It is so great to get an opportunity to have some kind of one-on-one time with you, Paul, your, your talk yesterday was so, um, it just resonated with me. Wow, That's so kind of you. Thank you. And, um, so one thing I wanted to ask you about, so I've been in retail most of my career, and I have kind of seen the focus on digital transformation be really about front end.

Mm-hmm. Mm-hmm. How do you iterate fast? How do you meet your customer where they're at?

And, and one thing that I think often happens, two things. One, supply chain gets left behind and leaders often think they know what the problems are and the solutions. So I would love for you to share a story that, you know, you and I had a chance to talk a little bit about around that dynamic with warehouse management solution and how that played out. And some of the, I would say, uh, innovative ways of working that you introduced to solve the problem differently.

Um, it's a, a, a great observation, and I, I do think, and, and Gene has commented on this, right? He, um, when he first started to try to find me, and I was happy that we found each other, um, he assumed that a lot of, uh, retail innovation, particularly at the Home Depot at the time came from, from e-comm or, or digital. Um, and I, I had the really good fortune. Um, I had stepped away from retail for, um, six or seven years.

I had basically grown totally weary of, of all of the issues of dealing with real product. And I got lucky that my reentry to retail, uh, was at the tail end of Frank Blake's turnaround of the Home Depot. And I, I think the other population that often gets left behind in these, um, digital transformations are frontline associates. And the, um, the reason it was super fortunate for me at the Home Depot is the, the culture of the place that, that Frank had just succeeded at restoring, uh, is actually driven on a mantra of take care of your frontline associates.

They'll take care of the customers and the rest will take care of itself. And it was against that backdrop, um, that a, uh, a very, you know, a very rational, uh, collection of people had concluded. The Home Depot stores had gotten really hard to operate. Some of them had had at the time, this is 2015, um, doing 120 plus million dollars worth of business.

And, um, you can imagine the receiving intensity and the movement of product from overhead racks down to where the customer can buy it, um, was challenging. And, um, but the trick was even people who believed and had grown up in and were very, um, you know, they lived taking care of the frontline associate, they then made that kind of inappropriate leap into the well, but I know what we should do to make their lives better. And, um, I've, I now have really good sense of when, oh, you know, danger will Robinson, um, how do you know mm-hmm. If you haven't actually talked to them.

Um, but the situation, um, was, was pretty interesting. We were doing really well. We needed to continue to do better, and that led a bunch of headquarters folks to conclude we need a, a whole new system for running Home Depot stores and their big warehouses. And so the obvious solution is go find a commercial warehouse management system and implement it in 2200 Home Depot stores.

And, um, and it will make the business more effective. Uh, it will help with better inventory management, which leads to better economic results that a retailer, um, and it will solve a whole collection of problems. You can only imagine. I'm sitting here, I've, I've done this many times in my career at this point.

Um, every warehouse management system implementation that I've been in or around, even in warehouses, it's really hard and usually has a lot of failures along the way. Mm-hmm. And, and they're often, um, you know, horrific failures. They incapacitate operations.

Um, and I, I just couldn't even mentally imagine doing this at the scale of, uh, of 2200 stores. Uh, and at the same time, it is a very rational approach on paper presented to people who don't know anything about the realities of doing one of these things. Sounds great. And, uh, lots of third parties want to win this contract.

Mm-hmm. So there's lots of support for selling this idea. Um, fortunately we had had enough success, um, at Home Depot at the time with a few other interventions of essentially honoring that frontline associate by going to them and by not relying on traditional intermediaries, not building systems that the headquarters folks wanted to then inflict on those folks in the front lines. And I leveraged that background to say, Hey, let's at least try to find, um, a simpler intervention that might work for the front lines and actually solve some of our problems.

We had a really, we had, we had attracted a bunch of fantastic people, um, but through total serendipity, um, I, I got the agreement from my counterparts in store operations to we're gonna deploy a team into the store for six weeks to try and, you know, figure something out about what might we do that could address this and isn't of the scale and disruption of warehouse management system. And the designer on that team was a, a woman named Ush Balka, just a, a not only a spectacular designer technically, but super skilled at, um, through observation and interactions with folks getting to the heart of what's the real initial intervention here. And, uh, she got an appointment with me about two weeks into this intervention. She comes into my office all excited and says, uh, Paul, I've got the answer.

And I said, no, we've been at this for, for like less than two weeks. Um, the store operations team has like a hundred page deck on all of the benefits of warehouse management system. How do you have the answer? And she says, just trust me.

And she puts down on my desk an eight and a half by 11 sheet of paper, and I said, you like you, you've gotta be, this is like a bad joke. And she turns it over. And, um, and, and I can almost immediately recognize what they've done. If you had walked into a Home Depot store in 2014, and you had looked up into the racks of products that are above the selling floor, you would've seen pallets of merchandise and you would've seen taped onto the shrink wrap around those pallets of merchandise an eight and a half by 11 sheet of paper.

And it would've had handwritten stuff on it. It would've had a couple handwritten SKU numbers and some quantities. Um, and it would largely be ineligible in illegible, right. You, you couldn't, unless you wrote it, you probably couldn't read.

And what Newin the team had discovered, they had been very systematic about this. They had gone to several dozen stores and they had done a classic two by two matrix. Right. They heard a lot of pain points, and they got a lot of insight into which ones would be most valuable when solved, uh, which ones would be least valuable, which ones would be easy, which ones would be hard.

This was far and away super easy and incredibly valuable. And, um, and what they did, and they had already, like, they had already implemented it before they told me that they had the answer. Um, because the store associates said, you know, if you just let us print these, then we could see them and we wouldn't have to get on the lift and go up and realize we'd read it wrong. Mm-hmm.

Um, and so that first app, it took like a day to write. It was like just key in a SKU number, in a quantity, and have us print a piece of paper. Wow. Didn't validate the SKU number, didn't do any sanity checking on the, um, on the, um, quantity.

Uh, but then what happens, and this was where the real magic was, uh, because the, to me, one of the failure modes of these systems that are inflicted on people or designed at the center and pushed out, um, people feel that they feel like someone else is forcing them to do something. The magic that happened here, and I've seen this many times, when you really get in this mode of having teams working with their direct end users, um, that quick shipment of this idea, which, which remarkably also got immediately embraced by a lot of stores without any formal rollout or training because it solved a real problem. Then the same population, the folks who had to do the actual work, they started asking, could you validate the SKU number? Could you do some sanity checking on the quantity?

Could you put a barcode on that eight and a half by 11 sheet of paper so we could scan it? And then when we scan it, could you give us a little bit of more information? And, and then eventually over the course of, I think this transpired over about two months, um, we meaning the store folks who actually have to do the work, now that you've got a barcode on that, uh, and, and anyone who's got any familiarity with the problem that we're talking about knows that we have now constructed a pallet license plate. And, uh, now that, you know, we have the barcode, we would like to scan that barcode and then scan the location that we put the pallet into.

And all of a sudden we have a warehouse slot locator system with no training program, no forced adoption, no compliance measures. As a matter of fact, it was 100% pull from the people who have to do the work. And the total cost was about 110,000 bucks. Wow.

And, um, home Depot, thankfully, is a very results oriented culture. Not, uh, you know, I, my credibility comes from implementing my ideas. So a lot of the store operations folks said, my God, this is, you know, this solves a meaningful fraction of what we thought we were gonna get from this whole full blown warehouse management system. So it's, and, um, I, I never thought it was gonna work.

Yeah. Right? Like, how do you, how do you possibly in a, um, lean startup, incremental, build a few features, learn some things, build some more, how do you compete against the commercial warehouse management system that already has all of the bells and whistles that that is feature complete? Um, but I think the way you do that is you go and figure out there's nobody who's doing the actual work who wants those thousand features.

Yep. Yep. I think too, it's connected to something you said yesterday about stop the discussions that aren't about working software. Yes.

I love that. Because every warehouse management vendor in the world can send you beautiful marketing materials and presentations on how they'll solve everything for you. Yep. I often also wonder, back to your point about, about all these bells and whistles, what's really even being used.

Yes. Sometimes the overwhelming like adoption of some of those packages is another reason why it doesn't usually lead to success. And so, uh, there's just so much good in that story around it's working software. Yes.

The eight and a half by 11 piece of paper, you could argue wasn't software yet. Yeah. But over time, and just building that, and then I would imagine, I mean, as someone who at one point was an engineer, the, uh, the like meaningful work Yes. That comes from that.

And the culture component of I'm building something that matters. And the, um, the, the most virtuous emotional feedback loop, I think is when, um, teams that are building tools and teams that are using those tools are in this, uh, positive loop of team that's using the tool, by using the tool. 'cause this is another part of the, you know, Fred Brooks observed this in like the early 1970s. Right.

The interesting thing about technology is the details of the problem don't really reveal themselves until we have fielded a candidate solution. And so the people doing the work get a new tool that makes them better able to provide some insight about, okay, this is the tweak now, now that I, now that I'm using it, and we've all had this experience as human beings, right? You think about buying something, but it's when you have it that you realize, oh, it works this way. Yeah.

Um, and, but the other thing that I don't think gets talked about a lot is this is the real payoff of we in technology have decided to do things differently. The real payoff is those folks then say, oh, wait a minute. I shared this with you yesterday and it's in the software when I turned things on this morning. And they feel honored.

They feel that this really is a difference. And they've heard so many pitches in the past decades about how some new package or some new thing is gonna be better, but it never delivered. So they're, they're sitting there and, and many folks in Home Depot stores were deep skeptics. They basically had concluded they needed to figure out how to run the store without any, you know, technology improvements.

And when they turn around and say, why haven't you been doing it this way all the time? Mm-hmm. Then you realize, yeah, this actually is much more straightforward. Yeah.

And so is that what happened? Were there other areas of the company that said, I wanna work like that? Yes, partly, and again, it was my good fortune to have kind of started this, what I think is like the third phase of my career, to have started at a culture that was so results focused. And so in service of the frontline associates and the customers that, that very few people were actually wrapped up in, uh, well, what about my ideas?

People were wrapped up in, are we getting results? Is the frontline happy? So that started to pervade everything. And we were doing a lot of things at the time.

The company was, um, very aggressively going after the contractor, which is a very different engagement model than the consumer, but done at, at Home Depot's case done in the same box. And there was this, um, this place in the store called the Pro Desk, and they really never had any tools. And when you would go into a pro desk, they would have lots of like handwritten notes and some of the better salespeople there. They'd have, you know, little clientele, descriptions of their customers, but essentially invisible to the rest of the company.

And I, I forget who, who came up with the idea of, Hey, let's build a, essentially a clientele tool. It was called my Pro Desk. But, um, the, the good news about that one is no one actually knew what should be in it. Um, it was kind of a new thing.

Um, and this iterative approach was hugely conducive to essentially listening to these folks, um, many of whom, you know, these individuals in, uh, retail operation responsible for driving one, two, $3 million of, of sales to contractors. And building the kind of relationship that gets a contractor to more frequently come back mm-hmm. To a particular destination. And, um, the combination of, um, talented merchants who wanted greater insight and folks in the store who wanted to do a better job then led to features like, Hey, you're checking out this customer, they're a roofing professional.

Here's a little pie chart of what all of the roofing professionals across all of the Home Depot are buying from the Home Depot. And here's the compare of this roofer. And the average roofer is buying a lot more, um, roofing, finishing materials, nails, tar, other things. This customer's buying less.

That's an entree to a very powerful question because we know they're not different from every other roofer. So they're buying that other stuff elsewhere. Mm-hmm. And the folks at that pro desk who had been doing all this stuff on paper, they just ate this up.

And, and you can imagine, and, and I think anyone listening to this who's been in technology, these are not hard applications. Yeah. Right. This is, there's no machine learning in here.

This is, this is database and display. So this is the stuff that you can and should be able to make, uh, daily or multiple times, daily changes to. Um, and, and thankfully by the time we got around to that, we had done all the work to have a platform where we could ship immediately and to have the ability to change software overnight. And we had broken the cycle of you have to do training before you do new features.

Um, so, so it was, we Yes. You long answer to your short question, this dynamic did then start to pervade lots of other departments. Yeah. Um, that comment that you made at the end about, you know, uh, like we, in some of the companies I've been in, it's like the off the floor training Yes.

Putting in a new release, we gotta pull everybody off the floor. And I thought, how might we design our, um, in this case, um, associate experience to be just like our consumer experience? Yes. We don't tell our consumers you gotta go through a two week training program to adopt our feature set.

Yes. And it's such, it's just such a, a mindset shift for organizations, I think to say. Um, and I think those kinds of comparisons, particularly in, in, in, and I, um, thought I, I felt this was even more the case pre pandemic. It may still be the case now.

I can't, I can't quite figure out some things that are going on right now with the, with the, um, American workforce. But it was clear then, this is 2014, 2015, that, um, people, young people, people in their twenties were going to work in these big enterprises that, that you've been in, that I've been in, they've grown up with really easy tools on their phone. And I would start telling people, Hey, we're bringing them into an environment and we're giving them tools that require training, are super hard to use, and some of our competitors are delivering much easier tools. We're gonna lose the war for talent.

Yes. And that was something that people could understand. Um, I, I do think though, it's, it's amazing sometimes the simp what seems to us like the simplest thing needs saying more than you might imagine. Um, so I started beating the drum of, um, we want the day one associate to be productive.

Mm-hmm. And they do important work on their first day. Yeah. Um, and the interesting thing is, we required every new hire at the Home Depot, even headquarters hires to spend, uh, a few days.

My, my first week at Home Depot was working in a store. And so then you have a visceral connection to, oh, some of these apps are not easy Yes. To use it also, I, I learned something really fascinating. When any organization does a pattern of behavior over a long period of time, it has really interesting effects that if you're not looking, you might not notice.

We started, um, this more incremental delivery, immediate feedback, um, you know, rapid change. But we started to encounter or take the software out into some stores and, uh, folks would refuse to use it. And when asked, they'd say, well, we haven't been trained on it yet. Ah.

And, and, and the team had to persevere and say that it's kind of the point we're actually trying to break that cycle. Um, but there had been a population that they, they had, we had trained them that they needed to be trained Yeah. Before they could use software. Oh my gosh.

That is so fascinating. Yeah. It's all human challenges. Correct.

It's, It's, Um, so I'd like to ask you, 'cause this is, I mean, this is the first time that you've spoken at this event. Yes. Um, what would you say to this audience if you were to kind of leave people with a message that you'd love for them to absorb and maybe take back to their organizations? I, um, I we're, you and I are sitting here in the middle of the event, and so I am, um, I am not, you know, I've not fully considered everything I've taken and, and, and one of the reasons that, um, I'm kind of still in processing mode is I've met a lot of people that I've never met before.

'cause it is my first time at this conference. And, you know, there tend to be these populations. Um, there are so many fabulous people here. So that's, that's, that's not a surprise.

Um, and the, you know, I think if you did a graph of the content of the talks box, there's a, a non-trivial amount about what you and I have been talking about, but it's still a minority. There's still, um, a real, you know, more than half of the content and the calories are around very nuts and bolts things. Um, they're, they're interesting nuts and bolts things, right. The, you know, the audit stuff and the, um, how to build a better pipeline and, and, and tactics.

Um, but they're, they're tactics. Mm-hmm. And I, when I see the titles of people here and, and the subjects that seem to light them up more, my, um, my commentary would be, and, and I think, I think Gene is thinking this too, because he's kind of pushed me to, to kind of find a way to say more about this is climbing that ladder of meaning climb. We, we've got a lot of stuff going on here that I would say if Maslow did a hierarchy of, you know, technology in an org, the pipeline and the platform and, uh, audit, they're like at the food and shelter mm-hmm.

Level. And at the top of Maslow's hierarchy at the self-actualization is, um, some of the things you and I have talked about, are you really creating an environment where people can have daily or intra daily meaning where the technology, uh, folks are doing real work and it, and they're getting feedback from the folks that they're doing that work on behalf of. And that feedback, even if it says you didn't get this quite right, it's so immediate and it's so actionable. And so I I I, I'm hopeful that the state of play of those things on these lower levels of Maslow's hierarchy is actually better than it has ever been.

Mm-hmm. And, and might not actually need so much attention Yeah. From the people who are coming to this conference. And if the, I I think the path of leadership is always to figure out how to stop doing work that should be done by someone else on your team.

Mm-hmm. And I guess that would be, um, I, I, I didn't really know this was where I was going with this, but I think my advice here would be for use this conference to figure out how to do your boss's job. Ah. Um, and to do that, you're gonna have to have some more people step up and do the job you are currently doing.

Yeah. I think that's a really good, uh, message because I think many of us don't always think about those as they're really learning moments for others. You're building a, almost like a version of a succession plan. Yes.

And if you don't give people those experiences, they won't be ready. Yeah. Yeah. Um, well, I have really enjoyed getting to meet you and spend time with you.

And I hope everyone watches your talk. I know I will be sharing it with a lot of folks. Um, and thank you for being here. My pleasure.

Thank you for the time on this. I too have enjoyed getting to know you and I'm looking forward to, to more of that. Yeah, Thanks. All right.

Thanks.