PEER TO PEER – His Side of the Mattress

A year ago, if you were in your mid-30s, drove a domestic car, and made between $30,000 and $40,000 per year, chances are Mattress Giant was trying to get your attention. However, if you fit that profile, you probably weren’t interested in what Mattress Giant had to say. That’s because you weren’t a customer of the Addison, Texas-based specialty bedding retailer. But the company didn’t know that. For years, Mattress Giant annually poured more than $2 million (or 10 percent of its annual revenue) into advertising to a demographic that simply wasn’t listening. And what would you guess was the information source that drove this misguided strategy? Siebel? Oracle? SAP?

None of the above. It was…gut feel.

As the new CIO for Mattress Giant, I was in a jam. Just prior to my coming on board, the company’s CEO had halted the implementation of an integrated point-of-sale (POS) and ERP system 35 percent of the way through the project. The sales force had complained that the integrated POS and inventory/distribution system was too complicated to use. They also claimed it was costing the company sales volume. In the meantime, Mattress Giant was flying blind, without any real business metrics or customer information. And although the CEO’s concerns were well-placed, I felt that it was only a matter of time before the absence of such data would choke off the company’s growth.

Somehow, I had to convince the CEO to change his mind.

Learning the Language of Springs and Coils

So where do you start when you need the blessing and trust of the CEO? Particularly one who, early in the process, informed me that I was asking him to put his whole company at risk for the sake of a computer system. Earlier in my career I would have begun with a well-researched technology plan, accompanied by a strong ROI analysis, a thorough project plan and maybe even a colorful PowerPoint presentation. But this time I chose a different path.

I turned off my computer, cancelled my meetings and got elbow-deep in the business. With the blessing of the executive vice president for sales, I visited our retail stores, talked to the salespeople, watched the sales process on the floor and learned the Mattress Giant language of sales. I even tried my hand at selling mattresses. I heard people talk about the IT department and what they said wasn’t pretty. I also went to our distribution centers, studied the delivery procedures, loaded delivery trucks and participated in the existing physical inventory process. I added myself to the distribution list for customer service e-mail to learn what our customers had to say about us. I lived and breathed the company’s operation for more than a month.

In today’s enlightened IT world, “knowing the business” seems like a clichŽ, but in reality, its importance cannot be overstated. Not only was I able to get a crystal clear view of what the issues were with the existing process and what the problems had been with the ERP implementation, but I was also able to build more credibility with the CEO than I could have imagined. I could now speak with him in his own language, and ensure that my future memos, e-mails and reports were not only read but understood. I became an informed adviser. But this was no guarantee that my project would get approved. This was only step one.

My next journey would take me to the CFO’s office. It was important to understand the mechanics of expense and project approval. I worked late into the evenings with the CFO creating a real case for the return on technology spending. We focused on finding the immediate hard-cost reductions and business benefits that made the ROI for the ERP/POS system work. As a result, I had a coauthor for my IT proposals. In fact, they were no longer IT proposals at all; they were business proposals that involved technology expenditures. In the end, my CFO became a strong ally in the boardroom.

Only now could I begin pursuing the classical IT management initiatives. I met with the ERP vendor, GERS Retail Systems, to ensure it took ownership for the project’s success. (Something it should have been asked to do two years ago.) GERS quickly realized the value of lending consulting support at near-zero cost. It knew that a satisfied customer meant continued maintenance fees and license purchases.

I also had to reengineer the IT function itself. I focused on building strong levels of technical support, a rejuvenated spirit of excellence in internal customer service and most important, a campaign to improve the image of IT in the company. To build cross-functional support, I took an indirect path. I made it a religion to always remind my fellow executives gently that anytime they used information based on ERP system data, their decision would not have been possible without the system. (And, by the way, wouldn’t it be great if 100 percent of our stores were online, as opposed to the current 35 percent installed base.)

We also prepared many business metric reports, always with the caveat that they represented only part of the company’s performance. For example, we partnered with our loss prevention department to identify breaches in inventory security. As a result, we were able to recover thousands of dollars in stolen merchandise and manual inventory errors?but only from stores connected to the ERP/POS system.

With all this ammunition, I finally presented my case to the CEO. It didn’t take long for him to recognize the potential value of a fully implemented ERP/POS system. He began to see that not implementing the system would be a greater gamble than implementing it. My partnerships with the CFO and the executive vice president of sales paid off as they backed me. The CEO embraced the project and became its biggest cheerleader.

Within nine months, we had the system up and running. The CEO bragged about its huge success. The CFO felt that he had made one of the best financial decisions of his career. And the IT department’s image was transformed from technology dictator to solutions provider.

With our new ability to capture a holistic picture of our customers, we found out?surprise!?that they are predominantly female, approximately 43 years old, with a household income in excess of $75,000. Consequently, you are now much more likely to see our ads during Friends than Monday Night Football. We use focus groups to better understand our customers (whom we now know), and we spend our advertising dollars more intelligently. The entire personality of the company has changed. Our salespeople now protest only if their POS system goes down.

The whole experience reminds me of an article I read in the Harvard Business Review by Abraham Zaleznik, which contends that one key difference between a manager and a leader is the leader’s ability to change the way people think. I agree. I believe that this principle, executed in a nonthreatening manner, is a critical skill for CIOs as they interact with others in the company.

Today, Mattress Giant is definitely a company that is thinking differently. The proof is in the pudding: It is projected to set record-breaking sales this year.