How In-Depth Customer Interviews Drive Innovation and Culture at Caterpillar
Ben Schmuck is a lean innovation manager at Caterpillar, where he accelerates an eclectic portfolio of early-stage innovation projects focused on revenue growth. Ben has coached over a hundred startups through 1871, The Polsky Center for Entrepreneurship and Innovation, and Techstars. Ben also coaches student teams at the University of Chicago Booth School of Business to help the nonprofit community in Chicago. In his free time, Ben enjoys woodworking, large-scale model trains, maker activities, and most other nerdy things.
Can you give me a little overview of what you do at Caterpillar and how Lean Startup is part of that?
I’m an Innovation Manager at Caterpillar for our Earthmoving Division. It’s not the biggest mining stuff and it’s not the smallest stuff that you might see on the side of the road — it’s in the middle. We do everything from road construction, to site prep for new buildings, to material production, like rock quarries or asphalt or concrete plants, all of the equipment that would be used in those types of applications. We apply a methodology we call lean innovation, following the principles of Lean Startup. The angle I take at Caterpillar is that we’re a big manufacturing company and we use a lot of the lean principles in both manufacturing and product development. We’re applying Lean Startup principles ahead of time to make sure we’re solving a critical customer problem or need with a new solution and also make sure customers are willing to pay for it.
Give me one good story about a lean innovation success.
One of our biggest successes was an internal innovation: helping our dealer salespeople sell our machines. We treated dealer salespeople as the user in this case. Obviously they’re serving customers, so it is very customer-centric in the end, but the new tool we built helps a salesperson find the right machine for customers. It was a really difficult and convoluted process before we designed this tool that helps get the parameters of a customer site together and displays options to a customer, while also giving the salesperson flexibility to make changes based on feedback from the customer. Then they can print off that information and let customers keep it to use in their decision-making process.
It really zoomed in on that customer interaction between the dealer and the customer. And that has been really important because we’re still a very relationship-driven business. Enabling our dealer salespeople to do their job more easily, but also enabling them to do it live with customers was a key part to designing this new tool.
We have to talk to our customers to better understand what’s going on out there so that we can put ourselves in our customer’s shoes. It’s not just a learning activity, but also helps us design better solutions.
How has bringing lean innovation into Caterpillar changed the culture of the company?
I teach this methodology internally, so I get to see some of the firsthand lightbulbs going off in people’s heads one by one. I see not only just interest in the training class, but also more ownership in applying the Lean Startup principles within new groups at Caterpillar. People are relying less on surveys and focus groups alone, but also coupling that with in-depth customer interviews. They’re working to understand what it’s like to really be that customer and make these decisions. I often say that I don’t own any Caterpillar equipment, so I don’t know what it’s like. Or that even if I did own Caterpillar equipment, I don’t know what it’s like to run a business with it. So we have to, to quote Steve Blank, “get out of the building.” We have to talk to our customers to better understand what’s going on out there so that we can put ourselves in our customer’s shoes. It’s not just a learning activity, but also helps us design better solutions.
Is there a principle or value that you live by in work and life — something that’s important to you?
I have two boys. They’re 6 and 9. They’re at great ages to be around as a parent, and I really want to be there for that. So that’s No. 1 for me. And that has changed how I define success. I know now that success is a lot more than how much money I make, or how many people I supervise, or if I’m the same rank as someone doing a similar job as me. That’s less important to me. I went to the Booth School at University of Chicago and was alongside lots of financial services people, and people who will definitely make a lot more money than me in their career. I have tons of friends there and love all of them, but I just know that’s not for me. I need a position that has more work-life balance. So, that’s a big part of how I evaluate jobs.
I got into the corporate innovation space because I really thought hard about starting my own business. When I was in business school, I really fell in love with the entrepreneurial space. And I still may do it someday, but I know that starting your own company is not a low-stress job and it’s not a good work-life balance job. That’s where corporate innovation was great because it allowed me to apply the entrepreneurial principles, but still in a job that’s relatively secure with better work-life balance.
What’s an area of the world or life that you think could really use some innovation?
I remember a design podcast where the guy speaking — I think it was “99% Invisible” — was talking about the little stickers that come on the fruit that you buy at the grocery store. He was talking about how those are terribly designed because they sometimes fall off. They’re hard to scan at the register. But most importantly, it destroys the fruit enjoyment experience because you have to try and take it off. Sometimes you pierce the fruit with your fingernail, or you tear some of the fruit off with it. And you don’t want that plastic in your food. There’s got to be a better way to have stickers on fruit. That’s something that I think about a lot. And there are so many things like that, that we’re just so complacent and can’t find a better solution for.
Another one: There’s just so much room and so much inefficiency in healthcare, not just financially, but also the operations of a hospital. My mom, unfortunately, just had to be admitted to the hospital. And she had to show up to the ER and then had to wait for six hours to get a hospital bed. And I thought, “This is awful. Why is it this way?” So I think there’s a lot to be done for healthcare experience as well.