Larry (left), Christian (center) and Bobbie (right) Merritt look to continue growth at Merritt’s Bakery.

Larry Merritt can't put a finger on the precise date it happened, but after at least a decade of owning and operating Merritt's Bakery, Tulsa, Okla., with his wife, Bobbie, he experienced a serious attitude shift.

“I remember sitting around in groups at Retail Bakers of America (RBA) shows and different trade gatherings, listening to fellow bakers bragging about how many hours they put in on the bench the day before so they could be at the show. And Bobbie and I had to put in just as much time,” Larry says. “I remember very consciously thinking, ‘Having to work a 20-hour day just to be here at a trade show sure doesn't seem like success to me.’”

But the definition of success is personal. From their bakery's inception in 1979 to the late 1980s Larry and Bobbie operated a profitable bakery business they had built from the ground up. The early days were rough, but the bakery put food on the table and afforded the Merritts a good lifestyle. But at some point, Larry and Bobbie realized that the long hours and never-ending work schedule weren't the kind of success they were looking for.

“We felt like failures because we had to work those 20 hours,” Bobbie adds.

But the shift in thinking was a gradual process until their son Christian Merritt, originally an engineer by trade, made a career change and joined the family business. During the '90s, they had opened and closed several locations, experimenting with expansion with varying degrees of success. The Merritts wanted to build a company, not just a bakery.

But for any baker with pride in his or her craft, relinquishing control can be difficult. They first experienced this in 1993, when re-opening a remodeled midtown location. The business immediately took off, with lines stretching down the sidewalk.

“That looks like success to a lot of people, but that was failure,” Bobbie says. They killed their business because the two of them could only bake so much, and they couldn't capitalize on their own popularity. With four decades of baking experience between them, it was reasonable to fear delegating baked products bearing their name to less-experienced hands.

Andrea Fitzhugh, head decorator, concentrates on a tiger cake. Special order cakes represent one-third of total sales.

But having learned their lesson, they resigned themselves to the decision to become business owners instead of bakers. They hatched a 15-year plan that included the incremental introduction of systems designed to maintain oversight while slowly ceding control of production to employees.

Christian brought with him a systems-mentality and a bit of tech-savvy that may have pushed Merritt's Bakery toward sustained growth.

“When you decide to raise and grow a business instead of just work a business, it's a very different mindset,” Christian says. “You have to decide whether you are doing a job because it's a passion and you're doing it just for yourself, or if you are trying to make money at it and build a business. And you can't change all of that overnight. We're just now getting the pieces in place to start to treat Merritt's Bakery like a business, with a lot of parts that we manage from a distance. We're present but detached; we have our hands in a lot of things, but it's in managing stores instead of operating them.”

Systems approach

One manifestation of the Merritts' new approach was implementing systems and procedures to ensure the business would continue to run smoothly without the physical presence of Larry or Bobbie. Christian developed straightforward flow charts describing precise procedures for any number of potential situations, from everyday procedures to unusual events, such as an injury or a power outage. These systems give employees the tools to meet challenges by themselves, without constant guidance. Official procedures were actually the first step in automating the bakery, giving the Merritts a degree of separation between their employees and themselves. But no system was more crucial to the expansion and growth than the computer system, which was added in 2003.

Housed in the production facility, a central server manages everything from inventory coming into the bakery to orders delivered from the facility to each of the four locations. The point-of-sale software feeds sales information into the central server, so the Merritts have a detailed understanding of what's moving where and when. Different reports access and mine the data, crunching inscrutable numbers to produce meaningful information.

“And we use those reports a lot, especially on holidays. We have to make snap decisions on whether to continue to make more of a product or cut it off, depending on our capacity. Without our system, we'd be making phone calls trying to tie together all the pieces of information to create one picture,” Larry says.

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