Welcome to the sixth season of the Troubleshooting Innovation podcast. Joanie Spencer, editor-in-chief for Commercial Baking, visits with various members of the team at New Haven, CT-based Chabaso Bakery. Hear about their journey to becoming a Certified B Corporation and building a business as a force for good. Sponsored by JLS Automation.

This episode focuses on continuous improvement. B Corps must re-certify every 3 years and meet a constantly evolving standard for social and environmental performance. So this week, Rich Jamesley, Chabaso’s VP of operations and supply chain, and Charlie Negaro, president, talk about how they approach innovation on a 3-year cycle.

Learn more about this season here, and listen to Troubleshooting Innovation on Apple, Spotify, Google and Stitcher.

Joanie Spencer: Hi, Charlie and Rich, thanks for joining me.

Rich Jamesley: Hi, Joanie.

Charles Negaro Jr.: Hey, Joanie.

Spencer: We have spent a few weeks really talking in depth about what it took to get this B Corp certification. It’s a long and labor-intensive process. Last week, Rich and I had this incredible conversation about what this certification looks like in the operation. In so many ways, achieving this was just the first step because in three years, you’re going to have to get recertified and kind of do it all over again. Can you explain to me what exactly a recertification entails.

Jamesley: With, the B Corp assessment, you have to go through quite a few questions. Then you have to demonstrate your results against those that then get certified by the B Lab group. They go through and confirm you’re meeting the criteria and then provide the score. The criteria gets more challenging each recertification. We will need to be better than we were in this past certification. Over the next three years, we’ll continue to evolve how we do business in order to attain that recertification.

Spencer: Yes, it’s not a one and done. It really sets your bar higher and higher every time, right?

Jamesley: I think when you become a company, you become a company. But when you’re a B Corp, every three years, you have to validate that you are meeting all those criteria that they have for being a B Corp. Knowing that the criteria changes and gets more challenging each time, means you have to get better, and you have to have a continuous improvement process within your organization to evolve and to attain that recertification every three years.

Spencer: Rich, we closed out last week by saying three years goes by really fast. So happy 2023, you’ve got two years left. Have you already started planning for your recertification? What does that look like?

Jamesley: What we’re looking at is various platforms and we have some exciting things that we’re working on from a people standpoint, which really is how we’re going to invest in our people to make them better. This will obviously make Chabaso a stronger organization.

Negaro: I’ll just add to that. Having someone like Rich, who has been a part of a B Corp before is just invaluable, to be overly honest. After we got certified, there’s an extent of, “Okay, now what?” Having someone on the team with the experience in manufacturing that Rich has and experience with B Corp is a number of things, but very comforting. As we mentioned last week, it’s this constant struggle and process to improve. This is almost a whole new challenge to continue, improve and evolve. Everyone needs to play a role now. Part of what we’re going to be doing is setting up these cross-department committees and establishing clear goals. I think one of the aspects of the B Corp certification that is really a helpful tool for us or the compass, like we talked about, was my dad has always tried to treat everybody like family in the company. But to some degree, it has always lacked focus. To be measured means you have to be focused. We think these buckets of improvement we’re going to have moving forward will just continue to be our hiring strategies, improving our environmental footprint and what impact can we have on our regional supply chain.

Spencer: It really takes you from a mindset of, “Here’s what we want to be,” to “This is what we are.”

Negaro: Yes, even before that it requires you to get shaken out of the day-to-day firefighting. As Rich mentioned, it’s not big steps, it’s tiny steps and those tiny steps upward every single day. If you can just get your head above water a little bit so you can be intentional about how you’re reacting to those tiny steps, they can build into something big over a long period of time. That process of collaborating and building something is what really gets me excited about going to work. Even on our toughest days, it keeps us all in the game.

Spencer: Okay, I want to take a , Charlie, and sort of talk about Rich like he’s not here. Sorry, Rich. But you mentioned what a key team member he is, and I just want to again point out what incredible find. To be able to bring someone on your team with not only 40 years of experience in the industry, but also someone who came from, and I mentioned this last week, Rich didn’t just come from another B Corp. He came from the standard bearer B Corp in the baking industry, in my opinion. How does having Rich on this team really help that mindset of like you said, “Woohoo, let’s celebrate for a minute. We did it and high five. Now back to work, because the work’s just starting.” How is having Rich a game changer for you?

Negaro: Rich started with us in January of 2022, but I’ve known about Rich for probably two or three years through some of our advisors and consultants that work for us. The baking industry is relatively tiny. Everybody knows everybody. Our last few years that come into ourcapex meetings and our engineering consultant, this guy named Tom Course, who was also consulting down with Rich, would come and say, “Hey, there’s this guy Rich, and he’s doing all this stuff.” The stories build into without you realizing, where you know you have to meet this guy. I thought to myself, “How do I find Rich?” Tom called me one day and said there was an opportunity to meet Rich, and there was an opportunity to possibly hire Rich. Tom called me at six o’clock in the morning, on his way to another meeting, and even just the process of getting to know Rich was, I would say, unique to meeting other people. I think when you kind of meet someone, whether it be a friend, employee or a coworker, you kind of go, “We’re in cahoots here.” The process of getting to know Rich and being introduced to him was great. Then the value of having someone who has been there and done that, but who is also open. There is zero of, “This is the way it has to be done. Let’s do it this way.” or “This is the way I did it here.” He has a very open mind. There’s things that I get to learn from him on a daily basis that open my eyes to all those small things that we can just be improving on culturally. This was probably the most challenging three years for any industry, but the most challenging year with dealing with sudden and abrupt inflation. And labor constraint that’s somewhat related to that, but somewhat not. Having someone like Richard around … I don’t how I could have done it without him. That’s all down to his experience in manufacturing and B Corp, but also just his personality and cultural outlook.

Spencer: My next question is based on all of that, and it is for both of you. As you’re going through the application process, and I think you both have very different perspectives on this, but did the idea that you’re going to have to be recertified in three years impact your initial improvements that you made for the application process?

Jamesley: I would say that the recertification from a professional standpoint really gives you focus. Every organization sets their long-term goals and their roadmap of the future. But knowing you must get recertified makes you focus on that you’re going to have to get better and you’re going to have to have the goals to do that. Sometimes goals are on a piece of paper and you share it, but knowing that an external group is going to look at what you’ve done and demonstrate those results and progression over the three years is healthy. It gives you that determination of, “What do we have to do differently to get better?” And again, I think it’s all under the lens of continuous improvement and how and where you are driving those results?

Negaro: Yes, I totally agree. I’ve been a part of various ways of setting strategy and setting goals. For me, and I think a lot of people in our organization, it’s finding what are the right tools that work? It’s not your job to go off alone in a room and figure out what to do and then come back and sell it to people. It’s your job to get everybody together and collaborate, to figure out, “What’s the problem? What are some possible ways? What’s the opportunity? Or some possible ways to get through together? What are some possible ways to capitalize on it?” I think that lends more to an organic uprising of strategies and tactics. The goals that we set or the focuses that we set to get certified just kind of came out of what we were already doing.

Spencer: Charlie, that kind of reminds me of something that you said in the very first episode. It was that it is so much easier to fix something that was wrong than it is to figure out what went right. Understanding what went right and how to improve on that really does require that team collaboration.

Negaro: Yes, exactly. Sometimes our best days are most frustrating because it’s a combination of 100 things that went perfectly rather than just like one thing that went catastrophically wrong. It’s great to have those days occur back-to-back. To be successful day in and day out, you have to somehow permeate in everybody’s mind the same goal with that we’re here to make a quality product, and it’s something to be proud of.

Spencer: Yes. Now that you are an official Certified B Corporation, how does it change your definition of innovation in terms of your product development but also as a manufacturer?

Jamesley: I think that one of the pieces that many organizations as we’ve gone through the tight labor availability, have gone to automation. I think that in particular, in the artisan bread, the use of our people to make that bread special, which is also part of the innovation process, products that we are making available both new as well as our existing, is the key to our success. That’s why investing in our people is a key piece that we are going after. We believe in investing in our people.

Negaro: I’ll just add from the manufacturer side, there are daily reminders of what the benefits of having a collaborative working environment are. Last week, Rich mentioned that, through this challenging year, we’ve been able to improve our throughput. Another piece that has come out of 2022 is that we’ve always had very good throughput. But our team came together this year and came up with new ways of asking for longer lead times from our customers. Rich has been working with scheduling. When we sit down with a customer this past year, all the conversations are around price, but to be able to sit down and then tick through their checkboxes and get to the end and go, “Well, your fulfillment rate is 99.9%. Great.” I think that’s been an enormous help for us. It might not sound like a huge thing, but it’s something that has come out of this culture. When someone from the outside looks at, “Why should I invest in culture?” Or, “Why should I invest in B Corp? It’s, “How does that improve? What are my tangible assets that come out of that? What’s my ROI?” There’s a lot of soft gains that actually help you out tremendously.

Spencer: I would say that 99.9% fulfillment rate is pretty big deal. That’s pretty tangible.

Negaro: Yes. A lot of it is just communication and everybody working together and knowing that we have to figure out a way to make this happen and do it continuously. That we can do it every week, not just this week.

Spencer: Let’s unpack this a little bit more, because Rich has mentioned it, you have mentioned it, everybody knows that 2022, despite being generally considered post-pandemic, was a really hard year. How did you both see supply chain disruption and this record inflation, really impacting your ability to innovate at the level and pace that you need to stay on a three-year cycle? Because again, we have said it several times, three years goes by really fast.

Jamesley: I think from a customer consumer need, we must continue to innovate and come up with the products that meet the new demands of our consumers. I think we have to partner with our vendors and figure out how we can achieve that with all the challenges from the supply chain, and find the partners that will work with us in order to do that in order for us to come up with new innovations. Again, being in the artisan bread industry, you can’t stand still, you need to come up with new products that people are going to want to try and continue being a supporter of the Chabaso, which ultimately leads to the support of our people and community.

Negaro: I think the one of the plus sides of a restricted supply chain was I gave everybody kind of the excuse to just kind of focus on the basics. A lot of customers just came out and said, “Well, here’s what I actually just really need.” I think there is some carryover from that in acceptability within the industry, and maybe in all industries and folk’s ability to say, “No” gently to things. In the past, like Rich was saying, people are looking for innovation, we’ve all gone to IBIE and IDDBA and seeing innovation that’s very far afield. Those things very rarely stick, but they’re flashy and they’re new and exciting. They create ripple effects and disruption. What we’ve been able to do is be smarter about the lanes that we want to be driving in and set ourselves up ahead of time, whether we’re talking to customers, brokers or our own team, just to say, “Here’s what we are really good at, here’s what providing a solution looks like, here’s what it doesn’t look like, here’s how we focus. Let’s stay focused.” There’s always these opportunities to still be creative. But it’s just very important that it’s a very intentional, focused effort.

Spencer: Everybody’s dealing with supply chain and inflation. No one’s immune to it. But then Chabaso is in a relatively unique position because you’ve got those challenges, you’re an artisan bread manufacturer sp that comes with its own unique set of challenges, and now you’re a B Corp and that has its own set of unique circumstances. When you put all those things together, how does that impact what you’re looking for in your supplier partners, and how does it impact — especially as a B Corp and looking through that lens —how does it impact who you’re choosing to work with and what those requirements are? And I’m thinking from an equipment standpoint as well as an ingredient standpoint.

Jamesley: I think one of the things that fascinated me was Reed and Charlie were looking at regional grains. Quite frankly, I didn’t realize how many regional grains were available here. But as we went through the 22 challenges of supply chain, it could not be an initiative that we could take on at that point. But I think that as we go forward, from a three-year lens, we will further pursue and find partners within the regional grains, which will be a great innovation for an artisan bread that will show our B Corp as well as our company beliefs in utilizing partners who are from the area, which really gets into the planet initiative of B Corp.

Negaro: I think that our experience over the last year or two is has affected how we look at that. When we first started to think about putting regional grains into what we do, there’s a lot of challenges there. But, coming out of the last year we thought, “Oh, we think this could work in these specific ways where it creates meaningful impact.” It’s also something that’s accepted by a consumer, customer or retailer. As we look at these smart partnerships, whether they be between us and retail or us and a vendor, everybody’s still looking for the same thing. I interact mostly with our retailers, and they’re looking for the best possible product at the best possible price. They are looking for a great service, someone that’s going to pick up the phone and help them walk through and solve their problems. We try to stick with partners, whether it is retailers or vendors, that you can see eye to eye on challenges when they come up, because they are going to come up. You can’t expect everything to go perfectly. You get to know people really quickly.

Spencer: It goes along with your theory that it’s easier to understand what goes wrong, then understand what went right. That’s when the work gets done.

Negaro: You usually create the best bonds with people through conflict.

Spencer: That’s true. Okay, we’re talking about the recertification for your B Corp certification, and it’s a three-year cycle. I’ve said that phrase three-year cycle several times, and you can’t say those words without thinking about IBIE. Your certification happened in 2022. Your recertification is going to happen in 2025. That’s the IBIE three-show cycle. What does that intersection look like for Chabaso from a strategic standpoint? How does your certification cycle impact how you approach IBIE?

Negaro: [Last year], 2022, is the first year I got to go back to IBIE in entirely too long. It was great seeing everybody and connecting with everybody. Maybe it was this mid post pandemic feeling that everybody had, but just being in the same place with everyone.

Spencer: It was a joyous, wasn’t it?

Negaro: Yeah. It is probably the one of the best places for us to be looking for partners to improve our cultural efforts going forward. I think if we can find ways to infect the IBIE world with the B Corp world, it’ll benefit everybody.

Spencer: I think you’re onto something there. There must be some way to infuse B Lab as an organization or B Corp, in terms of its standards into IBIE. We did that a little bit. Our creative director Jordan Winter, who produces this podcast,  has done a lot of work with B Lab in her professional life. She did a presentation at IBIE that she titled “Are you a B Corp and Just Don’t Know It?” and identified all these values for bakeries to look at and  think, “Hey, wait a minute, I’m already doing that. Maybe I should explore this certification.” Hopefully, we have companies like Chabaso that can help infuse this culture into the industry through IBIE.

Negaro: Yeah, totally. Hopefully three years from now, or two and a half years from now really, we’ll have tangible improvements that we can point directly to our B Corp assessment process or certification process, and be able to say, “Hey, this is why we did it. This was the outcome. This is how it helped us improve.” Maybe it’ll just influence a few other people to take that step into the unknown and go through the same process.

Spencer: Definitely. Correct me if I’m wrong on this, but I would assume it’s probably more common for your retail customers to say, “Hey, we want to purchase product from a B Corp; that has a lot of value to us.” Reed and I are going to talk about that next week. But is that a safe assumption to think that is a more common mindset, then baking companies saying, “I want to choose vendors who are B Corps.” Or should the equipment vendors and the ingredient suppliers really start looking at the B Corp certification because their customers are going to start requiring it?

Jamesley: The strength of the B Corp community is the interdependency of working together. Of course, you would want everybody to be a Certified B Corp. But as you mentioned, not everybody can be up to that criterion. But if they believe in it, and they want to partner with people who do business that way, that’s just as powerful. I think that as this continues to evolve, you’ll see more and more companies who are either a Certified B Corp or choose to do business with B Corp companies. I think that’s where the power will come from, in changing how the baking industry does business.

Spencer: I have this visual in my mind, if you think of it as a as a ripple effect. You throw a rock in a pond and that rock is probably the consumer. The consumer is the one who’s going to make that change in the center of the pond;  it’s going to ripple out. And the suppliers to the allieds in the industry, the equipment suppliers, the service providers and the ingredient suppliers, they’re going to be on the outside and they’re the ones, when the water comes up to the shore, eventually, it’s going to impact them. They’re going to start really needing to have more values in what they do and how their companies are run at some point. I think it’s going to be a slow change, like with any ripple effect.

Jamesley: I think it’s going to have to start from the consumer and the vendors. Whether it be from the ingredient, packaging or equipment, they’re going to see the companies that are driving those results and getting the business and they’re going to want a partner in order to grow their business. People are looking for companies that are doing good. I think the certification on your package that you are a B Corp says that more people are understanding the badges that are on packages now, which are a variety. But I think those badges really mean something as far as how the company does business.

Negaro: I agree with Rich that it’s consumer driven. The people with the dollars are the ones making choices. At the same time, when you sit down with a retailer and they say, “What are you guys doing?,” and you tell them earnestly what you’ve been doing in the last year, not because you were expected to be asked the question, but just what you’ve been doing. And B Corp comes up, and what we’ve been doing to get that certification and their eyes light up because they connect with it. Yes, they get to communicate to their customers and that helps, but they’re engaged. I think there’s this groundswell that is just coming from a societal movement towards what people are much more connected to and what they’re spending their money on. That’s both just the consumers that are going into the stores, and it’s the people who are making the decisions in the stores, then with our buying power on equipments and vendors. I think it’s very rare that any of them are going to be doing a stellar job if they’re not focused on their culture going forward, because it’s going to be tough to retain fabulous employees and to fulfill the increasingly difficult demands in this economy.

Spencer: Right. I know there are equipment suppliers and ingredient suppliers who are putting a heavy focus on their workforce and how they treat their employees and the values with which they’re running their companies. Not because it’s a good selling tool, but because that is what they believe in. And again, I think the change is slow, but I think it’s happening. I think those ripples in the pond are happening, and it’s reaching all the way to the shore.

Negaro: Exactly. As you mentioned earlier, any change worth doing usually is pretty hard. It’s good to see everybody pushing the pedal a little bit so that we can all be working on it together.

Spencer: I have one last question for you in this episode. With everything that we’ve talked about today, I’m going to ask for a little bit of self-reflection. What would you say comes first, the need to innovate or the B Corp standards? In other words, would you consider Chabaso to be primarily an innovator that uses B Corp as a North Star? Or do you see yourself as a B Corp first, and use innovation to do good in the world?

Jamesley: I’ll go first. I think we’re an innovator and a manufacturer who is making products that our consumers are looking for. By having the B Corp compass, we’re a force for good. That is how it helps me do my day to day and how I work with my team. We are innovating and delivering for our consumers. Every minute, we’re out there making bread, and at the same time, we have a compass that is keeping us going in the right direction and looking to get better and better from a people, planet and purpose standpoint.

Negaro: I agree. I think that is a tough one. Because it depends on what day you asked me, I might change my answer. But what made B Corp certification possible for us is that we had that compass and that foundational culture. There’s some degree of, “We’ve always felt this way. We’ve always been innovators looking for this creative collaborative, and what is the next experience for ourselves and our consumers?” I think I probably would agree with Rich today, we are innovators first. My first experience with learning about the B Corp 15 years ago was, “This feels like us. This feels like a tool or this feels like a group that I want to be a part of. How do we go do that?”

Spencer: Honestly, that’s how I thought you would answer, Charlie. Knowing that this has been on your radar for 15 years, I thought you would say, “I’m a B Corp first.”I’ll ask you again tomorrow. Okay, well that was the last question for this episode. I really loved this one. This was a great conversation. And again, just like last week, it’s looking at what it’s like to be a B Corp through a different lens. I appreciate both of you bringing your perspective in sharing what it’s like, knowing that achieving a B Corp certification isn’t the end, but really the beginning.

Negaro: Thanks for having us, Joanie, and thanks for the opportunity to talk about our journey.

Spencer: Next week, I’m going to circle back  with Reed Immer. We are going after everything that we’ve collected on this journey. We’re going to look at some of the secondary benefits that come along with being a Certified B Corp. I’m excited for that one. For today, just thank you again for your thoughts and your perspective in sharing this journey.

Jamesley: Joanie, I just wanted to share one thing. The B Corp Certification process is extremely challenging. When I came here and found out we were going down the path and had the opportunity to speak with Reed, who was leading it, I was like, “Wow, I’m glad he’s leading it and not me.” But the interesting thing is, and it goes back to a comment you made earlier, is that he is really taking this and bringing it to our partners in retail and consumer and making it about, “This is who we are.” A lot of times it comes from a call at the back end of the supply chain, but he’s the tip of the spear telling what Chabaso is all about and him being  the leader of the certification process. Just says how much he’s committed to it. It’s been my pleasure coming and working with him and shouldering a big chunk of the process of getting it done. So, thanks Reed.

Spencer: Oh my gosh. I don’t know that there is a better endorsement. And let’s just call it what it is Reed is the B Corp certification rockstar.

Jamesley: He’s my rockstar.

Spencer: Thank you for adding that postscript. I think it’s perfect setup to tease the conversation that he and I are going to have next week. Because while you can’t go into it thinking about what the secondary benefits are, you must be pure in your intention. There are some great things and sometimes unexpected things that come out of it that help make your company even better. I’m looking forward to that. Just again, can’t thank you both enough for this incredible conversation today.

Negaro: Thanks again, Joanie.