by Stewart Deck

Big Brands, Small IT

Nov 15, 200015 mins
Consumer Electronics

Reader ROI

Learn how IT contributes to the building of famous brands

See how very lean IT groups stay small

Get tips for doing more with fewer people on staff

It was 8:40 on an August morning, about three blocks from Frank Hood’s office in Winston-Salem, N.C., but it could have been any time of year. Two young girls in T-shirts and shorts pressed their noses up against a room-length plate glass window, hypnotized by a doughnut-making ma-chine at work in Krispy Kreme Doughnut’s flagship shop. The girls’ father, a local clothing store owner dressed in a comfortable gray summer suit, stood next to them. Beside him stood a commercial real estate broker, another customer who had paused to see a process that he’s witnessed perhaps 100 times before. Together they watched doughy circles dive into hot oil, flip over and trundle up a conveyor before finally parading through a grand sugar-glazing waterfall.

As anyone who has bitten into one of the 3 million doughnuts the company makes every day can tell you, these airy confections (with no formal advertising) have made Krispy Kreme one of the country’s most beloved brands. And it’s part of Frank Hood’s job, as vice president of Krispy Kreme in-formation services, to keep it that way.

Lisa Bell, Mike Freeman and Lisa Dumas can empathize with Hood. All of them are entrusted with upholding the status of some of the United States’ best-known brands by directing the technology works for Tabasco sauce maker McIlhenny Co., WD-40 and U-shaped bike lock maker Kryptonite, respectively. Their companies aren’t the nation’s most enormous brands or top revenue generators, nor are they on technology’s bleeding edge. But they also don’t work under the shadow of a corporate conglomerate. Each company has a specialty and employs a passionate group of workers to help turn out its well-respected consumer products. They also share another noteworthy trait: They all use technology in creative and judicious ways because their IS staffs are all surprisingly, even shockingly, small.

The Power Behind the Brand

Trusted, beloved brands don’t just happen. They are the result of effective planning and execution, not just by marketing departments but by everyone in the company—the IT side included. What’s often overlooked in producing a memorable brand is the support for internal employees, says Sheryl Goldstein, a marketing strategist at Luminant Worldwide, an Internet professional services company in New York City. “You can spend a lot of money to convince your customers that you’re everything that you say, but if your own people don’t buy it, then those internal customers will project a bad image,” Goldstein explains. “People don’t pay enough attention to how the brand experience is [presented], not just to your own audience and consumer, but to your own people because they’re the walking and talking entities of your brand.”

This means CIOs, more immediately than they might have thought, have direct responsibility for and influence on their brands. If they can provide the technology foundation that allows workers to get their questions answered, then these workers can provide greater value to customers and be happier for it. Therefore, what the CIO does also has a significant influence on customer experiences.

Jonathan Asher, president of New York City-based brand consultancy The Coleman Group, says simplifying every customer interaction—from getting questions answered to collecting payments—is also a key to brand building. “If CIOs can make it easier for customers to do business with them, they’ll build better relationships, negotiate better deals and ultimately provide the type of service that great brands have to have.”

Hot Stuff

When people find out where Lisa Bell works, their eyes light up and anecdotes start pouring out. People can’t wait to tell her how they sprinkle Tabasco sauce on everything from pizza to potato chips. A few have even extolled the virtues of painting boat bottoms with a mixture of the scarlet potion and paint to keep sloops barnacle-free.

Fifteen years ago you could find the 132-year-old McIlhenny’s delectably firey Tabasco sauce in almost any grocery store in the United States, even though the company’s entire IT operation was contained in one small room with three terminals into which all the company’s data was keyed in once a month.

Bell, McIlhenny’s IS director, is thrilled those days have passed. Five years ago the company, which manufactures 500,000 bottles of Tabasco every day, modernized things considerably by bringing Oracle Manufacturing and Financials on board for enterprise planning. It also installed a network with Lotus Notes databases that are now used for everything from promotion tracking and industrial customer listings to IS information sharing and customer complaints.

Since then the Avery Island, La.-based company has also added an online sales reporting system for its sales managers and a payroll system from Automated Data Processing. The company has also pumped up the use of its electronic data interchange (EDI) system, which now handles 90 percent of the 25,000 food broker orders it receives annually. Here’s the interesting part: Bell manages all this with an IT staff of five—that’s right, five.

A five-person staff doesn’t seem like it could possibly do everything required for such a well-established brand, but through a combination of automated systems, cross- training and elbow grease, Bell makes it work. “Actually, having a staff this size helps in many ways,” she says. “If we’re having trouble with our EDI system, we have one person to go to. If there’s a database problem, we don’t have to spend a lot of time figuring out whose responsibility it is. We have one [database administrator] who takes care of anything database related—same thing for Oracle applications or Lotus Notes. It really speeds things up.” But Bell doesn’t try to do the impossible with five people: an outside company designed the company’s colorfully entertaining website. (The site at keeps the brand burning, complete with a corporate history lesson by local sauce historian Raymond Broussard.) Having such a well-known product is a terrific assist, Bell adds. “Our name immediately gets the attention of [technology] vendors,” which are lured by the distinctive Tabasco label.

A strong brand has little to do with size and everything to do with execution. Stephen Dull, a partner in Andersen Consulting’s customer relationship management practice in Atlanta, says every strong brand is successful at three things: offering something distinctive and better than its competitors, making its product experience consistent every day and communicating its distinctiveness or personality clearly to its audience.

It usually requires a large IT staff to help provide this consistent experience and distinction. Some of America’s most well-known brands, like Coca-Cola, which has an IT staff of approximately 1,000 among its more than 30,000 employees, have made hefty man power investments in IT. But it doesn’t always require sheer numbers: Chick-Fil-A, America’s third-largest fast-food chicken chain (beloved for its nuggets and sandwiches) supports over 930 restaurants with a full-time IT staff of 57.

Lock It Up

Lisa Dumas hears anecdotes too. When she tells strangers the name of her company, they quickly respond with long narratives about locking up their favorite bicycles. Or they tell her about photographs they’ve seen of determined protesters chained by their necks to bulldozers or trees.

Twenty-eight-year-old Kryptonite has followed Dull’s recipe for strong branding precisely, and Karen Rizzo, the company’s director of brand management, says the brand name now carries considerably more heft than the company’s 60- employee operation would suggest.

“Every action and every decision we make isn’t about the product, it’s about the brand and supporting the brand. It isn’t about making bicycle brackets and other locks, it’s a passion for what these locks secure,” Dumas says. “We try very hard to make sure the product lives up to that passion.” She makes this statement knowing a lot rides on her efforts: She is Kryptonite’s entire IT staff, keeping tabs on everything at the company from EDI ordering systems to network security to back-end accounting software. Dumas says the company name and reputation are both a help and a challenge. “Because so many people know our name, it opens doors with some vendors, but it also gets the attention of some hackers,” she says, noting this adds an important challenge to her duties. A reputation for ironclad physical lock protection has drawn the attention of a few would-be network burglars who have attempted to hack Kryptonite’s network and website. “Our brand stands for safety and protection, so our own network has to reflect that and give customers a consistent feeling of security and strength,” she explains.

Dumas has automated as many functions as possible, from system and network backup to EDI, in order to handle the everyday needs of 60 users, many of whom travel extensively and require solid remote network access. “We’ve cut out as much data entry as possible, automated a lot and kept things simplified from a network perspective. And as the company grows, I’m sure we’ll add at least a few more IT staff,” she laughs. As it is, she doesn’t try to handle everything. Like sauce maker McIlhenny, the company outsourced its website design.

Glazed and Enthused

Within seconds of being introduced to Frank Hood, people start telling him stories from their childhood. He’s heard more than a few recollections of car trips to see grandparents and special Saturday morning expeditions. One of his favorites centers around piano lessons in the early 1960s in Richmond, Va., that were always rewarded with a Krispy Kreme glazed doughnut. Each of these stories is told with a chuckle and a fondness, and Hood knows that his company’s lighter-than-a-forgotten-dream yeast confections will eventually make an appearance. Hood loves hearing these stories.

Three years ago, as the 63-year-old company began to explore the possibility of going public, it brought Hood aboard from textile manufacturer Dan River Mills to develop an IT strategy—and staff—that would take it into the future. “The most difficult part was getting people to spell out our concrete business strategy and then translating that business strategy into an IT strategy,” he says. Hood also had to endure some staff turnover as he communicated the need to undertake more (and higher-profile) IT projects.

Hood helped crystallize a business strategy that would help the company gain a better, more granular view of sales data from each of Krispy Kreme’s 156 retail stores, while providing access to this and other data to the company’s business analysts across the nation. These end users wanted to be able to see sales data broken down into crumb-size pieces—everything from drive-through sales per hour to most popular merchandise per store to comparisons of glazed to jelly-filled sales at different times of the day. To do this, Hood and his IT staff of 20 set up plans to provide each store with common thin-client point of sale (POS) systems, as well as store operating systems, to provide remote users applications for retail forecasts and production management. They also began building an extensive intranet, called the Krispy Kreme Information Exchange, to serve as a conduit to get information and all documentation (including technical instructions on how the doughnut-making machines and POS systems work, how to order supplies and HR forms, and processes) out to the field. They also began laying the groundwork for a data warehouse to hold sales and route accounting data.

When Krispy Kreme went public in April, Hood’s team had plenty to show for its efforts. The company’s 220 mobile sales and divisional users and stores are now outfitted with IBM ThinkPads. In addition, 27 IBM AS/400s now support 38 regional sites, 17 Windows NT servers serve out applications and e-mail and four Citrix Meta-Frame servers help run the intranet. A Microsoft SQL Server-based IBM DB2 data warehouse holds information ranging from varieties of different doughnuts sold in each store during different times of day to broad customer-profile patterns to regional sales figures. “It wasn’t hard to see that what we were doing was the right thing to do,” Hood says. “We automated as many processes as possible, semiautomated our EDI systems and built ways to poll stores automatically [for sales data]. It took a lot of time and commitment, but without these systems and the data they provide, we couldn’t have gone public,” he says. In the past, he adds, such precise sales data, necessary for performance forecasts, wasn’t easily and quickly accessible.

Hood also recognized that all of his modernizing efforts couldn’t and wouldn’t ever upstage the company’s product. “Our brand and the experience of the product itself is held so dear,” he says, which is why strangers tell him stories about holiday car trips and piano lessons recalled from 40 years ago.

Stuck On You

Mike Freeman has heard lots of WD-40 sagas. Fishermen have told him tall tales of whopping bucket-mouthed bass caught on fishing lures sprayed with it. Others swear by the lubricant as a remedy for arthritis. His favorite story (and it is a good one) involves the product’s role in nabbing a naked burglar stuck in an air duct.

Well-known might be an understatement. Freeman can walk into just about any hardware store in the United States and buy a familiar blue and yellow can of WD-40. There might be one or two stores out there that don’t carry it, just as there are a few households that don’t have a can in the basement or in a toolbox. There aren’t many, though. The company’s research has found that 85 percent of all U.S. households have a can and more than 25 percent of U.S. households will use WD-40 this week. “My dentist doesn’t like me to say it, but more people will use our product today than will use dental floss,” Freeman says.

It takes an IT staff of six to drive this omnipresence.

Although that hardly seems possible, Freeman’s explanations are convincing. Orders from 120 of WD-40’s North American accounts come in chiefly by EDI and are handled by an automated order-processing system (the rest of WD-40’s 6,000 accounts don’t have EDI). Starting in December, order data will flow into an Innatrack ERP system (from Draves & Barke Systems in Minneapolis) running on a Unix file server. It is also transferred over a fractional T1 frame relay network to the company’s seven manufacturing sites. “We’re careful to set up good business processes and get live people involved only when there is an exception,” Freeman explains. WD-40 also agrees to beta test new technologies, “which is a little risky in some ways,” Freeman admits, “but it’s very economical, very practical and lets us see where we can get the most bang for our buck.” The Innatrack ERP system is one of those beta-tested technologies that worked out well because it allowed Freeman and his team to work closely with the developer to incorporate many of WD-40’s requirements into the software.

Freeman also makes certain his staff is cross-trained in other disciplines so that a sick day or a vacation doesn’t have disastrous results. “We make sure there’s a lot of communication in our group. But really, with just five [other] people, we’re always talking,” Freeman adds. “With a staff this size, I can get more done in a three-minute hallway conversation than I could accomplish with a whole day’s worth of meetings somewhere else.” The 41-year-old brand (named after its founder’s 40th attempt to make a water-displacement formula) also helps get plenty accomplished. “Having a strong brand is wonderful,” Freeman says, adding that some businesspeople who are familiar with his company want to help it succeed. “We wouldn’t be in some of the trade channels we’re in without such a well-established name.”

But Freeman neither counts on favors nor rests on what he’s built so far. “We’ve been growing through acquisitions lately [purchasing two more well-known brands, Three-in-One oil and Lava soap] so we look to IT to make sure we don’t get stuck in making those transitions.” The WD-40 brand is, after all, famous for getting things unstuck, including an infamous Colorado burglar who figured a middle-of-the-night air duct break-in would be easier if he shed his clothes. Police finally extricated the Mensa applicant after drenching him liberally with WD-40.

CIOs have long considered IT a business enabler. But when it comes to branding, Andersen Consulting’s Dull says technology now functions as the crucial component to building a lasting and well-known name. “Technology enables you to create distinctiveness and maintain it through consistency. Some companies are counting on more and new technology to replace the human touch in order to create greater consistency. But the best, the very best, are using technology to enhance the human touch.” To Hood, Bell, Dumas and Freeman, the human touch is absolutely essential. After all, that’s what the best stories are all about.