Truelogic DX: Digital Transformation Recording | Truelogic

Digital Transformation

Pioneer logistics company LBC Express had been in the process of implementing digital transformation when the government announced the lockdown. Hear Javy Mantecon, LBC CMO for Global Marketing, share insights on how COVID-19 became the ultimate test of fire for a company in the midst of digitizing the business.

Happened last Oct 1, 2020

Video Transcription

Bernard Sand Juan III

Hi, everybody. This is Bernard again, and welcome back to Truelogic DX.

I’ve seen that we’ve got some new faces and new people, and some people that were here that joined us on the first session. Thank you for visiting this time again, and joining us in this conversation!

Up today, we’re talking about the concept of digital transformation. And I know that’s been a buzzword for a while, and we found that the best way to explain it and dispel what it is and what it isn’t is to speak first-hand with the person that’s been through it and brought the big brand through it and its always exciting for me when brands move to digital, because I’ve been a netizen for over… And I’ve been waiting for the country to leverage the power of the Internet for a long time.

So, as always, these are conversations, and I strongly encourage you to participate. There is a chatbox. We will leave the last 10 to 15 minutes of the session to address all of your questions.

If you have the ability to enable your cameras, I encourage you to do so.

Make it more personal. You can drop your questions at any point in time. We’ll treat the chat box like a parking lot.

So, to get us started. It’s precisely 199 days since we all began to shelter in place and since we began quarantining. Some businesses were fortunate enough to manage their transition to digital before then – some of them right on time.

And then some of them are realizing that they need us.

Briefly, very briefly: in the current situation we’re in, we’re seeing banking become more aggressive. Shopping, and, yes, working from…we’re all banking, shopping, and working from home. Now you’re seeing more aggressive moves from brands to support SMBs (small and medium businesses).

If you’re on YouTube, if you’re on Facebook, you’re seeing ads from brands like Visa and BDO. If you thought Lazada, Shopee were ubiquitous, before we locked down – we hadn’t seen anything yet. Channels like BeautyMNL and other brands have also made big strides in digital, especially in the past 200 minus one days.

Bottom line: our customers are online; the people that are our lifeblood are online. And that’s where we need to be.

Personally, one of my favorite parts of these conversations is I get to invite people that have large, colorful careers – and it’s as much a learning experience for me, as it is for you.

So no point in suspense, ‘cause I’ve been posting it on LinkedIn, and the company’s been sending out newsletters, so you know, guys, who my guest is.

We’re lucky to be joined by LBC CMO Javy Mantecon, who’s been generous enough to tell us the story of LBC’s digital transformation. So let’s all learn from Javy.

Javy, welcome!

Javier Mantecon

Welcome! Thank you, thank you for inviting, guys.

BERNARD

It was our pleasure!

I think the experience LBC went through was a learning experience for a lot of brands, big or small.

So I’ll get into the meat of the topic, like almost immediately – and begin the talk about digital transformation as a big buzzword.

In my experience, I see people tend to underestimate it or overestimate it. And when they underestimate it, you know, they wind up overspending more than…they wind up paying more than what they bargained for. And when they overestimated, they just stopped in their tracks.

For you guys, when you were deciding to digitize LBC, what was the concept to you guys, in a nutshell?

JAVY

Well, I’ll take it a little step back.

LBC is 70 years in the business. Transforming every so often is not new, right. We started with paper, we went to typewriter, we went to computers, and now this is like a second or third generation type of transformation that we need to go through.

It’s a big customer – and from the top management, we started it, maybe, just about three and a half years ago. We started our digital transformation there – but it was a mix between what the customers now are wanting and expecting, and what the organization can deliver for them.

BERNARD
Okay. Did you guys break it down into silos? Into core parts? Was there a transformation for marketing, and then was there a transformation for people on the ground? Or did it just have to be one big thing that just washed over the entire organization?

JAVY

No, no, no. I wouldn’t suggest [it for] big organizations like ourselves. You can’t do one thing across all facets of the operations.

BERNARD

So how did you guys break it down, because if you got…if you began three and a half years ago, who…what was the most important thing? Like, where was it important to initiate the transformation in?

JAVY

Yeah, so three and a half years ago, the first department that transformed was HR. Actually it was a bit hard for self-servicing people. I mean, we’re LBC, we’ve 1,000 plus 500 branches all over the Philippines. So that was one core unit -it’s like a little silo on its own – HR – with its own requirements, all the log in, leaves, rostering of the people, and all of that. We started there. And then we moved to Operations right away…from HR to the operations, which is the meat of our service. So we moved to the hubs, to our teams, to handheld devices, to be able to gather data faster, quicker – as information pushed to our customers was one of the vital insights. That we needed to do.

BERNARD
Okay, and Marketing came in on what year?

JAVY

Marketing came in soon after – maybe, almost three years, or two and a half years now. Marketing came in, because again, as another silo, I can market. And we did.

We moved from the traditional; we moved to digital. Then you start realizing, “Oh my webpage is not set up,” right? It’s easy to put the ads out.

And then you’re like, “Oh my website is not optimized. It doesn’t have all the content. They’re not tagged properly.” Then you’re looking at the analytics from that. So that’s…

We started moving down from there – from the ads, all the way down to the website, the support, you know, going down there. So it was a pivot from internal HR, operations, and then marketing na. Because, of course, we’re all there, right?

BERNARD

So – when the conversations were beginning three and a half years ag… I think the first thing is,

was it important to have conversations with top management? And then, were there challenges there? Did you encounter resistance at the top management level?

JAVY

Not really. The senior management was the one recommending and really pushing that, you know, it’s time for us to go. When we went to the executive…to the Execom – fortunately, our Execom in LBC are also young people. So it was not a matter of convincing. It was more of a matter of, okay: How are we going to execute it well?

BERNARD

When you had their buy-in, who needed to become part of the conversation, then?

JAVY

Right after, you have to go down to the managers. The managers of all the functional [teams] have to own it. This is something that you can’t take away. You cannot run it from the top; it’s gonna come down to the middle management. The middle managers have to own it. And they will be the one to make sure it’s getting executed down to the staff.

We invested a lot in cascading. We had cascades. We had a lot of talks, speakers. We had coach, job motivational speakers talking about change. Because we needed the people to understand, again, why we’re doing this, for the importance of understanding: what is it going to do for them and to our organization.

BERNARD

Which section did you find most challenging? Like, getting the transformation done…getting the…making sure that the transformation or the change was being executed consistently?

JAVY

It’s always down to the final user – you know, our actual frontline staff and the couriers entering the data. That was the biggest challenge: getting the proper data in. Garbage in, garbage out, right, so to speak?

BERNARD

Yeah.

JAVY

So we had to make them understand that, “Why are you putting the numbers, why are we getting the address? Because the SMS support and the email – everything will dig into what you’ve entered too.” And that’s where the biggest challenge…

The system is easy to buy. Any system, you can buy. But to make use of it, and to maximize it… It’s now what goes inside that…those platforms…that can really transform your company, right?

BERNARD

And digital is a double-edged sword, because if people execute it well, you manage to do a lot of things better. But if the data that you receive is not accurate, if the way people are not…if the system runs the business, and the people don’t use the system correctly, then you’re not…you wind up not measuring the right things.

Did partners and vendors have to participate in the buy-in conversation? In the transformation conversation?

JAVY

Definitely. Again, you know our business is in logistics. We know what we do. Now, when it comes to the platform, and how the platform can transform our organization, we have a “visual” – but we need them to be able to also take us through that journey, to make sure it’s being done right. So we need their expertise in how we push to the stakeholders.

BERNARD

Yeah. So one of the things you mentioned was that LBC is 70 years old and you guys did a lot of changes – from manual bundy clocks to things on paper, to typewriters, to going on computers and then eventually being digital.

What’s the inertia for that kind of change? Is it the competitive landscape in the market? Is it your customers asking for that? Or is it LBC just always getting a competitive lay of the land, and then you guys are just changing, believing that your customers will follow you? Or do you let the customers lead the change, and then you follow in the direction they go?

JAVY

Well, there, it’s a mix. So being in a third world country, we’re lucky we have, like, a crystal ball. We just watch this world. We see what’s happening there. And then you can now nitpick and say, oh, that one, I bring it in now, it’s too expensive, let’s wait.

But the consumers are also moving.

So you have the factors of your consumers getting younger, going into these new platforms… They expect [that] when they put the package, now, after two minutes, they’re tracking it. They’re, like, here in my office…well, I mean, it hasn’t moved yet – right?

And then you have LBC being the leader. So we have to always push ourselves to the next level, and so you have those three components that will have to work harmoniously. And timing is obviously also very critical.

If you’re one of the first movers, you also pay the more expensive… you’re…the learning curve…allo of that. So that’s why I said, it’s a way for us to see. There’s things out there that – “Oh, that one, we can bring, this one we can do” – and then fit it to how the organization can execute.

BERNARD

But in most situations, I think LBC did take first mover [advantage] – in a lot of cases. And I think it has to do with the fact that’s already…that it easily made itself a large, established business, and whatnot.

So if you were giving advice to a smaller business, how would they know the right timing? To be able to say that, okay, it’s time for a change, it’s time to lead the charge? I don’t want to do the trial and error and experiment, and be the one that gets it wrong.

But then, how do they know that it’s becoming too late? What’s the right way to read the market and say, yes, now’s the time to reap the change?

JAVY

It’s a good question, but if you’re really running your business, you would really know.

You know there’s a point of, I can’t keep doing this; I can’t scale; I want to have more productivity; I want to be able to do a better customer experience.

And you realize the way you’re doing it manually, or mixed, is not enough. So once you keep those questions coming in all the time, I think, then you realize, “It’s time for me to make this transformation.”

BERNARD

Yeah. And how much of that transformation had to be done with captive talent? Like, people that you have in-house? And how much of that had to be had…where you have to find the right partners, where you had to find the right vendors?

JAVY

With LBC, we stick… Our internal talent is really core to our business. Everything else, we work with partners, and the partners are there to keep up with the times. They’ll always reinvent, have updates, and keep at that, which is hard to do for some organizations.

It’s not like… For us, we’ve made that decision that we won’t be bringing in all these talents, and then have to do it ourselves – when we can work with the partners and keep the core for our operational requirements.

BERNARD

Is that the whole point of finding partners versus having captive talent – they should be able to focus on the core of the business?

 JAVY

For us, that’s how we carved it out.

BERNARD

Okay. And what were some of the criteria that you guys had when it comes to selecting partners? Because even now, when we work with you guys, we meet your other partners, and we all sit down – well, we all used to sit down in a room together! But we get to meet them and we make sure that we’re all aligned toward the same goals.

But one of the things that I always wonder about is, Oh, okay, so I understand the selection process that went into working with Truelogic. I wonder what the selection process was for working with the other partners that we’ve gotten to meet in LBC’s offices.

So when you guys were picking up the right partners, what were the criteria for finding the right ones?

JAVY

Well, each department have their case studies, so to speak.

Here’s the business case. These are the challenges. And then we put it out to several partners and then we start evaluating from their technology standpoint, their vision, how do they look at it, two, three. So it’s not just about the here and now.

It’s also about how is it going to look like two, three years down the road. Will these companies still be there and be pushing innovation on their side? Because that’s why they want to partner with you and not have it with us.

It’s just they have to want to keep reinventing themselves, also. So we look at those things. And then, obviously, the final [criteria] is some of the financial terms and benefits that we can both get. But it’s not led by just the cost. It’s not the cheapest guy winning; it doesn’t work that way.

BERNARD

And even when you guys were making the selection process, I didn’t even understand that that was part of what you were looking at – like, which company is innovating, which one is changing, which one is researching… It’s very interesting to hear that – especially retrospectively.

JAVY

Oh, it’s because we had some conversations, like, with Itamar… You know, those personal conversations with co-founders, owners, you know, the top – are what’s important when you’re selecting and working with…that’s where you see.

It’s not an explicit question, saying, how are you gonna be three years ago – in your conversations. You’ll start hearing and saying, oh wow, this guy’s already, you know, way past the ABC’s. Yeah, we’re just starting ABC, you’re already thinking DEF. And then, that’s when the continuous improvements and enhancements come along.

BERNARD

So in terms of what’s been achieved – and I’ll focus on the marketing side, because it’s a marketing conversation… On the digital marketing side, I think a lot of people see progress, but they don’t know when they should be happy with the results. 

So take, for example, for you guys at LBC: how happy are you with the direction the marketing is going, with the visibility of the brand, especially now, online?

And then I’m going to ask what metrics do you look at that determine your sentimentality, or your feelings, towards those results?

Let’s say, if you took a look at the results that LBC’s achieved so far, how happy are you with them?

JAVY

We’re extremely happy.

I think also the pandemic has pushed a lot, forced the ones who are not sure of going online move online! Yeah, so we’ve seen numbers growth online. We’ve launched several online service tests during the pandemic -you know, pick up, processing, remittance, all of these things there. And we’ve seen so much growth in the touchpoints that we were not even projecting to have at this stage yet.

BERNARD

Yeah. I did want to talk more about that, because that is, I think, super relevant to the people that are in the audience – where LBC is actually paying attention to the needs of Filipino online entrepreneurs, of Filipino online sellers.

I know that you guys have a program for that. Would you like to tell everybody here what that’s about? And how they can be part of it, if they fit the bill?

JAVY

Yeah, well, we’re launching So Shop! which is, really, our platform for social sellers and micro SMEs. So it’s your online touchpoint. You can process, batch upload, you have your own dashboard – a lot of functionalities that you can do: branch drop-off. You can have it picked up in your house. You can do COD/COP (Cash on Delivery/Cash on Pickup), have the money collected or not – the full value, the freight…

You know, we basically chopped up the service and said, Here’s a program platform for your guys – and that we will now support it there with webinars (like this) and others; educational tips; you get rebates; you get plowbacks for each company that works with us on that platform.

BERNARD

I think that the easiest value proposition there is the convenience – the fact that you don’t have to deal with logistics on your own. You don’t have to deal with tracking on your own. You don’t have to deal with collections on your own. Because it, sort of, puts that under one roof.

JAVY

And yeah, that’s… I mean, that platform, like I said, is as robust as how you want to use. Like any other transformation, or any other tool, you can buy a smartphone and only use it for call and text – or you can maximize the power of your smartphone.

The platform is there. The same – and we now want to be able to educate the SMEs and social sellers that, hey, there is this tool, and there’s a lot more to be able to achieve for them, with a partner behind them like LBC, that opens up your market, nationwide and worldwide.

BERNARD

Yeah. Did you guys treat that as a pivot because we got locked down? Or was it already a need in the market that you guys had identified a while back?

JAVY
No. We’ve always known we’re the biggest, [have the] widest reach here in the Philippines. We cover Aparri to Jolo.It was just what value proposition did that give customers.

Well, when… As we started going, why, why, why, why, we started realizing, hey, because they want to sell. And they want to open.

 So you’re not now just limited to my network of friends, my influencers here. Because if somebody wants to order and take it from Baguio, Hey, I’m the right partner for you – and you now think of your own store and market anywhere in the Philippines, because we have the capabilities to get it there and get your money.

BERNARD

So I think some of the brands, like, especially, even under the current situation. What they struggle with is finding this – like, where’s the need, and how do I fill that need. How did you discover that this was a great target audience? That these were a group of people that you guys could add value to their business, that you guys could help? What was the process for figuring out social sellers, online merchants, entrepreneuring Filipinos – [that] they’re the right market for LBC to talk to?

JAVY

It’s, again, it boils down to data. You look at your transactions. You look at your customers. And you realize 20-30 percent of them are giving you 70 percent of your revenue. Then you know go further; who are they, what are their profiles. And then you start looking and saying, wow, that’s there on this side, these guys are entrepreneurs pushing their service.

That’s where we said, this is the value we can offer you. We’re not just at logistics. Basically cost to switch in logistics is easy. You can go on your phone now, and use anybody else and all of that for a certain thing. But what kind of proposition can I give that’s different from everybody else?

So in my environment, in my community, I have buyers and sellers. They’re already with me. You’re a seller. You’re a buyer. You’re a buyer? I have sellers. Let’s make it online.

BERNARD
And I think that’s why SoShop! is built more like a community. It’s not just a product. It’s not just a service that’s out there for anybody that wants to use it. It’s being built like a community so that it becomes more…or it becomes exponentially more powerful that way.

BERNARD

So I’ll go back to the broader topic of digital transformation.

LBC is not alone in the vertical that you guys compete in. There are a lot of logistics companies – actually, there are a lot more that are springing up from the woodwork, right?

And for the people that are attending – I am certain that they are in verticals where they have competition.

But I think LBC is in a good fighting position, relative to the people that you directly compete with, simply because most of the transformation was there before we got locked down. And you know the direction of the business, and the plan, and the metrics were determined before March 16, which is terrific.

But there are brands that are thinking, oh, is it right for me? Should I invest in it?But regardless of the vertical, what do you think a brand or a business is risking by ignoring going digital, especially now?

JAVY

It’s the unknown. What they’re risking is a whole pot of gold, right outside, with the horizon of what they can’t see.

Because everybody is there. Everybody’s online. You talk to Facebook. You talk to Google. You talk to all the channels. Their numbers are way up there – Zoom and all these platforms; everybody is there. You can now actually communicate with them, reach out to them in a more effective manner than what you would have had prior. With the old ways of trying to think, this is what I would have done, I would have done this.

They just got to break the chains and look at the pillars that they want to really get into and focus. And you see restaurants doing it. They’re pivoting, they put this, you can order, you can do frozen; you know, before you couldn’t; now you can eat their food.

Everybody is pivoting. So the smarter ones are the ones who are dedicated, that are really thinking – are making the pivots.

BERNARD

But when you guys transformed, you guys began… So the transformation began with HR, I think, because that’s the most repetitive task. And it’s pretty standardized in every business, right? Everybody Bundys, times in, clocks out, OT is paid the same way…

 But essentially for you guys, as a business, you started with your core competency. You guys started with operations and logistics and the people at the centers. But is that prescriptive? Would you always advise that when a business digitizes, do they always begin in operations, or are there “it depends” scenarios?

JAVY

Yeah, you can take silos out, like I said. You can take marketing; you don’t need to fix your …digitally transform your operations, so long as you can still take the volumes and do what you need to do and provide the service. You can already take your marketing out.

So there are silos that can get “Volt-ed” in – and that’s what we did with LBC. We had all the senior management with their own division, saying, this is how I can transform, this is how we can transform. And you look now at, what’s the KPI that you want to be able to achieve.

In our case, it was really being able to scale. How do we get LBC and be able to scale this for double the volume and try to focus on operations.

BERNARD

Okay, that’s terrific, right. Like the fact that you guys knew, We’re doing this because we want to….we want to double our volumes. And so for you guys, you started with the operational pillar, and then all the pillars eventually followed suit.

So we’re locked down. It’s been one day to 200 days, and when you’re online, are you observing any brands that have been making a pivot – that you think are doing really well, other than LBC? Are there other brands that you’re seeing – wow, okay, wait – I’ve not seen that before, that’s a good approach. Are there any brands that have caught your attention?

JAVY

You know, in our field and outside our field, the smaller players are very agile unlike us. We’re a big aircraft carrier; it’s pretty hard to make a U-turn. It takes a lot. But we see certain things, bits and pieces from some of the smaller players – Hey, that would be a nice one. How could we try to incorporate that into what we have. [But] does it fit?

So it’s not always, Hey, let’s just copy because they have it. It has to fit. Where does it fit in our entire proposition, and is it worth it.

BERNARD

And so that’s where the metrics come in, right, Javy?

JAVY

Yeah.

BERNARD

So take, for example, for the people that are here that may not be transforming, or are actually getting started – like take, for example, for operations. What key metrics did you guys measure to say, okay, this is headed in the right direction, or for you guys to say, okay, wait – we’re not headed in the right direction? Because I think the data feeds back into whether you’re doing it right correctly or not, right?

So if we broke it down into silos or for, let’s say, for operations, what key metrics did you look at, to say, “Okay that’s progress”, or “No, that’s not progress.”

JAVY

So there’s several. For our industry, it’s rider’s productivity. So when he [the rider] goes out, how many can he do?

Then the second one goes, how many can he make sure he fulfills, because you can take out the thousand pieces, and then come back with 900 – still useless, right?

So you have to be able to [assess]: How many did come in? How many did he leave? How many did you fulfill? What route did he take to be able to make sure that he can optimize his route better – and make sure that at the end of the day, everything he took out is released?

So that fulfilment rate, and what we call Return to Sender, or the returns, is another that we try to look [at] and keep down. And that’s where we see that, okay, with all the tools that we’ve provided, and the transformation, what has happened, before and after?

You always have to have a baseline. Don’t do transformation without having a baseline pillar number. It might be right, it might be wrong – it doesn’t matter. It’s your baseline. And you can just take it from there and see forward if you’ve done better or worse. But you have to have a baseline.

BERNARD

Right. And I think that’s a terrific – because I think that there are some people that will invest money thinking, oh, okay, so I attended this seminar, they said it was a great idea… I’ll invest in Adwords, I’ll invest in SEO, I’ll invest in a website that costs, I don’t know, ten thousand dollars, half a million pesos… And then when we look at it, we go, like, why?

And you’re right – I think it needs to be motivated by a baseline figure that you want to move.

It’s interesting that the key metrics that you were talking about in operations, in logistics were rider productivity, fulfillment rate – but going all the way to route optimization actually does tell you when you guys are progressing.

On the marketing side, what metrics were you guys looking at, to say, okay, we’re headed in the right direction, or okay, stop, our message is not getting heard, we’re not talking to the right people.

JAVY

Well, so when we made the pivot online, everything now goes into the website. So we start with the basics.

Where’s the page rankings? Where are we for all of this search? What’s our volume coming in? The sessions, the page views? Are they searching other things inside LBC?

And then you go down to the: Did they sign up? Did they fulfill the whole transaction? So you now have the conversions and everything inside there.

So there’s several metrics that – yes, I put my ad, I can get the reach, and I see that they’re coming in. But is it now returning certain investments, which is now the sale? I need the booking, at the end of the day, right? So you can all be on my side, but if you didn’t do anything… Sayang naman…I’m a big brochure…

BERNARD

Yeah, and they always say, retrospective is always 20/20. So I would assume that, I think LBC would have encountered some challenges when you guys were doing your digital transformation. And I think regardless of the size – I don’t think you can ever be too big for transformation to ever be frictionless, because if it was, it wouldn’t feel rewarding when you get it done.

JAVY

Let me say: we’ve not transformed yet. We’re still transforming; it’s not a past event. These are things happening now. It’s not like LBC, oh, you’ve transformed… No, no, we are in the middle of the transformation. We gave it a five-year period. So we’re three and a half years in. We did not say, oh, we’re gonna do this and in six months, we’re all good.

This is a five-year transition. It’s carefully calculated. Resources. Like I said, you can’t go with 50 transformations all at the same time.

BERNARD

I think it’s also important that you break it down into pillars. You break it down into periods, because, you’re right – you can’t just do a sweeping change and then pray that everybody gets it, or that everybody will do it right, or that everybody will understand it.

I would even wager that five years from now you guys will realize, oh, wait, the market is shifting, the trends are changing. Okay, let’s move in that direction, since that’s the right way to do things now…

At least in the past three and a half years, what challenges did you guys encounter that you think small businesses should also anticipate? If they’re not as big as LBC, but they are looking into the process of transforming, these are the lessons that you think are key in LBC’s experience that, regardless of the size of business, you would learn from this?

JAVY

I think earlier, at the start you said two things, and that’s at the very very first .

Don’t overestimate what the transformation can do for you. Don’t underestimate the amount of work and effort that’s going to be needed to be put in.

You know, you can’t just, like I said, buy something and voila – it works, it’s all there. There’s always going to be some form of configuration, so when people overestimate or underestimate, it’s not about just the money. It’s: I didn’t think I needed to put that much time and effort. I thought I’d just buy it and it goes…okay. And then, I get my expectation is, it would have taken me from here to the moon right away.

So those two things at the very start, to manage it well.  And then, gain, you have to look at what you…what KPI, what metric are you really trying to change. Is it scale? Is it this… Once you know that, then you just focus on making sure you can get that now.

You’re going to have to put time and effort with… Data integrity is key. You cannot have analytics, you cannot have AI, you cannot have everything if your data integrity is bad, because it then turns everything out wrong.

BERNARD

I think also sometimes for a brand, they do their digital transformation because the objective is to disrupt the industry they’re in.

I’m not sure that for you guys disrupting all of your other [competitors]…because they’re not as large as you guys, and, you know ,they’re not as well known as you guys. And I doubt that they have become as efficient as you guys.

But – so if I were to ask you guys directly – which market is LBC trying to disrupt, like with your transformation, whose tree are you trying to shake?

JAVY

Nobody’s, honestly – because there’s no tree next to mine.

BERNARD

[Laughter]

JAVY

I know i’ll probably get killed, and people are gonna start saying….

But it’s true! There’s nobody close enough to even be compared with… You know, people say, oh, I’ll compare you to X, I’ll compare you to Y… It’s like, hey, you slapped my face… don’t even compare me there. So I need branches and my branches are what’s challenging us, so, like a big tree you still still have to chop a few branches and disrupt yourself for it to go to the next level, right?

We’ve proven ourselves during this pandemic. We never closed. We kept the organization running from March 16, all the way. We never shut down.

BERNARD

Wow. And I think that resonates a lot with me right now, because even for us, we didn’t shut down. In most cases we allowed everybody to work from home, just like everybody’s that listening to us is working from home. But there are a few key people that need to come to the office in order to keep the business going, because payroll has to go out, suppliers have to get paid, and all of that jazz.

So, I think that’s terrific. There have been, I would say, a couple of challenges, like probably more for you guys – like that thing that happened in Customs, or the pier or whatnot. But you guys sort of quickly overcame those, and customers, I think, appreciate the fact that the business is steady, it’s reliable. That – and the fact that you’re tryin to build the community now in So Shop!

So: given everything that’s going for LBC, would you say you guys always read the market correctly – or would you say in retrospect that there were things that happened in the market that you know could have been anticipated better, or things that you didn’t see coming?

JAVY

No, we’ve never… We’re not perfect. We make a lot of mistakes here and there. Logistics in the Philippines is one of the most difficult in the world, with all the islands, with all these challenges, infrastructures, and all of that. If you can perfect logistics in the Philippines, what the industry says [is] you can be a logistics expert anywhere else in the world – it’s ten times easier already. But I think being also 70 years…

And another advice : when we were transforming and the pandemic hit us during this transformation, we had to revert back the old. No airline. All of a sudden, our whole operations had to now go back to our business continuity plan, which was, what did we did do 15-20 years ago, 30 years ago? And we had to revert back to all those models, right? Airlines are flying now, very minimal flights. So we had to put RORO out, we had to do all of this to keep the business going.

We could have easily said, let’s just close. That’s the easiest thing. But SMEs and other customers are dependent on us. So that was one thing we were able to read right- because we knew what we did before, compared to other startups who started up really now, with the online – suddenly, they’re like, Huh, how do I do things, I don’t know. So you only start off that backup.

The other one is on being able to look forward and finding that gap. We’ve made our fair share of mistakes, trying to focus on certain segments and all of that – and we said, again, it’s timing-timing. They were not ready. We launched e-LBC, I think, it was 1999.  A full e-commerce place and, wait, everything way, way too early.

We wanted to try it, and we were saying: They’re gonna be ready for it…. Oh, they’re not, um, okay, let’s take that back a notch a little bit.

People were not fully ready, but we had shopping, we could do little things.

There’s always a right product with the right offering, and then – don’t forget – at the right time – that people are willing to take it.

BERNARD

You’re right. You’re right. I agree.

I’ve got a couple of questions that are coming from the audience, because we’re coming to 13 minutes at the top of the hour.

This one’s one of the most common questions that we tend to get.

When they assign a budget to digital, is it…should it be tied to progress – like, meaning, if they gain more than they anticipated, should they disrupt their budget and pour more into it – or should they be disciplined, and keep it at a steady pace?

I think the question that precedes that is, How do you even figure out what the budget is? This is always a recurring question for us, like, even on the first one [session] with Donald [Lim]. This got asked.

So if they were asking you, how do they figure out, like, what’s the right way to figure out what the right budget to Digital – either to digitize either operations, or HR, or marketing – how do they know what resources to spend on that?

JAVY

Again, it’s what KPI are you looking at. When we said we wanted to do operations and increase productivity…  There’s a way to be able to measure and calculate.

If I increase my productivity of my people 10 percent, times 10,000 people, times this, this…

I can get this, sort of, increase in…. Then you have have your investment. What period of an ROI are you looking at?

Some people are aggressive, like I said. I said, don’t overestimate – “Oh, I can make this back in six months, and we’ll all be good” – because sometimes it takes a while to fully maximize and execute.

It’s looking at what measure you’re trying to really drive.

And then, see, some: are a bit more complicated, like a website UX. Oh, we want to make the UX, but again, it’s not: is it about the UX, or is it about conversion? You go down to conversion, you can get a measure. And the reason I’m investing in the UX and changing and putting a [button?] is because I want conversions, right?

So don’t get sidetracked with other measures; stick to what’s the core, and you will be able to mathematically compute and say, oh, wow, that took 3-5 years. If you’re okay with it, and your platform will last, what, 5 years – you’re good.

BERNARD

I guess it also depends on what your perceived longevity of your own brand is, because if you feel that you’re a brand that needs to pivot every five years,  then go for a shorter ROI period.

What I always like to tell people is: when your time to achieve your goals is shorter, you tend to be more aggressive, which means you probably invest more.

One of the things that you always say, Javy, that always resonated with me is, It’s easy to buy the system.

Like, hugot ba yon? Like, where does that – like, when you say that, it sounds like it comes from experience.  So when you say that, what does that mean?

JAVY

Definitely from experience. When we started looking at certain transformations – marketing and tools; you know, CRM platforms; we had social listening tools… And I tried most of them. Because it’s the easiest thing is, what [did] they sell you, this, right? Get it. And you’re like …

We need them,  they say, we need customization. What do you mean, customization?  Ah, because obviously the out-of-the-box system you bought doesn’t work. We’re like… [scratches head}

So it’s: Buying is the easiest [thing to do]. It’s really now [about] understanding how it’s going to be used, where you can put in it, really, return what you want it to do is very important.

I know- and I guess a lot of people here, whether they made it or not – they know. They’ve tried it, and they know it didn’t work. That’s why now they got scared for the second time, the second time that they they have to try it – let’s say, transform – “But the last time I tried it, it didn’t work…”

BERNARD

Yeah, yeah, that’s true, that’s true.

I think one of the things that I really liked in the experience when we were understanding your business is, it almost felt like a process of being indoctrinated into what LBC’s values were, and what its core competency was, and what the goal of the business was.

How important is it that you indoctrinate your partners, your vendors, your providers into what you do?

JAVY

Well, it’s like what you’ve experience being in… We don’t deal with the partners in silos. We have breakout sessions, because it’s pointless to have everybody all the time there.

But there’s always that one meeting with all the partners, with one goal. It’s difficult to manage, because sometimes the partners are also like, “I can do that better than that guy in the table,” and here and there. But you define the roles and you share a common goal.

I’m the client, I’m the boss, this is our goal. You’re contracted to work on this, you’re contracted, and we have to work to make the block[s] fit. And then you bring everybody with common values, goals, KPIs; and now you get to maximize everything.

Now they respect each other – like you guys, with the other partners we deal with. In the beginning it was a very quiet meeting right, and then all of a sudden, after you break the chain…

BERNARD

Also, because everybody is also starting to get to know each other, and the people know to give a cue to the right people that are experts in the right fields. So, so that’s true, and I can attest to that from experience.

There’s a question for you here that came in, and I think you already addressed it in the earlier conversation. But the question was: is it important that operations, parenthesis, “the core”, is digitized first?

JAVY

It’s not a golden rule, but you – again – what you are selling?

So for us it’s the service, that’s my product. That’s my core. That’s where we felt, if I’m able to not only increase productivity, but give a better experience, a better product to my consumers, then it’ll be easier for me to also market and sell.

That was the basis of why we decided to go with the core.

BERNARD

Knowing you’re met[rics] – I think some of the biggest pieces of advice that we’ve received is knowing your metrics; knowing the ROI period that you’re investing in; and understanding which pillar you address first – because the next question is related to that.

So the question I got and I’m just trying to translate it: where should they be the most careful, like, if, when they’re doing their analytics, when they’re doing operational transformation of the core product or the service,  when they’re doing their marketing: where should they be the most careful at, in order to avoid the biggest mistakes?

JAVY

So there are… You’ll have to look at different industries. So different. I’ll try to narrow it down to finding out – one, the impact to this. So for like us, if we messed up in operations, we’re dead. I mean, that would – the impact would have been huge.

If you mess up on your ERP and you can’t get things, and your supply and all of that gets messed up, there are critical pockets that you need to make sure those ones – all attention, hands on.

If I go to marketing on my website, it’s not going to make or break or kill. The impact is also controlled. Then you can pivot; it’s not as critical.

So you have to define in your processes and everything: what are critical? What are the critical components? And those ones are where you really have to make sure it’s done, like I said, properly.

It’s done in a controlled fashion.

Don’t do it like…  We don’t do transformations or big changes during peak season. [Choose] the lower part of the month, and then okay,  that’s when we can effect the next change. Because one mistake there means thousands of customers already affected, right.

BERNARD

Yeah. So I remember one of the things that you always harp on whenever we meet is you always talk about the KPI. It’s always, data measurability is the key.  And then, you know, whenever we work on progress you always say – hindi na pwedeng puro kwento, it has to be about KPIs. It has to be efficient, on time, on budget. And you don’t, you can’t tell that if it’s not driven by the data.

JAVY

You can’t have meetings with no numbers. You have to have the numbers ,and you have to be able to say if you can do better than last week, better than last month, better than last year.  But you have to have a number; otherwise puro laway lang, you can just keep going on and going on and going on.

BERNARD

Javy, there’s another question for you here. It’s about the So Shop! program. How do you guys differentiate yourself from the channels that Watsons, Lazada, and Shopee offer. I think that’s a great question and I think – so if I’m going to guess the motivation of the question, do I get better ROI working with So Shop! than paying 15 percent commission to Shopee, Lazada, Watsons.

JAVY

They’re all our partners, by the way.

BERNARD

[laughter]

JAVY

So we’re not competing, and we’re not going to be competing with the platforms. We provide them a service; they have a marketplace, all of that. Ours is, it’s a community, and it’s a tool. You’re a social seller, you’re an entrepreneur, you want to sell your own product? This is another channel for you to go through.

We don’t charge commissions – nothing. Ours is, we want your deliveries ; that’s our business.

so our business is not on the ads in the marketplace, and all that. Our business is, give me your transactions to deliver and grow. And hopefully, we can make you grow by giving you another output of a community.

BERNARD

Right. And on the side, I will probably solve some of your e-com – your more tedious e-commerce collections, COD/COP problems on the way.

Okay. I thought that was a good question, and I think that that really clarifies it in my mind.

JAVY

That So Shop! program is still just going to launch, -so you guys are listening about all of this, might be searching the web and all of that. [You’re} Not gonna see So Shop! yet. 

Wait till October 15, and then we will be coming out with a big program on LBC social, and what it can do for everybody.

We have some teasers on the community page, “Coming Soon,” and all of that – but you’ll see the full effects and what it can provide to you and your products and services that you want to market, tied straight to a distributor/logistics provider that can reach the market you want to reach.

BERNARD

I think with that – we’ve got a few more questions, but we’re not going to have time to do it, because we’re reaching the top of the hour. But it was a lot to unpack.

I think I want to remind everybody we record these sessions, and then we publish them on Facebook, we publish them on YouTube,  so if you guys want to go back…

I have actually rewatched the previous one, because when you’re having the conversation, I realize I miss things. Versus when I rewatch it, and I’ll realize, oh, okay wait – when I, when he was saying that, that’s not what I was thinking. But now that I’m just watching it, it makes more sense.

So for those of you that want to go back to these conversations, I will send you guys the link.

I want you all to help me thank Javy for his time.

Javy, thank you very much. I was really looking forward to doing this with you for a while. I’m glad you could give us an hour of your time. And then for everybody, I hope this was super worth it.

Any parting words for the people in the crowd, Javy?

JAVY
Oh, it might be cliché, but follow your dreams. Stick to your passion. Commit what you want to commit and focus. The pandemic is not a life killer per se, but if you can innovate, and say, there’s a lot of opportunity out there… So let’s not make this situation such a big downer. We should look at it on the glass half full.

Yeah, there’s still a lot out there for everybody, so, just like the social sellers, entrepreneurs, stick to your passion. Stick to your dreams. You’re the ones who are changing the world.

BERNARD

Yeah, I agree – and I think, great words to end the session. With that, I’ll thank everybody for investing another hour of their time. Join us again.

JAVY

Thank you!

BERNARD

Oh, it was our pleasure. This was such a great convo! I actually get to interact with you a lot, so I think I’m the most fortunate person in the room. And hopefully, you know, sooner than later, we all get to see each other again.

Thank you for everybody that invested their afternoon. Join us on November 4. We’ve got Kankan Ramos talking to us about social media and its role in the current situation.

So I hope you join us again, Javy.

Again, thank you, everybody else. Thank you, have a great afternoon ahead.

JAVY

Thank you, guys. Thanks, everybody.

BERNARD

Cheers.

 

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