Carhartt CIO Katrina Agusti on GenAI partnerships

[This transcript was auto-generated.]
Maryfran Johnson 0:05
Hello, good morning and welcome to CIO leadership live. I'm Maryfran Johnson, your host for the show. Twice a month we produce this video show and podcast with the generous support of my editorial friends and colleagues@cio.com and the CIO Executive Council. We're streaming live to you right now on LinkedIn and on YouTube on our CIO channel there. And we welcome all of our alert viewers and participants today to join in this conversation and send us questions of your own for my guest. Our editors are going to be watching the chat on both LinkedIn and YouTube and we'll be happy to pass those questions along. And the questions would be aimed at my guest today is CIO Katrina Agusti of Carhart, incorporated in April of 2022. Katrina was promoted to CIO after nearly 20 years with the company's technology operation. Now as the leader of all things technological, she is tasked with creating an environment where technology and a digital mindset can continue to play a more integral role in the future of company of the company culture and the brand recognition in the market of Carhart. She reports directly to the President and the CEO. Most of you may know who Carhart what Carhart is founded in 1889, in Detroit, Carhart is a retail brand that was has been long known for its durable, long lasting work clothes, and it was originally designed for manual laborers such as railroad and construction workers and farmers. Today, this is a $2 billion retailer employing 5400 people. And it remains a family owned private company that is run by the descendants of the founder Hamilton Carhart, expanding beyond its blue collar work where roots Carhartt Apparel has now become fashionable streetwear for younger generations, thanks to its works in progress line, which I'll be talking about with their CIO. Now, before stepping into her current role, Katrina held several leadership roles in the IT department and organization at Carhart, most recently, she was the vice president of Solutions delivery, where she was leading the company's IT application roadmap, and all of technology support for Carhart, Mexico. Good, Trina, it's great to have you here. Thanks for joining me.
Katrina Agusti 2:38
Thank you so much for the opportunity, Maryfran.
Maryfran Johnson 2:41
Well, I'd love to start with the big picture impact of these last two years, you are a year, almost a year and a half into your very first CIO role. But you are a company veteran, you have been with the brand for 20 years. So you know it inside and out at this point. So retail analysts have really been raving about Carhartt apparel, having its moment, like the authenticity of the brand, the surging popularity of it trending in the UK, especially as well as in the US. So tell us about the customers about the you know, the DNA of the brand and how what you're doing in technology is playing into that moving into the future.
Katrina Agusti 3:24
Absolutely. So thanks for the question. We we definitely see a lot of brand heat at Carhart. But what what what we do is stay true to who we are right, we are rooted in work where, as you mentioned, that is our brand purpose is to deliver those rugged and durable products to our consumers. So, you know, through the years, we've had a lot of moments in time where we, from a technology perspective, have been able to meet the consumers where there are provide access to the brand engagement with the brand, and those types of things. But we're very fortunate to have a brand that stands on its own. And it has such a legacy where people just feel an inherent loyalty and dedication to the brand. So it's been a great opportunity to be part of the brand and it's double digit growth over the last several years. Yeah,
Maryfran Johnson 4:23
well, double digit growth was really something to if not outright, outright brag about today. It's certainly worth noting the talk about when we were getting ready for this interview today, you were talking about the segmentation of the brand and you mentioned the next generation Dewar's people out there. So this is this is part of the growth area for car heart. I mean, there's always going to be those tried and true customers. Tell us about that segment of the brand.
Katrina Agusti 4:53
Yeah, so we really tailor our what who we speak to to three primary consumer segments, as you mentioned, In First is the tried and true, which is our brand loyalists are blue collar workers. And the emerging area is what we call our next gen viewers. So these are folks, especially through the pandemic, who started to get into either trades or do it yourself type of home projects. And a lot of people started to kind of get back to those types of projects, but also back to the land, right, people started raising chickens and getting into a lot of the different components of really our core consumer purpose. So it was great to see that next generation start to pick up the brand, and see the value in its function. And then they see we have our active outdoor enthusiast, which again, are you know, those folks that are starting to, you know, as travel was shut down, they started to visit national parks and started to get more in touch with nature and hiking and those types of things. So, you know, it was a great moment for us to show the functionality of the brand and to introduce it to other Cust consumer segments that may or may not have been aware of, of the Carhartt brand. Yeah,
Maryfran Johnson 6:11
well, and I know, we're gonna probably talk about this more as we get into your digital strategy. But one of the things you had mentioned was building out a Friends of Carhart brands in in is that a marketing campaign? Is that something that it gets involved in?
Katrina Agusti 6:27
Absolutely. So we definitely try to use our social channels and connect with individuals that can help amplify our brand. So that's exactly right. We partner with various friends of Carhartt that are living through their purpose, do it yourself work or firming or egg and we go to them and ask them to, you know, speak on behalf of the brand related to their function and how they use our product. So that they you know, we're creating additional audiences and additional ways to connect with the end consumer because at the end of the day, that's that's what we're we're here for.
Maryfran Johnson 7:04
Yes. Okay, good. Well, and last question I have about consumers, I noticed behind you in the wall for those who are watching, that looks like those are testimonials written by people. Is this one of your demonstration areas? ACARA. Tell us what that is.
Katrina Agusti 7:20
Yes. So this is called the story room. And we we get a lot of fan mail, if you will, to our executive team about how much they love the Carhartt brand, how it's been patched to pass down through generations, how it's potentially saved their life or saved their limbs because they've you know, had a machinery accident or something where were the the garment actually held up in that scenario. We've had people get married, whole wedding parties stepped out in in the car hurt brand. So it's just so inspiring and inspiring as you can imagine the folks and how just emotionally connected they are to our product. Yeah, it's phenomenal. So yeah, we like to celebrate and share when we hear testimonials and feedback from our consumers. Because that's what energizes us.
Maryfran Johnson 8:16
Yes. Well, and that's I think at one point I'd asked you 20 years with the same company, this is one of the things you have enjoyed about it so much is just, I don't know the good feeling of the brand.
Katrina Agusti 8:27
Absolutely. Yeah, it's tough. As you mentioned, it's a fifth generation family owned, you would feel that through that culture and you and you feel that through the product and the authenticity of how we continue to maintain that brand DNA as we evolve our product and innovate our product to meet today's needs.
Maryfran Johnson 8:44
Yes. Well, and one of the things that I especially enjoy, as I talked with CIOs these days is, sometimes it's so easy, we could spend half of our time talking about their brands, because CIOs are at such a strategic level with all of that now, and that's it's just particularly fun, you know, you don't run into, you know, run into any heads of it that are not so deep into the brand strategy that they couldn't just hold forth on it quite a bit.
Katrina Agusti 9:11
Yeah, absolutely. And when we look at our strategies, we see, you know, it's probably 80% driven through digital initiatives that are continuing to enable and activate our strategies. So we I'm having the privilege of, to your point, having a seat at the table to influence that strategy, and at the end of the day, enable it through the delivery of our technology solutions.
Maryfran Johnson 9:36
Okay. Next question. What were your marching orders when you came into this role? You were part of the succession plan of the former CIO and a longtime mentor of yours, John Hill, who actually was on this show back in June of 2018. So I know that he's moved on to another company now where he's achieved Chief Digital Officer, but coming into it, where you were obviously not just expected to keep doing what John was doing. So what were the marching orders? What did the board and your C suite expect from you?
Katrina Agusti 10:15
Yeah, great question. So we had just gotten through a significant amount of foundational transformation projects. So we had been through moving about 95% of our compute from on premise to the cloud, we shifted to a new commerce platform, we upgraded our ERP back end. So there were a lot of projects that, you know, are foundational, but are not as consumer or customer facing when it relates to how easy it is to do business with Carhartt. So really, my first marching orders were 100% aligned with our strategy, which is, what digital projects can we do to amplify the brand. So that's around driving awareness, driving engagement. And of course, as I mentioned, and we can talk about a little bit more getting our women's strategy off the ground and more operationalized at scale, then we had just anything around the experience. So as I mentioned, those previous projects, they're very backend focused, and a lot of the end users whether they be internal or external, don't see the value of those types of projects as they would if we're making their lives easier automating or providing, you know, less friction, less steps. So really getting focused on the experience elements of our technology solutions. And then finally, there's just a foundational element, right? So do we have the talent, talent strategy? For our associates? How are our associates at scale, managing through digital change? So you had mentioned at the beginning, how do we shift to a digital mindset so that we are getting the most value out of our solutions? And then, of course, starting to support some of these emerging areas around sustainability and circularity and fashion in the fashion industry and some of the community and DEI efforts. So again, hand in hand from a marching orders perspective with our strategies, but then, of course, how can we get better internally as an IT operation and continue to mature and level up as as we scale? Okay, so those were the focus areas.
Maryfran Johnson 12:30
And it's not just one is it? It's like multiple, but of course, you would expect that right? As a CIO, give us tell us an example, tell us a story around something that you've been able to accomplish your team has accomplished in the last year, that speaks to that mission of greater digital enablement, that improves the customer experience, because that out facing external look at customers and how they're, how they're working with the company, what they're perceiving about the brand. All of that, of course, has technology underlying it. So tell us about something in the last year that particularly showcases that.
Katrina Agusti 13:10
Yeah, so we set out as we continued to mature, just our operating model at the enterprise level to really mature our sales, inventory and operational planning processes, but also our sales operation and execution processes. And one of the areas one of the primary focuses on that was how can we get the data that we need, in an actionable format to drive root cause analysis and solve for things that are inhibiting us to deliver the best service levels and deliver on our promise to our consumers. So we set out on driving really, the definition identification of those metrics, and of course, serving those up to the business in a way that they could digest that because as you can imagine, you know, there's various levels of detail, that that go into that so that they can start actioning. And as a result of that, we were able to improve our what we call our on time and in full rates, we're able to improve our overall customer and consumer service levels. So how quickly we can fulfill orders, those types of things. So it's really helped us dial in to, you know, instead of having anecdotal type of reasons why we thought things weren't going well. The data allowed us to tell the story and to really get after some of those areas of improvement.
Maryfran Johnson 14:37
Okay, great. Well, and I know that when we talked earlier, you of course you report to the CEO, but you're also very tightly aligned with the CFO, the Chief Financial Officer, and privately held financially in great shape. So I'm thinking on my end, that must be wonderful. You come into the role and you have an open checkbook to do whatever you need. How does how does that work? When you've got I think a lot of times, especially in public companies, the CIOs often think that when they're family owned and privately held, the sky's the limit whatever you need, and it's not necessarily that way. So how, how does it How does the budget things get? How do you manage all of that? And is it? Have you ever had an open checkbook? I love that idea. But
Katrina Agusti 15:23
I wouldn't say, you know, we've had an open checkbook, but what I will say is, Carhart understands the value proposition of technology, and that it is table stakes in today's environment. So, we have never, even in times of, you know, macro, economic headwinds stopped investing in technology, right. So there might be conversations of priority or sequencing. And a lot of times that's more driven that not necessarily financially but just organizational readiness, organizational resourcing, change management, you know, everybody's clamoring to get a lot of these digital transformation initiatives off the ground, but there's a change fatigue aspect to that. So how much can how much can the organization actually, you know, successfully implement. So I've been very, we've been very lucky as an IT organization and Carhart, you know, at large in that they've always prioritized technology investments. And I feel like we've had a good pace to go alongside our growth path. In those investments.
Maryfran Johnson 16:31
Well, in a, because I noticed that you've had one of those big foundational elements was moving a great big ERP system online. And I was thinking when you talk about change fatigue, every CIO I've ever interviewed about that says, I wish we had spent a few more months getting everybody ready for it, you know that? Where are you in that process? Is that project essentially? Or that that that effort that initiative? Is it up and running now? Or is there still a lot to do?
Katrina Agusti 17:01
So the all of those foundational elements are up and running, you know, we still have from a move to the cloud, we're probably about 5%, still on prem of compute. And that's just due to timing to move some of those applications off. Our ERP is now global on a standard template across all of our business units, which is EU
Maryfran Johnson 17:23
regulations. Yep.
Katrina Agusti 17:24
Yes, we do have our commerce, the new commerce platform running for our US website. And we're in the middle of migrating for our European and our, what we call car company gear, but it's basically direct to business for small companies. So we still have two more migrations on sites. But the one the big the behemoth in the room, which was the SAP implementation for ERP is Ibis.
Maryfran Johnson 17:53
That's good. Congratulations. Thank you.
Katrina Agusti 17:57
Yeah, it was definitely the source of the most fatigue.
Maryfran Johnson 17:59
Yes, yes. And you can proudly say, and everybody's still standing, you know, because that is often the biggest deal that CIOs will have to deal with. And you've gotten that under your belt very early in your CIO career. So that's even better, right? Really, when I always ask this with a certain amount of trepidation, because digital transformation has become such a big buzzword. It doesn't mean anything free standing the way we're like words like innovation, and you know, like strategy, it could be anything. So when you think about what carhart's digital business models are about, how what has changed there, and what is changing going forward, as I'm sure that if we were to ask, what does being a digital business mean to everybody on your C suite, for instance, they would probably have different takes on it. So give us your take, as the CIO on what the digital business is, for Carhart and how it's moving forward, when you'd mentioned that you're very focused on a future state right now. So you've got a direction you're heading. Talk about that?
Katrina Agusti 19:08
Yeah, so definitely, we are in varying levels of maturity across the different functions in the business. I would say, as we look at digitizing all of the functions within our business, the most mature area is anything that is consumer facing. So that would be our websites, they have the most maturity as far as capabilities, competencies, workforce plans, those types of things. There are other areas in the business that, you know, from my prioritization perspective, we just haven't built that muscle and that kind of product line ownership where you would have necessarily a product owner in the business that had a counterpart in it, and you're looking at it as an end to end platform versus looking at, you know, implementing individual applications. So we're on that journey. We're hoping to get a lot more focus on those partnerships versus, and I'm sure you'll you hear that a lot right as moving away from order takers to more business consultancy, but also with our business partners having skin in the game and accountability and ownership around the outcomes that we're trying to drive for the organization. So, again, we're it varies by function as far as maturity, and we're definitely continuing on that journey. And a lot of the ways that we're trying to enable that is through that organizational design, and addressing some of the capability and competency gaps that we have today, so that we can accelerate some of those digital projects in different areas of the business.
Maryfran Johnson 20:43
Okay, good. And we have actually our first question from our very alert and watching audience, we thank you for this. And it's a good question that plays right into what we're talking about, how do you prioritize your digital initiatives? Do you use any particular tool like a prioritization matrix or so forth, to rank the initiatives and decide which ones to focus on first? That sounds like a governance question to me. And I know, we'd love governance. Yeah.
Katrina Agusti 21:12
That's a fantastic question. No, there is no tool today. Doesn't you know it? Well, it might exist. But again, we're, we're in the very early stages of maturity when it comes to a repeatable process and governance around how we do how we make those decisions. Today, it's a very small committee that evaluates the overall portfolio based on, you know, the business case that we've in that we were in taking, what is the connection to the overall strategic objectives that that is driving? What what priority do we put on those objectives themselves? And then of course, there's other elements related to excuse me, the investment, the resource needs, the business readiness. So let's say there's a lot of criteria we kind of run through to figure out how we can best slot and prioritize but I would say, number one, the number one thing that's driving it is our is the connection and how it will drive the strategy.
Maryfran Johnson 22:15
Okay. And by the connection, you mean, like the customer experience connection?
Katrina Agusti 22:20
You got it? Yeah, it's enabling. It's enabling a pillar of our strategy.
Maryfran Johnson 22:25
Okay, excellent. Let me see. And we have another question pending. Oh, this is so perfect, because we are going to talk about this too. What is the strategy for using AI generative AI, Jen AI in supply chain? So this? I know well, this pivots us into that whole Gen AI discussion, which, honestly, every CIO, I talked to for months now has been kicking the tires on something. So let's talk about Gen AI at Carhart, and how you're approaching it and what you're looking for, especially from your supplier vendor partners, in terms of how they get involved with the strategy.
Katrina Agusti 23:07
Yeah, absolutely. So we are not using anything related to Jen AI or large language models at scale in a productive environment yet
Maryfran Johnson 23:17
very, very few are really, yeah, right. Right. But
Katrina Agusti 23:21
of course, we do have other elements of AI that we're using, we have obviously robotics heavily in our distribution center, we have, we're using predictive modeling, for example, in inventory optimization, and personalization. We're using natural language processing for consumer sentiment and those types of things. On the on the AI, Gen AI, large language model our approaches, currently, again, because we're still trying to navigate the governance and data protection and different things like that is we're providing safe environments for people to experiment. So for example, Microsoft has been for enterprise that will allow you to access that data, but not, you know, have that data ingested back. So there there are different tactics that we're trying to provide, if you will. sandboxes are playgrounds where they can can experiment with the technology, but we're still protecting that data. So we're, we're in the midst of that. We're also to your point around partnerships, we do see that Microsoft will be probably our primary partner related because a lot of the work that we're doing has to do with our internal data. So a lot of our data products in that space are Microsoft products. And they have about 16 Different copilots right now that they have in general availability. So we're starting to evaluate that around. They have a lot of productivity tools, and different things that you can take out of the box to run for example, large language models against your Dana versus You know, the the wide world of internet. So, again, we're still in the very early stages, and a lot of it has a lot of the energy is around the education, you know, policy development, security, and really connecting it to what the business value is, you know, what are the possible use cases that can be relevant and that we could quickly production allies. So our intent is to create a pipeline we are, we're actually going to do a hackathon in the second half of our fiscal year to really start to experience or experiment alongside of our business partners, because that's, that's the other piece of just there's some skepticism, there might be some, you know, resistance, but then there's other folks that are just like, I'm going full bore it's write speeches. For me, it's you and Brad. And so, you know, we're trying to create some guardrails, but we don't definitely don't want to inhibit any type of type of innovation or optimization that can be done in a safe way.
Maryfran Johnson 26:02
Yeah, well, because we talked about that, that it's now so old school to have any problem with, we used to call it rogue it or shadow IT. And this is now the era of encouraging the shadow and encouraging the rogue and then partnering with the parts of the business that want to play around with these things. Is this I'm making the assumption that the the business elements that would be most interested in Gen AI, are usually in marketing and communications into the company. Am I wrong about that? Is it different at Carhart?
Katrina Agusti 26:36
No, you're right about that. But there still is just general intrigue, and wondering what it could what it could do for them from an optimization perspective. Also, I think, again, it goes back to the education of there's AI, and Gen AI is a, you know, is under that umbrella is a large language battle. So people don't understand don't necessarily always understand and they don't necessarily have to is, you know, there are other elements of artificial intelligence, whether it's robotics or, you know, predictive modeling those types of things. So again, just making sure that people understand the different types of technology, what are the pros and cons of those? And what are the best applications based on the problem that they're trying to answer or the business case they're trying to enable?
Maryfran Johnson 27:22
What is the approach you're taking to kind of both answer those questions from the business, but also get a little bit ahead of it? And by doing more of you don't want to just outright call it educating the business? Because that sounds like you know, that usually gets that usually gets people's backs up, they're like, Oh, you're gonna educate me? No. But in terms of making sure that you're bringing up as many topics as they're asking questions, is that what you'll do with this upcoming hackathon? Or do you have other ways that you approach that?
Katrina Agusti 27:55
So we are we had started early on socializing with senior leadership about what our approach was right? Because we, you know, the second it got flooded into kind of industry articles or different things, we knew we that to your point, we better get ahead of this. Otherwise, it's it's gonna get legs pretty quickly. So we started with senior leadership team, we are going to continue to do roadshows, we're going to build it into some of our education related to like security and compliance data privacy strategies for that element. But as far as bringing them along, in the journey we're going to use we have a lot of projects that are already in the portfolio that could have use cases that have an element of AI to it. So we'll do that naturally and organically there. And then absolutely, to your point on the hackathon are all of our hackathons or innovation days include our business partners, right? And because we want them to be part of that process, and understand how these things come to life, and some of those technologies. So to your point, you know, those those things are converging. And given the scale of digital, it's very difficult to just try to control every element. It's more about how can we protect and and provide the most information so that they make the right decisions? Yeah,
Maryfran Johnson 29:17
well, and I would imagine in the next half a decade, probably, the word digital will just come to mean technology. It's like, you know, in fact, do you refer to is it still called it Carhart, or do it? Have you given it a fancier name?
Katrina Agusti 29:34
It is still it. However, we're starting to, to provide some words around what does it mean? So we're actively building our maturity in the technology space. So we've defined that in more digital terms. So it is starting to take that shape, just through those. Yeah,
Maryfran Johnson 29:59
effort. I remember in this would be a couple of years ago talking with the CIO. And we were talking about talent retention, like your best people. And this particular CIO told me that he had found that with two or three key people, he just had to change their titles and include the word digital. And the minute he did that, they were like, all right, they're happier with what they're doing. They felt like their own marketability probably was really up. But I thought that's have you and you had mentioned in or redesign, essentially, with that is going on now? Is that just happening in the technology organization? What can you tell us about that?
Katrina Agusti 30:36
Sure. So we had, you know, probably a couple of years back we, we had an organizational and enterprise level effort called fit for the new frontier. And it was just an opportunity for us to kind of reset and evaluate just the talent across the board. So that's been going on for quite some time. But it specifically as a support function, we were one of the last ones to get to go through an individual function, organizational redesign. So that started probably about six, six weeks ago. Oh, wow. And it really to align on a lot of the things we talked about as far as our marching orders, is to best enable, you know, some of these different emerging skill sets, better optimize the the overall, it function, and then of course, really bring home the best way to drive business partnerships. So how we're organized against, you know, the lines of business, and what that partnership looks like to drive the most value for the organization. So we did, yeah, we did a great job of kind of going out and hearing the voice of our business, consumer customer, and now we're answering those opportunities through the organizational design.
Maryfran Johnson 31:51
Okay, that's great. We do have another question, which actually harks back to the what we were talking about your ERP implementation? And this is really I think it's more backward looking for you, what would be the first step to consider in a global ERP implementation? And I think you've been there done that already. Right? Do you remember what the first step was?
Katrina Agusti 32:14
Yes. Honestly, I would say just evaluating the readiness of the organization and making sure that you are, you might have to break the work down. So depending on, you know, what your line of business is, how you're organized, what the complexity is, what the regionality is, you know, the first thing we did was okay, how are we going to break down the work? And we did, we ended up doing wholesale, that we did retail, wholesale, then our European group. And again, just assessing that business readiness? Do we can we dedicate the resources to do it in the right way?
Maryfran Johnson 32:50
Okay, good. And then another question pending from our audience. And this one is, could you provide one specific example of a Gen AI app that has yielded an ROI? And I know, I know, I asked that thinking that most, you know, most everybody I know, would say not yet. But maybe there's something I didn't ask you about you. You got anything? No,
Katrina Agusti 33:17
not not yet. Like I have heard people use it as an accelerator. Right. So instead of starting with a blank sheet of paper, it just helps accelerate the work, whether it's, you know, product detailed descriptions, or, you know, I'm creating a speech for the sales meeting, and here are the points I want to get across. So those are the types of of ad hoc things but not not at scale, not not to have a hindsight of really the value that it
Maryfran Johnson 33:42
added at this point. Yeah, there's nothing that would get your CFOs heart going pitter Pat. Exactly, exactly. No, we have another question, too. And this is Mike, could you had mentioned Microsoft co piloting, doing those co pilots? In which business processes? Will the Microsoft co pilots be used first, or most likely? And if you if you can answer that, it is a good question.
Katrina Agusti 34:08
Yeah, and I think we're gonna start honestly, with the productivity space, because we can contain it to our internal business processes, just so that we can try it out. And then you know, we would continue to expand our format. And you know, it might not end up being always Microsoft, we're going to partner with them to learn from the for our own internal development. But what we can see already and we're hearing it from SAP with his partnership with IBM, you just, you know, you see Salesforce, they're spinning up. You know, they're Einstein AI with partnerships and various things. So I think, Adobe, all of these, all of these large scale leaders in the technology space are going to start building into the platform. Now whether they decide to monetize that as a separate thing. That's TBD. But I They just by nature, by its nature, some of those will come into the other business lines of business through the platforms that we already have deployed in those spaces.
Maryfran Johnson 35:09
Okay, great. No. And of course, I'm going to try to get in a few of my own questions. Now the audience has been doing an absolutely great job. And we really encourage more of that to come. But we've been talking a lot about what it is doing. And I never, I never got to fit in that question about the size and scope of your IT department from it sounds like the kind of things you're taking on, you got 1000s of people working in it, but you do not
Katrina Agusti 35:35
know. So we have about 215 people in our IT organization, the different pillars, if you will, and how we're organized, we have a team that leads our business applications. So that's really product line delivery, support and maintenance. Yes, we have a team that that focuses on data and analytics. So that includes master data, business intelligence, those types of things. And then we have a technology team that is really focused on infrastructure, service, desk, digital workspace, so all of the hardware, those types of things, and also our security and compliance. Okay, so it's probably three primary right now, again, subject to change in our current org design. And then we do have a team. In current role Mexico, it's our shared service center, that allows us to extend our global team through additional headcount in that in that space. So we have about 60, folks of that 215 that are sitting in that facility. And we also have remote folks that support our individual facilities, whether it's our manufacturing, or distribution, our European subsidiaries, so definitely a mix of, you know, regionality and, and different roles. We also from a, from a partner perspective, we have, we do have a few folks that are that we're partnered with to do different types of operations. But we're really trying to insource a lot of that those functions back in just for, you know, to continue to cross train, we're moving more towards platform engineering apps, you know, having DevOps, those types of things. So we're trying to bring some of that were we weren't ready to take on the full, you know, experience and upskilling. Now, we were starting to have some bandwidth to do that. And then we'll staff fog, periodically ad hoc for, you know, projects specific. But again, really trying to give those opportunities to our internal resources.
Maryfran Johnson 37:45
That's great. I always love to hear that some insight or some or even substantial insourcing is going on because you're building up. And it does so much more than just build up tech capabilities inside the company. It gives more career paths forward in the IT organization, which I'm sure that's not lost on you. Are is it I know that the company tends to attract you're in a lot of it is in Michigan, and of course, you've got a place in Mexico, but are there? Are there talent areas where you have a lot of trouble recruiting or, you know, the often I hear data engineering, but I like to ask that what do you most looking for right now?
Katrina Agusti 38:29
So we, you know, given the change in market a year ago, I would have said, you know, hey, same thing, data security, you know, these types of roles, even to some degree, we were having trouble getting SAP functional folks. So we were we were struggling in certain areas now in the market is is different today, and seems to be a little bit more open. Plus, we I'm sure like many during the pandemic, we opened up the marketplace to be most of our positions. Exactly. So it has created obviously a much broader pool than we had experienced before. So I would say it's it's less about, you know, getting the talent in and more about retaining the talent we have and reskilling and upskilling, based on, you know, some of these modern technologies that we've taken on Yeah,
Maryfran Johnson 39:20
well, I have a feel, I think we're seeing it now. And I think there'll be even more of it in the future, where we talk a lot about how you get people into the office, and how much of a benefit that is. How do you approach it right now you're a CIO in this modern age where a whole lot of the staff especially in the last few years may have come on very likely came on as remote and that actually changes kind of the warp and woof of your your your, your CIO leadership style and all that. So tell us about, you know, where you stand and your time and effort and how much that balance between remote and in office, how you're managing all of that?
Katrina Agusti 40:07
Yeah, it's it's definitely been a challenge because I'm highly extroverted. And I am a walk around type of a leader. So I got a ton of energy and hopefully build meaningful connections with my team. Yeah, when we were in the office just due to the walk around, right. So making that shift has has been a challenge. And I think, quite honestly, we're still figuring it out. But what I what I have shifted is just more time, right, so more time with listening and communication to the team. So where I would have had the luxury of seeing folks in the office, I'm creating roundtables, I'm doing small group connections, I'm doing skip level meetings, I'm trying to create moments where we have an opportunity to have a dialogue, either one on one or in small groups. And then we're really trying to be purpose purposeful, because we have multiple remote locations, is to find maybe every other month going to those locations and bringing everyone together. And you know, whether that's events where we do things together, innovations, collaboration, you know, we've heard loud and clear that people just don't want to come to the office and sit on teams meetings, that have a purpose, we're going to come in and build those meaningful connections and innovate and collaborate. So there's definitely value to that I just think about new new entrants into the workforce, and how that How strange that must be right, and how much I learned just from the relationships and shadowing and different things. So we're trying to recreate those environments, especially for our new entrants, and folks that are harder.
Maryfran Johnson 41:53
I've heard that same sort of concern from a number of CIOs, I remember talking with the CIO at Gulfstream aerospace. And she was saying that, you know, she often tries to counsel younger members on the team to try and spend more time in the office, especially if they're ambitious, and looking to kind of move up the ladder into other IT management or director type positions. It's one thing if you're a heads down, techie, but even then, you know, I think even the most introverted Pitt this now this is an extrovert, who is to another extrovert, interpreting what introverts want. So I gotta assume I'm going to be about 90% wrong here. But I feel like I feel like that that energy exchange that happens when everybody's in the same room and around a table, and that sort of thing is different now. And I think we're going to have to head back to at least some of it in the future, but it's kind of hard. Well, you would agree, you're another extrovert.
Katrina Agusti 42:56
I find myself, you know, it started as you know, one week, a month, and now I'm in a couple of days every week. And so, you know, I'm just finding that I'm gravitating towards that. And, you know, it depends on the role, right? If you're, if you're a dev, and you're sitting, you know, cranking out code, it's different than if you're a business analyst, and you're working with, you know, your product line, product owners and things like that. So it's a little bit role specific, as well. But I'm with you, I think we have to find the balance.
Maryfran Johnson 43:25
Yes, exactly. And I don't think we have it yet. And I think it'll be I think there'll be a lot of conversations about it in the next couple years, especially. And I think it's especially valuable for younger workers that have never had that in Office experience. They may have read so many bad things about it, you know, about office politics and all that. But if you don't learn to deal with that, at some point, you really, you just kind of you sort of stay in place in your career. And I and hardly anybody wants to do that, right? I want I want to pivot over entirely and talk about some technology stuff that we had discussed that because this surprised me that you have a lot of efforts that are building up in RFID. And I thought RFID, I thought in supply chain and retail and tagging and all so I thought that was old hat. And it turns out not so much. So tell us about what Carhart is doing in RFID. And why why it's important now.
Katrina Agusti 44:25
Right? So I would say the technology of RFID to your point has been around a long time. And I think depending on your industry, and you know, your external parties, you may or may not have, you know, been mandated to bring that technology into the space. So we had, we had just kind of we hadn't had many folks asking for compliance. But the good news is and what we're doing to kind of tie this to emerging technology is taking this opportunity and time to create digital twins of our products, individual products. So not only not only We just say, Okay, well, we're gonna go ahead and be compliant for RFID, because our wholesale retailer is asking us to, we're taking this opportunity to take several use cases and business strategies and be able to, to enable them. So for example, you know, we have a 3d images and assets of all of our products, we, we are working towards having serialization of every individual product so that we can create, almost like an event management. So you can trace the product from all the way from the field to, you know, the consumer. So there's, and then of course, we're there's just a lot of regulation, as you can imagine, and customs compliance that helps that that traceability helps. So what we're really trying to do is take, you know, the opportunity to finally get something that has been in the market for a long time, but play it forward and be a little bit more innovative related to Yeah, creating those digital twins and solving more additional business opportunities alongside of that project.
Maryfran Johnson 46:05
Well, and what I love about this, the story around RFID, is that you probably could have done a minimal amount of things that would have, you know, Buddha satisfied the business. But you essentially came back to them and said, Let's think bigger and longer term, let's consider compliance issues, that sort of thing. So good for you. Apparently, that apparently that was very well received, right. And while we're talking about well, technology, and all the changes, you have a particularly, but I don't want to call it a project, because it's probably more of an initiative, establishing a transformation office. And I've heard, I've heard the big T word to the Tyrannosaurus Rex word about transformation used with a lot of things, usually the word Digital's in front of it, or that sort of thing. But you're going to actually create a transformation office like is that like an office of the CIO? What are you thinking around that? And what is that? And what will it be? And I know you're in the early stages of this. So yeah, I'm gonna go ahead and put you right down on a, on a limb on this and tell us what your Yeah, tell us what you're thinking and why you need this. And it's not just an IT, this is something you have taken on, but this is for the company as a whole, if I understand that correctly. That is
Katrina Agusti 47:25
correct. And to your point, you know, I'll use my disclaimer subject to change. But the intent, of course, was, you know, to be able to create at an enterprise level, our ability to really prioritize the right work to enable the strategy to manage change across the organization to, you know, drive outputs and outcomes, or excuse me, outcomes for the business, and really get process and rigor around it. You know, we've had several iterations over the years where we might have created business cases, but not having cited or we've, right, so we've kind of been half in and out. So this really gives us the opportunity at this point, to be able to say, Okay, let's get a process in place with governance around it, and make it a repeatable process also to provide communication and transparency to the business as to what we're investing in how we're making those decisions, and really be able to elevate the program as a whole. To make sure we're delivering at the end of the day. Oh, you know, I have, again, the privilege of because we've had so many large scale digital projects, and we're able to show our capabilities and our ability to connect the dots and kind of see ahead, if you will, related to anticipating the next need. I've been given the opportunity to set this up at the enterprise level. And give it a go. Yeah,
Maryfran Johnson 48:59
I know. Well, and the the discussions around this, were originally with the VP of strategy, who owned all of this corporate initiatives, enterprise PMO, whatever you want to call it, and that individual has now moved on from the company. And Correct. You're the new VP of strategy in, you know, stepping into that role, essentially. Yeah. Was that something? Did you step up for it and say, Give this to me? I think I can get this done, or was this your chief operating officer who said, I know who can take this on? Yeah, so
Katrina Agusti 49:33
just a point of clarification. So we had a VP of strategy that also did you know, corporate initiatives or enterprise PMO. So she didn't ask me to take on you know, the transformation piece. So the VP of strategy is still is still kind of a question mark. Oh, but 100% of you know, the components that need to be there are the portfolio management obviously, the change management component, organizational change management is going to be led by our HR team. And then of course, the strategy. So it would be there's a three pronged approach. And of course, you know, I'm I am going to be working with those partners to to make sure that we have the right portfolio for the organization.
Maryfran Johnson 50:18
Excellent. Well, I love the sound of that. I remember, some years ago, one of the CIOs here in the Boston area, had his next step after CIO was Chief Strategy Officer. And so that's that's not a bad path forward for CIOs not that you don't have enough to do now in your first year. On the job. Right. Yeah. Let me see. I wanted to there was, what was the other thing? Oh, I wanted to ask you about at the changing priorities with the C suite and the board. Are there anything we haven't really touched on yet? That is very important to Carhart, in business transformation, other strategic issues? And I'm thinking along like the environmental societal, the ESG. area, diversity and inclusion efforts, sustainability? What's what's happening in that area? Yes, give us give us the whole novel worth of efforts. And just a few great comments here. And how does how do you as the CIO play into those?
Katrina Agusti 51:25
Yeah. So we have definitely, in our foundational element of strategy, started to put more focus and energy around exactly what you said diversity, equity, and inclusion, are sustainability and circularity. And finally, community and making sure that we're showing up in community. So how it engages in that in various ways, of course, so and the circularity and sustainability side, for example, we've had energy management solutions that help us benchmark, you know, our overall usage there. We're looking at different ways to provide different materials, which cause you know, and traceability. So, you know, there's an element there of just making sure that we can tell the story, and the diversity, equity inclusion, it's really about the people data, right. So being able to help report and analyze the trends within our workforce to see if we're working towards the goals overall, that we're setting there. And then on the community side, we're just taking a board just being a part of it. Right. So volunteering, and having the opportunities to be closer to community. There haven't been any it s there yet. But that's subject to changes, you know, there's always a digital element.
Maryfran Johnson 52:46
No, there really there really is. And when it's not a digital element, it's at least a technology element. So but the I noticed, I see a lot of those posts on LinkedIn, I find on your feet, because I follow you on LinkedIn, of course. And there's just numerous of them. That all that sort of thing is is turning up. And I also noticed, I think we talked about half of the senior executive team at Carhart just happens to be women, your CEO, your CFO, the CIO, the head of HR. It's nice, it's one thing to talk about doing a good job of diversity and inclusion, it's another one to be able to show it to do you, and you must when you're talking to new candidates that are coming into it, especially in younger generation. They're probably looking, you know, pretty sharply at that. Yes,
Katrina Agusti 53:40
absolutely. And we get a lot of feedback from our associates that they want to see themselves in leadership. And, you know, make sure that it is representative of how we show up as a brand. So it's very important.
Maryfran Johnson 53:53
Yes. Okay. Final wrap up question for us here. I'm almost relieved to see that our audience questions have have stopped coming in. We've had a really, really great response from the audience. But I have a question about your own leadership style, and how it has changed what you have learned in the last two years, as you've moved up from, you know, this long, wonderful long history with the company, and then essentially getting singled out says you are part of the succession plan of the previous CIO. And here you are now in the job. So what have you learned about or maybe had to change about your leadership style as you became the CIO?
Katrina Agusti 54:34
Yes. So it's definitely different. You know, I had gone from directing the work to being more of an enabler for the team, right. So I spend most of my time listening, not talking. You know, I tried to clear blockers and really provide cover for my team. I spend a lot of time quote unquote marketing for it right and making sure that we are celebrating and telling the stories of all the value that we're driving for the organization. And one thing that I don't love that came with the title is just the, the request. And not you, Mary Fran, of course, but just everyone wants to, you know, for us to grow our brand and be, you know, be the Katrina era as a CIO. I'm not a big showy person. And I'm not a huge fan of me on camera. So that's one thing I've learned that I don't like. Well, I hope, enough unnecessary evil. Well, and
Maryfran Johnson 55:40
I hope when you go back and watch some of this today, you will say to yourself, you know, it's time I got over that. I actually, I actually do just great on camera, you know, in? No, no, really. And it's something a lot of editorial people in my field in publishing are much more behind the scenes. And then sometimes some of us discovered that we liked having a microphone in our hand as much as asking all the questions. And I think that that really, that's something that you might want to just leave at the train station, I think you do a very, very good job of that. And it's been great having you here today to do this. So thank you. Thank you for coming on for sharing so much about the brand and about what you're doing. I'm sure that anyone who's been following us on LinkedIn and on YouTube, if they haven't already, LinkedIn to you so they can follow you on follow you on LinkedIn. They absolutely should. Oh, the last thing we've I forgot to ask you about the women's line. You're developing because I'm a big time gardener. And I've been wanting specific gardening clothes that I want Carhartt to make now. But you do have other than my needs, you have strategies going on, that you have been very involved in as well from from the technology standpoint. So what do we want to say about that in pet as we wrap up?
Katrina Agusti 57:01
Yes, thanks for bringing that up, me referring to completely escaped me. So we have a renewed renewed focus and energy around our women's line we've had several times over the hundreds, you know, 35 years of Carhart, where we've tried to introduce women's lines that really just were extensions of a lot of the men's product. But we've gotten very focused built, built strategies and staffing around spinning up a woman's line that is much more catered to the needs of our, our women consumers. So you'll see different fits different fabrics, different functions. So it's super exciting. And I've already put a plug in Mary Fran for you on the gardener's gardening side. But we're super excited, and hopefully everyone will get an opportunity to take a look at our new women's line. I encourage you to check it out on her her.com
Maryfran Johnson 57:54
That's great. That's great. And I'm sure we all will thank you so much, Katrina, this has really been fun today and Didn't I tell you that our would fly by? Okay, just like I know, I go here we are all done. Well, thanks again. It was great having you here. Now so much. And if you joined us late today, do not despair. You can watch the full episode and my entire interview with Katrina or gusty of car hard here on LinkedIn, and also on cio.com Later in the day. And on CIOs YouTube channel, cio leadership live is available also as an audio podcast wherever you find your podcasts. And I feel reasonably confident that you enjoyed the conversation as much as I did today with CIO, Katrina gusty of Carhart. We'll be back again in two weeks with another show on Wednesday, September 27, when at noon, Eastern as well, when I will have CIO Shannon gaff of Teledyne here, and I hope you'll tune in for that show as well. Thank you so much for joining us today. And thanks, especially to all of our alert audience members who sent in such great questions. Do take a moment to subscribe to our channel on YouTube CIO on YouTube. Because you can actually find all of the 100 Plus episodes of CIO leadership live on there. I've been encouraging people to binge their way through all the leadership live interviews, but I don't know if anyone has done that and live to tell the tale. Think of all those more than 100 hours of CIOs talking about strategy, leadership and innovation. Anyway, take care out there. And thanks for joining us and we'll see you again here next time.