The perfect mix Featured

7:00pm EDT November 24, 2006

Whoever said that business and pleasure don’t mix clearly never met Greg Koch. When Koch and fellow beer aficionado Steve Wagner founded Stone Brewing Co. in San Marcos in 1996, the duo began building a team that, while diverse, shared one defining characteristic.

“Essentially, everyone here is different in every imaginable way, with one single point of convergence, which is a love for what we do,” Koch says. “That passion has been absolutely critical to what we’re all about and to our success.”

Now celebrating its 10th anniversary, Stone has experienced explosive growth in recent years, with revenue of more than $12 million in 2005, a 100 percent increase over 2002 revenue.

Smart Business spoke with Koch, chairman and CEO of Stone Brewing, about how his employees’ enthusiasm for brewing drives his company’s growth.

Q: What is the most important thing the CEO of a growing business must do?

You’ve got to be true to why you started and what you want to accomplish, and if you’ve changed from that, to really understand why. Was it because the original concepts and values were not valid, or because they got lost along the way?

It’s always good to bring a certain level of ignorance into business, the old ‘not knowing you weren’t supposed to do it that way.’ That, of course, is why people do new things and do things [about which] the veterans of a particular industry might have said, ‘Oh no, you’ll never be successful doing that.’

Our culture has stayed very similar. We’ve gotten larger, but again, we’re a passion-driven company, so we’ve been very careful to maintain that ethos.

It has been a challenge to keep focused on that passion from Day One. You get hit from a lot of sides, maybe even more so in the start-up phase. In the early days, we were certainly passionate, but we weren’t so certain we could afford to be passionate.

But we were bold enough to stick to our guns and maintain our philosophy, even though many naysayers were around.

Q: How can other business leaders inspire passion in their own companies?

They should make sure they’re doing something that’s worth being passionate about. In the simplicity of that statement is the beauty of it.

Literally, if you’re in a business that is concentrating on making something that is in the realm of the lowest common denominator — the cheap, the inexpensive, the for-the-masses — that’s something that’s very difficult to inspire people with. Of course, a lot of companies talk about wanting to be inspirational or to inspire their staffs, but then they intentionally set out to do things that, by their very nature, aren’t very inspirational.

What can you do if you make widgets, which are not necessarily good at inspiring passion? What can you be passionate about? Well, maybe you can be passionate about the ethics of your company, etc.

Q: How important is it to take risks?

It depends on perspective. For example, if we put out a beer that is really different from anything else — nobody is asking for a beer of that style, but we think it’s absolutely terrific-tasting and we really enjoy it ourselves — is that a risk or is that not a risk?

We already know what it tastes like, and we have great taste and we release it. I think that means we know what we’re doing.

You want that risk-to-reward ratio to be in decent balance. The idea isn’t just to throw stuff against the wall and see what will stick; you want to make educated risks.

Sometimes you have to go with your gut, certainly, especially if you’re in an area where you feel you’re privy to things that maybe not everybody else might be keyed in to yet.

Q: How does a leader’s responsibility change as his or her company grows?

You need to learn new sets of skills to deal with a larger company. And you have to be willing to be flexible and to change yourself as you’re asking others around you to start approaching something from a different perspective from the way you used to do it.

In many cases, you have to work hard to make sure you don’t have to make those kinds of changes. Sometimes you’ve got to bend over backward in one direction or the other so you can maintain that original culture.

My job is to make sure we have the framework in place within which people can be a part and contribute and get excited about what they do here, and to make sure that I steward the path of Stone Brewing so that we can maintain the focus of what we’re all about, which is great beer.

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