The Empire Rules

Do you remember Crumbs Bake Shop? In the early part of this century, cupcakes became the latest craze, especially after the popular television show, Sex and the City had their cast of characters eating Crumbs' baked goods on New York City streets. Crumbs started opening shops in New York and expanded to Philadelphia, Washington, D.C., and Beverly Hills, among other cities.

But at the same time, hundreds of other cupcake bakeries opened across the U.S. Among them were Sprinkles Cupcakes, which launched in 2005; Cupcakes Nouveau in 2007; and Georgetown Cupcake in 2008. Yet Crumbs' was still the powerhouse of all cupcake enterprises and was named as one of Inc. Magazine's 500 fastest-growing companies in America.

With more than two dozen shops opened around the U.S. in 2010, Crumbs generated about $1.8 million in net income on $31.1 million in sales. They estimated that it would double its profit to as much as $3.9 million the following year. 

Crumbs' troubles began though in mid-2011 when it was orchestrating a massive expansion. Store sales started declining as the cupcake market was rapidly growing more crowded and competitive. Analysts began warning of a possible cupcake bubble. Crumbs was also plagued by high real estate costs, according to Darren Tristano, executive vice president at the food industry research firm Technomic.

Before long, Crumbs, once a powerhouse, was gone. Why? Because Crumbs failed to adhere to The Empire Rules, which help successful teams and organizations stay successful. The Empire Rules derived from the failures of the Roman Empire.  

THE EMPIRE RULES...

1. SAY NO TO MORE. Tightly close ranks when successful. Hire new at a snail's pace. Too much growth can kill the quality. Remember, everyone wants to become part of a winning team; everyone wants an association with winning. Therefore people come out of the woodwork to volunteer, to assist, to "be apart" of something special. Remember, the success achieved came from not having many people—less was more than and now. Crumbs Bake Shop opened locations all over the United States, paying huge renting fees for spaces that forced their product to become unreasonable prized. 

2. DIG DEEPER HOLES. Dig more in-depth about the details in every facet of the organization. It's human nature to cut corners when you have been successful. The adage, "I can do this with my eyes closed," is the first sign that the finer details are slipping. Instead of doing several different styles of cupcakes well, Crumbs decided to become the king of different kinds of cakes, which cost more money to produce. They ultimately had less quality control and broader margins for error. 

3. REWARD FOUNDATION BUILDERS. By keeping the circle of team members small, it enables a better distribution of the money. Reward the people who built the foundation, not the ones who came along for the ride. 

4. BE CAREFUL ABOUT NEW. We live in a technology-driven society. We are curious to find a better path. Measure each new idea before implementing it. Don't be afraid to change, but follow Coach John Wooden's great advice: "Be quick, but don't hurry."  

Having success is a great achievement. Don't ever forget the "hows and whys," which enable victory. Never allow success to enable uncontrollable growth. Take your time and go slow. Never chase the money, always your passion!

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