Welcome to the third season of the Troubleshooting Innovation podcast. Josh Allen, award-winning artisan baker and founder of Companion Baking in St. Louis, is redefining ways to think about artisan bread production. In this episode, he unpacks what happens when a bakery always says yes, identifying the benefits and anticipating and troubleshooting the pitfalls.

Listen to Troubleshooting Innovation on Apple, Spotify or Google. Hosted by Joanie Spencer, Commercial Baking editor-in-chief. Sponsored by AB Mauri North America.

Joanie Spencer: I’m really excited about this episode in particular, because I think it draws on a very interesting part of your history and your narrative, and that is the rule of improv. If I’m remembering correctly, the rule of improv is that you always say yes, and I think that’s really interesting when you apply it to baking. So can you talk about how you personally learned the rule of improv and how you’ve applied that rule to running your bakery business?

Josh Allen: Absolutely. And whatever I do, I’m going to butcher because we’re talking about an awful long time ago, but we mentioned that I grew up in the food business. And when I went to college, I had the luxury — for lack of a better way of saying it — of just studying liberal arts. I was an American Studies major, which meant really, I could take anything with America in the title and it would count towards my major. I also really wanted to study different ways to communicate. I really had this sense growing up, forever, that I was going to go into my family’s business. I didn’t even think about anything else. I wasn’t worried about graduate school, I wasn’t worried about testing again, or any other experiences, I really wanted to take the opportunity. So I took public speaking, I took some drama classes, I took art classes, I took a lot of different stuff. One of the classes I took was a couple different semesters of improv, and I was terrible at it.

So this is not about me being some improv performer. But I found it to be incredibly fascinating as it related to the idea of customer service. And I can actually remember very shortly after graduating, going back to my professor and talking to her about potentially writing a book on customer service and the art of improv. It never went anywhere because I started baking, and that was sort of the end of it, but the idea was really about how you go into a scene with folks. And if there’s four or five or six people in a scene, or even just two people in a scene, you can’t get ahead of yourself and say, “This is how I think this is gonna play out,” because you’ve got all of these people that are doing whatever they’re going to do and bringing their experiences and their sense of what’s happening. So you just have to go with the flow the whole time. And as soon as you start blocking somebody, if they say, “Yeah, I’ve got a pink hat on and I’m getting ready to walk out in the rain,” you can’t say, “Well, no, it just stopped raining outside.” Because that’s just not how it works. It’s really the idea of no blocking more than it is the idea of always saying yes, but you just got to go with it and kind of see where it takes you and enjoy that journey and try to do your participation.

So that’s sort of been a way we’ve created a culture of ‘yes’ here, in that sense. It’s led to some super interesting opportunities, and ones that have really created the business, to be quite candid with you. It’s also just a lot more fun.

Spencer: Yeah, like you said, it probably goes back to just not blocking, rather than you just automatically saying yes. I imagine that in business, it might not always be safe to say yes to everything. Is that fair?

Allen: Oh, absolutely. Because in the end, what we’re trying to do is take care of our customers. If a customer comes to us for a certain product, a certain delivery location, a certain price or something like that … If we can’t achieve that for them, and if we say yes and then fail, not only does that hurt us, but it hurts them. Certainly, you’ve got to bring a sense of realism and capability to that. But it doesn’t mean that you can’t go out on a limb.

You know, our business forever changed in 2012 or 2013. There was a grocery store chain that was expanding across the country. They ended up with a store in Columbia, MO. They were kind of in Colorado and heading east at that point. They called and said, “Our frozen manufacturer let us down. We can’t get any product in Colombia. It’s about two and a half hours from St. Louis. We need bread tomorrow.” And I said, “Okay, let’s do it. We can get your bread tomorrow. Well, we can get your bread for the rest of the week. And then I’m going to come down there and we’re going to figure out if this is something that makes sense for either one of us.” But you know, I’m intrigued enough by what’s happening and seeing this opportunity for growth enough to just try to figure it out. We’re not going to make any money in the next four or five days, shipping bread two and a half hours away and having to use an outside service to do it, but we’re probably not going to lose any money either. So let’s get it down there and see what the opportunity was.

Taking that attitude on was different than saying, “I can’t get your bread in Colombia.” That would have been really easy to just turn it off. There was no way to make money in the short term doing that. But I think that willingness to go out on a limb [is important], because I knew how to do it. I didn’t know if it was going to work or not, but I knew that I wouldn’t let them down in the short term. I didn’t over promise and say they were going to have bread forever. I just said, “Look, I can get you through the rest of this week because this is your opening. I know it’s important to you. Then give me an opportunity to come talk to you.” And it turns out that they ended up loving what we did appreciated what we did. They gave us time to create some frozen products for them to then go into all their stores, and then we wouldn’t have built our new factory if it wasn’t for their growth and that opportunity. It all stemmed from just a willingness to sort of see it through. I think that’s super important.

Everybody knows that between production and sales, there’s always that battle. Production always wants to say no to whatever new opportunity sales brings, and production wants to say, “Well, I just created this new product,” and sales says, “I don’t think it can sell.” There’s always that kind of internal battle that’s happening. We could just turn that around and get a culture of yeah, let’s try that and just see what happens. Let’s be realistic, let’s have a real end date that if this doesn’t work, then it doesn’t make sense, but still taking shots at things. I do believe in the Wayne Gretzky idea that you miss 100% of the shots you never take. And I wouldn’t be talking with you today if we hadn’t taken that shot with that grocery store in Colombia, because it allowed us to expand our business, go into frozen, increase our distribution, meet new partners and [find] new relationships that have turned into other stores and other restaurant partners. That’s where we are today. It really all goes back to that phone call, and it’s really interesting to think about that. So that’s the culture we’re trying to create here. You know, that’s between companions, between departments, between the cafes that we have, and our wholesale operation and between us and our customers. It’s that sort of culture of saying, “Yeah, let’s give that a shot. And let’s see what happens.”

Spencer: So then what happens if you take that risk? You say yes, and you get into it, and you find out it probably wasn’t the right decision. I’m guessing that maybe that’s happened once, maybe twice? So if my assumption is correct, can you tell me how you navigate those kinds of situations and learn and course correct within that situation?

Allen: Well, I think it goes back to making sure that you’re under-promising in that. So if we’re going to help that customer fix that short term issue, deal with it in the short term and then say this just doesn’t make sense for us to continue this. And again, I really believe even though we’re in a transactional business, I believe that profitability — because my dad beat me over the head with it … in a very positive way — that it is relationship driven. We’re not going to make any money tomorrow making sure that you have something, if we have to go out of our way to go to another distributor to buy it and to deliver it to them. So they made a lot of short-term decisions that kept the relationship going. Because it’s a relationship: Over time, it’s thousands of transactions that develop the profitability of the business, not just the single transaction. So when we would do something, if we started making a bun for a restaurant group that in the end, we just couldn’t keep up with the production, or we didn’t have the equipment to slice it or it turned out to be much more of a pain in the butt than we thought it was going to be … before it gets too far, we go to them and say, “Look, this isn’t working for us. I know we’re taking care of you right now. Tell me how much time you need to find the next supplier,” or “Let me see if I can help you find somebody else who can do this better, more efficiently, because I’ve got to bow out of this in X number of days,” or whatever it is.

And again, we want to make sure we take care of the customer. It’s an incredibly incestuous industry and that chef or that purchasing agent is going to end up somewhere else. That’s an opportunity for us. And so how we handle that breakup is just as important as how we handled the initial sales opportunity. So as long as we do it with transparency and honesty and forward communication, it’s usually okay. Like they don’t want to do business with somebody that’s not making any money in the short term. They might, but in the long term, they know that’s not the answer. So almost all of the time they’ve been appreciative of us taking a chance at it. Hey, we said this might not work for us but we’re willing to give it a shot, and then we turn it off or we do something else. I think that’s allowed us to build the business. It’s given us better ideas and more information for the next time that similar kind of opportunity pops up. This is why this doesn’t work or hey, I can make you that bun at that price, but slicing just doesn’t work for me and the way my operation is so I’m not going to be able to slice it. Is that a deal breaker for you? It’s about giving the customer the opportunity, knowing enough to ask the right questions and provide enough information to give them the chance to say no, because that’s super important to them as well.

Spencer: That’s a good segue to the next question. And that is: How do you recover from something like that? Like, how hard is it to continue to have the courage to take risks and say yes to opportunities if you got burned on a previous one, and especially if someone tells you it’s a bad idea, but you believe in your gut it’s a good idea. How do you overcome those fears and hesitations?

Allen: Well, let’s go back to what you said before about getting burned. We don’t get burned in those opportunities. If we go into it recognizing that it’s kind of an experiment, you’re not failing, you’re learning. So it’s okay. We’re not going to hit them all out of the park, some of them are going to work. As long as we learn from it and we fortify our knowledge base, and our team and our understanding of the next time this kind of thing comes around, here’s the things that we need to ask for differently, or here’s what we need to communicate better, or this is what we’re going to talk to production about, or this is the piece of equipment that we should get before we run into that situation again so that we can handle it … then we learned from it. And then it’s probably better that we failed, because honestly, we learn more from failure most of the time than we do from success. So that’s not the problem.

The other thing you mentioned was when you think it’s a good idea and other people don’t. If we talk about it in terms of that experiment piece, and let’s try it and see what happens, then we’re all doing it. And we’re much more apt to support other people inside the organization and want to take a crack at that. Because we know that people will support us when we want to take a shot at something. And you know, we have a packaging supervisor that wanted to change some equipment around and we had some people who thought that was just terrible idea, like the slicer shouldn’t go there, the packaging machine shouldn’t go there. But really, in the end, it was like … let’s try it. What’s it going to hurt us to move the stuff around and see if it makes any sense. And we didn’t end up exactly where we were. But we ended up in a different place than we started. Now it’s dramatically more efficient and it makes more sense. That whole team has taken ownership of an area that they didn’t have that much ownership of before we started that process. Just that willingness to do it and to see what happens and to recognize that as long as we go into it knowing that it might not work, then we don’t go so far. You know, we’re not 100% committed because we recognize that it’s okay to say this isn’t working for us.

Spencer: Okay, so then building that culture of yes, it sounds like it’s helping to work across multiple areas of the company to find some synergies. You mentioned R&D is going to come up with a great product that sales thinks they can’t sell, and vice versa. So how does having this overarching culture of yes, and being willing to take risks — yeah, we can try that, and no, if it doesn’t work we can course correct — how does that create synergies between sales, marketing, R&D and operations?

Allen: It creates trust. So I think in the end, that’s what we’re trying to do. In the end, I think if we can trust each other, that idea might work. It’s trust and vulnerability, right? Like we’re vulnerable enough to put something out there that we know might not work, might not succeed, but we want to give it a try. We believe enough in it. Here’s what we thought about it, here’s our plan. This is what we think then if our whole team of people can then get behind it and say, “Okay, let’s give it a shot and see what happens.” And we start to build that trust across those departments.

We saw a lot of that with our waste reduction. We’ve talked about that in a few episodes so far. And you know, there’s been a lot of little things that we’ve done, it’s been a ton of incremental changes to the way that we manage our waste here that has saved us the 1 million lbs. per year that we’ve been able to achieve. There’s a couple of big things, but it’s been a lot of little things. And that’s just been saying, “Hey, what if we try this? Why are we doing this this way, when we could try it a different way?” The fact of the matter is, in so many instances, it wasn’t working. Like we know we were generating too much waste, so we were willing to take that chance and take that risk. We want to grow our business so we’re gonna have to take some risks with new customers, new opportunities, new products, whatever those are. It’s not just gonna happen without us going out on a limb in a couple of instances and making sure that we’ve got a safety net underneath us so that we don’t — to your point — we don’t fall, break our neck. But we’ve got to be willing to take those risks. And we’ve got to get everybody on board with that. Production has to be excited about the sales opportunity, sales has to be excited about what production is producing or throwing at them, and various things.

I think trust and vulnerability are difficult things to measure, you know. And they’re hard things to grow, whether that’s in a marital relationship or certainly at work. It’s even harder because we don’t have the background and the expertise to know about everybody and all the things that they bring to the table. But we can do that by giving folks a safe place to try things and a safe place to experiment.

Spencer: I feel like you all are really good at not only asking why, but also asking why not?

Allen: Yes, that’s true. That’s a great way to say it. I think that’s absolutely true. And you got to be able to ask both questions. I think it goes back to when we were talking about having a solution for a customer. No, we can’t do this, but here’s what we can do. It’s the same thing. Why are we doing this? And why don’t we try this as opposed to just questioning something? Why do we do it this way? Let’s question it, and then provide some kind of solution and create some kind of brainstorming.

We have what we call here “huddles” on a regular basis throughout the day: small groups of people that get together to sort of do a status update and say, “Okay, here’s what’s coming down the pipeline. Here’s the next three days running. Here’s what’s happening in the mixing area. Here’s what’s happening in the in the various stations across the bakery,” and in those huddles we’ll ask those questions. You’ll get a really diverse group of people who will throw different ideas around on maybe a way to solve it. The nice thing is, is in that situation, you can say, “Okay, well, I got that that particular dose coming down the pipeline again in two hours. Let’s try it in two hours and see what happens,” and then we report back in the next huddle. Here’s what the results were. So we can do that series of little experimentations and little tries all throughout the day, all throughout the week. And those add up to, again, building that credibility, recognizing that it’s vulnerable to come to the table and have an idea. I think that’s really terrific.

Spencer: So we talked about the yes, and I noticed the “why” and the “why not.” So you have the “yes and” principle, but I can also see there’s the “no but” principle, which I think also kind of falls in line with improv, right?

Allen: If there’s anybody with any real improv experience, I don’t think you’re supposed to say no, ever. But certainly, the idea has adapted for us. “No but” is I guess how you’d talk about it, right? Like, it’s “No, we can’t do this, but here’s what we can do” and maybe there’s a way to change it around to say, “Yes, we can take that order, but it’s gonna be on this day and not that day.” So I guess you’re not saying no, in that instance, we’re saying yes to the order, but we need to put a caveat in terms of when we can actually fill that order. Or, “Yes, we love to make that bun for you, but we’re not able to slice it.”

I think there’s ways to do it. And maybe “yes but” is maybe the perfect mix between the two, because we need to be able to control that. Again, I think it goes back to not over-promising or not getting ourselves into trouble with something that we just can’t do, and at the same time figuring out ways to say yes to the customer and yes to the opportunity so that we give ourselves time to know whether it makes sense or not. As long as we’re not hyper-focused on short-term profitability, it gives us that freedom to take a crack at something.

So I’m going to get bread to Columbia, MO, to this grocery store because I’ve read a little bit about him and I think they’re getting ready to grow their business. This might be a great opportunity, so let’s get it. They’re not worried about whether we make any money in the next week or two and see what that opportunity presents itself. And if they would have said, “Hey, we want you to keep delivering fresh every day and we’re going to take our national business through this manufacturer, but he or she just can’t to Columbia.” Maybe we would have said “Okay, that’s terrific. We’ll do it for another week or two, but this isn’t a real viable thing for us to deliver fresh bread two and a half hours away,” and that might have been the end of it. But I think because we said yes and we’re willing to just go out on a limb and just get him through their issue, they were then willing to talk to us and say, “Well, what would it take for you to be that national distributor for us?”

So again, it’s it goes back to that kind of trust and credibility and vulnerability and all of that. People still do business with people. People still want to help somebody in need. And they as long as you’re honest with where you sit most of the time, you can work together to find a solution.

Spencer: Yeah, you’ve used this word several times throughout the conversation, and that’s vulnerability. I really like how you use vulnerability as a strength.

Allen: Maybe that goes back to Brene Brown, who I listen to too much, the author who’s terrific, but yeah. It’s worked in my marital relationship with my wife. It’s worked with my kids. It’s super important for folks to know what you’re not capable of doing, what hurts, what’s not working. And look, we’ve had a handful of failed businesses in the history of Companion. We had a business and opened a manufacturing facility in Kansas City. We opened two cafes that we’ve since closed. I mean, we’ve closed some businesses. We took some shots that didn’t work. The courage to cut those off quick enough, before they took down the whole company or before they bled other areas of the business, it was hard to do that. It was hard to not want to just keep throwing everything we had at a business that really in the end wasn’t going to make it. But the courageous thing to do sometimes is to put an end to something and/or call for help. I think we’ve learned that through our handful of failures over the years. That certainly makes it easier. You know, when things are going swimmingly all the time, it’s certainly hard to be vulnerable, because you feel a sense of invincibility. We have no pretense of invincibility here, especially coming out of two years of the pandemic. We recognize that it all could go away in a minute … and then it can come back and then it can go away again.

So that’s the silver lining, I guess, of what we’ve been dealing with: We are much more willing to talk internally and externally about this is working, this is not working. And let’s figure out a way together to make it work.

Spencer: Now, do you think in those huddles that you have, that companions have a good opportunity to say, “Hey, I see places where things aren’t working well, or working as well as they could be? Let’s try this approach”?

Allen: Oh, absolutely. I think in the metrics that we look at, it’s sort of built in that way, right? Obviously, we talked about the trash, but if we mentioned sales per complaint, and if we start to see complaints coming in, usually they come in bunches from the same customer, right? If we make cookie pucks for somebody, and we were having an issue consistently with that, maybe there’s an issue with the cookie mixer or the way that we’re scaling ingredients or the makeup equipment that we’re using. And then we can get a group of people who participate in that to say, “Yeah, I’m noticing that and here’s what I think we can do to to improve that,” or “Okay, that’s causing a problem. I didn’t realize that was causing a problem. But here’s something that changed slightly that now I should be bringing to your attention.” If we didn’t talk about the complaints and start to mention where those were coming from and how they impacted that metric, maybe that never would have surfaced or popped up. It opens up those opportunities because we’re looking at some things differently. And then folks can have those ideas.

We are constantly asking on the floor: What could we do differently? Is this the most efficient way? Does this make sense? Why do we do this when we could be doing that? And people ask all the time, and then we try to celebrate when we make a change to something and that then reinforces it. Like Joanie had a great idea at the end of the makeup line to change the pans from vertical to horizontal orientation, because it’s easier to load or it’s less heavy to pick up. Hey, it’s we made this change and it’s going this much faster, or we’ve had less injuries down there, whatever the result has been, you know, let’s give Joanie a round of applause. And then we ask if anybody else have any ideas. So people want to be called out, people want to be seen and recognized. It doesn’t even have to be anything more than recognition. But if we can do that regularly, then it starts to open up that avenue for folks to come forward. Because it’s the people at the end of the line, at the oven, in the packing area … they’re the ones that have the right ideas, they do it every day. I mean, it’s not me walking around and coming up with these brilliant ideas just by spending a couple minutes at a station. It comes from working in that station all the time and recognizing the inefficiencies or just asking the question. Sometimes just asking ourselves “Why do we do it that way?” makes us answer with, “I have no idea. That’s how we’ve always done it like.”

Spencer: Exactly. And you know, honestly, that is something I think we are on the cusp of change in this industry. Because the product that you make is made by doing what’s repeatable and getting measurable results. So it’s all based on doing things the same way, the way we’ve always done them. The industry tends to default to that in their innovation mindset: We’ve always done it this way,

Allen: Right. And some facilities and the manufacturing has been set up, and it’s hard to change that. Like it’s not easy to change that when automation is a certain way or a line is set up a certain way or oriented a certain way in a business. Those changes are not easy. It doesn’t matter how big you are. The longer you’ve been around, it’s still a big boat to turn when you want to make a change, because it might be trying to turn a whole ton of tenured people in a different direction. Sometimes people are harder to change the machine.

I think that’s absolutely the case. And it’s one of the positive things about having so many new people, there are a lot of things that are challenging, like having a lot of new people in the business, but one of those things is if we talk about the vulnerability and the trust and coming up with ideas, when you have a lot of new people who really don’t have a lot of experience, they’re going to question a lot of stuff. We’ve learned a lot through that process and some of the things we just have to answer, you know, because there is a reason we’ve been doing it this way for a long time. Because that’s the safest way to do it, that’s what yields us the best product, or whatever it is. But there are a lot of things that — to your point — have grown out of happenstance and those they should be looked at differently. We talked about safety and loading the oven with no gloves. Obviously we take it out with gloves for a reason, but when we loaded it, you know, bakers who have been around for a while don’t want to put gloves on to put bread in the oven. But they were still burning themselves because the rack or the wheel would get jammed. And then all of a sudden you’re trying to move things around and your hand slapped up against the door, against the inside of the oven. So I want you to wear gloves, maybe we can solve that. And it wasn’t only because we have so many new people that were seeing the issue that we just think, wow, that would work for everybody. That would make sense for everybody to do that. So we’re learning a lot every day, thankfully.

Spencer: So I guess the last thing that I want to ask is with this culture of yes — and it’s a sort of an “in summary” question, because it’s what we’ve been talking about this entire time — but what kind of impact can this mindset have on innovation for our industry?

Allen: That’s a terrific question. One, I think it brings an element of fun to the business, because a lot of times you’ll tend to go out on a limb with things that you weren’t willing to do before. That’s something that we don’t do, whether that’s the industry or the individual bakery. And I think the industry’s willingness to look at things differently and have to respond to things differently, it’s just part of it. I think packaging is a big piece that needs to be talked about and continues to be talked about. With the pandemic, there’s a push for individually packaged things and fully packaged things, we’re seeing less bread sold in paper bags, and there is a change coming, right? There’s going to be more and more product that’s delivered from the grocery store to the person’s house. And people want things that are packaged, if it’s going into somebody else’s car or somebody else’s van and they’re not controlling that distribution. Now, it’s not just from the shelf to your home that you’re controlling, now you’re looking for some control or sanitation or sense of trust with that product all the way to your door. So those things are different, and it’s forcing the hand on all of us in the industry to think differently about: How can we still create a great product in bread, for instance? How can we educate the consumers to be able to have a great experience with bread that sold in plastic versus paper? And I think that’s just one example.

Multipack sizes and things like that, you know, if the bins are going to start to go away, and folks aren’t going to want to put their hand into a bulk bin or grab the tongs and build their own bins, then what are those packs? What do people want? Is it 4-packs, 6-packs, 8-packs, 12-packs? I know the store struggled with donuts with that, right? With the pandemic, people wanted to buy pre-packaged doughnuts. But how many donuts did you put in the box? What size box did you have? Is it a 2-pack, is it a single pack? And we’ve got to learn that and we got to talk about that. And then we have to be able to educate the consumer to what the expectations are differently when it’s packaged that way. The donut doesn’t have the same taste and texture necessarily when it’s been packaged the whole time than when it’s been allowed to breathe in a larger case. Bread is the same way, and buns and rolls are the same way.

So I think that culture of yes is what’s coming. We have to say yes to the consumer as it relates to the change in the way that they’re going to get their product to their house and the way in which they want it packaged. We can’t just say, “Well, look, we’ve always done it this way. Bread is always sold in paper and that’s just how it’s going to be,” because the consumer is going to find another way to get the product that they want. It’s just not going to work through Instacart or Amazon Prime that way. Like all industries, we need to continue to grow and evolve and stay in touch with our consumers and make sure we’re delivering not only delivering them the product they want, but delivering the product they want in the way that they want it.

Spencer: Yeah. I mean, consumers are asking “why” all the time and asking “why not,” so bakeries have got to keep up. I think that’s a really good note to end on this week, and it’s a good segue into next week when we talk about the definition of artisan and its relativity to how products are consumed and used.

Allen: Yes, absolutely. I’m looking forward to that conversation.

Spencer: I am too. I know you’ve got some really impactful views on that. I’ve had your products and you know what you’re talking about. So I will talk to you next week, Josh!