Welcome to Season 16 of the Troubleshooting Innovation podcast. We’re spending this season with Dale Easdon, CEO of Klosterman Baking Co., to discover how this leader is carrying a legacy name into the industry’s future. Sponsored by Bundy Baking Solutions.
In our first episode, get to know Dale and how he made his way into the baking industry.
Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.
Joanie Spencer: Hi, Dale, thank you so much for joining me for this season of our podcast.
Dale Easdon: Thank you Joanie. It’s a pleasure to be here today, and I’m looking forward to the session.
Spencer: So today, in this first episode, we’re gonna get to know you a little better. And I think you have a very interesting career path. And so, you’re relatively new to the baking industry, but not to food manufacturing. I was looking at your career path, and I kind of want to go all the way back to where it started. And it looks to me like that was in the airline industry.
Easdon: Actually, there’s a little spell before that. I share the story that myself and my younger brother, Edward, the two of us both went to culinary school with the mentality that we’d become chefs, we’ll never be unemployed. And that was actually quite a true statement because, you know, in 45 years, I’ve never been unemployed.
So, my brother and I both started in the culinary school in the food industry in Bonnie, Scotland, where I’m from. My brother is still in the food industry. He’s with one of the largest meat companies in Scotland. And I obviously, you know, I moved away, and I’ve been living in the US for a good number of years.
So then I did a little bit of time in restaurants to learn more of the trade, but then went into the airline side of the business, where I went into airline catering. So yes, but we did start at culinary school.
Spencer: Okay, so that was gonna actually be where I was gonna head with that question, was the order of your interest. Did it go from culinary to business, or business to culinary? That’s good to know. How fun was it to jump into that with your brother and sharing that passion for food?
Easdon: Yeah, it’s always remained. And my 35 years both in the airline side of the business world, I spent some time in agriculture, and of course, you know my career now is in the bakery industry, but I’ve done everything from the ground to 35,000 feet, and I’ve done that worldwide. But I think the catering side and the culinary side has always been a really, really strong foundation for me. I obviously, very quickly, I then went into the business side, went to business school and studied business management, but my culinary excellence side has really helped me as a really strong foundation.
And I think it’s something I do. And of course, my spare time, which I don’t have a lot of, but when I do, I absolutely love to cook, and so that’s what I generally do to relax is cook. So, I think that whole side has been a great start for me.
Spencer: Okay, so typically, people either love to cook, or they love to bake. Because each side requires a very specific mindset. There’s a lot of creativity and making it up as you go along, so to speak, on the cooking side. And on the baking side, there’s all this sort of precision that comes with it, and every single move that you make impacts the outcome. You’ve spent a lot of time on the culinary side and food services and prepared food. So, from a mindset standpoint and from a career standpoint, how did you discover the baking side of food, and specifically Klosterman?
Easdon: Yeah, well, the first half of my career was predominantly the airline side of the business, basically putting meals on aircrafts. So, there’s a lot of complexity of you’ve obviously got to calculate every product you put on. There’s a fuel bond calculation, just on weight. So, it’s not as simple as putting meals on an aircraft. There’s a whole calculation behind everything that you do. And of course, you’re catering on aircrafts 40 to 50 feet off the ground. It’s a real tricky business, but it really taught me the complexity of managing that.
The second half of my career, I then started to focus on private equity. So, the PE group who purchased Klosterman three years ago, based in Boca Raton, who they called New Water Capital — they’re a great team — this is my third assignment with New Water Capital.
Prior to this bakery project, I actually had a meat company with them in Denver, which we held for three years, and then we sold that business.
Then I actually was planning to take a little bit of a break, go back home to Scotland, be a rogue family. So I took a six-month break, and then consequently, they spoke to me about coming into Klosterman, and I joined the advisory board first. I came to a couple of board meetings, found it to be really, really interesting, and then the opportunity was to come in as the CEO and president, which I jumped at that opportunity. So, I’m now in my third year with the team and with the company, and I have to say, it’s been one of the most exciting adventures I’ve taken on in the baking industry.
I had no background in the bakery side of this, you know, this space, but it’s been fantastic, and I’m so glad I took the opportunity.
Spencer: That’s awesome. Okay, I’m curious about some of the similarities and differences, like operationally, that you have discovered in these three years. Like, what are the parallels and the differences between prepared foods and bakery?
Easdon: Yeah, well, the first is common in both sides, which is, you will never be successful unless you have an incredible workforce with passion. And in all of my business spaces, I’ve enjoyed having a great workforce. Our associates are everything to me. Always have been. That’s my leadership style. I like to be in the middle of it.
I always teach my team, ‘We don’t make money in the office, we make money on the floor.’ So I like to spend a lot of time in the business and in the bakeries. What I can say, however, in the bakery industry, which is incredible to me, to all the other spaces, is the seniority of our associates. And we actually, this afternoon, we have a celebration with our payroll leader, just an example of 40 years in payroll. This one department. We actually started with 50 employees, and today we have 1000. And we have the same payroll manager.
So, you know, when you think of seniority, and just one year ago, we celebrated with an employee who had 50 years in the bakery one of our Cincinnati bakeries, 50 years in the same bakery in the same department, and we presented him with a brand new car in recognition of 50 year service. We funded the whole thing and crossed it off for the tax, etc. And it was our way of saying thank — and I have to highlight and digress slightly to say his wife was behind the whole surprise of the presenting with the car. He had to come to headquarters. She told him there was an error in her paycheck, and we had the press there, we had the local news there and presented them with a car.
But I remember his speech, he highlighted that his wife only had 36 years with the company only. So, in that household, 86 years of dedicated service to Klosterman Bakery. I mean, it’s remarkable.
So, between that and then, of course, having a leadership team that basically has to really learn some of the business aspects. What we did have is a leadership team who certainly knew how to bake and how to produce product. What I was going to bring to the table for them is more, as we’ll talk in some other episodes about operational excellence, Lean principles, Six Sigma, and teaching them that. That was one of the big transformations.
But I would say, though, that the employee foundation is the strongest I’ve ever experienced worldwide, and that’s both in seniority, commitment to bakery and a willingness to learn. It’s absolutely incredible in this company, from the top to the bottom.
Spencer: I would say that’s indicative of the industry. We’re known for that in bakery. That you get in, and you don’t leave. And you might bounce around to different companies throughout your career. And that’s more, I think, of a generational thing. Younger people like to have more work experiences than just one company, but they stay, they stay in the industry. And I do think that that is a testament to companies like Klosterman, who have been around for 100 years or more, who create a culture, who have a good working environment. It’s very representative of this idea that all we’ve got to do is get people. We’re competing with Silicon Valley, we’re competing with the auto industry, but if we can get them into the baking industry, they can see that there are opportunities. There is longevity. It has staying power, and it is very tight knit. The baking industry is a community.
Have you felt that since you’ve been here, this sense of community overall?
Easdon: Oh, absolutely. It’s incredible. And I’ve enjoyed the energy that comes from all the teams I get to work with. And there’s a real strong passion about getting a great product in front of the customer. And this industry is second to none when it comes to that. And you’re absolutely right, as you know, I’m on the board with the American Baking Association, and I get to meet all the other incredible leaders from the industry, and they all have the same passion, from the top to all of the bakeries. It really is remarkable, and it’s a wonderful thing.
If you start with a strong foundation of passion for what you’re trying to achieve, then all the other tools that you start to lead into the business, then becomes a little bit easier, because there’s just such a willingness to learn. And I found that as well.
Spencer: Yes, and I think that there is this really distinct sense of pride that comes with knowing you’re feeding people, as opposed to creating an app or a piece of technology that people use, or making a car that people drive. Those things are important, and they’re a big part of society now, but we couldn’t drive our cars or use our apps or our computers if we couldn’t eat. and so I do think that there is that very distinct sense of pride that comes with creating these products.
Easdon: Yes, I agree totally.
Spencer: When you look back on these three years, do you have any moments that you could point to that were sort of eye opening, where there was maybe an aha moment or, like, ‘I wasn’t expecting that’?
Easdon: You know, there’s, there’s a number of them. I would say that one of the key learnings for me that I had never experienced, and again, I’ve been in food all these years. For me, it’s kind of almost a living organism of bread. Every yeast batch can be different, and the science behind yeast, the temperature outside and the humidity can affect the baking process. There is fermentation versus new systems, and the differences that creates in the quality and taste and texture of the bread. There’s a difference in flour. Flour can have high protein. I had absolutely no idea about this. For me, that is almost the simplicity of it. But it must be quite straightforward to bake bread. You know, we’ve obviously been doing it since the beginning of time. And then you find out when you’re doing scale, the science behind it. And that’s, that’s the key part for me — that’s the biggest light bulb — was really underestimating just the science and the technical expertise that is needed behind it.
One of the senior members of the team was very clear with me, saying that we must have expertise in every bakery, who is that master, excellent Baker. And we actually, one of the first things we did is created a team, so we actually have a leader based at headquarters, and we have one member of the team in every one of the bakeries who are the experts in bakery, who report to him. And Kyle is just an incredible leader. And every time I see him, without exception, he is covered in flour, and that’s because he is in the middle of the bakery. And one of the things we did that was actually five of those great leaders. We sent them to Xavier University to learn and actually to get us a qualification, a teaching qualification, so that they could actually come in and teach our leadership and associates, the true science of bakery.
So that’s kind of the biggest light bulb for me on that side, I would say that I guess I underestimated before I came into the industry. And it’s probably the biggest learning for me as I’ve come into the industry as well. All the other you know, day-to-day things that you will receive as a CEO in a company, a large company like this, those you know I’ve experienced.
I think the second one is, I do, jesy, but I almost say that it’s almost easier to get a new aircraft than it is to get a lost piece of equipment in the baking industry. Everything seems to have an 18-month to two-year cycle time. And we have ovens that operate perfectly well, that make a beautiful product, that are 50 years old. Our company is 130 years old. You know, I’m the old guy in the room now, but I do have leaders that are actually a lot younger than my equipment. And one of the big changes done with the private equity guys, they’ve been incredible, is giving us a substantial amount of capital investment to renew equipment. And I guess it’s a learning and a frustration. I’d love to put that new equipment in today, but on average, it’s a 12-month cycle time to 18 months to get this new industrial equipment. It’s a long cycle time to make the changes needed for future investment, for speeding up the process and so forth.
That’s been a big learning for me. That seems to be a little bit slower than other industries. And to be fair, COVID didn’t help that situation. That did slow down the process. It’s been a challenge. However, you know, we know how to operate, and the guys do a great job, and we are now starting to see those orders coming in.
I’m excited, in one of the bakeries, we closed down for seven days and put in a brand new mixing system, which is incredible, you know. But it’s a 12-month cycle time to get. But, you know, it’s okay. We get round it. We know how to deal with it now, and I’ve certainly learned, and it’s we just place orders further in advance to upgrade our bakeries as we go forward. So that’s, that’s another big learning for me.
Spencer: I think if you had come into the industry six or seven years ago, it would have been a totally different experience. And I remember watching all of that supply chain unfold, and it was like, ‘Ohhhh.’
It was like, there was COVID. Nobody knew what our future is going to be. We don’t even know what we’re going to need. We’re just trying to keep our heads above water and keep our people safe. And then all of a sudden, like, ‘Okay, we’re able to sort of get our brains around what’s happening. We got to get some equipment in here because we got to get this bread on the shelves.’ And it was like, well, there’s a chip shortage. You’ll get it when you get it. And so then there was this incredible mindset shift, and I talked to a lot of suppliers about it, where bakers were thinking more, ‘Okay, here’s where we are in our capacity, so we’re ready to procure some equipment to meet that capacity.’ Can’t think like that anymore. You’ve got to say, ‘Where are we going to be three years from now? Where are we going to be five years from now?’ And get those wheels in motion to start that planning to look way further ahead. And that was during supply chain disruption. That was probably the biggest message that I heard from equipment suppliers, was you got to start thinking further ahead. So, I feel like maybe you came in at the right moment because you didn’t have that background knowledge of how it used to be. You only know this as reality, and there’s no other baseline for comparison.
Easdon: Yeah, it does make sense, and I think you’re absolutely right. And I remember speaking to one of the manufacturers at one of the recent conferences, and I was asking, you know, the orders placed, what percentage is replacement of old equipment, and what percentage is new future growth equipment. And it’s almost 50/50, so it’s a very fine art of replenishing some of the older equipment that still operates well, but needs new technology. And then there is, ‘How do we actually fulfill growth over the next five years?’
So there’s a blend of both, which is there.
I think it also would be remiss of me not to mention one other big learning that’s really, really helped me, and that was joining the ABA. Eric Dell kindly invited me to participate and join the board. Because I really learned a lot from the CEOs and senior leaders who are all on the ABA. You know, you and I have spent time together in Washington, DC. but I can say that that support, that network, has been incredible for me, and it really helped that cycle time of learning the industry. It closed the gap because I’ve got the pleasure of sitting with some of the large family-run bakery leaders who are just incredible that have been a great support for me.
Spencer: I do think that you bring a really good balance in that you have this fresh perspective, and you have longevity of leadership in food, and you have a very fresh perspective of baking and working with some of those who have been bakers their entire lives, who are leaders. That’s a perfect balance. So, you all have leadership experience and business experience, and then you have different views of the process and the operation and the industry. And I think especially with ABA’s kind of pillar of advocacy on behalf of the industry in Washington, those broad, like having that spectrum of views, really helps speak on behalf of the industry, because the needs aren’t just this is how we’ve always done it. So, ‘We need you, Washington to help us do it the same way,’ we’ve got you in there saying, ‘Okay, let’s think about this differently and have different conversations with legislators to help us be future focused.’ I mean, that’s just my perspective of being at those events and seeing this, this broad range of perspectives, with a foundation of business leadership.
Easdon: Yeah. Thank you for that. It’s interesting that in 35 years in the food space and 21 years in America — as you can tell, I’ve now got a very strong American accent — but it’s after, after those 21 years it took the bakery industry to take me into the Senate and into Washington, DC, into the Capitol building, to talk about industry and get to meet with these wonderful senators and the support that we’ve got and Congressman. It’s just incredible that’s actually happened in the bakery industry, especially the amount of years I spent in the airline industry, I never got that experience. So, it has been, has been incredible. And I also recognize that the fresh eyes that I have on the food manufacturing side, when we get to talk about ops, has had a huge improvement in our financial performance as a business here at Klosterman.
And one of the concepts in the very early stages of my first year in the company was SKU rationalization. And the company culture, which is a wonderful thing, was to never say no. And as I jest with my team, you know, ‘Mrs. Smith, who needs a dozen loafs, will have the same standard as one of my strategic customers who need a million buns.’ And there was just no difference.
Well, of course, as you start to get the operations to get longer runs, higher batch factors, more efficiency, less waste and less startups, then you really have to do a considerable amount of work with SKU rationalization, and that was a huge initiative for us. But it really improved our throughput, our customer fulfillment, reduced our waste dramatically, and improved our EBITDA performance dramatically, also. Because we cannot be everything to 6,000 customers. That’s something that you’ve got to, you’ve got to sit back and look at it. And you know, we are sat today in a beautiful new headquarters. There’s a $2.3 million investment. It’s above our flagship bakery in Hebron, Kentucky, and we would not be sat here. We would still be in the original headquarters, which four generations sat in, then limited natural light, not enough space for the leadership team, no space for growth.
So these type of transactions typically happen when you look at it a different way, and you’ve got an amazing private equity group supporting us with the funding initiatives to have now a flagship headquarters with test kitchens and training rooms and conference centers. And all our leaders have an office, and there’s a lot of space for growth.
So, we’re quite excited about that with one year now in a new headquarters. And these type of transactions, I believe I wouldn’t have done it, because our main focus was, ‘Let’s deliver bread, buns and donuts to every customer that needs it.’ And we just couldn’t do that and sustain the performance that we anticipated.
Spencer: SKU rationalization is just one of the hardest conversations that a baking company must have, especially these generational, family-owned businesses that, like you said, they were built on this culture of, ‘We don’t say no, we take every opportunity, we want to help every customer.’ And you get to a point where it’s diminished returns, and you’ve got to figure out what to cut so that you can move forward. Those are just such hard conversations to have because what do you want to cut and who do you have to say no to?
Was it hard to be the leader that came in that said, ‘We’re going to make these changes,’ when you weren’t trying to diminish the culture of that mindset, but you were trying to create opportunities for growth, and you had this long-term view. How was that received? Like did the workforce or leadership, did they understand where you were coming from and accept that you had to make these hard decisions, or was that sort of a fight that you had to endure?
Easdon: Yeah, it was, you know, I have done it in many, many companies, especially as a CEO. However, it was, it was the biggest challenge of all the initiatives that we’ve done together over the three years. I go up to 35,000 feet. We have a three-year strategy, and it’s a very clear strategy. We have quarterly strategic sessions where the whole team, we have teach back. We have have a support mentor that comes in to help with team based leadership, and that session is held with at least 30 leaders. It’s not just the executives.
I wanted to get down to all directors and above and support functions. So, year one, we internally called it Put Out the Fire, which is basically back to basics, clean, clear, organized, Lean principles. And the first initiative was, ‘Dear team, if our offices aren’t clean, clear, organized, how can we expect a shop floor to be clean, clear and organized?’ So let’s start there, and what we’re weighing in. So year one was basically back to basics.
Year two, we call Raise the Bar, and that’s really starting to get strong KPI management and be top-level indicators. And then year three, which we’re in now is Best in Class. And that’s kind of the initiatives.
So one of the first projects that we had in year one, which was our SKU rationalization. When you have a leadership culture — just to give an example of our sales team — the average seniority of our sales team is 23 years. So, it’s a big challenge to actually have to walk away from some customers. We did, but I can give you a good example, which really turned the light bulb on for the leadership. And by the way, I had many, many, many customer calls, many. But one particular customer. This customer actually ordered from Klosterman Bakery 230 items. And they’re a very large partner across the United States, and they ordered 230 items. When we did skew rationalization, 33 items was 94% of the volume. Just do the math. So, you’re saying, ‘Guys, let’s go to 35 items.’ And I then joined a call and then visited the customer in question, the strong partner. And of course, the key goal here is for both to have a win-win. So, when I presented the data to the customer, they actually didn’t know that their teams were ordering so many items. And at that time, showing some of our dirty laundry here, we were at 86% customer fulfillment with that customer, 86%.
So I explained to my leadership team, ‘If you’re taking your mom to dinner, there’s 10 of the family members going for her birthday, and nine gets in and one doesn’t, would you go back to that restaurant? And I think we all know the answer. So, guys, we’ve got to improve our fulfillment.’ And today, our fulfillment and most customers, is 100%, our average is 99. So, it’s a huge improvement. But when I went to see the customer, I presented to them that said, if we can go to 35 items, we will commit it to 100% fulfillment, and we will hold your prices for one year, no price increase. When they actually dug into the data, because they thought my numbers were wrong, they were shocked to find that some of the teams were ordering products. So that example, we went down to 35 items. Their volumes increased because they actually believed we could fulfill at 100%, and we actually grew that customer pretty dramatically.
So, it’s just an example of doing the statistics that say, you know of 33 items over 90% are 33 items and small volumes for the rest, then you’ve got all that startup, changeover, clean-down, ingredients you have to carry, etc.
So, we’ve brought our total days on hand inventory from 27 days ton to an average of a company of 13 days. So now we have been holding all of our inventory in 13 days. You’re not tying up your cash, and you’re holding less inventory, which in turn has less complexity.
So, when you do the SKU rationalization, you have to teach the team everything from the whole supply chain. And once we got that one example over the line with the customer, everybody then said, this makes perfect sense. So it became an easier change.
We had some pain, of course, and it’s tough to have some customers been with us a long time that we simply said, ‘Sorry, but we cannot deal with that complexity, and it’s not got the profitability you’d expect, and you don’t have the volume.’
So, it was a big change, but — that one example — I could tell you that we had 30 of those examples. We were actually busy fools, and now that customer is delighted. Because if getting 100% fulfillment of the high moving items that they need, and their profitability improved dramatically.
Spencer: Yeah, and it seems like you kind of helped your customer, in this particular example, you helped them streamline their strategies as well. So, you helped them be more successful by straightening this out. If they were like, ‘We didn’t realize we had people ordering these products,’ you kind of made life easier for them as well, right?
Easdon: Yeah, yes, it was actually interesting, because there’s a large team from this particular customer. They’re a very large organization, and there they had one of the data analytics team members there who actually said to me, my numbers were wrong.
And I said, ‘Well, you know, I humbly apologize. I suggest that we both go back and look at what data and just to double check.’ And it’s truth be told, I knew mine was correct because I double checked. And then when they actually found out and got back to us, they were absolutely shocked that the network had expanded into ordering from us, because we never said no.
So, it’s the easiest way to get product … call Klosterman. And once we actually got that volume — and we had that in many of our business streams — through this SKU rationalization that really helped remove a considerable amount of SKUs, still delivering great product and still hit the volume. And our volume has grown dramatically, and so has our fulfillment.
Spencer: You know, it’s funny, working in this industry from the vantage point that I have, which is very different from most of the industry, the ones who are actually making the product, but I always tell new employees, like, you’re never going to shop the same way again when, when you’re in this and you understand how the products are made. And so I’ve been like, grocery shopping, and when I see something that I really love to buy and it’s no longer available, I automatically think, ‘Okay, well, I was probably the only one buying it.’ Like, there’s probably some SKU rationalization going on, and it’s not that the store pulled it off the shelves, but it wasn’t profitable for someone, whether it was the retailer or the baker. So, it’s interesting for me to hear you say that and sort of validate those random thoughts that I have when I’m grocery shopping.
Okay, there’s one other thing that I kind of want to get into, and that is, you started at Klosterman in a very interesting year. And I say that because we’re three years later. We’re heading, we’re just about to leave for the IBIE show. Your LinkedIn says you started December 22 so I’m guessing that’s when it was announced. So, it made me wonder, were you actually on board before that, like with IBIE 2022? Did you get to attend the show in 2022, or is this one that we’re heading into right now going to be your first experience?
Easdon: Yes, I did not attend. And of course, when I did join, I was on a pretty strict 90-day orientation into the business where, you know, I use the term, I walked a mile in my shoes. I basically, I wanted to go into every department and learn what was going on and visit them working all the bakeries and all of our distribution depots and town hall meetings. So I really was extremely busy for that first three months.
So no, I’ve never attended. This is my first, and I’m really, really looking forward to attending. I hear amazing things about it.
Spencer: I’m very excited. And I like that analogy. You had an opportunity to walk a mile in your shoes. Because if, I think if you had been thrown into IBIE, first off, it would have been like sprinting a mile across some hot coals. Like you would have truly been drinking from a fire hose. That would have been overwhelming.
So, I think you had the right strategy in just getting to know the company in the operation and the different departments. So, I’m wondering, like, how have you been preparing yourself and/or your team for this first IBIE experience, and kind of how you’re prioritizing from a business perspective and an operations perspective?
Easdon:Yeah, well, the first is, you know, everybody has told me this is one of the best shows. And of course, it’s, it’s a huge learning for everybody. I see it, number one, as a great networking opportunity. I’m inviting multiple leaders from the company to attend. I think it’s important. It’s not just a sales organization that’s going to attend. But also, you know, our head of operations will be there, head of safety will be there, head of supply chain procurement will be there. So really expanding the team to go to the session. And then, of course, it’s a little bit of ‘teach back’ from all of us on what we’re learning, what we’re gaining, what networking we’re doing, as we go to the to the show.
So, for me, it’s going to be a really busy event. And I’m also, as a board from the ABA, we’re obviously going to be spending time together and connecting. So, it’s going to be a really busy visit for me.
But also lets me see the future, which I get excited about. You know, what’s new and what we can actually start to see and learn. I see all these opportunities as a significant learning curve. Every time I go to any of these, these conferences, I just, I just keep learning and meeting great people.
So, for me, is just a great networking and educational process more than anything else, but we will have a strong presence, of course. The Klosterman team will be there, and everybody’s excited about it. So I’m personally looking forward to it.
Spencer: So like when you talk about the learning experience, it just makes me think of the IBIEducate program. They have a record number of education sessions, more than they’ve ever had, and I believe it’s the largest like on-site education program for any show. So how do you prioritize that from the perspective of the team, do you let them sort of identify what they want to attend? Or have you looked at IBIEducate and said, ‘Hey, I want to make sure that you go to this you’re going to learn something,’ or even for yourself, are there things that you’re interested in learning while, while you’re in Vegas? Spencer: Yeah. So from my team side, I will always allow my team to sign up for what they believe is a key learning for them. They are actually all doing that as a team. I tend to like to really learn more on what I would say is compliance change and what’s going on, clean labels, etc. So educational side for me, always want to keep abreast of what’s going on from compliance, any information that’s shared and educational on trends, trend analysis. We just worked with LEK to complete a full market study for us on the industry, which is really, really interesting findings. But I want to go validate that in as many of those sessions as I can. What I want to what I want to walk away from that is we hold an offsite, two-day strategy session every year with my senior team, which is predominantly vice presidents and above. And we go to a resort — that’s actually, ‘resort’ is a strong word — it’s a very remote place with cabins, and believe it or not, there’s only WiFi signal in the main building, but there’s nothing else. And we lock ourselves away and we build the next 12 months strategy, and we deploy our strategy in 90-day increments. We call them ‘rocks’ from the book Traction, where we go and implement the next 90 day rocks. We finish them and do the next 90. So we’ll go off site and we’ll build up that plan. It also becomes a foundation for our budget for the for the next year.
So in doing so, the timing of this session is really helpful to just really — that education of what’s going on, what’s the trends, what’s going on in the industry — that will link in perfectly to our offsite strategy session as we start to build up the next 12 months plan. So it really is good timing for us.
Spencer: Okay, I just have to say that I love you do that because we do it with the three partners who founded Avant Food Media. It’s so important to just get away from the business and really identify who you are and who you want to be, and how you get to where you want to be, and it has to be done in that setting. So I applaud you for that. I support it 100%. I think it’s really important.
Easdon: Yeah, well, thank you, and it really it’s been incredible for us. It’s really helped us build a really great strategy. We invite two or three of the private equity partners to come in and join us as well, which is always helpful.
We’re doing it together. So there’s a full buy-in to the session. And you know, there’s the phrase, which is, ‘Be here now.’ So, let’s leave the phones, be here now and give it everything and deploy into the strategy session. There’s a great bonfire pit at night with the bonfire going, and it’s just a great, great venue for it. It’s really been incredible. So we will do that again this year. So yes, I’m looking forward to it.
Spencer: You know, I just, I’m, I’m almost finished with a book called The Science of Happiness, and I’m on a chapter about focus, and it actually says that being in nature and being outside will increase and sharpen your focus.
Easdon: Yes, it does. It does Absolutely. There’s no better time for me when I get home to Scotland and go up to the highlands and get to walk. It’s just beautiful country, and that’s when you really get yourself centered. So those breaks are wonderful for me.
Spencer: It’s so, so important, and it’s an easy concept to miss. But being outside or just getting away helps create better manufacturing. Like you can’t just be in manufacturing all the time and get better at it. You have to step away and clear your head and like you said, like recenter yourself.
Easdon: Totally.
Spencer: Okay, I just have one last question for this episode, and we’ve talked about it a little bit, but I want to dive into it just to close out the episode. What are some of the benefits and challenges of stepping into leadership in a new industry? And I guess what I’m asking is, how does this experience impact you? And then how is your outside experience impacting the company?
Easdon: Yeah, that’s a really, really good question that’ll get me thinking a little bit. The very first thing is I have a saying and a phrase that … I have many of them. It’s a very Scottish trait where we have these little sayings that I share with my team. But I always tell my team, ‘Never call a plumber if you need an electrician.’ And what I mean by that is, when we recruit, let’s recruit subject matter expertise. Teach them our vision, our strategy, explain our culture, but then allow them to do the job. We often believe, because you’re the title of CEO, that you must be an expert in everything that we do. And I try not to behave that way, you know? I try to allow my team and the leaders that I’ve recruited around me, plus the family team members that I have here, to be experts and confident in what they do. So the first learning for me was to spend that 90 days orientation in the business and really listening to the associates, to the junior leaders, looking at the gaps and learning from them, before I started to actually build what is the strategy and what needs to be changed around here. Before you do that, go actually find out what’s going on.
And I spent a lot of time doing that. You know, one of my leaders said, ‘If you really want to understand what’s going on in the business, then I suggest you go into the route depots and talk to the depot drivers, because they don’t hold back, and they’re going to tell you what’s going on.’ They said things about the Scottish race, of people I hadn’t even heard so I was, you know, it was a big education, but I do joke. But they were, they were wonderful, because they just told me, at the end of the process, they deliver the product to the customer. I got to hear their challenges. So, they hear their challenges at the very, very end of the supply chain. What is it we need to do here to improve that?
So that was step one for me, learning the business to the best of my ability. And again, I’m three years in, and I’m learning every day. That was very important for me. And then building a strategy with the team, when I explained about the three year strategy and bringing my expertise into it, I’ve been blessed to spend time all over the world, in many different cultures. You know, I spent a long time in Hong Kong. I spent time in Brazil, Brussels, Germany, all over the world. I’ve had the pleasure, but I also got the pleasure to work for two years with Porsche in Stuttgart and Germany, and that’s where I did my black belt Six Sigma work. So being able to bring automotive principles of manufacturing into bakery, I believe, was the biggest change that I could bring for the team. And in some ways, I had to be quite firm in not listening to the reasons why, ‘But Dale and bakery, you must do this,’ because every industry I’ve been in, everybody believes that particular industry is really more challenging than any other industry in the world. I could see the same about, you know, like catering, catering off the ground, as I said, you know, trying to cater a 747, and not damage the engines. It’s got its own complexity, but when you really get down to it, it’s the manufacturing process.
So, bringing automotive principles into a bakery industry of four generations was where I knew I could help quickly. And I recruited some really strong team players to support me with that. We created the department, Operational Excellence, that didn’t exist. We created our strategy, which we called the Klosterman Way. And basically, what are we excellent at, and then where is there an opportunity for learning and the development? And that was all within that first year, as we started to deploy good data analytics.
And one of the things you must be careful of — and this is Dale’s view — can be a little provocative if you have a team of 10 individuals who are responsible for operational excellence change, and everybody is Six Sigma, you will calculate how to put a milk crate on the moon. And what you’ve got to be careful of is, at the end of the day, we’re making bread. Let’s not over complex data analytics.
But we needed transparency in data analytics. So today we have some incredible tools around waste. We have some incredible tools around overtime control, pounds per man hour, the supply chain, parts, maintenance, uptime. These are all typical things you would see in the automotive side and bringing that into here. But today we have one individual at headquarters for data analytics. We don’t have 10 people doing data analytics, and they’re providing information into our bakeries and our depots to allow the leaders to steer their own ship.
So that was very, very important to me, that we didn’t overcomplicate but gave them the data that was needed to go forward and then bringing in some real strong leaders at every area. Another example is we recruited a senior director for workplace safety. The business never had an individual for workplace safety. In year one, we reduced our workplace injuries by 70% in one year. Because we actually didn’t call a plumber when we needed an electrician. We got a subject matter expert, and that individual knows the vision and teaches us. In the beginning of year two, she presented a proposal and requested $75,000 to put a shoe policy — safety shoes, shoes for crews into every bakery so that every employee on day one gets new safety shoes — and in January of that year, our number two injury cause was slips and falls. Today, one year later, it’s not in the top five. It’s removed. So, slips and falls isn’t even on our datum. Because we did the root cause. We listened to the subject matter expert. We gave 75,000 per year for safety shoes, and everyone now wears safety shoes, and slips and falls have disappeared.
So that type of transformation, and then celebrating the wins, we created an amazing newsletter that goes out, and Amy helps me with that. It goes out every quarter, and we share the good news. We just share what’s going on in the business. So for that side of it, being a CEO, that is in the face of the business, and everybody knows me as Dale. It’s not Mr. Easdon. You know, that’s my father, but Dale is the CEO, and my team know me as Dale and anybody can come and see me.
So for me, it’s always about not overcomplicating the business, giving them the tools they need, getting a leadership team to realize their job is to remove the barriers from the leaders that are in the manufacturing business. And that, for me, is something that, you know, I’m really excited about.
And I share a little story, which I think is quite amusing, but I was I worked for two large airlines in my career, but one of my airline experiences, I spent half my career in operations, and I spent the second half of my career at headquarters. During the first half in operations, we actually called headquarters the Puzzle Palace. We believed in operations, that everybody at headquarters was coming up with ideas to complicate the business. We truly called it the Puzzle Palace.
Well, then I went to the Puzzle Palace and spent the second half of my career realizing that we were actually working on initiatives to make it simpler, but that connection wasn’t there. So, it’s something I learned early in my career that says, ‘Let’s not create a Puzzle Palace. Let’s keep it simple and make sure that the KPIs were developing help the business and don’t hinder the business.’
These are some of the tools I brought to it, and I then also increased the leadership at the front side of the business. So we strengthened our frontline supervisors, we strengthened our department managers, we strengthened quality, warehouse supply chain optimization. Launched an ERP system, so now, if you move the dial forward three years, it is a totally different business. But the great news is, I believe the team has been orchestrated, and they follow it. And this bakery here, which is our Hebron, the newest bakery, we call it the Lighthouse, and it’s deliberate that everybody comes from other bakeries and the depots to the Llighthouse to learn. We have a training center here. So anything we test, any new IT system, any new manufacturing process, we test it in the lighthouse. We prove that it works. We bring the leaders here for training, and then we call it lift and shift. We lift it, we shift it, and we put it in the other bakeries, and then we deploy.
So this is always going to be the center of excellence, and that way everybody comes here for education, and then we all move at the same speed. So it’s been a big, big transition, but it works pretty well.
Spencer: I love it. Okay, Dale, I feel like you gave us an incredible preview of what this month together is going to sound like, because we’re going to hit on all these topics and really dive into them. We’re going to talk about leadership and professional development. We’re going to really get into operational excellence and, of course, culture and corporate culture in a manufacturing setting. And we’re going to finish the month by hearing your thoughts and insight on carrying on the Klosterman name in new and modern ways. So I think we’re going to wrap it up for this week.
But this was incredible. I loved getting to know you a little bit better and hearing your story and what you bring to Klosterman and in the baking industry. And I just cannot wait to dive into all these topics. And next week, we are going to hear your thoughts on leadership and professional development. So I cannot wait for that, but for now, thank you so much for this enlightening conversation.
Easdon: Thank you.
