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Change Management in B2B eCommerce

Digitizing B2B: The B2B eCommerce Podcast

EPISODE 3

Change Management in B2B eCommerce with Justin King

Full Transcript

Jary Carter: Welcome to Digitizing B2B with Jary Carter. I’m here today with the one, the only, Justin King, the president of B2X Partners. Justin, welcome to the podcast today. I’m really excited to talk to you. I’ve been really particularly looking forward to this one, just given you know who you are in the industry and what you are doing a for the B2B eCommerce world right now. So, welcome Justin. Happy to have you.

Justin King: Very much appreciate it. And ditto, I think what Oro and you are doing in the market right now and this world of B2B eCommerce for distributors and manufacturers is pretty cool. So, I’m looking forward to this conversation.

Jary Carter: Yeah, great. Well, I am too. We’re talking today and you and I batted around a couple of topics and I’m the one that I think you rightly wanted to settle on is change management and managing change for companies that are going through digital transformation and B2B eCommerce. Now, this is such an important topic, but before we get to it, Justin, tell us about you, your background, how did you get to this spot?

Justin King: Yeah. It’s an interesting story. So, I was part of the original team that built a company called Brulant that eventually we were acquired by Rosetta. And then as Rosetta, we got acquired by Publicis. We were one of the largest kind of IBM WebSphere commerce shops in the US, really focused on retail eCommerce and I was leading the B2B practice. This is back in like 2006, 2007. And I was watching all these speakers around the world. I love going to conferences and listening to speakers. And I love speaking and I really thought I was good at speaking- or I thought of as good at speaking and I really wanted to be a speaker. So, I looked at these guys and said, how’d these guys become speakers? And as I reverse engineered them, I realize that all of them became experts at some kind of topic.

Justin King: And they took that topic, became experts. They started blogging on that topic, back in 2006, 2007 and they use that to kind of build their audience, leveraging the speaking and their speaking leveraging back into their company. As I reverse engineered that, I thought, man, that’s exactly what I want to do and I was kind of at this intersection of manufacturers and distributors and eCommerce, although we weren’t doing a whole lot of eCommerce, we were doing more of just websites and more brochure wear for these guys.

Justin King: I looked at my expertise and said that’s what I want to do. I wanna be a speaker, but man, I’ve got one big problem that is, I’m not an expert at anything like these guys are. So, I took these two loves of kind of supply chain and ERP systems and then eCommerce and I melded them together and I started probably one of the first ever blogs on the Internet related to eCommerce and B2B companies and I called that ecommerceandb2b.com- because I’m a clever person.

Jary Carter: (Laughing) Like the name of my first podcast Digitizing B2B with Jary.

Justin King: Right. We should let some more creative people into our mix. So, ecommerceandb2b.com, the brilliant URL that I picked that was available and I started writing on it. As I started writing on it, I was actually working with manufacturers and distributors. We just weren’t doing any eCommerce. In fact, most of them were saying they just didn’t have … that eCommerce wasn’t a thing for them, and I just kept working with them and started writing and I started actually creating a point of view and the point of view actually started to make sense.

Justin King: I started actually thinking through the same problems that my customers were thinking through, even though they weren’t doing anything about it yet. And I started actually come up with a decent point of view about how this whole B2B commerce thing was gonna shape up. In fact, back in 2007, I set it for the first time and it’s used all the time now is that the difference between B2B and B2C is that, in B2B, the people that are coming to our websites are not there shopping for shoes. They don’t come to our website and say, “Oh, that looks so cute. I’m gonna buy it.” No. They’re there because it’s their job to be there, they have to be on our websites.

Justin King: So, if it’s their job to be there, then the customer experience isn’t about helping someone find something in a shopping center, is about helping buyers just do their job. And if we help them do their job, these customers will come back and if they come back, we know they’re going to spend more. And that’s why I created that first. I mean, I think back in 2007, 2008 was when I coined that. Well, so what’s fascinating about that is, um, for five years I wrote on my blog. From 2006 to 2011, 2012 I wrote on my blog and literally nobody came to my website.

Justin King: Five years, I woke up from 5:30 AM, I wrote from 5:30 AM to 7:00. Nobody came to my website. Oh man, I’m exaggerating. I mean, like my mom and my dad, they came…. I remember- Do you know how disappointing it is to look at real-time analytics and you’re like, there are four people on my website and then see Akron, Ohio, Akron, Ohio, Akron, Ohio.

Jary Carter: (Laughter) It’s all from your hometown.

Justin King: I’m exaggerating a little bit, but really on this whole idea of eCommerce in B2B companies and distribution and manufacturing had hit ground. And so, I eventually left Rosetta after we were bought by Publicis and I went to Endeca. Endeca, it really is the one that invented onsite search and navigation, which is a huge topic in B2B and they were bringing Hybris to North America and they needed someone with B2B chops to be an evangelist for this. And so, I created a Hybris’s go-to-market strategy for B2B and we sold some massive accounts.

Justin King: And then Grainger went live on there … they publicly went live with their website and all of a sudden, everybody in the industry started typing into Google “B2B eCommerce”. And lo and behold, the only blog, the only website out there that was talking about B2B commerce was my site and it really got flooded. And it started a journey for me of really doubling down and niching down into this world of eCommerce, specifically inside of distribution, also a little bit with manufacturers and how to help them through this. We were eventually acquired by Oracle and I was the chief evangelist for eCommerce at Oracle Corporation where really I got to spend three years traveling across the world speaking to large audiences about eCommerce, hone my craft as a communicator, and also my expertise in this area of eCommerce, this niche area of eCommerce.

Justin King: It’s interesting, Jary, because it’s like this … when I actually think back to 2006 and then those times in 2010, 2011, where I would just give up and then try again, give up and try again, and then it blew up. And by the time I blew up, I actually had some thoughts and they might not be very good thoughts, but I have some thoughts and a perspective and a point of view on this area that at least I’m able to talk about with passion in situations like this.

Jary Carter: I’m just curious- when was that, that it kind of overnight blew up? What year was that?

Justin King: 2011. 2012 really. It wasn’t before then. That was right then. Yeah.

Jary Carter: Yeah. It does seem like that was when the world started talking about B2B commerce. Now, fast forward to 2019, six, seven years later, now you’ve become a real icon in the B2B eCommerce world. I’ve seen you speak at several conferences. I think you’re setting a lot of the conversation trends for what’s happening in this market. I’m hearing you talk now more recently about change management and how critical that is. This is a big topic. I see this as a big topic for you. I see it as a big topic for our customers. Why is this something that you’re focusing on right now?

Justin King: I think so many people in so many companies, they’re trying to do the right things, but the hardest thing for them to do is change. When you look at a traditional distributor or a traditional manufacturer, the things that made them good at what they are today- so everything that made them good at what they are today, they’re the exact same things that make them bad at innovation and digital. It’s the distributor’s innovation dilemma, if you’ve read that book. And so, the things that made them good, the people and the relationships and the sticky relationships they built over decades with their customers, that’s made them good. The processes they have in place, the supply chain they have in place, the systems, the ERP- they’ve helped create this distributor/manufacturer that is very good at what they do today and those same things are what make them bad at being able to innovate. I mean, anytime you try to innovate or introduce digital inside of a legacy organization, it’s just very painful. Because it means about moving from these processes and relationships and systems that we had in the past to something new. And whenever you’re introducing something new and change, it’s about people, and people are the hardest piece of this, right? Getting people on board…

Justin King: I always talk about how to get an organization, how to really get customers to use and start getting real revenue through a system. We call that customer adoption. And the biggest way to get customer adoption is to get internal adoption. Forget about customer adoption, you have to focus on your internal people. If you get your own internal people behind this initiative, then you’ll get customer adoption and yet, that remains the hardest thing to do.

Justin King: The hardest thing to do is to wrap digital, to wrap eCommerce into the DNA of a company. And when I talk about the DNA of a company, what I mean is like, when you have meetings, and not just executive meetings, but when you have meetings that are happening around your building, that people are actually bringing up the topic of digital or eCommerce. They’re saying, “Hey, how will this affect digital or eCommerce?” Or on the opposite, “How could eCommerce and digital affect what we’re talking about here today?” When you have people and meetings across your organization talking about digital and eCommerce that way, it start to seep its way into the DNA of your company. And when it’s in the DNA of the company, people start getting excited, they start talking about it. They’ll start evangelizing it, they’ll start selling it to the customers and yet, wrapping it into the DNA of a company is the hardest thing to do.

Justin King: And at the heart of that is, it’s change management. At the heart of change management is people. It’s about helping someone, an individual change from, hey, that’s not who we’re gonna be in the future. We’ve got to change to be this new type of company. This new type of company that’s gonna deal with the new challenges that are out there. By the way, the same challenges that every other company dealt with. Between 2005 and 2012, while my blog was miserably attended, right? Every retail company out there had to do the same thing and we’re just kind of seeing that wave seep into B2B. And we’re also seeing the people in B2B saying, I don’t know if I really believe this. I’ve actually heard people talk about the internet as if it’s a fad, as if it’s going away, as if it’s not something, a new way of doing business.

Justin King: It’s just not true. So, change management is the most incredible, is the biggest opportunity for any manufacturing company or distributor. It’s also the hardest thing anybody can do.

Jary Carter: Yeah, it’s interesting. I just interviewed Angela Spears who’s the VP of digital for Animal Supply Company. She talked about this. She talked about this is as … she viewed it as her number one job, which was sort of the change internally and the selling that she even still is constantly doing within the organization. The companies that are doing this successfully, how are they doing it? When you go into a company and see that successful change management is happening, what are the ingredients there?

Justin King: Well, I think there’s two kinds of change management. I’ll talk about the first type first, which is kind of a radical, and then I think you actually don’t mean as radical as I’m talking about, but the first type of change management is radical. Meaning, we can actually change. We can’t operate under the foundation that what we’ve built. So, let’s just take the ERP in general, right? I mean, the ERP puts such constraints on an organization because it dictates the process and flows of information and data and access and openness of having access to all that information. And yet, the ERP is the lifeblood of an organization. So, often, companies have to say, “Listen, we can’t actually innovate. We cannot actually innovate within the four walls of what we’ve built.

Justin King: The things that have made us successful today are not gonna make us successful in the future, so we’ve actually got to create something different. We’ve got to create a new Co. We’ve got to create a new department that’s outside the constraints that we’ve actually built into this company. Honestly, that’s the fastest way to do this. And then, take all the learnings from that. One of the guys that’s launched on your side Jary, Sean McDonald. He had to leave his dad’s company because his dad said, “People buy from people.” And so, a new company allows you to operate at those kind of constraints that you can actually give permission inside of a company for that to be created.

Justin King: Kellogg’s did it with their bare naked brand. Grainger’s done it with Gamut and a little bit with Zoro and there are others. Supply House is a plumbing outfit, where to really innovate and really embrace digital. Now, I think that was pretty radical. I don’t think most distributors have the appetite to do that or the foresight to do that. It’s something I coach registered on every day. I think real change management inside of an organization, it has to be aggressive. The heart of change management is just communication, right? It’s about how to communicate. And the biggest areas to start is you’ve got to wrap your team into this project from the onset. Your steering committee, your eCommerce steering committee, has to include the business. It cannot be made up of IT only. It has to include the business.

Justin King: And when I talk about the business, what I really mean is it’s got to include sales because salespeople are the most resistant to this change, mainly ’cause they believe that this change is actually going to affect them negatively, it’s gonna take money out of their pockets. So, we’ve got to bring those salespeople, actually sales people inside sales, sales leadership, we’ve got to get them involved in the project as early as possible. We have to start communicating the benefits. It has to be told to them seven times before they actually start to get it. It has to be done over months, not weeks and not days. Sometimes it has to be done over years.

Justin King: And we start communicating with them earlier and including their opinions as early as possible. Sales, inside sales, customer service, those are the three big ones that will affect the change. And then, identify those change agents inside the company. You’re going to have people inside your company that they’re just going to be firecrackers with new stuff, right? They’re the guys that are kind of talking about this outside of work. They’re the guys that get excited when you present something new in front of them and they’re like, “How can I help?”

Justin King: There’s going to be some people in sales that way. Some people in insights, customer service, IT, marketing, executive team. Bring them in, coach them and then send them off into the organization as evangelists for what you’re doing. The last part I’ll talk about Jary is compensation. Part of aligning an organization to a new change that you’re trying to roll out is aligning compensation. A compensation is affected by how the change is rolled out. So, one radical way I’ve joked about but not really. I mean it’s actually something that some companies have actually done is they tell salespeople, “Listen, you are now going to get paid 125% for every eCommerce order that comes from one of your customers.”

Justin King: What are we doing there? We’re emphasizing first, you’re gonna get paid. We know your’re coin operated. So, we’re gonna plug in the coins to get you motivated here. You’re gonna continue getting paid on those accounts. You’re not gonna lose those accounts to eCommerce. Those are gonna be your accounts. And by the way, now that you’re doing eCommerce orders, you can go sell and take and be true salespeople and do more consultative selling because you’re not taking orders.

Justin King: And then on the flip side, they say, and by the way, it’s not that just that you’re going to get paid 125% on eCommerce orders, we’re only paying you 40%, 60%, 70% on non-eCommerce orders. You wanna motivate change inside of an organization in 30 days, that’s how you do it. You will have every salesperson … well, they might be at their sales, their customers’ sites, actually keying in orders for the customer, but change is happening. Now, it’s a radical example, but the whole point of that is, align compensation to the change that you want to happen. Align management of the business objectives. I’ve watched CEO’s that have said, “Listen, my bonus is now predicated on how eCommerce is rolled out. I’m in this with you.” That’s some true leadership and leading that change along with the organization. And I think it’s one of the most powerful things you can do.

Jary Carter: It’s interesting you say this because I don’t think that what you’re saying is that radical. We’ve actually seen companies, customers do this, where they’ve over compensated on … and I love that you’re getting really tactical on this because I think these are the small things that actually drive huge behavior changes. I mean, compensation is, and I’m glad you addressed it, because compensation is such a huge motivator across an organization to indicate what you care about. It’s interesting that the companies that are doing this are actually seeing the quicker change results. And in long term will have much better profitability and sustainability because they’re actually sort of really driving behavior change across the organization. But I totally agree with you. I don’t think it’s that far-fetched of an idea.

Justin King: When I was at Oracle, Jary, when they wanted to emphasize or de-emphasize a product or put change in, I mean, they just align compensation. They did literally that. They would say 125%, you get paid 125% on this new product. If you sell that old product, you’re only getting 40%. There wasn’t a sales person at Oracle that would sell the 40%. It wasn’t worth their time anymore, right? It was radical change management. I think there’s something to learn from that. I think you’re absolutely right. I think it’s the fastest way to get change, but you got to think it through. You can’t have people truly gaming the system.

Jary Carter: No, you’re right.

Justin King: It’s got to be a mix of communication, leadership, compensation alignment, putting a leader… Here’s kind of the last one. I’ll tell you. When you have a leader, an eCommerce leader- the eCommerce leader doesn’t need to be a technical leader. They need to be an evangelist. Their job as a political job, right? So, it’s a job to bridge the gaps inside the company to help move the company from where it was to where it is. Digital and eCommerce, the roles there are all about change management. If you’re in eCommerce or you’re in digital inside of your organization, you are a change agent. That’s what you are. You’re an agent of change. You’re not a technologist. And if you can hire a leader that understands that and is going to be an evangelist inside of your organization and a broker within the organization and a relationship builder and understand the politics of the organization, those are the organizations in conjunction with the others that have a ton of success.

Jary Carter: Yeah. No, I agree with you. We hear a lot of our customers say, when we talk about sort of launching this new initiative, we hear a lot of our customers say, “Hey look, this is …” something along the lines of like, “For us, this is really … the success of this project we think is like 80% about business process in getting that right and 20% about the technology.” Because there’s enough sort of ready technology and there’s enough successful projects out there that that whole world, to a large degree, has been de-risked. But actually, getting the change and getting the business process optimized online, that’s where the risk of success or failure comes in.

Justin King: 100%.

Jary Carter: So much of the risk point I think is on this topic that you’re talking about.

Justin King: Absolutely. And the companies that don’t do it well, right? The companies that don’t do it well, they hire people. I’ve watched multiple distributors recently, hire abrasive technology people. They’re really good with the technology, but they don’t know how to build relationships internally, so they just tick everybody off instead of being that broker within the organization. The companies that just, actually this is one of my favorite analogies. The companies that treat the commerce as a little, the cute little eCommerce store, even when they call it a web store, it’s the cute little web store, and they pat it on its head every quarter, “Oh, you brought in $100,000.”

Justin King: We’re a $400 million company, right? Every quarter, “Congratulations.” When they set it up that way, when they call it a web store versus a strategic element inside their company, a strategic direction, an innovative direction inside their company, and then they hire in the same fashion when they bring on people that don’t know how to actually institute change inside of an organization, they are just destined to fail. It happens every single day. I mean, it’s really early. When we have the academy, it’s the one thing inside the academy that we teach the most is, this is how you talk to your executive team, this is how you broker relationships, this is how you communicate inside of your organization. It’s so important.

Jary Carter: Yeah, that’s really helpful. And from your work in the academy, you’re doing so much sort of consulting on this topic. Do you have a case study or a success story too and maybe some learnings? Or some learnings that you’re seeing across a handful of customers that you could share with our audience here? So many or people that are listening are going through this for the first time and they want to get it right and they’re earnest in trying to make it work. What have you seen the best company sort of do right?

Justin King: There’s a, or rather, they’re about like a $400 million plumbing and HVHC distributor. And when we walked into the organization, they were really struggling. They were only doing 1% to 2% online. And they asked us like, help us figure out what this is. I kind of diagnosed the problem. As we looked at the organization, it became very apparent, very quickly. As we interviewed them, especially internally that the guy that was running things was one of those, just abrasive technology types. He was a “no” man. If you’d go and ask him something, he would say no. It was like a recording. No, it can’t be done or no, we won’t do that. Or his way was better than your way.

Justin King: And he really turned so many people off inside of the organization. They’ve been doing eCommerce for about four years up until that point. The owner of this company came to me just a couple months ago and he said, “For four years we’ve been doing eCommerce, really not making any progress. I mean, seeing a couple upticks, but we’re still at 1% to 2% of revenue.” We came in and said, “You got to get rid of that guy and you’ve got to hire a guy that looks like this or a woman that looks like this. And they have to be a agent of change in an evangelist and a broker within the organization. They have to understand eCommerce, but they don’t have to be a technologist at heart.” And then we’ve laid out a plan and we codified as strategy.

Justin King: We codified a strategy that was a simple strategy. A strategy that everybody could understand. Not a techno babble strategy. It was actually a strategy that had steps and a strategy that the executive team first could understand. And once they understood it, they then got on board with it and they understood each other. They started talking the same language. They brought in a new eCommerce leader that talk the same language with them. They started using the same words with each other because of the strategy. Then they communicated their strategy out to the organization and then they align compensation with the strategy from the executive team down to the inside salesperson.

Justin King: He came to me, just a couple of months ago and said, “Four years, we were basically dead in the water and not moving anywhere. In nine months, we went from that to this is now part of our DNA.” Those are the words he used. This as part of our DNA. Meetings are happening and they’re talking about eCommerce and our digital strategy and the digital people are talking about other areas of our business. As we meet as an executive team, we know what questions to ask of our executive team. Before we didn’t even know what questions to ask. We didn’t even know like, what should I even ask you about the KPI? What even matters? I don’t even understand what those words mean. What does even KPI mean?

Justin King: Now, the CEOs, they would ask, “Hey, what’s this measurement this month? Hey, why is it so different from last month? I remember that. What’s changing? Hey, how are we gonna tweak this to really get this?” And we’re really seeing some momentum over here. And a tremendous growth. They’ll go from 1% of 10% this year in growth.

Jary Carter: Yeah, it’s interesting you talk about that. I’ve heard a lot of people talk about you this way in the … even when you present at these conferences, you really take the complexity and the technology of B2B eCommerce and you make it so simple. But, the CEO of the distributor in the Midwest or anywhere in the U.S. really sort of feels really comfortable with the strategy and comfortable with what’s happening. I think sometimes, us in the technology world, we get so wrapped up in our nomenclature and the words we use and how we talk about our product and technology that I think we get into this kind of bubble to where we almost can’t relate. I think this concept of making sure that the things we’re talking about, especially for somebody who’s driving change in an organization, that they really are speaking the language of the organization more than they’re speaking the language of the technology industry is so much more important. The words we use are really, really important for driving change.

Justin King: They are. Not massive moves inside of an organization, small moves. Knowing that you have to move the organization from A to B. When I use strategies, one of the first things, one of my goals is I want to move this organization from doing nothing to, hey, we got to hire a person and that person needs to look like this and we need to fund that person enough to get them started. That’s a huge change. And then, once they have that person, we need to move them from getting a person to, okay, what does it look like as part of the organization? This is no longer cute little web store, we’re going to move it to something strategic. And those small changes are more important than the big changes.

Justin King: One thing that I do pride myself on is, I do … I literally have pictures on my monitor here of- there’s a CEO, a CIO, and a CFO of a distributor that I have pictures on my monitor. When we wrote the book, I wrote the books to those individuals. I did not write this to an eCommerce person. I don’t to an eCommerce person. I’m talking to the owners, the executive teams of these guys. In this world, you just have to understand that you have to break things down and make things simpler, not more complex. And while you do get kind of job security by using words that nobody understands, it doesn’t actually help the organization.

Jary Carter: Yeah, and it doesn’t serve the organization because no one knows what you’re doing. Yeah, no, I totally agree. Justin, thank you for spending the time with me today. I want to wrap up and be conscientious of sort of our half hour together, but you’ve left the audience with a lot to think about. Tell us what you’re doing now. How can people find out more about what you’re doing and get plugged in to some of the tools that you offer?

Justin King: The coolest thing we’re doing right now is, we were more of an advisory firm that anything. We’re kind of like a mix of like Forrester plus an association really. So, we’re trying to provide these advisory services. And the place we do that the most is through our academy. It’s on the b2xpartners.com website. It’s a monthly membership. So, we have the best material up there. I just literally dropped in every wireframe. So, we’ve done quite a bit of user experience design for companies dropped. I just dropped in every wireframe we’ve ever created into the academy. I just dropped in all of the launch materials. So, every checklist that we use, SEO checklist, marketing checklists, I even dropped in two decks. It’s an internal training. So, how do you get intro adoption? I have actually a deck, a PowerPoint deck out there. There’s a sample for you.

Justin King: I have a customer training. Like, how do we train customers and get customers excited? I dropped that deck in there. Things that if you hired me, it would cost you $100,000 to do. I literally put them all in the academy. It’s an amazing place. We have a great community there as well. I have a ton of training videos, a ton about just change management, how to select technology, how to launch your site, how to optimize, all for B2B. We don’t talk about B2C at all. We don’t use the word shopper ever. We don’t use personalization or shopper ever in our materials, that tells you we’re B2B.

Jary Carter: Yeah, no I love it. Well, thank you so much. First of all, thanks for taking the time. I know you’re incredibly busy. Thanks for being with me today. Thanks for sharing your expertise and thanks for telling your audience where they can find out more. Justin, thank you so much for your time today. We really appreciate it.

Justin King: This is amazing. This is amazing. I look forward to seeing more where Oro goes as well in the future. I appreciate you having me on.

Jary Carter: All right, thanks Justin.

 

**Justin King has nearly 20 years of experience in B2B eCommerce and is the President of B2X Partners, an advisory firm for distributors and manufacturers. Check out our ecommerce podcast page for more episodes!**

Key Points
  • Justin King is the President of B2X Partners. He currently uses his expertise to consult and coach companies on how to build a successful eCommerce business.
  • Real change management begins at the heart of an organization, but internal adoption can be the toughest part.
  • Find out more about radical change management and whether it's effective in internal adoption for new business strategies.
  • Justin's advice: The fastest way to change is through a combination of communication, compensation alignment, and leadership.

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