Building the Creative Company

When my wife, Kim Jordan, and I founded New Belgium Brewing Company in 1991,
money was tight, so we created a business plan that fit within the budget and
a custom equipment plan that fit within the 211 square feet of basement space
allotted to the venture. We were told that it wouldn’t work. Creativity,
supported with confidence and buffered with a bit of ignorance, was our
greatest asset.

Sixteen months later, we were selling all the beer we could make. So when it
came time to open a second brewing facility, instead of buying all new parts,
I scrounged old dairies for tanks and other stainless steel parts, allowing us
to rapidly increase production volume without compromising product quality.

Three years later, when we opened an all-new brewery, I again stretched my
creativity. In one project, three engineers, including myself, did the work of
12 to custom fashion the control system and piping for our state-of-the-art
brewing equipment from Germany.

In 1999, we were searching for ways to reduce brewery carbon dioxide
emissions, a natural byproduct of beer fermentation. A brewery co-worker found
that we could buy wind power from our local utility rather than invest in new
CO2 recovery equipment, resulting in a six times greater net CO2 emission
reduction, without any capital expenditures.

Now that the company is established – we’re the fifth largest craft brewery in
the United States, with annual revenue of $42 million and 175 employees - I
still tinker to find solutions for our equipment needs.

So That’s Creativity

In my mind, building a creative company comes down to examples like these.
It’s the ability to bring innovative solutions to difficult problems. A
reflection perhaps of my background in engineering, it’s a concept that
nonetheless works well for our company.

It’s also a concept that, I believe, would be helpful to other entrepreneurs,
especially those whose image is, much like our own, that of being “hip” and
“funky.”

Indeed, we were founded after a decade of beer-related soul searching on my
part. I had the classic beer experience in college. Then I “graduated” to more
flavorful imported brews. I dabbled – disastrously at times – in home brewing.
In the mid 1980s, when I toured Belgium on a bicycle, I learned about Belgian
beer “styles” and the role of major ingredients such as yeast.

By the end of the decade, I was scribbling back-of-the-envelope notes about
how to turn what was a passion into the business that became New Belgium
Brewing. It’s a business that reflects my ideals as well as my beer-making
fervor: a pair of founders as dedicated to preserving the environment as
building a company; “hippie”-type employees who want to work for great
companies and make great products; and a participatory management style.

All of which is somewhat ironic given that it has been my prosaic definition
of creativity – and not only when applied to manufacturing – that has enabled
us to prosper.

Beyond Engineering

In the management arena, where my wife presides as chief executive officer and
president, the difficult problem that demanded an innovative solution occurred
in during a period of particularly fast growth in the 1990s.

The long hairs who embrace great companies and products wouldn’t be willing to
remain with a company whose culture was in danger of growing out of that mold,
we were advised. Our solution was to enable them to become owners of more than
30 percent of our stock through an ESOP program and to allow access to all of
our financial records, except salary information. We even sponsored courses in
how to read a balance sheet. The intent, and result, was to create the
mind-set of an owner.

These “open-book management” concepts aren’t unique to us, but they have gone
a long way toward enabling us to preserve our culture, and even to tweak it in
a way that makes sense for a maturing enterprise. These days, employees who
are also stockholders don’t think twice about foregoing a quarterly bonus that
could be detrimental to the long-term value of their holdings.

Product Savvy

A difficult problem once facing our product line occurred a decade ago when it
was clear that one of our products, “Fat Tire™,” was accounting for fully 80
percent of sales. A consultant we retained advised that we jettison our other
products and even rename the company Fat Tire.

The innovative solution to that problem came right from the gut, and that was
to say no. We wanted to continue with the strategy that we had embraced from
the beginning, which was to innovate continually when it came to our specialty
beers.

In our line of about a dozen offerings, we recently turned to creativity to
envision how ale from the Brussels of five centuries ago might have tasted.
Although we found a recipe dating from 1554, we couldn’t discern the brewing
instructions. So the new brew, which we’ve named “1554,” arose from our
attempts to improvise while figuring it out.

Similarly, innovation has led us to work around the brewing mantra that holds
that high alcohol content enhances flavor. Wanting to design a flavorful beer
with little alcohol, which we would call “Loft,” we turned to the creative
solution of using spices.

Our Creative Future

On the drawing board for the future is a plan to turn our company into one
that goes beyond green - that becomes a model of environmental adaptation for
other companies. A current project, for example, is to assure that our new
warehouse and bottling facility is a net producer rather than consumer of
energy.

Already the first problem has surfaced, that such a “living building,” as we
call it, will be more expensive to build. Already, we are turning our
creativity toward the task of solving that problem.

Our definition of creativity has forged a company. Adapt it in the course of
building yours, and you will be richly rewarded.

© Jeff Lebesch
Co-founder, New Belgium Brewing Company