5 Questions With: Adrian Blocker

THE REINVENTION OF HUMAN CAPITAL in the LUMBER & BUILDING MATERIALS INDUSTRY

A Q & A Series Conceived and Hosted by Matt Meyers of Yesler

Featuring Adrian Blocker, Board Member of Yesler Solutions

Your executive and board experience has been with large lumber producers. Why contribute your time and expertise on the board of a venture backed software company?

Over my career, capital intensive forest products companies have prioritized investments on improving their manufacturing cost structure as the way to compete. This includes significant investments in manufacturing hardware, software and technology to increase mill level efficiency and productivity. During this same period, the overall supply chain from the mill to the customer has remained largely unchanged, including the buy/sell process. Other than some minimal investment in customer relationship software, this area of the supply chain has been mostly underinvested. Therefore the next level of investment to grow margin and leverage the mill investment is on the buy/sell side through sales and transportation efficiency and transparency enabled by cutting edge software. The current decades old process cannot scale without adding headcount and cannot process the quantity of buy/sell iterations to maximize margin. Yesler is providing the tools to create the efficiency and transparency to realize this next step in margin improvement as demand grows.

What were your biggest “aha” moments in your first few weeks with Yesler?

Yesler’s approach to privacy is very different from what I expected. I was surprised at the complete control sellers have over which customers see which products and prices, but it makes sense based on how this industry works today.

On the buy-side, the “aha” is the amount of data that can be analyzed quickly for what you need to buy today. It’s far superior to relying on messy and outdated email lists, or what a seller tells you on a phone call, or your own instincts, or worse – outdated index pricing. And it is a much better, easier, buying experience.

On the sell-side the “aha” is actually three things. First, the capacity of a seller on Yesler. Second, the amount of information managed, the way it is tracked and searchable, and the metrics available are all new to this industry. As we know, everything today is in sellers’ heads – no records, no data, no transferable knowledge, etc. So it’s a huge leap forward to capture this information so it becomes a company asset. Third, maybe the biggest “aha”, is the view mills will ultimately have into market data. I know this is early, but this data has value to the mills and the industry.

I 100% agree. So tell me more about how you think the individual mill value vs industry value will be realized?

The individual mill is obvious. They only hear what their customers tell them and see the transactions they make. If they know more about the market they can make better decisions for profit. Today they are flying blind. I’m surprised you haven’t more aggressively pursued mill involvement on Yesler.

You have to remember the markets over the past few years were unusual. Record profits generated by mills for doing the same thing they have always done, so we focused elsewhere. We started building new seller tools last year as the market shifted. But let’s go back to your thoughts on the industry benefits from Yesler as a common platform for data.

The complete lack of real market information was part of the problem during the pandemic. Yes, record industry profits, but then back to historic lows. Everyone in the industry from mills to builders could make better, more informed decisions about their operations with better information. Yesler can solve that without sacrificing individual advantages of the participants who have made investments in capacity, proprietary technology and brands.

Why does it take so long for this industry to change? I think you said to me in one of our early conversations after you saw our technology that “this is no longer about technology, it’s about the culture of the industry.” Can you expand on that?

I think the time is right in this industry for that transformation on the buy/sell supply chain. We’ve seen lumber companies make investments in technology to improve manufacturing processes. There are still people in those jobs and processes. In fact, those people require more skills to operate the processes, and as a result, those people are also now more valuable to their companies. That’s the transformation coming with Yesler for sales operations.

The current buy/sell process is limited by the time and information that one individual has to analyze and determine the best option. However, the Yesler technology greatly expands not only the volume of options in the buy/sell process but also the amount of information. Therefore, with Yesler it’s no longer about not having the technology, but it’s a matter of overcoming the decades old culture of the industry. The very sticky culture problem is the individual people who have held all the knowledge in their own heads. Hoarding information for personal gain, or blatant refusal to consider new methods, has become the culture on many sales floors. But the future is the person who has the power and control because they manage more business with more information and create more value for their company. This is what technology has done for individuals across other industries. It is happening in this industry too.

If I were a lumber CEO sitting next to you right now, what would you tell me about why and how to start with Yesler to break down the culture problem?

I would tell you that investing in sales technology will provide the highest ROI given the decades old processes now in place. Small increases in sales margins on every transaction will result in significant increases in profit. Yesler tools not only enable this but also provide the sales metrics that leaders can use to further manage their sales strategy.

I also think you’ve done something with Yesler that other software companies have failed to do in this industry. Most software requires the leader to authorize capital, consultants, IT teams, etc to deploy it. The fact that one sales person can start to incorporate Yesler in their sales process, with their customers, for the same expense as one customer lunch a month is a no brainer. That starting point would take internal IT department years to build. And the executive only needs to encourage and ask questions about progress to start seeing metrics they’ve never had seen before.