How Kraft Heinz's CIO avoids getting lost in the shuffle of innovation
Francesco Tinto posed the question, "are we really changing the way we're operating, or just operating the same way and we just changed the technology?"
Since 1937, many a child has sat in the kitchen individually spearing Kraft Macaroni and Cheese noodles on the prong of a fork, creating warm, cheesy memories — it's one of the reasons Kraft Heinz is a household name.
In 2015, Kraft Foods Group and H.J. Heinz Co. announced their merger and created the fifth-largest global food company. Two iconic brands, under one roof, was a deal that shook the food industry. It also moved Francesco Tinto from CIO of Kraft Foods Group to global CIO of Kraft Heinz.
Just as Kraft perfected the recipe for its packets of powdered cheese, Tinto found the sweet spot between company culture and innovation — a recipe CIOs struggle to perfect.
Accomplishments are hard to quantify at times, though "making one company in nine months, I think was quite an achievement," Tinto said of his integration efforts as global CIO, in an interview with CIO Dive. It's "always the easy one as a CIO to talk about the big [resolve]."
The two companies merged in 2015, which meant two IT organizations had to integrate. The give and take of a merger extends beyond a formal contract.
Mass change wouldn't happen if all the small things weren't first in place. "I don't lose touch with what is going on at all levels of the organization," he said.
Focusing the lens on initiatives sometimes overlooked by general global CIOs gives Tinto a more intimate look into the inner workings of Kraft Heinz. Not every detail in the nitty gritty can get Tinto's attention, but he dedicates time to those organizational sessions, like discussing a debugging program. "Let's put it this way, I'm still able to do that."
What would Tinto do
CIOs have to strike a balance between making sure processes are in place to keep the lights on and transforming the company. Experimentation is great, and even with fail-fast strategies, a return on business value takes precedent when leveraging new technologies.
The attractiveness of blockchain, cloud or mobility can threaten judgment because "you can really almost try everything," Tinto said. But the most obvious technologies for Kraft Heinz to implement are artificial intelligence and robotic process automation.
Prioritizing ideas creates a manageable and digestible package of possibilities. "When you talk about innovation, it doesn't mean that it's completely unstructured," he said. "It means that you really change the methodology and you need to make sure you start bringing a different way of operating, but still very structured." Successful CIOs make sure they're actually addressing a business problem.
It's "not let's try different things, but [change] our processes," said Tinto, and this helps Kraft Heinz avoid getting lost in the shuffle of innovation. It helps IT sort itself into two categories: the traditional and innovative.
This mindset has changed how the food company operates with stakeholders, according to Tinto. He tries to be as "inclusive" with different levels of the business.
Tinto enacted "the concept of the garage, which is an innovation hub." It was built to focus on data analytics, AI and robotics. By exploring disruptive technologies, Tinto wants to help Kraft Heinz dismantle trepidation from nontechnical leadership and frontline employees.
"The biggest cultural barrier has been in ensuring that I can make the shift within the IT organization first," he said. "And to make sure that the IT organization [is] capable [of] moving from the traditional technology and the traditional way of operating into the mastering more of the interactive technology."
AI is helping the company improve the production planning of Kraft Heinz's coffee business for roasters. Traditionally, a person performed a diagnosis of a plant's optimization and could only be responsible for a few variables.
Now, AI has replaced the human component and can work on 2,000 variables, like weather conditions and determining the ideal time slot for predictive maintenance, using Excel, according to Tinto. The same model has been moved to other plants, like for Planters Peanuts and mac and cheese because of an issue in drying the pasta.
But "all these examples are not in silos, they are really working and they are spread within the organization," said Tinto. The company has been piloting rapidly, inching closer to making them a mainstream operation feature.
Never innovate for innovation sake
Disruption can be just as disruptive as the technology itself. Tinto had to show employees the possibility of a "new avenue of development and the possibility for the people to understand as well as a new career path" through changes in tools and operations.
Tinto pointed out that just because a tool is available, doesn't mean an effective change has taken place. If employees shy away from SAP and still use Excel, "that means that frankly, we failed," said Tinto.
"Are we really changing the way we're operating, or just operating the same way and we just changed the technology?" It's a valid question that CIOs have to come to terms with, especially when there is a cultural resistance that could be solved with training.
With recent $100 million investments in tech startups dedicated to the food industry, the company is looking for innovative strategies on nearly every front. As of Q3 2018, Kraft Heinz's e-commerce sales were up about 80%, with sights on revitalizing its recipe website, mobile technology used to generate customer data, and connecting with grocers.
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