Opening the Window to Data: Pella’s Journey - Creating Value with Information

Editor's Notes

• #3: Founded in 1925 as Rolscreen Company Rolscreen® was first product Started making windows in 1937 Headquartered in Pella, Iowa since 1926 Pella brand honors the City Population 10,000 Home to Central College Company renamed Pella Corporation in 1992 Aligns better with our brand
• #5: The PDSN – Pella Direct Sales Network – is how we go to market 70 Pella Sales & Service branch locations across North America Black dots are independent distributors Red dots are corporate subsidiaries Each branch has multiple showrooms in their territory for customer convenience – 450 in total
• #6: Now, let me take you a bit deeper into our IT strategy. I joined the company about 4 ½ years ago and I have responsibility for IT as well as Finance, supply chain, logistics, legal, etc. I have had oversight of IT in previous organizations, but that experience was much different than the situation I entered with Pella. In my previous life, my experience was about keeping the lights on a set of un-integrated, home grown legacy systems that were cobbled together. It always seemed like our infrastructure was totally dependent on that one remaining COBAL programmer with a history of heart disease. Needless to say, it wasn’t a strategic organization. The situation at Pella was much different. The team here had developed a very clear strategy of where they wanted to take the organization’s IT capabilities. That strategy was summarized in this circle. This is the 360 degree view of the customer. And the IT team was purposeful in enabling capability at every point on this continuum – starting really at the manufacturing end (6 o’clock) but building out the capability throughout the rest of the circle through Oracle’s e-business suite. The business had an intuitive sense of this growing capability but the capability was co-mingled with a lot of noise, a lack of understanding of the IT backbone that was being built, and a historical view of IT over an 85 year history as an adjunct to our objectives and strategy, not part of our strategy. Through the work of this team, we have been able to successfully integrate this strategy within the overall corporate strategy, as you saw on the previous slide. This is powerful – working in IT at Pella means that you are a critical corner-stone of the organization’s strategy. Now our challenge is to keep up with demand – demands from our customers, demands from the marketplace, and demands from an increasingly digital, mobilized world. We are well positioned – this backbone creates a launching point to be able to meet those needs, and the rest of the presentation will address that.
• #7: This Diagram depicts the 7 phases of the customer buying process and the emotional mindset of the customer during each of these phases. As we have implemented and enhanced our applications we have tried to use this diagram to ground us on how we are effecting the experience of the customer. What can we provide from a systems standpoint that can improve the experience of the customer when buying windows and doors from pella
• #11: Ensure customer gets what they need.
• #13: The Great Divide in Business. We explore those who lead, but also those who lag. A Great divide between those gaining success, and those at risk of falling behind Analytics is the key driver for those winners on the right side of the great divide.
• #18: Equates to approximately 15000 more jobs won. Average job size was ?? $6000 $90,000,000
• #23: Must Define Metrics You Want When Defining Process Use Information Captured as Part of Normal Process Does Measurement Map Effects When Components Change Identify Key Components of Metric Map Effects When Components Change
• #24: One of the first questions you should ask as you look at any company – what is their strategy and how do they plan to be successful. Here is a card we developed to succinctly summarize our strategy – let me walk you through it. We are creating a better view every day, with a focus on customer experience, using a diversified business model, leveraging our strategic competitive advantages. We use this card with our internal and external stakeholders, with our customers and suppliers. As I mentioned, our team also carries our strategy around – it’s not locked in a drawer, it’s hanging around my neck. Am I worried that our competition will see this – no, because they can read the card, but they will never, ever be able to create the strategic competitive advantages that we as a business have. Let me walk you through this card: Our focus on customer experience starts with a process-driven, knowledgeable team. We have innovated and high-quality products and services – we have a history of quality and innovation. We use advanced marketing science to enhance our customer experience – and you will hear a great deal about that over the next day. We use a diversified business model – we have focused go to market strategies in are targeted segments and channels. We also have a full line of products and services for residential and commercial markets –this diversification allowed us to be successful in an environment where one of our segments, single family new housing, dropped over 75% from peak to trough. Finally, we collectively leverage our strategic competitive advantages. The first is our customer-direct business model – we have a dedicated distribution system that we fully partner with to own and nurture our customers. we have the number 1 brand in our industry – second to none. And we have integrated IT capabilities (BUILD) that allow us to maintain that 360 degree view of our customer. Oracle has been our partner throughout this journey, and with this partnership, we have built a capability that we believe uniquely positions us in our industry. You will hear about that capability throughout the presentations today. Finally, our operational excellence, lean culture, and our people-focused culture, all give us a suite of advantages that we believe none of our competitors could ever replicate. These strategies, working in combination, deliver a strategic competitive advantage. What are strategic competitive advantages: “An organization’s core capabilities are those activities that, when performed at the highest level, enable the organization to bring its where-to-play and how-to-win choices to life….. Porter noted that powerful sustainable competitive advantage is unlikely to arise from any one capability but rather from a set of capabilities that both fit with one another and actually reinforce one another.” – Lafley and Martin It is critical that you understand the strategic competitive advantages of any company you are interested in working at – it defines how they will be successful, and how they will win in the marketplace. Let me discuss why our IT group provides you a unique opportunity. First, this company has great people. You will not find a place with nicer, more dedicated folks. Second, we are a unique IT organization. We have the capabilities of a much bigger organization and offer opportunities across the spectrum, but we are small enough so that you are able to get a complete view of our business. We have massive complexity – 8 Octillion buildable combinations, but are small enough that you have all the key leaders managing this business right here in one room. Third, you will not find many organizations that are on the cutting edge of technology – both in our applications and our infrastructure. We are unique for our industry, and we stand out in most industries. You will see a lot more of that coming up. Finally, you have the opportunity to gain experience in a truly unique American manufacturing success story. This company was started in a garage, grown by a young entrepreneur, nurtured with succeeding generations of family ownership, and uniquely focused on ensuring the wellbeing of all its stakeholders. These are the types of companies that build communities, support team members, and sustain this great country. As you evaluate places to work over your careers, it is very important to look deeply into the heart and soul of the organization – if you do that here at Pella, you will be very inspired. We have been around for 89 years and plan to be around for at least another 89!. That gives us all an opportunity to be part of something truly special. This company has survived the great depression, a world war, many oil crises and even the economic policies of Jimmy Carter. It’s easy for companies to talk about their advantages when things are going well – but the real barometer of a company is how it operates when times get tough. The folks in this room just helped us manage one of the toughest housing market depressions in our history. Through this most recent housing depression, we continued to invest in our IT capabilities, our people and this great company. We are now coming out of this darkness a stronger, leaner, more focused organization. We are poised for tremendous success – and over the past 2 years, we have started to see that success.