Dean Zatkowsky, a Kinko’s marketing executive from 1986 through 1999, thinks he knows. His new book, E Pluribus Kinko’s: A Story of Business, Democracy, and Freaky Smart People (BookSurge, 2009), claims that Kinko’s was done in by the loss of its innovative, democratic culture.
“We had a very American structure,” says Zatkowsky, “with our own version of the constitution, a very involved citizenry, and leadership dedicated to the preservation of individual liberty. Democracy was our key success factor for thirty years.”
However, after thirty years of continuous growth and profitability, the founding partners had no exit strategy. To create one, they had to consolidate 126 separate partnerships into a single company. Along the way, the democratic culture suffered.
“We brought in some Wall Street professionals to help us take the company public, and neither party was prepared for the culture shock. Reorganizing the company for an IPO required a more top-down management structure, sapping our energy and creativity. I’m not sure anyone realized how important the culture was to our success.”
Eventually, the Wall Street firm bought out the founding partners and then sold the rolled-up company to FedEx, which has since written down nearly the entire purchase price. “That’s how one of the most interesting entrepreneurial adventures of the twentieth century became little more than a tax write-off before disappearing completely,”
Paul Orfalea founded Kinko’s with a single copier and a small loan cosigned by his father. That single shop – 100 square feet annexed to a burger joint – eventually grew to an empire of over 1,000 branches with over $2 billion in annual sales. Orfalea says in his foreword to E Pluribus Kinko’s. “I’ve been working with Dean Zatkowsky since 1986, and while we often disagree about the meaning of specific events in Kinko’s past, we share a passionate belief that the company culture was something truly special and a good model for entrepreneurs. Dean’s focus on the democratic structure captures the key success factors as well as any analysis I’ve heard.”
Zatkowsky describes three pillars of Kinko’s democracy. “The Philosophy was like a constitution that clearly articulated stakeholder rights and expectations;
Organizational democracy champion Traci Fenton, of WorldBlu, Inc. (www.worldblu.com)
Most chapters of E Pluribus Kinko’s contain sections called “The Coworker’s Voice,” in which former Kinkoids, as they called themselves, describe the company culture in their own words. Zatkowsky notes that organizational democracy is more about voices than votes: “The really powerful democratizing factor at Kinko’s was coworker participation. If we erected a tombstone to the Kinko’s brand, I would carve an epitaph that reads: ‘Where every coworker had a voice.’”
“In a democracy, freedom of speech is as much a duty as a right. When the coworkers lost their voice, the company lost its most valuable asset: the fire in their eyes. That’s what happened to Kinko’s.”