Welcome to Season 16 of the Troubleshooting Innovation podcast. We’re spending this season with Dale Easdon, president and 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 Episode 4, Dale shares insight into a corporate culture focused on teams, collaboration and communication.
Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.
Joanie Spencer: Dale, Welcome back to week four. I’m so happy to see you again.
Dale Easdon: Thank you. It’s nice to be here.
Spencer: So, this is going to be an exciting episode. This is kind of diving into something that you’re known for, and that is corporate culture. With all of the high-level experience that you bring in terms of operational excellence and business acumen, you have the stellar reputation for building a corporate culture. And I’m curious, why — we talked about it last week, that culture is foundational for what you’re trying to build — but why? Why is it important to you? And why is culture at the foundation and for building a good operation?
Easdon: Well, the first part I’d like to start with is the Klosterman family, over 130 years really, really did build a wonderful culture, and they have a strong brand where there is a high level of passion for the baking industry.
We have, you know, a lot of senior employees who’ve been with us a very, very long time. And for me, the culture side is the most important foundation of any business. And I can also tell you, it is one of the biggest challenges as a CEO to make sure that what you’re trying to attain in culture and your values and what it means to you and your business reaches all the layers of the organization. And the interpretation of culture can be diluted the further you get to the shop floor, and the more pressure that those leaders are under. So, we’ve got to try to work at a senior level to remove barriers, to allow them to create an environment where they can actually follow and actually believe in the culture. So, it’s something that you’ve got to work on every day. And it actually does start at the top. And I try to avoid the buzzwords, because we can all say that, you know, we want to create a wonderful culture.
I can tell you, though, in all of my leadership, and all of the opportunities I’ve had all over the world, the culture for me is very, very important. That’s why in every transformation I do, in every organization, there’s five, six, seven leaders that I call, and they’ll come immediately. And they’re here today, and they’ve been with me in five different organizations because they know what my values are, and they know what I’m, what I stand for, and they enjoy that leadership style.
I think number one for me is to always deliver on your promises. And that’s something I say to my leadership team: ‘I will deliver on my promises to you. I expect you to deliver on your promises to me.’ That, for me, is just a real foundation. If you focus on that, and you make your commitments to both the business and to yourself and to your team, then I start to see and feel that roll into the organization. So that’s, that’s kind of number one for me.
But the culture side of it for me is, I think it comes back to being part of a large family. And I was always fully involved in sports when I was younger. I just, I think that the family culture is critical, and that’s why here — I think I shared on one episode a couple of weeks ago — I actually lost an employee of one of our bakeries. And I just didn’t go home that weekend and remained here, and went to the funeral and spent my time with the family. It’s important to me; that’s one of our employees.
Just as we also, last year had an amazing employee in our Cincinnati bakery, we celebrated 50 years with the company. Fifty years. So again, I think I mentioned this, but I got with my senior leadership team and said, ‘How do you recognize 50 years?’ It’s incredible. Well, of course, I came up with a recommendation that said, ‘Let’s present them with a car, brand new car.’ So that might sound like a pretty extravagant gift, but if you actually calculate the days over 50 years, it’s the equivalent of buying this individual a sandwich every day. If you think about it for 50 years, we just bought the sandwich. Well, mind you, that a very reasonable price to buy a car.
Now, of course, if all my employees hit 50 year service, I might as well buy a dealership! However, what that did for the employee and the family, that’s life changing. It’s life changing. And that made the local news, and of course, everybody was talking about it. But I just think it’s those type of things. Say thank you. We could have given him a watch, and you know, ‘Here you go.’ But this is, now he has a car, there’s no car payment, and he drives a brand-new car. So, these type of initiatives, for me, are very, very important. And the great thing about it is, I presented the concept to the investors, and they said, ‘Dale, this is great idea. Please do it.’ And that’s quite unusual in private equity to have them say, ‘Go buy a car.’
Spencer: I feel like there is a relatively unique alignment between your philosophies — your leadership philosophies — and New Water Capital. I don’t know if it’s that you have been part of some of their organizations so many times or for so long, but there does seem to be a synergy that you don’t always hear about with private equity. You know what I’m saying?
Easdon: Oh, 100%. I could work for whomever I wanted to work for. I have a good reputation. I’m pretty sure I’d find a job. However, I absolutely enjoy working with them, and I see the three senior partners as friends. And let’s be clear, they hold me accountable. If I’m not doing my job, they would let me know. But I do see them as friends, and the whole organization has an amazing culture. And I said in one of the one of the earlier episodes, one of the key roles, they told me to recruit first was a head of workplace safety. Not ahead of finance, a head of workplace safety, because it was too many injuries three years ago, and it was concerning to them. So, when you’ve got a private equity group that cares about people like that, then for me, that’s a company that I want to be part of. And again, this is my third project, and if I decided to do another project, it would be hopefully with them because I enjoy working with them, and I enjoy their values.
And it’s not just with me. The whole senior team — all of our senior leadership here — are very, very comfortable around them. They don’t micromanage us, but they have one of the partners is one of the best operators I’ve had the pleasure of working with. And he grew up in automotive, he’s extremely intelligent, and he’s a sleeves-up kind of guy. And it so happens he’s actually from Ohio, where we’re based, that’s when he grew up, and he’s one of 12 children. He grew up in a large working class family, and he’s now the partner in a private equity company. So, when you’ve got those foundations, you’ve just got a team that delivers. So if they listen to this, I might get a pay increase for those wonderful comments I’ve just made. I’m not sure.
But no, in a serious note, they’re a pleasure to work with. I think very, very highly of all of them.
Spencer: Okay, so you mentioned that one of the partners grew up in manufacturing as a sleeves-up kind of guy, and in manufacturing for years and generations, there was there was this belief that there was no place for culture in manufacturing. It was, ‘Sleeves up, get the work done.’ So, how do you see like, is it shifting, or are you and New Water Capital still sort of a little bit of an outlier?
Easdon: I would say that we are proud to say that we, you know, we set a high standard when it comes to culture and what we believe in and what we do. But I would say, to be fair to industry, over the past 10 to 15 years, it’s been recognized that if you really want to hold on to good leaders and good associates, you must invest in culture. You just have to, or you’re not going to hold on to them, and especially up-and-coming, new leaders who graduate.
You know, I have one of my daughters who’s about to graduate at the end of the year, and it’s quite incredible what her coach at university is telling her to expect when she goes into the workplace. And it concerns me a little bit. You know, they give her these expectations of huge salaries, and because you have this wonderful education at this university, you should be able to ask for this huge salary. And I’m saying to my daughter, ‘No, I’d rather you start at an intern program, learn some basic fundamentals, work your way up, and, you know, stick at it for a little longer, etc.’ So it’s, it’s making sure that the younger generation of leaders, if we can hold on to them for three years, we’ve done really, really well. Because the younger generations will move, and they’ll move, you know, they want to be connected more to the vision, the values, the culture, and they’ll move quickly.
So, you’ve got to be creative to hold on to them and hold on as long as we can. If I can get five years from junior leaders, new junior leaders, I’m very pleased with that. And then we have senior leaders, who this industry gets into the bloodstream, and then they just love it, and they’re here forever. You know you know them, and I know them, and they’re incredible people. But it’s the next generation of bakers and engineers and leaders and production managers. How do we get them to buy into our culture? That is something that does trouble me a little bit, just making sure that we can fulfill their needs whilst getting them the practical experience they need in leadership.
Spencer: You know, okay, so, everything that you’re saying sort of sparked this thought for me that hadn’t occurred to me before, but I mean, you’re right, that these expectations, that the next generation of workforce, they really prioritize culture, but they also, like you said, they don’t stay. They, they don’t, you know, we’ve got we’ve had younger workers here at our company whose parents are the same age as me, and she’s like, ‘My dad’s worked two jobs his entire career, and that’s so weird to me, like, I can’t imagine that.’
And so that almost seems like a juxtaposition, that they want this culture, but culture is supposed to make people want to stay. So, maybe, they just don’t realize, like, when they’re demanding culture, maybe, maybe the next generation has the power to sort of create a sea change for companies to create that longevity through culture. And the workers just don’t realize that when they have a good culture, they’re going to want to stay.
Easdon: Yeah, I will go back to though, I think one of the wonderful saving grace for us, for the whole industry, is just how many large bakery companies we still have that are family owned, three and four generations. It’s got to be a challenge for the next generation to get their kids to have the same passion as either mum or dad has. Because one thing’s for sure, all of the leaders in this industry work extremely hard, and they work long hours, and they start early, they finish late, and there’s a loving passion. And I’ve said it on one of the earlier episodes, when I get to see the board of the ABA, I’m always just amazed by the passion they have for the industry. Well you must be a little bit careful. I have four children, and the children look up to dad as, Dad’s always traveling, lives away from home. Dad works long hours. Do I really want to do that?’
I think, where it’s families and generations of families coming into the industry, I just think we’ve got to make sure we can adapt to what they need to be able to create the next level of leadership over the next five or 10 years. But I am hopeful that because of so many wonderful family-run bakeries that the next generation will just want to do what their grandparents and their parents have done.
Spencer: Yeah, that’s a good point. So another thing in culture that I wanted to talk about, you have this obviously, a heavy emphasis on people, but you also have a heavy emphasis on safety, and you mentioned it a couple of times so far in this episode, not everyone in manufacturing would put safety with culture. Safety is like the hard side, the manufacturing side. You have woven it into your culture, this emphasis on safety of your people. Can you sort of elaborate on that? And I know that Klosterman has participated and been recognized from ABA for some of the safety initiatives. So, can you talk about how safety comes into the Klosterman culture?
Easdon: Yeah, it’s, it’s one of the very, very first changes we made when you spoke to leadership, and especially, I’ll just talk in Klosterman, and I would go around all of the areas.
I often jest that I could pick them up by the collar. The little legs would be going 200 miles an hour, because everybody was task orientated. And the reason is, the drive is, we can’t be late for the customer. We can’t be late for the customer. And then I would come in and say, ‘I really don’t mind if you delay that truck by 12 hours because of safety breach. Let me call the customer and apologize and say, “I’m sorry, but we had this safety challenge, and I could not allow that to leave.” I think the customer will understand.’
Now, if I’m doing it every second day, that’s a different challenge.
So, what we actually started to get is safe and on time. I learned that as well from the airline side when I was at Continental, which was we didn’t want to be just an on-time airline. We wanted to be safe and on time. And that, for me, is kind of the starting point, which is safe and on time. So, we’re safe and shipping on time goes through all the way through the organization, that side of it, you’ll hear it used a lot, but I often say to our leadership, ‘When one of our employees kiss the loved ones goodbye in the morning and come to work, I want them to go home safely. I don’t mean go home with a band aid or a sprain or a slip or a fall. Go home safely.’
That becomes the core, that becomes the foundation. Then when we actually have, when we actually when we talked about our KPIs, we actually have safety walks. We incentivize a number of our leaders; they receive a quarterly bonus, and one of the basic kickers to actually attain the bonus is you must hit a number of safety walks. It starts with supervisors and above, and a supervisor may complete four safety walks in a week. And if you do that for all the supervisors and department managers, we could have 20 to 25 safety walks. And what we’re actually identifying in our indicators are near misses, and this is a very tricky indicator for leaders: The higher the number, the better. And what we’re actually trying to find is potential accidents and put a process in place to avoid it.
So, they will walk, they’ll walk the floor to find, ‘Ah, if we didn’t do something about that, that could be an accident at some point in the future.’ So, the higher the number, which sounds, you know, just doesn’t sound right, the better that we’ve got that focus. And by doing it, we’re actually avoiding injuries in the workplace, and our numbers have just reduced dramatically. And as you commented, we’re recognized by the ABA two years running for our safety, and it’s something that we’re very, very proud of as we go forward. We’re very proud of our food safety, also. We are audited as SQF, and I think the lowest score we ever have is 98%.
So we’re really, really high in food safety, and we’re also focused on workplace safety. We are the industry standard. We are considerably, considerably higher, but it’s a culture. I remember I worked in a business where — and this business was in New Jersey — and the safety leader took me for a walk, and it was a food company, and the break room — this was a large plant, had 1000 employees — and then the break room entrance, the break room can hold 150 people. He put down a $10 bill on the floor, and said, stand back and watch. And the first person seen it picked it up. He went back and put a little gold butter portion on the floor, and four people stepped over it. And what he was trying to get me to see is, how do we work on the culture that says that’s an instant ‘pick it up.’ It was a really early learning for me, and it’s something that I just keep focused on. I can tell you, our director of workplace safety just has a passion for the topic. And when we were awarded in Orlando with the ABA, I asked her to go down and get the award, not me, and she picked up, she picked up the award for the company, and we put it out in LinkedIn, etc. But she deserves it because she and her team wake up every morning thinking safety. And that’s compliance, and compliance can be perceived as holding us up sometimes from trying to get product out the door. But she she’s just got a good, a good relationship, and she’s respected. And yes, we want our employees to go home safely at night.
Spencer: And that’s Liz, right?
Easdon: Yes, it’s Liz.
Spencer: I met her at ABA. She’s a smart cookie, and she really loves her job. And she and I chatted about you for a minute.
Easdon: Yeah. Well, hopefully that was good, not all bad. But she is, she is an incredible leader, yes. And she’s just, she wants to be in the operation. She’s actually there. And we’ve got pictures of her covered in flour with harnesses. She teaches on how to, you know, use a harness correctly. She’s actually willing to roll her sleeves up and teach. That’s the key part for me. When I have leaders around me, I want leaders that want to do it, and she’s one of them.
Spencer: And that’s, I think. is sort of an answer to that question of you know, is there still room for the old-school way of thinking that culture doesn’t have a place in manufacturing. This is a good reminder that when you say culture, it’s not soft skills and butterflies and rainbows. It is about empowering your employees and knowing that you care about their safety and care about the quality of their work and providing them opportunities. And to me that there’s enough nothing soft about any of that.
Easdon: Yeah. You know, I don’t want anybody thinking we all go around here, you know, playing the guitar to each other and singing songs. We are a very, very, very busy team. But I can tell you, my leaders would tell you, if the steam ever comes out of my ears is because of an accident or an employee booked vacation and we made an error and didn’t pay their vacation pay; that will upset me more than we shorted the customer. Those are cultural indicators that say we, as leaders, care.
You know, can we answer a question that’s asked of us within 24 hours? So when an employee asks us a question, you don’t have the answer, just say, ‘I don’t have the answer right now, but I will get back to you within 24 hours, and I’m going to have an answer.’ These are the basic fundamentals.
And we have two of our bakeries — 30% of our total workforce — that’s 30% — is unionized, but we don’t treat union employees and Klosterman employees any different way. They are ours. They’re our family. It’s our culture and our union recognize it that we do the deliver on the promises, which is great, but I don’t look at it any different way. I don’t behave any different way. Neither do our leaders, which I think is important.
So I would say to that any old practices of, ‘If you don’t like it, you know you’re fired, or there’s a highway,’ I think those days have long gone, and any leader that tries to run a company like that will clearly see why they’re not hitting their indicators, because they haven’t invested in their individuals.
Spencer: You know, I think the adage of the customer is always right, like, people are starting to really view that statement very differently now. Because you can’t say the customer is always right at the expense of your workforce, because without your workforce, you don’t have a customer. You know, it’s funny, like, just speaking of your airline experience, I really kind of heard that sentiment a lot from the airline industry. Because it’s such an easy place for — it’s a consumer facing type of business — and those airline employees just get abused. And so I, you know, I’ve heard that it’s, we can’t just blanket say, ‘The customer is always right,’ because it comes at a cost of the employees, and you have to care about your employees first before you can take care of your customers. Is that accurate?
Easdon: Yeah, yeah, yeah. It’s very true. Yep, absolutely is. And I believe you can do both just by a little bit extra investment. You can, you can take care of both groups. I tell a little story that I did in an earlier podcast many years ago, and I was asked about — because I’m soccer crazy, which we would call Britain real football, but soccer crazy — and for our American audience, this may not be appreciated, but I follow Manchester United. And Manchester United are playing absolutely terrible, so it’s painful to follow them, but every weekend, I get up at 6 a.m. to watch the Premiership League in the UK. This is, you know, it’s just such a wonderful league. And many years ago, I got to go to a board meeting, and it’s held at Old Trafford, which is Manchester United stadium. And at the time, was before 2013, Sir Alex Ferguson was the manager of Manchester United. He won every possible award you could win. The average seniority of a manager in the soccer premiership in the UK is three years. Then they’re generally dismissed. He was there for 25 years. So, so I went, I went with Lufthansa to a strategy session, and we got a behind-the-scene tours of Old Trafford. So they took us in where the players, the players get ready from the game, Sir Alex’s office. And then we got to sit where the players sit at the side of the field. And the gentleman who was doing the tour was talking to us about the beautiful field where they play the game. And on the grass was a gentleman in his late 80s, and he was one of the gardeners who gets the grass ready for the next game, and he had heated lamps on the grass. And one of the questions we asked this gentleman that was doing the tour is, ‘What’s the culture like working with Sir Alex Ferguson?’ I mean, he’s won every award. He’s an incredible manager. ‘What’s the culture like?’ And he said, ‘Let me show you.’ And he calls the gentleman who was working on the grass to come over, and this gentleman comes over to all of us, and he asked him, he said, ‘These gentlemen are from Lufthansa airlines. Can you tell them what your job is?’ And he said, ‘Yes, to win the Premiership League.’ He never said, ‘I’m here to take care of the grass.’ And Sir Alex Ferguson got everybody that worked there, from the lady that did the uniforms to the individual that made the tea to the person cutting the grass to understand their job was to win the league. So, not just the strikers, not just the players. So, if you can culturally, get that into an organization, well, the results will speak for themselves, because he retired in 2013; we’ve had five managers since, and they’ve never won the league again. So, it lets you see the culture that he created over 25 years, and they’ve never won since he retired in 2013.
Spencer: Wow. I don’t know, I feel like you embody a lot of that too. And you know, I told you, Liz and I were chatting about you for a few minutes at ABA convention, and I’ve just, I’ve heard great things about your leadership, and I’ve heard it from people on the bakery side and also from the corporate side.
When you take that kind of example to heart and try to manifest that in your leadership, what would you say it would take for a bakery leader to connect with people across all aspects of the company? And you even said, you know that you have this expectation of not leading the bakery from the office. What does it take to be able to make those connections, regardless of what area of the bakery? And we’ve been kind of leading up to this — and you’ve said it in a lot of different ways — but just to put it clearly, why is it so important?
Easdon: Yeah. Well, you always hear the term of having an open-door policy. For me, it is, I want to create an environment where anyone can come in and talk to me and sit down and say, ‘Dale, I need your help,’ whether that be a personal issue, a business issue, and I would hope that all of my leaders take the time to do that. I want to be very, very transparent. I hold my team accountable to a very, very high standard. And I hold myself to very high standards. You know, I have high expectations of my leadership. That being said, I take care of them, and I take care of our associates, and there’s a passion for it.
But I think for me, in all of my 35 years in manufacturing, I really, really love what I do, and I think that really helps, no matter what kind of company. I could tell you that I’ve really enjoyed the baking industry. I just think it’s just got some of the most wonderful people I’ve ever had the pleasure of meeting who are so passionate about what they do — at all levels and all companies — and I think that’s a great foundation for us.
So, for me, I believe that the culture that you don’t just come to work. You come to work because you’re part of a bigger thing. You’re part of the team, and you want to win. I can tell you, it’s hard work. Sometimes I get it wrong, and if I get it wrong, then I will say I got it wrong. I’ll admit it, and I’ll apologize because I’m, you know, I’m human. But I can tell you that I try my hardest to get it right. I really do try hard, and I know I have leaders around me who do the same. The projects that we have taken on together — just the website alone, rebranding our website — that was between a year and a year and a half of hard work to get it right, but we were involved in the details. I mean, right down to which photographs we’re going to use. Are they correct? Are they right? We just keep checking and checking and checking. But at the end of the day, the finished product, I think was incredible. Our board approved it and said, ‘This is excellent work.’ But I do roll my sleeves up and get into the project, and I do that with everybody. You may call that micromanaging, I guess, and there’s a little bit of that, but it’s because I wanted to be done right and right down to the furniture that we picked for the new headquarters. I got involved. I want to make sure that everything got the attention to detail it deserves. And I say with my associates that every associate deserves a little square red carpet. And if they want to come and see me, we should put the red carpet and just take time for them and listen to them. And I’ve always done that, and I always will, and I think I’ve surrounded myself with leaders who feel the same way. I truly believe that, and I think that’s what makes Klosterman a fantastic company. I really do.
Spencer: I just can’t believe what a good fit you are for this company, and just the instant joy and passion that you have for the industry, it’s like, ‘Ah, Dale, what took you so long to get here!’
Easdon: I know it take a while, I had to say that after two years.
Spencer: Um, I think you are such a good fit for this company. And who would have really seen that coming though: A 130-year-old, family-owned company, then bringing in somebody from outside the industry, not even just outside of the company. I mean, 130 years, that is when you say, ‘Well, we’ve always done it this way.’ So, like kudos, to leadership for being able to bring in someone from the outside who is so open-minded with a lot of ideas and high standards.
Because our industry, we’re feeding people; we can’t do that halfheartedly. So, I think you’re an amazing fit. And I think this is a really good segue to what we’re going to talk about for our last episode, and that is carrying on the Klosterman name. So, I’m excited to dive into that with you next week, and so I think we are going to wrap it up for this week. And thank you again for such good insight and wisdom.
Easdon: Thank you for all the kind words. Appreciate it. Thank you.
