What does it mean to digitally transform a legacy brand? We learn the answer from a true master who has perfected the art of doing just that. Our very special guest Arthur Phidd, who is an award-winning and globally recognized innovator and visionary, and current CIO of REEDS Jewelers gives the crew and listeners a real treat in this episode. His unique advice and insights on how to use technology as a catalyst for change, in combination with an omnichannel framework is an exceptionally astute perspective every business owner and entrepreneur looking to scale will want to hear.
Timestamps:
1:13 How Arthur got his start
5:24 The Big Corp advantage, entrepreneurs often dismiss
8:07 Transforming a B2B model into e-commerce
10:43 How to spearhead the digital transformation of a legacy brand?
15:35 A unique take on the 90-day plan
20:45 Restructuring IT and why creating various “Centers of Excellence” is important
22:37 Succession planning
25:00 Giving back through mentorship
Transcript
Brian Weinstein: Welcome everybody to Sippin’ & Shippin’. I’m your host, Brian Weinstein. We’ll be kicking it here every other Friday, quenching your thirst for an insider’s take to enhance your customer experience. So grab your drink of choice, kick back, it’s Sippin’ & Shippin’ time. All right, welcome everybody to another episode of Sippin’ & Shippin’. I am your co-host, Brian Weinstein, bringing it to you every other week with my favorite other co-host, Caitlin Postel.
Caitlin Postel: Nicely done, Brian. How are you today?
Brian Weinstein: Good. I think this is the first time I ever got the new 2.0 pronunciation correct.
Caitlin Postel: I’m digging it. Happy to be here and excited for the episode today.
Brian Weinstein: Yes, said excited because it’s Friday, which is fantastic.
Caitlin Postel: Well always that, but to be able to have it Friday with such a special guest just makes it that much better.
Brian Weinstein: Yeah, that is awesome. And a good segue, thank you very much. So we have with us today from REEDS Jewelers, CIO, Arthur Phidd. Arthur, how are you?
Arthur Phidd: Hey, how’s it going, Brian, Caitlin? I’m doing well. It’s Friday afternoon and it’s sunny in Wilmington and there are three beaches 10 minutes from here.
Brian Weinstein: That’s fantastic. It’s nice that we’re getting to this time of year. I’m excited. I’m just back from travel, from Vegas where it was a little bit warmer. So I’m excited to be back here in Jersey and start to head down that path of seeing flowers bloom, days getting warmer and longer, which we’re already starting to see. All right. So Arthur, can you give a little bit of background about yourself to our audience?
Arthur Phidd: Sure. I am currently the Chief Information Officer for REEDS Jewelers, and that includes our digital business as well, reeds.com. I’ve been in the IT industry, gosh, for well over 30 years. So I’ve been around the block for a while and-
Brian Weinstein: There hasn’t been much progress in that industry over 30 years at all, I don’t think.
Arthur Phidd: Yeah. Not much has happened. We’re still using floppy disks, but I had my entree many years ago. In my third year in college, I was by IBM. And so, I was a member of a team that was located in Brooklyn, New York, in a building where 70% of the thing was below the ground. And because we did a lot of our work on our power supply units for the mainframe, and from a security standpoint, you’d go in the building, you’d press six in the elevator and you’d go down. So it was it was a trip, no pun intended.
Brian Weinstein: Right. That’s funny. That’s like you see in the movies with the military and the top secret, going down into the bunker.
Arthur Phidd: Exactly. And so, was intrigued by that experience. When I was at IBM, there was a meeting we had with some senior folks up at their Kingston location, Kingston, New York, and they told us there are only three types of people on the planet, those who worked for IMB, those who used to work for IBM, and those who want to work for IBM. And I turned to the guy next to me and said, “It’s a cult. I got to get out of here. This is crazy.”
It actually formed the core of, I think the person I am today, the leader I am and the training. We get there and having left IBM, I made my entree into the Wall Street world. I was hired by a Merrill Lynch in the World Financial Center, downtown Manhattan, and worked my way through, what was that Wall Street experience as a young 23 year-old, kid and spent about seven or eight years there. And I did what most of us did back then is, you would go from one Wall Street bank to another. So I did my time going to different banks. They’re literally across the street from each other, just because of how downtown is located or situated. And then I had an opportunity to work for Avon.
I found my softer side, Brian, and I joined Avon. I was originally responsible for business intelligence and analytics and building out a whole infrastructure using technology provided by a company called Cognos. And eventually, when Avon decided that it was going to adjust its model from being a traditional B2B, selling through catalogs, to a more of an omnichannel where you’re going to enable direct-to-customers and then use that channel to drive the B2B, I was picked to be the head of global e-commerce, and to lead the build-out of what you now see as avon.com. And of course, this was in 1999, 2000s, so it’s a long time ago.
Brian Weinstein: It’s interesting because we’ve had some other guests on, and I think maybe for some of the younger entrepreneurs that are listeners, there is a value that comes from working for these very large organizations like an IBM and I’m sure a lot with the banks, where they teach you levels of discipline and structure that maybe younger entrepreneurs, they may dismiss it, but there is an importance to it, wouldn’t you say?
Arthur Phidd: Oh, absolutely. It’s either that or utter chaos, right? And you’re right. It’s funny, when you look at a lot of what I do today in academia, I’m on faculty at the University of the West Indies and two faculties there, and I spend a lot of time lecturing to the MBAs and the MSCs and information management about the importance of knowing how to write a business case. People complain a lot that, we need to get this new thing, and they just won’t fund it. That pronoun, they, they never fund anything without thinking, “Wow, maybe I’m not making a case for it.” And so, that’s just one example that has stayed with me, that structure. You don’t want the extreme where you’re spending your time doing PowerPoint slides either, but it definitely gives you a proper context for those that [inaudible 00:06:51].
Brian Weinstein: Yeah. And again, because the entrepreneurial spirits, you need to harness that talent to a degree, you need to harness and be able to focus your thoughts in a specific way that’s going to be productive without, to your point, being so structured that you suddenly have these blinders on and you’re not unleashing the creative side of the entrepreneur.
Arthur Phidd: Oh, yeah. So it’s finding that happy ground, Brian. Someone once said, “Given the choice between chaos and tyranny, the people often choose tyranny.” Which is a pretty ironic outcome, but there’s a reason they will choose it. At least they know where the lines are drawn. And if you take that metaphor and you bring it forward, you have to want to understand the protocols and the frameworks for how do you bring an idea from an idea, into a product that is consumable by an end customer. And you don’t just sit in a lab and say, “This is a really cool thing”, and then it happens automatically. So that big company grounding and discipline around risk management and business case development and design before you build, what a thought, is critical.
Brian Weinstein: So then, you started to talk about Avon a little bit and going down this path of really taking a company that was B2B and catalog focused and transforming into e-com. And we have a lot of customers that we speak to that start out digitally native, and they go towards the brick and mortar side. This is really the opposite, which I always think is harder, especially because you’ve got companies that are established. So I would imagine that you had to be that entrepreneurial voice within the organization to go into this e-commerce world.
Arthur Phidd: So there was a whole group of us working at that time to… And again, we’re talking just after the year 2000, so they whole Y2K.
Brian Weinstein: By the way, they’re not here. You could take all the credit. It’s fine. We could just say it was you.
Arthur Phidd: No, we had a solid team. And what was interesting though is the number of times, even in today’s construct, that I mentioned things to the team, and then I tell them, “Oh, we did this in the year 2000”, and they’re looking at me like, “What?” And I said, “Yeah, actually, that’s what we did.” But it tells you a bit about where we were then, in the year 2000, 2001 at Avon, because when our leaders made that brave decision that we were going to go against a 118 year-old model of selling through 3.5 million Avon reps back then, that takes a lot of guts. And then, when you’re the person building out the actual platform, there are a lot of sleepless nights. And we as a team, spent a lot of time trying to understand how to speak to the ideals of the Avon lady, the Avon rep.
And what we realized is, it’s all about leads, leads generation. And so, to the extent that we can use avon.com for example, even though it goes direct to Caitlin or Brian to drive B2C sales, to the extent that we can harness that information and then bring that customer over to an Avon rep to build that lead. So that customer now has a relationship with the old model. It’s fantastic. And so they all said, “Well, okay, what are you waiting for? Just rack up those leads.” Hence the birth of avon.com. And every now and again, I log on that site and I look at it and I go, “Oh, wow, she’s still running. There she goes.”
Caitlin Postel: Yeah, that’s very interesting. As a business development person, you say leads and I’m bought in, but how do you take a legacy model to a new level and really use technology for a catalyst of change? How did you get that buy-in or really spearhead that effort?
Arthur Phidd: I’d probably use a couple of other examples where I played more of an ownership role of the transformation. I’ve done it at financial institutions. I’m doing it here at REEDS Jewelers right now, which is almost a sort of a parallel situation, isn’t it? When you look at Avon, REEDS has been in business, Brian, for over 78 years, a very successful family owned jewelry company, selling primarily in a particular section of the United States, Southeast, Mid-Atlantic, through a whole bunch of brick and mortar outlets and franchise outlets. And we’re now realizing, “Well, hey, there’s an opportunity for us to attract customers who are in parts of the United States at that point in time and are unaware that we even exist.” The cost of building out stores would be prohibitive. And so reeds.com is alive and well. And the approach to drive that is not easy. There are really three major points that I focus on, Caitlin.
It’s people, process and technology. Interestingly, I believe we live in a world today where the technology is a commodity. So that’s not the hard part anymore. 30 years ago, that was the hard part. It’s a commodity. If I need an order management system, I can pick one. I need a PIM, a product information management system, I can pick one of those. So how do you help people understand the value proposition of the change that’s coming? And as a CIO, I have accepted the fact that my role is not just to lead the tech brain thrust, it’s to drive the cultural a adoption of the change. And it requires that you spend a lot of time understanding what makes people tick, what do they like, what’s working, what’s not working, and show them the value proposition of using this new platform and process changes that it’s going to bring with it, to enhance their quality of life at work. And that’s really what I emphasize a lot.
Brian Weinstein: Yeah. I-
Caitlin Postel: Yeah, makes sense. Sorry, Brian, go ahead.
Brian Weinstein: No, I was just going to say, and I thinking through, and I’m going to go back to Avon for a second, the incorporation, I don’t know that all the listening audience remembers that there were Avon ladies, which was what they were called, and they were the ones who were selling the products-
Arthur Phidd: And men.
Brian Weinstein: And men, but incorporating the boots on the ground, if you will, into the whole new e-commerce strategy, to me is very different, very intriguing to do that. Because now you’re not creating this divisive culture where you’re either the boots on the ground or you’re the e-com strategy. You’re bringing those together. And then, that to me is fascinating and even more fascinating when you think about when you were doing it, what, 15, 20 years ago.
Arthur Phidd: But even today, it’s still fascinating. Because if you look at the average, the traditional consumer products retailer, it’s the same story. They’re going through a traditional go-to-market channel, and then there’s this digital thing. And they typically exist almost as two businesses within one company, don’t they? And so it’s still a question of, “Okay, if I’m doing marketing, Brian, and I’m doing digital marketing, is that just to drive revenues, the revenues of the e-com store, or is that also going to drive traffic into my brick and mortar? And then if that’s true, who gets credit?”
Is it the digital business that gets credited for the cost and the revenue? So it means we have to become an omnichannel organization, where it’s one business with multiple channels through which you’re delivering your services, but the channels aren’t competing, they’re coexisting. There’s harmony between the channels, and it allows your customers to be somewhat nomadic, if you follow me, because then the customer feels comfortable moving between, in our case, a REEDS store on Amazon in the marketplace, or reads.com, or a REEDS outlet, or a REEDS Pandora store. And the list goes on, and you still feel what I call that quantification of the brand.
Caitlin Postel: Yeah. And the quantification, I think that you had mentioned on our call, it was like, you’ve been home before, you know this place. You’re familiar, you [inaudible 00:15:43]. And I really love that. And I’m going to go back to the three points that you made earlier, which is people, process, and tech. You said tech’s a commodity, processes are important, but it’s those dang humans, the people that [inaudible 00:15:58], which we know can be tricky. And another thing that we talked about on our intro call was your 90-day plan. And I thought it was super insightful how you were able to use this really anywhere, to those people, the culture. It doesn’t matter where you are, the brand. And I know you’ve had experience working in Asia and the Caribbean, and this 90-day plan has really been across the board effective for you. Can you tell our audience about that 90-day plan, if you don’t mind sharing?
Arthur Phidd: Sure. And it requires that if you’re the chief information officer and you’ve been tagged as the person who’s going to enable change and drive the transformation, I hate to break it to you guys, but you’re going to have to get out there. This isn’t one you’re going to delegate. This one’s on you. So if you are a CIO or an aspiring one, the stuff I’m about to talk about, is you, it’s yours. Typically, in my first 90 days, I essentially played a role of a consultant doing an assessment, and it’s an assessment, Caitlin, of those three points, people, process, technology. The technology, because I want to understand to what extent is this the accolades heel. Is this going to be the toll-gate that’s going to slow us down? I want to understand our exposure from a risk standpoint.
Then the process is, the idea is to understand, are these processes effectively leveraging technology that’s there, and can they be transferred to the future, the technology that we’re going to bring it? And why are we even doing the things we’re doing, Brian, just because we were doing it 40 years ago, doesn’t mean we still need to do it. And then from a people standpoint, it’s a discussion around our capacity. Now, most people, when they hear capacity, they immediately think, “Okay, let me do headcount.” But that’s just a single dimension of capacity. I’m looking at capacity in terms of skills, capabilities, competences, and the ability to have the right set of resources at the right time for the right purpose. It’s a combination of those three that then leads me into a series of things that we’re going to do. One, what’s a structure of the IT division and the concept of creating centers of excellence.
What I typically find, Brian, in my career is the people who lead or own companies view IT as the people who keep the lights on. And that’s just a fact. They won’t admit it, but it’s a fact. And my goal, having assessed the IT structure itself, is to change that structure so that it can be the great enabler for change that’s now going to come. So essentially, you change the organization as a function of the change in the IT organization. And then from that, I take a look, Brian, at policies and governance, it’s important. And so, at the end of that 90-day period, there’s an entire strategy around the realignment of the IT services where we have what I call stealth IT, where there’s a little bit of IT in every department. We start taking that back and you restructure the IT vision along centers of excellence, and then you put the processes around, how do you govern the spend for IT investments, Brian?
Most people say, “But Arthur, I have a budget and the CFO approved that budget.” My view is, a budget is not a license to spend, it’s just a budget. So we have to put the disciplines in place around establishing what I call, a strategic planning committee for IT, where you write business cases, go figure. You use English or any other language on a structure to put a document together with a cost benefit analysis. And so, that then drives a cultural shift across the company, because the person’s writing these business cases, aren’t the IT people, they’re editors, they’re contributors. It’s the business owner who has the P&L who wants that new call center software. You’re going to write the business case for that. We’re going to fill in the IT section, but you’re going to present it to this committee and we’re going to thumbs up, thumbs down. And so, that’s an example of an IT infused idea coming out of that 100 day process, Caitlin, that then pushes the company.
Brian Weinstein: I’m sure there’s work where you’re doing, as you said, you have the stealth IT around who’s collecting the information and understanding the different functional departments and what their wants and needs are that are going to help to drive that change, but you still have to bring it into a cohesive IT-
Arthur Phidd: Exactly. Which is why you restructure the IT team. You create those centers of excellence, for example, around cybersecurity and infrastructure management, around e-commerce technology, around data management, around IT risk management, around project management and quality services, and around the application support services. You create these seven centers of excellence, and then you start to claw back from those little stealth IT professionals who really need to be shepherd and nurtured and led by an IT executive. Because if you have IT sitting in an IT professional sitting in a finance department, Caitlin, tell me what the CFO is going to tell this person about their future as an IT professional.
Caitlin Postel: I don’t think that’ll be very well received.
Arthur Phidd: That makes no sense. In the same reason, if I had a junior accountant in IT, I’d probably say, “You really need to go join the finance department.” So it’s really this realignment of the organization driven by the IT realignment, but that comes out of that assessment. So Brian, to the question, it’s a proper turbocharged, on the road from one location to another. When I was at BNB Bank on Long Island, it was visiting all the branches, calling the branch manager saying, “Hey, I’m coming this day, that day. They’d cleared the day. We’d sit and we’d talk, I’d interview them, they’d tell me the good, the bad, what works, what doesn’t work, what they’ve always wanted. And you come back with this huge list and that informs then what becomes your three to five year IT strategy.
Brian Weinstein: That’s amazing. And then, to bring that all together and get the team rolling. Well, obviously you have to sell that further upstream to create the plan, create what’s going to happen, and ultimately that transformation. So for you as that leader, when do you hit a certain point where you kick back and you say, “You know what? Maybe not my job is done, but I’ve gotten my team to this certain point.” And now how do you start to think about a way, and I think we talked about this on our pre-call, you need to have an exit strategy of how you’re going to replace yourself. Not that you necessarily want to leave, but how do you go about that process and when is that right time?
Arthur Phidd: That’s what I call, if you’ve read the wonderful novel, Shane, or seen the movie or seen the Geico commercial, That’s the Shane’s riding out into the sunset moment.
Brian Weinstein: Right, exactly.
Arthur Phidd: You’ve touched on it. For me, it’s all about identifying my successor as close to day one as possible, Caitlin. It’s identifying your successor in that first year and not keeping it a secret. So if I have tagged Caitlin to be my successor, I can guarantee you she knows, because I’m going to tell her, but her colleagues know as well, and the HR department knows, and the executives and my peers all know about it, because she needs to now get their support as well.
And it also now forces this new relationship and this exposure, and it is now my job, one of my goals is to train up my successor over that three to four year period, so that I can have that Shane moment. And so, that’s the approach. It’s once I believe I’ve gotten to a place where my successor is able to take it and really continue the mission, then I think it’s at that point that I don’t know that I’m leaving, but I tend to pull back and allow this new CIO to shine and get the notoriety while I sit back as the old coach going, “Yeah, that’s one of mine over there.”
Caitlin Postel: Mr or Miss jewel tech number two, the second.
Arthur Phidd: That’s right. Yeah, jewel Tech number two.
Brian Weinstein: I have to tell you, and I’ve said this before, I think one of my favorite parts about being where I am in my career, is the ability to now be a mentor.
Arthur Phidd: Absolutely. Isn’t it great?
Brian Weinstein: It is. To look around and have the ability to work with people and help them realize their potential and teach them something along the way. And obviously we too learn from them, because they come in with fresh perspective sometimes and you’re like, “After all the years of me doing it, I didn’t think of it that way, but you’re right.” And that’s such an enjoyable part of, I guess, the career process as you continue to grow in your career, that I think people should look at the mentors that they have now and want to be a mentor in that same way when they get to that stage of their career.
Arthur Phidd: It is an unbelievable feeling when you’ve impacted on the career and the lives of those who were under your charge, but also when they say it to you while you’re still alive.
Brian Weinstein: Right.
Arthur Phidd: I’ll never forget having gone to Beijing with colleagues and we acquired a bunch of gaming companies and we created a whole new thing and did an IPO. And so, we’re in the online gaming and lottery business in Beijing and Shanghai. When it was time to leave, I received a greeting card, Caitlin, and it said, “Please hurry back, because when you’re in Beijing, the sun shines brighter.”
Brian Weinstein: That’s awesome. That’s absolutely awesome.
Arthur Phidd: You can’t pay to get that. That’s the punctuation right there.
Brian Weinstein: Yes. It’s the reward. It really is the reward.
Arthur Phidd: I believe that every C-suite executive, I’ll be more specific, every CIO should go and teach somewhere, at a graduate or undergraduate level. Just do it, part-time. Because as you said, Brian, you’re learning from them as well. But the feeling you get when that light bulb goes off and you realize that their lives are forever going to be changed because of your influence, it’s amazing. My colleagues, my peers, my subordinates, my team members, they’ll all tell you if you get to speak to any of them, that they feel daily as if they’re in a lecture, lecture hall. And that’s because there’s this need for us to be shepherds. And I said this on a podcast maybe two years ago, CIOs and those who aspire to do what I do, just understand, if you’re not willing to shepherd and coach and lead and mentor, then don’t do this. Be a manager somewhere, but you don’t need to be in this office, because those are necessary, must have skills and requirements. You have to want to do that.
Brian Weinstein: Absolutely. So there’s nothing else that I can say that is better to wrap up this episode. Arthur, I cannot thank you enough. This has been an absolute pleasure.
Arthur Phidd: It’s my pleasure as well. It was a blast.
Brian Weinstein: All right. Caitlin, you want to take us out?
Caitlin Postel: Yeah, Sure. Of course. Thank you everyone for listening. Thank you Arthur, Mr, jewel tech himself, it’s been great today. Thank you everyone for tuning in. Check us out every other week on your favorite podcast platform. Have a great weekend everybody. Thanks guys.
Arthur Phidd: Bye now.
Brian Weinstein: Thank you.