The People Ingredient: Is it a craft brewery’s biggest threat?

Get it in writing

One such plan is inserting a mediation clause into written agreements, whereby parties utilize mediation if/when disagreements and disputes arise. Mediation is the middle step between DIY and securing legal advocacy, and it can save time, money, stress and your business.

“Failure is a good teacher; instant success isn’t,” so said Bill Eye, current head of Denver’s new Bierstadt Lagerhaus. At age 53 he’s considered a veteran amongst the younger craft brewers. Eye is another example of a passionate brewer who had to learn from what he describes as “lost dreams.” He was emphatic in proselytizing a philosophy rooted in cynicism yet yearning for the positive. “Too many brewers and business partners become at odds for it to be a coincidence. Before forming a partnership, you must examine your goals or become victims of circumstance.”

The circumstance Eye referred to is the reality that brewers have the passion. They speak and live the culture before ever attempting to make it a career. They go to conventions and tastings and collaborative festivals. They follow their artistic motivations. Then the reality of needing capital causes the search for a financial partner, who naturally wants return on her/his investments. The beer makers want something more esoteric. They want the lifestyle that goes with the beer making.

“I love the feeling of walking around the bar and seeing people enjoying my beer; it’s so validating,” said Eye. “But the investors don’t need that; they just want the beer sold and distributed. It’s not wrong. It’s just the reality.”

This is where the cycle of incommunicado begins, and it manifests itself in completely different approaches, from day to day to long term. It leads to animosity, grudges, hazy perspectives, misunderstanding, dropped duties and lost jobs. It creates a culture where money is expected to trump everything and brewers feel resentful and are lead to believe they don’t have value and are not protected.

“Business people can’t be successful without us,” said Eye. “We really do have intellectual property and knowledge that should be valued as much as the money side.”

His lessons learned?

Mandatory must-do: operating agreements that are symbiotic as well as balanced (“So I won’t lose control”), goals that are delineated in advance, business plans that are joint-collaborations and partners who understand with whom they are going into business. This takes intense, interactive strategic planning meetings to discover, understand and prepare for the details of running a brewing business. Not many individuals have all the answers, or even all the questions. Pooling intellectual and creative resources can address this challenge.

“There is more than one way to do things; every brewer in the industry has an opinion on nitro beers or Vermont-style IPAs. We can disagree at fundamental levels, but the best way to flourish as an industry is to come together and share our points of view,” said Adam Dunbar, Mountain West district manager for Green Flash Brewing Co.

Dunbar loves his position, the company and the infrastructure at Green Flash. But after intense frustrations at a prior position — experiencing what he now considers a lack of communication, confusing hierarchy and vague strategies — he relishes the current family-oriented culture and clear structure at Green Flash. Communication is collaborative (weekly meetings, sharing ideas openly and honestly). He described fluid working conditions and more of a flat hierarchy, and tools such as a best practices procedures and a manual. Adam would like to see more in-person brewers’ summits and fewer blog, Facebook and online complaints.

“At the end of the day, we will learn something and it will be beneficial,” he said. “Let’s face it, our brains are wired differently, and we should find solidarity in coming together and talking shop.”

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“Mario,” a self-proclaimed beer geek with a science and business background, entered the craft brewery world believing he could truly pair his academic acumen with his hobby. Within a few months, he was out. The main reason: communication.

“I was a manager yet didn’t know what the strategy was,” he said. Mario sees most of the craft beer industry made of young, non-corporate-trained people. There’s a lack of organizational structure and no communication processes. There is little planning and communication of goals and objectives, making it difficult to impossible for employees to do their jobs effectively.

Mario goes on to say that brewers need to hire consultants specialized in business conflict to train them in planning, strategy, communication and conflict management. They need to be able to “keep their employees from feeling like they’re shooting from the hip. Sometimes a little corporate-type of structure is a good thing,” he said. His biggest piece of advice: “Don’t wait until you need mediation, put in practices to avoid going out of business.”

Of course, mediation is always an option

These cautionary tales serve as critical advice, but more importantly they highlight the need to dig deeper into, and understand, a brewery’s People Ingredient. Brewery owners and staff must respect the importance of communication and interaction and the details therein. They must not ignore the “soft skills” designed to strengthen intrabrewery communication and relations. Talented, artistic individuals and experienced business people require strong communications and interactions to become a symbiotic and successful team. After all, what can make or break a brewing business is its skill set involving personal interaction, conflict management and communication. But it’s tricky once we start peeling back the layers.

Communication, for example, has many layers aside from personal exchanges — operating agreements, best practices, team cohesion, organizational structure, planning, strategies and objectives, training and development as well as conflict management and problem solving. Honest feedback and constructive criticism are always “welcomed,” but they are still difficult to absorb and even give. It helps to have constant or continual personal interaction, if for no other reason than to keep people connected.

Mike Sardina at Societe Brewing Co. outlines some of their practices to foster interpersonal relationships. “We have a staff appreciation day each year, and we sponsor group outings whenever possible. We have a beer with a brewer program where one of our tasting room staff members will go out for a beer with one of our co-founders or with a brewer or with me personally.”

Even if they engage in no shop-talk, these measures help improve interactions. Adopting and honing skills to improve intrabrewery relations, can be the difference between thriving and failure. This is a difficult task in no small part due to the personal introspection, criticism and learning, as those profiled have experienced. There is no shame in admitting mistakes, ignorance or lack of skills. It just means that you’re wiser than you were yesterday and can improve.

To quote Sun Tzu again, “…If you do not know your enemies nor yourself, you will be imperiled in every battle; if you do not know your enemies but do know yourself, you will win one and lose one; if you know your enemies and know yourself, you will not be imperiled in a hundred battles.” The battle here is against the erosion of the People Ingredient. Knowing yourself is the first step to better understand, manage and enrich your People Ingredient. And your brewery will thank you for it.

Author Jason Gladfelter is director of the Brewery Mediation Network and a principal at Oval Options for Conflict Management, an organization that helps business, communities, and families find better options for resolving their conflict through mediation, strategic planning, evaluation, arbitration, facilitation, coaching and training. He has more than 20 years of experience in team leadership, management and customer relations positions through his extensive work in the retail, sales and training industries. He is a Cicerone Beer Server, has written over 3,000 beer reviews and is a homebrewer. Jason is also working on implementing a series of Brewer Summits. Follow him on Twitter @BeerMediation.