Lessons from Smurfit Kappa: Meeting Your Customer’s True Needs
Your customers are not just the end consumer, your customers are all around you. They are the employees who help grow the business and the partners you work with to create sustainable products.
And if you aren’t meeting all of your customer’s true needs, you’re in for some rough times.
We speak with John Gossett, US Sales Director at Smurfit Kappa, in this episode to learn more about how he adopted a customer service mindset and the impact it’s had on his ability to enable others to make and sustain change.
Join us as we discuss:
- Which customers you may be overlooking
- How to identify your customers’ true needs
- Enabling your customers to accomplish their goals
Experiencing disruption on the frontline? We can help. Request a demo today.
Check out the full episode below:
John Gossett: We are a firm believer in what we call Better Planet Packaging which means designing our solutions in such a way that we improve the recyclability, and yet, still maintain the customer’s needs of delivering products to the marketplace in saleable, usable condition.
Josh Santo: Welcome to the latest episode of Conquering Chaos. Today we’re talking about what it means to meet your customer’s true needs, who your customers are, and spoiler alert, it’s not just the people or companies buying your products. We’ll be diving into a few examples of common needs in manufacturing today. Of course, it is not just me talking. We have a great guest from an impressive company lined up to share firsthand insights into meeting your customer’s true needs. Our next guest is a veteran of the US Army who spent more than 25 years in manufacturing.
When you look at the impressive names on his resume, you’ll notice a theme. We’ve got International Paper, Georgia-Pacific, and Smurfit Kappa just to name a few. He’s an expert in the corrugated packaging industry and has held various roles in sales, quality, management, and corporate positions. In fact, he was recently named the Sales Manager of the Year for 2020 and 2021 due to his team’s achievements leading growth in new business for his companies including the petroleum-derived products market, where he is actually a member of the Long Range Planning Committee for the Petroleum Packaging Council.
Currently serving as the US sales director for Smurfit Kappa and here today to talk to us about meeting your customer’s true needs, please welcome to the show, John Gossett. John, thanks so much for being here today.
John: I’m glad to be here. Looking forward to talking over these topics because they’re very important to me as well as to folks in the industry. I do appreciate the opportunity, Josh.
Josh: Happy to have you here. Just so the folks listening to the show know, we’ve had a number of technical difficulties in connecting. You need to know that a lot of work went in just in getting together and getting this episode delivered to you today. John, we start every single show with the same question and I’d like to pose this question to you. What’s your day-to-day look like in your role?
John: I wish I could describe a typical day because I don’t really have a lot of those. Generally, I’m traveling. We have facilities in Texas, Arizona, and California. I’m working with the sales managers, the sales teams, and the lead teams at those various facilities to approach our customer base in the best way possible. Those are three fairly unique marketplaces and we have various challenges in each of those.
A typical day involves more telephone calls than I like to keep track of and way more emails. I don’t even want to think about how many emails pile up when I take a day off. We recently took a longer vacation and a lot of emails showed up because I hadn’t unplugged in quite some time. That was interesting to see. Mainly, it’s about working with the lead teams and the managers to ensure that we’re providing the best solution to our customers.
Josh: On the road pretty frequently, in constant contact. It sounds like, John, that you’re someone who’s in a little bit of demand. What would you say to that?
John: I would say yes.
Josh: You heard it here, everyone. John is in demand. [chuckles] Trying to get ahold of him– Really glad he’s here to talk with us. I want to start by really digging into this idea of your customer’s true needs. You hear this all the time, that the customer is always right, but I often find myself wondering, is that even true? Sometimes I wonder, does it even need to be true? Then when you think about the idea of a customer, do we even know who our customers really are? These are some of the fascinating topics that we’ll be exploring today and we’re also going to discuss real-life examples and applications of these concepts. John, my first question to you, is the customer always right?
John: Actually, I’ve gone through this a lot in my career. It’s not about the customer always being right, but the customer is always the customer. I would differentiate it a little bit and say that what we’re talking about is not necessarily whether they’re right or wrong, but have we effectively described the situation and the communication that’s necessary? If you say that the customer is always right, that means you’re always telling them, yes, and that’s not something that we operate under because you can’t always deliver what the customer is requesting.
That’s a time when, personally, I call it a constructive no. I say, no, and I say, here’s what we can do. Here are the challenges that we have with your initial request. Here’s a timeline we can meet. In doing that, you don’t just shut the customer down, but you show them what you can do, what your capabilities are in this particular situation, and the things that you want to follow up on. The customer’s always the customer and that’s the most critical part to me.
If you’re a yes person to the customer, whoever that customer is, you’re going to let somebody down, and quite honestly, that betrays their trust and it damages your credibility. I would prefer to confront the harder situations up front and say no when I have to say no and look for a solution that’s a win-win for both parties.
Josh: If you don’t, then they’re not going to be your customer anymore and then the question of whether or not they are right is moot because they’re not your customer.
John: Exactly. I couldn’t say that even better because you only get so many opportunities to deliver a solution before somebody goes. Every time they say something, they say they’re going to do things and then they fail to deliver and you develop a reputation for being what I just honestly would say is untruthful. I prefer to tell people upfront, be truthful. Give them all the information and you allow them to make an informed decision that way.
Josh: The customer is always the customer and really reframing the question to not be focused on is someone right or wrong, but really what I’m picking up from you, John, is really understanding what is the need that is being expressed by the customer. What I would argue is that the customer is always right about the fact that there’s a need, a fact that there’s an opportunity, or a problem that they need help with or that they’re trying to solve. They’re not necessarily right in the ways in which they might be trying to go about solving that.
That gets to your point, John, of sometimes you have to tell people no. Sometimes you have to challenge them to think about a particular concept a different way. They’re still right about the fact that they have a need or something to explore further, and it really becomes that mutual relationship that establishes that credibility, and ultimately, keeps the customer a customer.
That’s how I’ve often thought about it. I know when I think of customers, so often I’m thinking of the end users of my company’s products. That’s not always the case. I think a lot of other people think that way too but, John, would you say that customers are just the people who are buying our products, or are there other customers that we should be mindful of?
John: It’s funny you say that. I just literally had a situation in one of our facilities where I brought the lead team, everyone together, and we talked about this exact topic because everything we do in our daily lives, especially in the packaging business, we’re all in customer service. It doesn’t matter if you’re in a different department that doesn’t necessarily say customer service, but you are working to satisfy your customer, which may be the next process.
If you’re in manufacturing, it could be going from one conversion operation to another and from a conversion operation to shipping, and from shipping to the actual end user. It could go to a middle stop there in the process. Those people are your customers. Each of us every day is working not just in our little block but in the entire world that involves all of our customers, both internal, external as well as our partners, because you have customers that get things that they need from, for instance, human resources here at the facility, they’re working closely with them.
Their customers are all internal so that actually never goes outside but that customer– Then the person working here who receives a product or a service from our human resources group, they’re now being either satisfied or it’s a service failure, and then you go into recovery mode. The main thing is that we’re constantly thinking about the fact we’re trying to deliver a good product or a service to our next customer. It’s internal, it’s external, and it’s our partners.
Josh: I love how you broke that down and I couldn’t agree more. I hadn’t thought about this prior to talking with John about it, but obviously, our customers in Smurfit Kappa’s case, your customers’ customers are a key stakeholder but it’s not just the end users, the end recipients of the product or the service, it’s the internal people that rely on you in order to even get to that end result.
I love how you broke it down of, you’ve got within a particular process or workflow you are assigned work and activities, and at some point, you have to hand it off to the next individual in the chain and that individual who is relying on you to deliver it at a particular time, at a particular level of quality, that’s your customer that you have to support. Overall, I just love that approach, that idea of we are all in customer service and your customers are all around you.
John: It’s an ongoing challenge for all of us and one of the things that I really enjoy about Smurfit Kappa is we’re daily being tasked with supporting our internal customers, as well as the external customers and it really starts to– You look for the true needs internally as well as externally. We value each individual for who they are, equality, all for one. It’s a theme that we have running through our organization and that allows people to then be focused more so on the fact that I’m part of Smurfit Kappa. We have certain goals that we want to accomplish for our own internal partners, as well as for our external partners.
That’s an exciting thing for me every day is it does change the traditional mindset of, we’re just making a product, a box in this case, or a packaging solution and we’re sending it out there into the world and not following up on it and not backing it up.
Josh: I think that’s a great message from, not just a culture perspective, but imbuing ownership between people like I own the service that I’m providing to my customers who are all around me. The idea of servant leadership very much resonates with me and that’s essentially what you’re describing is leading through service. Now, you mentioned this idea of the customer’s true need. What does it mean to get to a customer’s true need?
John: Internally, you got to work on recruitment and retention, which is a challenge in this marketplace, everybody knows that. I don’t think there’s anybody out there that is not experiencing personnel shortages and, or personnel turnover because there are certain positions and certain industries that are in such high demand, individuals and if you have a valuable individual, your number one priority is to figure out how to maintain them on your team because to find that replacement is so much more difficult. It actually is very similar to the difficulties of when you have your own customer base, you want to maintain those people.
There’s numbers quoted that seven times more of your businesses comes from your existing accounts. It’s that much harder to get new business to bring that business in and I think the same rule applies with recruitment and retention in your business because you’re trying to bring partners on that are going to really be focused on what the organization’s after, and then you get them trained up, and they begin to really see the goals and know the steps that they’re going to make.
That’s the challenge. You have to identify and you got to do it quickly, much more quickly, I think than we used to in the past. You could wait 60, 90 days and say, oh, yes, they’re starting to catch on. Now, you need to know that within weeks almost and that’s a hard thing. It requires managers and leaders being a lot more attentive to their newer employees, making sure they’re providing them with the right support, that they’re meeting their financial aspirations.
Everyone’s different. You can’t always assume somebody’s aspirations and where they want to be but to sustain those and achieve those goals, you have to be communicating. It’s got to be one on ones. You got to have a system where you do get information back to the customer and that customer, in this case, is one of your resources that you’re working with and that then quite like you said, Josh, when you think about that, it’s the same thing when you go introduce it to an actual customer out in the field.
You have to work with them to find their specific goal, their specific needs because if somebody comes to us and, for instance, says, “We would like you to quote this package of boxes and we just want to get your numbers.” Quite honestly, that’s not who we are and what we do. We will work with prospects and customers themselves, but our goal is to find a solution that makes their business more successful, and to do that it’s the same thing as working on the inside, trying to recruit people through the various sources. You’re looking to create a solution that provides success and not just a blip and then it’s over.
You want long-term success, whether it’s in recruitment, retaining our own people, the sustainability goals of both internally for Smurfit Kappa, and externally with our customer base and for everybody, quite honestly, I’m very upfront, I like our people to be upfront. We’re in a profit-based business and the customers we’re working with are as well. There’s a give and take there. It can’t be that somebody’s running that on negative, and then the customer is reaping all the benefits because long term, we will go away as a supplier if that’s the situation.
Josh: Borrowing from some of the perspectives that you shared earlier, in this case, [chuckles] we’re going to get a little meta here, but our customers were also the customers of our customers because just like you described, there’s a bit of a reliance on that relationship there. It is a two-way street. It is not a one-way street. It is a partnership. We’re there to help support you, and by supporting you, you support us and that, again, really reemphasize that idea of constant customer service throughout all these different levels across different types of customers but it can be a little bit of a brain break to think about how you are your customer’s customer.
I really appreciated that breakdown that you gave because I want to interpret it in a way that I was hearing from what you were saying. When you gave the example of recruiting and retaining workers, one of the things you really focused in on is understanding what’s it going to take to retain this individual worker. I think, in that kind of example, really breaks down one of the most effective approaches there is in identifying some of the true needs and that’s getting to the why.
The root cause analysis, performing the five whys, whatever you want to call it, whatever method you want to use, it’s getting down to that core concept of why. Why is this a problem? Why is this an opportunity that you want to pursue? Why, why, why, and when you get there, then John, to your point, you can start to really be a partner and provide the best service possible by saying, here’s how we can help you accomplish this goal.
John: It’s interesting you phrase it that way because one of our requirements for us to be successful is that we understand what our internal and external customers want. With employees, quite often you need to know we had an opportunity open up in our facilities and there was a person in the operation side who we considered rising star to transfer into a different role but we had to go to them and make sure that we understood what their actual goal was.
Did they want to stay in, for instance, operation in a manufacturing track or would they be willing to jump over into our side, as some people would call us the dark side, the sales organization and it works out for the company either way because the main thing is, you still have a person who’s in a role that they’re good at, they enjoy doing, and they have goals they want to achieve within that but at the same time, you’ve gone to them, you’ve shown them that you think they have the flexibility and the value to be considered for a completely different role.
It’s happened to me a couple of times in my career where I was in a role that I was perfectly happy in and somebody came to me and said, “Hey, would you be interested in doing this?” Flashback to when I did customer service excellence years ago on a nationwide basis.
It was completely different to anything I’d done previously, to be responsible for almost 30 facilities nationwide and working with their customer service departments and their lead teams but I didn’t even know I wanted that opportunity until they presented it to me, which then opened my eyes to the fact that career path doesn’t have to be linear, it can have multiple branches, starts and stops, brief sessions where you’re not doing as much of the same level of things, and sometimes those remind you of just how much you’ve enjoyed doing what you’re doing.
Josh: There’s certainly an ebb and flow. I’m curious, that opportunity that you described of working in customer service excellence, how did that opportunity present itself? Was this a manager that approached you, a colleague, a mentor? Talk to us about who was providing that excellent customer service to you.
John: The company’s time was very focused on servicing the customer, being recognized in the marketplace as the best customer-focused organization. I brought a few things to the table that I think helped them see that I do have that customer focus and it is something that I always want us to be focused on. It was a division HR major who came to me and said, “We have this opportunity. We’ve done some research with the organization. We would like to take this and we would work together.”
I got the opportunity to work with him and several other folks throughout the division, that the goal was to develop, at that point, a new line of progression for the customer service field across the country. To do that, it was quite exciting because we were able to take people from a more clerical approach to being almost internal sales managers and give them the authorization to make decisions more so than just being data entry.
It was a very exciting time, and quite honestly, it came with higher expectations, but also higher compensation potential. It was very exciting. I am a little bit of a forceful personality. When I get into a room and start working on something, I get very engaged. My wife sometimes wants me to dial it back a little because I’ll get engaged even at home on a project and she’s like, “No, we’re not doing a work project. This is a home project.” She’s much better at them than me so I don’t ever argue that point, but I do recognize that sometimes my enthusiasm will fill up a room to a level that maybe everybody’s not comfortable with.
It was an exciting time to have somebody come and do that. I’ve had it happen a couple of different times. Some of the moves are great. Sometimes you tried and the corporation changes their goals. Your individual goals change so you never really know when you step into one of those roles if it’s going to be the thing you wanted to be doing or not. You’ve got to just be willing to step off that plank at the end.
Josh: Absolutely. Now, how did your time in the customer service excellence side of things, how did that shape some of the thoughts and perspectives you’ve shared so far today?
John: It’s interesting. It allowed me, number one, to travel all over the country. I think I’ll paraphrase it roughly, but Samuel Clemens, Mark Twain once said that travel is the enemy of ignorance or something to that extent. I had had some travels in my life, but not to the fact that I had been to the various regions of the country and also been exposed to so many different manufacturing challenges.
It was an exciting time for me to go into these different communities around the country and not just learn about the people, but learn about their environments there. Who we are as a country almost because you’re learning about things that– I grew up in the deep south but now I’ve spent as much time outside of the deep south as I have in it. It’s been exciting to me to be exposed to the various regions, the different ways people think about foods and things they drink, and entertainment activities. Everything is a little different and that really then gives you tremendous knowledge as you go into a specific situation.
You’re sitting in a box plant or a facility that’s challenged in a certain way. You’ve probably seen something similar to it in another plane. Is it identical? No, because everything we do within corrugated is a job shopping mentality. Everything we do is different. Each order can be different. Each print can be different. Everything can change with every order, even with a customer that you’ve been doing business with for a number of years.
That job shopping mentality is common to most box plants because we’re all running various orders, multiple orders a day, hundreds, if not thousands, sometimes of orders a day throughout the division to various different customers and everything can be changed at any point in time. That’s exciting in and of itself. Then traveling to all those locations, you develop people that you work with, that you develop bonds with because you immediately identify that they have the same goals as you, which is improving the world of customers, internal and external, and for people to be successful.
That’s an exciting thing to find those people and then you end up with a network of people and you start talking about what a small world it is because you’re in a discussion with someone and you worked with somebody that they knew for the last 20 years. It’s an exciting thing to build that environment where you always have somebody you can call at a various company and get a referral or you say if you want to know how somebody does something well, you have people that you can reach out to.
Josh: It sounds like based on these experiences of seeing how people in similar positions, but different locations are able to accomplish similar goals or maybe even take it even further. Then using that information, those observations, and taking that with you to whomever your customer is to share the insight that you gained through that observation or that new perspective that you shared. That really starts to highlight again that idea of customer service being everywhere.
Now, in an earlier question, you mentioned a couple of key ideas that are very prominent in the industry, specifically sustainability and financial goals. I’d like to talk a little bit about both of those. Now, sustainability, in particular, and ESG, these are very, very hot topics these days. We actually had Dave McLain from Printpack on and he shared with us how Printpack is anticipating their own customer’s needs with their sustainable product initiatives.
We also had a group called Corporate Citizenship on who spoke about how manufacturers can operationalize sustainability instead of treating it as a separate goal. Consumers are demanding companies produce sustainable product workers. We talked about recruiting and retention. Workers, especially younger workers, are flocking to companies that prioritize sustainability, and just in general, the whole wide world depends on it. It’s a pretty big deal.
John, I’d love for you to talk to us about how Smurfit Kappa is making a sustainable impact.
John: The basis of what we do primarily throughout the company, Europe, South America, Central America, here in the US, we are mostly a recycled producer. We are always thinking of how it’s going to impact the planet. We are a firm believer in what we call Better Planet Packaging, which means designing our solutions in such a way that we improve the recyclability, and yet, still maintain the customer’s needs of delivering products to the marketplace in saleable, usable conditions.
We’re very focused on that from our headquarters in Ireland on through the entire organization. One of the things is that we have very aggressive commitments on our reduction of carbon emissions. That alone is a big thing, but the fact that we are 100% recycled through most of our organization., that’s a big deal for us because we think trees and corrugated are about as close as you can come to a continually renewable resource.
That’s exciting to me because I love to recycle all the products I can. Some things are more easily recycled than others and our goal is to make sure that we provide the best solution we can to improve that environmental protection and reduce our negative impact to the environment.
Josh: With those products, very much a focus on how can we not only meet and maybe exceed our customer’s expectations but how can we do it in such a way that we’re living up to one of our core beliefs, which is providing this or designing this product that is essentially optimized for recycling in order to make that more sustainable impact. In some of our conversations prior to recording, I learned that each plant has its own sustainability certifications. I’d love if you could tell us a little bit more about that.
John: Say again, that each plant has its own what? I broke up a little.
Josh: Sustainability certifications. I’ll restart the question. Let me just note the time really quick. Okay. In a previous conversation, you mentioned that each plant has its own sustainability certifications. Could you tell us a bit more about that?
John: All of our facilities are certified. Most of them are certified in various sustainable forestry initiative. There are different ways you can certify at plant level. There are different things that are then reviewed. One of the biggest challenges is a lot of our customers are being pushed by their end users to improve their sustainability score.
One of the quickest ways you can do that, obviously, is to go from using unrecyclable products to something like corrugated, it is recyclable because it helps reduce your footprint and it helps meet those requirements like you were talking about, of the generation of workers that are coming out right now. One of the critical things they’re talking about is the negative impacts of certain types of operations. We’re going to continue to look for those.
That’s a challenge when you go to the marketplace in lots of cases because people are just used to using– Pallets is an interesting situation. Of course, I know, everybody thinks, “Oh, wooden pallets, you can always just make more.” You can and you can’t. Lumber was tremendously in demand over the last couple of years, and because of that, prices for pallets went sky high.
There’s a lot of maintenance involved with them. They have to be repaired all the time. There are recovery operations that are very, very difficult to manage. It’s one of those things that people do it because it’s easier. We’ll throw it on the pallet but can you figure out how not to use a pallet or can you figure out how to use a pallet that is more recyclable?
There are honeycomb pallets out there, multiple people make them, we do. They achieve a lot of the same things. It’s about addressing with the customer, can we find a solution that gets your product there in the condition that needs to be there but also has less impact? It changes the mindset. Everybody thinks, “We’ve always used pallets.” But why? We get to the end of the system, I’ve gone to places before and they say, “We use pallets and we try to reuse them but we have so many of them that get broken or damaged and, or that we just have to throw away for whatever reason.”
That alone jumps out at you as, “How much money did we spend?” When I say we, there’s the global we, to solve your packaging solution, just to throw a huge portion of it away and it doesn’t even get recycled. Those are changes that have to be considered all the way through the system. How are we getting it to the end user? Now, the loop is closed when you think about bringing it back and put it back in the system again. That’s the part that changes a lot of people’s minds because they’re like, “I sent a pallet out. The product was on the pallet. It was all good.” But it was, then somebody had to dispose of the pallet.
Josh: Like we talked about, that person who disposes the pallet is, in a way, your customer. It all keeps coming back together. That’s someone that you have to serve. It was such a great breakdown and a constant theme through that, that I feel like I was picking up on was the importance of change because what you’re describing is, “Something’s got to change.” You can’t accomplish these two goals without changing and not only that idea of change, but it’s really breaking down the status quo.
We do things this way. We’ve always done it this way, and then just like you asked, why? Why do we use a pallet? Why? I feel like if I were talking to someone and they were like, “Josh, I want to order a pallet.” We can roleplay with you, John, if I’m talking to you, John, and I’m like, “I want a pallet.” And you asked me, “Why?” I would be like, “John, just give me a pallet, man, just because that’s what I need.”
But it takes that openness, that willingness to really explore, have we been doing this the best way, or were we using what was available at the time in order to accomplish the goal? Is that method truly the best method or can we evolve it in order to accomplish these different goals? Now, a lot of what we talked about was really focused on the product side of things, the product that’s being developed in order to be delivered to the end customer. What kind of changes had to occur within the manufacturing operations side to support some of these sustainable efforts?
John: It’s interesting because when people are talking about sustainability and how it’s going to change their process, their process is set up, its run, they pick the product, they bring it down the line, they pack it, and maybe in the packing, they’re using packing materials that are usually non-recyclable, but they’re quick or they’re easy, or in some cases, they’re more readily available, and some cases, they are still cheaper than some of the others.
But then, like you said, the challenge then is to get them to recognize that final cost. Sometimes– You made a good point, the final cost is not even at the customer. The final cost is what it does to the environment as a whole. That’s when you have to have more people involved. You can’t just have a purchasing person whose job is the bottom number because if that’s all you have involved, they’re not even going to think about the fact that it impacts the environment negatively.
Going back to our pallet example, in some cases, the pallets themselves because they’re heavy, and because of what they’re made of, they have some inherent damage they can do to people’s hands. People bend over and pick them up wrong. A pallet is a lot heavier than people realize, especially some of the higher-grade pallets. You pick it up wrong, it’s bulky, it’s generally 40 by 48. You pick that thing up, that’s a lot of weight distributed in a poor way across an employee’s body.
You have to stop and think about, is this the best thing for me to be using because if that hurt employee, now, you’ve got the medical costs, but you’ve lost a resource. You’ve lost your person that was helping you accomplish servicing your customer.
Changing that mindset, making sure that you have people involved who are looking at a bigger part, sometimes that means you need to get the operations people involved, you need to get the logistics folks involved at the other end. Sometimes you literally have to work with the human resources group, I’m your customer because you start talking to them and you find out they had three back injuries last year from people picking up pallets. There’s a bigger picture than just that dollar at the bottom of the list. Is it important? Yes. But can it be the only decision that you make? No.
Josh: It sounds like one of the changes that really prevailed there was understanding the actual impact. It wasn’t just a cost, it wasn’t just a line item on a budget sheet, there was an impact that may not have been accounted for that certainly should be accounted for. It may be difficult to measure some of those pieces of the impacts, like you said in that example, having to reach out to the client’s HR team just to get those data points, not everyone’s willing to share data at this point in time, even though, spoiler alert, it will help everyone do a lot of these things better.
The more open we are with certain data types, sharing that, taking action, innovating together with it, we’re talking about really meeting some customer true needs there. I’m getting off-topic. Throughout that process, what were some of the challenges that were discovered, either on the Smurfit Kappa side or on your customer side, in transitioning to this sustainable product development?
John: I would say that one of the biggest challenges is to get the team involved. Quite often you have individuals who are in-sourcing your materials management, whichever field they’re particularly common at that time and their focus is one area, but we have to get them to then branch out and bring in the other players that are impacted by those decisions. That can be one of the most difficult things because a lot of time you run into individuals who either because they like holding the information and the knowledge and the power close to their vest, that creates a challenge in and of itself.
At the same time, the decisions they’re making don’t serve their organization even as a whole. In a particular case, we were designing a package and everybody told us, “Oh, that package is great. It’s an amazing package, we got it for X dollars.” What they didn’t account for was the fact that they weren’t even investigating and rolling into that cost structure, the quality complaints that were coming back to them.
They were not minimal quality complaints. It was in the millions of dollars a year for a company that was not a massive multi-billion dollar company, but they were paying these millions of dollars worth of quality claims because that package had been designed in such a way that it got the product to market but not always in a way that it need to be and there was no closed loop on that information. You were running up against making a “business decision” that was actually, if you turned around and went the other direction and came in from the back way and said, “Oh, my gosh. Look at all these quality complaints we’re paying.”
You want to take care of customers. When they have a problem, you want to make it right for them, but if you’re making it right to the fact that now, had you upfront paid X plus one, instead of X minus one, you would have avoided all that in the first place. The negative connotations of the damage, the cost of processing returns, the credits that you’re writing, and unsatisfied customers.
It all kind of loops back the same thing. It’s one of the things that I preach all the time is that it all gets back to customer service and keeping those customers happy with how you’re satisfying their issues, solving their problems for them, taking their worries off their desks, and making their lives easier.
Josh: One of the things I’m hearing from you in that is it’s important to never, I should say, lose sight of the goal, the actual goal. The metric is not the goal. The metric is a leading indicator or sometimes a lagging indicator, however technical you want to get to it. The metric itself is not the goal. What you described, the metric of can I reduce this, let’s say it’s the cost. The cost of the raw materials, thus reducing cost of goods sold, that kind of thing.
It makes sense that from a measurement perspective, you’re trying to optimize there, but to the point that you called out, in your efforts, you actually got away from the goal, even though it was in line with the metrics that are there to serve as an indicator of whether you’re on the right track to the goal. You cannot put metrics on a pedestal. You have to keep your eyes on the goal. You bring up another good point. Another theme that’s popped up throughout our conversation today is change. Like we’ve talked about, change is difficult. It is resisted.
In previous episodes of this podcast, we’ve talked to a few different people who have highlighted how culture is a key component of any change initiative. Another extremely important data point is the business case. Really understanding what is the impact that can be had because that is what can ultimately serve as a motivator for getting people on board with the change that’s being proposed. John, I’d love for you to define for us a business case. I know that I often think of it as dollars spent versus dollars gained. Is that an accurate depiction or is there more to it?
John: As I said earlier, most of us are profit-based organizations so there’s got to be that give and take. At the same time, if you’re only dealing with, as we said, the sourcing individuals who are really just focused on a specific number, our budget’s $1 billion, pick $1 billion, it’s a big number. There are people out there that spend way more than that on packaging. You think about it, their budget’s $1 billion. If they get it in for $900 million, what a great deal. They saved 10%. If that’s just that number and then like we said, the quality guy turns around and comes back in and the quality professional says, “Yes, except we increased claims by a factor of 50%.”
Did we accomplish our goal? No, we didn’t. That’s one of the harder challenges because when you think about– A lot of people think about the plain box. It’s just a simple corrugated design that’s going to get your product to the market. Some of them are not so simple. It’s boring. Nothing fancy pops off of it. We can do some really nice prints and things like that and some boxes have really unique aspects, but it’s still corny. It’s still a process for getting the products to the market.
If you don’t have their manufacturing group, if you don’t have their logistics group, you don’t have their quality people sitting around the table, then we’re really short selling the whole the in the system. You have to get those people involved and they have to also be willing to share some numbers because those numbers we talked about previously, the folks in the sourcing side did not know the extent of the numbers that were coming back to them. We recently had an opportunity to work with a customer. We took some business, we bid it a certain way, we put our product in there and it’s not performing.
We’re looking at it, we’re going, “We know we design this well enough to work.” We go to a site visit, and while we’re there, we’re looking at, we’re watching the machinery. The machinery itself– Machines only know the one thing with a box. They make it the way that they’ve been told to make it. Boxes have a little bit of variation to them. No two boxes are the same. There’s going to be a slight movement here or there, but in this case, their equipment was in disrepair. I’m looking at it, and I’m not an equipment specialist, but I’ve seen a lot of equipment run and I could tell that there were a lot of issues with this equipment.
The workers there were mad, they were blaming the box. It’s all about the box. It’s all about the box. I’m like, in this case when was the last time we did a maintenance project on your machine? We do them once a year or so. I think we missed the last one. We keep pushing it back because we’ve been so busy. It’s the same case of everybody has been so busy, especially through the pandemic, machinery has been run, people have been run, you name it, we’ve exceeded the required maintenance windows for a lot of our people, for a lot of our equipment.
In this case, they had bypassed their maintenance. We started asking that question. They were like, yes, but that’s not the problem. It’s still your box. We’re like, let’s find out. We had to go back up through the chain, talk to the people, the operation side, the person side, get everybody together and they realized the machinery needs some upgrading, some updating, just some TLC to a certain extent. When they did those things, the problems with boxes became very minimal. It was a pure case of where somebody’s mindset like you said, everybody’s change resistant.
I just want to come in and do my thing. Go home. Your box isn’t working so it’s got to be your box because the predecessor’s box, their box worked fine. It worked fine because you’ve been running it for a long time and you were used to that. That was your comfort zone. Now, we’ve brought you a different box that is more environmentally friendly. We’ll help your sustainability scores and still deliver your product to the market in the shape that you need it for your customers. You have to take care of your equipment.
It was an exciting result for us to walk back in there and watch our product run great because they were running things at the correct temperatures. They had changed some wheels that drive the gears. All of a sudden boxes run great. It’s like, we’ve sent 40 truckloads in a row and had two issues. That’s amazing if you can do that with boxes. That’s an exciting thing. It’s about changing people’s mindset, getting them to recognize that just because the way they’ve done it for the last five years works, doesn’t mean it’s the best solution.
Josh: You hear that all the time with that phrase if it ain’t broke, don’t fix it. I get why people say that. I think we all do. If something’s working fine, leave it alone. Ultimately, you have to understand that just because it’s working fine doesn’t mean it can’t work better. Part of what’s being described here is like, it may not be broke but the goal may have changed. That’s the point that you made earlier. As time goes on, things are going to change. Consumer demand is going to change. Social issues are going to change. There does require that adaptation.
Now, what I love about the example you provided, John, was there’s an option there. There’s an option that’s not really aligned with our whole your customers are everywhere provide excellent customer service theme of today. There’s an option to say, our product is fine. Our product is doing exactly what you need it to. The problem is on your side, vaya con Dios, go with God. That’s all on you to fix. I love how you didn’t stop there. It turned into let’s really examine this. Why is this a problem? We know that the product is high quality and it’s exactly what it needs to be.
I’d be willing to bet that if pressed, your company would find ways of optimizing it if it weren’t optimized. You took it to really understanding, is it our product’s fault or is it something about the environment in which this product is being used, only to explore some bad habits had built up. Out of necessity, you have to make decisions and trade-offs all the time. No blame, no finger-pointing there, but just the reality of the situation because the machines haven’t been maintained well, that’s what’s causing the problem. It’s not that we broke a working process. It’s that we really revealed a hidden problem that was bound to even cause more problems as time went on.
I love how there was a bit of extreme ownership there in that story that you provided going above and beyond. I think that that’s really what highlights that idea of every single person in the chain. Our peers, our colleagues, our partners, our customers, those are all our customers. I think that that really highlights that example with that example that you provided. Now, you started talking about the idea of getting everyone’s buy-in. Because ultimately, that’s what a business case is for, is helping with the buy-in. In this case, again, you tie it to some of those emotional needs. Let’s get to the root cause of the problem that you’re experiencing so that we can help you get that.
Buy-in looks different at different levels. How have you helped other organizations get that buy-in? Let’s say, in this case, we’re transitioning to a particular new product that you have that’s different from what they’re used to. You mentioned a couple of examples like the pallets or even more recyclable materials. What are some different ways in which you’ve found help get buy-in?
John: It’s an interesting challenge and given over the last couple of years with the restrictions due to COVID, it made it more challenging. We did a lot more communication, obviously, we’re doing now or on via Zoom, via Teams trying to do things virtually. We were even doing virtual tours at our experience center in Dallas–Fort Worth, getting people to see the ideas that we have because you’re still trying to find those solutions for people.
It’s still a challenge to get everybody’s buy-in to be sure they understand what their goals need to be and what our goals need to be as well. It’s a challenge that we got to find a new solution to it each and every day, to a certain extent. You’re always trying to tell people and work with them on their challenges. To a certain extent, what we do, I use this example with people. I said, “You have to remember. What we do is we fold trees for a living because we’re literally, through the process of trees and recycled material, both we’re using wood to become paper, to become your box.
It will only do what we can tell it to do and then how you treat it through your system. That’s the ownership part that’s sometimes hard for them to understand as well is you can’t expect it to work like some of the precision items that are made in the automotive industry or the aerospace industry. The tolerances on things that are so small. Then we talk about boxes and we’re talking about tolerances in 16ths and 8ths of an inch.
Because into scientists and people that are technicians that sounds like a massive amount. My statement is always like, “We are folding trees,” because that’s truly what we’re doing. To do that, they have to change their mindset to work with us. We have to change ours to understand that some people have an expectation and we have to help them understand the limitations of what we’re providing.
It’s got tremendous benefit to the world because of its recyclability. We can use it over and over and it’s lightweight but performs with X amount of strength. Ours is recycled. We have to ensure that from the get-go we examine how our recycled facility, our recycled fiber, and our recycled products are going to perform differently in certain environments. Because of that, everybody’s got to know upfront.
Years ago we were having, what’s interesting, we were having failures at a facility that I was. We designed that box well and we know their process. What are we missing? It was previous company and we knew it went into freezers. We’re like, “We know it goes into freezers. We’ve accounted for that. We’ve calculated that in all of our solutions.” We kept following it through their plant system and there was an area they’d never taken us.
We walked up and literally the gentleman us the boxes packed out were getting ready to go into the freezer. He was spraying them down with water. [chukles] Water’s not a friend to corrugated packaging. We were like, “Nobody ever told us you hose down the boxes before you put them in the freezer.
That’s a game changer. [chuckles] We need a little time to think this through. It turns out they did not have to do that. Ultimately, they were able to stop doing that. The solution we provided still work, but that was one of the cases where we thought we had this one nailed in all the ways possible. Who knew that they were going to hose down boxes?
I had a case before where somebody said, “Your solution’s not working. We’re like, “What do you mean?” They said, “When the drivers throw it, sometimes the product comes out.” We’re like, “What do you mean they throw it?” [chuckles] They’re throwing sleeves of product. Nowhere in our description of the logistics channel had you said they throw the product because that’s not in our handling description. We didn’t put that in there and give it a penalty factor of seven for the fact they’re throwing the product around.
You got to make sure you keep asking questions and keep asking why. Why did they throw it? They have to do that to load the trucks faster. Let’s see, can we find something where they’re not throwing the product with it in the box? It’s always a challenge and that’s a case of mindset change as well. As I said, knowing the customer’s process every step all the way to the end.
Josh: We covered a lot of great topics today during our conversation together. I can’t emphasize enough how much it resonates with me to hear about the focus on customer service and how your customers are all around you. Your customers are your employees, your customers are your end customers and their end customers. Your customers are the partners of which you’re working with in order to achieve the goal of delivering a great sustainable product in such a way that you can sustain the business. A lot of great topics here. John, I’d love to hear. How could our listeners connect with you to continue the conversation?
John: Easiest way is, I’m available via email and it’s just my name, John.email@example.com. I get a lot of emails. It’s interesting since I took this new role. I get a lot of emails that I have no clue how the person got my name or my information. Some of them are valid emails, people that need our assistance and some of them are looking to sell me something.
I understand that everybody’s out there trying to sell things. That’s the quickest way to get a response from me is via email because I do try to respond to all those and my actual phone number is on the website, 210-5056846. I check the messages quite frequently, make sure that I haven’t missed a call from a customer or I’ll prospect somebody looking for a solution.
We, of course, we’re primarily based in three states right now, Texas, Arizona, and California. Manufacturers in those regions, some of them heard of us, some of them have not. It’s an opportunity for us to continue to grow and help individuals find a sustainable, more environmentally friendly solution for their packaging, and at the same time, benefit them and benefit the world at the same time.
We regularly host people at our plants for visits but I mentioned our experience center in Dallas–Fort Worth area. It’s a tremendous opportunity to go in and see not only what designs that we have provided to them previously, but it’s a great location for brainstorming. Gives you the opportunity to actually see, we have a store visualizer that allows you to see what your product is going to look in its packaging in a retail or a wholesale environment.
Really gives a great opportunity for people to see that. There are even more advanced metrics with the eye tracking heat spots for the marketing side. A lot of different ways that we work with people. The technical side of course is there as well. We have people that come in and literally start with an idea and they can leave with a mockup by the end of the day. It’s a great opportunity to brainstorm and partner with people and provide a solution that really benefits both parties.
Josh: Great. John, thank you so much for joining us today.
John: It’s been great to be here and I appreciate it, Josh. Thank you so much.
Josh: That’s the show. Thank you so, so much for joining us today. Conquering Chaos is brought to you by Parsable. If you’re a fan of these conversations, subscribe to the show and leave us a rating on Apple Podcasts. Just tap the number of stars you think the show deserves. As always, feel free to share what’s top of mind for you and who you think we should talk to next. Until then, talk soon. Take care, stay safe, and bye-bye.Listen to learn a few lessons on meeting your customer's true needs from John Gossett.