Pacific Coast Companies CIO Marty Menard on leveraging vendor partners

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Hi, good afternoon and welcome to CIO Leadership Live. I'm your host Maryfran Johnson, CEO of Maryfran Johnson Media and former editor in chief of CIO magazine. This video show and podcast is produced by CIO.com and the digital media division of Foundry, which is an IDG company. Today's episode is sponsored by DataXstream, which develops sales order management solutions on emerging technologies for SAP users. Its flagship platform simplifies and streamlines complex sales order processes, which helps your company deliver exceptional customer experiences. For more information, visit them online at DataXstream.com. Our show is coming to you today live both on LinkedIn and CIO's channel on YouTube. So we invite our viewers to take part in the conversation today with questions of your own. Our editors are watching both of the chat streams on LinkedIn and YouTube. And they are at the ready to pass your questions along to my guests today, who I'm very pleased to say is Marty Menard. He is the CIO of Pacific Coast Companies. Pacific Coast is a privately held company based in Rancho Cordova, California. Its business in IT business has been running for more than 70 years. And it is a family of companies that specializes in providing a wide range of facility services, construction materials, supplies and fittings. The company employs more than 4000 people and has over 100 sites. Marty joined Pacific Coast as CIO seven years ago, and he brought with him more than 30 years of cross industry executive leadership experience from his senior roles in IT business operations, manufacturing and finance. Before his current role at Pat coast, he served as the CIO and executive VP of Rabobank. And then before that he spent several years with Hewlett Packard, most recently as VP of Finance and Administration. And before that, 24 years at Intel, where his last position was Group CIO for the IT organization. Marty, welcome. It's so good to have you here today.
Maryfran, thanks for having me. This is that was a great introduction. My gosh,
I know, I find, I find my CIOs are always they're so impressed with the with their own backgrounds, they you never stopped to think do you about really all the things you've accomplished, because when I was first looking at your bio, and I saw it was 30 plus years of industry experience, I thought, well, he still looks like he's in his 40s. This can't be true. This can't be true. So let's start out with some perspective on your industry and the impact these last couple of disruptive years have had on the construction and services business and the customers that you all are serving?
Well, it's really been an interesting couple years, you know, in in 2020, March of 2020, COVID hit, although it may have been around prior to that, and I think our company really was confused about what was going to happen, you know, we send all of our employees home. Many of our employees that work in our manufacturing sites that were considered necessary. Employees, so manufacturing kept working. And we really anticipated a significant slowdown in our business. And actually, the direct opposite happened. The last time the construction industry really had a major slowdown was 2008. And it really during the financial crisis and really slowed things down. And since then it's just been in recovery mode. I think that was our lowest point prior to 2007. And then around 2016, we're back above previous year's level. So we've rebounded, and every year since then has been a new record for us in terms of revenue margin, etc. And we've been growing at that same time. So while COVID appeared to be a killer, for our industry, it was actually the opposite. The demand for new homes, the demand for more construction. I think the infrastructure plan that the government put in place is going to continue that as well. Yeah. It's really been surprising.
It's so much fun, isn't it to be working for a company where it's just growth, growth growth? And it sounds like from our previous conversations about this, that the the family that owns the company got a lot more interested in upgrading the whole IT operation. So tell us about that. I know that this is your first venture working for a family owned company. And you've been at very big public companies, Intel and HP and all that. And so it's a very different environment with very different needs. So what is the what have you been accomplishing over these last seven years? Well,
it's, it's, you know, there's, there's a tail of between 2008, and then 2017, and then 2017 17. So in 2008, when the economy went bad, the CIO and a number of principals left the company really decimated the organization, but they were trying to serve as both the company and the industry. And that didn't really work. And so between 2002 1017, they went through three kind of CIO leaders, the investment went down, because they were worried about the total spending, we went well below 1% of revenue being spent on it. And they just had a hard time attracting people because it just wasn't viable. And so by the time I arrived in 2017, the relationship between the subsidiary presidents we have five of them and the IT team was terrible. The reliability was terrible. We didn't know how to spell cyber, the risk assessment just hadn't been done. And so that that beginning process of coming to the company, was, for me starting is, you know, do you want to invest? You know, what is it you want to become? Where do you want to go? And so we've, we've more than doubled our investment in it. In the seven years that I've been here, I think today, we're about 1.7% of revenue spent on it, we've improved the reliability environment, right. So your table stakes for it is really making sure things run smoothly. And if they do, you can go on and do other things. And if not, you have to make it reliable. When I started, we were putting a new phone system in place. And I got a phone call from our one of the Presidents every week, complaining about the reliability and the pace with which we were moving. I like to talk about the Valley of Death and the Valley of Death is time in between when you start an implementation and when you finish. And the longer that is, the more people it is right, you want that to be as short as short as possible. So those first couple of years worked with the family was, hey, we're committed we want to grow, we want to expand. And, you know, we need help with from a technology perspective. So we've totally recast the leadership team, everybody that's working for me today is new in the last four years. Okay? The leaders below them are all new in the last four years, the average tenure of our employees today is around four years. And I've got two employees that are 30 and 35 years mixed in there as well. So you can tell that there's a bunch of new new folks, so kind of a long answer. But you know, working for a family business is very different. The the overhead and structure and requirements from a public company are much greater, certainly much less than a than a financial institution. And, and a lot of it comes down to trust. And maybe we can talk about that a little bit. But it's great working for a family run company. I'd encourage anybody out there that CIO and their work for a public company. Go try working for a family company, I think it's
well in a lot. I've interviewed many CIOs over the years who've done that have gone from either PE based companies or public companies to a private one. And the thing that seems to amaze them the most is how streamlined the decision chain is. I had one CIO told me about going in and big entertainment company that builds like, venues like stadiums, and he went in and you know, proposed various things that to the CEO, the owner, the cons. And the guy said, that sounds great, go do it. And he said, Oh, okay, well, what do you need next? You know, do we do a business plan? And do we have a committee and he was like, no, just go do it. And that must feel so different. Having your hands on the wheel that way? I guess that's why you're still there seven years later, right.
That is, that is exactly my experience as well. And, you know, I joked when I came in that the average life of a CIO and a role is usually three years. Three years came in, they're like, you're still here, like, Well, why wouldn't I be? This is fun. It's enjoyable, right? We're getting stuff done. It matters, you know, the trust level is back between the partners. And it's a very enjoyable, very enjoyable role. Let's,
let's take a little sidebar and talk about those trust issues. What sort of, what sort of advice do you have for other CIOs and IT execs who might be listening about how you went about building that trust level? And was it different? Or did you do something differently from how you had built trust before?
Really, really good question. So when when things are not reliable, oh, you're getting phone calls, you know that there's no trust, right? When I was at Intel and an HP, I used to say, hey, most, most business people are from the state of Missouri, you have to show me your worst something before I'll trust you. And I grew up in Detroit. And we, I always believed that you had my trust first, and it was yours to lose. And so coming into situations, you know, it felt similar to working at Intel and hp in regards to die, I have to prove myself first. And it was obvious what I had to prove, right. And so you get reliability working, and you start focusing on risk, because everybody knows, I mean, anybody that watches TV, watches, 60 minutes, reads a book knows about ransomware and hacking, and so on, so forth. And so everybody's an IT expert. And so getting that trust was really relatively easy. Because I knew what I had to go do, we just had to get some things fixed. And so there had been a number of technology based decisions. And the organization operated in such a way that technology led versus business leads. And so as soon as I came in, I spent time with all the business leaders trying to understand, where are you going? What are you trying to do? What are your problems, and that open communication is so important. And too often I think, technology people lead with, well, this is the greatest SD Wan solution, this is the greatest cyber solution, this is the greatest whatever. And it really needs to start with, you know, the business problem or opportunity we're trying to take advantage of, and then fitting the technology to that.
Okay, that totally makes sense. The one of the things we'd also talked about was that there's a lot of unique complexities to the various niches that Pacific Coast is involved in, you're not just a simple building trades Supply Company, and you don't just do manufacturing. Tell us a little bit more about that, because that makes your job as the CIO. You know, that's a lot more balls to juggle in the air, I would imagine because you've got you said five subsidiaries. So that's a lot of presidents of different subsidiaries that you have to work with. The
so I work for the family member, third generation who runs the companies overall. Yeah. And along with the chief legal officer and the Chief Operating Officer, the three of us report to him and so we provide these central shared services to the other five subsidiaries. So I have really six bosses, but one that carries the family name. Yeah. So two of our businesses are in manufacturing. Between them, they have 20 different manufacturing plants across the western United States. We have companies that run from the Canadian border down to Arizona, and then from Hawaii to Texas. And that's kind of the footprint that we sit in. So those 20 manufacturing facilities are all across the United States and no two are exactly the same. They're all slightly different. And I can go into that if you want to. In addition to that, we have a distribution business that has 55 locations across those 14 sites, 14 states. And there's a growth plan there. Each of the companies grows differently. Those facilities sell around 6000 products to contractors and subcontractors in their particular area or region, and then we do deliveries for them as part of it and two of the deliveries for shingles, composite shingles, and then drywall wallboard actually are placed on the roof or inside of buildings so that people don't have to carry things up any longer. It's actually put in place where it's needed. So imagine a four storey building and you know, those elevators that have to put out stuff, we actually have a boom that puts it inside the building for them. Cool. And we have a specialty contracting business that does things for contractors, subcontractors, commercial as well as consumers. So we'll get hired by a KB homes or eliminar homes or something like that to put on 100 roofs or 50 fireplaces or 75 garage doors in the neighborhood. We've been hired by Google and Apple to work on their campuses for waterproofing and weather proofing. And so fairly large business and very, very different than the other two. Yeah. And then we have a logistics group. group that also does hauling of our products for us as well as for other companies as well. And then they also have a freight forwarding business where companies will deposit their products into our yards, will store them until they need them, then somebody will come and pick them up, and then we move them to either a train or a truck for. And so they all have their different needs. And they all think that I care about one of the others more than that. And it's been pretty interesting having that conversation with people. I'll
bet of it. When you'd mentioned also, we talked, I always tend to ask about the digital business development, like what has happened with, you know, XYZ company in terms of growing in digital services? How relevant is that for you and Pacific Coast? Do you have some of your subsidiaries that are much more advanced than that? Or is there an overall digital strategy that I should be asking you about?
So I think one of the things that unique about a family businesses compared to a corporation that's public is that each of the businesses has a level of autonomy, to make investments, as they see, they each have their own board of directors, they each have their own financial officer, and they each have their own president. And so that uniqueness then says some people move faster than others. So are one of the manufacturing groups today would be my number one customer I would say, it's called Pepco, they do roofing paper and then gypsum board. They have one of the most efficient wallboard plants in the United States and the biggest desert desert ever flying to Vegas, you see a gigantic solar array in a giant mind, that's us sitting out there in the desert, you can waive as you as you go by, I definitely will. They are their leader has a clear vision of what he's trying to accomplish in terms of remaining relevant with his customers. And so we're starting with some capabilities that give them more awareness about shipments that we do. Because there are hundreds of trucks and rail cars that leave our mind and our plant in Vegas every single day. And depending on whether it's a direct ship to a distributor or direct ship to a site, when it gets there, somebody has to unload it. And so one of the problems has been people show up in the the truck hasn't arrived yet, we put in some capabilities that now tell the customer Hey, at three o'clock on Tuesday, you're just going to be there, they can have a crew there to unload it, and take care of take care of business. And then he also wants to have more, provide more capabilities to his customers that they understand pricing, inventory, specials, rebates, you know, all the rest of those things that create stickiness, with those distributors who are very large, much larger than our company as a matter of fact. And so they're they're probably the leader, and then one of the other manufacturing groups is less interested. They're spending more of their time focused on robotics inside the factory. I think one thing that's common, Mary Fran, across all the businesses is trying to find labor. And that really became more evident during COVID. And it's been harder and harder. But you know, whether people you know, first of all, it's a dirty, dusty, hot, cold, miserable environment that our plants are in. Yeah. And sometimes it's hard to get people to want to do those jobs. And so they're looking at robotics and automation that will allow them to replace jobs and move people into more value added positions.
Yeah, it sounds like it's it's really fun for you because you have a CIO job for essentially these five subsidiaries. It's a lot of variety, isn't it? I mean, there's, there's probably no one size fits all, in anything that you're dealing with.
Each of the I think one of the things that's common across all of them today is the need for a greater level of mobility, in terms of what people do and how they do it. So their ability to check in on a job and see where things were at make sure that they're going to the right location, to make sure that we're informing customers of when we're going to arrive. There's a whole focus right now for us across all the subsidiaries around mobility, that'd be the one thing that's common after that a very, very different needs and demands. The manufacturing guys are putting in all this robotics and technology and they need more networking capabilities. And they've got more servers and things on the edge right because a lot of these applications that are being run are now we used to take all that stuff out now we're putting it all back in. And when you do that, then you know we need to have ot people sitting in at the factory, and one of the things we're wrestling with is to those ot people Operational Technology Report to the factories, or do they report to it? Or how do we share that responsibility. And
they've offered, they've often been very separate in the past, I remember it, CIO magazine. And before that a computer world about doing stories about the communication and collaboration, difficulties between the OT folks, which tended to be more as you say, factory based, and they were more like engineers on site. And they felt very distant, often from enterprise or corporate it.
You know, when I worked at Intel, we had a manufacturing organization that supported Intel's factories, and the people that worked in the OT environment actually reported in it, but they were on site. And there was, I think we'd collaboration that way, you know, as soon as you take a person, you know, the farther away you get from the mothership, less relationship you have with what's actually going on. And so I think it's important for those people actually at least have a matrix relationship back to it and the CIO. So it's clear what kind of job one is. Because when somebody is out in the middle of the biggest desert, and somebody says, hey, you know, machine X is down, I need you to come over and help me, everybody is going to drop what they're doing and make sure that that happens. Because they have to keep production running.
Yeah. The is speaking about that of the kind of common problems you get out in the you get out the industry a good bit, you go to some of the big provider and vendor shows and you meet with other CIOs and CTOs? What are the common problems you come across in the building and construction trades industry that others are tackling today?
Well, that's a that's a tough question to answer. So that, you know, if you think about us, we're a one to $2 billion company, we're very diversified in terms of what we do. And there are companies that are in distribution that are eight to 10 to $12 billion, and just tribution. Right. And so it's hard to say any one thing is common, I think everybody is wrestling with certainly cyber, right? Nobody wants to be that guy that has guy or gal that has been ransomware. And and their systems get shut down and they can't do email. And you know, I think everybody is struggling with what does digital transformation mean to them? Yeah. And kind of a sub element under that is data and master data. And the one of the things I've been talking about too many people, especially now due to AI, is, where's our data? How clean is it? Well, who's managing it, because as soon as you start exposing it to your customers, which is what people want to do, it has to be right. It's one thing for us to make a delivery and send five A's five eighths inch wallboard instead of half inch wallboard. And we can go oh, you know, we're just a bunch of dumbasses. And you know, we screwed up, and then we send the right product. But, you know, we've lost margin because we're sending something twice. But as soon as somebody sees that online, and shows up, it becomes different strike, because we're all used to having the Amazon experience. I know, I know. And so that master data, what the product looks like, what the specifications are, when it's available, pricing, any of those things becomes more challenging. So I think we're all dealing with that as well. I mentioned AI, I think AI is, you know, our minds are just exploding. You know, what, what are we gonna do with AI? And our boards want to know, and always want to know, and yeah,
and that's, that's an absolutely great segue to the whole topic of AI because I've found over the last year or more that everybody from CIOs just kicking the tires, they may still be working through their master data management strategies, or the the data quality and cleanup or the the security and the privacy aspects that have to be around it, depending on their industries. So let's talk about that about your your strategy for artificial intelligence future plans, how you're educating yourself about it, because as you say, it's just an exploding mind impact right now. And so how do you how do you approach that?
So I am not a great reader. I read for pleasure, but I get lost in the minutia. So I spend a lot of my time learning about AI by talking to people. So I have five or six. Are you Yeah, I can read about it, but I tend to fall asleep. And I'd much rather have a conversation. So I have five or six significant business partners, trusted advisor lasers, companies that I absolutely believe in and trust. And they all are larger, much larger than us. And at&t and NTT DATA extreme is one of our customers SAP, and they all have a chief data officer, or they all have a chief artificial intelligence officer. And so I've been able to get relationships built and have converse and Gartner obviously, and I've had conversations with these experts in and that's helped me, you know, kind of learn and help us figure out what to go to. That's first thing. I think the second thing is gardeners provided as they usually do a really nice model that has nine, I think, different swim lanes in three or four, you know, it's it's typical nine by three matrix store. Yeah. And what we've done is we've gone through that and chosen elements across those different swim lanes and said, Okay, we need to start here. So one of the things we're starting with is a policy. That's one of the things that I've heard over and over. Yeah, if you have a policy because your employees, we know that they're using chat GPT, we know that they're using co pilot, we know that they're using other large language models, because we can see the traffic we know where people are actually going. And so we're trying to put a policy in place, first of all, so that we can educate our employees around that. And then I have a, I think something that's unique, that not other many other companies do. I'm I'm super surprised by this. But I have a committee that reports to the parent board. And that committee is basically my air cover for things that I want to go do you were talking earlier about how much easier it is in a family company. Yeah, I review it with them, I review with the parent board, that I go to the presidents and say, Hey, here's what we need to go do. And I've checked the boxes with these things. And then they give me the okay to go off and do that. And so I'm bringing experts in to talk to them as well and help educate them so that they can then help me challenge myself on some of my thinking. And then last we have, well, there's kind of two parts that are next one part is what do I do about my master data? Because my AI and my large language models and all the things we're doing, whether it be rpa, or advanced analytics, predictive analytics are only can be as good as the data. And so I need the business partners to go make an investment in managing their data. And then we have identified a few, I guess I would call them pilot areas where we think that there's actual fruitful value in making an investment. And I just want to back up and say one of the things that I'll turn it back over to you, I think, I was certainly enamored with AI. It was almost scary. Like it like AI has never been anything like this before. I've gone through all kinds of technology changes in my career. Sure, but AI is different. And I think I've come to learn now that it's really not different. It's just another tool in the toolbox. And really, it matters. Three things. What's the business problem or opportunity we're trying to take advantage of? Where's our data? And is this a good solution for ourselves compared to something else? We might go? Yeah. And so I'm trying to demystify artificial intelligence because it seems too esoteric. At the at the HP event I went to last week they had into Antonio Neary in a AI box. It was an image of him and you could talk to him and he would respond is it was super cool. I'm not gonna do anything like that. We're not a you know, 100 billion dollar company, right? We're something's somebody,
what are you and you're not a movie studio, you know, some of this stuff that seems mostly entertainment and sales value. But I know what you mean about AI and AI, it reminds me of Sunday, we used to call God should be back in the 90s. And they called it airplane magazine syndrome, where the CEO of a company would be sitting flying back from maybe California would have Businessweek in front of them. And there'd be like, I don't know what PC networks or something, I bet and they look at this and they think oh my god, are we doing this? What are we doing this? And that's the last time I can remember anybody you know, in the business world feeling like they needed to know more about this. It's certainly I know that the all the cloud vendors tried to make the, you know, like networks and the Internet data networks more glamorous by calling it cloud. But everybody pretty quickly figured out that it wasn't saving all the money. It was promised. It was much more complicated than it was pitched as and that it was really just somebody else's data center when you get right down to it, but AI is turning up in our lives. So I mean, I go on, I'm looking on Facebook through like a garden group, and somebody gets like 200 replies to a question. Now you can open it up. And there's an AI summary at the top. Right. And of course, it's all over Amazon. And so people are seeing it and experiencing it. And as you mentioned, chat GPT has become a very big deal. You told me, I think you told me that you used it to craft a job offer or a job?
Yeah. So periodically, I'll put some postings on LinkedIn and say, hey, you know, we're looking for PM, or we're looking for this or looking for that. And I'll get a couple of responses, but it's nothing significant. And so one day I wrote one, and I said, Hey, I'm looking for business analysts or program manager and one other I think bi person we're looking for. And at the bottom of LinkedIn, it said, use
our large language model, I can't remember which one it was rewrite it and I hit yes. And I looked at it was like, oh, it's really good. And I changed a couple of words and posted it. I had 90 notifications. The next morning, I've never had that. People actually sent me a personal note, a DM. And I was like, Okay, so some of the people are from India, we can remove those because we're a company. Some of them were from Pakistan, some whatever. But there were 15 people in the Sacramento area. And wow. And a third of them were in the United States. And so it whatever it did, it got the attention. And so we've been trying to encourage our folks to use the API's to help us in those large players models to rewrite these things, because they're, they're much better at it than we are. I've been hearing a lot from CIOs about, especially in terms of pilots and things they're doing internally, it's usually a productivity enhancement, or the use of one of the AI offerings from the vendor community that they're using, say, to provide information more quickly to their sales enablement teams or to their call centers. Sure. You had mentioned that you're doing some pilots in it right now. Is there anything you can tell us about or brag about? Well, I don't, I don't know, I would brag about it, I would say it's pretty mature. But I think there's three things we're doing. So our project management office is using it to first of all capture, because we're on video today, we have recordings of our project reviews. And there then having the transcription done by the large language model, we have to go back and do some editing. But all of those action items and other things that people are doing are actually being captured for us or will be being captured. So that's kind of one area.
We built a bunch of knowledge articles that our helpdesk uses for people that are calling in related to PC issues or application issues. And we haven't turned it on yet. But we're prepared to do a chatbot, which, you know, chat bots are everywhere. But we're going to try that internally with our folks. It'll be interesting to see how that one works out. Because we're such a family run company. Everybody wants to be around everybody. Yes. And then the third one, I think you mentioned, so we're a sap shop SuccessFactors, which is the human capital management solution. So they have something called jewel that sits out there. And it is one of those productivity improvements. And it's available to us because we're in the cloud. We haven't told people about it yet. We're trying to figure it out ourselves. It's kind of goes back to the whole education thing of so what can it do? And what's my role in teaching people about it? Or is it the business's role?
The HR world in that particular case, and so we're trying to work our way through that. I think that a lot of it has to if you're going to use a large language model, I think a lot of it has to do with the ability for you to ask a great question.
And so should we teach people how to ask great questions? Or how do we evolve? The questions that they're asking? My wife has been using it pretty extensively in her consulting business. And her observation is that she doesn't have to be great at getting the first question. Right, just to be great at getting the third question, right. Yeah. Because that then evolves the work that's coming out of the large language model and helping her clarify exactly what you're trying to do. Yeah. Well, in a lot of the CIOs, I've spoken with about this recently, I've also emphasized the importance of like the human element in working with the AI models like the way you know, your wife can continually refine and then see that she's getting someplace really good with it. That seems to be a big factor. Let me let me pivot now. I want to talk about the enterprise. The Enterprise vendor management that you do
Whew. I mean, as you mentioned, you're a company between one and 2 billion in revenues. So it's not Intel, it's not $100 billion company. But from our previous discussion, I know that you've got really good partnerships with a lot of the big boys, you know, with SAP and with Microsoft, and even with our sponsor today, data extreme. How did that come about? Is this a different kind of relationship you have now with your vendor partners working at a smaller family owned company? Versus you come from that world from HP and Intel? How does that how is that different for you now? And how do you make sure these are partnerships and not just transactional? You know, the sales guy showing up to talk you into upgrading? Yeah, I, I don't believe I've ever had an original idea in my entire life.
But one of the things I'm really good at is improving other people's ideas. And at Intel, we certainly had a lot of discipline associated with building trusted partnerships. If you think about manufacturing at an Intel, or engineering at an HP, you have to depend upon your partners, you can't you can't tell people what to go do you have to build it together. And so within our environment, we have, like most companies, we have 375 ish, total applications. About 20% of our total applications are Microsoft, Microsoft ecosystem, SAP SAP ecosystem. And so the other 80% are the dogs and cats that have come along with acquisitions that we've done over time. Yes, of course. Yeah. So I've always believed, you know, first of all, I, I believe a lot in transparency and making sure I'm being honest with people about where I'm going. It surprises me that I think more IT shops are trying to guard and hold things because they're afraid it's going to work against them in a negotiation. And I think this goes back to kind of the trust thing of being from Michigan, you know, I trust first, it's yours to lose. But what we've done is give more of our share of wallet to a fewer number of people. So I've got a bunch of 80%. But the large bulk of my total investment on the contract side really goes to
six to eight different companies. And so there are five that twice a year, I have executive business reviews, I have an executive partner that's at least at a VP level. And each of these companies, we talk on the phone regularly, I asked them for things like hey, can you tell me about your chief data officer, your chief artificial intelligence officer? And can we spend some time together, and they opened those doors for me where I wouldn't get that opportunity otherwise? And in these reviews, they're not tactical, that we're not talking about operational metrics, we're not talking about 99.9 versus 99.95. We're talking about, what's our strategy? Where are we going? And what services and capabilities do they have? That can fill in some of those gaps? Now, they're, it's part of the sales team. So they're gonna try and sell. But
we, you know, we try not to get into the sales side, instead, use those meetings to really clarify, where are we going, what do we need? What are they have? Can they fill a gap, and if they can then bring back those capabilities, we understand them. And then the teams can go and go through that work. And Judge
solution A versus Solution B for versus solution. And so we did that at Intel, we did it at HP, we did it at the bank, we're doing it here. And, you know, for me, it's
10 meetings a year that are multiple hours, four to eight hours. In each meeting. We traveled there, once they travel here, once you know we have dinner, we break bread, we have a glass of wine, too, and, you know, build that relationship so that if there is something wrong, we have an a path to fix. Right? Well, I remember you mentioned that when you first got to the company and you were looking at the new area that you were going to your new marching orders and the plans that you had for it, that you have one of your subsidiary companies was ready to move to a very industry custom built ERP solution, and you had to kind of head that one off at the pass. I talk about that a little bit. So our distribution business.
You know, it's more than half a billion it's 50. Look at that time was 45 locations. And of all of the customers they were probably the least satisfied with what it had done for them over the last few years. And they had gotten to the point where they
They wanted to go to an industry specific distribution system, ERP, ERP, and away from SAP, because they had lost confidence. And so when I was brought in, and the first thing that the company asked me to do was help them make a decision about whether we were going to have one ERP or more than one or ERP. And so we, we created a what we called a peer plus one group. So we had we had President of one of the subsidiaries, he today runs all them, because it's family, one of the board members, one of the CFOs, and myself be a part of the analysis. And so I spent, along with keeping things running,
did an evaluation of one versus two. And you know, stuff from a strategy perspective, strategy is about making decisions.
You can go left and go, right, you can go center, or you can stay where you're at, but you have to make a decision. And so between May of
17 and December of 17, we did that analysis, and our recommendation to the board was to stay in SAP and not have to,
you know, we took the approach of I may be right, I may be wrong, but I'm not confused, we're going to have one. And that became the decision point. And then from there on, it was matter of so now that we've made the decision on one, how do we provide the capabilities that the distribution team needs in order to be successful. And that then became pretty easy, because we were gonna stay on SAP, SAP prod data extreme to the mix. And they became the point of sale solution that
today is in place and highly successful? Yeah. Do you find that I thought that was interesting. I wasn't aware of that angle working with the very big vendors that they would bring forward, someone who essentially like with data extreme, they replaced your SAP front end. And I always look at that. And I think, well, the sap is so big, they have so much money, why don't they just fix the front end, but this partnership, I guess, when we're talking about vendor partnerships, it's just as important who they are partnered with. Yeah, you know, I think a company like SE and I think highly of SAP, you know, for those other CIOs, there's probably a love hate relationship with SAP probably went well, with all of them with Microsoft with. Oh, yeah. But but they, they can't do everything. And they have to depend upon the partner network. And you know, whether they purposely leave holes, or whether they think it's not important, and I don't think that the GUI, even though it's been upgraded three times really,
you know, is sufficient, which is where kind of data cream filled a hole for us.
You know, I think they're doing that in other places as well. I won't get into a bunch of details. But yeah.
We've been talking about a lot of the nitty gritty work that you do, and it what is the size and scope of your tech team today? How many people do you need to do all this work? So we have, we have 72, full time employees. And we're on site. I think we talked about that. Yeah.
A few contractors two to three. Okay. If we do a big software implementation, we may bring an SI n. So when we move from ECC, to s four, we hired a third party, si to come in and help us do the work. We shared that relationship because we want our folks to learn as far as well. And then we have this summer, we have 15 interns working for us. And they're kind of spread out across the three different organizations. We have a project, we have a director of Project Management, in business analysis, we have a senior director of operations and cyber, and then we have a director of applications that reports to me and then my EA and person that does communications for us. Well, I'm always so I'm always so pleased when I hear about intern programs. I mean, a lot of times it's multibillion dollar insurance companies or health care companies, but for you know, a sizable mid sized company to have an intern program, I think is terrific. Have you always done that? Or is that something more recent? Something recent, one of the Presidents really encouraged me to take a look at interns. He had used that as a program. I think it called a builders program, trying to get people into the building industry leaders program around that. And he really encouraged me, hey, you know, the cost is minimal. And the value is tremendous. And so we started this. Two years ago, we've had 40 ish interns that have come to the door we allow them to stay to periods so they can be
Each fall spring that can be spring, summer that can be summer fall that they need to go. Because we want to rotate people through. And generally they've been we've had two kids from high school. They're brilliant. Brilliant. I can't say it any more brilliant.
And then freshman, sophomore, junior, of the kids that we could have hired, there were eight who are graduating during one of the periods that they were here. And we've hired for them. So pretty, pretty good hit rate. And, you know, I've had great experience with hiring young people, whether it be new college grads, or interns. And I think what's great about that, a lot said about this generation, how hard they want to work, and so on so forth, cheap cash. My experience is that, you know, young people don't know the definition of No,
they want to get something done. There's fun. And so it's been we think it's been super successful. I'm surprised more companies actually don't take advantage of their local communities, in hiring, hiring people. Yes. So I still remember a story from years ago that I heard at one of our conferences, and it was the CIO of a very big international, kind of a construction management company. And they were in somewhere in South America. And they had, you know, with some big meeting, they were having a lot of problems were happening with ransomware, and cyber break ins. And that was that anon group, the cyber security hacker types, and they were in a big meeting, and they had one of their interns in there. And he was like a 19 year old kid on a summer internship. And they were all talking about how to protect themselves from an attack. I think it was a DDoS attack of some sort, from Anon, and the kid who is listening to all this said, Well, why don't I just go join them? You know, like, why don't I hang out and find out what they're doing? And at first, the CIO said, they were all aghast. They were like, Well, no, that's like, they're the bad guys. And he was like, Well, let me just go infiltrate. And, and then they stopped and thought they're like, what? It's brilliant. Yeah, let's do that, you know, and, and I, and it worked out. Well, otherwise, I'm sure she never would have been telling that story at one of our events. But it was, it was a great reminder about just fresh opinions and fresh ideas, you know, probably across all age groups, but not, you know, discounting, any, any generation and saying, Oh, well, millennials are this and Boomers are that and Gen X. It's just most of that is just marketing hooey. I think that we all tend to buy into it that our first reaction is no.
Yeah.
Yeah. And it should be the first reaction should be let's think about that. And then those conversations, let's have conversations about it. I think that's our I agree with you. They're 100%. Now speaking of which, you've mentioned this one or two times when you say we are on site, we're 100% on site. And what you mean by that? I mean, this is rare in this era, everybody that I would think that most of the people that come and apply for jobs today, expect there's going to be flex time and work from home and all those other options, which became so vital during 2020 and 2021. And then sort of faded away. And I think I told you, I have a nephew who's been trying to find a company that wants him to come into the office.
But how does that work for you? And is that any kind of a? I mean, it seems unusual to me, do you get that response? When you talk with other CIOs where they say what you make people come into the office?
I did a reference call yesterday for one of our one of our suppliers. And there were eight people on the call. And they were all remote. You could tell based on their backgrounds, they you know, like your office, right? Hey,
I'm still shocked that people haven't come back to the come back to the office, really. So we're a family company. We've been around 72 years, you know, I like it. We love on people, you know, we once a quarter we have an all employee meeting at our location. And we roll in a barbecue and the executives all put on aprons. And, you know, we we serve people. And I think from a servant leadership perspective, it's consistent with that. And so yeah, we have we have things like we buy people donuts, and we encourage them to go on walks.
And I think we get a higher level of productivity and just my ability. I've never met a fan. I've never been in this situation before, right? Because I've always worked for these big multinational companies. I have 1000 people that work for me at Intel, and they're all over the world. And if I was going to see them, I had to go somewhere. Well, I can walk out tomorrow.
Well, we have an all employee meeting, I'm going to have 72 people sitting in a room with 15 interns, and we're going to talk to them face to face, and they get a chance to ask me questions. And, you know, we've we've been back in the office really since August of 2020.
Now, by we provide a lot of flexibility, you know, somebody's got a sick dog, they got to take them to the vet, they're gonna work from home in the afternoon. Okay. Right. Somebody's got to pick up their kids at three o'clock. Okay, they're gonna work from home in the afternoon. But people are in the office. You know, generally we don't we don't we have, we have a couple people have medical related issues. They're working from home full time. But the vast majority employees are in the office every single day unless they have a work life balance requirements. Right. Right. Well, I think and that has not been an obstacle for you in hiring. I mean, you've got your internal programs. And I think it makes a whole lot of sense that interns would want to be in a work environment. Oh, my God. So true. I mean, when we first started this, we lost about 10% of the IT team
had a variety of reasons for it. And since then, we've lost maybe another two or three folks. But I've also hired like I said, we've hired people, and they I'd love to come in the office, oh my god, you meet and collaborate with people, I can walk to somebody's desk, I don't have to get on Zoom, I get I get zoomed out, I'm tired.
And instead, you can sit and have a conversation on a whiteboard. So yeah. Okay. And I want to pivot back at that. Well, good for you. And, and great luck, as you know,
pretty much an extreme extrovert, I've always loved being in the office. And, you know, my background is all in, in newspapers and newsrooms, and you know, when I think about trying to do that all writing all alone in a room somewhere, it's just, it's just sort of, it's depressing. You know, it's not that there, but of course, it people are overwhelmingly, introverts. They're more I just think of introverts as the more thoughtful human beings, you know, the people who think before they speak, versus the extroverts who speak before they think sometimes. So I, you know, kudos to you, I wish I could send my nephew out there. He lived lives in Florida. So, you know, he
sent me his resume live, Northern California is beautiful. It really is. And such better, better weather to, I want to before before we get to our wrap up point, I want to talk about two more things. One is, you mentioned this, this board that you've worked, I think you call it your test board, where you've got presidents and
X CIOs and people from the company influencers, essentially, in the company. And I think you also called it a parent board. It's you use it to test your ideas to like, talk to them about AI and everything. I want to hear more about that. Have you ever done this sort of thing before? And it's it's a really, it strikes me as a really smart governance move, where you're preparing the people that you need to go and talk to about what you want to do ahead of time? It seems it seems politically very smart to do. So because it's a family run business, I don't need to go do this. I could just talk to some people and say, Hey, here's what we're gonna go through. And generally they would agree. Yeah, it just became, I think, smarter. I thank you for the acknowledgement. We'd never did this with Intel. It's as far as I know, we never did it at HP. As far as I know. We didn't do it. The bank for sure. Yeah. In the committee is actually so it's a committee of the reports of the parent board member. Each of our subsidiaries have their own board.
But this is the committee that reports to the parent board. There's a family member on the board, who's the leader of the group, Brian, there's a member of the parent board on the group. There's the COO for the companies. And then I have 3x cio CTOs, cybersecurity officers who also are there. And so I use that as a testing ground for hey, here's what I'm thinking. Does this make sense? We meet six times a year, they get paid a small renumeration for their time. We do three that are face to face and three that are on video because they live all over the place.
And gosh, it's just it's been so successful, and it's fun. And it's yeah, they're, they're challenging. They asked great questions. And it what it does, in addition to provide me with it or cover is it helps me be prepared when I have to go talk to the presidents. Yeah, about what we're trying to do. It helps me get my story straight. Yeah. Well, I think I think it's an absolutely great idea and something that I hope anybody who's listening will take as inspiration to figure out some way to do that in maybe in their own company, maybe with their, you know, local SIM group or something. We do I just checked to see if we had questions in the audience and I think you'll you'll find this one very entertaining
It's a question from someone named Paul Menard. And he wants to know,
what is Mr. Menards? best piece of advice for young leaders? And who is his favorite son? Oh, well, he is my favorite son SDSU. You know,
I think young leaders are all trying to crawl their way up. Yeah. And I would encourage people just to be patient, you know, be more open, listen. It's I was there. I know what he's trying to do this career. And a lot of young people, I had a one on one with the interns yesterday. And he wanted to have a similar kind of thing. But, you know, this idea of patience and listening. And being curious, I think is so important. As people grow, and what I told the interns yesterday is you may be the most qualified person for the next job, whatever that job is, and you're not going to get it. And you're not going to get it not because you're not qualified, but you're not going to get it because you don't have the right air cover. So you have to go build that circle of trust, real people will say, hey, let's give Paul Menard the chance to, you know, take on that next leadership role, because we trust him. Yeah, demonstrated the ability to go do that. That's, that's pretty awesome advice. And I'm sure that Paul Menard will be very grateful if he hasn't already heard this from dad.
The other thing that we mentioned, when I asked you that, as we wrap up with our final question about what you've learned about your own leadership style, and you mentioned becoming more patient right away, you also mentioned curiosity, and the importance, the importance of listening to each other.
So the patient's thing has come over time. You know, as a young dad, I probably wasn't as patient as I am as an older dad. So I remember to listen a little bit more in to all of my all my people are here. I think the curiosity piece is super important. You know, we tend to judge No, no, no, no. Yeah. Tell me more about that. Tell me more, you know, open open the door, we we took all of our leadership team through a workshop based upon a book called bridge the gap. Yes. And that really solidified for us, who is the person across from you? What is it that they need? And then the third thing, I think, would be around?
Gosh, there's, there's the golden rule, which is Do unto others as you would have do unto you. And then there's the Platinum Rule Do unto others as they wish to be treated. And so not everybody wants to be treated same way I am, you know, I want people walk in are like, Oh, hey, how was your weekend? And what's going on? And I've got a couple of people that are like, we need to get down to our agenda, you know, what's, what's going on here. And so I have to learn how to treat people with the expectation that they have. They'll talk about their weekend later, but they don't want to start with that. So those would be my three things that I've learned about myself as a as a leader now. Well, those are those are pretty those seem like pretty good things. I was interested in when you mentioned the bridge the gap, I went and looked it up on breakthrough communication tools to transform work relationships from challenging to collaborative, and Inc Magazine called it one of the top three business books to read in 2023. So it's very, very recent. And you so you had a whole program around that with bridging the gap, or did you create the program out of the book, we brought, we brought one of the authors in to talk to us about it and teach us things and we had the leadership team go through it first. No, we had all the employees go through it. So okay, well, it sounds like your name language at this point. It sounds like you've created a real company of communicators. They're from the IT department on it, which is wonderful. Thanks very bad. Oh, I called you Maryanne. I am so sorry. Don't you worry about it. I have been called Mary everything. All my life had starting in grade school when the nuns would say Mary on your feet and eight little girls who were Mary Elena,
Mary Francis, would stand up on their feet. Don't you worry about it at all. I really enjoyed chatting with you today. Thank you so much, Marty for joining me this was such a fun conversation. Thank you. I can't believe the hour is over already. You're such a great facilitator and make it so easy to do something like this. You're not a bad talker yourself. So thank you for bringing all your wit and wisdom to this. This conversation today. If you joined us late today, don't despair. You can watch the full episode of my conversation here today on LinkedIn but also on cio.com and on our YouTube channel, CIO leadership live is also available as an audio podcast wherever you find your podcasts. And I hope you did enjoy today's conversation with CIO Marty Menard of Pacific Coast Companies as much as I did. Thanks again also to our sponsor for today's episode data extreme. And if you want to be sure not to miss any of our shows, or if you just want to take a wander through some of our previous conversations, do take a moment to subscribe to CIOs YouTube channel, where you can find more than 130 previous episodes of this leadership live show, along with several international editions which have spun out of the podcast. And those feature CIOs from all around the world from Canada, India, New Zealand and Australia. And I always feel like what better way to spend your time than listening to CIOs talk. Thank you so much for joining us here today. And we'll see you again next time.