Charlie Pizzi says his greatest challenge as the president and CEO of the Tasty Baking Co. is ensuring that the company will be as relevant in 2010 as it was in 1950.
The trouble is, when Pizzi took the reins of the company five years ago, its state was much closer to 1950 than the 21st century.
The company, which produces Tastykake snack foods, had no technology platform of which to speak. Its line of baked snacks was produced in an outdated, six-story factory constructed in 1922. The building required workers to pump ingredients up to the top floor, then gravity-feed the products down through the building during the preparation and baking process. And further complicating matters was the fact that the company’s warehouse wasn’t a part of the production facility.
Pizzi says it became evident very quickly that the company needed to modernize.
“The way we were doing things, it was probably good in 1930 but certainly not after that,” he says. “Our competitors were in a situation where they had more modern facilities and had a technology platform. When you’re competing in a marketplace, you need to be as efficient as your competitors, if not more efficient.”
And that wasn’t the only problem. “Those were the leading indicators, but we had other things we needed to fix before we tackled that element,” he says. “We had to reconstruct our financial structure before we put in the new technology platform. Then we had to start marketing and advertising again to bring news and excitement back to our great brand.”
Pizzi needed to change the way Tasty Baking Co. did business. People would have to learn new systems, prepare for a move to a new facility and new life needed to be injected into the iconic East Coast snack-food brand.
But change doesn’t come easy for everyone, and many changes can have far-reaching effects. It requires finding people that can help you win over employees, having a solid understanding any change might have on your brand and making sure the changes actually stick.
Cultivate change agents
In a company of nearly 1,000 employees, the number of people who were using computers as part of their jobs when Pizzi took over was minuscule.
“Before, we had about 60 people utilizing computers in the company,” he says. “We went from 60 to 450 computer users in the company and are now probably closer to 500.”
It didn’t quite happen overnight, but the introduction of the company’s first real technology platform jolted the Tasty Baking Co. into the computer age full bore.
Pizzi says he generally favors a steady, methodical approach when it comes to change. But in the case of the Tasty Baking Co.’s technology platform, the change was so radical, it took more of a leap of faith on the part of both him and his employees.
Any type of internal change can create resistance within your company, especially if your employees are used to doing things a certain way. That makes achieving buy-in from your employees paramount, especially from the employees who have been with your company for a while.
“They are the people who are most important if they’ve worked for a company for a substantial amount of time,” Pizzi says. “They’ve seen a lot. They’ve seen things the company has done right and things the company maybe hasn’t done so well. They are looking for the opportunity to give us their perspective. If they do that, then they have bought in to the new process of transforming the company.”
Pizzi says the key to achieving buy-in from employees who have been with your company for years is to make them feel like their experience counts for something. You do that by letting them have a hand in steering the company toward its new direction, which is accomplished through proper training and creating a culture that values accountability.
“One, you can’t hold someone accountable if you don’t train them properly,” he says. “Then once you train that individual, you also make sure they understand how their job impacts the greater organization on an ongoing basis.”
It’s what Pizzi calls a “bottoms-up” approach. He gives his managers and employees reasons to get involved by actively asking for their input, then rewards outstanding ideas on a quarterly and yearly basis.
“When I first took this job, I ran into another CEO and he told me, ‘I ask one simple question: “So what do you think?” and then I listen.’ A good leader is a good listener. That is the biggest thing as to how you can get people to buy in. You listen. It’s basic courtesies and respect for each other.”
Pizzi says identifying change leaders is the No. 1 criteria for any change or transformation in a business. Those change agents can come from within the business or from outside sources. During the Tasty Baking Co.’s transformation and modernization, Pizzi recruited people from both sources.
“We brought people into this company along with identifying people within the company,” he says. “We brought significant talent to this business from lots of different places, different food companies.”
Change leaders are important because they will set the example for the rest of the company. If employees see their colleagues buying in to the company’s new direction, there is a better chance that they will, as well.
“That (leadership) is the No. 1 criteria for change that can be brought to the table, where people will follow and embrace change instead of fight it. It’s about providing an environment of trust and credibility, being open and honest, and communicating.”
Know your brand
When taking your company through a major change, you need to understand not just how it will affect your company internally but how it will affect your customers.
Pizzi says the effects of major change will be felt by the people your company serves, so you need to have a thorough understanding of your brand and how it is perceived by your customers.
Pizzi’s plan to overhaul the Tasty Baking Co. didn’t start and end with the internal workings of the company. It was also an opportunity to refresh the Tastykake brand, which has existed for nearly a century.
“You really have to have an understanding of the depth and breadth of your brand and how far that brand can be lever-
aged,” he says. “That leads you into two different decision-making processes. One is through product innovation and the other is through new geographic distribution.”
As with the company’s technology platform, Pizzi and his management modernized Tastykake’s array of products. Following the recent low-calorie trend in snacks, Tastykake introduced sugar-free and 100-calorie snack lines.
“Every company has a brand,” Pizzi says. “It’s about, what is the strength of your brand to move the business? We are blessed with one of the best brands a brand that has lots of emotional ties to it.
“We always send products over to the troops in Afghanistan and Iraq, and I once had a mother write me and tell me that her son is over there [and] had received some of our products. She sent an e-mail and asked me to look at the attached photograph. She said, ‘This is the first time I’ve seen my son smile since he’s been in Iraq.’ That’s what the depth and breadth of your brand is about.”
Developing a new understanding of the depth and breadth of your brand doesn’t necessarily mean you have to redefine what your brand stands for; it might mean you need to find new ways to leverage your brand while staying built around the core pillars of your business.
“You have to remain very cognizant of your core products and core users,” Pizzi says. “You have to analyze the depths of your brand and business to help keep your core consumers happy while meeting the lifestyles of today.”
In contrast with the relatively sudden and radical shift of launching the Tasty Baking Co.’s technology platform, Pizzi’s brand and market analysis spurred a far slower, steadier transition.
“You do it through a lot of analytics and a lot of consumer testing of your products, and develop a database on which to draw from,” he says. “A big part of our brand is our sales distributors. We have approximately 500 sales distributors with roots in our core market area. With my past experience of working with small businesses, we try to create an environment of trust, partnership and listening. In that vein, we created a sales distributor council where they come in twice a year to meet with management.
“We get almost 8 to 10 percent of our folks in to meet with us. They give us a firsthand view of what is going on in the marketplace. The latest thing is, with our technology platform, we have been able to provide them with lots of information so that the ordering process becomes much more mundane, as opposed to having any mystery.”
Sustain the change
When you are considering a major shift in how your company does business, produces products or brands itself, you need to ask yourself one overarching question: “Is it sustainable?”
Pizzi says short-term shifts might make your profit-loss statements look good for a while, but if you haven’t put the framework in place to sustain the transformation, the chances of a successful change go way down.
To that end, the Tasty Baking Co. has been successful. The company reported $267 million in gross sales in 2006, up from just more than $250 million in 2003, and is slated to open a new 345,500-square-foot production facility in Philadelphia’s Navy Yard complex in 2009.
“What we did when we put together our plan was to put together a sustainable plan that would provide a long-term return,” he says. “That comes back to discipline and focus.”
Once you have collaborated with your managers, received input from employees and feedback from customers, then formulated your go-forward plan, you have to will yourself to stick to it. Communication is a big factor to making a companywide plan take root and grow.
“Once you have your plan in place, you have to be disciplined in executing it,” Pizzi says. “That means don’t stray, keep your sights at hand to really make sure you execute. You have to do that through a lot of communication. If everybody understands the plan, everybody is going to be rowing in the same way.
“Everyone from our sales distributors on down the line is constantly updated with where we are in the project. We even attached a camera to the Navy Yard building site so employees can see where [we are] in that process.”
Pizzi says that, in the end, a good communicator is a good storyteller. If you can communicate your company’s story to employees and customers, where you’ve been, where you are and where you’re going, you’ll be able to lay out the case for change in a compelling fashion.
“I find the most effective way is if I can tell our story to our employees, our sales distributors and our customers, and do it in on an ongoing basis every step of the way,” he says. “That was why we wanted to hook up the camera, so that everyone can actually see the construction of the facility. It is our hope and our vision that this will really revolutionize our company.”
HOW TO REACH: Tasty Baking Co., www.tastykake.com