This month we talk to Tom O’Brien, Chief Operating Officer of Tom’s of Maine. O’Brien joined Tom’s of Maine eight years ago to help the company achieve its next level of business success. Before coming to Tom’s of Maine, O’Brien spent 13 years–at Procter & Gamble, working his way up from an entry-level sales position to Director of Worldwide Strategic Planning and Marketing for all deodorants. At Tom’s of Maine, O’Brien has overseen annual growth rates of more than 20% and talks about the challenges of managing a growing company while maintaining the company’s values and vision.
Q. What is the biggest challenge facing Tom’s of Maine right now?
A: Managing growth. We’re growing very quickly and that is, in and of itself, a challenge. It seems every six to eight months the business has grown itself out of our previous infrastructure, organizational structure, and we have to redesign to keep up with the business.
Q. When you say you’re growing continually, you mean you’re growing both with sales and in terms of employees?
A: Yes. But not just sales and employees — it’s sales, profit, employees, and infrastructure changes — and as we grow, there’s a higher and higher demand on technology. Keeping up our technological platform as it relates to partnering with other customers is a key part of our growth challenge. We have an extensive EDI (Electronic Data Interchange) process that is staffed internally by a full-time IT person. Primarily we’ve been in reaction mode with EDI and so we react to customer requests downstream in the supply chain. But in the last few months we’ve moved to a more proactive position, controlling the linkages and relationships with our customers downstream, as well as move EDI upstream to our suppliers. We do a very good job with EDI; approximately 55- to 60-percent of our customer base is managed through EDI, ordering for the most part. Half of those customers are also paying us electronically — our accounts payable are all done electronically now, too. So keeping up with all this growth — and the demands behind the growth as we take on more customers, bigger customers — it demands a big change in how we partner.
Q. So does that mean that you have to hire people to manage your IT infrastructure and buy new equipment?
A: There are three different types of work that we do around IT that supports our growth. The first is process work. You have to be able to define your process. I’d say 50-percent of our IT work starts with process work, process definition. And of course, as we’re growing, the processes are changing, becoming more sophisticated.
Q. Wow! Do you think that it’s typical for a small manufacturer to spend so much time on process?
A: No. I think we over-invest relative to our competition. I bet you we spend two to three times as much on IT as our competition does. We have a full-time IT staff here. We have three full-time IT people here: one does eCommerce which is all the electronic data interchange downstream and then he’s also building our upstream eCommerce into supplier networks. We have another full-time employee who handles all our internal and external networking — for our employees and our partners. We have broker partners and customer partners who want access to our information. For instance if a customer wants to run an ad, they can come into our site and pull the ad right off it. Our third IT person runs a helpdesk and he just troubleshoots all day long for both internal and external customers.
We also use two full-time consultants. One does development work — he looks at what a business process is and then matches up the right software and hardware to bring technology to bear against that process. The second consultant — and our fifth IT person — does actual program writing, software development. We do this because a company our size wants to use technology to support our growth, but often times the ideal program is out of our reach and we have to write our own program. Enterprise solutions are too expensive for our taste right now.
The new thing the company has really learned a lot about is web-based solutions. Instead of going out and creating our own software, we’ve found some wonderful web-based software solution providers. They do all the hosting and you don’t have to buy any equipment — well, you might have to buy a server or upgrade a server on your end in order to take full advantage of the solution, but these providers do the hosting and build the solution. In fact our whole recruitment process is done through a web-based supplier. This has been a tremendous help to our company.
Q. How does that work?
A: Well, someone comes to our site at www.tomsofmaine.com and they fill out an application, submit a resume, and answer some personal interest questions. In the old days, all that used to come in hard copy, go down to our professional life department and they’d try to keep up with the fire, but we get 100 to 200 resumes a week. Now this information is sent to a web-based provider who screens it and loads it into a database so we can search through it to find an appropriate candidate.
That’s one example. Another one is our customer relationship database. Our system has become unwieldy, we’re using an internally developed system built on an Access database, and we’re considering moving all of this to an outside web-based provider. The customer database has expanded so greatly and trying to keep up with it is more than we can manage.
Q. So then will you have a piece of middleware that ties together your SCM and CRM systems and gives you a real-time view of what’s going on in the company?
A: That’s exactly what we’re doing. Our full-time programmer is tasked with building bridges between internal and external software. Or, even two pieces of software that are internal. For instance, we just put in a new warehouse management information system (MIS) but we worked very closely with our accounting software provider, Expandable, because they had to upgrade their software so it would work with our warehouse MIS system, but even then we still had some bridge work to do. And, we had to do some bridge work between the warehouse software and our reporting portals. We’ve found that there’s just no easy off-the-shelf solution.
Q. You’ve really built out your infrastructure.
A: Yes, as we’ve grown we’ve kept it up, we’ve had to. Two years ago we grew our sales organization from 6 sales people to 45 sales people and you have to have technology to manage that, to have the sales force highly connected. We needed to build the sales organization because that’s what’s fueling our growth, driving our sales. But you have to have technology in order for them to do their jobs successfully and the management staff needs it to benchmark and measure the effectiveness of the group.
Q. You’ve got access to real time information?
A: Yes. I can log in to my system right now and tell you what we’re running at our manufacturing facility right now, how many units a minute we’re running, information like that which is updated every 15 minutes.
Q. Does it tell you why I can’t get my favorite Tom’s of Maine Toothpaste at my grocery store?
A: (Laughs) Sure it can.
Q. So, what’s your greatest concern when implementing all this new technology?
A: Employee adoption of new technology is always my biggest concern. We can define the process really well now and we can find the right partners and solutions — whether it’s web-based or internally hosted software solutions — but employee adoption has a couple of issues. The training it takes — not just upfront but on-going — so that folks will utilize the technology correctly is a challenge particularly for small companies because we tend to train up-front but don’t do any on-going training. If people get frustrated and don’t use the software correctly then all our investment is for naught. The more I look at our IT investment, it’s the implementation and on-going training and support around that technology that causes concern. We always underestimate the support, too.
Q. Do you work with a local VAR or reseller to help you implement and support your technology or do you rely solely on your internal IT staff?
A: Solely on the internal IT staff. In fact, they handle all our purchasing of desktops, notebooks, servers, plus software development and support. It’s amazing, but we tend to replace things such as laptops much more frequently than other companies. For instance, we don’t go more than 18 months without replacing or upgrading laptops. We’re going through a major server upgrade right now so we can develop our own web-based network –migrating out of shared access files into a web-based environment with Microsoft Sharepoint. In order to do that we have to upgrade our servers. It’s a huge upgrade that we’ve been planning for three years. When we’re done, everything will be in one location, you’ll have access to the latest files, never have to wonder if you’ve got the most current information.
Q. Will this improve customer service and productivity?
A: Dramatically. A lot of the stuff on our servers is PPT material that takes up a lot of capacity and we’re setting this change up so that salespeople, for instance, don’t have to download big files to their laptops, they can just log in to the server here and run a presentation or do their work. And they can log in from anywhere. Again, we really believe you can’t grow without technology. Customers demand it, your employees demand it. We have people come to Tom’s of Maine from other companies and they say, “I can’t believe I’m getting a new laptop. I can’t believe you have these systems.” They’re just amazed at how much we invest in IT.
About Tom’s of Maine
Tom’s of Maine has always been a family-owned company. The company was founded in 1970 by Tom and Kate Chappell and sales have grown impressively. Through it all the company’s family orientation has endured. The company is still the kind of place where people know each other, where people notice the new faces in the crowd and can take a moment to welcome them to the community.