Big Bets and Lessons LearnedBig Bets and Lessons Learned

Big Bets and Lessons Learned Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how are you doing, sir?

Carman Pirie: I am excited to be here per normal. And you?

Jeff White: I’m really happy to be here. Yeah.

Carman Pirie: Nice.

Jeff White: It’s been a few weeks since we recorded an episode, so I’m glad to be back in the booth.

Carman Pirie: Yeah, exactly. And that gives us a good excuse if we sound at all Rusty too.

Jeff White: Exactly. You know, always good to keep the expectations low.

Carman Pirie: Yeah, Yeah. Exceptly ramp them, ratchet it down just a just a notch or two. Look, I have high expectations, however, for today’s show. Really excited to have today’s guest. And, uh. And it’s a fun topic, you know? Uh, I think we’re breaking new ground here at Kula Ring. We’ve not talked about this exact subject before.

Jeff White: No, I don’t think so. But, you know, our guest certainly has a tremendous amount of experience in marketing. And joining us today is Pierre Tannooux. Pierre is an energized and entrepreneurial marketing executive with decades of experience working in both B2B and B2C manufacturers, most recently at Henkel. And really glad to have you on The Kula Ring today, Pierre.

Pierre Tannoux: Thanks guys super happy to be with you. I will try to live up to the high expectations for today. That’s a lot of pressure.

Carman Pirie: That’s just by design. Pierre, We try to put all of the pressure on you so that we can relax for the remainder of the show.

Pierre Tannoux: Fair enough, I’ll take it.

Carman Pirie: Let’s, uh, let’s learn a bit about your background. If you would introduce our listeners to you a bit more fully and, uh, kind of what you’ve been up to over the last while.

Pierre Tannoux: Sure. So my name is Pierre, and as you might hear from my successfully not last accent, I’m originally from France, but I’ve been in the U.S. for the last 11 years, and I’ve, uh, I’ve worked for 15 plus years, as you mentioned, in manufacturing in both B2C and B2B marketing. And recently I was working for, uh, for the industrial business of, uh, of Henkel with the leading manufacturing energy technologies around the globe.

Carman Pirie: Pierre When we met earlier to chat about doing this show, I really liked the, uh, the way you were and the clarity with which to you, you saw the challenge of manufacturing marketing and how you weren’t afraid to think creatively. And I want you to kind of take our listeners through that notion of I believe what I would say is just really a strategy of taking bigger bets. I want to know about those bigger bets that you’ve taken over your career and the lessons learned along the way. What’s the biggest bet that you’ve taken?

Pierre Tannoux: Uh, I could think about about two different examples. One more on the consumer side, one more on the B2B side of my story, I think the more visible one on the consumer side is bringing the brand that I was managing at the time in the U.S. for the first time in the Super Bowl. And for those who don’t know Henkel, it’s, uh, it’s a German-headquartered corporation that does roughly 20 billion in annual revenue. And it’s a great company, but it’s also known to be quite traditional. And so you know, when I moved to the U.S. and joined and took that position, you know, we had a brand awareness issue, which is not unusual for, you know, brands that are not in the traditional CPG company CPG category. In this case, I was, you know, advertising or selling glue. So you don’t have a great huge budget and yet you have to be known by your audience to make sure that whenever they get in that position and you’re in the relevant set for them to buy your type of product, you want to be the one they pick and that brand at a huge awareness issue. And for those of you who marketed brands and products in the U.S., you will know that to move a needle in awareness in a country that is that big, it takes a lot of dollars and a lot of dollars that I didn’t have. And, you know, my predecessors had tried many, many things and great things, but it was very difficult to move the needle in the awareness. And so together with my team, we pitched to put 100% of our marketing budget into one single night and make a big bet to your point and put a glue brand with people dancing to the joy of a glue that works on Super Bowl night in 2015.

Jeff White: How does that conversation go?

Carman Pirie: Yeah, Yeah.

Pierre Tannoux: It’s funny because I think, you know, you are saying that I’ve been trained to do big bets like my whole career. That’s a little bit of my footprint, so to speak. And I think for sure it’s scary, you know, And I’m scared people many, many times when you bring that kind of ideas, put this kind of ideas on the table. But I think in this case, you know, maybe less for my German counterparts, but for the US leadership audience, there was something like super exciting, scary but exciting, you know? And when you manage to be to put people into that space and take the, you know, the stress off of their shoulders and showcase the opportunity rather than the risks that come with it, I think, you know, that’s when you start to have a conversation and then it becomes a team story.

Carman Pirie: I reminded a guy I used to work with probably now 15, 20 years ago, we used to joke about starting an agency that was called Bet the Farm. The idea would be that basically we’d recommend exclusively really one idea for the entire budget for the year and you basically would be betting the farm. Little did we know that somebody was actually doing this. They just happened to be working at Henkel.

Pierre Tannoux: I will say you know the idea was also born very much as part of the pitch that we did at the time. So actually I did a pitch when I arrived to select a new agency. And at that time, you know, the Super Bowl idea was not there. And it’s when, you know, one of the agencies pitched their idea, which I thought was amazing and I was not the only one. That’s the Super Bowl idea that then was created. So, as always, you know, when you go to do something crazy in marketing, it’s never one guy, it’s never the client, it’s never the agency only. It’s when you manage to create that, you know, that unique symbiotic relationship. And when great things happen. And, you know, it’s funny because it’s been nine years, but there is a little group of people, you know, between the creatives, the guys who are on the agency side, the people who are in my team that are still friends to this day because of that adventure, you know.

Jeff White: And the best marketing is a team sport.

Carman Pirie: Yeah, absolutely. I want to talk about the impact of that because, you know, it is funded through imagine the internal sell that was required to get the permission to do this and they get the organizational buy-in but what was the impact?

Pierre Tannoux: The impact, what we did the key objective was brand awareness. Right. So we measured brand awareness before and after. And overnight we were able to to increase that brand awareness by five percentage points, which was a great accomplishment. I will say, though, you know, not everything was perfect, you know, if I were to do it again there are many things that I would do differently. So, you know, we had a very hard time sustaining that awareness after the Superbowl because we had $0 left.

Carman Pirie: Right, right.

Pierre Tannoux: So that was that was a big change. But we did move the needle from that standpoint and that was able to give the other positive aspects. You know, in our case, as I said, we were selling glue and you know, if you are a buyer at Walmart, Target or wherever, and you’re dealing with and always are in a push to buy Bud Light, you know, around the Super Bowl game, you know, in the U.S., you know, it’s part of the yearly operation. It’s you’re used to that if you’re a global you’re at Home Depot and you have your sales guy coming to you and say, hey, we’re going to the Super Bowl. You know, that’s great excitement on the customer side. And so we were able to also rally our customers around this initiative. And that resulted in increased sales. In this case, you know, our super category grew double-digit that year.

Carman Pirie: It gave you something to talk about it. And it’s something exciting to talk about. To your point, you know, the guy or girl running the local corner stores and getting all that excited about the Bud Light Super Bowl promotion this year or what have you. It’s just it’s expected. But I think that’s one of the things that the manufacturing marketers are very quick to maybe look down on the category a bit and say, oh, well, you know, it’s hard to do exciting things. It’s hard to do the fun things that the B2C side does. But, you know, but when you do when it zig when the rest of the industry is zagging, everybody notices, whereas nobody notices really when another beer brand has a cool, you know, Super Bowl ad. Were you able to sustain those sales gains? And my guess is that they were probably a little bit easier to sustain than the awareness lift.

Pierre Tannoux: Yeah, I think so. Also, the numbers I gave you were collected for the full year that year, the double-digit growth and I can see what’s helped us is, for some reason there is also a little bit of seasonality in the sales of that category and around the time of the Super Bowl. For those of you who don’t know, but I guess everybody would know it, the beginning of the year. It was February 1st in this case, and it’s really the slow season. So basically we we generated huge growth at a time where, you know, we usually have very low sales and that excitement and this first quarter incremental sales you know lifted us up as well for the back end of the year because our customers saw that that we were able to to sell through. So definitely there was not as much growth in the back end of the year, but it was more than sustained. And that’s what resulted in the, you know, double-digit growth for the full year for the full year, which was at that time, just to give you a point of reference the fastest growth that that category had seen in the last between five and ten years probably.

Jeff White: Were there any knock-on effects to kind of doing that Super Bowl ad, Like did they increase the budget for the following year to include one plus other marketing to support more traditional efforts?

Pierre Tannoux: Unfortunately not. So I would put that on the on the part that you would not count the success. And also, as I remember like the night after the Super Bowl, you know, we were there was a team we went to our agency actually was Fallon based out of Minneapolis and we had like a war room type situation where everybody was there and we didn’t sleep between trying to manage what was happening in social media and drinking champagne. But I remember the day after, you know, somebody asked maybe it was my boss or somebody else in the team said, should we do it again next year? And I said, I don’t think we should, you know because that’s kind of the thing where, you know, if you’ve done something that you think is a good job and it was a good job by doing something out of the ordinary and exceptional, you know, the next year you want to do something else, you know, which we did, you know, in a different fashion. But no, to answer your question, we did not redo it, nor did it really affect our budget.

Jeff White: Hmm. Interesting. Still, you did a Super Bowl ad. 

Pierre Tannoux: We sure did. 

Jeff White: And it nailed it that year.

Carman Pirie: Yeah, exactly. And so you mentioned that there were two examples leading with the Super Bowl. I mean, it’s going to be hard to follow that up, I think. But like, let’s give it a try Pierre.

Pierre Tannoux: Yeah, And it’s funny because the Super Bowl is a project, right? It’s you know, I remember, you know, we pitched the idea in the summer, previous summer, you know, and then you, you know, you brief the agency, you work, you know, you produce, you know, you develop the whole entire strategy. You go live, you know, that’s it. You know, that’s that’s a very, very finite window. The other example is, is when I moved through the B2B side of the business later, you know, after a few iterations and a few, uh, a few experimentations, we decided to, uh, attempt at launching a large scale digital transformation program for business that was 11 billion in, in revenue, very traditional B2B type business. And that was, I would say, another big bet a completely different dimension, because in this case, the bet was we know we got to transform this, uh, 11 billion business and the 26,000 people that come with it but we are very, very few people to see what we think everybody else should see but don’t.

Carman Pirie: Let me unpack that a bit. What were and what kind of, digital transformation can mean a lot of things to a lot of people. What were we, I guess how holistic was that transformation that we were seeking?

Pierre Tannoux: Yeah, that’s a good question. And I agree with you. It’s a very much overused term that can mean many different things. And in our case, you know, to make it very simple, that business, which is a very, very powerful,  strong business, is based on a sales guy having amazing expertise and talking to an engineer and helping him solve these challenges to build this car, build this phone, build this whatever, whatever that is, which is great, except we notice that there was like two things that were mainly changing. Number one, you know how you scale that, how you know, because the question, even if you’re 11 being big, you know, the question of the market is always the same. How are you going to scale growth? You know, and it’s very difficult to scale when your growth is dependent on a human, you know, solely. That was number one. And number two, surprise, surprise, you know, people are changing, you know, So even if our audience, in this case, was engineers, design engineers, process engineers, those guys wanted to interact with the brand and with the company in a much different way. And so our whole premise, our whole vision was to say, if we want to win and help to scale this business and continue to be the most relevant for our customers, existing and new, we got to make it easy. We made it easy to do business with us. And I can tell you my conclusion after doing this for four or five years is that in a big, large industrial type business, it’s not easy to make things easy.

Jeff White: Yeah, that’s a good line.

Carman Pirie: Yeah, man, I have so many kinds of off-ramps to that comment. You know, it seems to me that that kind of business model and there are so many manufacturers that find themselves in that they’ll say, Yeah, you know, where we really succeed is when our highly technical sales professionals are working shoulder to shoulder with engineers on the client side to create solutions. And then you start to unpack the dynamics of that. And we realize that that salesperson has like 35 years experience with the organization and has developed a level of technical knowledge around the solutions that they sell that, you know, doesn’t exist in any kind of training system in the organization or what have you. And then you look at who’s being recruited into those roles today. They’re not going to stay there for 20 years. They’re not going to stay there for ten years. They’re not going to have the time to develop the depth of experience that they can just kind of have that muscle memory to draw on to make the organization money. I think this challenge is pervasive.

Pierre Tannoux: I think everywhere for sure. And I think there is I would have to observation to that comment. The first one is that guy, you know, 35 years there, you know, I’ve met so many of them and I have so much respect for those guys because indeed like when you are in the business like this, you got to love those guys. You know, they’ve grown with a company they know like a crazy amount of stuff about what they do, and that’s an asset to any company. Right. My first question, you know, to the CEO of that company would be, you know, I love that you have a 35-year-old. You know, salespeople, but how much percent of their time do they leverage, what you just describe as being great about them? And there is a very high chance that if you ask them, they will tell you very small, you know, very small. There are very, very few moments where I’m actually leveraging all my expertise and making the deal and all the rest of the time is spent in, you know, doing sitting, you know, trying going to trade shows, you know, trying to do relationship management, uh, all the administrative crap that I got to do all that stuff. And the reality of it is if you have an asset like that, you want to make sure that you maximize the time that you use them for what they’re best at, that’s number one. The second thing is, as great as it is, you know, I remember talking, I think it was last year with one of our kickoff managers and the guy was, his clients were Google and Meta and you could find it weird because they, you don’t think manufacturing for those people but actually they are manufacturing datacenters, for example, that makes them a customer for Henkel. And our sales guy told me you know what, I love what you guys do because the engineers at Google and Meta you know, they are they’re young guys, you know, and they are behaving completely differently than the one I used to deal with, like even like five or ten years ago. They don’t want to talk to me. They don’t. And they are telling me, you know, we’ll reach out to you when we need you, but we don’t want, you know, the old plot of, Hey, how about we get together and I show you my solution and, you know, a 30-year-old engineer today doesn’t want that. I want to hear that. He doesn’t want to do that. The big shift is the customer is in control. At the end of the day. And I think we come from a world where sales was about a sales guy coming to a customer and the new world is a customer looking for a solution and understanding that you may be able to help come to you. And it’s a complete, complete shift in paradigm. And as any company needs to adjust to that.

Jeff White: The other piece too, is that those salespeople with decades of relationships, I mean, my goodness, they probably would have gone to some of their customers, kids graduations and, you know, they would have that depth of relationship with some of the customers they’re working with and probably really value that and leverage that and maybe overly depend on that. And then when they get in the situation where they’re meeting, you know, mid-twenties engineers who don’t even want a phone call, let alone in an in-person meeting, you know, how do they react?

Pierre Tannoux: Both are true, Right. You are saying, you know, are we going to be more and more rare to have a guy who remains a sales guy, you know, in the same company for 35 years? But you go on the other side. Also true, the guys, the on your customer side. And that means that doesn’t mean that relationship no matter I think it’s you know a business is always going to rely at some point in the process on, you know, two people coming together, trusting each other. You know, that there’s always going to be that component, I believe, at some point for important business relationships. But it’s just a different game in terms of how you play it. I think I needed to adjust to that too.

Carman Pirie: You mentioned that after five years, the one conclusion that you have of this is not easy making a large manufacturing organization doing business with them easy. So I guess that is a nice pivot to a lesson somewhere. And is there anything you could have done to make it easier?

Pierre Tannoux: Yes, I think, you know, one dimension that I think is really, really critical that I definitely underestimated is a cultural aspect of change and, you know, when you work for a corporation, you know, a big, large corporation, I think it’s always a big risk to be too inward centric. You know? And so I always like trying to, you know, do the exact opposite, you know, and very much focus on the outside, on the customer and on what we can do. But I think, you know, in this case, we probably neglected, you know, the importance of over-communicating and making sure that internally again, when you have 26,000 people that you got to move. They need to understand that this is important, why it is important, what we are trying to accomplish and what they can expect or what is the expected result of everything that we’re going to do. If you’re trying to build a transformation within a small, rather small community, even if it involves some execs and senior execs, it’s not enough. So I think that that’s one big learning that I’ve had. The second one, which is maybe actually the, you know, one of the most important ones, I think, you know, there are a lot of debates, even, you know, you see on LinkedIn and stuff, you know, how much a CEO should be involved in, you know, any type of business transformation. And everybody agrees, oh, yeah, you know, the CEO should be involved. They should be like a sponsor and whatever. And my big learning is that that’s 100% not enough. The only way that you can be successful at transforming a business in any way that you want to transform it, take it to a different level. You know, whatever the case is, the CEO himself needs to be driving. It needs to be a driving force. So he’s not going to do everything himself. Obviously, he needs people to do that, but he needs to position himself as I’m driving this, If he’s not driving change, then the change doesn’t exist. That’s just the reality of how things work in any company, I think. But even more in larger corporations. And the last learning I would give you, which I think is very much less relevant in smaller type company, but in big it is, is a syndrome that I’ve suffered from, which is what I call pilotitis. And when you’re trying to invent something new in a big operation, you want to do pilots, right? You want to experiment, you want to show, hey, we’re going to take a small, small piece, we’re going to play around, we’re going to show you, you know, what it could be if we were to scale, you know, that effort or that new thing or that we’re doing. And you need to do it in some form. But you will very quickly realize pilots are killing your transformation because they excite everybody. They give the impression that the transformation is happening, even though it’s not because it’s you know, it’s again, touching 0.01% of the business. But, you know, in the C-suite, people are like, oh, yeah, that’s great. And that’s done. No, for them, that’s a big risk. Big lesson learned also.

Jeff White: Oh, well, we could spend another half hour on this. Yeah.

Carman Pirie: Yeah. Like where does that is, Gentlemen, this podcast will now extend to 3 hours. Where? Well, honestly, this pilotitis had a man. Oh, my goodness. Do you see that? I like that is everywhere. And I just. I don’t. I can’t even say there’s no way I can say it better than you just did it because it gives people the illusion that change is happening. And it’s this little organization, this little piloting break-off organization, which chances are when your staff that you picked out all of the Misfits that didn’t fit in the normal organization. So you put them over there in the innovation center right because they’re more creative, which really means they’re less annoying if they’re over there amongst themselves and then they do the pilot and it’s great. And then of course, it can’t it can’t scale across the organization anyway, because the organization doesn’t function the same way that that small little division functions. And the big hard culture work is not even on the table to your point. It’s not even being considered because they’re sitting there thinking, well, we are we’re doing innovations. We have these ten pilots on the go.

Jeff White: How though, do you because it’s hard to convince people to make the big bet and go all in and kind of, you know, do the thing. So is there a way to engage and create a pilot and build the plan for the larger rollout at the same time?

Pierre Tannoux: Yes, there is a way, there is a way for sure. If you’re conscious again if I knew that five years ago, you know, that’s why I’m happy to also share that because I think it could be super helpful. It’s going to be hopefully helpful for me in my next adventure. But there is a way to do that, which is first, you know, you need to, you’re going to need pilots, right? The reality of it is you do need to experiment. You need a space to do that because if you want to transform an 11 billion, 10 billion, 20 billion, or 30 billion business, you’re not going to go all in and do whatever you have cooked in your brain with your team, You know, at scale, that’s not going to happen. So you need that. What you need to do is to create a very comprehensive plan from the get-go. Where piloting is part of a grander plan, ultimately scaling the transformation. And you need to have a stage-guided approach. And from the get-go you say, we’re going to pilot this. Exactly this, nothing else, nothing more. We may change. You know, it could be like a few shifts those pilots are made to invent. But in that window, we will decide whether we go for it or we don’t. And at the end of the window, you create accountability for, you know, whoever is making the call, making the decision, whether it’s your C-suite or whatever the case is and you say wherever it doesn’t matter what will have accomplished or not say in six months from now, we meet again. We review what we have done, we review the results, and we decide whether we go or not. And if we go, we’re going to then enter phase two of our transformation, which is a scale-up, and that’s going to take that. But I think you lay out the plan from the get-go and you create accountability for people to have to make a choice. It’s not like, oh, let’s also try this. And it’s not it’s like that’s what we’re going to try and we’re going to decide that window whether it works or not based on agreed-upon criteria. And, you know, KPIs obviously.

Carman Pirie: Pierre, I don’t want to put too many words in your mouth, but I wonder if this is, I wonder if you’d agree with this if I were kind of speaking back and what I think you’ve taught me here and what I think you’ve taught our listeners, it’s a bit of this is a bit like the cultural change and the communication ought to start. Are you are going to be imagining that bigger and at a grander scale earlier so that you’re tilling the soil and basically providing the context within which those pilots are happening so that the exact changes we’re going to make not exactly sure, but those changes are in service of this broader vision of digital transformation, which we’re starting to communicate now. We’re starting to work on the hard stuff, the culture change stuff. And the specifics of that transformation will be informed by these six pilots or two pilots or whatever it is. And so it’s not about doing the pilots in very small, kind of isolation and then seeing how you scale it. It’s actually starting with scale in mind from the start.

Pierre Tannoux: You start with scale in mind 100%, and you tell that story to everybody because if you don’t, then you end up in my situation, for example, where we had one pilot which we set up in India in one part of our business. And then when we end up in being in a position to scale because we had seen great success there, the organization was reacting to say no, but that’s that was for India, you know. Oh, that was for that business, not for the rest, you know, because we had not done a good job enough early on to say India is just a means to the end, which the end is. The scaling of this for everybody.

Carman Pirie: That’s fascinating. Yeah. I mean, I’ve got… I think we could just, I really feel that the landing on this, uh, diagnosis of pilotitis for global large manufacturers is just fantastic. And I’ve found listening to you, Pierre, and learning from your big bets and lessons learned. That thing’s been fantastic to have you on the show. Thank you for sharing it with us.

Pierre Tannoux: Thank you. It was fun.

Jeff White: Thank you, Pierre.
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