Responsive Customer-Centricity5

Don’t Crush the Chips

"Don’t crush the chips!" | Andy Cerio, Sr. Director of Product Management at Target

Andy Cerio

March 14, 2018


Generally, this isn’t the first thing you consider when launching a new grocery offering into new markets as teams are generally focused on differentiating features and how to bring the offering to market. Andy will tell a story about how he and a small team leveraged ruthless prioritization, a test and learn team culture, and partnered heavily to navigate a large organization for support and execution to bring this new offering to life in a timespan measured in days, not quarters, or months.

About Andy

Sr. Director of Product Management @ Target

Andy Cerio has seventeen years of experience encompassing omni-channel retail, e-commerce, enterprise capability development, and make-to-order manufacturing. He has a passion for product management, defining strategy, and shaping organizational culture while driving change and execution. When not focused on execution, Andy enjoys partnering with individuals and teams to elevate their performance and career development, extolling the virtues of the ‘Silicon Prairie’ (hailing from the Twin Cities), training for marathons, and going on hikes with his wife and two daughters.

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Video Transcript

This is a story where we were able to do that, and so I'll tell you a little bit about all the mistakes that we made along the way, and then as we went through the process, kind of what we learned and how we overcame them. But before I do that, I want to tell you a little bit about Target. So Target is a North American retailer based exclusively in the US. We have about three hundred and twenty three thousand team members who are running and operating about eighteen hundred stores in all 50 states. We're about 60 billion in overall revenue and we have roughly thirty eight distribution centers that are driving and moving all of these products to our stores. And we sell everything from tomatoes to TVs and everything else in between. And I would say, you know, we have our fearless mascot, Bullseye, as well for those of you who are familiar with him. So it kind of gives you just a little basic sense of Target. We are based out of Minneapolis, Minnesota. So, Evan, wherever you want, we can show you snow whenever you like. You can feel free, feel free to come and we can get that checked off your list as well. 

So with that, I want to tell you a little bit about an initiative of a new, a new grocery offering, and I sit in product management on the business side and I have our enterprise tools as well as our restocking grocery businesses. And this was an initiative where - and I'm going to skip over a lot of the qualitative and quantitative research that went into identifying this opportunity, so just run with me on that - but effectively, as we did a pile of research, we found this notion that we want to take care of the boring stuff for people. People really don't have a lot of discovery in finding sugar or paper towels. If you do, talk to me after. We should, we should discuss that. But, you know, just those basic things about macaroni that you just, it's the same thing that you get every week. 

And so we crafted this concept that we call Target Restock. And this was basically an initiative that came together from idea and concepts, to shipping product to customers in thirty five days, and for Target, a big company, this is very, very fast. So again, if those of you have done this faster in large organizations, you should probably come up here and present instead of me, but if not, let's definitely talk after because we learned a ton along the way. 

So, you know, diving into this a little bit, some of the issues that we ran into as we started getting into this were certainly as we were shipping product, we were getting all this feedback. But I want to use this again as just a broader analogy on some of the specific issues that we started to bump into as we got this initiative on the way. And so this is kind of what day two looked like after we started. You know, we got together a group of people, we got executive sponsorship to really drive this forward, which is another key piece of it. 

We did our kickoff. We brought the group together, and the next day I came into the office, I was faced with something that looked a little bit like this. My inbox was full of all of these ideas about how we can improve what we wanted to go and achieve. You know, we had executives coming in and saying, "hey, wouldn't it be amazing if", or, "hey I was doing this research", or, "we were looking at these competitors". We had other teams coming and saying, "hey, we absolutely want to be a part of this. This is going to be completely amazing and we want to be a part of the journey", and so all of a sudden, we were faced with, OK, how are we going to move through this particular barrier? 

The second thing that started to happen as we started to get a couple of weeks into this process is, we started crushing the team. The other presenters talked a little bit about this 'command and control environment' that, that team members can be in. And what ended up happening is, all of a sudden we had a lot of people saying, "hey, could you please send me a status report about how this is going", or, "hey, you know, those red, yellow, green dashboards that have a tendency to circulate around different organizations? Could you fill one of these out? We'd really like to understand where you're going and why", and all of a sudden this empowerment that we had talked to these people about at the very beginning started to trickle away. And we were like, "gosh, how are we going to how are we going to defeat this?", because the engagement then goes with it, right? Because teams are saying, "do you really want me to make this decision? Am I am I accountable? And do I have the ability to make this decision?" So how do we overcome that? 

You know, the other thing was just crushing the learning. In big organizations, sometimes what we find is that we're trying to focus on the value opportunities that are the biggest, that're going to generate the most value. And what we learned as part of this initiative is that sometimes these really small grains of sand can actually be amplified and generate a ton of value and a lot of different ways across the organization. So there's this notion of instead of moving fast and skipping over the learnings, how do you actually amplify the learnings that you have and share them with the broader organization so the broader organization can also improve. 

And then the outcomes. The previous speaker talked a little bit about 'output versus outcomes'. So being super clear on what it is that you're trying to achieve while using OKRs, BHAGs, stated objectives, but being really clear about "here's specifically what we're trying to achieve and why", and then how do you actually value that through the specific metrics that you're tracking was another thing that we stumbled with along the way and then ended up overcoming as we went through the process. 

So. That tension that I was talking about. We're trying to create a stable path for teams to move forward very quickly, but again, as we were going through it, we found ourselves bound by this healthy tension that we were trying to walk a tightrope, as I keep calling it, with the various leaders that we were talking to. So instead of creating this clear path, they had on this one side, trying to maintain what was happening in the organization and really drive to some of these broader mechanics and mechanisms that leaders had put into place while at the same time trying to move very, very quickly. And so what I ended up calling it is like, just take us off the tightrope, right? Allow us to move fast in the way that we want to, in the way that we need to in order to get this offering to market. 

So how do we achieve some of these things, how do we overcome them, what did we learn? The first part of it was really, "where are you going and why?" So in order to clear the trees off the road, and I know this sounds super basic, but we said, hey, while all of these ideas are super basic and super exciting, we really want to focus on hassle-free shopping for the boring stuff. We wanted to deliver a service that a guest could go in, they could order by 7:00 pm the previous day, and have the products delivered to them the very next day. And the way that that process worked, just to give you a little bit of insight, is we crafted a new website. That website would release the order to one of our eighteen hundred stores. The team member would pick and pack that product, and then we would ship it through a third party, third party carrier to their front door. And that was really the essence of what we delivered from end to end, and the number of teams that we had to collaborate with was fairly extensive because we had to work with everybody from our digital teams all the way down to our supply chain and our stores organizations. And so we just had to keep repeating the "why" over and over and over again in terms of, hey, it's hassle free shopping for the boring stuff, it's shelf-stable grocery. We're not into fresh or frozen, things that spoil or that go bad.

We really focused on the things that were repeat purchases that people bought a lot of the time, and I think the other thing was, as we were really clear about where we were going and why, it also helped us focus on the resources. So as you look at this picture, some of you may think, hey, we're going to go climb this mountain. Others may feel like, hey, we're on a cross cross-country road trip and neither one of those things are or incorrect or wrong. But the resources that you need, the tools, the team, very, very different. If you're climbing a mountain, you need very, very different equipment than if you're going on a cross-country road trip. So that helped us really identify the resources, which was the second thing that we went through and identified. And I don't have any cats in this picture, in this presentation, and so I have the obligatory Steve Jobs quote. But I find this to be really true is that picking the people is really, really essential to a strong team and a cross-functional group of people that understands aspects of their business. And there are 12 of us in this core group from start to finish, and they all represented a different discipline across the organization. I would say the other thing that I would tack on to this, is make sure that these people are credible, because having a proven track record of delivery or people that understand and can represent the basic incentives and objectives of their particular area prevents people from coming in and trying to kind of come into what it is that you're doing. If they have the support and the credibility of their particular area, when you bring them together, that keeps people kind of comfortable and at bay so that the team can focus on what it is that they need to do. 

Prioritize what is needed, not convention. What was really interesting about this phase of our journey is we started to bring together what it is that we wanted to deliver. One of the things that got us going was, hey, we were going to build a website, and of course, everybody said, hey, well, you need a home page, a category page, a landing page, a product detail page, a help page, you know, a F.A.Q. page, a link to the contact center. If someone slips and falls, we have to cover that. So all of a sudden, you know, all the various aspects of what it is that we were trying to accomplish got sucked into this notion of convention about what a website should be. 

And the team got together one morning and they're like, well, we need to check the eligibility for somebody who's coming to this program. We need to show them product, and they need to check out. And that's all we did. So the team basically said, hey, we're not going to have a product detail page, we're not going to have category selling pages. We're not going to have, you know, all of these other bells and whistles. 

People need to come in and buy product, and that's what we're going to show them. And what was really interesting about this when we got started is there was a lot of headwind that we had to kind of counteract against this convention, and what ended up happening is we started getting feedback. People were really impressed with how flat and fast the experience itself was, and so they were like, "hey, I can come in, I can get my marshmallows, I can get my paper towels, I'm gone. It's fantastic". And so we had to kind of go back and say, this is good, right? You're comfortable with this, right? As the data and the outcomes of, "hey, it's fast", versus,  "what's the revenue?", all of a sudden got to be a very different conversation as we went. 

The second thing that we discovered: our boxes were taking a really long time to get packed, and so as we went down into the stores, we started looking at the processes that they were using to pack these boxes, and what you're seeing is just a window into the process for enclosing a container that goes in transit to a guest. Now, I don't know about you, but I haven't had a box of bandaids, like explode in transit as its on its way to my house. But, you know, these are some of the things we started to, had to really start asking, like, "hey, why are you doing this? Does that really make sense for something that was of this kind of order and what we're trying to accomplish?", and, "does this really meet the profile of what we're trying to achieve as we deliver some of these products to our guests?", and so as we were working with these various organizations, again, this is where the power of that cross-functional team came into play because they were able to then talk with their leaders and say, "hey, let's let's talk about how we're enabling and delivering on some of these processes, because some aspects of this may not make complete sense for what it is that we're trying to accomplish." 

Revenue versus literacy. So this is one of those interesting things that, again, some of the others have talked about today. What's the smallest distance you can move for the greatest amount of literacy? And how do those things combat with some of the regular KPIs that we often see in terms of top line margin, et cetera? And so as we went into that, as we started to pick up success, we started to pick up steam. We started to get ideas. All of a sudden we were back on the tightrope again. And this is where it got super uncomfortable, because as we started to pick up speed, we started to pick up momentum. People saw how we were doing this, all of a sudden, "hey, we should do this. We should do that. Did you see this? Did you see that? This was amazing. Could we add that? What about this feature what about that feature?", and all of a sudden the team is getting inundated again because we've kind of gone through that trough of disillusionment where we're trying to get everybody with us to believe in the idea. Now that the idea is starting to pick up steam, we're right back on the tightrope again. And something like, hey, can you take us off the tightrope? And, you know, there was some, you know, evidence that they were going to let us do that but then I just started to use specific examples to try to drive home the point. And this was one of the ones I used. So Restock is a box-building initiative, where you build the box up to one hundred percent, and then you ship it once it hits one hundred percent or you can build another one, it's really up to you. So I don't know if any of you have picked up on it or not yet, but this looks like we can't do math. 

So you've got three similar things taking up a similar amount of space. I started to talk with the leadership team about, hey, you know, they were like," hey, can just fix this?", like it was some kind of a mathematical problem. And we actually said, well, in reality, this is actually a product dimensions problem, because the underlying dimensions of the product are incorrect. And for those of you in the audience who are are saying, "hey, the one on the end's actually 30 ounces, not 32 ounces, so it's technically smaller.", what this got us into a conversation about was dimensional weight versus scale weight. Scale weight being how much does something weigh, dimensional weight being, how much space does it actually take up? And so when you're packing a box, both of those things matter. And so what we started talking with our supply chain teams about is, hey, the accuracy of those particular product dimensions actually has the ability to improve the overall supply chain. So it gets back to that one little grain of sand saying, hey, if we can focus on getting some of these basic fundamentals right, the broader organization will actually benefit from some of the things that this team found. And so by getting everybody to focus on the outcomes of what we were trying to achieve, we're able to kind of keep some of those new and interesting ideas at bay for a while while the team really focused on how do I get this stress free, care free, hassle free way of getting products to our guests. 

So the last thing I'll talk about is, because I'm running tight on time already, is this notion around empowered communication. So we talk about empowered teams, but this is a picture of one of our standups - I know they're sitting down - but this is one of our standups. What I learned really fast was, an empowered team can actually be empowered through scarcity in communication. So, again, if you if you work and operate in a large organization, all of a sudden when you start a new initiative, all of a sudden all these status meetings, get-to-know-yous, one on ones, what's happening, how you doing, can I have some insight, can I offer some advice, we tried this three years ago here's what we learned - What we told the team at the very beginning is decline all of those. Don't go to any of those. And really what that did is that created this like, anxiety. There is a stress that happened, but again, that's where my role, some of the executive sponsorship that we had, helped kind of calm the waters a little bit. 

But also, again, why it's really important about being really deliberate about how you pick and select that team, because, again, that that cross-functional team, having those credible folks in the room, they can represent the incentives, the ideas, the needs of those particular areas. But really, what we boiled it down to is we had three meetings, and this was it - truly. We had three meetings as we got this thing going: there was a daily standup where we talked about what did we do yesterday? What do we need to accomplish today? How did those things that we decided on yesterday go, and what do we need to accomplish and what decisions do we need to make? And the decisions were made in that meeting, and that's as far as we took it. That team, made the decisions and we communicated them out accordingly. 

The second meeting that we had was a weekly stakeholder meeting for an hour. And that's where we invited anybody and everybody in the organization that thought they had a point of view, or a stakeholder that was a part of this process so we invited them to this particular meeting. We communicated where we were on decisions. We talked about what we learned and we talked about where we were headed next, and then we solicited a pile of feedback based on any blind spots that we had or things that we didn't consider. And this was the one place that people had the ability to provide feedback and tell us what it was that we were doing or not doing, and that drove wildly good attendance by not having, and attending any of these other meetings. 

And I would say the third thing that we did do, because we were going guest-facing and that Restock is now in 11 markets in the US specifically, is we did have a biweekly L.T. meeting where we just did update some of our senior leaders on where we were headed and what we needed from them. Getting the yellow light. 

So back to crushing the chips, so those basic things outlined again: having an empowered team where you're going and why, being really, really deliberate about who you pick and have on that team, really focusing on the outcomes and the literacy of what you're learning and how you could apply it. And then again, empowered teams through empowered communication or in this case, scarcity of communication. 

So getting to the punch line, because now I'm getting the red light, which is basically how do we not crush the chips? So, as I got back to that cross-functional, empowered team. We talked about, hey, we've got a lot of different things happening. Should we redesign the algorithm that's packing the box? Should we redesign the box? Should we update the packing process? 

This is where that team really, I would say, shined the best and the brightest, is because as we're going through this, trying to figure this out, we had oodles and oodles of options. And so ultimately, what did they pick? 

Handles. They put handles on the box, because what we learned, as we actually did a follow-on with one of our delivery carriers is, what happened is either the carrier or the person receiving the box, because of the way that it was built, they would naturally flip it on its side to hold it, and all the heavy stuff would fall to the bottom of the box and crush the fragile stuff. So we just put handles on it so it was a more natural way to lift the box and bring it into their home or to deliver it. 

So again, smallest distance you can move with the greatest amount of literacy. Thank you.

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