The Human Side of Business Transformation with Six S Partners' John Preiditsch

In this Snippets episode, Leon Goren sits down with John Preiditsch, Managing Partner at Six S Partners, to discuss what it takes to successfully lead business transformation in a rapidly changing environment.

Drawing on nearly four decades of experience working with growing mid-market companies, John shares why transformation initiatives often fall short of expectations and why leadership, communication, and change management matter just as much as the technology itself. He explains why organizations should focus on outcomes rather than implementation timelines, and why creating a clear vision for employees is critical when introducing new systems and processes.

The conversation also explores the growing role of AI in business, including why trusted data and consistent processes remain the foundation for getting meaningful value from new technologies. John offers practical perspectives on leadership, organizational readiness, and the importance of investing in people throughout periods of change.

Listen in for a thoughtful discussion on business transformation, leadership, and preparing organizations to take advantage of the opportunities created by AI.

Transcript

00:00
Special thanks to Focus Wealth Management for helping us bring you today's PEO Leadership Innovators Alliance Snippets Podcast.

00:13
Welcome back to our Snippets podcast. I'm Leon Goren, CEO of PEO Leadership and Innovators Alliance.  Today I'm sitting down with John Preiditsch,  Managing Partner at Six S Partners, a consulting firm on best practices and the improved use of ERP and related technologies. And that includes the whole implementation side, bringing the ERP systems into your business as well. John and his team work with growing mid-market companies every day, helping them scale their operations, sharpen their leadership, and navigate the complexity that comes with real growth. He's had a front row seat at what works, what doesn't, and the decisions that separate the companies that successfully transform from the ones that stall. John, really glad to have you with us today. Thank you, Leon. I'm going to kick it off with a funny question, but John, you spent years working with these growing companies. And when you look across the market today, what's one thing leadership teams think is important, but actually is probably not that important?

01:13
And what's something they're generally underestimating? And you can sort of tailor my question, but that's sort of where I was driving. Yeah, great.  Yeah, so I've been doing this for 38 years, so like right out of college.  as you say, it's a front row seat.  Most manufacturers don't get a chance to see how their competition are doing things. And so I've had the uh fortunate situation to see a lot of that.

01:40
And I think the one thing, if I was to jump right to your question, that people tend to both underestimate but also think is more important is this idea that  an ERP project, a business transformation project, which it really is,  mainly they're buying something to do something different, not to do it the same. And so therefore it is transformative is that they believe that the go live date is the most important thing and they judge their success and failure based on it.

02:10
Whereas I would recommend that doing it right is probably more important. And so the message in front of the audience of your staff and your culture is often challenged when you think that it's just the date and just the timeline, because  the variable is people  and people aren't as predictable or as easy to assess. And so some people take a little longer as they go through this change and

02:40
visualize management's or I guess operationalize management's vision. And I think they underestimate back to your second part of that question, the effort it takes. And so you can't run a project like this  as one of 12 major strategic projects this year. You need to clear the desk a little bit, clear the messaging, and you need to show people that it's strategically important to the business because it is so foundational.

03:09
How long does it typically take to actually implement? Like from the planning process to the actual implementation to live date, what's a realistic goal that these  leaders should be thinking about?  Even the selection is a project, right? So oftentimes management makes the selection and then they say things to my team, you know, we've been doing this for 30 years. Can we get this done in three months? We're going to transform everybody. There's usually  in those cases quite a burning platform.

03:38
Sometimes it's just a desire, other times it's a race to something and the sale of the business, et cetera. The reality is, is that it's going to take somewhere between 10 and 12 months. We've done six months. We have actually done three months, probably not to be repeated. was in COVID times when focus and availability was there, possible. The reality is, is that it's better to take a little more time because all of the use cases, while people were using

04:07
They're people to implement this with us.  It's our expertise, but their domain knowledge of their business. And so  for them to get it right, I think it's worth it to take a little bit more time and you'll have a better product. And that's why, you if somebody was to say in the middle of a project, think we need an extra month or near the end of the project just to do this right. I've had many management teams just try to plow forward because...

04:34
they perceive failure as being this go live date if they miss it. In reality, we have to explain to them that you're gonna blow away your final phase of the budget as you go live because you're not ready. And that can be problematic. But I think you have to be realistic about these things. They take time. I  have had this problem with my team.  old shoemakers kids don't have shoes. We're implementing technology, why can't we go faster?

05:04
Right.  It's kind of funny. It's kind of a mindset of most of us as leaders. It's like, come on, it's simple, isn't it? You just put it in and it should be running. And that's an installation, not an implementation. And so if you want somebody else's best practices, which is akin to alienating your staff because it's not invented here, it didn't, you didn't, I've been with you 20, 25 years as a loyal employee manager operations person.

05:32
but  suddenly my voice doesn't count, yeah, we can do it. We can install it and tell them what to do,  or we can actually get their insights  and really make it a powerful  groundbreaking transformation for the company to take it to the next level. That's the difference. It becomes strategic. you noticed, I'm just curious because you've  heard horror stories, right, on ERP implementation, but years ago, I'm just wondering, in the last five years,

06:01
Has the attitude and the mindset changed with your new clients that come on board? Like, is it different today than it was years ago?  And I also ask that because of speed again, right? We seem to be running at such a crazy pace these days. And I'm curious, are they trying to push you hard on the speed as well? You know, it's interesting. Some things have changed, some things haven't. So what has changed is the me now, I want it faster.

06:30
And in many ways,  the industry has responded. So  in the old days, would have  somebody invest in a server  and they would take time and they would actually see it as a strategic project  and they would give it time  and they believed that, okay,  this is gonna unfold. And anybody chosen to be part of the  subject matter experts  on that project team.

06:57
they would see it as an honor to usher the company into the next phase of business. It was also a time in the late 80s, early 90s when I got started when you would have three or four people doing the role of what has essentially become one. Purchasing is a great example in a department or, so companies are much more lean. So there's a little bit of stress there and it's hard to do your full-time job at the same time.

07:23
Kind of getting back to your question, I would say that it's now easier than ever to get into ERP because we can fire up access to a new system within a couple days instead of a couple months.  In terms of the deployment, the cloud has made that so much easier. Traditionally, when it was on-premise  on a server, people would be  willing to pay for all the software upfront plus the first year's maintenance. Now it becomes an easy monthly or annual fee.

07:52
What is waning now is the commitment  because it's easy to get into it. People think that it's easy to get out of it or that they don't need to give it as much commitment. And so we have people joining these teams that are pretty reluctant. And the one thing that is challenging is we're not seeing the consistency of leadership, understanding their role, because this is a bit foreign to them. Everyone has a certain relationship with technology, but

08:19
leadership's role need not be about the technology. It just needs to be focused on the business improvement. We spend a lot of time now coaching change management. And I would say that that is the, it's not new and it probably was  skills that were exhibited in the past,  but with everything that else is going on, people don't want to slow it down. And often they think it's a bit of a lovey-dovey discussion, you know, feel good discussion when really it's about charting a course with a team that needs to catch up.

08:49
Management's already tasting the fruits of this investment and you have the people who have to deliver on it catching up on what is it you want me to do? Without that vision, you're going to find that people are just going to recreate the old systems  because that's the reference point. Give them the vision they can actually help deliver on it. You sort of jumped into my  kind of next question because I was going to ask you, you you've been in the service industry for so long. You're serving from

09:16
clients with revenue anywhere 10 to 70 millions, probably your sweet spot manufacturing. The great companies versus what you've seen as laggards and the leadership team, are there similarities with those winners? Like it sounds like vision, communication, but do see other elements that are really important that sort of distinguish between those two? I do.  And I would say that the leaders that I see that are

09:44
you know, for lack of a better term,  emotionally intelligent. In other words, they  know that it isn't always black and white.  Some leaders will say, well, you know what, we'll just tell them what to do.  And  that has its own outcomes. And uh oftentimes it comes down to speeding up a transition to maybe some new blood in the company. You know, sometimes that's strategic and that's for that company or that leader.

10:12
Here we are in the year 2026, going into 2027. We're looking at 2030 in the eyes. The last time I checked, there probably aren't a lineup of people outside your door with all the skills you want ready to go. And there's a long-term investment in people. And people still make the difference. And so I would say that  those who are appreciating the fact that they need to transition, they're people, not just the technology use.  And

10:42
and are willing to be a bit of a, I'll call it a broken record around what they're trying to achieve and getting people on board with it. Those are the ones that are very effective and these transitions,  transformations happen.  To this day,  and sadly in my space, I'll preface this with, we do not have this end result, but 70 % of these types of projects, just call it IT as a whole, fail to reach their overall objectives.

11:12
So one could call it a failure. We hold customers accountable. They hold us accountable and we're willing to have  that partnership at that level so that we can actually get that trust and get past that and focus on what's really valuable to them. But I would say that it needs a partnership, but it also needs a leadership team that really is aligned. Without that, there are more challenges that are a little bit surprising.  You're saying 70%. It's  like,

11:41
The most important part,  they call it the last mile or the last 10 % is really  probably the most important element for the leadership team when they first engage with you or any type of project. It's the outcomes. So if you fall short, you could see it being disappointing and  it's crazy actually.  And I think it's management's ability to articulate the opportunity and the challenge.  I there's the carrot and the hammer.

12:08
Right? You're all going to be fired until, you know, firing will continue until the morale improves.  You've all heard that in the old days,  but the carrot is we need to be able to hire new blood. New blood doesn't want to work on pounding out spreadsheets. didn't go for their MBA or their  college or university degree so that they could pound numbers. They want to be valuable. And so, you know, today's information worker managing numbers, bringing value to the business wants tools helping.

12:37
people who are close to retirement make that transition is a challenge. But it's necessary to the business for it to survive and thrive that they do so. All right, let's bring it back to AI. The hottest topic out there, right? And you're on the ERP system. I know the ERP is sort of the foundation to this,  but we're thinking as AI and every day it's changing. Like I'm having conversations with people and I can't believe what's going on.

13:03
But as it becomes more capable at sort of orchestrating these workflows, these platforms, where is ERP going to fall into this? Is it going to damage the ERP? Is AI going to take over this side of the business? Is it going to be AI platforms? Or is it AI platform sitting on ERP? I know I'm asking lots of questions. It's just, I'm trying to understand, and a lot of leaders are trying to understand today because they're sitting on decisions on their technology today.

13:32
And when they're looking out at the landscape, everything is changing so quickly. They're saying, well, if I wait another 60 days, who knows what's coming out? I may not have to invest this way. I could invest that way. You're right on the front lines. You must be seeing this. Well, first off, AI, mean, nothing has been more transformational in terms of analysis,  productivity, bringing the person who knows how to ask the question is in a fantastic position to be

14:01
ultra productive. And I think the saying goes that you will not lose your job to AI, you will lose your job to somebody who uses AI better than you or uses it in period.  so I've every day I see, and I'll say this, both staff  and my customers have those aha moments about how great it is.  And you know, AI is the ultimate last mile analysis tool, but it really relies on good data and good data.

14:31
relies  on, and let me just step back. It relies on  good information, not just good data. So there's a difference.  And good information is the outcome of a consistent, trusted process inside the business. So if it's on a spreadsheet and it's  a little loose as to how often we report information of what's going on, some of the old again, new again things is you can't manage what you don't measure. So if you don't have good

15:01
I'm a Six Sigma guy, so if it gets down to root cause, if you don't know what the real numbers are, the information, the data will provide great insights. But if you don't have the supporting facts to why you are where you are, then no system is going to help you. In fact, it'll hallucinate and give you that information or bad advice. And so I think

15:28
You have a bigger question here. What is the future of ERP in light of AI? You know, I can speak to, represent Epicor. It's a mid-market leader and we've dedicated our business around it. So I can speak to what is going on at Epicor as  in context here. The reality is, that there are a lot of people that believe that AI is going to replace ERP. In fact, I can build my own ERP using AI. And to that, say, you can welcome yourself to the fold of

15:58
being in the software business.  And the first thing you'll learn about it is it's not about can I develop it? It's what are the best practices that are baked into it? And with Epicor, it's over 50 years of experience  and industry standards and metrics. And so, you know, what is an economic order quantity? How do I schedule using finite capacity? And I could get really deep. How do we do financial consolidations? And  so there's the industry,

16:28
There's the best practices  of supply chain  and all of the departmental best practices that go into this.  And there's no doubt in my mind that you can absolutely create software fast now. But the reality is that ERP companies have been building AI solutions into their products and  MRP, material requirements planning, I worked for the guy who wrote the first system,  Ollie White, Joe Orlicky.

16:56
and the gentleman I worked with was Richard Lilly, and he wrote the programs that use this domain knowledge. In fact, it was a scientist, a mathematician, and a programmer that came up with these concepts. And so in many ways, AI is an exponential combination of those things that have happened in the past in ways like MRP. So how do I forecast and schedule and do all these things all at once in a productive manner?

17:23
Epicor's data model or a lot of the systems out there that have one common solution, not a lot of things cobbled together, have a common data model. And with that, can  enact security, you can enact AI solutions around it that become very powerful. But if you've got a lot of systems, a spreadsheet here, a database there, another third party sewn together, it's very difficult for AI to see it.

17:51
to use it efficiently. And in many ways, if you're building your own AI solution around existing tools, you're really just kind of building a bunch of custom solutions that need to be maintained. So how does it all work together? How does it upgrade efficiently? So then suddenly you find yourself in the software business with one paying customer, you. So I think more than ever, there's a reason to outsource or partner with a supplier vendor partnership where that product

18:21
is solved for, for the most part, but it's not to say that you can't, with a solid foundation,  speed your user interfaces and tailor those with AI. And so this concept of headless ERP, meaning the ERP is the engine, but I'm making bespoke or  unique tailored solutions for my user base that help us  get the information that we need anyway in a way that works well for my company.

18:50
That's now being enabled. The foundation with its best practices  and the adherence to checks and balances is very, very important. And that's not easy to develop with AI. AI doesn't know it unless you tell it. The data model for these big ERP companies isn't published.  It's not something that's freeware. It's protected. So  I think we're in an interesting position of perspective here. Many people will think that they can build their own

19:19
Time will tell and it may work just like building your own custom software, but it's going to cost a lot more and it's going to take a lot of effort from the very people that you want productive. They're now inspecting testing software on an ongoing basis instead of doing their day to day job.  I think it's offshoring in a great opportunity and I've products like Epicor. You can plug in your favorite AI. It has AI embedded, but you can plug in your own. You know, today it's  Claude or ChatGPT. might be another product.

19:49
later.  think there's right now. knows what's coming  with these guys? Exactly. It's kind of like pick your search engine.  It is interesting. I  think with the ARP system, I think you've got the foundation and the data is the most important, right? And you know  the data is accurate. And from there, you can build with And I think what management knows how that data got there, and they trust that process. Absolutely. Now they're willing to be informed by it, and AI will make more sense. It needs to be

20:18
closed MCP as they say. it's yeah. Last question and there's going to be a quick one I'd like to ask everybody. All you guys have been running businesses for so many years over your career. What's one leadership lesson that took you a little longer and you wish if you have hindsight now boy I wish I could have solved that 20 years ago. How long do you have? No only have 15 seconds come on spit it out what is it John? I think the opportunity

20:48
of just working with your teams  and working with people. I think we often underestimate the capacity of people and their ability to  run with something. And I think if I was to do it over again, I think I'd be a little quicker to let people loose and let them go and support it in a manner of learning. Because I  think when you trust people, I think there's a lot of uh value exchange in that. Coaching.

21:18
It all comes with a good coaching model. So I'd say  how you build the talent in your company would be my answer.  And  it's something you just can't ignore. If you really want good outcomes,  you need to invest in your people.  just, you need to trust them. It's really absolutely. You need to trust them. And you know, that old fail fast. It's okay. I think the best thing is that they make a decision  and execute something. And if it's wrong,  you can, you can always correct, but

21:48
It's better than not making a decision and watching you fail without trying. know, it's, it's a, there's a lot of analogies in there, but I think it's about investing in people and giving them, getting them out of the nest fast so that they can prove themselves. Well, John, thank you so much for taking the time. It's been a great conversation and really sharing what you've learned and some of those lessons and a couple of golden nuggets for,  many of our members and all the listeners who, who listened to this snippet podcast.

22:16
For anyone watching who wants to connect with the peer community of CEOs and senior leaders who are committed to growth and building great organization,  I love to have that conversation. You can find us at peo-leadership.com.  Thank you for joining us.  Have a wonderful day today and we'll see you next time.