Kris Safarova  00:45

Welcome to the strategy skills podcast. I’m your host, Kris Safarova, and our podcast sponsor today is strategytraining.com. If you want to strengthen your strategy skills, you can get the overall approach used in well-managed strategy studies. It’s a free download we prepared for you, and you can get it at firmsconsulting.com forward slash overall approach. And we also have another gift for you, McKinsey and BCG winning resume, which is a resume that got offers from both of those firms. And you can get it at firmsconsulting.com forward slash resume, PDF and today we have with us Tom Muccio. Tom was the architect and first team leader of the groundbreaking process that turned an adversarial relationship between Walmart and P&G into one that created win win for both companies, and has now been replicated in 1000s of customer supplier relationships around the world. Tom, welcome.

Tom Muccio  01:45

Thank you. My honor to be here with you.

Kris Safarova  01:49

Tom, you had such an incredible career. So let’s start with giving us a little bit of a background of how you ended up women in that role to begin with.

Tom Muccio  01:57

Okay, well, I was with Procter and Gamble for 34 years. The first 20 I was in sales, marketing assignments in most of the various divisions that we had, and in the US and internationally. And then I was asked to to head up a group, a multi functional team to help the company understand how should we be going to market with our customers in the year 2000 and that then led to a recommendation, which didn’t get a lot of support at the time because P&G was winning In the current system, and it was a threat to have to do the change and so but then we had a situation with Walmart and that as that then came together, and there was corporate ego on the line. People said, what are we going to do? And they said, Well, we have this recommendation from mucho and his guys and his and his team, you know, why don’t we do that? At least we can. It probably won’t work, but we’ll get credit for trying something new.

Kris Safarova  03:11

So you had a situation with Walmart. Let us know what that situation was.

Tom Muccio  03:17

Well, what we had was, P&G was was the most successful consumer products company in the world, and in in those days, in the late 80s, the the power was more in the an influence was more in the consumer products companies and less in retail. And retail was going through kind of a transformation. There were, there were for consumer products companies. Most of it was sold through grocery stores, but you were starting to get discounters like Target and Walmart were starting to pop up, a club, stores, Super Centers, all of that was happening. And the person who actually put me on this assignment to to create a different way of going to market, he basically said, Hey, wait a minute, we’ve been successful for 30 years. But what’s with all this change? You got technology, you got all these things, how does that going to guarantee us that that we will be successful in the future well, so what we did is we as a group. We studied our company, what we thought were the strengths, what were the weaknesses or gaps? We studied competitors. We studied other industries. We brought in futurists from each discipline, so they what the supply chain looking at. Where’s that headed? So we took all of that input and came up with a recommendation, because we had a whole lot of learning of gaps that we didn’t understand. And for our retail customers, like Walmart, we had eight independent. Divisions, but they all said Proctor and Gamble on the invoice. So for Walmart’s point of view, it was like eight faces to them and the companies, the different divisions didn’t necessarily have the same terms. So it was very confusing. And again, we were pretty arrogant, you know, if there was a good idea, we would give it to the retailer, and we knew what we wanted, because, I mean, our strengths as a company were researching what consumers wanted in products, then making superior products, then creating the market with our advertising. We were the number one advertiser and TV at that time, and and retailers for us were just kind of, they were very sales and retail were very tactical. It was just, was, you know, kind of a convenient place for people to pick up the products. Well, Sam was starting, and he had this new idea of everyday low price, and P&G was his largest supplier, but he just he couldn’t get anywhere with us with his eight divisions. And in fact, one of my colleagues said P&G could have been a Mercedes, but instead we had eight bicycles. So we had no corporate putting it together at this without losing because the whole idea was, how can we get more corporate but without losing the expertise in each of the product divisions? So Sam used to say in the early days, he wanted to punish one of his buyers. He put him on the P&G business. So he was so desperate, though, to create a relationship that he said they had a very prestigious award every year called vendor of the year. And he said, Does anybody have anything that P&G has done that we could recognize them? Well, someone had something. So Sam calls our CEO, John Smale, at the time, but John’s assistant won’t put the call through, because our CEO doesn’t talk to customers, and she didn’t know who Sam Walton was. So he got transferred to around. I was the national sales manager of the food division at that time, and there were eight of us, so he got transferred, and he finally got frustrated and gave up. Well, the same person who put me on this assignment to how to go to market in the year 2000 realized that he was an Eagle Scout at the same time that Sam was there, and so he reconnected with Sam, and of course, being P&G, we said, Well, Sam, if you come to Cincinnati and bring your management team, this was the days of total quality. And Edward Deming had done a special total quality course for P&G. So we said, you know. And so Sam, again, he was desperate. Walmart was not one of those companies that would spend a week or three or four days in a in a meeting room, but so at the end of this total quality seminar that we did together, he stood up and he said to our CEO, John Smale, let’s do this. And John said, Let’s do what Sam says, let’s do this total quality between our two companies. And so that was the genesis, and Sam said one of my first meetings with him, if you thought of my stores as an extension of your company, we would do business entirely differently than we do today. And that really was kind of the mantra. I then Co Op, the name one company, operating model, so that even though we were two separate companies, if we took the way we did business together and said, Let’s pretend we’re one company, what would we do differently? So that’s, that’s how we started out, and we moved from Cincinnati down into into Bentonville, northwest Arkansas area, which was a huge cultural shock for for everyone, and made it hard to recruit the talent that I wanted. But so that’s where we started. And then we we created a parallel group in WalMart. We called it a mirror team. So they were mirror functions. So find you had finance in both teams, supply chain, on both HR, all of that. So you you were able to have functional expertise talking with each other for better understanding. And then we we came up with common strategies, and we co designed the relationship. And whatever we did, we said, has to play within both companies, and that’s how. We started, and it’s just been absolutely amazing for just for perspective, when the first year that I was the team leader, our business with Walmart was $350 million when I retired, 15 years later, it was 8 billion, and that’s a 30% compound annual growth rate. And the P&G-Walmart relationship alone in 2003 would have been the 230/4 largest company on fortune 500 and at the same time, this wasn’t just a benefit. I mean, P&G’s market share almost doubled in Walmart, but Walmart, when we started with losing 5% on P&G because they were selling at Lost leaders. And he had a difference. He had this everyday low price strategy, and the rest of the world was high low, so that it did, they just didn’t fit together. But by working together over those 15 years, we took it the minus five margin and made it positive 15 and on $8 billion that was $160 million so that’s, that’s a pretty good swing in terms of and that was this, you know, the business is very easy to take a look at that. We we came up with a lot of industry standards together, but the people development was incredible, because neither company internally, we kind of did a little bit of multi functional, but for the most part, both companies were very siloed. And so then the relationship was only between a buyer and a seller. So all the resources in both companies never, never, up until this point in time, never, never, were involved in in the decision making and the strategy and the execution. And so that was, well, all of the people on the mirror team for Walmart, the original mirror team, they all became company officers at Walmart, and they said one of the big reasons they were able to do that was the working with P&G, and that relationship and working multi functionally, they understood business entirely differently, even though, in the past, they had been experts in their silos.

Kris Safarova  12:27

Incredible. I love that story of CEO of Walmart calling your CEO and the Secretary is not letting him in. And at the time, if I am correct from your book, you mentioned, I think it was about 3.5% of your business, right? So it wasn’t a small customer, colleague.

Tom Muccio  12:44

No, no, there, but, but they were we. We managed our business in those days by market. So if you wanted to know what was going on, Atlanta, New York, LA, but we didn’t really manage it by customer. And so, and then they were settled down here in in Bentonville. So, I mean, it just wasn’t on anybody’s radar. Even though they were big in the absolute, they just, they were kind of an afterthought.

Kris Safarova  13:15

How important that is for people who are gatekeepers to know whose call you have to pass through because someone could have got offended. And maybe, if it wasn’t such an important supplier, they could have said, You know what, let’s punish them in some way. All kinds of things can happen like that. People do get offended. So let’s talk about what mindset shifts were essential to transforming your relationship.

Tom Muccio  13:41

Well, the first one was, was just understanding each other better. We found that there was a lot of misalignments, because we really didn’t understand what they did or why they did it, and they didn’t understand what we did and why we did it, because to them, everything was on absolute price, so they didn’t really understand the different tiers of quality and value. They were just trying to get the very lowest price, and we didn’t understand all the complications from a retail point of view. What did it take to to be successful in that route? So we we did a lot of learning together. And so that was the first thing was to and then we would co design, we’d work, we’d work together to put together the strategies that would work in both companies and how we would approach it. And then one of the other things that we did was we were willing to test a lot of things. And I really go back to saying test most organizations aren’t do not do enough testing, because if you do testing, you do risk trying new things. And But importantly, in doing that, you have to have six criteria. Area in writing to start with, because you otherwise, you fall in love with your own ideas. But if you start out saying, Okay, for this to be successful in Walmart, here’s what we have, what needs to be successful. For this to be successful, here’s what it has to do for P&G, then we could test it, and if it met the criteria, we knew the time, effort and money we invested so we could figure out the ROI. And then a question is, how do we scale it up? And I mean the example after example of how that worked. And but then you would, you run into, there’s roadblocks, in corporations. Every corporation I’ve dealt with their organization, there are five dragons that I find all the time. And you know, well, Kristof actually uses this all the time as well. If you want to marry the princess, you got to kill the dragons. And I said, Well, I’m gender I’m going to be gender sensitive. But so if you also, if you want to marry a prince, you got to kiss a lot of frogs. So you can go with either one of those. But the five dragons that I found, the first one is, I call it corporate fog. The top level of the company has no idea what it’s like to be a customer or supplier of their organization. And I even joke and say, if they had to be a customer of their own company, many of them would switch suppliers. And then the same fog is so thick that the people doing the work are doing this. They’re saying, Do you realize the pain we’re going through? Do you realize the opportunities we’re missing? But again, the fog is so thick and and people say, Well, how do you get rid of fog? And I said, Well, how does nature get rid of fog? Well, the sun comes out, puts light on, and it melts away. So my equivalent of that is getting to reality, getting to truth. If you understand truth, there’s lots of options to do things better. So corporate fog is the first dragon. Second is the and I didn’t get this from Trump. I think he took it from me the deep state. Those are the people that are successful in leading the company as it exists today. And they don’t want anybody telling them they have to change, they have to do this. So they don’t want it. They don’t want any part of that. And and they and when and when threatened, they don’t react very well to that either. Then you got the Third Dragon, which is the swamp, which is the bureaucracy which gets built up over time, and many of those policies and procedures were very smart when we put were put in. But nobody’s gone back and and streamlined or chopped and whatever. So they just layer one on top of the other. Then the third Dragon is, was I called them the Flat Earth Society. They’re the people who this idea will never work. It’ll never work. And I’ve seen the map, you’re just going to go out there on your boat and you’ll fall off the end of the world. So they I’m not putting resources, time and effort, because it just won’t work. And then the fifth Dragon, which is the one that frustrates me the most was the loyal opposition. They’re the ones who, even with success, they’re picking at you, oh yeah, but you didn’t do this or, Oh yeah, but you didn’t do that. And they could tend to be passive aggressive, so that you they wouldn’t necessarily take you on, on the facts, they would just they could, you know, they could, if you were die, if you were a diver in the bottom of the lake, they could stand on your air hose while saying, Go for it. Go for it. We’re behind you. So those were some of the dragon, and then you had the natural dragon or the natural obstacles. You know, the problem with recognition and reward systems is they work. You get what you recognize, you get what you reward. And here we were working together in a totally different way, multi functionally and the recognition and reward systems of of neither of either company didn’t really recognize that, that when the first people that I got to come down in the team, they they really put their careers at risk, meaning you were away from Cincinnati, you were in nobody knew what, what, how it was going to work, and whatever. And even in the business processes, for instance, maybe an example here is helpful. We we, once we understood how much labor was involved in retail, in the warehouse and in stores, we came up with a concept called pre built displays. So we in our factory, we would put a. Uh, make a pallet that was uh display and wraps uh or uh, foil, or not foil, but shrink wrap stuff around it. We would ship it to them. It would they would unload it. The trucks at the warehouse take it immediately and cross dock it and put it in a truck for a store, the store would unload it on a pallet, take it right out to the selling floor, take the stuff off the outside the wrap, and they had an instant display. And this saved 31 cents a case. Well, you would think, well, why wouldn’t Walmart want to do that? Well, the buyer had to fill in about an inch and a half worth of paperwork in order to do it every every one of those was a brand new item. So I was looking for, how do I dimensionalize this? So these were the days before a lot of security in corporate offices, so I had access to Walmart’s executive suite pretty easily. So I had one of those phone checks made up, like they do for golf tournaments or tennis tournaments. I had it made up to Walmart for a million dollars. And so I stood outside of their executive break room, and the CFO came out with a cup of coffee. He said, Hey, Tom, what are you doing here? I said, I’ve got a million dollar check for Walmart, but I can’t get anybody to take it. He said, Come into my office. You found somebody. So I got in there, and then he said, Well, what’s what’s the game? Okay, tell me what it is. And I explained it to him, and he said, Well, I can fix that. I said, Well, how are you going to fix it? He said, Well, you tell me how many, how much we’re going to save. I will give half of the savings to the buyers and put it in the buyer’s account, and the other half can just it’ll be in the warehouse, in the store. We don’t need to micromanage that. We know it’s good for the company. When he made that change, all the buyers were knocking on our door, hey, can you do it on this product? Can you do it on this product? Well, you can imagine then P&G is getting a lot of displays, so our market share is growing, so they’re reducing costs. The buyer is winning and P&G’s winning, and it’s all because we aligned the recognition and reward systems in a way that supported what it was that we wanted to get done.

Kris Safarova  22:24

Incredible. They were lucky to have you. Can you highlight the core principles that emerged from the P&G and Walmart partnership and also explain why they remain relevant today?

Tom Muccio  22:38

Why are we it’s still going today after 35 years. And some of the things that, I mean, well, first of all, there’s, there is a much better respect in of what each other does well. And then, you know, in the early days, we would flow chart all the processes to see whether, well, wait a minute, you’re doing this and I’m doing this over here. Maybe one of us doesn’t have to do it and but, you know, it really challenges the norms of how business is done. In a sense, I in many companies that I’ve consulted in they have internal measurements that I’m not saying they’re lying, but they but they shade the truth, so that when the senior executives are looking at it, and this is another true story, when we started the relationship, the Walmart team leader said to me, we’re very frustrated because we can only pay about about 40% of your invoices without manual intervention. Well, my data said we were doing 99% perfect quarters, so I reached in my wallet, pulled out $100 bill, slapped at the table. I said, I bet you $100 I’m right and you’re wrong. He said, Okay, but how are we going to prove it? I said, I will pay to have an outside agency come in, and every invoice that comes in, they’ll keep track of it. Well, I lost my $100 and then I got very angry. Say, how can I get 99% and what it was, here’s, here’s the example. Let’s suppose you ordered a truck load of product and you wanted it delivered Friday. Well, if it got delivered Friday’s full truck load, that would be a perfect order, but maybe I was having a problem with production, so I’d call you on the phone and say, I can’t deliver it Friday. Can I deliver it Monday? Well, you had no choice but to say, Okay, I need the product. So now Monday became a perfect order. And then on Friday, I called you and said, I can’t meet the whole order on how about if I deliver half on Monday and half on Wednesday? And again, you had no choice but to say yes, but So those became perfect orders, so it didn’t have anything to do with how the. Customer viewed it, we had jury rigged the system so that it gave us the numbers that we wanted internally, and we found that in incident after incident after incident, but and communication was so important. I mean, we had to build trust, and we didn’t trust each other to start with. We said we would trust each other’s intent to be trustworthy, but we needed, we needed more verification and and, and building corporate relationships isn’t a whole lot different than personal relationships. You build up trust over time, and you share things, and you’re more vulnerable as time goes along, because that trust level exists. And then again, as I said, testing was so incredible. Here’s another example. P&G had two cosmetics companies cover girl and Max Factor. Well, cosmetics are all these little fiddly you know that eyeshadow and and nail polish and whatever, and they’re always changing with the latest season and whatever. Well, in Walmart, that was managed by the same department manager that managed health and beauty aids. So they’re, they were concerned with shampoo and toothpaste, deodorant, bigger products. So the last thing they did was, was cosmetics. So you, you know, if you went into their cosmetics department, you had old product, you didn’t have full assortments. You could have any kind of eyeshadow you wanted, as long as it was blue, you know? So I went into the the EVP for Merchandising, and I said, Bill, I got a great idea. Let’s create a department manager just for cosmetics. He said, What do you think money grows on trees? I said, No, but this is your lucky day. I’ll tell you what if you’ll test it with me. I will pay for three department managers in three stores, and we’ll just, we’ll measure what happens as a result of that. Well, obviously, when you start, you can sell product once you start having it in store, and right and and cosmetics were very profitable to Walmart, but very profitable to P&G as well. So that was a way of improving our margin with them, which was which was a problem, and increasing our sales and our market share. Well, after three months, it was such a no brainer that he went to his senior management and they rolled that out chain wide and so forever, however many stores they had at the time, someone got promoted to be the department manager. So that worked good for someone in in their organization as well. So those are just the kind of things that we just we refused to to just say, this can’t be done. We just said, Well, up till now, we don’t know how to do it, but what are some ideas? And we’d brainstorm and then put up some kind of a test, and again, you can do that. De risks it so that you’re not it’s something you can do without a lot of approvals. What you can just do it?

Kris Safarova  28:18

I love your studies. You mentioned roadblocks before? So when your vision hit internal external roadblocks, which happened a lot, how did you adapt, negotiate or persist to maintain momentum towards your goals? If you could share with us?

Tom Muccio  28:34

Yeah, sure. We early on, we had an when we were doing this, our first recommendation that didn’t get accepted very well. We we had an organization change consultant come in and recommended to me that I should have a cross section of people from different divisions and different functions, and call them a steering team. And therefore, every two weeks, we would have lunch with this group, and we would share what it was that we were learning and what we thought the implications were. They would push back and say, Well, I don’t agree with this or and we were very transparent. We said anything that you disagree with, or ever you let’s, we’ll, we’ll capture it, we’ll put it on the list. My only request is, if we come back with things that answer your question, you’ll let me take that off of the list. You won’t be the loyal opposition. So we then modeled that same thing. When we started the relationship with Walmart, we were like we created our own glass house. So anything anybody wanted to push back on, or any concerns or whatever, we would capture those, and then we would say, okay, in order to make progress, we have got to find a way to satisfy that. So we spent an inordinate amount of time community. In functions between companies and on the teams, so that and Walmart was very good at that already. They had their Saturday morning meeting where all of the all of them, the managers in their home office met every Saturday morning to review the business from seven o’clock till noon, and you know, they were then in a position to change for the next week. It was incredible system that they had of and so we again, it was transparency and, and then just willingness to to define reality and, and just saying, Okay, I know that this is going to be inconvenient for P&G or this is going to be inconvenient for Walmart, but what we’re doing here is not right. It’s not fair well, and here’s just a couple of examples, Walmart would would send their damaged products to a warehouse and ask us to give them credit for that? Well, when we got into that, there were a lot of boxes where there were cut box knives that would that would be some damage that was done in store. Or we get empty packages of diapers, and we would find out that some of the stores put diapers in the women’s restrooms for a convenience for the customer. So I said, Well, that’s not that shouldn’t be our damage. We’re spending all this money on packaging to try to get it, so, won’t we? Then agreed, okay, we agreed to us very small percentage that would come automatically for damages. But then Walmart, if it was exceeded, that that was their damage in store, if we, if we ship them damaged product, obviously it was 100% our, you know, the pallets were crushed or so, anything like that. That was, that was our, our responsibility. But we just, we, we just tried to problem solve together. So much of it was common sense and and we just we had a culture that said that, you know, we can do anything. We just don’t know necessarily how to do it all today.

Kris Safarova  32:13

With the steering team you mentioned and how you were sharing learning, any particular learning moments that stood out for you that you want to share now with us.

Tom Muccio  32:21

Well, what we did is we developed a mentality, which we called Friday’s payroll and invent the future. And I said, Every job has those two has a Friday’s payroll element and an invent the future. If you spend all your time on Friday’s payroll, which is very important, because that’s Friday’s payroll, then you won’t have a future. But if you spend all your time in the future and let Friday’s payroll suffer, you’re out of business as well. And so it was really we then said, this is an and solution. So how do you know? I made the joke and said that you know, the the electric light bulb was not a continuous improvement on the candle, but you could improve the candle by making the candle bigger. It might be perfumed. But then breakthrough happened with the car, and then or the light bulb. And then I said the same thing with with an automobile, was not continuous improvement on the horse, but you could have your different kind of horses. There were race horses that would go fast, plow horses that would were stronger. Then once you develop the car, you could continue to make improvements, some bigger than others. The first cars were all black. So when you started to offer colors, that was a big that was a big deal. And then there were bigger breakthroughs that would be trucks or SUVs or whatever. So I tried to get that mentality on our team, and I had everyone had a whiteboard in their office, and I they, I wanted them to put the two or three ideas that they’re working on from somewhere that, if you think of a continuum breakthrough to Friday’s payroll, tell me what you’re working on on that continuum. And what I would do is I would go from office to office, and I would say, tell me how you’re doing, what’s and one of my questions always was, what does help look like? And most of the time, they could identify where the roadblock was, but they didn’t know what the options were. I mean, can I get some more money? Could I get another resource? What could I do? So once I got them to tell me where the roadblock was, I ended up finding out that 80 to 90% of those were within my ability as a leader to do something about well, when that started to happen in the team, now you were getting two. 20 and 30 potential ideas going at all one time, instead of having to come up through and get approval for each one through the through a hierarchy. So that gave us a lot more breakthrough, lot more testing, and that’s allowed us to move much faster. And then what we did is we developed a concept, which we call search and reapply. So if we had an idea that worked well in the paper business, we’d say, well, wonder whether that’ll work in the soap division. So we were, because in the past, those divisions didn’t talk to each other. And the same thing, when Walmart still going, started going internationally, I could test something in Canada, and if it worked in Canada, I could expand it in Mexico, knowing exactly what we would get out of it. I could convince P&G, Canada and Mexico, and the same thing with Walton, because we had tested it. So it’s their own people saying yes, we did that, and yes, it did work, and that we were getting ideas translated and and move forward before our competitors ever had a clue what was mean the first time they’d hit it. Boom, it’s in the stores, and we’re winning with it. So it’s it was things like that, that. It was, it was fun. We P&G was a very hierarchical culture. Walmart was much flatter, and we adopted Walmart was, was very much, well, I we used to say it’s ready. Fire, aim and P&G was Ready. Aim. Aim again, change the scope. Aim again, because we were very analytical. Well, there was a compromise here. They taught us how to go faster, and we taught them how to be more analytical, because the closer you get to the target, the more bullseyes you’re going to get, but you won’t get any bullseyes if you don’t pull the trigger. So, you know, we just, we just learned that way and and then applied it, and we had fun doing it. We took the as our example, we are first our offices down here. We made all the offices the same size, and we made the coroner’s conference rooms so nobody had a corner office. My office was probably 10% of what it would be in Cincinnati, but that made it real easy to move people into different clusters, so that they were in work groups and whatever. And there was no, there was you weren’t signaling hierarchy, which goes sometimes it goes against teams, it and so forth, and which was more of a Walmart kind of a concept and and then language is very important too. I mean, we called our customers accounts. I said, Wait a minute. I have an account at the bank, but I’m a customer. And when you just use a different term customer, it’s it sends a whole different signal than than does account well, Walmart, they called us vendors, not suppliers. And when I thought of vendors, I’m thinking of a machine where you put your money in, and then it made me think about when I was in college, in our fraternity house, we had a Coke machine in the basement, if you put your money in and gave it a forearm shiver, sometimes you got your coke and your money back, which reinforced you to do that at every time. But and things like Walmart called their their people not employed. They called them associates. They didn’t call their office headquarters. They called it the home office, and you could so so words were, are very important in these relationships inside each company, inside the teams that are getting the work done, as I said, Ed and that also same thing about recognition and reward, people need to see that they’re going to be Advanced if they’re doing the right thing for the team. And one of the pieces of advice that I give today to folks, I said, if I was leading an organization today, again, I take a group photo of my leadership team or key group of some kind, and then I would send it away and have it made into a puzzle, and I’d bring have it come back, and I’d give everybody a copy of that, a box of that, so that it could see, here’s the team. But when you open it up, there’s a lot of pieces inside, and it only makes the picture when we when we hook the pieces together, you. And that, you know, leadership is a role. It’s not a it’s not an entitlement, it’s not a it’s a job. And you do your you do your duty, and yet it gets paid more because it does act, acts more of an economic value, but it doesn’t make me a better person or a bigger person, or why do people need to salute me? Or, I mean, it’s so it, it. And I also use the example all the time. You know, with our bodies, we got a lot of parts inside of us that we don’t get to see, and I’m sure happy, they all work well, but we’re always we can comb our hair, we can do we can do all the things that are external, and the leadership tends to be the external part of the team, and they get much more credit. And my philosophy was, I want to get a little bit less of the credit and a lot and take a lot more of the of the of the blame if something goes wrong, so that I’m not putting Now, if that doesn’t mean I’m not going to hold people accountable, but it’s different if the company holds them, you know, is making it difficult for them in terms of blame, because I said first thing we need to do is stop the bleeding, and then we can worry about cosmetic surgery later. But and of course, then what happens is you really, you’re really getting people to show up at work with their heart as well as their head and their hands permanent.

Kris Safarova  41:30

How did you prioritize initiatives? There were so many things probably that were urgent and potentially transformative. How did you prioritize?

Tom Muccio  41:40

That’s a great question. Well, we always had a thing called pain points. If pain was being caused somewhere in the system, we how do we address pain? And then we what we did for Well, first of all, I tried to spread innovation as broadly as I could on the team. So I had a lot of things, you know, I maybe had 10 things, 10 projects going, and they could all go at the same time. But then we would have, if he had to prioritize, we would prioritize based on the contribution it might you know, is this something that’s going to increase volume or market share or or improved profitability for Walmart, or is this an invention of some kind for the shopper and so And quite honestly, Walmart actually helped us to learn how to go much faster. P&G, when we used to launch an item, it would be 16 weeks before we would start advertising, because we’d take it to the retailers. The retailers would take it to their buying committee, they would and then, you know, maybe they would buy some and then they had to get it to the store. You had to get it on the shelf. And Walmart said to me, that’s really archaic. I said, What do you mean? They said, we take we we add hundreds of items every week. I said, Well, how would we do that? I said, Well, I’ll tell you what. We know your products are going to sell. So we’re not this is not about decision making, but if you’ll involve us earlier in the process, so that we can provide input and comment, but then when you’re ready to launch, you put the product in my warehouses, and you tell me the first day that it can ship is 1201, on a Monday, I will take it. I will have it in every store by Friday, it’ll be on the shelf by the mother another another week, and then they came back to me and said, but Okay, we’ll do that, but you have to come up with ways to help us sell that until your advertising starts. So that was the whole idea that led to shopper marketing. So we had things that happening in store to influence the sale and inform shoppers of this new item. But we then, we were able to start advertising our products at at five weeks instead of 16 weeks. And with your financial background, you know that what that does in terms of lifetime of a project, if you can start it 11 weeks, you know, the and we The other thing we didn’t know is the impact. We each silo knew what they were doing and but they didn’t know necessarily, what if they did something different, how that would help something else, you know, and you know, like inventory turns in cash flow. Well, okay, if, when we started out, Walmart’s inventory, our payment terms once we finally, well, that was another thing. We took all our different eight product divisions and we harmonized the payment terms so it was, it was 2% 19 days everywhere, but it had to be electronic. Funds transferred. No more checks in the mail. You know, we, we did all those things, but we and then when we started doing managing their inventory for them, we were able to take their their inventory turns in total from the low 20s to the high 40s. Well, boy, does that do a lot for cash flow. And so it was, we just it was seeing how the I have a my thinking pictures. So I kind of think about it like as an looking at an ant farm. And you can when you’re if you’re an ant, all you can see is what you’re doing. But if you’re outside the ant farm, you can see this one taking it over here, and this one move. And so it was. It’s it. Collaboration really does work. I mean, I’m a zealot for there’s, there are better ways to do business in the way, for the most part, we do it between buyers and sellers. And in fact, if I was leading a, probably a medium sized company, I would combine my customer facing organization and my supplier face organ. I’d make that one organization, and I would have multi functional resources that are supporting that, because they’re everybody’s dealing with in brown and outbound freight. Just think what you could do with career pathing. I worked with the suppliers for a while, and then I worked with customers, and in this organization, I could continue to grow. And it’s actually you could have one less person in the C suite, because you’d have a person who manages that group, and yeah, there would be a functional head for each of those. But it wouldn’t necessarily need to be at the C suite. And there’s many things that we’ve found that are we that we could learn from our supplier, that we could then reapply to one of our customers, but you can’t do that if you’re not talking. The biggest thing is communication. People just don’t they don’t talk, and they don’t understand the implications. And I had one of the the same person who put me on the on this team, and then made the first contact with Sam Walton. He would say, what you don’t know will not hurt you as much, is what you know that’s not so and that is really so true, because if you go in with with a prejudice, or, you know, here’s the way this works, and if that’s not really the way it works. So that was another thing that we tried to do with each both companies and together, we just challenge. Why do we have to do it this way? Is there? Let’s think, are there a way to do it faster? Is there a way to do it cheaper? Is there a way to skip a step? And, you know, so it’s, it’s been really fun, and for me, and another big one to me is continuity. Because with continuity, you have people who are become they become faster. They more willing to take at risk, because they understand. But the problem against continuity is we don’t reward that in most companies. And the example for me, I was down leading the Walmart team in three in two years, we tripled the business. We went from 350 to a billion dollars. My boss came down to me and said, We’re going to make you a we want to make you a vice president. I said, Great, when you’re going to make the announcement. He said, No, no, your job is not a vice president’s job. We’re going to send you to Caracas, and you’ll be in charge. You’ll be the Vice President of Sales for South America. I had two kids in high school. I said, No, I’m not interested in that. He said, Well, we really think you should be a vice president. I said, well, then that’s your problem, not mine. And by the way, I’m getting companies like Coca Cola knocking on my door saying, Hey, I’ve seen what you’re doing with P&G. Would you do this with us? And they don’t have a problem making me a vice president. He said, Okay, I’ll see what I could do. And in about six months later, they promoted me. But that’s just a classic example of how the recognition and reward systems were that mean we had this policy and what jobs, and nobody had bothered to rethink some of these things.

Kris Safarova  49:28

So I feel that we can speak forever. I think we need to do around two just on your career and your view on how to be a great leader, because you are really an outstanding leader.

Tom Muccio  49:41

Well, after, I will tell you that after I left the P&G, Walmart, I was a CEO of a startup company, and so I was able to take a lot of that learning, and that even works in startup companies, the same kind of understanding who your customers are, who your suppliers, and even though we weren’t very big. We We ended up where we said we can be strategic, because we can be learning laboratories for you. And so, you know, I those kind of things, and then how to keep people involved. And then, obviously, I was able to do 15 years of consulting and speaking. And so I started to get other industries, and you just get cumulative knowledge. But people will say, Well, what was your personal secret? And I say, Well, I’m kind of wired that I’ve always been courageous, so I have no problem going into the lion’s den then, and I’m very resilient. You can knock me down and I’ll get back up again. But by working on this team environment, I learned humility. I realized that I was just one piece in the total puzzle, and therefore, then I said, Well, how’s the best way to express that in in an organization? And so I was introduced to servant leadership, where you turn the pyramid upside down, and the leaders are basically there to help the people doing the work to be more successful. And therefore that led to, you know, what does help look like, or and in more encouragement. And so, for instance, when we had a we had a team meeting. Or when you have a record month in which we had quite a few, as you can imagine, when your business grows like that, our leadership team would, we would get these big charcoal grills and put them in the parking lot, and we would cook lunch for the whole team, and we would serve the team, and that was a signal we were and then I had one that I got from Dan Cathy, who was CEO of Chick fil A, and he was at a conference that I was at, and he had a shoe brush, and he called people up, and he got on his knees and shined their shoes as an, you know, as a servant. So what I did is I had shoe brushes made that said Walmart Global Customer team. So when we had a team meeting, I brought my leadership team up. I did, got down on my knees and did that. Then I gave each of them a brush. They went to their team and did that, and then we gave everyone in the team a brush, because they had co workers that, that, and then everybody kept those on their desk. But, you know, there’s those are, those are all reinforcements. And because, you know, I believe there’s a thing called cultural or organizational entropy. It’s the second law of thermal dynamics. You know, everything, if you leave it alone and don’t inject new energy, it goes backwards. And I laugh, and I say, think about if you organize your garage, it’s perfect. How long does it take before everything goes from order to disorder your closet? What and organizations do as well? So you got to be on top of it constantly. We had the values of our team. We didn’t let anybody join the team until they said, I can support those values. We said, I’d say to them in an interview, if this isn’t who you are, that’s okay, but this is the way we’re going to lead this team. And if you want to be successful, we’re not looking for. We’re not looking for cultural Mavericks. We’re looking for business Mavericks from an innovation and collaboration point of view, but, but we’re not looking for and we had a couple of team member leadership team that would say things like, there’s no I in team, and, you know, I is right there in the middle of pride and so. But those were a little kind of always kept us in front of and the only reserve parking places we had were for the Walmart team, the Walmart folks, when they came up to work with us on a project, we had two parking spaces for OUR Walmart associates. So I said to people, if you want to get the best parking space, just get here early, because I was an early morning person, so I but it wasn’t because it was a reserve space. It was because I just got there early again.

Kris Safarova  54:19

Thank you so much for being with us today. Where can our listeners learn more about you by your book? Anything you want to share?

Tom Muccio  54:25

Well, the book is called Collaborative Disruptions and and it’s available wherever books you know, amazon.com, walmart.com, all of those. And I had five audiences in mind when I when I wrote it. One was senior executives. I wanted them to see how much they’re leaving on the table, by the way, they’re doing business with their customers and suppliers. I wanted to do for team leaders to give them some some ideas. Some templates, some suggestions of how they could do a better job of leading their team. Then I wanted to have things there for aspiring leaders so that they were able to how do they grow their skills? How do they grow their their breadth? Because I because at the end of the day, you have to earn a seat at the table. You have to have the skill set, to be able to have the seat at the table, to make an influence. And then the fourth target I had was people who like business history, because I’ve had several people saying what happened here was like the assembly line from Ford. It changed how, just like the assembly line changed how manufacturing was done. This changed how, at least in in in the CPG world, how retailers and suppliers work. But Kristof, who you’ve had on on your program in the past, he’s gone. He has a lot of in other industries that in the same principle. We both, we, he and I have done some consulting together, and the principles work every place. And then the last audience was, if you pick this up at an airport or you had I wanted to be a good read. I want people to go away saying I enjoyed the story. I learned a lot. There’s some things that are useful to me and I can reapply, but I also enjoyed it. So that was, that was what I did. And, you know, I I’m always a bit I’m, like I said, I’m a zealot for the concept. So people want to talk more. They want, you know, I just, I love. I love. As you can see, I’m enthusiastic about the possibilities that exist.

Kris Safarova  56:40

Tom, thank you again. Thank you so much for being here.

Tom Muccio  56:44

Thank you so much for having me. I really appreciate it, and I’d love to be able to have any kind of follow up that would be useful for you in any way, shape or form. So just if there’s if there’s somebody, there’s a client, if there anything I could be able to do to help you be more successful, just let me know. And if I can do it, I’d be happy to do it.

Kris Safarova  57:02

Thank you so much, Tom, you’re incredible. Have a blessed Christmas. Thank you. You too, and for everyone as well listening, our guest today, again has been Tom Muccio. Check out his book. It’s called Collaborative Disruption, and it is a very good read as well, on top of all the benefits, and our podcast sponsor today is strategytraining.com if you want to strengthen your strategy skills, you can get the overall approach used and well managed strategy studies. It’s a free download, and you can get it at firmsconsulting.com forward slash overall approach. And you can also get McKinsey and BCG winning resume, which is also free download, and it is a resume that got offers from both of those firms, and you can get it at firmsconsulting.com forward slash resume PDF. Thank you so much for tuning in, and I’m looking forward to connect with you all next time.