Talking Innovation with Stanley Black & Decker CEO, Jim Loree

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Jim Loree started his career as an analyst in the Financial Management Training program at General Electric. Today he runs one of the world’s biggest tool manufacturers that is investing heavily in technology and innovation.

Founded in 1843 by Frederick Stanley, Stanley Black & Decker has been making tools for over 175 years. What was once a purveyor of manufacturer bolts, hinges and other hardware is today a $13 billion dollar company leading the way in manufacturing innovation. 

Since taking over the company in 2016, Jim Loree has been at the forefront of innovation at Stanley. In 2019 the company opened an Advanced Manufacturing Center of Excellence which aims to be a manufacturing innovation hub in Hartford, Connecticut where the company is headquartered.  Under Jim’s leadership, Stanley has made strategic investments in advanced analytics as well as digital and innovation accelerators to meet the demands of Industry 4.0. As a result, the company that was once a manufacturer of bolts has grown into a global leader in industrial solutions and security in addition to its traditional business of making tools for the builders of the world.   

This interview has been condensed and edited for clarity.

With Industry 4.0, there’s this convergence between manufacturing and technology that Stanley is at the forefront of. What are you expecting from your technology leaders at Stanley?

There’s a keen awareness of both the threat of not [investing in technology innovation] and the opportunity it will unlock by doing so. It’s a nice combination if we get it right. If we don’t do it right and we let time pass us by, we’re going to lose our competitiveness.

We have over a hundred plants and an organization called the manufactory which is comprised of subject matter experts in Industry 4.0. Left to their own devices, they were not able to get the job done because the infrastructure in the plants for IT was not sufficient to operate and protect the integrity of the systems.  So we started with something very foundational, which is a rewiring and re-rigging the IT infrastructure for all plants where we’re implementing industry 4.0.

I see it as a team approach where we have subject matter experts that are outside of IT working hand in hand with the IT leads to make sure that the systems that we put in are functional and operative.

What keeps you up at night with regards to technology?

The pervasiveness of a cyber threat and the persistence of the threats, plus the fact that the whole field is evolving so quickly. The stakes are obviously very high, up to and including business interruption that lead to catastrophic results and risks. We take cyber very seriously.

A Gardner study noted that an organization’s refusal to address complexity in the business process, such as setting unrealistic goals and lack of accountability, are main reasons technology efforts either completely fail or have budget overruns. In your experience what do you think is a leading cause for why technology doesn’t deliver as expected?

As a company that has done over 130 acquisitions, we are the poster child for complexity.  We have roughly in the area between 60 and 70 enterprise systems in the company that have been rationalized down from well over a 100 just over 2 years ago. Our issues were not the failures of IT projects but rather the fact that we spend an inordinate amount of our time and money on keeping the business running and therefore are facing trying to be proactive from an IT perspective.

In order to address this issue, there has to be an over investment in IT for a period of time. The cloud is incredibly helpful when it comes to rationalizing enterprise systems. We’re moving more quickly now to rationalize into the cloud than any time before. I think technology is going to make it easier as it evolves.

As CEO, what is the convincing argument you are looking to hear when deciding whether to make a large technology investment, especially one that hasn’t been unproven?

In my entire career I’ve noted that lots of times people tend to underestimate the benefits that comes from IT projects. A good accountable financial system and management system will ultimately hold [people] accountable to delivering the results. Therefore, they don’t want to over commit.

The systems for determining where the value comes from on a project are not all that great. I think it’s really important to have honest, candid and realistic quantification of benefits. I think we would spend more money on IT if it were possible to have more clarity around what the actual benefits work.

People tend to stop on the benefit counting at the point where it’s enough to justify the system on a ROI basis. As a result, a lot of companies shortchange IT investment.

Leaders tend to see IT as a cost center versus an enabler of the business. What are your thoughts?

Corporations are at a crossroads right now because technology is advancing so quickly. Every business process, every product, every function, every business model seems to be digitally enabled and needs to be enabled yesterday. It really affects everything. In order to enable these processes digitally it requires the talent to do it and requires the investment. This goes beyond IT. It’s pretty much the entire organization of 62,000 people need to become digitally proficient.

We’re entering a new era. The CEOs and C level people who don’t understand that this is going on right now are going to get blindsided because the traditional approach to just having the IT department being a vanguard of technology is no longer a viable model.

What is a recent effort that has really forced you to be innovative and creative?

Going back to the Industry 4.0 implementation approach and taking the idea that Stanley could create a center with an ecosystem of partners around it. We have about 18 or 20 ecosystem partners for Industry 4.0 that include Microsoft, Cisco, and various startup companies.

We needed a place where those folks could help us understand the technologies that we would be implementing and help us select the best systems approach, enterprise approach, and technology stack to implement. So much of this is uncharted territory. We’ve never had the capability available to us to make this happen and now it’s emerging.

The existence of this place allows people to come and see how the technology works, how it can actually make jobs safer and less tedious and how it can improve productivity. Just to be able to demonstrate like that in a kind of urban environment where you’re sitting next to accelerators that are starting up companies. It’s an interesting juxtaposition of the old and the new. We are now able to demonstrate to young people that [manufacturing] is doing cool things, and that you can do it with the latest technology. There was no existence here for how this might all play out. I’ve been very pleased with the progress that we’ve made with this vision that we have.

Published on January 2, 2020

Starr Corbin is the Founding Partner of Corbin Solutions Group. Follow her on LinkedIn and Twitter @StarrCorbin.

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