CIO Leadership Live with John Hill, CIO at Carhartt | Ep 5


good morning and welcome to another
episode of CIO leadership live I’m Mary Fran Johnson executive director of CIO
programs for IDG joining me today from his office in Dearborn Michigan is John
Hill the chief information officer at Carhartt incorporated a premium workwear
brand that makes rugged apparel for men women and children this is a retailer
founded in 1889 and still today run by the Carhartt family the CEO is the great
grandson of the founder Hamilton Carhartt and members of the fifth
generation of the family many of them still work at the company
in fact one of them is a member of the analytics team in IT John join Carhartt
as the CIO two years ago after serving as VP of solutions delivery at Granger a
ten billion dollar distributor of industrial products a former US Air
Force officer John’s experience spans several industries he has worked in
automotive pharmaceuticals biotech software-as-a-service insurance and
government and now most recently rugged retail he found his way into IT from the
business sourcing and supply chain sides of companies such as IBM General Motors
and Roche John welcome it’s great to have you here today before we get into
some of your top priorities the car heart which we’ll be talking about I
wanted to talk a little bit about your IT and business experience across all
these different industries and one of the things we’ll start with is why yeah
I’ve heard you call yourself an accidental CIO so how did that happen
well number of different industries and my career after I left the Air Force was
you know started in the global sourcing business at IBM just after Gerstner
joined and I was responsible for a lot of the big relationships that IBM IBM
had with companies like Cisco or HP the sport is it’s kind of emerging global
services business and and from there it just kind of stayed meandered even when
I was at IBM I built our first intranet site in Notepad for the for the
procurement division and just like I said I found myself you know taking on
more and more IT type of things and and as I moved on in my career I did a
start-up out in California at the height of the dot-com era so got to spend a lot
of time with industry folks and and then I’d say after I got to Roche and it was
clearly I have the opportunity to become a CIO in the future I think that that
business experience having done supply chain business development you know
helped me to be able to operate with the other senior executives and be able to
talk maybe I different a different language them and on top of that I was
used to being the receiver of IT services so I think I had a unique
perspective in terms of what I liked and what I didn’t like when I was on the
other side of the equation so speak well well that’s great how when you’re when
you’re about to dive into a new industry how do you learn about it you’ve been
through five or six different ones do you have a special immersion therapy you
put yourself through or you know you went your last one you went from
industrial products into retail which probably couldn’t be more different
yeah you know the at the heart of it I like to say that you know a lot of the
core business of an industry are kind of similar you everybody’s got to you know
make a product to sell a product of some kind but if you if you look at the way I
even approach my daily life you know the first thing I do every morning is read
The Wall Street Journal and I think that’s helped me to have a kind of a
broad understanding of industry and as I looked at opportunities like a card I
did a lot of research in advance a lot of Industry research read analysts read
in this case I couldn’t read necessarily the company annual reports but I read
all of the competitors annual reports it’s been a lot of time learning about
the industry before I get there and then once I get in the company I
spent a lot of time you know really on the ground in the different business
functions so here spending time in our factories you know with the sewing
operators in our distribution center working to understand you know what’s
happening on the good person station for example going out in sales calls with
reps to understand what our customers think of us spending time with the
marketing team or spend time with the product development team you know that’s
that’s way the only way you can really learn you know the the industry is
spending time with the folks yeah and ask a lot of questions it’s it’s really
helpful sometimes to be that new person because you have a completely unjaded
view as to how things work and so so far it’s worked well for me and and I’ve
been lucky that you know a good team that works with me that helps me more in
that industry as fast as I can yeah well and I was interested to one of
the articles I read that you had been interviewed for you were talking about
your interview process with the executives at Carhartt and you made the
rounds of all the different executives and you had specific questions that you
asked them what were those like yeah I mean a lot of them were you know the
norm I say that normal I think everybody would ask this but you know what’s their
key business challenges you know what what are you they looking for from from
a cio but but similarly I’d ask them how do they work with one another in in the
company you know what are the challenges they see as an executive leadership team
and working together what do they see in terms of competitor threats and what I
was usually what I’m usually doing is looking to see if there’s consistency
across that executive leadership team you know it’s a it’s a telling point if
there’s if there’s not consistency in terms of whether it’s the internal
viewpoints of how how things get done or how the company is positioned in the
marketplace and you know I say Carhartt I was lucky that you know we have a
fantastic senior executive leadership team and very aligned we don’t really
have a lot of that I’ve seen some of the challenges you see yet maybe have some
of the bigger companies yeah well which you had just come from you
know Carhartt is probably six or seven times larger
then of course this isn’t editor doing math so we should never do that but it’s
so much bigger than Carhartt and so the scope and the size was a change for you
you must have heard things when they talked about the company culture that
were just a real attraction to you and what was that well I mean you mentioned
a little bit about you know car hearts legacy 1889 now family owned you know
and you look at our mission which is to build rugged products to serve and
protect hard-working people both my family and my wife’s family have roots
you know in blue-collar jobs and so with the brand and the culture we’re just a
fantastic fit for me personally if you add in the challenge from a business
perspective to help Carhartt digitize and better serve those
hard-working people that it was a known break a no-brainer for me I really
wasn’t concerned as I looked at you know what the next opportunity for me about
the size of the company or the prestige of the company you know culture and you
know fit was the number one criteria for myself as nice as I did evaluation okay
well that’s a very good segue to my next question which do they picked you and
you got there and what were your marching orders you’ve been there now
it’s a full two years and usually the president and the board have something
in mind when they’re bringing in a new CIO so what was that for you I think
there were three different things that depend on which which level you were at
if you if you think from a president perspective her most important thing was
leadership you know providing leadership to the organization helping to develop
people you know to get the the output from the talent that was in the
organization and Emily it’s a very talented IT organization you know top to
bottom and so for her that was the number one thing I think I had three
interviews with Hearst and you know every time it was was keep talking about
leadership how do you approach this so that was her number one point and
knowing that we can take care of that it takes care of a lot of the other
challenges that and IT organization or any organization for
that matter has to work through if you if you then talk about the rest of the
senior executive peers there’s would been two items one was
time to market and the other one would be innovation or trying new things you
know they had never done any cloud activity and time to market for example
the time between the last build on the website and the one that just happened
as I was doing the interviews was four months so there wasn’t a real time to
market okay yeah so so those were the two from their perspective and and if
you look at what we did on on time to market for example I’d say probably two
key things that we did one was implement a jille lean agile and the other was
create capacity in the organization so let’s talk about my the harder one first
creating capacity having just about like they did not like they said here’s a
blank track you know go spend money so we need to figure out how we could you
know create that capacity in their own ization do more projects what we saw is
that we hired a lot of contractors in to do projects and our internal staff
worked on maintenance and support the problem with that was you had a pretty
significant learning curve of every time somebody came in we didn’t have the
internal people that were necessarily available to work with those consultants
and so you looked at that ability to do a lot of projects as a challenge so what
we did is we decided to outsource all of the application maintenance and testing
essentially the model then didn’t right yeah and then I could capitalize
internal folks which I was capitalizing the consultants I could capitalize the
internal folks and and and basically stay budget neutral and in addition we
didn’t have to layoff a single person as part of that outsourcing of the
applications maintenance and testing and and if you look at that the the
transition was absolutely flawless because nobody was
worried about their job not a single knowledge management session was missed
during that transition and IBM who’s our our partner and took over it if you’d
ask them they said was one of the best transitions they had we actually put a
project manager and on our side to manage it from our perspective I think a
lot of companies just use the suppliers yeah but we had one on our side to drive
it and so that became not only a way to free up my team but it also meant that I
had a go-to partner for four projects and they knew our landscape they
understood so they could quickly come in and jump into projects and be ready to
go so we saw about a 30% bump in capacity just by doing the flip of that
model yeah the other thing then we did was the lean agile and it was a car was
a classic waterfall organizations the challenge is they they focused on you
know kind of we’re gonna take the whole program we’re going write it all down
and send six months on writing up the requirements and we’ll deliver it over
three years mm-hmm and and what happened is that that meant
that only one or two things could get done because of these type of efforts so
we put in the lean agile heavier Kanban then then then then scrum and our big
focus was on Minimum Viable products you know break things down into very small chunks of realizable business value and
so we could do a lot of projects at the same time because the teams were focused
on delivery nose and short cycles and we weren’t crowding out a lot of activity
as a result you know we we reduce we deploy new functionality now into the
website but even our ERP environment every two weeks yeah and John when you
said a Kanban rather than scrum yeah what’s the layman’s description of the
difference between the two of those so if you think about Kanban and if you for
those familiar with manufacturing it’s it common as a way of visualizing
work-in-progress and it may faction use it to understand where
your choke points in your organization if you think about any think about a
water pipe if you had a pipe that was this big and then you had a little pipe
and then a big pipe the flow to the last part of the pipe is only the size of
that middle pipe and so what we well I’ve done in a few places is you realize
that knowledge workers have the same challenge if you throw too much work
towards them it actually reduces their their effectiveness mhm and frankly you
you misunderstand where those choke points are in the organization so we use
you know we use the story process from agile and we merge that then with Kanban
to limit our work in progress and understand where that is across the
organization not just in the development teams but all the way through to weather
security or infrastructures or the the architecture teams we do have scrum
which is that traditional agile teams structure but but like I said we’re a
heavier con by well I always think it’s it’s fascinating the whole process of
moving not just an IT organization but an entire company to that agile
approaches to that different way of thinking I think a lot of times it
becomes a little bit of a shock on the business side when they realized how
much they need to be involved how many meetings they have to be in how there
has to be a product manager how fast things are moving I mean they can’t just
sit back and say well you guys take care of that over an IT how did you how was
it introduced into cars did you end up bringing in like outside coaches or
trainers or you would obviously worked in that environment before so how did
you approach it i focus first internally in the IT organization and I actually
did the training myself so relighted I led an introduction to to lean agile for
the entire organization to teach them how how it works and then approach was
go experiment go try stuff I think a lot of times people think
there’s a blueprint for this but what works in one organization doesn’t work
in another and and and I’ve done this in four different organizations and I can
say well without any doubt that all four implementations are quite different than
the others mhm and really it’s that experimentation go try it go see what
happens you’re not gonna nothing’s gonna break because you’re trying this so we
did that internally first and and then we started to find champions and within
the organisation who could then train others on what did they learn what’s
working well for themselves and then we picked some business unit to say listen
we need a product owner from you now now we’re ready you start you start writing
the stories you start prioritizing and for us we picked our e-commerce business
as the best example to do that first but now we’ve rolled that out across the
organization even if you look at the traditional s AP environment hmm we’ve
got the product owners from finance or HR or supply chain that are that are
providing that product ownership okay now is the attempt to the intent to
eventually or perhaps you’re there already get to essentially 100% agile an
approach or do you think they’ll always be somewhat of a balance between the two
we we don’t really have we don’t have waterfall anymore no there’s no there’s
no waterfall it’s it is all I’d say that clean agile okay well in some of the
things we talked about some of the projects and the things that got
accomplished in your first year where your first two years an ERP
implementation office 365 rolled out Salesforce the IBM sourcing change the
new website the lean agile moves and a new warehousing system now you’re doing
this with an IT staff of about 115 people that’s correct
the IBM team in India okay the of all those you know that’s a lot of projects
of course to have in the air especially the first year when you look back is
there anything you do differently about it you know there’s one that’s one thing
I mean we you know you say we did a lot and in fact you
know there was even others I I was surprised as I got ready for this
interview to kind of look back at the last two years in terms of just the
sheer scope and the number of systems that have been done so one thing I would
say that I’ve done definitely is the office 365 implementation we we took a
decision to go very fast to get everybody on the platform as quickly as
possible mm-hmm so that we had everybody starting
to use the same tools and and we could have done it like a very deep approach
with each each function mm-hmm and then rolled it our fear was or was by mine my
team was well I would I would safely say we’re not we’re not completely on board
with that go-fast approach but the fear was is that some teams would start to
complain that the other teams couldn’t work with them you know on not the key
tools that they had and so I think what we needed to do though was to provide a
different level of education than we did we did the basic education what we
needed to do is what we got them on really fast
we should have deployed people to sit down with each of the business units and
talk about their business processes a little bit more and understand how can
really tailor that now we ended up doing that probably nine months after
implementation I think it was been a little smoother if we had we had done
that everybody’s very happy yeah and we got it done very fast so when I’ve
touched with some businesses where they were making a move to office 365 and
they were coming off Lotus Notes and they did you remember Lotus Notes and
they they tended to have a lot of positive feedback because they were
going from kind of a stone-age approach to this but it is a very complex piece
of software so you know you know people think it’s just what you see on your
desktop and it’s a lot more now in addition to your CIO duties and what you
do on the IT side of your job you’ve also added other business functions
since you got there planning pricing supply chain planning I guess it is
talked about how that came about that was not part of
the initial discussions when you came in you know the it really came up just
because we we decided to add a focus on a different line of business which was
our industrial business or business-to-business space and so what
an executive that was responsible for those functions we said okay you’re
gonna take responsibility now for leading this effort so my Boston of
course comes and says hey can you pick up these these other activities and yeah
I mean I always consider myself first and foremost to be a member of the
senior executive team not the CIO so I you know for me it was no big deal I
have a great leadership team in place on the IT side I’ve been able to put in you
know fabulous group top to bottom and they’re able to run there are there
pieces of business and they work really well together we if you think the one
thing I’ve done with that team is I use a heavy reliance on shared goals across
that leadership teams and what I mean by that is we may take a goal which is all
the projects for example and everybody on the leadership team has the exact
same goal we’ll have a goal related to what we’re gonna do even on our way to
protecting the brand or or getting more effective every one of the team members
has the exact same goal and that’s so that everybody’s lined up if there’s
something not going the right direction I don’t have to jump in and say go fix
it they’re all lined up in their compensations lined up to say we either
get there as a team or we don’t get there so that really freed me up to be
able to spend the time on on other tasks as well okay well you also made the
point that you are pretty vocal in the leadership meetings in every aspect and
that you don’t just restrict yourself to IT topics right yeah for most people you
know talk up you know a fair number of you of course talk to thousands of CIOs
probably over the last several years that could be true and I think that
there’s there’s really two ways looking at your role on a leadership
team there’s either I’m the CIO and I’m representing IT familiar ship teams or
I’m a member of the leadership team and I am helping to run you know the company
as a whole I choose the latter in terms of the approach and and that means that
I’m expected to contribute doesn’t matter if we’re having a discussion
about our our distribution strategy in terms of who are selling to our supply
chain strategy our our marketing strategy you know I’m expected to
contribute in and you know I I make sure that I’m prepared to have those those
conversations that the leadership yeah well from what I’ve seen with the CIOs
you know we have our wait do 10 events a year so we see a lot of CIOs there and
of course we talk to them a lot in the course of our own work here but it seems
that in the last I’d say two to three years the expectation from other
business executives about what IT is going to contribute has really grown it
has changed I mean with there’s now you know the Wall Street Journal has an
entire section CIO Journal that is it deals with all of the issues around IT
in the business em and that sort of thing and it just it seems like the
expectation has changed a lot have you seen that in your own career progression
yeah you know I think there’s I let’s say this the companies that are gonna be
successful in the future have definitely embraced that have embraced that that
you know you can’t there’s well there’s no business process there’s nothing
that’s gonna get delivered today in today’s world without technology as a
key part of it and I so I think that any company who who understands that
understands then that you need the CIO to to play a more strategic role in
working with the the business you to help shape that there are a fair number
of companies out there and I’ve talked to fears you who are necessarily treated
you know that way but my experience that car art is you know that’s the
expectation and and we you know we just expect that when we’re talking about
this we’re having strategic discussions you know we expect the CIO or if it’s
one of my direct reports you know to be able to contribute to that to that
discussion right okay it’s definitely changed though if you look at yeah I
jump back even to my time there it’s definitely changed well and it it kind
of has to because if you’ve got a lot of expectations about having strategic
level discussions but they’re only being had on the IT side and no one on the
business side is particularly looking for that that can be a pretty hard
uphill climb for any I mean I I remember years ago at one of our events you know
we’ve been talking about strategic role of the CIO probably for the last ten
years maybe longer and some CIOs would say you know in my industry that may
never happen because of the way IT is viewed in the function that it plays but
it’s harder and harder I think these days to find industries where technology
and technology enabled capabilities are not a centerpiece of how the business
makes its money yeah let me um when we look ahead into 2019 and 2020
what is the focus for you as the CIO and all these these other duties you do when
you look at the technologies and the business issues that have the biggest
share of your mind right now what are you thinking about these days yeah I
mean the I think the one challenge that God is that everywhere needs something
right I mean it doesn’t matter yeah everywhere needs something it’s so it’s
very broad but if I look at we’re on personally spending my time thinking and
talking with folks analytics I think is number one we’re making a big investment
in analytics where we’re adding you know 16 positions to Alex team is so if you
look at an organization our size it’s a big bet and three of those are data
scientists in that area so that is you know we’ve done a lot of work on kind of
the look-back world of analytics you know playback side you know now is
predictive and and you know III just see an insatiable demand
on that side it doesn’t matter what part of the business units not just the sales
and marketing but our supply chain which has traditionally not had a lot of that
that ecosystem put around them so analytics would be a big one we have a
big move that we have to do believe it or not we’ve mentioned the upgrade of
our ERP well you know we have to make a major move we’re a sa P customer and
we’ll be moving to the s for fashion product line which is a kind of
re-implementation and we’re expecting to do that and by 2020 probably mm-hmm
we have continued expansion of our direct-to-consumer business in Europe
that will continue and then we’ll look at to move beyond that Canada and age at
some point we’re also looking to see how do we help our retail partners so a
large amount of our revenue is is derived through relationships with
retailers and how do we help them compete out there in the marketplace so
we’re looking at how do we deliver endless aisle capability so that they
can retail products that they may not be carrying directly in the store hmm
I’m saying we’re spending time on on the AI space we see bots and and then supply
chain I think in general in the supply chain space for us a big challenge with
the inventory management if you look across really vastly different even
though we’re selling us and where we’re selling the same product vastly
different markets whether it’s our wholesale market or direct to consumer
market or that industrial business to business market I talked about mmm-hmm
they all have very different requirements in terms of service levels
and how do we manage that inventory across that space without you know
rocketing the size of that inventory well and that is that does seem to be
one of the kind of the final frontiers with digital transformation for a lot of
companies there’s a certain amount of it you can do inside and upgrading for
digital technologies in various areas but then you get into your supply chain
and all this sudden at some point in that type you
run into manual processes and things being done on clipboards and paper
describe a little bit about Carhartt supply chain and where you see the
greatest opportunities for digitization yeah well you know I mean it’s obviously
it should we manufacture our own products as well so and we have source
partners you know the challenge for us is how do we we help our own shop floor
and we’re gonna do that we’re gonna put in technology this year in fact to be
able to understand what’s actually happening on the floor today it’s it’s a
ticket based paper-based system on the sewing floor so we will be able to do
that I do see the the focus though being on how do we link up that consumer
demand or our customer demand and tie that tightly together so that our supply
chain whether it’s our own internal manufacturing or our source partners can
better react to those market conditions and and smooth it out and not have it be
so choppy in terms of you know one month it’s this kind of man next month it’s
another demand and and in this this space it’s that’s very not only
difficult to do but it can be more expensive to do if you’re if you have a
very choppy forecast okay so that for us is probably our big focus the other one
would be we are we’ve started do 3d tools in our own product development
side so we’ve we’ve got a few in place where we will use that to to digitize
that the development of the product what we want to do then is how do we move
that down to our our partners or sourcing partners so that if they’re
doing some kind of code development work with us that they’re able to do the same
work and do that frankly they’re probably farther ahead because of their
business on doing some of that 3d modeling but the 3d modeling does number
of things one it reduces your time to market tremendously because you’re
reducing your need for samples and it helps us on the backend if you
digitize something already when we go to put it you know online for sale or we
provide that images to a customer to put on their own website they’ve got much
richer experience to be able to show that consumer Oh interesting well and
the you mentioned how you’ve got three data scientists on staff right now well
we’re going to hire them cuz you’re in Dearborn Michigan correct yes I was I
was sitting here wondering what the market well what is the IT hiring market
like in Dearborn Michigan what how do you I know you don’t have a great deal
of turnover you said your attrition is about 15% most actually internally it’s
less that’s our offshore is only 15% okay and but I’m sure we’re less than 5
percent attrition you know the two things I mean obviously I think
everywhere you know the IT market is pretty strong I don’t think there’s a
lot of cities where the iTune employment is like 0% and I think what’s important
is do you have a brand and do you have a place that that people want to come work
ok and do you have a culture that drives that and and people come here and and
people loved working here and and that certainly helps us in terms of
reputation in the marketplace so you know I’ve certainly been able to bring
in folks you know from other companies as direct reports from very large
companies come work here but even like for the data scientists I believe that
we can offer them an experience that they couldn’t necessarily get at a
larger company I’m looking at putting these data scientists sitting with this
senior executives sitting with their leadership teams there is nowhere else
that they’re probably gonna get that type of exposure and interaction and you
know even you know it’s funny we just did a session on that with a senior
executive committee yesterday and and that’s what we talked about we
might hire folks right out of masters programs or PhD programs with no
business experience but they’re gonna sit on your leadership teams and
and like I said I think that’s gonna help us recruit people yeah well they’re
also one of the things CIOs have told me when they bring in especially when
there’s an emphasis on bringing in millennial developers and millennial
data scientists that they’re not aware of any of the corporate blockades that
might be in place you know there’s a lot they don’t have the not invented here
syndrome which tends to infuse new thinking in the team regardless what the
topic is well when you in you restructured and added the the 16
positions in analytics do you have any accomplishments things are proud of that
you can point to that car heart’s been able to do with that new emphasis on
analytics in just say the past year crease for this year yeah you know I was
able to hire in somebody that we said not only did they take over traditional
analytics but they’re responsible for all data for that company so they’re in
charge of data strategy they’ve got the business side of the analytics with the
data scientist and so I think number one was getting
agreement that that’s how we’re gonna work as a company and break down the
silos that could exist in and in the data world especially but we’ve spent a
lot of time cleaning up the I’d say the plumbing we put in a master data
management system last year there was no MDM we got a we you know be able to see
a consumer no matter how they’re interacting with us whether it’s in the
store whether it’s online so that was a that was a big push and then we we
started to shift away from a report centric world and moved to a dashboard
centric world with power bi so if I look at you know kind of the key thing was
getting that strategy in place changing the culture around how we want to
consume the data and then fixing the plumbing a good example is MDM but
there’s others mm-hmm and that will continue there’ll be a
big time they said that upfront engagement with the with the business
colleagues but we will we will spend a lot more money on whether it’s big data
whether it’s geographic information type of layer strategies so still be a lot
and the plumbing sizes as well well you know one of the things I found is so
unique about the CIO position well it there are functional pieces of it there
are transformational pieces and there are strategic pieces and you don’t get
to just move from one to the other it’s not like you get the foundation in place
and everything is fine and then you can ignore it and move on to do
transformational work and then it’s digital work and you know it just you
pretty much have to be all over the spectrum yes tell me about retailers
often seem to have I think the toughest road of anybody it’s such a competitive
industry the margins are often razor thin how is Carhartt doing in the
broader context of today’s retail market and just the difficulty of hanging on to
consumers because there’s so many choices yeah but you know consume you
know there are core consumers you know do love the brand we’re we are
relentless relentlessly focused on that and we manage growth to make sure that
we don’t dilute the brand and we don’t lose focus of why we exist you know we
have a hundred and twenty nine years of history and you know the owner and you
know he’s he’s I said he’s relentlessly focused on that brand so we do very well
in the marketplace we we have a customer set when talk about those retailers who
are very loyal to us as well and we you know ultimately we aim to make sure that
they’re successful were successful and so good news I think is it’s always good
I think in this industry that to have an authentic brand and the folks say you
you if you talk to have an offset Brande they’re probably doing well right
now okay all right fair enough now you’d mention those three business
areas that Carhartt is in direct to consumer wholesale and then in the
industrial and you mentioned that the market is ripe for innovation I think
you were talking about the industrial piece of it I just wanted you to what
makes one part of your market more ripe for innovation than others yeah well I
mean a couple of things we we we saw that we were underrepresented in that
marketplace even though it was the same product it was the same consumer right
that was their employer though was buying the you know the stuff to uniform
them so we saw there was a huge opportunity and we were just
underrepresented so we started digging into that marketplace we saw there were
a lot of challenges in terms of just yeah well lack of even digitization in
that process there’s a lot of paper involved believe it or not the uniform
business there’s a lot of opaque pasady actually in terms of understanding
what’s possible and and so we see that there’s a great opportunity because our
that worker you know wants our product so how do we help the their employer be
able to clothe them in Carhartt and at the end of the day if you go back to our
you know our mission is to protect those employees and you know it we think
there’s a ton of opportunity in that space not to get into specifics you know
what we’re gonna do but we think there’s a ton of opportunity to to serve that
industry and and help do more for frankly the same amount of money they’re
spending already and are there particular parts of the the areas in IT
that you’ve been transforming are there particular parts of it that apply
directly to that in you know that getting in and with some of that
innovation I mean I’m thinking about your ERP upgrade was probably
significant in that I think all all kind of whether it’s data you have to
understand our our website we have built functionality which is meant to be able
to serve that market mm-hmm be able to provide workflow type
of activities we see there’s obviously a ton more that needs to get done to go
after that space but it really still rests on the core I call it
infrastructure of car hers you know to deliver product so everything we’ve done
you know exactly whether it’s the PLM the product lifecycle management system
we put in or the ERP work website all those things are gonna help support that
marketplace okay most companies today are engaging in some version of what
gets called digital transformation and I have actually found that across
different industries it means entirely different things you can talk to someone
in the oil and gas industry and if you say digital transformation they look at
you a little quizzically but they say oh you mean you mean oilfield
transformation and you know it’s something very specific
what are those buzzwords mean at Carhartt and if I were to ask your your
president what would she say yeah I you know for us it really is you know
getting down to it is frankly it’s it’s digitizing all those business processes
and and you know the ultimate goal for us is you know to be able to eliminate
silos to make sure that information is flowing across that environment I talked
to us on those challenges of you know between you know everything about the
front end of your business of sales back to supply chain you know to degree that
that is interconnection across that is really the ultimate goal you know so
we’re really focused on finishing up that that digitization across those the
really the last space where we’re doing that I said that’s the product lifecycle
management we’re just in our first implementation this year and we’ll focus
on supply chain next and that means we’ll have every business unit a fairly
digitized and if it will say well then you’re done well no you know then that
drives up an ability to continue to drive continuous improvement or
innovation opportunities but only once you get that kind of base environment
set across that ecosystem can you really garner I would say game-changer type of
opportunity’s very difficult if you don’t have that interconnected you know
okay well one of the things I always like to talk to CIOs about is how they
approach innovation just as a leadership topic as a very practical matter of how
its structured within the company some companies take a pretty informal
approach to it others have something much more structured and formal
how have you been approaching IT innovation since you arrived at Carhartt
yeah so I mean if you remember that was one of my three topics at the beginning
they besides leadership and time to market the other one was innovation how
do we create innovation so what we did first was I just asked the team’s listen
let’s get pilots going figure out how you can get team members to start coming
up with things nobles just come up with ideas and so we implemented a shark tank
process so folks came up with their ideas for the committee then that said
yes come forward and then they pitched it they built something and pitched it
to really the judges would usually be myself and one of the business execs
mm-hmm and and that was great we did that for the first a year and a bitch
and but what we found was is that well we got a lot of continuous improvement
types of opportunities and a number of those went to production afterwards but
we weren’t getting game changers and we weren’t getting people to try things
that they didn’t have experience with yeah and and I really felt that that was
the only way we were gonna get a true innovation culture is to take it to
another level so we then late last year then changed
it to an Innovation Challenge and we decided to set aside five percent of IT
time during the year to work on innovation so I know a lot of see I was
a five percent how did you measure that I said or take we set aside one Friday a
month okay and we said that Friday there’s no project work I mean other
than if we have a system down type of issue or something like that
people are freed up to work on an innovation prize
and we but we didn’t force the religion we said who wants to volunteer to
participate we had I would say between 50 and 60 people sign up in few fours
for example and then there were nine teams that were all then working I came
up with a nine topics and I said okay here you are so some of the examples of
things that were built we had a product kind of search bot in facebook Messenger
that was built and that was like I said this was built in one quarter and was
alive working prototype we had another bot for customer service we had a way to
do location-based targeting we we were working at one side done yet to do 3d
scanning in other words create your own avatar so then if you think about it you
could try on clothes you know online remember I talked about the 3d modeling
we’re doing yeah we could actually not only just you try the clothes on but you
could see an x-ray view to see how it would fit on you so where is it tight
where is it loose not just how it looks on you but how this we had a digital
board room we had translation so we had these projects and I out of the nine
teams five or six then pitched it at the end so they spent three days and then we
had four members of the executive committee that came in and spent a few
hours judging the teams and it was a great result I mean obviously all the
teams all the teams played with technology that they had no experience
with yeah I thought that was an interesting aspect of it you didn’t want
your people who were already familiar with mobile development to be developing
some new mobile innovation you made them go work on something else and really it
was to just start opening up you know the aperture get people to start
thinking about things differently so the person who runs it for me is my head of
planning and architecture so you know she runs the process of saying okay you
know here’s for the first couple quarters I’m the one who came up with
the topics yeah and then she you know she then slots team people to those
teams they don’t get to volunteer for what project they want to work on
she’s slots and based on trying to create functional groups but also to get
people on things that maybe they don’t have experience with and yeah we it was
good date the first the first quarter we also make sure that every member of my
leadership include myself worked on a project mm-hmm so we run a project as
well leading working with our team so a little bit of competitiveness also
helped as well to get the juices flowing how did you come up with the nine topics
this is something that had been on your to-do list for a while or yeah just
things that came up in driving home and all those were things I saw we had some
kind of a business capability gap okay okay how can you go find something they
might fill that gap we don’t know what it is yet and frankly all the ones we
didn’t tell them what technology to use we said here is the solution we want you
to go built go find the technology we want to use and go building and we spent
zero dollars doing it now that’s an interesting piece of it because a lot of
times innovation efforts have some percentage of budget or some kind of
funding to it and you did the zero that you spent on it was due to supplier
relationships right talk a little bit more about that because I think
sometimes that’s an overlooked area in fact you said that that it’s overlooked
by a lot of CIOs how much more involvement they can get out of their
their vendor partners yeah you know we I would say even Carhartt was probably the
same thing they they traditionally treated suppliers like vendors right you
know I think everybody calls it a vendor and I say well that’s vendors like the
hot dog guy right that’s a vendor so but at the end of the day you know they
they’re interested in making sure that we continue to grow and get the most out
of the technology and they’re interested in creating market opportunities for
their products and so we we do build you know now we
have very you know strategic relationships with IBM or a Microsoft or
an s AP or a Cisco and and our strategy even on new
projects is we pretty much go to them first we look to them and say can you do
this first before we even go to look at other potential suppliers that’s our
trade off on this is you work with us and then we’ll we’ll make sure that
we’re trying to leverage those relationships but we I took my whole
leaders team for example on a West Coast supplier visit we went out and spent
time with each of our strategic suppliers out there so we’d spent a
whole day with with them and understand not just what we’re interested in about
but what are they working on that no they think we might be interested in IBM
for example runs workshops here four times a year as part of our relationship
and we can pick a business topic and they’ll come in and run the workshop for
a whole day including with my peers in the room about this is how we might be
able to attack a particular challenge so they’re actually gonna run one on that
industrial space with us here in a couple weeks and are you mainly asking
them to bring expertise in a consulting sense or do you look for other kinds of
resources it depends frankly we might be looking
for feels like you said particular expertise we might be looking for
ability to try things out you know that for free before we do anything we’re
looking for thought leadership even from a business process standpoint experience
that they may have with other customers that you know that they could help share
and and that we can learn from so there’s a wide range of those things and
and I think it’s important to realize it has to go both ways so I if any of those
partnerships like I said we’ve got the thing which is we engage with them first
and opportunities but the other one is that you know I’ve done a number of
things with several those suppliers in terms of speaking and other activities
but that’s my you know commitment back to them if they’re a good partner to us
then you know we’ll you know we’ll do the same to help them out yeah I wonder
– is it sometimes whether mid market sized companies even realize that they
can ask this of their various partners and suppliers you don’t have to be a
fortune ten or a fortune 50 company to get this kind of
tension yeah you know I I will admit that it’s helpful to have the car brand
yeah so all right you have a brand knowledgeable brand right I mean it’s
you know obviously and it’s helpful that you know we’re trying to drive
innovation and do those thing cuz a lot of good stories around that mmm-hmm
but but even though you know I’ve done I was at insurance company which wasn’t a
brand and we were able to get the same type of experience so I do think it
comes down to you know the relationship that the CIO and their executive IT team
you know and how do we treat those relationships how they treat those
suppliers and it doesn’t mean we’re a pushover when it comes to negotiations
but but at the same time we’re we’re trying to to grow for the long term with
them yeah I think and that’s something that I see when CIOs move up through
functional to transformations which is to a strategic level they do tend to
have these more strategic relationships with their partners they just look at
them differently and they demand different things from them yeah you
wrote an interesting blog a few months ago I think back in November about
overcoming the obstacles to innovation so I want to talk a little bit about
those you identified four of them the first one was agile development itself
and how it can get a little overwhelming for the teams just in terms of the
stream of work that is constantly flowing through and it never ends
because there’s the MVPs to create and new cycles that are starting so talk
about that first obstacle to innovation and how you try to get over it right yes
I think the key thing as you mentioned is like people think that in itself
agile drives innovation but all it drives is a backlog yeah so you’re just
gonna get faster at delivering the backlog yeah so you you know the big
thing is is that you have to figure out how to create capacity for innovation
whether it’s time and sprints or whether it’s like I like we did in terms of
setting I set aside in a Friday you know the premise of being agile like I said
is not necessarily about innovation in itself though being agile can help you
you know be more innovative because you can try things at a faster pace mm-hmm
but it won’t free up time to truly get game changers necessarily because the
product owner may not prioritize those types of activities that’s right they’re
actually focused on the product they’re working on right so the innovation
essentially has to be earlier in the process before the agile the second one
was budget and of course we already talked about that a little bit your
advice is get your suppliers in the game yeah absolutely yeah and even so
somebody will say on public-sector I’ve had people say on public sector and I
can’t do that it’s not not true I be you know for
example the insurance company I mentioned wasn’t public sector yeah and
but we had a rule that said we did this group of concepts and they were zero
dollar purchase order type of thing with them but what we said is that anytime
all they do is create a market opportunity everything was going out for
RFP right you know if we came down to the actual like we want to do something
in this space so you know I don’t think you know you have to be private sector
to be able to have those supplier relationships that’s a great point to
make sure it I’m glad you mentioned that your third obstacle was just human
nature the team excitement it’s just it’s a it’s a bell curve right everybody
gets all excited at first and then it starts to get a little more I heard one
CIO talk about it as the trao of despair how everybody’s very excited in the
beginning and then the work really starts and then they realize that
they’re already behind and then they get a little despairing so how what do you
do when team excitement starts to peak out a little bit yeah yeah two things
right in there one is the extra work sometimes people see it as just extra
work yeah and and you really do need to make sure that you’re slotting off time
for them but but but also make it fun if it’s not fun and this is it I also think
sometimes people too much put too much structure around it we have there’s no
we have no standard operating procedures on this there’s no process or
nothing ok there’s really just hey here’s the idea let’s go yep you know
and and be fun about it we joke about it we by definition no innovation project
can go to production it gets thrown out you have to start over and do it the
right way because we don’t worry about security we don’t worry about is about
learning it is not a pilot and I think sometimes people get those confused
there’s a pilot means that it goes to production if it’s successful so it’s a
lot more rigor on things all the overhead for me yeah and don’t be don’t
always be in an organization some people want to do it and some that don’t and
like I said in mine I’d say it’s half the people are like yes I want to be one
CIO referred to that to me is the rule of thirds
he said anytime you introduce something new there’ll be a third of your people
that are super excited a third of the people are doing a little bit of watch
and see and maybe I’ll get involved and then a third of them not interested and
when it stalls out time same thing that innovation try something different like
we did with moving from the shark tank to the Innovation Challenge for example
put a different spin on it now try you know to to reinvigorate it just like
well that’s your fourth obstacle the things get stalled right yeah and there
you’ve got the Friday time that you carve out and so forth ok we’re getting
near the top of our hour here so I guess my last question for you is about the
CIO role itself it’s it’s been it’s always fun to talk about it because it
seems to be in a constant state of evolution but you said some interesting
things about that one as you said because I asked about what what did you
think would happen would like the CIO title and going into the future and I
think your response is something like titles don’t really matter so talk about
how you see the role evolving whatever we’re going to call it in the future
I I think in the in the future you may have somebody responsible for technology
but they’re probably also responsible for for something else it may be similar
to my role and so whatever they call it I don’t know like my role is CIO but I
didn’t change it to be CIO and head of planning and pricing and you know all
you add another line to your business card so but I think because it’s so
integrated in terms of the the business know that I do think there is going to
be more and more where somebody you know on the executive committee has got two
hats you know it’s got everybody does to make sure that there’s consistency but
also you know one of the business processes so that they have a better
feel for is that technology really working is it really you know providing
the value so anyway yeah well I’ve had some CIOs recently that I spoke with who
are more and more interested in the chief operating officer role and how
that is changing and that our focus is all around CIOs here so I don’t really
get to talk to that many CEOs but the point that they’re making is that the
operation of the company is so tied into all the different digital technologies
and various technology tools and so forth that there’s a likelihood over the
next few years that the CEO o role may come to include technology very well
yeah yeah okay let me see I guess I did have one penultimate final question your
reading habits how do you stay on top of you mentioned that you read The Wall
Street Journal how do you stay on top of the market technology and business
trends what do you recommend oh you know I think you know today’s
world you know with whether it’s a Twitter feed or your or you are LinkedIn
feed or you know whatever might be more like Google feed it’s coming from
everywhere fast and furious so you know starting the day on a wide range of
topics is important for me yeah but if those supply relationships is where I
get a lot as well I do a lot of executive briefings with them I I do
spend time and go to for example IBM think or so I think and I still try to
do that and learn a little bit about the technology itself I’d like to say I’m
really self actualized and that’s all I do but but you know when I Drive to work
I ride home from work I’m not thinking about technology I listen to to ESPN
radio in the morning I listen the comedy channel on the way back so good you know
I like to keep a foot in real life yeah my life so but I do I think the
relationships and the team members you know even like folks in my team come
with hey we’d like to talk about this so I look a lot just from all those
interactions as well yep well sometimes the listening can be
the most important skill we use you know absolutely and it’s been a real pleasure
listening to you today John so thank you so much for joining me for this
conversation and I will I’ll be talking to you again soon I hope okay thanks
yeah and thank you all thanks to our audience
for joining us today this was a conversation with John Hill
the CIO at Carhartt rugged where rugged work where for men women and children
and we will be back with another episode of CIO leadership live on March 8th when
I’ll be talking with mojgan Lefevre is the CIO of the global specialty business
at Liberty Mutual and in the meantime if you’re just tuning in and catching the
very last of this episode we do put a the video will be up tomorrow on cio.com
and we also produce an audio podcast that we post to iTunes Google Play and
SoundCloud so thanks again for joining us and we’ll see you next time

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