Vote of Confidence

The team also discovered the start of a backlash against the commoditization of food that began in 1950 and spawned a coast-to-coast sameness. People were looking for a more unique expression of their tastes and style. Shaich and his team sat in a restaurant in St. Louis and wrote a manifesto -- a 12-page bible that spelled out what Panera Bread would be, from the type of food it would serve to the kind of people behind the counters to the look and feel of the physical space. "We knew that this whole thing had to hinge around bread," says Davis. "And we knew that it was going to be a neighborhood bakery café rather than an urban store like Au Bon Pain."

Shaich also understood that it was time for one of those gut-wrenching decisions that make CEOs reach for the Maalox. He could see Panera's huge potential, but he knew that it would take every ounce of the company's resources to turn it into a winning brand. "For every 100 concepts that want to be nationally dominant, only 2 or 3 of them ever make it," Shaich says. "It's a very hard thing to pull off."

Meanwhile, Au Bon Pain's stock had been flat for four years, the banks were beating up Shaich for putting money into the new business, and members of the executive team were at each other's throats. So he made an emotionally tough decision. "I went to the board and said, 'We're going to sell our first son.' " By May of 1999, Au Bon Pain had been sold to a private investment group, and Shaich's team members could turn their full attention toward growing Panera.

They began with what they'd learned at Au Bon Pain: that delivering real food makes a real difference. "We have a commitment to doing the best bread in America," Shaich says. That starts with making fresh dough every single day at 14 locations around the country and trucking it to the cafés where it gets baked overnight. "Nobody has ever done this on such a large scale."

The team also held the conviction that the quality of the people involved is an equally essential ingredient. "People are a critical part of the product," he says. "Everyone wants to have good people, but we know that in order to get them, you need to have a systematic approach to their development."

Next came the environment: a comfortable place in pleasing colors where people could sit and dine off of real china -- even if the meal was delivered at a counter. Each store is designed individually within the rules set up in the company bible.

Finally, Shaich says, there was a commitment to authenticity. "My role," he says, "is to hold us to our promise and to really deliver."

So far, says Joe Pawlak, a principal with Chicago-based restaurant-consulting firm Technomic Inc., Shaich has honored his pledge. "Panera has the right formula," he says. "It could very easily become a 1,000-unit chain."

But if Shaich's experience has taught him anything, it's that being on top today is no guarantee about tomorrow. "Our biggest risk," he says, "would be to get fat and happy and therefore stupid. My job at Panera is to keep challenging the existing assumptions."

Shaich is cagey when asked about the company's future strategy. He and Davis will admit that they're testing wireless networks in some of the shops to accommodate the chill-out crowd. They are experimenting with various ceiling tiles and flooring options to make the environment at Panera more acoustically appealing and tinkering with the music mix. They are trying out ways to increase production capacity at lunch, when shops tend to be overstretched. They are also planning to commission paintings and graphics from local artists around the theme of bread, hoping eventually to acquire the country's biggest collection of bread art.

Because ultimately, Shaich says, it really does come back to the bread. "We legitimately want to have the best bread in the country," he says. "That's number one."

Linda Tischler (ltischler@fastcompany.com) is a Fast Company senior writer. She has never felt more confident.