less for something than it's worth, but when our business partners and our own coworkers see that we care about pennies, it makes them all sharpen their pencils. We are particularly careful and conscientious about the bidding process for our equipment and buildings. This is especially important in a bricks-and-mortar-intensive business like brewing, where the physical capital to expand capacity infrastructure can cost millions of dollars each year.

Creative Freedom

Being freed from anxieties on the cost side allowed me the freedom to be creative. For the majority of my work hours I was unleashed to do what I most love—come up with new ideas for Dogfish Head.

My role as the founder, chairman, and majority vote holder made this creative freedom both a blessing and a curse for the company. I could launch an initiative pretty much on my own say-so, without first having to clear organizational hurdles or establish a comprehensive plan to move an idea forward. My personal vision drove our actions; strategic choices shaping the future of Dogfish Head were preeminently (and almost exclusively) mine. From my perspective as an entrepreneur, that was the good news. The bad news, from the perspective of my coworkers, was that I was always having ideas.

While often serving our goals, the result of my high-voltage energy pumping through the system could also, at times, be disruptive to the organization. As “the boss,” I would announce my latest business idea, and coworkers would have to switch gears and revise schedules to prioritize it. Nobody except Mariah felt empowered to resist. And I didn't always listen to her or our CEO Nick Benz or the rest of our leadership team when they would present resistance.

After almost two decades of successful growth I was convinced that this gut-oriented approach was for the best. Sometimes it was indeed for the best, as in the case of the Choc Lobster brew we released in 2012. A brew with cocoa nibs and lobsters, it originated as part of our program to make experimental one-off batches for our beer dinners. When I tasted it, paired with chocolate lobster bisque and a white truffle lobster salad slider at the dinner, I thought it was so terrific that we brewed a scaled-up batch to offer at the pub. When I proposed rolling it out commercially, everyone internally and externally insisted it would never sell since we would have to charge so much more than the average keg price for a beer made with hundreds of pounds of lobster. I was sure the beer would be a success and rolled out production anyway. It turned out to be well received, winning a Great American Beer Festival silver medal. We went from brewing a few kegs at the pub to hundreds of kegs that we sell in states up and down the East Coast.

In other instances, though, my next great thing ended up costing us time and money without much return. Like the combination see-through visor and baseball hat I designed. I figured this hat would play off our penchant for combining beers into a new style or beverage mash ups (such as beer-wine hybrids like Sixty-One, which was conceived when I poured some red wine into a glass of 60 Minute IPA, or our Positive Contact, a hybrid of beer and cider brewed with Fuji apples, roasted farro, cayenne pepper, and fresh cilantro). In this case I wanted to do a mash up between a baseball cap and a sun visor, with the character of Paul Bunyan featured more prominently on that hat than our logo. We must have devoted the bulk of time in 4 two-hour marketing meetings over the course of several months to this project; designers drew up a half-dozen iterations, and three different prototypes were produced. I was confident that our customers, themselves being so off-centered and fearless, were going to love it. We stocked it at the shops in our restaurant and brewery, where it died on the shelves. It is still dying on our shelves, where you can buy one very reasonably at a deeply marked-down sale price or, if you prefer, for a nominal fee on eBay.

Rather than worry about consequences of abrupt midcourse corrections, I prided myself on taking risks, learning quickly from our mis-steps, and changing course. Were Dogfish Head a conventional company, the seemingly erratic course I sometimes steered the organization on would not have been tolerated. But it was precisely this opportunity to boldly guide us into unexplored waters that I found so satisfying. The thrill I personally got from not knowing what would happen next was a powerful psychic reward. To me, this feeling was the essence of being an entrepreneur.

That said, I am learning that being hooked on the adrenalin of uncertainty and directing a company unilaterally by improvisation are not the hallmarks of a great leader for a company of our scale. They are important traits for an entrepreneur to have, but they need to be tempered and honed as a company grows.

Creative inspiration for me comes from traveling outside my comfort zone—outside of what I know in general life terms and, from a business perspective, outside of what already exists in our industry. I rely on this creative urge to push beyond limits when it comes to designing a new beer. As a result, we have not spent much time looking at consumer data or conventional tastes when we decide what beer to make next. Instead, our one fixed point of reference has been to seek out innovative, off-centered ways into new products and projects.

As the person who fed those creative fires for the first 20 years, I got the most satisfaction roaming around far-flung fields that interested me. I am always on the lookout for ideas, seemingly unrelated to brewing, that can inform and complement our approach to what I like to call “the soul” of Dogfish. This is probably why, as we've evolved, we have become more than a beer company, and we do our work in many industries: food, spirits, clothes. Everything we do—making a pizza, designing a shirt, brewing a beer—informs everything else we do. Each business unit collaborates with and enhances the unique stature in the marketplace of the other business units. An apt way to capture our spirit of creative roaming is the quote from Moby Dick I had sewn on the collar of the shirts we do in collaboration with Woolrich, America's oldest outdoor clothing company: “I am tormented with an everlasting itch for things remote, I love to sail forbidden seas and land on barbarous coasts.”

Your Coworkers Are Your First Responsibility

There is a term in Japanese for the ultimate expression of selfless appreciation and support: omotenashi. There is no direct translation in English, but the best definition might be something like: the host anticipates the needs of the guest in advance and offers a pleasant experience that guests don't expect. In the context of business, this can mean that “the customer is always right.” Or simply that we want to “exceed customer expectations in every way the customer interacts with our company and the things we make. ” I love the concept of omotenashi, but in my journey toward leadership, I give it a different twist: the customer is secondary.

As a leader, your first responsibility is to your coworkers. You need to support them and help them to always try to do the right thing and to be as happy doing their work as possible. Going forward, I need to redirect more of my creative energy toward this end. I'm no Zen master, so there are going to be stumbles along the way. And I still intend to personally take the lead on some experimental brewing and arts projects that are dear to my heart, creatively cathartic, and marketable. Some of these projects may go into coast-to-coast distribution and some experiments may be one-time-only small-volume brews produced for events around our Delaware facility that allow me to interact with coworkers and Dogfish fans who come to visit us in our home state. But in terms of the evolving soul of Dogfish Head, my most important role is to be one among many who collectively make the important strategic and opportunity decisions facing the company. There will still be some specific functions attached to my job responsibility, particularly as majority owner, but a central component of my evolving role at Dogfish is to allow great ideas and great people to bubble up and contribute exponentially and collectively to the company we are growing together.

With my transition in the company from single-minded entrepreneur to responsible leader, my creative approach similarly needs to change. I have to make sure the vast majority of product launches and innovation are no longer driven solely by my inspirations but, rather, by the team's collective ju...

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Introduction
• Chapter 1: From Entrepreneur to Leader
• Chapter 2: Laid Up in Zero Gravity
• Chapter 3: The Radically Changing Beer Business
• Chapter 4: Leadership 101
• Chapter 5: Preparing for Success
• Chapter 6: Internal Collaboration
• Chapter 7: The Radically Changing Beer Business
• Chapter 8: Collaborative Creativity
• Chapter 9: Off-Centered Capital
• Chapter 10: Decade Three as an Off-Centered Leader
• Afterword
• Acknowledgments
• Index
• End User License Agreement