In this episode of the Troubleshooting Innovation podcast, engineering expert Rich Berger explores how a bakery can innovate solutions to labor shortages, supply chain disruptions and the evolving relationship with automation. Hosted by Joanie Spencer, Commercial Baking editor-in-chief.

Sponsored by Shick Esteve.

Joanie Spencer: Now, Rich, we have been talking about community involvement and sustainability [in this season]. And now we’re going to talk about people. It all revolves around what we ended the last episode on: talking about a paradigm shift around who the stakeholders are and what benefits them. How are people playing into that?

Rich Berger: That’s an interesting question. It’s probably been a couple of years now, but there was a business roundtable of a group of about 180 CEOs of America’s largest companies, including Julie Sweet, Brian Moynihan, Tim Cook, Jeff Bezos, Larry Fink. The roundtable’s statement of the purpose of a corporation is that first, it puts stakeholder responsibility on equal footing with shareholder responsibility stakeholders, of course, those being employees, suppliers, vendors, customers and their communities. I think that’s really fits well with our conversation.

There has never been a better time than now to be investing in your workplace, the environment of the workplace and your employees. Here we are in the middle of a pandemic, with many labor shortages. And if we cannot invest in that workplace and our employees, it just makes it more difficult to sustain a skilled workforce in the food industry.

Spencer: So I’m going to ask you a little bit of a personal question. You are an engineer and you started your career in offshore drilling. What attracted you to food manufacturing?

Berger: Yeah, I did. I did start in offshore as well as heavy industries such as utilities, and pulp and paper and chemical. I would say that in our food industry, that the diversity of problems to be solved, is certainly one at the top. Also, the challenges that food companies face, which I think show up as opportunities, to have a direct influence on the health of the supply chain, and opportunity to really make a difference in what we do. Also, the speed in which innovation is adopted in this industry is very exciting; the creativity that has to be there, the speed in which you have to seed and nurture and commercialize new products to stay present and current. And lastly, I think the people in our in our industry — and in many ways, the industry feels like one team — it has a feeling of helping each other solve problems to generate value for all of our consumers.

Spencer: Absolutely. Now, you mentioned supply chain and you also mentioned innovation. We can’t have a conversation about manufacturing without addressing the supply chain disruption that’s happening. And a shortage of labor is a huge component of that. So how is the lack of workforce directly impacting innovation?

Berger: Yeah, there aren’t many food companies at this point who are immune to our current and future skilled labor deficits. There are just many things that need to be addressed in order for that labor gap to shorten. But innovations need to begin in order to prevent future supply chain disruptions. For example, automating simple tasks so that employees can work more efficiently and focus on the core.

Managing workflows with software. For instance, employees can often waste time trying to figure out what to do next in a process, whether crucial steps have already been done and even which steps to prioritize when multiple projects are going on simultaneously. A software tool, for example, can automate the process and provide, for example, a searchable database of current and archived prospects and projects, and even record which processes have been completed by which employees. So just managing those workflows are super important.

Improving productivity with online video, I’ve also seen as a huge benefit. Messaging, collaboration, doing that digitally really brings a lot of value. The visual factory concept can be very useful here, where an operator might have the tools to quickly send a video, for example, to maintenance on an equipment issue. Tools such as that help the team become more responsive to the day-to-day tactical work that we do, thus freeing them up and freeing more time up to focus on that core that I mentioned earlier. And lastly, I think just simplifying the work process with digital checklists can also help greatly.

Spencer: So automation is definitely becoming a solution in our industry for the workforce shortage. How is that relationship between people and machines evolving? And the reason why I asked this question, I talked to a baker once who said yes, automation is really helping, but it doesn’t necessarily teach employees the process. And so they become button pushers, but they’re not bakers. What does this mean for innovation and manufacturing? How are they gonna come together?

Berger: Great, great topic. I would start with the fact that job openings in manufacturing have grown to double-digit rates since 2017. And they’re actually very near the all-time high recorded in 2001. The pandemic probably has put us over the top there.

A recent study by Deloitte shows that between 2018 and 2028, an estimated 2.5 million positions are going to remain unfilled. And I think that there’s many factors that contribute to this. First, the available workforce consistently lacks the STEM skills needed to fill modern industrial jobs. And many times, that means developing those skill sets gets transferred to the operator, right? And that’s okay, and that actually is something that we have to continue to do is to be developing those skills with our employees. Skill sets are shifting and the shifting is related to the use, as you mentioned, of advanced automation. Continuing to develop those skill sets is very important, because it’s very different than even what employees were doing on the shop floor 10 years ago, right?

A persistent misperception, I think, exists about the nature of manufacturing jobs. I think that probably contributes as well. And then we’ve got, you know, a wave of retirements from Baby Boomers who have held significant accrued knowledge over the years.

And lastly, I think the hidden factory dilemma facing the frontline due to a lack of collaborative tools is some of which I had mentioned earlier. The good news is that technology can be used to address these challenges. I think it improves retention, attracts new talent, improves the work environment and engages workers to build those vital skills in the workforce. I see food companies doing this in a lot of different ways. For example, software systems, AI, and machine learning are right now being implemented to help companies identify top talent, attract individuals with that critical thinking and programming skills needed to to manage automated systems. And to keep that talent once they’re hired.

Collecting and leveraging resources, for example, from retiring employees. Building new, more engaging training programs that perhaps are designed for the next generation. Implementing apprenticeship and one-to-one training programs, I think, are super valuable. And many times they’re supplemented by technology, which is helpful. And lastly, leveraging technology to supplement jobs and expand performance opportunities in the organization.

Spencer: Can you elaborate on that a little bit?

Berger: Yeah, it’s similar to some of the visual factory topics that I was talking about earlier, in that we can supplement jobs through many of the new technologies that exist to actually expand the skill sets of the employee base, vs. limit them and silo them. Investing in engagement is also super important. According to, I think it was the corporate leadership council survey that was recently completed, the most engaged workers are 87% less likely to leave. Wow. So if we think about that as a goal in retaining talent, it’s a challenge for us to sit down and try to think about how do we engage with our workforce. The top companies to work for, in that same study, had a 13% voluntary turnover rate compared to almost triple that in comparable industries. So look, the data is there that says engaged workers stay on longer than those who are not.

With the cost of replacing an employee sitting at one and a half to two times an employee salary, retention is really one of the areas in which companies can have the largest impact on their bottom line.

Engagement is the first step in doing that. It boosts overall work satisfaction, it communicates with transparency, it forces us to think of ways to provide tools for employees to solve problems quickly and implement multiple communication channels. A single interface can sometimes remove barriers to quick communication, from really anywhere in the organization from the boardroom to the frontline, making it faster and easier to to address challenges.

Make people comfortable and empowered to provide feedback. For example, we talked about little bit about this in the first episode, in that a lot of this leads to trust, which leads to quite a bit of great ideas that come from the team.

Spencer: You know, I was actually thinking about that first episode myself, when you mentioned that. We talked about how it’s not enough just to have a voice, the workforce needs to know their voices will be heard. So that’s important to understand in this discussion

Berger: Absolutely. Training programs, engagement oriented communication platforms, and improvements to the management style and in the organization can really all have a direct impact on our ability to find and hire top talent. When your company becomes a company that everyone wants to work for, you won’t need to fight for the best of the best any longer; they will come to you.

Spencer: Right. I’ve always felt that it’s important to have a company that people want to come to work for. I think that’s key. So I have a question for you, Rich. You mentioned the STEM skills and you talked a lot about technology. I recently participated in a panel for the CAPS program, and talking about the food industry as sort of a hidden gem for STEM students in high school as they think about their college plans and career plans. So what are your thoughts on what the food manufacturing industry can do to sort of open the doors and be a visible, viable career opportunity for students who are going into STEM programs?

Berger: Well, I think it’s badly needed in our industry. You’re exactly right. We need to continue to think about ways to attract those skills into the industry. Skills such as these don’t have a start and end point. I see it as sort of a continual educational journey. So what I have seen many companies do is dedicate resources to continued education, even after the hire, to continue to develop and sharpen skills. That’s what folks want; they don’t want to hire onto a company and not continue to learn. That’s very important.

Another component, I think that can be very beneficial, is how we begin to adopt more technology in our industry, because that will also attract people with those skills. When they see the industry using tools, machinery, systems that bring the latest technology to the operation, people want to be in that kind of a work environment. So that also helps greatly.

Spencer: I totally agree. And I think, as an industry, we could probably do a better job at promoting that. I was actually talking to a supply chain executive for a major snack manufacturing company, and she said she was hosting some interns for the day. She asked them, “What’s the biggest surprise that you’ve seen?” And they all unanimously said, “I had no idea there was so much technology involved.” So I think that technology could be used as a recruitment tool.

So Rich, there’s one other topic that I want to cover. And that is the industry, you know, we are facing a labor shortage crisis. But culturally, we are also facing a crisis of diversity. So how can we shift our thinking and look at diversity as a workforce solution, as opposed to a problem that needs to be solved?

Berger: I really like how you introduce the question because I think a lot of folks, including myself, sometimes think of it as a problem to be solved when really it’s a solution to so many things that we do in the food industry. Workplace diversity is taking the HR world by storm really more than ever. Food companies are prioritizing Diversity, Equity and Inclusion (DEI) initiatives and investing resources into making sure their teams are set up for success. Focusing on DEI is not only the smart thing to do, but it’s also the right thing to do. I feel strongly that diversity has tangible and intangible benefits.

Joanie, in our space, there’s no doubt that challenges exist. They’re there, and we have all faced them, such as aligning DEI goals with the broader organizational goals, or overcoming bias, and even sort of a natural internal resistance to the process. But if we can overcome those challenges — and we can — there’s numerous benefits that I see, Joanie.

To answer your question, first I would say new perspectives. When you hire people from diverse backgrounds, nationalities and cultures, you’re bringing a fresh array of perspectives to the table. This can lead to benefits like better problem solving and increased productivity. Think of it as a scavenger hunt, okay? Would we find more success by sending everyone on the team in the same direction? Or would we gather information more quickly by having a team that splits up strategically? So I think that “new perspectives” piece is a big benefit.

Second, a wider talent pool. It brings a ton of value. Employees are no longer simply seeking a nine-to-five job that pays well; they’re looking for space where they can grow. We just talked about continuing to develop skills, right? They’re looking for space to feel accepted and to be challenged. And that’s why a company that embraces diversity will attract a wider range of candidates who are looking for a progressive place to work. Moreover, I think that the millennial and Gen Z generations are the most diverse in history. Only 56% of the close to 90 million millennials in the country are white, as compared to 72% of the just under 80 million members of the Baby Boomer generation. A 2020 Glassdoor study found that 76% of employees and job seekers report a diverse workforce as an important factor when evaluating companies and the job offers that they get. So as a result, diverse companies are more likely to attract the best talent.

Third, I think workplace diversity leads to innovation. If you think about it, the correlation makes total sense to me. If you have a homogeneous group of people, chances are that everything from their thought patterns to life experiences to problem-solving skills are likely to be similar as well. And sameness doesn’t lead to very creative solutions, right? On the other hand, a diverse group of employees will contribute unique perspectives that can lead to, I think, breakthroughs in thought. It’s really the same reason why companies go off-site for important strategy meetings, right? Or why a change in pace can help you solve that problem you’ve been stuck on for days. New circumstances, new environments are known to spark fresh ideas. And I think that’s part of that, why workplace diversity leads to innovation.

Fourth, I think better employee performance and diversity and inclusion go hand-in-hand. When you create a work environment where employees see a representation of a variety of cultures, backgrounds and ways of thinking, they’re more likely to feel comfortable being themselves. I think this, in turn, leads to happier and more productive employees.

And lastly, increased profits. There are a ton of studies out there that show diverse teams simply perform better and, as a result, bring in more profits. McKinsey did a report in 2015 on a little under 400 companies. They found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. Another interesting stat: Those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. A similar study that McKinsey did found that public companies in the US with diverse executive boards have a 95% higher return on equity, even those with homogeneous boards. So clearly, the data shows Joanie that that diversity pays off.

Spencer: What do you think the food manufacturing industry needs to do to take those steps, of broadening the talent pool and and looking in new and different places in order to create a diverse workforce but fill that gap? Are we looking in the wrong places? Are there other places that we should be looking? What’s the magic answer?

Berger: Well, I’ll have to think about that one for a bit. The only answer I have is cast the net wider.

I would say, go into it recognizing the benefits that we just talked about. It will drive the hiring team to seek out more diverse candidates, because they’ll see the value diversity brings to the business and, when that value is in front of us, it truly drives us to seek out more diverse candidates in the process. Whether that be cast the net wider, or further, or continue to appreciate the different points of view of the different cultures and the different backgrounds. All of it, I think, brings the value that we just talked about. And when that’s recognized throughout the organization, it actually becomes part of the process of looking for candidates.

Spencer: And I do feel like diversity is going to breed diversity. And as companies engage in technology, and they engage in a diverse workforce, then students and employees and just people in general, when they look at the industry, they’ll see people like them, and they will be attracted to the food manufacturing industry, don’t you think?

Berger: Absolutely. In fact, I’ve seen it.

Spencer: Okay, Rich. Well, I think those are all of my questions for this episode. And I just want to remind our audience that our last episode, which will be two weeks from today, Rich is going to answer listener questions. So if you have anything that you want to ask rich and have him take a deeper dive into, you can send an email to info@avantfoodmedia.com. And we will address those in our last episode.

Berger: Looking forward to it.

Spencer: See you next week!