Welcome to Season 12 of the Troubleshooting Innovation podcast. Joanie Spencer, editor-in-chief for Commercial Baking, is spending this season with Tony Martin, president of Martin’s Famous Pastry Shoppe. They’re exploring how this company has grown from a family-owned brand into a national icon. Sponsored by AMF Bakery Systems.

In the fourth episode, we hear how Tony’s family has passed down its values for generations, from supporting non-profits in its local communities to providing workers with benefits like a wellness program, profit sharing and more.

Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.

Joanie Spencer: Hi Tony, thanks for joining me again this week.

Tony Martin: Glad to be here.

Spencer: Okay, I am having a blast getting to know you and getting to know Martin’s from a ton of different perspectives, and this has been really educational. So, I am just thrilled to have this time with you this month. We’re going to talk about culture, and I think that this is something that Martin’s does really well, so I’ve got a lot of questions for you, so put your seatbelt on.

Martin: Sounds good.

Spencer: All right, so we’ve talked a lot about your view of the company through the lens of a family member, the lens of a baker and the lens of a leader. But when you think about culture, what does culture for Martin’s look like today, as opposed to when you were first getting started?

Martin: I think it’s interesting as a small company, of course, you work with ownership, you work with leadership directly. You know, there’s not many rungs from the entry-level to the president of a company, and so I think you kind of catch the culture much easier in that type of environment. Then when you get a little bit larger … I don’t know everybody’s name anymore. I’d love to, but at this point, you know, we have to figure out, “How do we capture the culture that we have intentionally wanted to present?” We want to make sure that it gets all the way to the bottom, to the top.

So, several years ago, we put a team together to talk about this subject: How do we intentionally share the values that we feel are important for our workforce and to all of our members? So, we sat down, and we strategically developed cultural value statements that we feel like were historical and that we wanted to present this legacy going forward. And so we wrote a couple of them, and I’m going to share a couple of them with you.

We want a person of integrity and respect. And what does that look like? Treat people the same way that you want to be treated, be transparent, identify and eliminate unethical habits. We want you to be a communicator on a unified team. These are all fancy, right? But we want to improve communication channels. We want you to be a contributor to the culture, so rigorously dedicated to extraordinary quality and customer service. Again, we’re only quality; we’re only good service. Otherwise, we don’t exist. We want you to be a proactive thinker, somebody who embraces a mindset of thorough and planning continuous improvement. We want you to be an ambassador for Martin’s. So what does that mean? Hey, when you’re having a picnic with family members, grab some of the product, take it with you and talk about the positives. And if you have somebody you think will be a good employee, tell them about your job and see if they might want to work there as well. So being an ambassador is so important, especially to a small company. We’re word of mouth, and we want to present who we are to people from top to bottom and have a consistent message.

So, we want to be very transparent. In every generation, we want to basically not have those changes that could happen to a larger company. We want to keep acting like we’re a small company. You have to be very intentional to do that.

Spencer: So, I’ve worked for large companies that weren’t always large companies, and I’ve heard stories throughout my life about big companies that are still trying to act like a small company. And so, there is sort of that bridge that you cross, and it’s a hard bridge to cross when you still want to sort of maintain those values, but you cannot function like a small company once you get past a certain point when it’s just in theory.

So, I love that you write down those values. And it made me curious, the list that you just read me, how does that align with what you saw when you were still just a grandson and just a son and not part of the company yet?

Martin: Well, I would say, it’s very similar, right? We believe that you should treat others the way you want to be treated, and we all felt that inherently when you’re a small company and how you’re treating people. So, we want to make sure that we define what that means so that the next generation isn’t trying to interpret, “What do you mean by that? What does it look like?” and so that we can analyze that.

I mean, even today, we had meetings that basically talked about, “How do we handle absenteeism? How do you handle the hard parts of your job? Do you have a black-and-white rule? Are there circumstances that need to be evaluated each time? How does that work in discrimination?” I mean, these are hard things that you go through. When you’re a small company, hey, you know everybody. You know such and such … you know your wife’s sick or ill, and you deal with it differently. When you’re a large company, some of those things you’re not aware of. And so you try to treat people all the same, so that you’re fair, but then ultimately that becomes a problem.

When I was first here, you’d have people hard up, and they would say, “Hey, could I have some money? I need to pay off my car, or the bank’s going to take my car.” At a big company, that’s a harder thing to do, but principle-based, you want to provide the same type of environment. So, some things are hard, but at the end of the day, you want to be able to take care of your people, because without your people, you really don’t have a business. And so, there’s that balancing act there.

Spencer: I think it adds another layer of complexity when, you know, we talked last week a little bit about how it’s now sort of an employee’s market. It’s post-COVID and the benefits that people had to keep them safe changed their perspective on their expectations for their workplace, and that just sort of adds a layer of complexity to those demands.

Martin: What we do from day one, we bring people in, and we talk about what we call the pyramid of success, and I talked about the attributes of that success. But we want to be, first and foremost, an employer of choice, because we know employees today, as you put it, it’s low unemployment. They have choices, and so you want to make sure that you’re one of those that they like. We also want to be a supplier and a provider of choice.

So those customers out there, like the large grocery stores and foodservice people, there’s lots of opportunities and lots of choices out there. So, we want to be one of those that top of the list; we want to be chosen. You need to be an investment of choice. The investors, not just us as owners, but every employee here is an investor, because we share in profit sharing, we share in opportunities for healthcare, and if we can provide as good or better healthcare, we want to share that with them. And then, most importantly to the family, is we want to be a God-honoring company so that we are living what we believe.

Spencer: I know that that is such an important part of your family, and I was just going to ask you: What are some of the specific Martin family values that translate into the company culture, and why are those values important, not only to the company, but to you as a leader and as the third generation?

Martin: Like I said the other day, we feel like we’re stewards of the business, and the business is made up of … every employee we have here is an investor in this business. We like to give back to the community. We try to make sure that we give more than 10 percent of our income away to nonprofits, because we feel like that’s what we’re called to do. And there are, you know, local community events and things like that that we participate in to try to, I guess, be seen in the community, that we are available for employment, as well as giving back to the community as best we know how.

For our employees, we like to make sure that, obviously, they have competitive wages, because we feel that’s important. You need to be fair to everybody. We do have a 401(k), we do profit sharing. A lot of companies do this, but we want to make sure that we do it right. We also put in, a few years ago, a wellness program. We have a company called We Care that actually has a doctor’s office with doctors and nurses that are within walking distance of our facility that they can participate in for no copay. So, this is a way they can have healthcare, plus their families. We provide basically all their medication other than, let’s say, narcotics at this facility for free. So, we want them to participate in that, because we feel like, if you have a healthy work environment or healthy worker, they’re obviously going to be happier, they’re going to be more productive, and they live a happier life. And that’s what this is all about.

We actually also provide a chaplain service. They walk around the facilities, meet the folks at lunch, and they actually kind of, you know, just, “Hey, how are you doing?” And it’s amazing how … everybody goes through rough times in life, and they may have a death in the family, they may have a wedding, and they will tap these folks, and they’ll come and participate in the funeral or a wedding, and those kinds of things. So, they’ve become folks that they really rely on. They basically just walk around and help them on a daily basis on, “Hey, how’s life? What can I do for you? How can I help you?”

Spencer: You know, I have to say, just personally, my father passed away in the early 2000s and the person who was in charge of the profit center where I was working came to my father’s funeral. I had a lot of coworkers who came to my father’s funeral, but you know, the woman at the very top came to my father’s funeral and she took communion, and I remember that moment just hitting me so deeply that she cared enough about me to come take communion at my father’s funeral. It did something for me, and not just made me want to work harder, it really gave me some loyalty to that job, but it also made me feel very safe. It made me feel seen and cared about.

I’ve since moved on, obviously, but it was a moment that changed me. And so, just on a personal level, I can tell you as an employee that to have someone reach out like that, it does make a difference. It really does. And of course, there’s research that says when you care about your employees and when they are healthy and have access to health care, there’s a tangible ROI when they don’t miss work and things like that, but just on a basic human level, it changes a person, and it makes their life a little bit better, especially in hard times.

Martin: I totally agree. When you go through a health event or a family member gets really sick, it puts everything in perspective. What’s important in life instantly. The things that you thought were important are not important. The things that you didn’t think were important … all of a sudden, it’s very important.

Spencer: Yes, and to know that you have an employer who sees that … it makes you feel a part of something, and not something that you want to walk away from, but something you want to grow with.

Martin: That’s our hope. We just want to treat people the way we would like to be treated.

Spencer: Absolutely, I think you’re doing a really great job at it, too.

So, I want to shift gears a little bit. We touched on this a couple of times a couple weeks ago. As a multi-generation, family-owned business, Martin’s really does emphasize that leadership positions are earned and not just inherited, and I did notice that you use the word “earn” more than once. Can you elaborate on your personal experience in earning your positions and then how that has impacted expectations that you have for your children or anyone in the next generation of the Martin family?

Martin: When I started at Martin’s, I started as their pilot, as well as learning the business in different areas. I think earning the position was to learn and understand from a company that didn’t have a lot of computerization … needed it, and so basically, one chunk at a time, we worked through the whole company, and I would say, earned the respect of each department as we installed software and also helped them manage their systems through that process.

You know, there are many late nights, and it wasn’t one of those things where you were going home at 4 p.m. and everyone else was staying late. You were part of the process of making this work or fail, and we had failures, and you learn from your mistakes, and you do something else.

As it relates to other parts of our business and other family members, we’ve all kind of earned our strikes. We worked in different areas, and kind of worked our way up and until we earned a position of authority or managerial, presidents or vice presidents, those kinds of things. The next generation, of course, we’re a little bit more sophisticated than we were, so there’s a little bit more that’s documented. We have a process in place, and we want them to understand their role in the business. I have one family member who’s considering going on to law school, so I think their hope is someday to maybe rejoin the company in that type of capacity. But again, I think you learn as you go. There’s no perfect solution, and I have seen it work different ways, at different companies and family businesses. But, at the end of the day, I think it works best if you’ve earned your position, and you live the job, too. You don’t just tell people what to do, you do it as well.

Spencer: Right. I agree with that. I do have a friend who, she is president of a local business here, and it’s a family-owned business. She knew at a very young age, high school, maybe even younger, that she would eventually be in a position of leadership in the company. So, she went to college to get a business degree, and she said, “I knew that that’s where I was going to end up, but I never wanted anyone in the company to look at me as though it was given to me. I had to do everything that I needed to do to earn that position, so that the company would look at me as a person who earned that position, and not just someone with that last name.”

So, I always admire those who earn their position, and I like seeing the evolution of the expectations that you have for the next generation. And I think that that’s a reason why there are four generations of Martins in the company. So that’s really cool. And you can tell Emily that her blog post had a big impact on me.

Martin: I will definitely do that.

Spencer: So, I want to keep talking about this sort of generational topic. We’ve talked about this labor crisis. Prior to COVID, it was boomers versus millennials, and we Gen Xers were just sort of sitting back watching the battle. But there really was this different mentality, and it’s the old school way of just rolling up your sleeves and wanting nothing more than the pride of a hard day’s work, especially when in a manufacturing environment. Younger generations don’t have that mentality. They don’t subscribe to that.

As someone who has been in your family business for three generations, how have you seen that mentality evolve? What did that look like? Where did it start shifting?

Martin: Yeah, I would say we definitely saw a shift, like you mentioned, prior to COVID, where ­— we’ll call it the newest generation — were entering the workforce. Again, I came out of the IT side, so I would think it was even exaggerated in that field, but there was an expectation that they should have accelerated growth in their in their job and their responsibilities. No longer was it, “I earned my spot; five years later, maybe then I’d become a supervisor or become a project manager.” There was an expectation that, after a year or two, I would like to see, “What roles of responsibility can I have now?”

So, we’ve wrestled with that, and it’s been a little bit tough, because, like we say all the time, somebody has to take the garbage out, and nobody wants to take the garbage out. So, you have to figure out, is that a shared responsibility? Can you create levels within the company? We do that with our manufacturing maintenance folks … that’s one of the hardest areas to hire into. But we created levels. So, level one, you’re off the street, you really don’t know much, you’re maybe a good mechanic, but you don’t know our equipment. So, we actually created tests internally so that you could go to level one, two, three and four. And then, of course, we had compensation packages that aligned with that, so that we could, obviously, pay them more when they were more skilled.

So, we’ve done that with the maintenance folks. We’ve done that with our IT group. The more that you know about our systems, the bigger salary you can have. I would also say it was a cultural change. It’s not all bad for society. We learned through COVID that people all of a sudden started enjoying being home with their family, and so they wanted to spend more time with their family. Personal time became more of a priority than a bigger paycheck, let’s say it that way. So, we’ve had to adjust and understand that their priorities have changed, and to be successful, we have to kind of ride that carefully.

We can’t have everybody working from home. Doesn’t work in all jobs. You can’t have your bakery employees working from home. It just doesn’t work. But there are different jobs that you can provide an opportunity for that. Of course, during COVID, we did that as much as we could in order to provide a safe work environment. The cultural change in that becomes a challenge, because your head count can go up and your productivity may not. So again, I think it’s been a societal change that there’s just a general acceptance that we’re not quite as efficient as a country as we were. But I keep telling everybody, we don’t know where we should land. I said, “Well, after five or six years post-COVID, the companies who survive will have chosen the right path, and the ones that are struggling didn’t.” So, we don’t know who they are at this point.

Spencer: Yep, very true.

Martin: We’re getting close.

Spencer: You know, I do think — and you’ve touched on it in that response — it’s different for manufacturing. These new needs and demands that workers have, just like you said, you can’t work in a bakery from home. But there’s also this need for more of the softer side of life, I guess. That culture plays a central role, and that’s this idea of needing purpose and this sense of belonging. How do you see those kinds of needs fitting into a manufacturing setting? What advice would you give other bakeries if they want to be the ones in a couple of years when the dust settles that they’re still here?

Martin: So, we try to start off by reinforcing the fact that we are a small business or a small family group. And how do you do that? When we onboard, we actually created — we mentioned this a couple weeks ago — the original bakery, which was a garage, and we actually bought it, brought it on-site and set it up just like the old bakery was. And so, one of the first things that we do when onboarding is we actually give them a tour of this. We call it the Golden Roll Museum. We have little oven in there, a little proof box, and all the places. It’s laid out just like we would have done, made the donuts and all those things. And then we have some videos of the old way of making product we have here and through the years. We actually have one of the original cars that we used to transport products to market. We want them to understand where we came from, and that if you forget where you came from, you’re bound to make mistakes going forward.

So, we start out the first week doing that. And then, of course, we reinforce this is what it means to work in a bakery. Because we want people to, frankly, decide the first couple days, is this what I want to do? Because there’s nothing worse than having somebody stay a few weeks and then quit. We would rather them know upfront, “Hey, this is what it’s like.” We try not to paint a glorious picture. It’s hard work, and some days it can be hot. Our bakery is air-conditioned, which does make it not so hot like when I worked over there, you know, we didn’t have air conditioning. We had to walk uphill, both ways.

Spencer: In the snow!

Martin: In the snow, right? So anyway, we try to onboard that and be very intentional about our culture, who we are, who we want to be, and then we try to reinforce that.

Spencer: That’s really amazing. And thinking … I just have to laugh, because it’s air-conditioned, but there’s still a giant oven.

Martin: Yes, correct.

Spencer: So, it’s not quite as hot, but it’s still hot. But I do like what you said, that you’d rather know up front, and I can only imagine that you get probably one reaction or another when people are able to experience where Martin’s came from and where it started. And it’s either, like you said, “This is where I want to be.” or “How could someone have done that? This is not for me. I was just here to collect a paycheck. I’m going to go to the convenience store down the street and work the cash register.”

Martin: Right. Yeah, very much so. I mean, obviously there’s a lot of standing around in a bakery, especially an automated bakery, so they don’t necessarily know what they’re in for until they actually come the first week and observe.

One of the first things we do is we take them on a walk through the bakery and observe, “Hey, this is where you’ll be working.” And some, you know, gravitate to the fact that, like, “Yeah, I don’t think that’s for me.” And that’s okay. We’d rather know that up front.

Spencer: This is an area that ABA is actually working on as part of its new strategic plan. So, I’m curious, Tony, as a board member, can you sort of elaborate for me a little bit on what ABA can accomplish with this goal of bakery being a destination workplace, and how that goal aligns with Martin’s culture?

Martin: Yeah, you know, destination workplace … It means to us that it’s going to be easier to find employees who want a career in baking. And I think at this point, a lot of folks don’t know what a career in baking could look like or should look like. Everybody feels that they don’t know much about a job until they’ve actually experienced it. So, I think ABA is working hard to find partners that will basically expose what it’s like and how you start in baking and where you can end up. And make it a more desirable job preference for folks.

We’re trying to do it as well, even at a local level, working with our vocational technology schools and trying to make sure that they understand that you don’t necessarily have to go to college if you don’t want to, and you can actually career in something and be a professional, albeit in the bakery, as a supervisor on the line or a manager. We want it to be like a destination workforce, somebody that really is starting out in life. “Hey, I want to be a baker,” or “I want to work in a production facility,” because there’s so many benefits to it versus other jobs.

A lot of jobs, you know, you take home with you, but if you work in a bakery, in manufacturing, a lot of times when your shift’s over, you can go home. You can spend it with your family. You can spend a weekend, or whatever days off, and you don’t have to necessarily worry about what’s happening back at work. There’s a lot of benefits to some aspects of it. We know a lot of people do just come to work to collect the paycheck, and that’s okay. You know, if you’re really good at what you do and you care about what you’re doing when you’re there, you can sign off when you leave and you hang it up. The rest of us have to take a phone and be available for emergency calls and things like that. So anyway, I just think that the ABA getting behind it and trying to help educate the general public on what it means to work in a bakery can do nothing but help our ability to find good resources who want to work in the bakeries.

Spencer: You know, I agree, and I would even go so far as to say there is this trend — and I think it’s simmering just below the surface — that conversations are starting to happen about trades. I am seeing out there, just these conversations doing the math of a starting salary for a trade versus the amount of investment in education to get to that starting salary. These conversations are starting to emerge, and so good on ABA for getting in front of this and really starting to participate in these conversations now, because I do predict that there will be momentum on this in the next five years or so.

Martin: I totally agree with you. The debt they’re coming out of school with and being able to find good jobs is becoming a reality that wasn’t necessarily good ROI. So, trying to figure out how to get around that … and some people actually like to work with their hands, and they don’t want to sit behind a computer. So, I think for a little while, we felt like in the future, everybody was going to sit behind a computer, and that’s not going to be the case.

Spencer: That’s right. Culture doesn’t necessarily mean what’s going on on the bakery floor, even inside the walls of the company. Community involvement — you’ve mentioned it a couple of times over the past few weeks — plays a big role for Martin’s. Can you sort of talk about what some of the most important community causes are for the company and for you personally?

Martin: Yeah, as a family and family business, we donate over 10 percent to philanthropic organizations, which can be anywhere from the Red Cross to different places like that. We also support a number of Christian organizations in the area. We support some colleges in the local area. We try to help fund them, some schools, some Head Start programs and things like that locally.

But from a community standpoint, like I said earlier, we participate in some of the local fairs. We have a food stand where we provide all the bread and rolls, and that’s able to help organizations that are trying to raise money for their organizations. So, whether it’s a girls club or the Boy Scouts, if they need product, we give them the product, and they make sandwiches, and they sell those sandwiches. So, it’s a way for them to leverage their labor and make money for their group. And that’s a good way to do it; it’s a partnership.

Spencer: Yeah, I really like that. It gives them the autonomy to earn their fundraising through a gift that you give them. I like that a lot.

So, I just have one more question for you this week, and that is: What is the key to translating corporate responsibility — we could say that’s the company — into its culture, which would be the workforce. How do you make what’s important to you and what’s important to Martin’s, important to all of your associates?

Martin: That’s a very good question. We try really hard on this subject. We actually measure each year. We do the Best Places to Work survey, and what we learned from that is what we’re doing well, what we need to do better, and then we make modifications to what we do.

But one of the things we do, was to create a spring and fall profit sharing, which was a shorter time fence, so that everybody would look at it the same way to say, “Hey, we’re all benefiting. Hey, we’re having to work extra hours, even if your salary, and how do I benefit from that?” Well, we have a profit sharing that goes along with that. So, one: profits. If your profits are up, obviously we’re efficient. If the profits are down, we’re not so efficient.

We do regular, what we call State of Affair meetings. We meet with our employees regularly and tell them, “Hey, this is how we’re doing. This is what our plans are in the near future.” We share with them some of the stories from our customers to try to get them on board, because they may not know what countries we serve or what states we serve, who our customers are, because they’re, you know, maybe in Chambersburg or Valdosta. So, again, we meet with all of them on a regular basis.

We also write what we call the MMM, or the Martin’s Management Minute. Every two weeks, a little blurb goes out, and we put this in the lunchrooms. Again, it’s just a microcosm of what’s happening right now and what we’re excited about and what’s coming about.

We believe in six-month reviews with our employees. That’s hard when you’re when you have as much going on as we do, but we’re trying to meet with them on a regular basis, tell them again what’s going well. You know, what do you want to do in your life? Where do you see yourself in six months or a year or two years? So, try to have some idea of what kind of career path they’re looking for. So, we try to keep that regularly updated. And then again, I mentioned the annual survey, which is basically reinforcing what we’re doing well and what we can do better.

Spencer: That’s awesome. So that’s going to wrap up this week, and it just leaves us one more topic for next week, our last episode, and I’m excited that it follows this episode; I think they kind of go hand in hand. But we’re going to talk about marketing.

And you did mention … I think it was last week you mentioned talking about Martin’s growth and that a lot of it was grassroots and it was without marketing, but now you’re sort of this national icon, and you’ve got a super cool mascot that I cannot wait to learn about. So, for now, I’m going to say thank you for another exciting conversation, Tony, and thank you for your time and your insight.

Martin: Well, I appreciate being here and all these good questions. Hopefully other people can learn from them.

Spencer: I think they will. All right, I’ll see you next week.

Martin: All right. Thank you.