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 outlines ways that bakers can think outside-the-box to baseline efficiencies and streamline productivity.

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: So last week, we had a really interesting discussion about how fixing the trash at your bakery really changed how you operate. So first, I’d love to just quickly recap the impact that made on the business and how your waste management practices have become a baseline for productivity.

Josh Allen: Yeah, I think we talked last week about the big measurement that we look at. We look at two things relative to waste.

First, we look at real pounds and then a kind of a trailing, 12-month look at how many pounds are we generating on an annual basis in terms of waste, and that’s a combination of both waste for landfill and also composting. So both of our partners/vendors in that do weigh what they take away from us and send us a report monthly to give us a weight. So it’s not a number that we can manipulate here.

And then we also look at trash in what we call trash efficiency, which is our sales divided by pounds of trash. And obviously, as we retract our business as we did during the pandemic, or as we grow our business, we just want to be more efficient with our waste creation. And obviously, we’re looking to eliminate it completely. But that’s maybe not realistic in a manufacturing environment. But relative to sales, we want that number to continue to climb. And obviously the weight, the real pound number is going to go down. I don’t like looking at charts that go down. They’re not really like psychologically motivating to me. So turning it on its head and looking at trash efficiency as that’s the number that we want to see go up. And the sales per pound of trash for us, it’s relative; everybody’s business is different. But as an example, when we started that metric, I believe we were at about $5.80 in sales for every pound of trash generated. And we’ve gotten that number up to almost $13 on an annualized basis.

You know, at almost 2.5-times where we started, it’s had a huge impact. It’s had the impact where you would expect it to — in gross margin and labor savings, because we’re not producing all this product that’s never making it to the customer in ingredient savings for the same reason, obviously — but also just the real trash hauling savings has been pretty dramatic. And we’ve seen that snowball throughout the bakery. We’ve seen it in office supplies, because we used to print multiple copies of every invoice that went out. We would ask the question of ourselves, what do we do with that additional copy of that invoice, and we realized that if the customers didn’t require proof of signature, that we were just discarding those invoices and those POC slips when they came back to the bakery. So we realized that if we’d just printed one copy and left it with the customer, that’s all that we needed. Except for that there were maybe four or five deliveries on a daily basis, out of a couple hundred, that they required us to be able to prove that they signed for the product. So we’d bring those back and keep those, but the rest of them… That was reams and reams of paper on a weekly basis that we weren’t recycling or throwing away or whatever is happening. So we tried to trickle that down everywhere that we could. And in all of those different places, we found that composting was less expensive than sending trash to landfill. And so just everywhere that we’ve been able to look, the waste measurements have had a profound financial impact. It took the bank off of our back, and thankfully. I love the bank, they’ve been a huge supporter of ours, but it’s no fun when they’re looking over your shoulder as aggressively as certainly as they were for us.

Spencer: I can only imagine that it’s quite a motivator when the bank says, “We’re going to come have a conversation.”

Allen: Yeah, because they bring a team of people that you’ve never met before. They bring that kind of, I don’t know, emergency turnaround team or whatever they call themselves. And yeah, it’s not a fun time around the conference table.

Spencer: Okay, so you said something that I thought was really interesting: how you don’t like looking at charts that are trending downward. So you kind of look at them in a different way to see what you’re doing right and improve on that. I think that’s a really interesting mindset to have because it can be a little bit different, realizing when you’re looking at what’s going wrong.

Allen: Oh, yeah, absolutely. And we have a QA metric here that we do, we haven’t really landed on a name yet. But essentially, it’s sales per complaint. Our QA department obviously logs complaints that come in from distributors and customers. If there’s a product out of spec, if it’s underweight, overweight, a baking problem, a packing issue, a labeling issue, whatever that might be, we log all of those complaints and we try to resolve them. But we were just tracking that number. And that’s the same kind of thing, like with real pounds of trash: You want the complaint number to go down, right? But then you’re looking at a chart that’s going the wrong direction.

So again, sort of flipping it on its head and saying, “Look, as we grow our business, as long as we can keep our complaints less than where we were previously, as we continue to grow, then we’re going to be more efficient, and it’s going to be less energy. It means we’re producing a better quality, it means we’re creating better credibility.” So we look at that same number, which is sales dollars per complaint, and establish some goals for that, and some baselines for that as we move forward. That’s another terrific thing, because it’s a great balance against the waste number. I do believe that what gets measured gets managed. And there’s a tendency when you’re managing trash for folks to want to push product through the system. Because “Okay, I know, Josh doesn’t want us throwing anything away. So this product may be sort of on the cusp, but let’s get it out the door, because maybe it’s okay.” And what we don’t want to do is inadvertently incentivize our teams to send out bad product in an effort to generate less waste, right? So we’ve got to make sure we have some balancing metrics to do that.

The trash efficiency is one we’ll do over time, because if you can’t grow your business or because you’re producing poor quality product, eventually it’ll catch up with you in the trash efficiency. But it’ll catch up with you faster in the sales per complaint. So if we’re logging a ton of complaints and a ton of issues, then we can look at that in conjunction with the trash efficiency and say, “Okay, it’s great that the trash numbers are getting better. But we’re sending out poor product. And we got to fix that first. And so we try to have those kind of balances and the sales per complaint. One is a great check on quality. And another great one to celebrate vs. celebrating the number of complaints, right? Like nobody wants to talk about that, as much as it’s important to pay attention to it.

Spencer: I really love this. This is incredibly fascinating because I haven’t really heard of a bakery using customer complaints as a metric. That’s incredible. And I love how you use it in conjunction with fixing the trash, because you’re right, that can inherently become a risk. I heard some really good advice once: Solving a problem by creating another problem is not a solution.

Allen: Absolutely. Yes, that’s actually the case.

Spencer: It’s like an extension of the waste management. So are we truly solving the waste problem? Or are we creating a problem elsewhere? Like you’re taking it to the next step. And then I also like that you’re using it as a positive to say, “Here’s how we’re celebrating how we’re fixing those customer complaints.” That’s incredible.

Allen: If the pandemic has taught us anything — or has taught me anything, I won’t put words in anybody else — what I’ve learned through the pandemic is that it’s really difficult to motivate people to line my pockets with more money. Like to go out on the floor and say, “Okay, let’s really drive this gross margin,” or “Let’s really knock this operating income out of the out of the park.”

You know, a sustainable business needs to generate income to be able to take care of all the things that it wants to take care of. And I certainly believe that, but I do believe there are ways in which we can measure success and find ways to celebrate things that in the end will create a very viable, sustainable business without necessarily having to talk directly about the reduction of labor costs or ingredient cost as a percentage of sales. We’re paying attention to those things, don’t get me wrong, but when we talk about like a scorecard for our business, and the transparency of inviting everybody into that process and doing our best to make sure everybody on the floor and in the dish room and in the sanitation team are involved, and all of that really understands if we’re doing a good job or not… Then that’s not a huge motivating factor, at least currently in the marketplace that we’re seeing.

We need to create some metrics that people can get excited about. And people have gotten excited about trash and its reduction. They have gotten excited about, you know, we’re really talking about taking care of the customer, then if we can sell more stuff per every time the customer finds a problem with us, then we’re doing a good job. In the end, we know that yields better profitability. That’s just kind of intuitive, but we don’t have to talk about it that way. We can talk about it in other terms. Everybody calls a customer service desk when they have a problem. everybody complains to a manager or writes a Yelp review when they have a problem, so they understand complaints. It’s an easy thing to talk about. So how do we reduce complaints? This is what this product is supposed to look like, this is how many are supposed to go in the box, this is what we’re trying to do to take care of our customer. Let’s do that and get less of those complaints. It’s a really easy thing for everybody here to get their arms around and understand.

Spencer: I like the concept of looking at these metrics from the point of view of every aspect of the bakery, because you’re right, if someone is coming in for a certain amount of hours a day and they’re in maintenance, or they’re in sanitation, they’re not thinking about metrics and the success of the company in the same way someone in R&D would be thinking about it, or someone on the sales side or in accounting. So I think that’s great that you’re really looking at it holistically.

And when you said that, you mentioned a scorecard. So if you were to sketch out a scorecard of your metrics and business success, what would that scorecard look like after you’ve got the trash and you’ve got the complaints? What are some other line items that would be on that scorecard?

Allen: Well, we’ve talked in episode one before about our four C’s. The first C in our four C’s is our companions. So if we believe that our first obligation is to take care of our own folks, then safety has to be on there. So safety is on there for us. We track safety through injury frequency rate, which is a fairly common metric. The formula the simple. It starts with accidents, and we use lost time accidents, which is an accident that would keep somebody from being able to finish a shift or come the next day to their shift or multiple shifts, as opposed to somebody who cuts their finger and puts a Band-Aid on it comes back on the floor. So it’s lost time incidents times 200,000 divided by the hours worked in the bakery. What that basically gives us is for every 100 people — because 200,000 is roughly what 100 people would work full-time in a year — for every 100 people, how many injuries we’re having on an annual basis.

And there are metrics across all industries and across all spectrums, and across all sizes of companies that we can compare ourselves to, because we take it per 100 employees. And if you Google “injury frequency rate (IFR)”, you’ll see that sometimes they do it per million hours worked. We do it per 200,000 because as opposed to looking at 500, you know, it’s easier to talk about internally. We’re not quite at 100 people. But it’s easy to say, hey, if we had 100 people on the floor, this is how many injuries we would expect to have.

And look, if it’s about safety, we got to drive that number down, right? And we’ve got to help each other drive that number down. Going back to that idea of what gets measured gets managed, if we’re if we’re just thinking about it, the number comes down, because people are starting to look out for each other. Every month, Josh stops us and tells us what our IFR is. And we want it to be smaller, you know, we want that number to be better than it was before. And so I’m going to pay attention. I’m going to say, “Hey, these pans are stacked too high. Hey, that cart has got a bad wheel on it. Hey, there’s a little lip when you roll in and out of the oven that we ought to get fixed.” Things that maybe we weren’t thinking about before, that we’re now thinking about because we’re talking about it. There’s so many things that folks do in bakeries that you just sort of do because that’s the way you’ve always done it. And it’s interesting, we made one simple change a few months ago. It’s been 30 years we’ve been baking and we’ve always loaded a rack with no gloves on because everybody was comfortable doing it. You push the rack in, you turn the timer on, and when you come back, you put the gloves on, because obviously the rack is hot. Well, we had a handful of burns and somebody said, “Why don’t we just why don’t we just load the oven with the gloves on? Why don’t we just change that? We have so many new people who aren’t so comfortable pushing around a rack with strap pans that are heavy, or various things that can be kind of precarious. Let’s put the gloves on before we load the oven.” We haven’t had a burn since on the ovens. You know, burns are terrible, burns suck. They’re painful and they take a long time to heal. And you’re going to potentially miss work depending on how bad it is, especially when it’s on your hands. So that was an idea that came from just talking about safety more, you know, every day, every meeting or anything that we’re doing, we’re just we’re updating ourselves on what that safety is. And we’ve got to do that.

I believe that we’re going to see long term retention improve because we’re paying attention to safety. People come here and their families trust that they’re going to come back with 10 fingers and 10 toes. And that’s really it, right? Like if you trust the people that you work for, you’re apt to stay longer. And the trust comes from building that credibility. So what are the things that we’re doing? We actually stopped everybody the other day because unfortunately in the storm, last week, we had a slip and fall in the parking lot. We do everything we can inside the bakery. We have a service that comes in and ices, but it started to melt and then it refreezes overnight. Somebody hit a patch of ice and fell; they couldn’t even start their shift. And they’re going to be out for a few days. And that’s a reportable accident for us that we feel terrible about. We put a new policy in place about how we’re going to handle the overnight freeze and thaw issues. But then we also talked about it. And by bringing everybody together and saying, “Look, this is what happened.” We haven’t had another one because I think now people are getting out of their car and going, “Oh, wow, she had a slip and fall, maybe just I should just pay a little bit more attention.” But if we hadn’t talked about it, I don’t know that we wouldn’t had another one because maybe nobody else would have been paying attention getting out of their car. There’s so many opportunities for accidents to happen. So safety is No. 1 for us on our scorecard. It always needs to be and will continue to be.

We also track retention, just a typical management of retention and turnover. Obviously, it’s become a much greater issue in the last two years and will continue to be moving forward. And we look at it in a couple different ways. We look at just a pure turnover calculation, which is terminations divided by the number of active employees that we have on a regular basis. And then we also look at average tenure. So we take all of our active employees and take the average tenure of that group. What we’ve seen is that we’ve lost almost one and a quarter years of average tenure through the pandemic. So a combination of losing some long-term people for some various reasons through the pandemic, and then also, as we’ve rehired having so many people on staff that are so new, that’s a pretty big percentage. I think we went from seven and a half years down to like six and a quarter years. And that’s a big year. I mean, we know how long it takes to learn things. And we know how much people continue to learn in a bakery environment and how much knowledge they carry in their head and experience and comfortability, and just ease of operation and knowing what to bring back with you when you go put something down. So that year and a quarter has been costly.

We’ve got to continue to pay attention to that, you know, looking at average tenure forces us to not only pay attention to the new folks that are coming in to keep them here, but also looking at our long-term folks to make sure that we’re continuing to provide personal and professional development opportunities for them so that they stay. That’s a big one for us, too, as we look at our companions, and then from a company standpoint, our big thing has been — again, through the pandemic — has been fill rate. So for us, if customers place an order, you know how much of that order is making it out the door. And we’ve certainly struggled with that over the course of the pandemic at various times. So we look at it on like a trailing 52 week — so what’s the annualized fill rate number that we’re able to achieve? — and then on a shorter, more volatile trailing month four-week basis because that’s a hugely important number for us too. Because that’s about building credibility with our customer. We talk about it on the floor with our team, like, “Look, if you have a favorite restaurant that you go to, and you love the steak, if you go one week and you order the steak and they say, ‘Boy, we know it’s great, but we just don’t we ran out of steak this week. Do you want to try the chicken?’ You might try the chicken that week because you like them. And you’re forgiving of one week having that issue. But you know, two weeks later, you make a reservation, you go back and you order the steak, they’re like, ‘Yeah, well, sorry, we don’t have it again. You want to try the chicken?’ And you’re like, this is two weeks in a row. You’re starting to lose my trust. I might find another place to go get a steak.”

Spencer: Yeah.

Allen: And we can’t afford that. It’s too hard to get a customer, it’s too hard to keep a customer. God forbid, if they place an order, we got to figure out how to fill it. And that’s a combination from open communication upfront, like you place the order for two or three weeks from now, whatever it might be with our frozen business, we might need an extra week or let’s juggle this PO, maybe these products are going to be hard for us to make. But if we have that upfront communication and get the PO changed, or if we get the order changed so that we know we can be successful, then they know what they can anticipate. They change the PO and then we can fill what we told them we could do, but through the pandemic — and it’s happened to everybody; it certainly happened to us — we think everything’s fine and then two days before we have seven people call off sick and all of a sudden we couldn’t finish the order. Or we couldn’t get it packed. Or we had some issues with mixes or we had to cancel mixes because we didn’t have anybody at the end of the shift. Whatever happens. And it’s when we don’t have that transparency, that credibility starts to suffer.

So fill rates, something that even though it was not fun to look at through the pandemic, it’s been something that we’ve paid a lot more attention to. And it’s something that we can continue to celebrate as we get better. But it’s also a story to tell for new customers as we start to do better. So if our sales team can talk to somebody and say, “Look, we’re running a 92% fill rate for the last year even through a pretty difficult time of the pandemic, but in the last four to six weeks, we’ve been running 99% fill rate”… That starts to build credibility with those customers because they’re having issues with other vendors. And so if we can lead with that and make that part of the conversation, it becomes pretty powerful.

It’s not about price. And it’s not about some other things when we’re gonna get you what you need. It sort of changes the conversation. It’s no different if anybody’s tried to buy a car during the pandemic, right? Like you don’t get to negotiate on price anymore, you just hope that the car that you want is there. Or that you’re going to be able to get it in the next six months or whatever period of time that is. Price all of a sudden isn’t even relevant to the conversation. At least the dickering on price sort of goes away. It’s been really interesting. We’ve been able to arm our sales team with much more knowledge of that: of the logistics, of the supply chain. And they are going to come out stronger because of it, again, because we’re tracking it. And because it’s on our scorecard, it’s important.

And then the last one is just sort of a productivity we look at. We produce bread that goes into a case, so for us, it’s cases per man hour. Sotal cases sold divided by the number of hours that we worked the week previous. And we look at that number on a regular basis. A smaller bakery can do, you know, pounds per hour or loaves per hour or whatever metric works. But that productivity measurement, what I like about cases or pounds or loads or something is it takes the dollars out of the conversation. So it isn’t a function of telling a group of people, how many dollars in sales were generated against their hours of work, that it’s really about what it is that we make. And let’s see if we can get more efficient at making more of those things per hour worked. For us, we believe that sanitation needs to be in there because if the bakery’s not clean and the dishes aren’t clean, we’re not going to be able to be efficient. We believe that for our logistics team and our packers, and so we put everybody in the organization in that number because we believe that overall number is what we need to be able to drive. If we decide we need to hire another person in customer service, that’s going to affect our cases per man hour, so we got to make sure we have an increase in sales coming to justify the need to have a new person in customer service because they’re going to impact those productivity measurements.

Spencer: Okay, so I have a question to go back to the fill rate. When you have those metrics on the fill rate, how do you develop? And this may be an impossible question, considering just how unpredictable things are these days in the pandemic. But how do you develop an action plan if your fill rate drops or you see it start to drop? Where you’re like, “Okay, this is trending in the wrong direction.” How do you take those metrics and develop steps toward, like, what I guess is a contingency plan?

Allen: Well, I’ll tell you what we did during the pandemic, because we really struggled for people for an extended period of time. What we said to ourselves, we looked at it the same way, we use a lot of restaurant analogies here because many folks here have come from the industry. They just make sense in this business. So we look at a restaurant analogy, and we say, “Look at seven o’clock, there’s 50 seats in a restaurant and we can only seat 50 people. If we take reservations for 75 people, we’re gonna piss off 25 people. They’re not gonna have anywhere to sit, right? And the kitchen only has the ability to handle a certain velocity of people. We know what the average table turn is. Maybe we seat 25 at 7 p.m. and 25 more at 7:20.”

So really, the fill rate problems that we ran into could go all the way back to when we took the order. And if we could fix it at the order point, what we did was we looked at how many cases are we really capable of producing on a weekly basis right now given our labor challenges, and it wasn’t anything we ever had to think about because we used to just take whatever orders we could get. We could figure out how to make the bread and that went away in the pandemic with labor challenges. So we had a finite number of cases that we could ship, and anytime we took orders for more cases, then we just failed. So we just put a cap on it. We said, “I’m sorry, reservations for that week are full and here’s when I can get you your product.” It was difficult at first because they had never heard that from us. People had never heard “no” when it related to orders, but they appreciated the fact that if when we said “yes” that we were going to do better with it. So, “I’m sorry, I can’t get that to you on Tuesday. But if you come on Friday, I could have it. Or if you’re willing to come the following Monday, we can have that product produced for you.”

So really, being honest and recognizing and learning what we were capable of… And we still stumbled, don’t get me wrong. We’d lose a few more people or somebody else would get sick or, you know, our guesstimates of what we were capable of didn’t always hit those numbers. But we did much better by limiting that. And we’re only now starting to take the cap off some weeks. And as we start to move out of this — and that’s the hope obviously, that we don’t have to do that — but the lesson learned is still that on any regular basis, we know what we can produce. And if we have more orders than that, maybe we’re gonna have to hire so we’re starting to see those numbers trending higher, we’re going to have to figure something out. But really understanding: How many seats do you have? And how many seats can your kitchen handle at any one time? The way to fix it is that forward planning and the true understanding of who you are. Once you’ve taken the orders, and you’re just killing yourself, there’s really no fallback position at that point.

Spencer: Yeah. I heard you say, you’ll tell a customer, “I’m sorry, we can’t get that to you by Tuesday. But what we can do is we can get you this by Friday.” And I think that’s so important. You have to be able to come back with a solution. We can’t do this, and you can’t just put a period at the end of that statement, right? There has to be a follow up with a solution.

Allen: Oh, absolutely. You got to make sure that you’ve talked to the right teams inside the bakery to know what that solution is, before we make that call back. We all want to answer the customer as fast as we can, obviously, but we need to take that minute to take a breath and say, “Okay, it’s going to be no, but it’s going to be no with this solution and this option.” And I’ll tell you that in 99.5% of the time, they took the option. There were instances where somebody said, “Look, I’m going to panic, I can’t do it.” And we said, “Okay, how about if you cut the order in half? Like what do you really need? Yeah, you have 100 cases on order? What do you really have to have?” And they would be like, “Well, I need these 30 cases, because this customers out of product.” “Okay, we can get you the 30. And then we’ll worry about the rest of it later.” Or we could work through that with them.

It opened the door to that sort of communication that didn’t ever exist before. You know, it was easy for distributors to be like, “No, I’m placing this order.” And I mean, we have distributors that pre-pandemic, they’d have penalties against you if you filled less than 98% of the order. There’d be a chargeback. Like the expectation in the industry, as I think it should be is, I’m going to give you an order with whatever lead time you ask for and that you’re going to fill the order. That’s how it works. And it’s only in the last couple of years that we have so much volatility everywhere, that they backed off on that, thankfully. At the same time, it opened up the opportunities for conversation. And that’s all this is. It’s about the relationship. If we’re honest with people, people want to help, right? Like, if you say, “I’m in big trouble here, I’m really struggling. This is what I can do. Is that okay?” In almost every instance, they’ll say that’s okay. But most of us were too embarrassed to ask or afraid to ask or something like that. And so you kept saying, “sure, I’ll have it,” and then you put 25% of it on the truck, and then they get irritated. And that cost them money because they sent a truck or you ship the truck that’s only 25% full, like there’s so much inefficiencies in the lack of honesty.

Spencer: When you were talking about the average tenure of your employees, and with that fill rate, part of the factor in the struggles that you had with the fill rate was if you didn’t have the labor. You said that you’ve noticed in the past couple of years that you’ve lost about a year and a half off the average tenure of your employees, right?

Allen: Yes.

Spencer: Okay. And so I know you’re working to get that back up. But again, I have a journalism degree, so math is not my strong suit haha. So what is sort of the formula? And how long does it take, if you lose a year and a half off of the average tenure, to get that year and a half back?

Allen: I mean, that’s math. So it’s dependent on how many people you have and how many new people you add. So if you stopped hiring, and everybody stayed, then probably more quickly that number will start to go up, because everybody that’s here starts to have more tenure every month. But you know, with the natural course of things — and again, with the volatility and people making different kinds of decisions than they used to make, there’s still a fair bit of volatility both with long-term and short-term people — every time you hire somebody new, you’re starting with somebody with zero tenure. And so it depends if you’re hiring a ton of people, then that number is going to continue to go down for a while because you’re adding a lot of new people. It’s just a different way to look at that retention number and look at that workforce number.

So I guess the answer to a journalist would be: It depends. And even to somebody who pretends to know math, I think it still depends. And so I think, I guess my answer to that is that it’s going to take a while. Because we are growing as the pandemic is sort of starting to wane, we know that it’s not gone. And we’re going to deal with whatever we’re going to deal with. In this moment, we’re seeing growth, but we need more people in order to achieve that. So it’s going to get worse before it gets better. I think it’s definitely a lagging indicator of the pandemic, because that number will continue to go down as we hire new folks. But it’s still something to pay attention to over time and start to see if there’s a sweet spot or see if when it turns, do we see any changes.

To me, tracking all this stuff is interesting. But where it really gets interesting is when you can look at the curve of any of these sort of non-traditional metrics, and then put them up against gross margin or operating income or whatever it is, and start to see, okay, when we get safety to this number, or we get trash efficiency to this number, that’s when we start to really see and drive profitability. For the leadership of the organization, that’s what we’re trying to do. And we believe that these metrics on our scorecard will have a positive impact financially. But that’s just an assumption. Then we have to prove it. So we still talk about it internally, we talk about the scorecard with everybody on the floor. And then we got to start to weigh those scorecard metrics against the actual financial metrics, and make sure that those things are headed in the right direction because we may find that driving a certain number, in the end, doesn’t drive profitability. And then if what measured gets managed, we gotta stop measuring it, because it’s not the right thing to be looking at. Those mistakes certainly can happen. I still think they can be interesting and things to learn from, we can understand why and maybe it’s tweaking it or looking at it slightly differently, but all of that stuff is sort of important to look at in concert with the financial aspect of the business.

Spencer: And you know, that’s funny, I was gonna say, if you look at the scorecard and then you compare it against the financials, and it’s not there, my initial thought was, well, then what do you do? So I like how you said that you have to tweak it or find different metrics.

Allen: There are certain points, I will say, during the pandemic that with the depressed sales and the challenges of the pandemic, it was very difficult. It has been very difficult for us to make any money and to show any real level of profitability through what we’re dealing with. That being said, we can look at the velocity of things going the wrong way. And the financials slowing down, as we turn some of these metrics around, it might be later on that we can really marry them up. I mean, the last two years have been such an anomaly as it relates to so many different things. We have to believe that the metrics are the right thing. We’ve had enough experience pre-pandemic with a lot of these metrics to know that they work. So it’s still worth driving them. Even if our sales go down 60%, like they did for the first eight or 10 months of the year, it didn’t keep us from paying attention to trash, even when we weren’t gonna make any money with sales down that far. But that doesn’t mean that we stopped paying attention to trash.

Spencer: Right? So just kind of two thoughts that I had. One is there has to be a level of hypothesizing I guess, before you decide to dive into non traditional metrics, you can’t just think this is something cool that we should measure and then cross our fingers and hope that it supports the profitability, you really have to sit down and say, Okay, these are things that we should be measuring so that we can manage them, because we have a reason to believe that managing these specific aspects will lead to better profitability, right?

Allen: Yes, absolutely. And I think some of it comes with experience. Some of that comes from listening to other folks in the industry and what they’re doing. A lot of it comes from listening to folks in other industries, because in the end, we’re manufacturers and it’s not that different than making anything. We happen to we get a kick out of it because we make something that we love, and we like to eat what we make, and there’s there’s an element of bakery that’s special, but it’s not different. I think there are so many places you can turn to, to learn some of the stuff and pay attention to some of these things. The internet is a great resource for looking at non-conventional metrics and conventions and educational opportunities, and all that stuff exists. But at an end moment, you’re going to have to say, “Okay, I believe that paying attention to safety, for me, is going to be a metric that drives better retention. And it’s going to help our production because if we keep our people working and on the floor, as opposed to out because they’ve hurt themselves, you know, we’re going to make better product.” You got to believe all that stuff and think that there’s going to be an effect down the road.

Spencer: Mm hmm. This is my last observation, and I think it’s going to be a good closing thought. It goes back to one of the first things that you said in this conversation. And that is, you don’t want to have your companions have an assumption that it’s about lining your pockets. And would you say it’s a fair assumption that when you have these types of metrics, with the waste management and the companion safety, and the fill rate and the retention, it leads people to really be able to participate and feel like they have a hand in making these changes. So then when they do lead to profitability, it’s not Josh’s company is better, it’s our company is better because we participated in this.

Allen: I absolutely believe that. And I also believe that it’s a lot more fun to celebrate the success of a group than it is to celebrate the success of a business owner. It’s hard to think pre-pandemic, because it’s been so long, but what it has given us are things to celebrate. Even in the midst of a pandemic, as challenging as things were, we could celebrate our continued improvement in our trash efficiency. We could continue to celebrate an improvement in our sales dollars per complaint, even through the pandemic. And so, look, we didn’t have a lot of good news to share. Hey, we lost this customer, we lost this volume of business, we got this number of people sick, we got to wear masks all the time. All the things that we kept imposing on folks that weren’t positive pieces of news, but to be able to stop monthly and say, “Okay, that’s great. We got to be honest about what’s happening in the world. But we can also celebrate that we’re still going here, and we’re still getting better, and that we’re going to be better, even on the other side of this.” That means a lot to people and to continue to celebrate Companion of the Month and things that folks are doing to contribute positively to everything that’s happening here. And finding metrics that we could continue to celebrate even during financially challenging times I think is super important, because there wasn’t a lot of positive things to hold onto in or out of work. So we got to try to create those moments. We’re not trying to just manufacture those out of nothing for the sake of celebrating things. I mean, these are true things that we do believe long-term are going to have hugely positive impacts on the business. And so it’s been great to be able to celebrate those and continue to do so as we wind through this experience.

Spencer: I love that. And Josh, this was such an interesting conversation. Thank you so much for sharing your very unique philosophies on metrics and how you’re finding success and things to celebrate with the entire bakery team. It’s really cool. And I’m excited for next week because we are going to go in a totally different direction. We’re going to move away from those hard metrics to talking about how you learn some lessons from improv on how to create a successful business. I’m excited for that one, too. See you next week!