Would you hire somebody to work at your company sight unseen? No resume, no background check, not even an interview? That would be crazy, right? Then again, fellow Rule Breakers, it might just be Foolish!
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This video was recorded on Jan. 19, 2022.
David Gardner: Greyston Bakery. Heard of it? It’s a Bakery that makes brownies and blondies and in so doing it supplies some of my favorite food purveyors, Whole Foods, Carver, Ben & Jerry’s. Greyston Bakery, heard of it? Well if you hadn’t before this week, I believe you will never forget it after this week’s podcast because how the brownies are made, who makes them, and why that is the case, are really beautiful examples of capitalism at its best. What many of us call conscious capitalism. I want to introduce you this week to one of my fellow Board members at conscious capitalism, who also happens to be the CEO of Greyston Bakery and a friend of mine and now yours too, only on this week’s Rule Breaker Investing.
Welcome back to Rule Breaker Investing. I’ve said this many a time over the years, we spend about a third of this podcast on investing, a third on business, and a third on life and when I think about the first couple of weeks looking back this year, there was essays from yesterday, Volume 3, I feel like that was about life. There was definitely some investing in there but anytime I do essays from yesterday, we were talking about the world and how it’s progressed over 10 or 15 years and what we were thinking back in the day. Last week, certainly in investing, one is we talked about NFTs with Aaron Bush, but it’s almost hard to separate NFTs from business and really life these days as well, it seems, well, I can tell you this week’s podcast is squarely focused on business. I’m speaking to an entrepreneur.
I’m speaking to a businessman about a really compelling business and as we do so this week going forward, I’m reminded how many of you are in business, entrepreneurs yourselves, or just working professionals, and what we’re going to share this week really can be relevant to almost any workplace of a significant scale. So I’m really excited to have my friend Joe Kenner join me. Before I welcome Joe on, I just want to mention, of course, next week is the January mailbag. So firstname.lastname@example.org is our address. If you find yourself inspired by any of the things I said a couple of weeks ago, essays for 2005 or maybe you were challenged or titillated by something that Aaron Bush said last week on the subject of NFTs and or what you’re about to hear this week, I’m really interested in hearing back from you any takeaways from these January 2022 podcast. So again, Rule Breaker Investing mailbag next week if you want to be featured, tweet us at RBI podcasts, or even better, drop us an email, email@example.com. Now we welcome him from Yonkers, New York or somewhere nearby, Joe, I understand the power went out. It’s what’s happening this time of year. So you are at home, welcome to Rule Breaker Investing.
Joe Kenner: So good to be with you David, we improvise, we are leaders. We know how to do things.
David Gardner: I wanted to start with a leader who is not going to be part of this conversation today because he’s the founder of Greyston Bakery, Bernie Glassman, and he clearly was a leader. Somebody who had real foresight. He was a thought leader in addition to being an entrepreneurial leader. I thought we should start there with the founding story of Greyston Bakery. So Joe Kenner can you give us a little bit of chapter and verse there?
Joe Kenner: Absolutely. Again, a pleasure to be with you David, and I always enjoy telling the story of Greyston and I have to tell you, Thank you doing the interview today, we are actually recording on Bernie’s birthday.
David Gardner: Wow.
Joe Kenner: So thank you so much for the opportunity to really celebrate Bernie and celebrate Greyston than what we’re all about and I cannot think of a more apt example of conscious capitalism than Greyston Bakery, Greyston foundation and we’ll talk about that. The history is quite interesting, David, and you’ll appreciate this as an investor. We started based on the product per se and I’d like to say we have two products, but we do brownie inclusions within packaged brownies, but that is not the reason why we were started. In 1982, Bernie founded Greyston but became known as Greyston really on a question, an idea and that question and idea was, how do we give people hope? How do we create thriving communities? At this time, as you know, in the 1980s, the economy was not in the best shape, particularly where we are now located in Southwest Yonkers. Very economically challenged area, high unemployment, homelessness, was rampant and Bernie saw so many people on the streets looking for work, couldn’t find opportunities and he saw that as one of the greatest injustices in this community where you have people that want to work, that have something to offer and they couldn’t get the opportunity. That for him was the question that needed to be solved.
How do we give these folks hope? How do we get them off the sidelines and into the economic mainstream? He and this Zen Buddhist community that he was a part of at the time they actually lived in the Greyston mansion in the Riverdale section of the Bronx, which is how we got our name. They supported themselves baking cakes. So Bernie would literally pull people off the streets and say, Hey, David, you’re looking for something to do. You want to learn a skill, you want to learn a trade, why wouldn’t you come work with us baking cakes and we will teach you how it’s done to have short for work, take construction and you’ll learn a trade and hopefully this will improve your trajectory. That was the genesis of open hiring what we now call open hiring where it’s no questions asked policy, no background checks, and so forth. But that’s where it all started, David. How do we bring people into the economic mainstream? How do we get them hope? Bernie’s firm belief was, you do that through a job one person at a time.
David Gardner: Joe, I think the year was 1982 and if that’s true, that means it’s the 40th anniversary of the organization that you lead today. I’m just curious, before 1982, who is Bernie Glassman that he would start asking that question, how do we give people hope and then I think a lot of people when they would try to answer that question, they might use some of the existing institutions in our society maybe a church or a synagogue, or maybe they would go out and be an inspirational speaker. But the idea of actually giving people hope through open hiring, which we’re going to talk a lot more about very shortly. That just seems very unusual and very innovative.
Joe Kenner: Yeah. But it goes to Bernie’s faith and as I said, he was a part of a Zen Buddhist community at the time but you really have to really dial it back and you think about someone like Bernie and how did he even stumble on to this. Bernie was a Jewish guy from Brooklyn, trained aeronautical engineer. He comes as a Zen Buddhist monk becomes a social entrepreneur. That’s where it really starts. If you read, and I recommend this to your listeners, because I’m sure they’re avid readers, read this book, Instructions to The Cook. There you will get a sense and I give this to all of our new employees when they start, by the way, because of this helps them understand the DNA of Greyston and why we got started. If you think about society in our lives as a meal, Bernie strongly believes that everybody is an ingredient that makes the perfect meal.
You have something to offer society, I have something to offer society, the next person has something to offer. When we use all of those ingredients, all those gifts, everybody benefits. That really forms the heart and soul, the DNA of Greyston. It’s really about just bringing everybody in. One of our core values is collaboration and non judgments, another one, that’s really what we’re all about. How do we bring folks and how do I use what you have to offer to society? I don’t have to tell you this, David, but there are a lot of folks that really don’t know what their gifts are. They haven’t been afforded the social capital that you and I probably had where folks could give us guidance and direction along the way and that’s what Bernie wanted to do. Start here, work with us at the bakery for a little bit, figure out what you want to do, and we’ll be a reference for you if this is not where you want to go, but we’re going to give you an opportunity to get started.
David Gardner: Well, let’s now get into open hiring then, and thank you for the note around Bernie’s book Instructions to the Cook. So I think what jumped off the page to me it was, I guess, I should say off the screen because I think you were presenting at the Conscious Capitalism Conference and there was probably a big screen, an image PowerPoint something like that behind you. But what jumped off the screen to many of us when we first hear about Greyston Bakery. If we’ve not already counted the delicious brownies or blondies, which is often how a lot of us might first discover Greyston bakery. But we’ll hear about open hiring and open hiring, I noticed has a TM on your website, so it sounds like this is a trademarked approach as well and we could talk about that, but let me just state briefly my understanding of open hiring.
This is the layman’s reaction and then of course I want to understand exactly what is it and how does it work. Because we have a lot of entrepreneurs listening right now. A lot of people who may not be running their own business, but might be part of another business where they could wonder a lot within their workplace, what if we tried that here? I just bet some others are going to be copycatting Joe Kenner, Greyston, and Bernie Glassman as a result of this week’s podcast. We’ll see. I think it’s a remarkable start to open hiring. So my understanding is that if you want to be hired by Greyston Bakery or any business that does open hiring it pretty much comes down to you feel out your name and your address, maybe you give your phone number. That’s about it. There’s a waiting list, so it might take a month or so, but all of a sudden, I get a call to that phone number I gave you and it will say, “Hey, David, come work 9 AM Monday morning. We’ll see you then.” That’s open hiring, no questions asked, no background checks, no awareness of who I am, what my skills or talents are, what my past holds. Nothing at all. No questions asked, 9 AM Monday morning. How accurate is my layman’s stab at describing open hiring?
Joe Kenner: I’m going to give you an A-minus on that, you did a very good job.
David Gardner: I’ll take A-minus any time at any level in a school. Others are frustrated by the minus, I never was. Thank you.
Joe Kenner: But I would add and you’re right. It really is. My background too, David, I mean, I came from Corporate America, Wall Street, and government and I tell people all the time if you had told me about open hiring and how you have some manufacturing entity during this 10-15 years ago, I probably would have laughed at you because it is very simple. As you outlined, you put your name on a list and you write your name, address, phone number, email so that we can reach you. We’ve now moved into the tech age where we have QR codes on postcards and you can do it on our website, greyston.org, so that’s the way you can get added to our list and we have about 150 or so people on the list as we speak. But that is truly it. That’s the simplicity of it. The radically different nature of it, as we’ve alluded to already is we don’t do background checks, we don’t even do an interview. We just call you up and when you get that call, you’re essentially already hired. You just have to show up for orientation and that day is your first day on the job. That’s the first day you’re actually earning a salary when you show up and that begins what we call your bakery apprenticeship, which is about a 6-9month program.
David Gardner: Let’s talk about that because again, shortly I want to ask some about the advantages of this and certainly the disadvantages too. I can imagine there’s a good list of both. But clearly, this has been working because I think Bernie started this something like 40 years ago or so and here you are thriving four decades later. So it seems to me, proof positive that this does work, but it sounds like my first day of work, I am actually being trained as much as anything. I’m not immediately productive, which would make sense because it’s a manufacturing business. Coming off the street, perhaps, how could I possibly know the right thing to do?
Joe Kenner: That’s the beauty of the program. It’s about a two-day orientation program that we’ll walk you through. You’ll hear from our supply chain folks, our R&D, and quality folks. The operations team, Greyston Bakery is owned by Greyston Foundation, which operates a lot of workforce development training courses and job developing services we provide to the community and to our bakers. You’ll learn about all of these different resources that are available to you. One of the enhancements we’ve made to the program over the years is adding a social worker that we now call our resources support specialists to our staff and that person’s job is to provide the non-traditional HR benefits and services. So what do I do if I’m getting evicted? How do I get child care subsidies or child care in general? I need to look for affordable housing. All of these non HR benefits that you probably wouldn’t get in a normal work environment, we provide that, and it’s to me, as I always like to tell people, this is the next evolution of human resources as we look at employment and hiring, but employment generally more holistically. So what are all the things that my employees need to be safe? Obviously, we’ve learned that in this COVID environment, but really understanding what is my trajectory here, how can I move up? In some cases we believe in this, how can they move out? Maybe they want to do something else after two years of working at the bakery and they realize they found what their gift is. They want to try something else. That’s where our foundation can come in and just say, “Hey, we’ve got all these other great hard skills training courses that you might be interested in where you can get a nationally recognized certificate in something else. Let us help you.”
David Gardner: Joe, we have a lot of business people listening to this right now. A lot of people who invest. I guess a natural question for me is, it sounds like your business model supports this additional support. Razor-thin margin companies wouldn’t necessarily be able to afford extra support in the form of some social work, just helping advise people on the side. Can you remind me what is for profit here? What is not-for-profit and I’m assuming the for-profit portion enables this additional cost base.
Joe Kenner: I would say it’s a reallocation of resources, David, as Greyston Bakery is actually the first benefit corporation in New York State. This is actually our 10-year anniversary of being a B corp.
David Gardner: A B corp.
Joe Kenner: Yes. So we got our 40th in existence, 10 years as a B corp and today is Bernie’s birthday. So we’ve got a lot going on in 2022. But I would say that it’s a reallocation of resources here. All of the time and the effort that we would spend essentially keeping people out of the labor force, we’re diverting it to how do we one, bring them in, and keep them? Because it’s about keeping folks and developing them so that they can continue to contribute to our organization and whatever product or service that you’re providing. But also how can we develop them and help them find, like I said, their gift in terms of what they can contribute to society. It’s really a reallocation of resources as opposed to an addition or I even say, I don’t like to say cost-cutting is really just a reallocation of those resources.
David Gardner: Joe, as the CEO, who is your dream employee? Do you want somebody? I know transformation occurs. I know butterflies are born and that’s part of the story of Greyston and I know that’s got to be high up there in your list. I’m sure we’re going to hear at least one great story of an employee. But are you hoping that that person is still with you 6-8 years later? Or are you halfway house bringing them in, in some cases, saving them as they save you, but then maybe they’ve moved on somewhere else three or four years down the line?
Joe Kenner: Well, I have to say you use the term transformation, which is another one of our core values. You’ve really done your homework on us, so I appreciate that. But the ideal employee is really anybody who has resolve they want to be successful. That’s really it at the end of that. Let me say this, this is not a promise. This is not a welfare to work program where you are mandated to work with us. This is not some kumbaya moment that we’re having. It is still a business at the end of the day and we have to operate as such. But if you want to be successful, if you want to learn something new and give it a try, this is the job for you, and we will give you all the support in the world. It’s got to be reciprocal. I can’t help you if we don’t know what’s going on in your life, so let us know. That’s why we’ve got the resource specialist, that’s why we’ve got HR, that’s why we’ve got the team here to support you and everybody sees you as a colleague.
You’re not in some special class with the open hires. You are a colleague, and we want to support you. But truly for me, it’s just somebody who wants to be successful, and I will not be upset if after a year or so you’ve realized that you want to go on and do something else because I always start with the premise and we have all these different KPIs and metrics for success. But really my metric of success is, what would be like for these people if we weren’t here and if we didn’t provide? We can get into stories later, but if we didn’t provide employment opportunity to the folks who work for us, and really anybody. David, I’m talking about myself included here. I don’t really consider myself working. This is like a labor of love, this is a calling, I enjoy what I’m doing here. When I left the office today, any person who I talk to, they’re just so grateful and it’s any level, whether it’s finance, whether it’s development, whether its operations. They love coming to work knowing that whatever job they’re doing, it’s contributing to giving some of the positive current trajectory.
David Gardner: Absolutely. Let me ask you, the Motley Fool is a private company, so I’m not out there sharing our numbers all over the place. I am happy to tell people we have 610 employees or so right now. That gives some people a sense of scale. Can you give us some sense of scale for Greyston Bakery. It sounds like you have a waiting list of about 150 people who would love you working there this coming Monday. But give us a sense of where you are right now as a business.
Joe Kenner: If you look at the bakery, we’re about 110 employees, and 70 plus are open hires, and the rest are the administrative staff. All the R&D, supply chain, HR, finance folks make up the balance. But about 70 all the open hires.
David Gardner: The natural next question then as we talk more about open hiring, who are you hiring?
Joe Kenner: Anybody who wants to work, and I can tell you, we get this thing, it’s written into our narratives somewhat unfairly because we hire anyone, we don’t target any particular…
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