Interview with James Broadley
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio interview between Andrew Zezas, CEO of New Jersey based Real Estate Strategies Corporation and financial executive, James Broadley.
Visit www.CFOstudio.com to read about this interview and to watch the entire on-camera interview.
Revolutionizing the Culinary Experience
Zezas: This is CFO Studio and I’m your host Andrew Zezas, and joined today by Mr. James Broadley, CFO and COO of Tribeca Oven. Tribeca Oven is a manufacturer of artisan bread products of the highest quality. The company is privately held 50% of sales are going to retail and 50% of sales to the food service industry. Tribeca Oven has a very aggressive growth plan seeking a 40% increase in sales. Mr. Broadley has ten years experience in public accounting and consulting with Deloitte in South Africa. Since then he has been in the food and beverage industry with companies throughout the world such as Diageo & Mars and has a background in IT, marketing, finance, planning and much more. Mr. Broadley is here today to talk to us about Revolutionizing the Culinary Experience. James it is really great to have you here today at CFO Studio.
Broadley: Thank you Andrew. Thanks for inviting me.
Zezas: So we are here today to talk about Revolutionizing the Culinary Experience. That’s a very, very broad statement. What are we talking about?
Broadley: Well we, in terms of putting together our vision, mission, strategies and goals we had to oversee like everybody else is does, and go climb a high mountain and strategize and contemplate and all. The whole concept of what we are trying to do with growing our company is to think big and to really think at the highest level. So the concept of revolutionizing was very important. And the culinary experience is something else with the bread products. So, if you take the white bread, people….
Zezas: The peanut butter and jelly types.
Broadley: Yes, the peanut and jelly types. Yes, exactly. We are trying to perhaps add more value to their cuisines, to their culinary experience at the dinner table maybe even at the lunchbox. We’re by the week would provide them with a more quality bread, all natural healthier food kind of thing. The revolutionizing is really what, for example, Starbucks did to the coffee industry here 20 something years ago and what Godiva did to chocolates by bringing in this high quality artisan type, richness, the crafting of it, and that’s what we do. We want to be able to go commercial in a hand crafted, artisan way. And that is what we do. Everything we do is a small patch process. We want to keep it that way so we can control the quality. But, by the same time, appear to be revolutionizing the way the people go and buy there bread.
Zezas: You are not just talking about locally; I mean Apple changed the world. Coca Cola, a hundred and fifty years ago changed the world. Starbucks & Godiva changed their own corners of the world. You are talking about changing the world of bread, not just here in New Jersey.
Broadley: Yeah, and I think that we are not the only artisan bakers in business, we like to think of ourselves as being more of the high quality end of that spectrum. But by the same token, Bill Gates started at the garage. We are relatively a small company, we have a very aggressive growth plan, and we do inspire to being a voice in the industry. We want to make sure we are a responsible player in the industry. So even though there are one or two companies in the artisan bread business that are larger than we are. I think we have and I feel like we have a responsibility as well to be able to grow the industry and to find quality as being the premium end of the market.
Zezas: And I have had your products and they are quality to say the least. So let’s talk about how you are doing that okay. The economy and everyone knows where the economy has been. Have you guys had experienced challenges as it relates to your banking arrangements in being able to move the company forward?
Broadley: Well, not really. We obviously just embarked in the largest capitol project last year that we had ever undertaken in our company. Obviously, there was some concern about how we were going to finance that. It wasn’t necessarily going to come from within, we needed some help. So we did put it out there and we did get some support through the New Jersey Commission and our bank as well.
Zezas: And that was the economic development.
Broadley: Yes, exactly. And our bank actually supported that and has provided the funds through that. It has been a great partnership with our bank.
Broadley: And I think people are very interested to support something that is very tangible. A lot of what we are doing is tangible so the collateral is there in the event to call in the asset. The asset is there to be able to….
Zezas: And that is not likely to….
Broadley: Well, hopefully not likely in our business, but the bank was looking at as a protection perspective.
Zezas: So you are talking about 40 percent growth in sales. That’s a very aggressive projection. Do you expect that will come and the growth will come from new customers or up sells to existing customers. How do you plan on making this happen?
Broadley: It’s a bit of both. We have a geographic expansion going on in our business right now. We would traditionally in our roots we are a high stream baker in Manhattan, which is Tribeca. And we grew, we move to Brooklyn, we got bigger, we started distributing and making a slightly bigger foot print, and now we are in New Jersey, and we have a 200,000 square foot facility now. Everything we do we par bake and we flash freeze. So we have the ability to guarantee our products for a minimum of 6 months. So we are actually shipping now to Hawaii in the west to the Middle East. We have got a couple of customers in the Middle East, Canada, and so on and so forth. So we are actually expanding that foot print and in that footprint we are not only expanding through our additional, existing customers, but there is a big drive now in terms of our part in new customers and our focus of our investments in our sales and marketing division has been on the attraction of new customers as well.
Zezas: Wow. So it is geographic; it is new customers; and it is existing customers.
Broadley: That’s right.
Zezas: You covered all the basis.
Broadley: Well, a lot of the new, the fact that we put in this newer equipment last year it is really one of a kind. It’s really revolutionizing how we make bread. Not only that but if our quality level was here before, it is here now. And I think when we go to market and we present our products to potentially new customers, they would really like what they see. So this is very exciting for us.
Zezas: Well, now I’ve been through your plant with you and I find it to be an amazing facility. It was very impressive to say the least.
Broadley: Thank you.
Zezas: Okay, so aggressive growth in all directions, 40% growth in sales in fact is what you are seeking. Are you profitable? Are you just generating top line? What steps are you taking to maximize gross profit?
Broadley: You know, in our business it is not about sales, it is about what money you put in the bank. So we have to be profitable. The bank wants us to be profitable. Everybody needs us to be profitable. The least three people in our business wants us to be profitable. So profit is very important. We have various different priorities that support our goal and strategies and the financial success is very important. We have certain top line, gross margin that is very important and our bottom line is very important as well.
Zezas: Excellent. So, as you are growing it is not only planted equipment, its people, are you hiring?
Broadley: We are indeed. I think what we use to supplement our work force with a lot of temporary labor because of the different products that we make might have a bigger demand on the type of product we are making for a certain labor element that we don’t need in other products. And I think we have learnt was while this has been an affordable opportunity for us to take advantage of in the past, I think the reality is we need a skilled set there that has the ability to follow instructions, following a recipe. We want to produce high quality products every time, not just once a week.
Zezas: Right. It’s hard to do that with temporary employees.
Broadley: So the emphasis has been on making sure that we have skilled labors, laborer force that we have people that are educated, that people can read and do math, that people are bilingual, and so on and so forth. And that’s very important. So those are the type of people that we are seeking.
Zezas: Are you finding them?
Broadley: We are. Fortunately, there are people in the area that are working in which is northern New Jersey. So there are a lot of people around that don’t have to travel too far to our place of business.
Zezas: So, let’s talk about the management team for a moment. CEO at your company, CFO at your company, how closely should those two roles be aligned in order for a company like yours to achieve its growth objectives.
Broadley: 100%. I think is the bottom line answer. I think it’s really important that the CEO is operating at the 10,000 foot level that has the ability to look around and see what else is going on that we should we be doing, what should we be aware of, and so on and so forth. Where we should be looking for acquisitions, whether we be looking for competitor activity…
Zezas: New customers…
Zezas: Whatever shows the face of the company.
Broadley: Absolutely. So, the alignment has to be such that the CFO, the COO, and the CEO are very much in sync with each other. Now, is it possible to be 100%? Not necessarily. We are different people, we have different drivers, and we come from different ways. I think that’s part of the check and balance that goes on. In fact, my CEO and myself actually have a weekly meeting, weekly alignment meeting, where we sit down with a business coach, and whose a third party and will stir the pot every now and then and again to create a reaction to make sure that we are aligned.
Broadley: And that is actually very useful. Very useful exercise and we do that every week. In addition to that, we have a one on one meeting whereby it’s just he and I and we sit down and go through whatever is topic or whatever we need to prioritize and so forth. So it is very important for him to feel confident that if he is at that level the 10,000 foot that he can be there knowing full well that we have the same agenda.
Zezas: Right. And I heard you say before that that relationship that you have with CFO/CEO has a lot to do with trust.
Broadley: Yes, in fact, it is something that most management teams work on from time to time depending whether if you got new players or whatever and we all read the business books. I think every now and again you do get some degree of dysfunctionality in your team. It is either a particular player or it’s the team itself.
Zezas: It’s the team dynamics. Sure.
Broadley: We have been spending a lot of time because we are growing and there is a lot of change happening in our business, people are often afraid of change. Actually, they are more afraid of transition then they are of change. I think once you make that decision this is what we are going to do, I think it’s the ambiguity of the transitional elements, are we going to go left, are we going to go right, up or down that’s where people struggle. Once you make up your mind, people are more receptive to make a decision and move forward. We’ve had a lot of work in terms of our management team in working together on team building aspects, on alignment aspects, on trust, on candid, on fusion, on all these elements that takes to be at one in the change.
Zezas: Wow. Well it sounds like you put a lot of emphasis on the management team.
Broadley: It’s an ongoing thing. It’s not like oh, we did it last Thursday. This is an ongoing thing and we will continue to do so as we grow.
Zezas: Now, Tribeca Oven, the management team is very interesting in its makeup in that you serve role of CFO and COO. Is that an advantage in the company, is that a competitive advantage, is that a good thing, should it be different?
Broadley: Well they save money.
Broadley: No, I think it comes back to this alignment thing. We are a small team, the leadership team is a small group of people and I think that that is something we don’t necessarily want to have a large board room table with a lot of people sitting around it. We want people that are in the room that can make a decision that cover the functional areas. So we all have broad responsibilities. I’m even the Chief Coffee Maker.
Zezas: CFO, COO, Chief Coffee Maker
Broadley: And I’ve been known to clean out the toilets too.
Zezas: Sorry to hear that.
Broadley: Well yeah, anyway, you do what you have to do to make it happen.
Zezas: I understand.
Broadley: And this is something I think I learnt with my former employer Mars, you throw out your first description when you arrive. You do whatever you have to do and you pick up the pieces afterwards and find out who is really responsible, any changes you cross correct, you do these kinds of things. And I think it is the same in our business. I think that having somebody on one hand, that is responsible for the cash management and all of that stuff as well as operationally responsible. You know you are bringing that accountability down onto one person. I think from a CEO perspective, I would imagine he would feel comfortable with that because a lot companies that I have certainly worked in you create these artificial barriers either because you have put up a wall and the marketing people sit here and the finance people sit here and they all hate each other or in the Mars business, they got rid of all the walls. They did not want those barriers. And that was very interesting. And I think that is what we try to do is we actually try to break down those barriers. We very much have an open door policy. We want to make sure people can come up any point in time, interrupt with what you are doing, and interrupt with what you are saying; “I need an answer to this problem that I got” and you can be very collaborative and get the people together very quickly to….
Zezas: And is that working?
Broadley: It does. It can be better. It can always be better. We are working hard on improving communication. I think that communication is one of those things today that is almost a bigger problem than all the technology that we have today.
Broadley: Then when we use to have a pencil and paper because now there is so much different media.
Zezas: That you can hide behind.
Broadley: You can put it up on the television screen, you can put it on your smart phone, you can email. But if you suddenly want to do something quickly, people tend to email. But you also have a job to do. Did you check your email, are you aware that there is a meeting that’s being scheduled and so on. Some of these break down because people aren’t chained to the technology. So we need to kind of find a way that we are communicating effectively and we are working hard on doing that as well.
Zezas: Well it looks like management is focused on the right direction.
Broadley: We have to work on that for ourselves.
Zezas: Well, but it sounds like you are doing it. James, I just want to thank you very much. We are out of time. I appreciate you very much of joining us here today at CFO Studios and sharing insights on Tribeca Oven. I hope you come back and come see us again.
Broadley: Andy, thank you so much. I really appreciate you inviting me. Take care. Thank you.
Zezas: This is Andrew Zezas, your host at CFO Studio, with James Broadley of Tribeca Oven saying thank you very much for watching, we will see you again.
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