Ask John Bole, CEO of Yokes Washington Foods Inc., the secret to the success of the Spokane-based chain of nine grocery stores, and hell tell you the story about the floral department manager who wanted to sell Beanie Babies.


The store manager knew it was a mistake. The floral merchandiser knew it was a mistake, he recalls with a wry smile. Heck, I knew it was a mistake, but I said, If she wants to do it, go for it. How much can we lose?


To his surprise, the Oak Brook, Illinois-based Ty Inc.s Beanie Babies became a nationwide sales sensation, and Yokes ended up being one of the few grocery chains in the country with a contract to distribute the highly-sought items.


To Bole, the story serves to illustrate the success the employee-owned grocery chain has achieved by encouraging its nearly 800 employees to think like entrepreneurs and manage the areas of the stores where they work like owners, rather than employees.


In a Spokane-area market that grocery-industry observers have identified as one of the more competitive in the nation, Yokes has made a lot of news recently for a small, locally-owned chain.


In June, the company announced a major remodeling and growth campaign, saying it would retrofit four stores, starting with its Indian Trail store, and add a new store. On Sept. 13, it said it would replace its Airway Heights store. On Sept. 25, it announced it would build a new store at Argonne Village.


Those projects add up to a big commitment, but Yokes has achieved steady growth over the last four years since Bole joined the company, and Bole says theres probably more expansion to come.


An experienced auditor who holds degrees in accounting, literature and law, but who had no prior experience in the grocery business, Bole became CEO in 1997. The company has increased its sales an average of 6 percent in each year since 1998, and that trend is expected to continue this year. Bole declines to disclose other specific revenue or profit figures.


Moreover, since its Mead supermarket on Market Street was named National Store of the Month late last year by Progressive Grocer Magazine, a national industry publication, Yokes has decided to adopt the same Fresh Market theme in its retrofits and new store construction.


Yokes recent growth is all the more remarkable, given that some of its competitors here have slowed their growth or even contracted, and the company was widely regarded as a prime candidate for bankruptcy or takeover just five years ago.


We were on the brink, acknowledges Bole. Morale was in poor shape. We were losing money, and we had a bank that didnt really want us.


The key to the survival of the company, founded by the late Marshall Yoke in 1946, lay in reviving what remained of the companys friendly, small-town-grocery legacy, Bole says.


Chuck Yoke, who followed his father, Marshall, ran the business for a lot of years and sold it to his employees in 1990. He was very popular with employees and had a way of inspiring people, Bole says. Some of our people had been with us for a long time, and for them, those were the glory days.


To Bole, those people were Yokes greatest asset.


People policies and marketing are very integral, he says. With competition so keen, there was an almost militaristic or harsh culture in this industry, he says. We wanted to create an environment where people had fun at work. If you do that, customers will respond. It translates into better service and better marketing within the store.


The concept was intended to distinguish Yokes from its larger corporate competitors, he says.


Theres already a Safeway and theres already an Albertsons and theyre better at being Safeway and Albertsons than we will ever be, says Bole. But I know most of our employees by name, and weve gotten some great ideas from our operational employees, which is something that would be a lot more difficult for Albertsons and Safeway to do.


The companys efforts to create a culture that rewards risk-taking and encourages employees to come up with what Bole calls that crazy idea had much to do with the development of the Fresh Market concept thats proven so successful in the companys Mead store. The Fresh Market concept utilizes a creative, point-of-sale approach to merchandizing, based largely on a rural country theme. While each department has its own, often rather whimsical, theme, features of the overall theme, such as decorating the Mead store with antique farm implements that teams of employees scavenged from Spokane-area barns and garage sales, carry throughout the store.


That stores connection to the fruit growers in nearby Green Bluff isnt limited to decorations.


Our produce manager, for instance, has pretty much complete autonomy to merchandize how he wants and buy as much as he wants from Green Bluff growers, Bole says. My approach is, lets give employees a unique challenge and see what they can do.


Employees suggested members of their ranks be used in Yokes print advertising, he says, prompting the chains current ad campaign, which features individual meat department managers posing in cowboy hats in front of a herd of cattle.


Bole asserts that Yokes reputation as a fun place to work is reflected in the fact that his company continues to hire employees who contact Yokes while theyre still working for other supermarket chains. Many of Yokes butchers and scratch pastry bakers joined the company when other chains cut costs by deciding to sell pre-packaged meats and pastries in their stores, Bole claims.


Bole expresses confidence in Yokes plans for continued expansion, saying that once the current remodeling and construction phase is completed, he expects Yokes will construct an additional new store about every 18 months. He says those stores will probably be located within the area served by Yokes primary supplier, Spokane-based wholesale grocery cooperative URM Stores Inc., which distributes primarily in Washington, Idaho, and western Montana. Predictably, he sees the continued development of Yokes employees as a key to the chains future growth.


The challenge will be finding people with the same passion. Our No. 1 hurdle is the continued development of qualified store managers, assistant managers, and department managers, he says.


To that end, Yokes has placed a major emphasis on promoting from within, as well as on developing programs to identify promising employees and to train them to be leaders, says Bole.


If we can take someone working in the deli and give them the skills to be a store manager, they can take a lot of pride from that, he says. It can mean a great deal to them, and it can mean a great deal to us.


Yokes has started using its older and smaller River Ridge store at W. 4507 Wellesley as a training facility for employees who demonstrate management promise, Bole says.


Its changed from being viewed as kind of an end-of-the-road assignment, he says. Its now, Hey, we believe in you and so were sending you there to try some stuff and see what you can do. And if you make a mistake, cool!


Yokes continues to reinvent itself, but Bole only hints at the changes to come.


There are some things we may be doing in the future that are completely beyond the scope of what groceries have traditionally done in Spokane, is all he says. I think youll see us taking some measured risks.


Yokes also operates supermarkets on East Sprague in the Spokane Valley, on North Foothills Drive in North Spokane, in Deer Park, and in Sandpoint and Kellogg, in North Idaho.