Navigating through business transformation with Nellson Burns

This week I’m joined by Nellson Burns, the VP of IT and CIO at Daltile.

In our discussion, Nellson shares how the pandemic accelerated the company’s business transformation efforts and how this impacted customers. He also goes into what the pandemic has taught him about his leadership and team. In addition, we touch on his perspective around technologies such as cloud, AI, ML and technical debt and how he navigated away from hyper configuration.

Podcast Episode

Links

Nellson Burns LinkedIn: https://www.linkedin.com/in/nellson-burns-581b215/

Daltile Twitter: https://twitter.com/Daltile

Daltile: https://www.daltile.com

Transcript

Tim Crawford:

Companies are looking for new ways to transform their business to remain relevant and differentiated within their industry. Technology now plays a central role in this transformation.

Tim Crawford:

Hello, and welcome to the CIO In The Know podcast where I take a provocative, but pragmatic look at the intersection of business and technology. I’m your host, Tim Crawford, a CIO and strategic advisor at AVOA.

Tim Crawford:

This week, I’m joined by Nellson Burns, the VP of IT and CIO at Dal-Tile. In our discussion, Nellson shares how the pandemic accelerated the company’s business transformation efforts, and how this impacted customers. He goes into what the pandemic has taught him about his leadership and team. In addition, we touch on his perspective around technologies such as Cloud, AI, ML, and technical debt, and how he navigated away from hyper configuration.

Tim Crawford:

Hey, Nellson, welcome to the program.

Nellson Burns:

Thanks, Tim. It’s great to be here to chat with you a bit.

Tim Crawford:

Now, I’m glad that we have a chance to chat outside of the other venues that we typically are seeing each other. You’re the VP of IT and CIO at Dal-Tile. Tell us a little bit about yourself and your role as CIO.

Nellson Burns:

That’s a great place to start. So, I’ve been the CIO for Dal-Tile for approximately three years. For about 10 years before that, I was the CIO for a downstream oil and gas company, HollyFrontier, and for about nine to 10 years before that, I did a consulting for Ernst and Young and Capgemini, mostly focused around SAP. So, I started my career as a “SAP guy,” which really led me to my first CIO role. We had just implemented SAP in HollyFrontier and that background was very important. And from there, the last three years I’ve been working for Dal-Tile.

Nellson Burns:

Dal-Tile is the largest North American manufacturer of tile flooring, wall tile, et cetera. We’re responsible for about 30% of the market in North America. And then we’re part of a family of companies under the Mohawk Industries umbrella. Mohawk overall is the world’s largest flooring company, and there’re five business units, of which we are one. In the US, there are two, there we have Dal-Tile that sells tile, roof tile, wall tile, countertops, and then every other type of flooring you could possibly imagine is sold by our sister business unit out of Georgia, so wood, carpet, laminate, luxury vinyl tile, rugs, et cetera.

Tim Crawford:

No, that’s great. And I think that’s great context for our conversation today. You’ve had a chance to serve as the head of IT and as CIO for a while now, and you’ve seen this across a number of industries as well as companies. How has the role of the CIO and IT changed, especially when you think about kind of what we’ve lived through in the last 12 to 16, 18 months? How has it changed?

Nellson Burns:

Yeah, it’s changed quite a bit from when I first started as the Holly Corporation CIO in 2007, I believe. I’m dating myself a little bit. I had the great opportunity to kind of grow with the company. We quintupled in size over the 10 years that I was there. And so, got a really good chance to build an IT organization from the ground up. But at that point, the value of IT, I think was probably understated, or people didn’t quite understand the true value of IT, just how much it could bring. And I’ve noticed that changing a little bit before COVID with digital transformation and companies leveraging technology to reach their customers, to transform themselves, to reach more customers, but COVID, I think really solidified that in two ways. One is we had to get everyone remote very, very quickly, and so there was a bit of the hero thing going on there. We were faced with a challenge, unprecedented challenge, and we were able to come through for the company. And that story has been repeated over and over again at every company that I know of and every CIO that I know of.

Nellson Burns:

But I think the other thing COVID really did for us and it’s related to the digital side, before COVID how many people really understood how to use Zoom or Microsoft Teams, right? Well, now soccer moms, grandparents, children are going to school on Zoom. Everyone knows how to use this technology, and everyone had to change, and they had to change nearly overnight. And so, in the 13, 14 years I’ve been a CIO, I’ve never seen the willingness to change be so high. And I think that is a direct result of COVID, but also some of the digital transformation that’s been happening before that, but then on COVID, it was just transformation on steroids. I read an article that digital projects that used to take 18 months were being done in a number of weeks, projects that took months were now being done in a number of days. And for us at a Dal-Tile, we had to, we had to shift overnight so we could stay in business.

Tim Crawford:

Yeah. It’s funny you talk about how that acceleration kind of took place in one of our fellow CIO colleagues actually mentioned that they moved to a completely paperless process, something that would have taken ostensibly probably a couple of years to do, they did it in a matter of a couple of weeks, because they had to. It was out of necessity.

Nellson Burns:

Mother is the necessity of invention, right?

Tim Crawford:

It’s amazing how that plays out. That’s one of the things that I think is really interesting about this period of time, right? You could talk about the pandemic and the importance of the pandemic or there’s a lot of downside to it as well, but what did it do to technology? However, several of these trends as you mentioned, were already in flight before the pandemic even hit. And one of those that folks tend to bring up is business transformation. And I want to be clear, I’m talking about business transformation as opposed to digital transformation. How do you see the role of the CIO playing in that, and where did business transformation fit in for you?

Nellson Burns:

That’s a great question. And I would answer first with another question. How do you really transform a business without technology? I think it’s possible, but if you look at the examples of really dramatic business transformation that we all have seen, technology has played a role and maybe it’s not the only part of it or the key part of it, but it’s certainly a major part of it. For us at Dal-Tile, the experience of, if you’re a small contractor picking up tile in the morning for your job for the day, it was not uncommon at some of our locations. You would go, wait in a line to pay or let them know you were there if you’d already paid. That might take you 30, 45 minutes. And then you get to wait in another line to pick up your product. And it had gotten to where it was such a captive audience. We started having food trucks show up at some of our parking lots in the mornings, because they knew they had people there for an hour or two hours just picking up tile.

Nellson Burns:

We had already been working on the solution for that pre-COVID, but what COVID did for us was it forced the business to adopt it immediately. And what we did was to transform the experience I described into, “Hey, now we have an application. Log on the night before. Tell us when you’re coming, tell us what you’re picking up. We’ll go ahead and pick it and pack it for you, put it by the loading dock. And then when you get there the next morning, it’s going to be ready. You don’t have to go wait in the line inside to pay. We can send you an email, you can pay with FreedomPay. And when you get there, we recognize you and we pull out your product, we put it in the back of your truck.” And depending on the municipality, we’d either, you’d sign an iPad, capture on the go or in some cases, we wouldn’t even allow them to sign the iPad, because you’d have to get too close for that.

Nellson Burns:

So, what started as a 90-minute, 120-minute process, now you can get in and out in the same locations in 15 minutes or less, and we’re working on some technology to make it like a NASCAR experience where we can get you in and out in a minute, because we know exactly when you’re coming, we tell you where to go, and we’ll have your product on the forklift before you even pull into the parking lot.

Tim Crawford:

And that seems to be part of the whole thing around business transformation is first understanding what the customer is going through, what they’re experiencing, how they’re engaging with you? How did you start that process? And I’m kind of putting this in the framework of you, Nellson as the CIO, how did you get involved in that customer engagement shift as part of that business transformation?

Nellson Burns:

In my case, when I started here three years ago, we had a vice president for sales ops who preceded me by a couple of years, who had developed a lot of the vision for what we were going to accomplish, but he needed a partner that could execute on that vision and be agile and shift with… We really just listened to the customers. We do what the customers tell us to do. And now that we have a portal for them, it’s very easy to get that customer feedback. And so, we listened to them and that informs our roadmap. Every quarter, we get together, marketing, sales operations and IS, and we have a year roadmap, but we’ll adjust it, we’ll tweak it here and there every quarter. But really to get to the business transformation, I think you have to be culture-focused, your internal culture, you also have to be customer-focused.

Nellson Burns:

And if your internal culture does not focus on the customers, it’s going to be a lot harder to do that, and so you have to pay attention to the culture of your company where it is, and how much change can they really adopt in a short period of time? So, those are two of the things I would say about how we approached this, really customer-focusing, and then really paying attention to our internal customers, as well, as part of that focus.

Tim Crawford:

Interesting. But when you talk about the business transformation and customer engagement, kind of changing those processes and listening to customers, you’re really talking about something that’s larger than just the CIO and the technology organization.

Nellson Burns:

Absolutely. You can’t do it alone, and you have to have good partners to be successful.

Tim Crawford:

Yeah. So, let’s maybe get a little personal for a minute. And I know this is something that you’ve thought a bit about, but as you go through this process and you think about things externally, we talk about business transformation, we talk about customer engagement and that’s great, but your organization changes and you change. What are some of the things that you’ve kind of learned about yourself, maybe your leadership style or changes you might be thinking about that have really kind of bubbled up over this same period of time?

Nellson Burns:

I feel like I’ve become a more complete leader in the last 12 months, and I’ll tell you what I mean by that. I’ve always been focused on my people, my team and making sure they have access to training, making sure that we are coaching and mentoring them in real time, not just at the end of the year in the performance review. And I spend a lot of time personally developing and mentoring people on my team, but I was missing something and I didn’t realize it until COVID, and what it was was really getting to know my people, not just for their performance and their skills at the office, but understanding their home life, understanding do they have children? Understanding if they have hobbies that they are really interested in?

Nellson Burns:

And I’ve really gotten to know my… It sounds weird because we weren’t together as much, but I’ve gotten to know my team much better, and that’s allowed me to be more empathetic, which I think is important. It’s an important ingredient in the recipe for a servant leader. And so, I think that’s the biggest thing I’ve noticed. And then COVID gave us all a great opportunity to reflect on our career, where we’ve been and where we want to go. And so, that’s the answer I came up with is understanding the value of focusing on my people, a little bit more getting to know them. And so now, as an example, we’re back in the office, I’ll walk around and talk to people, and it’s crazy the stories you get from people’s personal life and how much they’re willing to open up when they trust you, and when they know you’re not going to judge them, and especially when you remember what they talked about the last time, and you can bring that up, it’s opened my eyes up quite a bit. And so, I think I become a more complete leader as part of the pandemic.

Tim Crawford:

Well, sounds like you’ve learned a lot about yourself, but then also about your staff, your team. It used to be that dog walks into the frame, kids walk into the frame while you’re on video, and it’s like, “Come on, we’re trying to conduct business here.” And now it’s just kind of happenstance, it’s like, “You know what? It’s part of life.”

Nellson Burns:

Absolutely.

Tim Crawford:

We’ve a family at home.

Nellson Burns:

And we have a guy that plays… Yeah. We have a guy that plays guitar and every week or so, he sends a name that tune out to the team on a WAV file. And, we’ve found unique ways to stay connected, but again, it’s ironic that it took a pandemic in us splitting up and going virtual for us to get to know each other a lot better. But I think that’s… I don’t think I’m the only leader who’s noticed that, I think that’s happened in other companies as well.

Tim Crawford:

Yeah, it absolutely has. In fact, I can think of a story that one of our colleagues was talking about, and he was saying how he would travel overseas to meet with his staff, to get to know them and be present. And one of the things that he recognized… Fast forward to the pandemic here. One of the things that he recognized was that during the pandemic, he actually got to know them better via video than he did in person, because he could spend more time with them. And you got kind of a key hole look into their lives outside of the office. And so, it actually starts to help you understand who is Nellson? What’s Nellson like? “Oh, he likes that light, maybe he’s more into architecture.” You learn a little bit about who he is or she is, or what their life is like outside of the transactional work that we used to do.

Nellson Burns:

I think you’re absolutely right. And if you just think about it, if you’re traveling overseas to visit with your team, are you 100% when you show up that first day, or do you have a little jet lag? You might be out of your comfort zone, which might not allow others to get out of their comfort zone. So, it’s counter-intuitive, but I completely agree with you. I’ve seen it happen over and over again.

Tim Crawford:

The other thing you think about just from a timing standpoint is you spend the 15 hours… Let’s say for me, going to Asia, I spent 15 hours going to Asia to spend a day or two, maybe once a quarter, couple of times a year, if I’m lucky, whereas on video, I might be with them once a week or maybe a couple times a month. And so, I have more interactions and that leads to learning more about your team, and therefore, going back to what you were saying about culture and understanding what your team needs, and helping them be successful.

Nellson Burns:

Yeah. And so, you spend more time with your team, but I’ve also… Because you’re not traveling, you’re spending more time with your family as well. And so, that’s been another really nice thing to come out of this is just having that opportunity to see my kids a lot more, and not be missing soccer practice, because I’m traveling to a plant site or a distribution center to try to improve some process. It’s been a very welcome respite.

Tim Crawford:

Oh, that’s great. So, they’re not to the point yet where they’re like, “Dad, when are you leaving again?”

Nellson Burns:

No, they’re five and seven. Give them a couple of years, then you can say that.

Tim Crawford:

Yeah. Wait until they get to be teenagers.

Nellson Burns:

They still like me.

Tim Crawford:

When I think about the transformation you went through and how you’re engaging with customers, I have to believe that technology kind of fit into that somewhere. Let’s talk about tech for a minute, because I think this is something that often comes up. We talk about leadership, we talk about culture, we talk about what it means to be a CIO. We don’t necessarily get into the nuts and bolts of the technology, but how do you think about technology, especially some of these that are commonly kind of bandied about like cloud and AI and ML and RPA and technical debt and cybersecurity. Do you get into that? And if you do, how do you get into it?

Nellson Burns:

No, absolutely. From a strategic point, we get into that, and for our example at Dal-Tile, if you want to continue the example of our stores, we had a lot of technical debt when we started, not just what you think about, but infrastructure device, technical debt, old routers, old access points, UPSs that are being bypassed because they failed, and then now we can’t see anything at that site. And so, we really consciously tried to attack that at our stores prior to COVID before we even knew COVID was coming, and we were very fortunate that between that refresh of the hardware and adding in the ability to process credit card transactions via email or text link on a more secure credit card network, so we don’t have to pay as much in terms of fees to the credit card providers, that in our portal and the ability to schedule that all kind of came to fruition within the three months prior to COVID.

Nellson Burns:

And so, it was a really interesting opportunity for us that we were preparing for that we didn’t even know we were preparing for, right? And so, technical debt was part of that, but cloud was also a big part of that. When you have a legacy application, sometimes it’s just easier to go to a new version of that or a new application that’s in the cloud. For us, some of that technical debt caused performance issues that quite frankly, the cloud has helped us solve. And that’s not always the case, but in our case, it certainly was.

Tim Crawford:

Can you talk maybe a little bit about an example of that, or how it’s helped out?

Nellson Burns:

Yeah. So, one of the great things about software as a service and cloud-based applications is you tend not to customize them as much as you do your on-premise. And there are probably a variety of reasons for that, but if you’re going to go to the cloud, you really should go standard for the most part, and that shortens the cycle to replace some of the applications. And in our case, getting away from over-customizing allowed us to have better performance, better response times, have our team members who are happier with our services. When I look at where we were, when I started three years ago, I’m surprised we haven’t had a revolt in our stores sooner about technology or lack thereof. And I mentioned the hardware, even getting into the network connections and then backups and everything, we had to really drill down to the lowest level of detail to figure out how to make this work.

Nellson Burns:

And again, we didn’t know we were preparing for COVID, but we certainly were. When it comes to AI, artificial intelligence, machine learning, there is huge value for any manufacturing company to leverage that, to improve your manufacturing process. And you may have to convince some folks, “Hey, I know we’ve done it this way the entire time, or this has been a challenge for us for the last 30 years, but we can actually make progress on fixing that problem.”

Nellson Burns:

And there’s a couple examples from our parent company, Mohawk, but from a carpet standpoint, delaminating is one of the largest manufacturing issues, and that’s when the bottom part of the carpet comes apart from the top part of the carpet, right? And if you can eliminate that or reduce it, you save a ton of money, because every time you have that, you got to cut the carpet, and if you think about a roll, you’re cutting it in half, it’s no longer useful for as many scenarios once it’s cut in half. In addition to the time it takes to cut and bowing or bending and curving and plastic plank tiles leveraged… I say, we, I’m using the Royal we-

Tim Crawford:

The Royal we.

Nellson Burns:

… Or, the Mohawk… Yeah, exactly. We’ve virtually eliminated that on some of our products where it was the biggest issue we had. And so, if you think about that, you can have a huge impact, and we have some pilots we’re working on here at Dal-Tile that if we can really make a difference in, for example, shade variation, we can dramatically simplify our supply chain, because then we don’t have to keep five shades of the same product in five lots, because you never want to mix shades across an installation. And so, think about that, if you go from five shades to two shades, think about the complexity that takes out of your supply chain, and customer service, you’re able to serve customers much faster, because you are more likely to have that shade in stock if there are only two of them.

Tim Crawford:

It’s consistent. It comes back to consistency and setting those expectations.

Nellson Burns:

Yep, absolutely. And I think it’s hard to address some of those problems without the machine learning, without artificial intelligence, without some of the data, the big data. I think every manufacturing company should be looking really hard at all three of those areas right now.

Tim Crawford:

Yeah, I think that’s great. And as you were talking about cloud, and how you’ve kind of moved away from hyper-customization, creating that snowflake to using something more out of the box as much as possible, limiting the customizations, my thoughts just went right back to your experience of SAP. If you think about… I was an SAP customer many moons ago, multiple times, and going through that hyper-customization is great to some degree, I would question how great it really is at the end, but you may think it’s great. The problem is down the road when you need to upgrade, when you need to make changes, and it’s a snowflake, it’s like its own product just for you.

Nellson Burns:

Yep. I’ve learned that standard SAP works, the internal integration between different modules in SAP, whether it’s supply chain, materials management, sales and distribution, your finance or controlling. If you don’t customize that, it works. And it works probably 99.999%, maybe one more nine percent of the time, because there’s so many customers that are on that platform. And if something does go wrong, they see it immediately. And the platform has been around a while too, and so a lot of the bugs and kinks have been worked out. But the second you start customizing, you better be clear about the value you’re getting out of doing it that way, or you’re going to be creating more technical debt, higher cost of ownership down the line. And you’re exactly right. It’s the same principle as we talked about with cloud, but that’s where most SAP implementations fall down in my experience, in my opinion, is they try to make it do things that it was not intended to do.

Nellson Burns:

And that’s not to say that you can’t customize, I think any implementation, you’re going to need to customize 10% to 20% on things that actually differentiate your business, right? Or things that can be innovative, but I don’t know why you’d ever want to innovate around account allocations right? And creating a sales order, you might want to have front end, but that stuff is the same at many, many manufacturing companies or other companies. And so, you have to be careful about what you do customize and be very focused on the value that you’re going to get out of it.

Tim Crawford:

No, and you’re not alone there. I’ve spoken to a few SAP cloud customers specifically about this, and the CIOs from those organizations have echoed exactly what you said, which is the single best thing we could do is just take it right out of the box. So, instead of trying to customize it to fit our business, we figured out how to fit our business to the product. And we actually gained a lot from doing so, from a business standpoint. So-

Nellson Burns:

Absolutely.

Tim Crawford:

… you’re a good company.

Nellson Burns:

And the other thing, so many people think of SAP as a technology project, it’s not. Implementing SAP is a business process project and a people project. And if you don’t pay attention to the change management, you will more than likely have a poor experience with it, particularly right after you go live.

Tim Crawford:

Yep. Right when you don’t want it to. Well, Nellson, we’re going to have to leave it there for this episode, but I appreciate your time, and thanks for coming on the podcast.

Nellson Burns:

No, Tim, thank you very much. I appreciate what you do for the IT community. And as I told you before, I love hearing your perspective on things that are going on. So, thank you so much for having me today.

Tim Crawford:

Thank you.

Tim Crawford:

For more information on the CIO In The Know podcast, visit us online at ciointheknow.com. You can also find us on Apple Podcasts or wherever you listen to your podcasts. Please, subscribe and thank you for listening.

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