Welcome to Season 8 of the Troubleshooting Innovation podcast. Joanie Spencer, editor-in-chief for Commercial Baking, is spending this season with Marc and Elana Schulman, the second and third generations of leadership at Chicago-based Eli’s Cheesecake. Their conversation explores innovation, growth and longevity through the eyes of a family-owned bakery. Sponsored by Oakes.
This episode features Eli’s unique workforce development strategies and reveals best practices that any bakery can emulate.
Learn more about this season here, and listen to Troubleshooting Innovation on Apple, Spotify and Google.
Joanie Spencer: Hi, Marc and Elana. Thanks for joining me again this week.
Elana Schulman: Thank you. Great to be back.
Marc Schulman: Yes.
Spencer: I’ve had so much fun talking about how Eli’s was built and talking about what makes a Chicago-style cheesecake and how Eli set that standard. But this week, I want to talk about the people in your bakery who make the cheesecakes because you do some special things. I’m very excited to get into this with you. I’m just going to make the first question really short and sweet. You treat your workforce well. Why?
Marc: If you’re in the restaurant business, who’s the most important person? The dishwasher and the bus boy. Eli had these core values that he used to pass out to his customers that drive us, “Treat the other as if you were the other, and charity will never bust you.” Your mind must be in the right place.
In the workforce, there are times when there are not a lot of people to hire, and then businesses suddenly are very focused on recruitment and retention. Years ago, when we were expanding and working with the city, we were trying to get other food companies interested in some of our educational initiatives, and the attitude by some was, “Hey, we’d rather keep our people stupid.” But we’re not going back there again. Minimum wage rules and immigration law have changed dramatically, and we don’t hire temporary workers. We hire permanent associates, and we will go through some of the ways that we do it. We have people who have been here for a long time. If you want to keep people, treat them like you want to be treated.
Coming out of COVID, we feed every associate a hot lunch every day. We give everybody cheesecakes to go home every week. We try to do those things, but I think where we’ve really worked hard is on educational initiatives and taking steps that help expand the diversity and skill sets of our people.
I think that over the years we were fortunate to partner with several institutions. One is Wright College, which is our neighboring community college in Chicago. Also, the Chicago High School for Agricultural Sciences, one of the few public high schools in the country dedicated to producing leaders in food and agriculture. So, they’ve been great partners, and then we’ve really worked to bring education in the workplace.
In 1991, we partnered with Wright College for Eli’s U, which is our on-site GED-ESL program. Then interestingly, it was that program that created the visit by Bill and Hillary Clinton in March of 1992. But bringing education into the workplace and being able to continue that over the years as we moved into this facility … One of our next phases of plans for growth is building out the space we’ve dedicated for an education and innovation center so we can do even more for our people and then more for the community as well.
Spencer: I think this is interesting because you’re touching on something that doesn’t get talked about a lot. When you talk about education, it’s twofold. You are educating your workforce on how to do their jobs, but you’re also enabling them to have a high school diploma. Not a lot of bakeries talk about how they’re educating their workforce just to be productive members of society in general and giving them a general education. How is doing that benefiting your workforce and benefiting the business? Because there really has to be a business case for everything, even if that’s not the primary reason for it.
Marc: Well in January of this year, we were fortunate that Secretary of State Antony Blinken came to Eli’s, and that was because of our long success and partnership with hiring refugees. In his remarks, Secretary Blinken took what I had said to him, because everybody’s going “Oh, God, you’re so great,” well then, I’m going, “But if this individual is going to school at Eli’s, then going on to get a four-year degree or technical training, it’s really their investment and their commitment.”
Whatever bakery or food company you’re talking about, we all need more trained people. I’m saying it’s a good thing to do, but it’s good business as well. If you want long-term associates … the skill sets and flexibility are just so much better when you have people who have been with you 10, 20, 30 years in terms of what they do.
I think education is something that we have a history of doing, but we really want to be able to do more. Over the last few years, there has been a greater expansion of refugees coming to the US. In our employment, we have the ability to work to help them have ongoing training, make them better associates and better for their own lives. They go together, but I think you need respect. You need to respect all our cultures. We have several associates from Afghanistan; we have several associates now coming from Ukraine. Our vice president of procurement, Elias Kasongo, came from the Congo 29 years ago. He has been in the dish room, he got his GED, his associate degree and then received his college degree from Northeastern. He went from the dish room to the c-suite, because of his work. But I think that the ability to create an environment for success and giving people those opportunities has just been critical to what we do. And with the great partnership of Wright College and the other work that we’re doing with students with disabilities, we’re creating better career paths for people to pursue careers in food and also at Eli’s.
Spencer: Okay, so let’s talk about that. Because that’s a program that I’m less familiar with, as opposed to Eli’s U and the work with Refugee One. So, let’s talk about this initiative with students with disabilities.
Elana: One thing I just generally want to say about these long-term partnerships and different hiring strategies is these go back 30 years. My dad has really dedicated his life to this work, and it is meaningful for me to come in and to see that. It’s not just something that is a recent development, and it’s not for optics. I have really appreciated his long-term commitment.
We’ve been hiring individuals with cognitive and developmental disabilities for a long time. But more recently, we started this program in partnership with Wright College and the Chicago High School for Ag Sciences, and it’s a state-funded program called Project Wright Access. We just finished our third cohort. Basically, the idea is that students with cognitive and developmental disabilities who are in this transitioning year, where they’re going to be leaving their schools where they have access to all this support, have this big moment where they can join the workforce and develop all these really amazing workforce skills. But you must have the right partner to do that and the right people behind the scenes to help with that. We’ve just been lucky to work with so many amazing educators and administrators on this program. And we’ve hired two students from this program, who are working in various roles in the bakery.
The idea is that you should have the same access to jobs and life experiences, regardless of ability. It has been an amazing project for me to work on, and I have formed incredible relationships with all the people that are working on it. Seeing the joy and happiness of these new associates that came from this program, they’re so proud to be in the workforce and to work at Eli’s, they literally are skipping into the building. We hope through this program more companies will take part in it and provide more opportunities. It has been something that we’ve done for a long time, but then more formally through this program.
Spencer: When Marc answered the first question, as he was describing these philosophies from a historical perspective, I was thinking there are a lot of companies who recognize the labor crisis in the industry and they’re trying to come up with new initiatives, whereas Eli’s has always been doing this. And while that is just another thing that makes this company special, I think that this episode is important because companies can learn new practices for solving workforce and labor issues by learning from what you’ve been doing since the bakery started.
Marc: Absolutely. I think that whether it is a community college, Refugee One or partnering with high schools, the goal is to help those associates because one of the other points of hiring people for the long term is not where they start, it’s where they finish. You want to give them the opportunities to be successful. It creates a more rounded company. I think we have associates here from 20 to 30 countries, many different languages, and we do a lot of things to honor holidays and traditions. I think if everyone shares that passion for quality and customer service and growth it makes our job much more possible to be successful. So again, we’re doing it because it’s the right thing to do, but it’s also the best thing to do for business. It is what makes our product stand out and someone understands why it’s special.
Spencer: That totally makes sense. So logistically, or organizationally, how do you manage so many different programs and initiatives? Do you have a specific team that’s dedicated to it? Elana, is this all your charge? Or is there one person in charge of each specific initiative? Just from an organizational standpoint, what does that look like?
Elana: My dad is looking at me. It’s an all-hands-on-deck situation. I think we would love to be like, “Oh, it’s all very planned out, and this group of people is responsible for this.” It’s really a collaboration between me and my dad. We have an amazing human resources team, and it’s kind of a labor of love coming together and figuring out the best way we can support our associates.
Marc: If we’re hosting a job shadow for the Chicago High School of Ag Sciences or … We just finished a five-week summer program for eight of their students with Wright College where we bring in speakers and they get college credit. Our food safety and decorating teams are involved because they have a competition in decorating cakes. I think that the goal must be to create a welcoming environment. If you’re hiring an individual with a disability, or it’s an individual’s first job in the US, or you’re hiring someone who’s never worked in a bakery and manufacturing before, the fact that everyone is creating a welcoming environment and being supportive is just critical. I think they go hand in hand. We’ve just have had these great partnerships.
One thing that gets hard sometimes is, I have spent time with other companies trying to convince them that they should do these things, and you really learn that there are some companies who see the benefits and other companies think, “Hey, today we’ll do the minimum possible.” They might move their facility because the minimum wage is a little cheaper across the border. But we’ve found that this strategy works well for us. And again, quoting Eli, “Treat the other as though you’re the other, and charity will never bust you,” doing the right thing has really allowed us to succeed and grow, and the skills and dedication of our workforce are an important part of that.
Spencer: You mentioned that there probably are still manufacturing companies out there that are going to focus more on the bottom line first. Those are the ones who are much more reactive in terms of the current labor situation. I think you would agree that this labor situation is not going away. I think that this is a new reality that’s going to be a baseline for normal moving forward. I do think the ones who are not on board need to get on board, or they’re going to eventually pay a heavier price. Would you agree with that?
Marc: Oh, absolutely. The few other parts of it are that wages are up dramatically. So, you need a more productive associate. Within the SQF audit now, there is a section on having a culture of food safety … quality. I think it’s moving in that direction. And again, we’re one company, one plant. Elana and I hear people say, “Well, where are your headquarters? What’s in the bakery?” You are there with your people and it’s worked well, but you can’t live in the past. If we’re talking about how we got this award 10 or 20 years ago, that’s irrelevant to the discussion.
The question is, how do we expand? This summer, we’ve had an associate working as a consultant on expanding educational opportunities for all associates because we really do want to give every person — if they want it — a personal development plan where they can take classes at Wright, pursue a four-year degree or a graduate degree and say, “Just because you started in the workforce, don’t think that your opportunities for education have ended.”
I always remember the day before my father died, and I was with him. We were at Governor Thompson’s birthday party and we’re on the way back and I’m reading my father this prospectus and we’re going over this company, opportunities and challenges. Eli was always thinking. For me, I always say, “Readers are leaders.” So, I read a lot and share that knowledge. Obviously, I read Commercial Baking, the newsletters and everything else, but the more that Eli’s is a learning environment, and that knowledge is not only at the top levels but really throughout the organization, is a much better chance that we’ll have the long-term success we envision.
Spencer: You are sort of answering my next question already. I was sitting here and thinking about professional development in more general terms and training across the board for everyone. And while you have these incredible programs, to enable access for anyone to have a job, regardless of their background, once an employee is in the door, what do your programs look like for not only onboarding but also training up so that employees have opportunities to advance in the company and create that longevity that you’re talking about?
Marc: It’s really where they add focus. I know in a future episode, we’ll talk about COVID and the impact it had. Obviously, a lot of our activities had to be curtailed, but I think we always know we need to do better. There is certain training that is essential for the job. There are certain tests that individuals need to take every year in training within their job. I would say where we see the highest priority for our workforce today is additional work-related training on the floor and the ability to get the training or educational experiences.
It’s a work in process; we’re a little tight on space. Sometimes, like when we did our ESL program, we would lose our conference room for four days a week, for half the day. That’s why we want to be able to add the other space to do it. Then the other part is, if we can encourage people and give them the incentive to go to Wright College or you go take classes online, and then we’re doing more short courses because again, as we talk about equipment, the biggest issue of quality is, is the equipment set up right? Is it giving the right readings? What are we doing so that in the end that operator can have the appropriate skills to operate that piece of equipment safely and with quality? I think we have more work to do. And that’s good because it’s not the awards you get. It is about what the plans are for the future. We’re proud when people take tours of our facility to see that people are smiling, people are engaged, people are acknowledging other people, and that’s the type of environment that we want to be.
Spencer: Absolutely. I think you do have that reputation. You said something that sparked a thought for me in talking about the equipment and especially as things are more automated and more technologically advanced, I’ve seen a couple of conversations lately, that got me thinking. Automation is really helping in terms of creating a more equitable work environment in some respects, such as manual tasks that women or people with disabilities weren’t previously able to do that they are now. But at the same time, as you said, these are highly advanced pieces of equipment that need some level of education to learn how to use them. So, are you seeing that trade-off? How are you all creating opportunities, but also navigating the challenges that come with those opportunities?
Marc: I think at a certain point in time, you update your equipment when you’re working on your standards. The challenge is that we can start a lineup or a product, and it’s extremely manual because that’s what you must do. Then you have a plan because in the long term, the cost of associates is just too high. However, when you can show an individual maybe the size of the mixer, the type of depositor we’re using, or individually wrapped packaging equipment, that there is no way you’d be able to do without sophisticated equipment, how important it is to have the right people who have the skill sets to set up the equipment and clean that equipment.
I know from your work with touring bakeries, seeing when someone takes a depositor apart and then puts it back together again, that they are taking pieces of equipment that there could be hundreds of pieces, and you had people doing it every day. So, it also comes back to a long-term associate learning this job. You just can’t have a temp walk in off the street to this job. I think if you have a more dedicated and talented workforce that allows there to be long-term continued wage growth, other benefits, profit sharing and other things that come along with being successful. If you tried to do it on the backs of your people by just sharing how much you made without any concern for investment to go with it, you wouldn’t be around very long.
Elana: Something I was going to say is, I was recently talking to our chief engineer who’s been at Eli’s for a long time, and we were talking about this next generation of people on our maintenance team. As far as the skills need to be developed and how technologically advanced equipment has become. He said that he was going to start having a couple of people on his team learn programming because they would make great programmers. These are probably conversations that did not happen 15 to 20 years ago. I think it’s really thinking ahead, thinking about what skills are necessary to be successful and really thinking differently than before. Everything is changing so quickly; we need to have those skill sets in-house to be successful.
Spencer: It got me thinking, like you said, in the past, it was to go get an engineering degree, learn how to be an engineer and then you can apply those skills to operating this equipment. Now it seems like, especially in this environment of learning at Eli’s, you can be on this equipment, and you have access to learn those skills. That feeds into that engineering type of education so that they’re getting the opportunity to learn the skills without having to go out and earn the degree where they might not have that opportunity out in the real world.
Elana: Absolutely. My dad mentioned Eli’s U, which is this GED-ESL program. Right now, a big project I’m working on is building that program out. Part of that is doing more check-ins with managers and everyone on the floor to say, “What can we do to make you more successful at your job? Or are there things that you want to do that you’re not doing? Or something a skill you feel like could develop and it will have a huge impact on your work?” I think it’s finding those gaps, especially with more technologically advanced equipment, and all these things where maybe someone just didn’t have access to that before or they’re in a new line of work. And they have an interest or think they would be good at something, but don’t necessarily know how to get to that point. We can fill in that gap. But we’re working on that now. There’s not necessarily a very formal process for that. I want to formalize it to make sure we’re consistently having those conversations all the time.
Spencer: That seems like white space.
Marc: The one thing I’ll add on that, we’ve always had a summer intern program. Sometimes the interns are children of associates, mostly from the outside. But this year in engineering, we’ve had a lot more young people, children of associates finishing high school or college coming in. I think that’s something that having them do the job and realize this is something they are really interested in. I think working in an environment like this is intimidating. But working in a plant environment and the bakery, people are curious about. So, I think by starting younger … Elana is a third generation … we have other associates who are second or third generation and if we’re able to develop those young people we’ll just be that much more successful.
Spencer: You don’t hear about that very often anymore, multiple generations outside of the company’s ownership or leadership. So that’s impressive.
Elana: We like to keep it in the family.
Spencer: Okay, I just have one more question for this episode. We talked a lot about some of the partner programs that you have, like Refugee One and some of the learning institutions. Are you collaborating with any other baking companies? I was thinking about the last time I saw you both at ASB’s BakingTECH in Chicago, and there happened to be several baking companies attending. I moderated a panel on DEI and the inclusion side of DEI, so this was a big topic of discussion. There were a lot of people who were there engaging in these kinds of practices. I didn’t know whether Eli’s is collaborating with any other baking companies to share their ideas or to get new ideas. What does that look like?
Marc: We work with the Chicago Food and Beverage Network on educational initiatives in our work, which is with High School for Ag Sciences. We’ve had Bimbo Bakeries out to the school. We are certainly happy to call and talk about it. Our goal is to promote Chicago as a city that is great for startups and headquarters, but our space is the city where things are made.
The city funded our plan for an innovation center, at least to contribute $1 million to our plan, and the goal is to continue to do that outreach. I think we’ve mentored and worked with other bakers in terms of doing it. Over the years, I think we’ve learned the best way to contribute is by setting up the programs. The Chicago Food and Beverage Network does have an educational program that can be adapted and then work with other companies. But I think we’re going to have the most impact by being on your podcast today, telling our story and doing things in the community. When we were recently at the restaurant show, the retired CEO of Panera was really interested in our program with people with disabilities. I think our impact will probably be more across the broader food spectrum of food and agriculture companies, but clearly very happy to work with bakeries in the process.
Spencer: I was sitting here thinking, I hope that people who are listening to this episode will be inspired to reach out to you to learn more. I also have to say, it’s funny when I asked if you’re collaborating with other baking companies, you’re telling me that I was thinking too small. You have this opportunity to collaborate with the food industry at large. That’s incredible.
Marc: Absolutely. Moments after this call, we have a call with the Food and Beverage Network at the University of Illinois on programs that we have. Then we have discovery partners with the university. So again, Chicago and Illinois are places where it’s great to make things, where people are valued and where education is important. I think the great thing about our business is we’re successful when people come here with backgrounds in food. Baking might be a little too limited. If they know how to bake and mix, that’s certainly an advantage. But a lot of times, it’s someone who’s coming out of a foodservice background, who’s able to adapt to what we do. But again, with education the more we do it and not talk about it, the better will be.
Spencer: Those are all my questions and as you mentioned, you have a very important call along these lines, so I want to make sure that you can get back to putting good out in the industry. So, thank you again for taking the time to talk to me today.
Next week is going to be interesting because we’re not only going to reflect on the impact of COVID and what that looked like in Chicago and for Eli’s but also the comeback that you were able to stage and talk about the expansion at your plant. I’m looking forward to that. But for today, thank you so much for your time and your incredible insight.
Marc: Thank you.
Elana: Thank you.
