Laura Merling,

Chief Transformation Officer,

Arvest Bank – Part 1

THESE ARE INTERESTING times for people who run businesses. Technology, which is infiltrating every aspect of a company’s operations, is changing at an ever-faster pace, making competition in the marketplace keener than ever. But long before today’s business challenges came to the fore, a young woman from the Upper Midwest found herself thrown into the tasks of helping companies make changes that could give them an edge. Since then, she’s led transformation campaigns at such companies as Ford, Pepsi, Alcatel-Lucent, AT&T, and, now, Arvest. We sat down with Laura Merling to hear about the making of a transformation guru—and the “five-pillar” program she conceived along the way.

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Before we talk about transformation, tell me a bit about yourself—where you grew up, what kind of kid you were, how you got interested in technology and business.

What kind of kid was I? You can ask my mother—she’ll probably say all kinds of bad things [laughter]. I’m the youngest of four girls, and I grew up in a family just outside of Detroit. When I was younger, I thought I wanted to be a school teacher.

Then when I got to college, I wasn’t sure what I wanted to do. Mainly, I wanted to get out of the Detroit area because I had watched the ups and downs of the automotive industry with my whole family. My father, my brothers-in-law, my grandfather, my uncle, they were all in automotive, as you might suspect. I was the first person from our family to go to college, and by the way, I didn’t finish. I have one class left.

I’d say you’ve done pretty well for a college dropout.

So my goal was to get out of Detroit, and I had very specific plans. I decided I wanted to be an attorney, but not just any attorney—I wanted to be an international attorney for Pepsi, because I wanted to travel the world. Anyway, this is where my brain was going.

I went to Oakland University, which was literally 20 minutes from my house. I had to pay for my own school, so I was working at Ford, switching on and off between fulltime and part-time; I ended up mostly working and going to school part-time.

At Ford, I was in the IT department, but my role was to teach. We were rolling out new technology to all the plants that was tied to the timekeeping system for manufacturing, so that if you had an injury, it would track your injury restrictions; it wouldn’t let you clock into a certain job, for example. So we were automating the medical department and the timekeeping system with the medical department.

I didn’t really know much about technology, but I was learning. Just to give you some perspective, this was the mid- to late-1980s, and my job was to teach doctors and nurses how to use this electronic medical record system. If they didn’t learn it, they were going to have to outsource the medical activity. In that case, any worker who got an injury, or even needed aspirin, was going to have to leave the building. That’s not a good thing in a manufacturing facility.

Most of the medical folks who work in production and manufacturing are usually retired physicians and nurses, and many of them were very resistant. Just imagine in the 1980s trying to teach them how to use computers to do the job that they’d been doing for 50 years, right? I would say that at Ford I was doing transformation from the very beginning. We were teaching these retired physicians how to use software, and it was important to understand the need to have empathy for them when they were going through this major change.

I was going to ask when the word transformation became associated with you, and it turns out you started that way.

Yes, in a sense I did. Then from that job at Ford, I got recruited by Pepsi. This was the early ‘90s, and the Pepsi project—transformation project number two—was called “10X.” Our goal was to figure out how to make Pepsi 10 times better. It wasn’t just about technology, it was also about processes, and team structures, and how they delivered product. It was super interesting because we were using handheld devices—Palm Pilots, remember them?—to be able to track orders off the truck: what we delivered and what the truck picked up for a new order. We were also using these devices for equipment inventory on our repair trucks, the trucks used to go fix a fountain machine, or a vending machine, or whatever.

Is transformation how you think of it in hindsight, or did you think of it that way at the time?

At the time, I didn’t think about it as transformation; I just thought of it as a really big change. I think Pepsi thought of this 10X project as transformation. They wanted to reestablish Pepsi and make it 10 times better. That was different from how the Ford plants were approaching it. They were transforming their medical processes as a mechanism to fight OSHA compliance. Pepsi was truly out-and-out asking, “How do we change our business?”

Pepsi wanted to be leading edge, ahead of the curve, and to accomplish that, they were using a 4GL software tool called Power Builder, which was something like Microsoft’s Visual Basic program. The company that made it was called Powersoft, based just outside of Boston, Massachusetts. Pepsi was using this platform to build the front end for the handheld device, and for the web, and for the end user as well. Powersoft approached me and said, “You ask really good questions. Would you like to come and work for Powersoft?” And I said, “I know nothing about programming. I don’t know how to code.”

And they’re like, “Yeah, but you ask good questions. Come work for us. We’ll teach you how to code.” I left Pepsi and took the job and went to work in the software industry. Later, Powersoft was acquired by Sybase, and then Sybase got acquired by SAP.

At Powersoft, I went from not knowing anything to teaching people how to code in six months, and I actually built part of the software product, pieces of the programming tool.

So when did you start thinking about transformation as a program, or as a philosophy, or as a business?

Having gone down the path of technology and building software, I was now thinking a lot about technology and ways to use it. When Sybase acquired Powersoft, I went with them, moving to California. After Sybase, I worked for a couple of software startups, and then I went to work at a high-tech nonprofit called the Software Development Forum. In fact, I ran it. I was the CEO for four years. We helped software developers figure out how to get venture capital dollars, and so part of that was me teaching these would-be entrepreneurs new technologies. Our investors included Sun and Microsoft, and a bunch of VCs, Silicon Valley Bank, a bunch of banks, and they all wanted access to these next generation entrepreneurs. So for four years I ran a program of trying to help software developers become entrepreneurs and put together a business plan. That was where they had to start being able to talk about, What’s the business value of the technology that you’re doing? How do you think about that business value? How do you create it? How do you tell the story?

I went from that nonprofit to a startup that was doing APIs. Think 2006, nobody knew what APIs were, right? Only Amazon was really focused on these Lego-like blocks that let you talk to other applications. This startup had asked me to run sales and marketing. It was a startup, so you do whatever it takes, and in order to convince people that they wanted to buy our software, we had to show them what the problem was that they could solve with it.

So I hired a third-party design company to make a bunch of sample apps for me, so I could show them, “Here’s what you could do if you took your data and put it on somebody else’s app, or you built a mobile app, or you built a website.” It was transformation, but from a conceptual standpoint: “Hey, Best Buy, you really want your content to be in somebody else’s website.”

After that, I left to go do a business transformation at Alcatel-Lucent in France, because I had reached a point where I wanted to stop doing it on the software vendor side and do it for a company. I wanted to be on the other side.

And here you are. That brings us to the “five-pillar” philosophy of business transformation that you’re now known for.

Yes, at least the start of it. By 2015, after I had worked at both Alcatel-Lucent and AT&T, I was thinking, “Okay, I keep doing the same things: There’s the change management process. There’s the Do you know what your business strategy is process? There’s Where are you going? What problem are you trying to solve? Because if you build it for today, it’s going to be obsolete tomorrow.” A lot of that insight came through my work at AT&T. So I wrote a first draft of my five-pillar program in 2015 when I left AT&T. I was like, “This is wash, rinse, and repeat, no matter where I go. I’ve done this enough times now that I know what the pain points are.”

Great—we’ll dive into that program in detail next month. Can you give us a preview?

Absolutely. A couple of things I see over and over: One, the transformation that companies think they want to make often is only a fraction of the one they need to make. And two, people say they’re ready for change but we honestly all struggle with change.

Sounds exciting—looking forward to it.

See you next month!