Digitizing Manufacturing Processes With Naveen Poonian [Episode 74]

Digitizing Manufacturing Processes With Naveen Poonian

I have a great, powerful, highly intelligent CEO. His name is Mr. Naveen Poonian. Naveen owns a company. It’s called iBASEt. The company was founded by his dad in 1986. His mother ended up taking the company over. He then subsequently took the company over. They do some cool stuff. They cover processes from A to Z for manufacturing. We are going to talk about why processes matter, not just in manufacturing but they do this on a highly complex basis. They help build F-35 jets from Lockheed and all kinds of things.

They might have 1,500 suppliers that are all involved in a project. Imagine coordinating 1,500 suppliers into a process that is now delivered in a cloud-based application to keep all of this on track with checks and balances and everything that goes along with that. Think about the level of thought that had to go into that complexity to go from the original ideas that people were trying to do.

They were doing them way back when on paper and Excel spreadsheets to go from that to where he is. The level of thought that the company had to go through and why your company also should pay attention to putting together processes in your business for everything that goes along, so it’s aligned, manageable, and measurable because it will allow you to give yourself a win-loss analysis at the end. Let’s talk to him. Take a pen and paper out, digital, whatever. Take notes. This one that you will get a tremendous amount of value from. Not that the other ones haven’t been but this one here impressed me. Here we go. Let’s talk to Naveen.

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Naveen, welcome to the show. I’m so grateful you are here.

I’m glad to be here. Thanks, Doug.

I have been looking forward to speaking with you because I remember speaking with you the first time, you and Tom. You, being the CEO of a company called iBASEt. When I first saw the name, I was like, “What the heck do these guys do?” The more I looked at it, I was like, “This is amazing what you folks do.” You take the A to Z processes, the manufacturing for complexity and manufacturing. You will take 1,000-plus suppliers and do things like build an F-35 jet from Lockheed Martin or whatever. You take that whole supply process right off their plate. Is that accurate?

Exactly. We work with companies that are building highly complex assets. We have thousands, if not hundreds of thousands of parts, thousands of processes, distributed work centers, and global work centers. You think about all the different intricacies and components and things that go into, let’s say, an aircraft, an engine or a satellite. We help orchestrate that whole process. It’s, “How do I get all my parts and pieces, people, and processes aligned so I get that product out the door with high quality.”

You have a solution. It’s a business procedure, business processes to improve the business by using step-by-step measurements and things like that throughout the process.

Traditionally, in our world, a lot of people have a bunch of different disparate systems and pinpoint solutions, often Excel spreadsheets or they are on paper. They are trying to manage this intricate process through manual methods. Over the last several years, we’ve built a digital solution that has all the capabilities. It’s turned into a platform.

What did start as a bunch of little features and functions to help people on the shop floor produce a better product? It’s starting to grow, working in partnership with our customers and eventually becoming a platform that’s meant to have the A to Z process inside but to have all the players that are involved and all the stakeholders, including the supply chain, involved as part of that.

You said something key. This didn’t start as this complex aggregate of stuff that you made really simple. It started off a little bit over time.

It started as a proof of concept. The company was founded by my father in 1986. It became a software company in ‘95. We got our first break on the C-17 aircraft with McDonell Douglas right here in Long Beach. That’s where it all started. It started with my father going up to their procurement or IT organization, saying, “You’ve spent millions of dollars on a solution that hasn’t worked. Give me $1 million, and I will build you something that’s going to help fit the need and solve the problems that you guys have and help you in how you manufacture.” They gave him the $1 million. He built the proof of concept. He ended up getting a $5 million contract after that. We’ve grown the capability. Five features and functions to now over 4,800 features and functions within.

Your dad is a pretty bright guy. He recognized a problem, approached them with a solution, and ended up with $1 million out of the gate.

It all starts with a vision. As CEOs, that’s what we are responsible for. He had the vision. He sold it to his people. They believed in him. Even the customer believed in him and what he wanted to do. Through a lot of tenacity, he was able to get this product out the door. We had people sleeping in pots and didn’t have an office. The company started in my playroom with the folding table and then spent night after night trying to build this product and get this product off the ground. It’s a true startup story to get the software to where it now is.

 

It’s an amazing story. It’s the true essence of what people take and say, “This is a startup.” They will look at your company now and go, “What a big company,” but they don’t look at the humble beginnings of how a company began.

All the best companies come from those humble beginnings. Four guys and a dog or a bunch of people who were sitting at the bar having a few beers coming up with the idea. We have one customer, Virgin Orbit. From what I hear, Richard Branson came up with the idea of a napkin to take an engine, remove it, put a rocket on that engine, and then launch the rocket after the plane takes off and it’s in space.

Launching the rocket from, let’s say, a 747 aircraft to do a micro-satellite launch, Earth orbit launch. This has started on a napkin. It’s awesome. These are our customers, highly innovative companies creating groundbreaking products and complex and not easy to do. It all starts with that vision, putting that plan together, and probably having a few failures along the way.

Let’s talk about a few failures along the way, if you don’t mind. A lot of people, again, will take a look at your company and stop by your dad. I’m sure there were some failures along the way, not knowing but I know every business I have ever been involved in has always been a failure. How does a CEO supposed to look at failure versus someone else?

We always have to be honest with ourselves. We don’t always know it. We don’t know the future. We can’t predict the future. We can’t predict when things are going to pop up that you don’t know, even things like COVID. Every failure is an opportunity. You look at Elon Musk, the first rocket he launched. It didn’t land on itself. You have to think of the continuous improvement and iteration that has to happen for you to eventually get it right. It takes failure to understand what works and what doesn’t work. If you did everything right, that would be great but that’s not perfect in any world.

Every failure is an opportunity. It takes failure to really understand what works and what doesn't. Click To Tweet

We’ve taken that approach. We used to be more of a conservative company. “Let’s think through everything. Make sure we make the right decision.” Oftentimes, we found that what we thought we needed to do wasn’t always what we needed to do. Now we’ve taken a different approach, and it’s more of the fail-fast mentality that you see in Silicon Valley and all these startups. How do we accelerate innovation and iterations? You might fail but let’s learn quickly. Let’s apply those learnings to what we are doing and then come out stronger and hopefully with a better product, a process or a capability that’s going provide value to the customer.

A wise man who built a billion-dollar company once said to me, “Doug, sometimes you’ve got to try things to find out what you don’t like and what you shouldn’t be doing.” That’s what I heard you say and the capacity of how you said it.

The fail fast has allowed us to be more focused. What we should be doing is important but also as important as what we should not be doing. You look at Steve Jobs, Jeff Bezos, Elon Musk, and Warren Buffett. All these guys have talked about focus. Take the top 5 things that you want to do, throw the 3 of them out, and look at the top 2. Those are probably what you should be going full force on and focusing your time to get you where you need to go. Oftentimes, we want to do everything. If you do everything, you often do nothing. That’s always a critical thing in your decision-making. Focus is important to execute.

 

That was brilliance. I don’t think a lot of people might have caught that. I want to go back. You take your top 5, and then throw out the bottom 3 and keep the top 2. That’s where you should keep your focus.

I’m not saying it was me that said that but I saw a Steve Jobs interview about that. You can debate that he’s one of the most brilliant people who created one of the most amazing and innovative companies in the market now. I realized that. That’s one of the failures that we’ve also done. It’s easy to start looking at shiny objects and going after cool things or, “Look at this new industry. Maybe we should go over there.” You lose focus on your core market. That is a big lesson learned but the focus is important for you to execute.

You can imagine that if you have a company of 2,000 people, how do you get everyone to row in the right direction if you have 10 different initiatives without real prioritization? Who knows what they are supposed to do? If you focus on two, you can rally the entire company and get them all rowing in the same direction.

You may not have said that first but you said it to probably 15,000 or 20,000 people who will read this. This is awesome.

Hopefully, it makes sense.

I wrote it down. I was like, “That is sage advice.” Thank you for bringing that forth. We are speaking with Mr. Naveen Poonian, who owns a company called iBASEt. He is the CEO of the company. The company was founded by his father in 1986, according to what he told us. They do amazing stuff. They put processes around complex manufacturers, that whole process for sometimes thousands of suppliers and putting something together. I have a question. There are a lot of companies reading. Maybe they are doing $1 million or $50 million. They do not need 1,500 processes. What is the value of having a business that uses step-by-step measurements versus winging it all the time?

Everything needs to have a process. How do I get from point A to point B or point A to point Z and have predictability? Once again, you might define a process, and it might not be the right process. I know you deal with sales processes and making sure you can streamline that. We are dealing with manufacturing processes. In some cases, you build the process but it might not be right. How do you start leveraging data from your process so you can start to make actionable information? That’s key. What are we doing that allows us to win? What are we doing that can create that more predictable outcome for us? You have to be able to use data to start measuring your business.

What am I doing? What is my status? Where am I at? As I start to make changes, I can also see the impact of those changes and see, “Am I moving the needle forward or did I make a bad decision and that was a mistake?” I’m sacrificing what I’m doing. I’m not building a better product or I’m not running a better sales process. What you get is information. Every company needs to have continuous improvement as a key initiative that they are doing. How do I fine-tune and build a better process so I get a better outcome in the end? That process enables you to keep the focus on what you need to do, measure what you are doing, and then use the data to get better.

Data measurement drives the business. This is objective. We are learning objective data versus subjective data, which I see so many leaders of companies, which is nice. They rely on their creativity and all. When we measure it, especially on the sales side, it’s like, “What are your ratios here and here?” They’ve never measured it. What I find in a lot of blind spots by not measuring these things, and one in particular, I remember a guy who had a lead system that was going on to a first touch point. Sixty-two percent of the time, his sales team never touched the lead.

It’s crazy what data can do. You can see it with wearing an Apple watch. How am I sleeping? You look at the data, and you’re like, “I’m tossing and turning. I’m doing this. Maybe I need a new mattress. Maybe I need to have a warm glass of milk before bedtime. I need to do something different because the data’s not good,” or it tells you that you need to stand up.

You have been sitting for the last five hours. You are like, “I didn’t even think about that.” Data put information that you don’t always see every day, whether it’s your sales process or manufacturing process. Oftentimes, we are trying to solve problems that aren’t the root cause. It might be that I’m trying to solve a symptom, “This doesn’t look right. I’m going to solve that symptom.”

You never get that step-level change where you are transforming the organization because you are looking at cursory data that you see. There’s all this data behind it that maybe you don’t see. That’s where there’s a lot of power. In our world, it’s hard. If you have things in disparate systems if you have things on Excel, and if you have things on paper where data dies, once it goes on paper, are you going to see it again? How are you going to get access to it?

Data dies when it's on paper. Automation is key. Click To Tweet

If you can start to marry all this together and then great analytics and be able to see what’s happening, sometimes you are going to see something, and you are like, “There’s a fundamental problem there that I need to address.” Not just, “Can I buy a machine and make more widgets? That’s going to make me better. I read it in a book. I read in a magazine article that automation is key.”

We have some customers who automate and produce more widgets but it gets stuck in inventory, and they are not able to build it into their product because they had, let’s say, an issue. Bob had a bad marriage or a supplier is not providing the right part. There’s a bottleneck in the process. It’s not, “I’m not producing enough widgets. There’s a bottleneck over here in this process. That’s why I’m not able to get products out faster.” Once again, that’s the power of data. It gives you that inside information.

FYI, I got a good friend named Bob. We always say, “Bob did this.”

We had a few Bobs but I don’t think we have, as mentioned.

Bob, I’m sorry if you are reading this. I heard what you said. A lot of times, CEOs or people who are running companies are trying to solve problems that are not the root cause of the actual problems. They are going after the symptoms but because they don’t have the subjective data, that’s saying, “Doug, you are gaining 1/2 pound a week.” Ten weeks later, you go, “I feel a little heavy in my pants. Guts are hanging out.” If we looked at the root cause and said, “Doug, you are overeating. Look at the metrics of your watch. It’s telling you whatever it might be.” You then fix that. You remove the cause that’s causing the problem. We no longer have a problem.

It’s funny because you are talking about weight. When you look at nutritionists and all that, they tell you to write it down what you are eating. You don’t realize I have this snack or I ate a steak, and there were 2,000 calories in that cheesecake. You add it all up, and you are like, “I’m at 5,000 calories but I didn’t see that. I didn’t think I was doing that. I just had a little snack.” It goes with anything. It goes with how you are executing sales. Let’s say Salesforce. You want to capture everything that someone is doing, so then you can see you have a win-loss analysis at the end, “I’m seeing a trend of all the wins that I’m getting over here and what my team is doing or the losses.”

At this sales stage, it keeps dying on the vine but I’ve noticed that I didn’t insert any marketing material that helps the customer perceive the value at this particular stage. You get that type of information, and then you want to incorporate it. Incorporate the change. It’s going to make you win. That’s what it’s about. Incorporate the change that’s going to make you manufacture better, be more efficient, and produce a higher quality product.

Look at your wins and losses, and incorporate the change that is going to make you win. Click To Tweet

We are speaking with Mr. Naveen Poonian. He’s the CEO of a company that was founded by his dad in 1986. The company is called iBASEt. We are talking a lot about complex processes. We are talking about processes in general and measuring. You keep dropping these amazing bits of wisdom. You are off the top. The win-loss analysis at the end, I cannot tell you how many people I know when I look at a company, I go, “I see you reporting on this, so we could look at what’s working, what’s not working?” and they don’t have the data. You deal with a lot of manufacturers. Maybe small to medium size businesses or the manufacturers in general. How are they faring during this economic environment that we are in?

There’s no doubt. There are a lot of macroeconomic headwinds for the SMB market. If you are in the SMB market, you are not Apple. You are not necessarily super cash-rich, and you got billions of dollars waiting in the wings that you can deploy or use to ride out the storm. It becomes a little bit more of a difficult situation for SMBs. When you look at things, the cost of borrowing is increased. It creates a predicament. “Am I going to borrow money to stay open? What does the future hold?” Inflation and cost have gone up. Hiring has become difficult as well. It seems daunting. During this time, it’s important for the people, especially the SMB, where their key differentiator.

It’s often customer service, customer centricity, and being able to be closer to the customer. When you think about big giant organizations, it’s harder for them to have that customer focus like a small and medium business can. Given the environment, it is difficult. What I’ve seen is pivoting more towards focusing on the customer, engaging more with the customer, and making sure that you are taking care of them.

You are preserving your revenue. You can ride out the storm. In many cases in our world, we are seeing that being more close to the customer is also leading to new sales opportunities that we didn’t know before. That’s also another lesson learned that we’ve had as a company. We grew. We were customer focused and intimate. We thought, “We are going to build this product. We are going to build that product.” We went off and started building.

You got to build it with the customer. You got to be there with the customer. You got to get that instant feedback and information, “What works, and what doesn’t work. How am I going to build a product that fits the market?” I can tell you we’ve built products and we gave it to the customer. They said they wanted it, by the way. We gave it to the customer, and they said, “I don’t know if it’s that valuable. I wanted it but I don’t want to pay for it.” You are like, “I spent millions of dollars to try and put a product out. The customer doesn’t want it.”

If I were there every step of the way, I probably would’ve learned that sooner or I would’ve learned that they want something else different. With these headwinds, that’s where the focus needs to be for the SMB. Those who are more customer-centric and closer to the customer and the customer perceives that they are delivering value are going to do okay because the customer is going to work with them to ensure that we can all move forward given some of these headwinds that we have.

I will go back to what you said, though, which I believe was brilliant before the win-loss analysis at the end. You are saying to stay close to the customer and understand what they are doing. Don’t just be a vendor to the client. Be part of the integration of their business. You will get more information. You can evaluate. When you start hearing overlap going on in that industry, then you will know to be able to test a product or service out of the gate. You made some errors that cost you millions of dollars. That’s never fun spending millions of dollars. You learn from it. You moved on.

That’s another wise thing. It’s like, “You are going to make mistakes no matter what size business we are in. I made one. It cost me $53,000. I wasn’t a happy dude that it cost me that. Certainly not millions of dollars but it’s still $53,000.” We have to, as CEOs of a company, go, “I recognize that. I made a mistake. We got to move on.” I love win-loss analysis because that tells you what not to do ever again.

Two things. You said win-loss is good. It’s funny because you ask the sales guy, “Why did we lose?” “We are too expensive.” Usually, it’s price. That’s what the customer always tells you. You call the customer. You looked like you were high-risk. You weren’t able to explain the value. The other customer came in and was more consultative and did X, Y, and Z but you will never get to know that because no one ever wants to look bad in front of a boss or something like that. Sometimes the customer doesn’t want to tell you. That information, once again, becomes powerful.

Another thing that you said was the whole vendor. No one wants just to be a vendor. If you are a vendor, you are a commodity. You are something that’s there. What we try and do as a company we want to be the trusted advisor. In many cases, we are helping our customers outside of our product. They are not even using our product but we are going there consulting them, “This is the best practice. This is what we see. This is what Gartner is saying. This is what IDC is saying. This is what the analyst groups are saying. This is what another customer of ours is doing.”

We have this thing called an Executive Advisory Council, where we bring C-level executives together to, 1) Help us influence our strategy in direction, 2) Wouldn’t it be great for you guys to have each other’s numbers so we can start solving problems together? What one person might have done and have an experience with, the other person needs. How do you start to be more than just a vendor but deliver value on multiple fronts? We have a product launching to buy our product but how can I also add value outside of that and be more than a vendor, be a trusted advisor?

We all want to do business with people we trust. I’m going to have a long exit on this thing. I want you to know. There are many valuable things you are saying during this. If people want to check out more about your company or you, how do they find that information?

We have a website. Like many companies, we are redoing it again to optimize it. You can learn a lot. It’s great to learn a lot through shows like this and understand a little bit about what I’m thinking and where we are going. You get to learn a lot about the company as well. Even doing a google on us, you can see our pedigree, where we’ve come from, and the customers we work with.

We have videos on YouTube as well as on our website. That show who we are as a company. Once again, that’s what’s important. We want to bring people who share our vision, our values, where we want to go, and how we want to change the world. We want people who believe in our vision. Ultimately, that’s what makes a great company and a great fit for the people that want to join.

I agree with you. Thank you. I have one last question. People start these things on spreadsheets. They start them on napkins and writing down on the back of 50 business cards and doing the old sticky method on the wall to get their processes. You guys have transitioned this whole thing to now a cloud-based process. It’s scalable and has global reach no matter what. I wanted to ask you this question. How are businesses now increasingly relying on the cloud to meet new challenges? Is it advisable for all companies or the majority of the companies to look at increasingly relying upon the cloud as the future of business?

To me, the cloud is a game changer. Especially when you start thinking about things like 5G and our ability to increase the bandwidth to work with the cloud, it’s only going to get better and better. I suggest every company should be looking at it. There are different times in our journey when it makes sense to make the move. Every business is different. We have a lot of customers who have mission-critical operations but they are running an on-prem situation. Sometimes it makes sense, and then other times, it’s cloud. What we are seeing, though, is that most companies are starting to pivot towards the cloud because there are a bunch of benefits as a result.

 

You start to think about scalability. You were mentioning it. “How do I bring thousands of people into one ecosystem and not be stressed by having an IT staff of, let’s say, five? They are going to be spending all their time trying to maintain this and deal with it. How do I scale up quickly?” If you are doing work with a platform like AWS or Azure, you have a whole support team behind that can help you scale up your hardware and your software, your servers or the bandwidth. That’s important. The beauty of the cloud, too, is that it democratizes data. It allows you to unleash the data and move it anywhere that you want, versus sometimes, it’s stuck here in a server in this system, and it makes it a little bit more difficult.

How do I access that? How do I give access to other people around that? You have to start thinking about data access, data transfer, and data storage. The cloud makes that a lot easier than trying to do it by yourself in an on-premise environment. Another is agility. As I talk about, “How do I spin up resources as needed? I don’t need the resources. I’m shrinking in this area so I can tone it down and reduce my costs as well,” obviously, increase your costs if you are going to scale up and decrease your costs if you scale down. There’s also resiliency.

Think about the data backup everyone is doing. I remember I was always talking to our IT guy. He’s doing backups every day. He’s in the data center all the time. He’s going in and out. Now you can have real-time data backups. If for some reason, something happens, you can spin it up in another environment quickly and efficiently. That becomes great if something were to happen. Even if you had a security breach, security is another thing. Imagine AWS and Azure has thousands of top-notch security protocols and processes that they have people, and this is all they do. They probably have better security people than you do in your own company or even our customers do.

It’s going to help by making that move. It’s innovation. There are cloud services and integration with other software. We produce a lot of data. We are not an AI company but we have all the data to marry with an AI algorithm company that specializes in that. How can we bring in an AI software solution, marry it with the data that we capture, and create a better product for our customers? Those are a few things that the cloud helps customers with but I do think it’s the future. It takes time. It’s a journey for everybody.

You said four cool things. It’s agility, reach, resiliency, and the future. That encompasses the cloud extremely well. I would say it’s cool. I’m waiting. Will they ever be able to teleport me from here to Los Angeles, so we could go out and have lunch, let’s say, and then I could teleport back? I don’t know. Maybe it will happen.

I’m still dreaming of that and wishing for that all the time.

Naveen, I appreciate you being here on the CEO of Sales Strategies. I appreciate you going all out. There are many wisdom nuggets that I wrote down. I literally have a whole page of wisdom nuggets. Normally, I don’t have that many on many episodes. I would love to have you back again. If you would like to come to the show again, let me know.

This was a lot of fun. I love to talk and pontificate about the environment now and in the future. It was great. Thank you for hosting me.

You are welcome.

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As always, I take notes. I love the fact that he wrote down from CEOs, take your top five initiatives that you think you are going to do, throw out the bottom 3, and work with the top 2 because that will give you what you should be working on. I also love the fact that when you are using data in your business, you can measure the business and you can measure it objectively.

When you are putting processes around everything, you can measure all of this data that’s going on, and you will be able to solve it. Solving problems is important in your business. A lot of companies and CEOs are not solving problems at the root cause. If you remove the cause of the problem, you no longer have a problem.

If you are treating symptoms, you could still have the problem, and those would continue to persist, even though you think you might be addressing those. There’s so much here about why you want to use data in the cloud. It’s agility, reach, resiliency, and the future. It’s where everything is going. If you haven’t embraced the cloud yet, I would highly beg you if you would, for the sake of your business, to start embracing the cloud more and more on a regular basis.

I loved what he said here on the win-loss analysis at the end. When you have data, you can look at things, and you can go, “This is working, this isn’t working.” It gives you this objective view to manage your business and run forth, whether it is on operations, on sales or whatever it might be on. It gives you objective data. That will tell you the truth versus being honest.

Honest is objective. Objective data is truth. If you love the subject matter of this particular episode and you want to hear some subject matter that you came up with, and you are like, “I wish somebody would talk about this or if you think you’d be a great guest for this show yourself, reach out to us at YouMatter@CEOSalesStrategies.com.

Let us know what the idea is. If we can source it and make it work, we will do so. We will even find the expert and bring it in if it’s not yourself. If you love this show, I would love for you to please give it a five-star review. Pass it along to your friends. The more people will know about this, the better the ratings. The better the ratings, the more we can do for you.

If you know anybody that’s looking to be in the top 1%, whether it’s yourself, your team or people you have or know that want to be in the top 1% of earners in sales, we have a whole process around this that’s duplicatable and teachable. We will be happy to help you out in that capacity. Lastly, if you can go out and sell something, go out and sell something, sell a lot of it. Play win-win. Play the trust card on both sides. Help other people win, too, and you are going to be highly rewarded for it. Again, go out and make it a great day for your success.

Important Links

• iBASEt
• YouTube – iBASEt
• YouMatter@CEOSalesStrategies.com
• https://www.LinkedIn.com/in/naveenpoonian/
• https://www.LinkedIn.com/company/ibaset
• https://www.Facebook.com/ibasetglobal/
• https://Twitter.com/iBASEt_global