Ron Shaich is the founder and former Chairman and CEO of Panera Bread and of Au Bon Pain and is the current Chairman and lead investor in Cava, Tatte, Life Alive and Level99. He is also the author of the best-selling book Know What Matters: Lessons from a Lifetime of Transformations (Harvard Business Review Press, 2023).
Shaich makes his investments through Act III Holdings, a $1 billion+ evergreen investment vehicle. In Shaich’s last two decades as CEO, Panera generated annualised shareholder returns of 25 percent and was the best performing stock in the restaurant industry. Shaich is often credited with defining the $300 billion+ fast casual segment and is known for continually disrupting industry paradigms to find new ways to build companies of value and with values. Shaich has twice been recognised as an Ernst & Young Entrepreneur of the Year, was selected as the 2018 Restaurant Leader of the Year and was presented the prestigious Nation’s Restaurant News Pioneer Award as one of the most significant contributors in the history of the restaurant industry, joining the ranks of Colonel Harland Sanders, Ray Kroc, Norman Brinker and J. Willard Marriott.
In this interview, I speak to Ron Shaich, the extraordinary entrepreneur who founded Panera Bread and Au Bon Pain. We discuss the realities of life as an entrepreneur and what it takes to build a $multi-billion business, with over 100,000 employees.
Q: What is the reality of entrepreneur life?
[Ron Shaich]: I believe that the entrepreneurial life, even when running a large company, is a dual experience of joy and pain—two sides of the same coin. The joy lies in putting yourself out there and leading an organisation in a specific direction, but with that comes the burden of responsibility.
In my book, I aimed to take a different approach from the usual narratives that boast about making billions and offer a simple formula for success. That kind of talk is nonsense. I wanted to convey the truth of it. As I often tell people, if you don’t love the act of doing, you’ll never find happiness. If your motivation is glory or money, you’re bound to be disappointed. If you’re more excited about lunch with investment bankers or the Harvard Club than dealing with the day-to-day realities—like working with bakers or being deeply involved in the entity—you’ll end up unhappy.
Entrepreneurial life is about making tough decisions and managing uncertainty. It’s about judging what will matter tomorrow and prioritizing what comes first, second, and third today.
One of the key ideas I discuss in the book is the distinction between means, ends, and byproducts. I use a friend as a metaphor—he’s a type 1 diabetic. His goal is to live as long as anyone else, but he can’t simply make that happen, just as Viktor Frankl said you can’t make happiness—it ensues. For him, maintaining health means keeping his blood sugar between 80-180. That’s the byproduct. The means are diet, exercise, and insulin.
Being an entrepreneur or running a large corporation is similar. You want value creation for your enterprise and all its stakeholders, but value itself is a byproduct. So what should you focus on? The job of an entrepreneur or a competitive leader is to create the conditions that make your organisation the better competitive alternative. In my industry—restaurants—this means ensuring that your target customer chooses you over 20 other options. That’s competitive advantage.
All your efforts should be directed towards marshalling and channelling resources—human and intellectual capital—towards being the best competitive alternative. And in entrepreneurial settings, the challenge is figuring out what to prioritise next, because everything can seem important.
Q: How do you build and maintain culture, at scale?
[Ron Shaich]: Let’s start with the principle. If I could personally serve every guest, I’d be happy to, but I can’t. When you’re handling 10 to 12 million transactions a week, serving 1 out of every 30 Americans, it’s impossible to do it all yourself. So, how do I get over 100,000 team members to embody the essence of the brand?
I begin with the understanding that I can’t make people do anything. What I can do is find the right people—those who fit the culture—and let their humanity shine. Then, I need to create the support and mechanisms for that to happen. And to be clear, it’s all in the system and structure.
In the U.S., we have a TV show called *Undercover Boss*. I was asked to participate many times, even for the pilot, but I turned it down every time because it goes against my belief about leading a large organisation. With about 100,000 employees, if the success of the company depends on me randomly stepping in to solve someone’s issue, that’s ludicrous. The system itself must be designed to hire the right people, create a structure that supports them, and align their self-interest with the organisation’s goals.
As a leader, I’m always trying to connect with people in a way that excites them about our mission. I view my team members as a constituency that I need to align with. Sometimes, this means having direct and honest conversations. It’s about creating an environment where people feel pride, excitement, and a strong sense of affiliation with what we’re doing.
Being an entrepreneur, or even running a large organization, is like being a society builder. The system is bigger than any individual. You can take the same person, place them in different environments—like the old Soviet Union versus the UK or the US—and get completely different outcomes. It’s about the system.
I’m not a politician, but I see the incentive system as akin to tax policy. What you reward and expect shapes behaviour. Many food companies talk about customer satisfaction, but if they only reward cost-cutting, they’ll end up with poor operations and good margins. My view is that if you focus on the harder work—like running great restaurants—the margins will take care of themselves.
This is what I mean by creating a society. When you build a business, especially from the ground up, you’re architecting and constructing something substantial. In a large, established company, you might just be the 40th person in the role, tweaking what’s already there. But when you’re building an enterprise, you’re shaping the system and the culture—defining what’s acceptable, setting the norms. It’s like deciding where the walls between the living room and dining room go in a house you’re building. It’s big stuff, and that’s what makes it exciting.
Q: What are some of your key learnings on leading effective transformation?
[Ron Shaich]: I ran a public company for 27 years, and people often focus on the outcomes. Over the last 20 years, our company delivered the best performance of any public restaurant company in the United States—twice that of Starbucks, four times that of Chipotle. We delivered a 25% return over two decades. People talk about that, but what I find most fascinating and impactful is that these results were the byproducts of four or five major transformations in my career, each one a necessary step in my evolution as a leader.
For me, transformation is about understanding how the market is evolving and positioning your organization for the future that’s unfolding. It’s about ensuring that you’re there when that future arrives. The larger the company, the more it’s like an aircraft carrier—it requires careful steering and a long-term vision.
Innovation is a subset of transformation. Transformation is innovation occurring across multiple areas, coming together in a cohesive initiative to achieve a goal. It’s like moving house: packing up the living room is just one project that ties into the larger initiative of relocating the family.
As a large company CEO, I believe one of the most critical roles is driving innovation and transformation. In fact, the CEO has to be the “Discoverer in Chief.” Let me explain this through the concept of the organisational lifecycle, which many readers might recognise from their own experiences.
When an organisation is first formed, someone has to discover something significantly better—because without that, no business would ever get off the ground. Early on, you lack scale, access, and structure, but someone finds a better way, and the business begins to gain momentum. As it grows, capital comes in, and the focus shifts to building out the organisation: hiring delivery people, financial experts, purchasing teams, industrial engineers, and so on. This process works, and margins improve.
However, over 10 or 20 years, a divide often forms between the discovery people and the delivery people. They come from different worlds. The language of discovery is imaginative and poetic—”imagine if,” “what if we tried this?”—while the language of delivery is pragmatic and data-driven—”prove it to me,” “show me the numbers.” Over time, this divide can drive out the discovery mindset, leaving the company excellent at delivery but lacking the ability to innovate.
In the restaurant industry, companies often wake up as billion-dollar entities that are great at delivery but have lost their edge in discovery. They end up serving a market that’s 5, 10, or 20 years old, falling behind the curve.
I believe the CEO’s role is to protect and nurture that discovery impulse. The CEO must continually assess where the world is going and identify the critical tasks the organisation must accomplish to stay ahead. If these tasks aren’t completed, the CEO should be held accountable—whether that means being fired or stepping down.
At its best, the CEO is not just an administrator or a tiebreaker but the one who brings it all together and takes the necessary risks. Too often, organizations become like frogs in boiling water—gradually losing their competitiveness because everyone is afraid to take risks. The short-term pain of taking a risk seems more daunting than the long-term consequences, even though the long-term pain could be the loss of competitive advantage and, ultimately, the entire value of the enterprise.
Q: How do you identify how to break into competitive markets, and scale?
[Ron Shaich]: Since leaving Panera in 2017, I created an investment vehicle for my own money and my partner’s. Now, I’m the chairman and largest individual investor in Cava, which went public this year and has nearly quintupled in value since its IPO, making it a $10 billion company. I also have three other businesses that show great promise.
One of these is Life Alive, which focuses on plant-forward food. I’ve been working on it for seven years. Another is Tatte, an upscale Mediterranean bakery café with nearly 50 locations in Boston and DC, and it’s expanding to the tri-state area. Tatte is a $200-$250 million company, offering a unique blend of influences from the Middle East, Lebanon, Israel, and Turkey, bringing a fresh approach to food.
In addition, I’m involved in an entertainment business called Level99. It features a series of 40 to 50 different challenges designed for 20- to 50-year-olds, with a farm-to-table restaurant at its centre.
In all these ventures, we’re identifying niches where the tailwinds will be strong in the next five years. You can spot these opportunities by observing patterns, understanding customers, and having empathy. One of the most powerful business skills is the ability to listen, not just act. As entrepreneurs and business leaders, if we’re going to focus on what truly matters, it starts with understanding what matters.
So, I’d say job number one is identifying the niches where you can compete and have a competitive advantage. Then, in our case, we focus on scaling effectively. We’ve done this enough times—with Cava, Tatte, Life Alive, and Panera—to know what works and what doesn’t. It’s crucial to do it right and to have the right people working on it.
I want to challenge you and your readers with something. If you’re not breaking through and completing a job for certain target customers in a way that others aren’t, then it’s not worth pursuing. The world doesn’t need another enterprise or restaurant—it needs something that addresses a real need in a powerful way.
Take Cava, for example. Ten years ago, when they had just two stores and we first invested, it didn’t take a brain scientist to see that Mediterranean cuisine was a powerful niche. It was the number one diet in the United States, recommended by doctors everywhere. It offered bold, exciting flavours that were both entertaining and accessible. It was clear that these trends were strong, and someone was going to own that space.
So, we set out to make sure Cava would own that category. Once we were confident in our position, we led them in acquiring a public company five times their size because we knew we could do a better job in that niche. This strategy allowed Cava to quickly grow into a dominant position within the emerging Mediterranean niche. Today, people are saying it could be the next Chipotle, and it certainly has that potential.
The key is identifying a niche and ensuring you have the capabilities to build a position of dominance within it.
Q: What do you hope your legacy will be?
[Ron Shaich]: When people talk about legacy, they often focus on what they left behind and what it became. For me, legacy is rooted in the process and how we did things. I believe there’s a better and worse way to approach business—and life, for that matter. I’ve tried to share a better way to think about both.
Living your life smartly means asking yourself, “What will I respect in 5 or 10 years? What will people say about my enterprise in 5 years?” If there’s any legacy I hope to leave, it’s in the process—the way of thinking and the way of approaching life and business.
This isn’t just a business philosophy; it’s about how you think about life. Having watched both my mom and dad pass away, I realised that there’s a judgment day. I can’t tell you what it’s like up there, but I can tell you that if you live with a chronic illness, you’ll face a judgment day.
To me, what really matters isn’t the legacy defined by others, or what’s written in books. It’s about your own self-respect. What matters to me is building my organizations and living my life in a way that, when that final breath comes, I can respect what I did. It’s not so much about what I accomplished monetarily, but about how I did it and the principles I upheld along the way.