Ep. 152 - Scale Retail Collaboration: The One-Company Model

The fastest way to grow a business relationship isn’t more meetings; it’s better trust built through real work. Andy Wilson sits down again with Tom Muccio, former P&G leader and author of Collaborative Disruption, to explain how the Walmart and Procter & Gamble partnership moved from a traditional supplier-retailer dynamic to a true one-company model in Northwest Arkansas. The stories are concrete, the lessons are repeatable, and the results are hard to ignore. 

We talk through the mechanics of collaboration that actually change outcomes: mirror teams that map every process, store immersion to understand retail realities, and a push for quick wins by running multiple projects in parallel. Tom shares how joint learning surfaced unexpected opportunities, from recognizing the scale of Spinbrush to testing and scaling Swiffer with the right in-store space and timing. We also dig into how faster item launches forced a rethink of marketing, helping spark what we now call shopper marketing. 

Trust is the core thread, and we get specific about how it is earned. Tom lays out two principles that reduce friction fast: focus on issues instead of positions, and choose what’s right instead of who’s right. From there we move into supply chain disruption and vendor-managed inventory, showing how shared retail data, clear rules, and accountability can improve forecasting and manufacturing efficiency. 

We close with what it takes to scale collaboration across customers, why leadership support matters, and why there’s fresh opportunity to rebuild these muscles post-COVID. If you want practical change management, supplier collaboration, and retail strategy insights, listen now, then subscribe, share this with a colleague, and leave a review with your biggest takeaway.

00:00 - The Friction of Endless Meetings
04:15 - Inside the Walmart and P&G Partnership
11:30 - Mirror Teams and Store Immersion Mechanics
18:45 - Scaling Big Wins: Swiffer and Spinbrush
25:20 - Two Principles to Reduce Business Friction
32:10 - Rebuilding Supply Chain Muscles Post-COVID

Transcript

Welcome Back And Book Context

SPEAKER_01 0:06

Hello everyone, and welcome to Doing Business in Mittenville. My name is Andy Wilson. I'm your host. And I'm and if you had watched Tom Muccio on episode one, this is episode two with Tom Muccio. Tom, welcome back. Thank you. It is so good to have you back. And I'll tell you, this is such a great day for me to get to spend time with my friend Tom Muccio. And we talked about his book, and there'll be uh tremendous information on our website about the book. If you haven't picked it up yet, make sure you get a copy of Collaborative Disruption. It's it is such a great title, but such a great book. I will tell you, it just makes me I've got to go get into that. So, Tom, again, we had such a great uh re uh discussion in episode one, and we got in, you know, talking about you know, this one company model between you from Walmart and uh uh Proctor and Gamble. You did a great job talking about change management. Um, and you even shared your learnings, some of your learnings, and those were very valuable learnings. So if you haven't looked, have you watched or seen episode one with Tom Mucho, please do that because it this is it's really the foundational piece of what we're gonna talk about in this piece. So, Tom, um, how are you doing? I'm doing great, thank you. Good, welcome back. Um, I thought you did such a great job in episode one, and the thing that I thought you'd you know, there's so much good information and great information there, but from a timeline, you talk about the beginning of the with the Walmart and the Proctor Gamble relationship, this deep, deep dive, if you will. And it took like two to three years. Right. So you so what we want to do is move to the next segment of your journey. Okay. Okay. I I would say you relocated to Northwest Arkansas. Absolutely. Okay. Absolutely. So he was in P he was at PG working two to three years with with a Walmart team, with a PNG team. He's telling me you do a great job walking through all of that. Now, as we go forward, now you're in Northwest Arkansas, the first supplier with an office in Northwest Arkansas. Yes. And there's two to three thousand now. So good job.

SPEAKER_00 2:32

So uh I wish I had bought real estate.

SPEAKER_01 2:34

Yeah, I know. Yeah, me too. Uh so now you're located in Northwest Arkansas, you've got so much work. So talk about now, here you are, now you're just you you've you've you've had your team, you've navigated the obstacles, now we got to go to work. Right. We've got to grow the business, we've got to make it more profitable. Talk about this segment of what you did and and and share with

Mirror Teams And Quick Wins

SPEAKER_01 3:00

us the story.

SPEAKER_00 3:01

Well, uh when we we have this group called a mirror team. They were folks from each function in Walmart, DG, and they were kind of we considered ourselves kind of the board of directors for the relationship. And what we did is we'd start, well, we would flowchart every every uh business process. So we'd say, okay, we start here, and then this is what's happened next, this was, and then we'd say, well, wait a minute, we're doing this and you're doing the same thing over here. So I mean it was very valuable just talking about it and understanding. The other thing is we had all people on our team had to spend a week in a Walmart store uh so they could learn, because we didn't understand retailing. Right. And we brought uh uh Walmart folks up to our branding seminar so they could understand that the difference between uh just price and price and value and uh and and so forth. And then as we so we had each function making uh changes to better align systemically, and then we had the whole uh how do we bring this together and and uh we we tried to create a sense of urgency, which we did. So we had a lot of things going at the same time versus one thing at a time, uh, and that was very powerful because that gave us a lot of early quick wins, which allowed us to then enroll enroll people from both companies saying, Well, look at this, we've improved this, we've done this. So we were building fans, so to speak, as we as we went along. Uh, and there wasn't anything we felt we couldn't challenge, and and try and do something in a better way. And we also learned that each company did something much better than the other company. And so we tried to learn the solutions weren't PG or Walmart, they were a combination. And frequently, and I describe it as it's like peeling an onion. We didn't know what was in the end. Yeah, after you peel a couple layers off, that may have been the treasure. We're we're out out here uh worrying about something, and the inside was where where the big idea uh and there's so many of these that uh were well as an example, um we we B and G has crest, so that was in the toothpaste category. Well, Walmart had a brand called Dr. John Spinbrush, and that was a uh toy manufacturer that made electric toothbrush, and we poo-pooed it. Uh and then finally Walmart said, Do you know how much of these we're selling? And so when we when they helped us to understand that, we eventually went and bought the company.

SPEAKER_01 5:50

Yeah.

SPEAKER_00 5:51

Uh yeah, and then the flip side of that, when when I remember sitting down with Walmart uh saying, I need four foot of space in your stores for this new item. What stores aren't elastic. And it was for Swiffer. Uh the swift the Swiffer lineup. Sure. And and we we we were replacing buckets, mops, dustpans, which were one-time purchases, with an item that was a razor blade razor. Right. And so Walmart said, I'll tell you what we'll do. We'll give you 25 stores, four feet. And they did. Uh cleared it, cleared it out, and then it worked so well. And and the profit margins, the sales, because these were items sold for instead of a a bucket for two bucks, this was a machine that was 20 bucks. Right. Uh, and then the stuff that would use it inside of it. Uh and so it was just over and over things we we uh at PG, when we introduced a new item, it took 16 weeks before we'd start advertising. Uh, because you know you had to go and people would send it to their buying committees and then you had to get it in the stores, get it on the shelf. Walmart said to me, Wait a minute, we add hundreds of items every week. Why don't we help you to go faster? Okay, what do you mean? We know your products are gonna sell. You got a great track record of so we don't need to have you jump through hoops, we're gonna take the item in, put it in our warehouse, and then tell us what's the first day you can ship to retail. And by the end of that week it'll be in all of our stores. Then that's what then gave rise to shopper marketing. Because okay, you got it in the store, but before we started our advertising, how are people gonna know what it is, uh how to buy it and what to use it for? And uh and as a result of that, we ended up starting advertising in week five, totally revolutionized the way we introduced new products. And in order to do that, we had to involve Walmart much earlier in the process, which was a big scary thing for people in Cincinnati at PG. Oh, we're there our competitors are gonna find out, we're gonna be leaks. And in in the 15 years that I was the team leader, Walmart never compromised one I owe to any data.

SPEAKER_01 8:26

Uh you know, it leads me to a question.

Building Trust Through Shared Principles

SPEAKER_01 8:29

Uh, and I think as I'm listening to you tell the story, which is a great story, the ultimate question I uh the question I have here is then how did you build trust? Because there had to be a tremendous amount of trust between a supplier and Walmart, and I will tell you it wasn't much trust at times. There was not much trust at times. So you had to this is huge to get what you're describing done, but the trust is critical. How did you do it?

SPEAKER_00 9:01

Well, it started again, I keep going back to multi-functional. Yes. Because now we were looking at the total playing field. Okay. We weren't just looking for uh I describe it as if if you take a building and you look out one window and I look on the other side of the building out a different window, we can both describe what we see, but we're not seeing the same thing. So how can we all look out the same window and with each functional, oh well gee whiz, I can see this. I couldn't see that. Uh and uh so we start it started there, and then just through better understanding, spending more time together. And and what how do you how does Walmart how do you make money? What where are the leverages? How does what does PG do? What's the leverages? And then uh then we identified pain points in the system and missed opportunities in the system. And so we made buckets of Pierce Point, how do we get rid of these pain points? What could we and and the two that we had two levers that we used to say let's define let's uh focus on issues, not positions. I could tell you here's our policy, you tell me here's our policy. That's not gonna get anywhere. Right. What's the issue we're trying to solve and why did you solve it this way and why do we solve it this way? And then the more we talked, we said, well, wait a minute, what if we did this and this, and there was a third way, and it it solved the issue and worked in both companies. Then the second thing we said is let's not focus on who's right, but what's right. And that was a fundamental poly uh value for both companies. I mean, Walmart was always, what if what do you how do we do the right thing? So was PG, but we never applied that same those same values when in working together.

SPEAKER_01 10:49

So I think the critical thing here, as as as our viewers and and listeners think through this is how they apply it to their organizations or you know their businesses. Uh you've got to build the trust really before and and you build the trust by navigating all of all of these issues, not positions. Absolutely. I think that's critical. You get into the issues, solve those, don't worry about the position, because that solves the position. Yeah. Right? Yeah is that what you're saying? Yes. Okay. No, I I think that's so critical. So as you think back now about some of the biggest obstacles on the collaboration. So how you had to you know, you you talked how did you overcome some of the biggest obstacles? Two large companies at this point. Right. Okay, and very independent. Okay. I mean, we Walmart, we knew merchant, uh, we knew retail, you knew. I mean, you know, you knew the manufacturing and and and that piece of it. So had to be some huge collaboration.

SPEAKER_00 11:59

Yes. Um and the you know, there were a couple of things which that which really drove that. We we tried to understand from each other what were all the things that we measured inside each company and why did we do that, and what was the impact that what I did had on that for you, and vice versa. Okay. Um because in the in the past we knew what we wanted, Walmart knew what they wanted, and we didn't really care what the impact was in the other. We just wanted an outcome. Okay. Um and so by doing that, and then we started saying, well, you know, why don't we share data so we can start looking and and uh that's what gave rise to retail lake. Walmart had incredible fast data. And they and but it was formatted in a way to run your business. Right. But there was another level to that, yeah, which is if if a supplier can look at that data, there's all all of a sudden there's new insights they can bring to Walmart above Walmart just knowing what their comp sales were and their margins and whatever. Um and so that became really important. Another big obstacle we had was uh initially, um this was a lay on to Walmart associates. I mean, they they had a regular job and then they had to work with us, right? Where we were totally dedicated. And so what we did is we said, how do we make their time more efficient? So we would have a meeting and we'd agree stuff, and we would then go away and get it doing 80% of the work to because we were fully dedicated that we were getting paid to do that.

unknown 13:40

Right.

SPEAKER_00 13:40

Okay, and then we would get back together and fine-tune it so we were taking good advantage of their time, they were getting a big payback for the time investment, and we were moving the ball forward. The other thing we did is as this sense of urgency, we had a lot of projects on the go all the time. Uh and if instead of having one at a time, if you have ten things on the go and five of them work, you're you're you're you're making great progress in in that regard. And then the last thing for trust, in my view, uh was you know that we actually we communicated to each other that we did care about the other's success, both personal and and as a company, and then integrity. And integrity is what do you do when something doesn't work the way you thought it was going to work? And a couple of examples. Uh uh PG had a policy that when we raised our prices, every customer got two weeks of inventory at the old price. Uh and if they had merchandising happening in that window, they could complete their merchandising order. But Walmart ran monthly tabs and the quantity they ordered was so huge they had to tell us that six months in advance so we could gear up for it. Well, I remember when we had an item in the tab and we were gonna uh uh increase price, and I was supposed to go back and tell Walmart, oh, just kidding, it's it's not this this price. I said, I'm not gonna do that. That's just that is not fair. That is not right. They did this to give us a chance for manufacturing. Uh and so we amended our policy as a company that we if you had a firm plan merchandising, you and and because and they gave us a firm order, you know, or at least a starter order. Uh that uh so we changed that. The flip side of that, we uh we made some custom packs for Walmart uh and they would say make us I'll make it a hundred thousand at least. Well, sometimes those wouldn't sell as well and they as they thought they were gonna sell. And then I they'd come back to me and saying, There's any way you can stop this at 75,000, we'd appreciate it. But if you can't, we will take it. We ordered it. Wow. So and and we said there was example after example. Perfect. Or I had I I remember one where one of my new uh people quoted the wrong price to a Walmart buyer, and product went out at that price, and they didn't notice until the invoice came in, and we covered that. Yeah.

SPEAKER_01 16:28

So you were building the trust as as you're navigating through it, but that was, as you said, critical, critical piece of the relationship. Now, Tom, we talked about the store side, we talked, you know, we we've talked about that.

Vendor Managed Inventory And Supply Chain

SPEAKER_01 16:43

Let's talk about supply chain for a moment. Okay. And let's talk about the disruption, if you will, that was taking place in the supply chain. And of course, you know, COVID brought some of that to lie, but you're also dealing with supply chain now in a different way. So talk about how you work with the distribution supply chain, you know, through some of these disruptions.

SPEAKER_00 17:05

Well, it it you know, it it started by again back to flowcharting the situation. And when we we were the first one to go on what they called vendor bandage inventory. Right. So what had happened is we we had this chain where the buyer would give it to the salesperson, salesperson would give it to manufacturing, you know, on up the line. And we said, wait a minute, we we need someone to own the process. So why don't PG own the process? You tell us the rules, Walmart, what's the level of inventory? We use your incredible data, and as things scanned, anything uh scan scan at the register, and we would know where and what DC. And so as you got the truck full, uh uh and and we everybody at PNG said, Oh, it's gonna cost well, yeah. Great, great Muccio, that was smart. Yeah, you take over their work for him.

SPEAKER_01 17:57

Yeah.

SPEAKER_00 17:58

Uh yeah. And we ended up paying for it three times over because of manufacturing efficiency and better uh with our suppliers, better ability to predict uh things. Uh and uh and it it was it was incredible. Uh but again, it's it's like it's that peeling of the onion, it's willing to try something that's never been done before, trying to, you know, this the whole idea of doing things systemically, because things plug together, uh, you know, and appliance, you got to plug it in the wall, and then it worked. The appliance may be terrific, but you don't have any electricity. And we found that uh that was the case. And and of course I had that one of my stories for trust was when I was growing up, my brother and I would would we'd have Twinkies, and we'd fight over who got the hat biggest half of the Twinkie. Well, my dad said, I've got the solution. One of you cut the twinky and the other one gets to pick first. We had some clean-cut Twinkies at our house. That's a great story.

SPEAKER_01 19:05

So, okay, tell them, um let's talk about okay, so much focus on Walmart and P and G.

Scaling Collaboration Beyond Walmart

SPEAKER_01 19:13

But Walmart, I mean, but PG had hundreds of thousands of other customers. Okay, uh, other retailers. Right. So as you think about this collaborative collaborative dis disruption that was happening to Walmart and you were dealing with the issues and solving all the issues that you have shared. What about other comp other retail companies? Kmart or others at the time. How didn't this re this re all this learning take place with other customers of PG?

SPEAKER_00 19:48

Well, that's a great that's a great question. About two years into this relationship with Walmart, it I mean, obviously Walmart was taking share, we were building share, so other retailers or what you know, you're giving Walmart something special. Right. We said we're uh our policy is everybody gets the same price in proportion. Uh uh, but we're both investing resources, so uh Target would say, Well, uh I want to do it as well. And I would say, and I met with every C-suite, uh Costco, uh uh Target, whatever, I said, Well, you need to understand this isn't you going into the barber's chair getting a haircut, and we say, Okay, you're done, Skippy. This is not something we do to you. This is something we do together. And you, if we're gonna put in resources, you have to put in resources. And and the objective is I'm not asking you to change your strategy. I want to help you to use my brand to support whatever strategy. You're responsible for your strategy, not me. So like Walmart was everyday low price. Right. So we how do we help Walmart execute their strategy, which was totally different than what was done before then? And still there's a whole lot of high low people out there. You know, most of the grocers, Publix uh Kroger, I mean, they're still high-low. Right. Buy one, get one, freeze, and all of those kinds of things.

SPEAKER_01 21:20

Uh so that was uh So BG did they put dedicated teams with a Costco, with the Target and others then similar to what if they were willing to invest.

SPEAKER_00 21:32

If they were willing to make the change. And then we put firewalls up. There was nobody in my leadership team that could go and work for another retailer without having a year's assignment someplace else in the company. So they got a break. Um because and even though I wasn't the president of global teams, I would never compromise anything that would that was Walmart proprietary or semi proprietary between the two. I was dealing

SPEAKER_01 22:00

with the with the mechanical you know here's the mechanical things that you need to to do and then helping the PNG team leaders uh learn how to be general managers uh as you look back now and you're if you take a global view uh retail a global view um um uh suppliers as you look back what what do you see because of this collaborative disruption that took place both companies that you have shared with us what are some key learnings now that that are happening today this you know because this started twenty years ago maybe all of us you know at least about twenty years ago so as you uh fast forward for our audience today they can say okay what about today um you know let's talk about today well you made a comment before we we one of the things it has to be a win-win in total and in any in individual decision it needs to be win-win or win neutral so sometimes it'll be if I can help you and it doesn't cost me anything why wouldn't I

What Still Matters After COVID

SPEAKER_01 23:14

do that?

SPEAKER_00 23:14

But overall it's got to be a win-win uh and uh the the so I would say support at the top of the company and then alignment uh because you can't do change if you don't have you don't have some flexibility if you can't try new things so you have to have um you know the C-suite controls rewards uh uh uh helps to go against resistance it gives you the rope uh to be able to to do these things and I think a lot of that fell apart during COVID where people were working from uh home the team you know the teams there were just teams weren't functioning and so now we're coming back and how there's a lot of opportunity to relearn and to retry. I mean Doug McMillan uh the CEO of Walmart he'd picked uh my book Collaborative Disruption is one of his top ten books for this year. Seen that that's wonderful he said to me would you come up and speak with some of our so he had me up speaking and and answering questions for a big group of merchandising folks a group of multifunctional people and then others in their merchandising said would I come up with and work with their group which I'm happy to do because I'm a I'm a zealot for collaboration. Sure. Uh but Doug is wanting to get Walmart to restore that uh you know to to lean forward more and I think there's enormous opportunity um within the whole supply supplier world uh to learn how to redo that but you got to do the principles. You know I I used to say we're good but we can't do gold out of straw. I mean you got to have the resources and the ability to uh to move them around if you want to get that the result.

SPEAKER_01 25:10

Well I think I think your I think your book uh has just a really great outline uh of of really how you approach this complex situation or this disruption. Right. And I mean but the key word here is collaborative. Right. And I think you've done a great job of talking about this you know nothing is wrong with disruption in fact you know that's change and you know Sam always taught us he said the most consistent thing at Walmart is change. Right. It's been that way since day one. Right. And it's still that way I th I believe. I believe you're right. And so but you know disruption is change and you thought you I think you lay out really well in your book you know how this whole thing about the one company model the change management the transforming of relationships that take place um and then how you overcome these obstacles uh and then I think you know the the the bottom line that you that you talk about on every no matter what relationship you have uh from business to personal is that trust that you talk about and that building trust and yeah I think you give some great great great great advice Tom um and um I've I know I've learned a lot uh so much so yeah um a couple things we get out of here though because I want to talk about I want to talk about things uh a couple things with you as you think back your time on all this what's what's a great story that you learned you know that you you that you can share that made it was a great learning for you or whatever.

Leadership Lessons And Joint Innovation

SPEAKER_00 26:54

Well it started for me being I went to every Saturday morning meeting oh I used to see you there for the first five years at Walmart for a while. For the first five I learned so much and I learned so much about leadership from Sam David Glass uh Don Soderquist I mean Paul Carter the I mean there was just terrific and that also helped build trust because people saw me there yeah say what's this guy doing here and but it also gave me an opportunity to have a a one minute conversation follow-up conversation with you with 10 people that you wouldn't have had a meeting about but I said hey Andy you told me you wanted to do you know I'm gonna get that in the mail to you so that that was a big help uh but I learned so much from a leadership point of view from from my association um with the with the Walmart leaders yeah I think you know the what when I when I would see you there I knew what you were doing you know I knew you were PNG I see you were there and I would see you having these little sidebars between breaks and things with Walmart leaders and you were listening but you were very engaged and and I think that thing that when I look at you there you paid you that was part of your learning to learn the culture at Walmart and and to be around the people uh and and care deeply about creating this to happen.

SPEAKER_01 28:20

And and so you set the example of that. And uh and then you got to hear these great stories.

SPEAKER_00 28:25

And then the the second thing that is the the power of joint innovation because each company each company does something better than the other but when you put the opportunity in the middle of the table and you build together you can make two and two five every time.

SPEAKER_01 28:44

Yeah wow um I can't tell you how much I appreciate you being here uh you're such a great friend I've known you for a long time and um I want to talk to our viewers about something that we're gonna do soon that we'll be a mental scene but any closing thoughts around this topic then I want to move to another topic but any well I just would encourage people to invest in collaboration with their customers and supplier there's a lot that's laying on the table but it takes you you you don't get it if you're not willing to work for it and change some things but it but the but but there's gold and then there are hills. Yeah that's good. Well I think one of the things that that I learned watching uh this whole thing uh develop and my time you know because I I was running operating uh I was uh I was uh running operating division then when a lot of this was taking place and I was uh I was watching it and from afar but one of the things I learned is that even things when things are going really good that's a time you need to lean in and change it. You know when times are great you know this is it's it's important to create a disruption and look at this and I think that's what you were doing. Our business you know we we were doing great business absolutely but look because of disruption and how you navigated this disruption look at what happened it changed relling and supply relationships and what you did right you know there. So I think to learn this you know as you many of you that are doing listen to this you run businesses you run this don't be afraid now to create that disruption.

SPEAKER_00 30:26

And it's worth it I mean yeah PG Walmart relationships started out at $350 million 15 years later it was $8 billion which was 234th on the on the Fortune 500 as an independent company and Walmart went from losing 5% to positive 15. That's a 20 margin point and there was no magic formula we did that one brick at a time we built those businesses.

SPEAKER_01 30:52

But that is the long-term effects of collaborative disruption is what you just said. Yes if you really want a long term effect and it took years to do this but you but but but with that you just shared financials of what collaborative disruption can do with great people leading that

Servant Leadership Tease And Closing

SPEAKER_01 31:14

those efforts. Tom Lucio what a what a pleasure to have you here now um something Tom and I've been hanging out and talking about is that Tom you're gonna see Tom come back listeners said okay Tom listen we're gonna we'll do a couple of these but you got to come back so what Tom and I are doing they're gonna hear us in the future talk about servant leadership we're both passionate about that in doing business at Bentonville we're gonna be launching uh and and we have not told a lot of people about this yet but we're gonna be launching this year a servant leader podcast and Tom has agreed to come back and share great leadership lessons around that he's passionate about it and so he's gonna come back and we're gonna have continue some great conversations around servant leadership so you'll see a lot more about that as we get ready to uh launch that so Tom I'm excited that you'll be coming back I'm looking forward to it I'm looking forward to it thank you my friend it's it's always a pleasure thank you all our viewers and listeners again we appreciate you so much reach out to me on LinkedIn anytime send me a message have questions of I'll answer that. So thank you have a wonderful day goodbye