Iggy’s Bread of the World

JRL Consulting

Cross-Cultural Technology Management

E-Mail : tech@jrleeconsulting.com

Website : www.jrleeconsulting.com

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TABLE OF CONTENTS

I. Executive Summary

II. Iggy’s bread of the world

III. Core Values/Mission Statement

IV. MARS model

V. The conflict between new management and old culture

VI. Cross-culture differences

VII. Summary

VIII. Recommendations

IX. References

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EXECUTIVE SUMMARY

Exceptional cultural values with family-community-oriented mission statement

provide the guidance on how Iggy’s Bread of the World works, ever since Igor and Ludmilla

Ivanovic opened their first bakery in Watertown, Massachusetts in 1994. The company relied

only on “word of mouth” for retailer sells as well as persuasive high quality delicacy breads

for its restaurant accounts. The revenues increased 6 times from 1994 to 1999. The MARS

(Motivation, Ability, Roll-Perception, Situation factors) model can be applied to explain how

this small family-oriented company was so successful. The leadership that the Ivanovics

demonstrated by using lead-by-example. They empowered their employees using this direct

influence.

With the success and growth, the Ivanovics decided to expand the business and hired

a professional manager (Matthew McRae) to be the company COO (Chief Operation Office).

While McRae seemed to know how to run a company, but his organizational behavioral

(from MARS model) and the values system he believed didn’t match with the corporate

culture of the Iggy’s. With these mismatch characteristics, no clearly defined functionalities

of COO and the lack of communications among McRae and Ivanovics, problems and issues

aroused. These issues can be solved by releasing McRae (COO), dissolved the new

management team, re-enforce Ludmilla’s concepts of old cultural values and elected either

Nikola or Menezes as CEO then to hire someone who has experience in bakery1,2

as well as

congruence of values with the Ivanovics

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Iggy’s Bread of the world

Iggy’s bread of the world was founded by Igor and Ludmilla Ivanovic, Igor was a

passionate bread maker and Lumilla had the vision to be a caring, supportive employer.

Originally, Igor Ivanovic was from Belgrade, part of former Yugoslavia while Ludmilla Luft

was from Montreal, Canada, but her mother was born in Latvian. They met while working

for E.A.T, a Manhattan restaurant, it was there Igor developed the passion for the bread

making (baking) and soon after they met, they combined their goal and passion for bread into

a bakery business. In 1994, they opened the first Iggy’s bread of the world in Watertown,

Massachusetts. The launching of the Iggy’s was a great success that depended solely on

world of mouth and the high quality of their bread products. The revenues for business

increased from 1 million to 6 millions from 1994 to 1999.

Core Values/Mission Statement:

The mission statement from Iggy’s bread of the world:3 “the mission of iggy's bread

of the world is to make breads of the highest quality and then deliver them daily to our

customers with the highest standards of service and integrity. Our priority is to learn to work

well together, and to create an environment that fosters communication and personal growth.

Honesty, mutual respect, sharing and caring for the people and the planet are the values on

which our business is based.”

Core Values: 4

(1) Provide high quality products for customers by using

a. High quality ingredients: buy only the highest-quality ingredients (all

natural and organic) or as close as nature as possible.

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b. Double filtered water

c. Old world style baking

(2) Establish a healthy Business. Enforce the concept of “Clean and happy hands.”

Not only employees needed to clean their hands to make good and healthy products,

they also need to keep their problems checked before they make the breads.

(3) Make Iggy’s a community-based company. Iggy’s as a good community citizen

should provide and participate the following services.

a. Customer relationship: The customers will be treated and addressed as a

person not like a number.

b. Donations to the school and churches as well as breads to local soup

kitchens.

c. Local agriculture: Whenever possible, the needed products will be

purchased from local merchants.

d. Natural cleaning products used as required by the FDA based on following

guidelines (1) biodegradable (2) concentrated (3) made with renewable

ingredients (4) cold water soluble

e. Recycling Program for the community.

f. Maintain the status of a small business to provide greater services for the

community.

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The MARS model5

Figure 1 MARS model

There were major attributes why Iggy’s was so successful without any advertisement

and the revenues grew from 1 million in 1994 to 6 millions in 1999. These attributes could be

summarized into three categories: (1) Superb Leadership. The tactics was lead-by-example.

That is the best way to influence people to achieve the common objectives (2) Values

Congruence. Employees were treated as family members and shared the common goals. (3)

Core Values/Vision of the company. The exceptional company’s culture created by the

founder provided the guideline on how the company functioned. The MARS model listed in

figure 1 shown the individual behavior and its drive to produce results. Several key members,

Igor, Ludmilla, Nokola Ivanovic as well as Mark Menezes all could use this model to

characterize their drive to success.

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Motivation: Igor, Nokola, Mark to make sure the highest quality of bread, Ludmilla to make

sure the employees’ well-being to accomplish work on bread-making

Ability: Igor, Nokola and Mark all had the skill to feel and make the bread, while Ludmilla

acted as the bridge (administrator) among customers, employees and management

Roll-perception: Igor was the chief bread office, Nokola was the “go-to-guy” in the bread

related issue, Mark was the “product manager”, Ludmilla was as president of the company

Situation Factors: Because the high quality and unique bread making process, the Iggy’s

breads were in high demand, all four of the key members could barely keep up with their

jobs.

Results: As successful as it could be under its current capacity.

The conflict between new management and old culture

With the growth and expansion of the company, Igor and Ludmilla realized that it had

reached the critical mass, they would need to turn down more restaurant accounts or

expanded the company to next level that required some professional help. When they decided

to expand their capacities in late 1999, they hired a COO (McRae) to help them run the

company. After he was hired, McRae quickly assembled a team of managers to implement

his plan for the Iggy’s. He ran the Iggy’s as if he was running his own leasing6 company that

went public before he took this job. Because his own personal agenda as well as different

values system he presented with Iggy’s that created so many issues and problems for the

company, that forced the Ivanovics to summon their informal advisors to decide the fate of

McRae who earlier submitted a resignation and withdrew a day later. To help decide the fate

of McRae, we could also use MARS to decide the compatibility of McRae in this company.

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MARS’s analysis on McRae:

Motivation: New adventure to conquer, the opportunity to run a successful company

that could make it public and earn lots money.

Ability: Administrator position in a leasing company, may not be applicable to the

baking company.

Roll-Perception: CEO, the Ivanovics hired him to be a COO to help run day-to-day

operation, not as a CEO to take charge of the whole company. The Ivanovics also

made a major mistake for not defining clearly what COO should do and properly

transferred some power to McRae. The lack of communications led to a lot of

misunderstanding of the roll-perception.

Situation Factors: McRae, I believe, was in over-his-head on this job, his previous job

deal with papers (leasing contracts) more than people (employees). The lack of

experience on bread-making contributed to his policy of trying to do division of labor

that didn’t work out as planned only to create conflict between new management and

older and useful workers.

Results: The results were very bad. The employees felt isolated. The Ivanovics felt

isolated and stripped of power of hiring new managers. McRae also didn’t deliver the

results what Ivanovics requested.

The Culture difference

While MARS model provides the analysis of individual characteristics on how he (she)

behaves in the organization and possible results, we could also analyze the compatibility

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based on the culture differences between McRae and Ivanovics. Two different evaluation

methods can be deployed to analyze this: (1) Culture values on individualism7 and

collectivism and (2) Other cross-cultural values8

Culture values on Individualism and Collectivism:

As shown in figure 2, the individuals (McRae9 etc.) from US favor individualism

while the individuals (the Ivanovics) from totalitarian region tend to abide with

collectivism. McRae made his leasing company public while the Ivanovics tried to

make Iggy’s a community company.

Figure 2 Individualism and Collectivism

Evaluation on other cross-cultural values:

Figure 3 shows the comparison of the US and other countries on cultural values. It is

clear that McRae didn’t share common values with the Ivanovics as shown in figure

4.

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Figure 3 Other Cross-Cultural Values

Individuals Power Distance Uncertainly avoidance

achievement vs nurturing

Long vs short-term

McRae Low Medium Achievement Short-term

The Ivanovics High High Nurturing Long-term

Figure 4 Cross-Cultural Values between McRae and the Ivanovics

SUMMARY

Exceptional cultural values along with the leadership provided by the Ivanovics had

guided Iggy’s Bread of the World to a very successful company since it launched in 1994.

The leadership that the Ivanovics demonstrated could be traced back to the values system

they obtained in their cultures. This cross cultural values allowed them to lead-by-example as

well as provided direct influences to their employees. The hiring of McRae as COO to help

expand the business was a major mistake, since McRae and the Ivanovics did not share

common values and views as shown in figure 2, 3, 4. Other factors contributed to the “why

the new management system was not working” were (1) lack of communications among

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them (2) the roll of COO was not clearly defined (3) the power to McRae was not transferred

properly (4) the Ivanovics were not willingness to compromise their principles.

RECOMMENDATION

These issues can be solved by releasing McRae (COO), dissolved the new

management team, re-enforce Ludmilla’s concepts of old cultural values and elected either

Nikola or Menezes as CEO then hire someone who has the experience in bakery industry as

well as congruence of values with the Ivanovics that can be evaluated with MARS model

and/or cross-cultural values.

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Reference

1. “Bakery Industry”, retreated from http://sbdcnet.org/dmdocuments/Bakery204.pdf

2. “Bakery Industry”, retreated from http://sbdcnet.org/Snaphots/SnapshotBreads041906.pdf

3. “Mission Statement “of Iggy’s Bread of the World, retreated from

http://www.iggysbread.com/main.html

4. “Philosophy” of Iggy’s Bread of the World, retreated from

http://www.iggysbread.com/main.html

5. Steven L. McShane andMary Ann Von Glinow, Organizational behavior,3rd

ed. (McGraw-

Hill:Irwin, 2005). P39.

6. “Guide to leasing”, retreated from http://www.leaseguide.com/lease02.htm

7. Steven L. McShane andMary Ann Von Glinow, Organizational behavior,3rd

ed. (McGraw-

Hill:Irwin, 2005). P51.

8. Steven L. McShane andMary Ann Von Glinow, Organizational behavior,3rd

ed. (McGraw-

Hill:Irwin, 2005). P53.

9. “Name Originated” retreated from http://www.clan-

macrae.org.uk/scotland/history.cfm?ID=102