CIO Leadership Live with Mike Santimaw, SVP and CIO at Rent-A-Center

Thank you, thank you so much for having me.

I gotta say, it wasn't easy. You think about all the rules, all the responsibility that comes with being a CIO. For me, I took a little bit of a step back from the traditional sense of that and said, what does it really mean to be a CIO? A legendary CIO talked to me at one point and said, you know, you think about it being a Chief Information Officer, but really it's a Chief Integration Officer. And that individual couldn't have been more right. So I've really taken that to heart and said, how do we really start building relationships across the organization, become one with the business? So that's exactly what we've done in my first year. We've gone out, we've embedded ourselves in the business, become experts in their delivery and their success, and really have brought them into IT as well. That's simply that collaboration where you make IT the business of everyone. You've got strong IT presence inside the business and strong business inside of IT, because we're all in this together. We want to make sure we're getting to customer journeys right, we want to make sure we're executing on our strategy the way we should, and really want to make sure the experiences are good as a whole, internally and externally. So that's been the challenge and the wonderful accomplishment in the first year. And to be honest with you, I couldn't have done it without the strong executive leadership team we have here at Rent-A-Center. Such a collaborative group, it's been wonderful to work with them. And we've done some really great things for the business. We've rolled out a very collaborative purchasing portal for our franchisees and our corporate stores in the first year as well. We replaced multiple systems, simplified architectures. We've done a lot more than just collaboration, but it's been a great ride so far.

Absolutely. I'm just a firm believer in making sure that we're all marching down the same plan and making sure that we are integrated as one cohesive unit, because that reflects the experiences that we provide to the customers today. And they see it. If we're all disjointed, if we're not delivering on the customer journey the way we should be, it's on us. It's all in what we do at the customer.

Sure. Maybe I should first start with what Rent-A-Center is. And also another exciting side of the business is our Preferred Lease side, which is a store-inside-a-store type model. At Rent-A-Center, as our core offering, from inception we were renting goods today to the underserved market, where someone would rather have the flexibility to rent goods instead of buy them, or we're giving them the means because they don't have the credit to get those goods. So that model is very interesting. It's all about the relationship with that customer. I was very surprised to see when I walked into a Rent-A-Center store upon taking this role, seeing Suzy walking in the door and someone screaming from the back counter, 'Hey Suzy, how you doing? Are you here to pick up this fireplace? Are you looking at that TV today?' We're really entrenched in what those customers' goals are for their products, who they are as a customer, and the things they're going through in their own lives. Because we all go through struggles. They might need a little help with payment plans and things, and we're there to help and serve. So I'm so impressed by what our stores do in that regard. They call themselves customer relationship managers, and I love that about our stores. It's just so inspiring.

No, yeah. The industry is saying just that. They're seeing those Amazon-like services coming into play, and they're being challenged in their own worlds. But at Rent-A-Center, in-store retail is definitely not dead. It's really about how do we tie it all together in an omnichannel experience that everyone is so hungry for. You transact where you're comfortable, via mobile or on the web, and then at that last mile component, we're delivering directly out of our stores. So it's a bit of a handshake model, and we're doing a really good job of delivering that experience for our customers.

Yeah, absolutely. If I think about where the disruption maybe is for Rent-A-Center, it's how do we maintain that intimate customer service that we're so good at in that omnichannel experience. We've got some exciting things coming down the pike that are really going to enhance that. We're working very close with our friends in marketing, really driving what the customer experience should be in that omnichannel spirit. So I'm really excited about 2020 and what it holds for our customers.

It's been a lot about how we're seeing that shift, how they're using our services more as a way to get those goods in a more subscription-type fashion. Trying to tie all of that together so that the way they're browsing, the way they're interacting, the way they're chatting with our coworkers, and really driving that all together has been a big change for us, as opposed to just going into the store and talking to our coworkers. It's been wonderful to see.

Absolutely. It's not about landing the sale. Of course we need to make sales to stay in business, that's retail business as a whole. But Rent-A-Center really does care. They care about their consumers, where they are in their stages of life. They want to make sure that they're able to get the quality goods that they need for their family. It's a great mission. And it's very exciting to also tie those same principles and goals for our customers into the Preferred Lease model as well, which is that store inside of a store. So we have coworkers inside of an Ashley Furniture or Rooms To Go, and we offer the same no-credit options for those consumers. There's no reason if you can't qualify for credit, you shouldn't be able to get the goods you need to make sure your family is successful and you can provide pride for them.

Absolutely. So your traditional transaction is you rent goods, and as you get through the end of the agreement, you either just hold on to them or you can turn them back in, whatever suits you best. But we want folks to go to ownership. What we're seeing is as they get to ownership, they want the latest and greatest, they want to upgrade. If you think about the way we are with our iPhones, I have to have it. I'm not getting in line at 5:00 in the morning, but I'm definitely going to have it shortly thereafter. So we're seeing those trends where customers are going through their agreements and then coming back for the latest and greatest. They want the higher-end technology now, which I think is pretty refreshing. If I was to summarize how we started at Rent-A-Center, it was about fulfilling a need. Now we're seeing us becoming that partner of choice for technology refreshes, getting that latest and greatest technology, the QLEDs, OLEDs, the latest Xbox, the nicer furniture. You're basically putting out one low cost per week or bi-weekly, however you have your payment set up, and you're able to get those great technologies as a service.

That's something we've been pretty proud of over the past years. Traditionally, technology teams are the answer for delivering an experience, trying to figure out how we can deliver it as quick as humanly possible so it can get out to the market. Well, we flipped it on its head a little bit and said, how do we build business-driven development models? What I mean by that is utilizing platforms or creating platforms that allow our business teams to alter the experience or enable a new experience just by configuration items. The power that has taken flight has been pretty incredible. We're doing chat options for our consumers now. We've enabled so many things. The platforms we use pretty heavily internally, Salesforce, the flexibility inside of a platform like Salesforce allows us to put the power in the hands of the business and really enable them to develop great solutions for our consumers.

Most definitely. There are a couple different ways. Throughout the organization, we're always talking about security, always making it top of mind. But at the crux of it all, we put security at the core of all the technologies that we have. I won't go deeply into all the security controls we have, I wouldn't be very special if I told all of our secrets. Making those controls and protections inherent to our systems just makes sense. It becomes just a part of what we do and who we are. Organizations cannot really afford to build a lot of these in-house, so my advice is don't be afraid to partner with industry-leading security companies to put things on the ground that are so expensive to build in nature, like a security operations center. You can subscribe to security operations center services all day long and get great security talent through that model. Not saying you don't need talent inside your four walls, because we have a very strong information security practice that I'm very proud of. But it's hard to build and scale security technologies and big practices like that 24/7. I'm going to continue to subscribe and have a nice core group of folks that I'm going to navigate through that model.

No, they're very informed consumers and they're hungry for it as well. But look at what's at risk: it's our customers' data, our internal data. We take that very seriously. How we protect our consumers with everything that they trust us with is extremely important. It's a core competency that we have.

Our customer base, I'm not sure of that number at this point, but it's quite substantial. Our internal customer base is 17,000 if you count all the retail locations. As far as the size of the team, we are just under 300 coworkers, and that's a strong mixture of strategic partners in the technology space and internal Rent-A-Center employees. There's every discipline inside of that team. You think about the importance of security that we just talked about, we have very talented developers, an extremely talented DevOps practice. The list can go on and on. I love when folks ask me about what's inside of the team, because I really don't think there's a discipline we don't have, especially when it comes to the development side. The team is so strong, they're able to respond to any need that the business throws at them. And if we can't, we band together and figure it out together. It's a very strong team that I'm very proud of. The really incredible piece is when I took this role, I made a few small changes. We've been growing this team for a number of years. I've only had a view into it since 2017, but we went through a few resizing exercises between 2017 and when I took on this role. I'm happy to say we've got the best of the best on the ground here. A few small tweaks to put them in positions of empowerment so they can help drive that collaboration with the business is really the changes I've made. I want to give them a huge shout-out for all that they've accomplished and the exciting things they're working on for 2020.

Well, there's quite a few options where we leverage partners. In that specific instance, when we were talking about empowering the business with that business-driven development methodology, I'm very proud of the work that the team has done in collaboration with the marketing team this past year to rebuild our website. If you think about the journey different online experiences go through and the maintenance associated with it, you can imagine how that could build up into an environment where you have multiple touch points to change anything and everything on that website. A lot of cascading things happen on websites, so many break points. But at this point, we worked deeply with the business to rebuild our website. We're seeing great traffic growth going to the website now, and a lot of the configuration is in the hands of the business now. That was a huge win for us. It's no longer 'how do we get this enabled and have it be an IT function.' We did that work with a partner as well. We have strategic partners in here that are fairly large in size. One of the main three helped us with that. It was tough, a big project of that size, you can imagine where it would be challenging across the entire organization to get it right. But through that partnership with our internal teams and our partners, we were able to get that done and actually deliver an experience that's going to be very beneficial for the business going forward.

For sure. I'm rattling through my head all the things that we flattened and simplified over the past year to give our internal coworkers that better experience. Don't get me wrong, we have a lot more work to do. But it's a very simple thing that we talk about here from an IT perspective: a happy coworker is going to deliver a great experience inside your company, and that translates to customers. Just giving them one place to look for everything to do at the store level, helping to simplify the way they search for product, all these things seem very small in nature, but to that coworker who is standing in front of a customer trying to get an agreement done, trying to get the product so they can take it there, it's a really big deal.

Oh, absolutely. If any of our coworkers are listening, we take that very seriously. Call me right away, call Mike Santimaw, I will answer. We want to make sure that it is a great experience for them and that it's transitioning into our customers. You heard earlier about how passionate we are about knowing our customer and giving them great service. This is one more way to do that.

Oh, absolutely. We're very passionate about data as well. First off, protecting it, so I'll keep throwing security at the front of all these conversations. But also knowing our customers better. We want to be able to provide experiences where they are, and be able to put the best information in front of them as far as products they're interested in, and basically the whole customer journey. Our customer data platform work is a big activity for us right now, and also cleaning up some of the data attributes that we have from being a business as long as we have. That's huge as well. But what it really boils down to is us challenging and evolving our data strategy so we can really get to data-driven decision making at Rent-A-Center. We're doing it now, we can do it better tomorrow through an even stronger data strategy. We have a good strategy now. One of the strongest leaders I have on my leadership team is working on it now, and I'm so excited about where he's taking us.

That's a great question. I do, I don't. When I think about the leap to a Chief Digital Officer, I've seen a few do it. Some do it well, some probably not so well. One particular person I'm thinking of has done an amazing job and is revolutionizing the healthcare industry as a part of her new role. It's a couple years old now, but it's so fresh and exciting every time I turn on LinkedIn, this individual is doing some amazing things in healthcare. I think about how there's a tight intermingling of the business functions and IT, and that's kind of the holy grail for me. If I'm thinking about my journey to get to that Chief Digital Officer role, I feel like I'm on the right path because that's what we've been talking about this entire time: how do we better integrate into the business and be stronger business partners? You're looking at more of that business view instead of just 'I need to enable this from a technology perspective.' We need to see the end-to-end picture. When I think of the Chief Digital Officer role, it's about that digital transformation that's going to enable the business, having functions that work inside the business reporting up to that role. So I definitely could see an evolution of more tightly integrating IT and business together.

Yeah, again, I think it comes back to what we were talking about earlier about the business-driven development models. We've done a really good job of taking the complexity out of IT and putting the power in the hands of the business. But there are times where IT needs to respond, and through that simplification, we are able to put those flexible architectures on the ground that allow us to move faster. Think about the data center world that we've all come from, where it's all about big metal boxes, power, and cooling, all those things that we hate today. We've done a really good job over the last year of simplifying those architectures, moving as much as we can to the cloud and to platforms as a service, and really been able to respond really quickly. We're a heavy container shop, so you think about the self-healing properties that come alongside that. We're able to respond better from an operations perspective. We're automating as much as we can so we can build out environments and be very flexible on how we demo some of these environments and how we can experiment quite a bit with different technologies. We're not just throwing things out there and hoping we get the right experience; we're really going to drive towards that experience with experimentation in that flexible world.

When we talk internally, it's all about products and services. So when I think about a product, I think about our two business lines: our traditional Rent-A-Center brand and our Preferred Lease brand. Those are our products, and we've done a really good job of being very aligned on the roadmap side of things of what it is to evolve those products. That's what you really need to hone in on, making sure that we're all aligned on the same path from a roadmap perspective. So IT has had to get very focused on delivering, very focused on how do we help build that roadmap with the business. I don't necessarily like big meetings, but steering committees and things like that are very important. If we're going to drive experiences, we need to be aligned on it: business operations, IT development, etc. So we have made some subtle changes there to make sure that we have the right level of scalability and the right level of focus to respond to those products.

I'm going to happily say yes.

That is a really good question. Thank you, Roger Shetty, for that question. There are a couple different ways. We've done things where we've had them come through some of our existing integrations with bigger partners, so kind of a pass-through model. And then there are other times where we've gone in and matured some of those smaller partners so we can integrate, whether it be through some kind of email ingestion. Generally, we would like to work through a services layer of some kind. I come from a heavy integration background, primarily at BDP International, and there are a million different ways you can spin that one. Think about the days in logistics at BDP, where small mom-and-pop shops doing the final mile on a shipment would want to hand you a piece of paper or fax you something. So it's a difficult question to answer, but for us, we've handled it through relationships with our greater partners and maturing their practices, working very closely alongside them.

I don't want to claim that we have defined the customer journey, because that's okay, we're not letting you take all the credit. I would love to because there's wonderful work there, but it was primarily done with our entire leadership team. From a technology perspective, one of the things we're building out now and experimenting with is how do we get better at identifying the touch points inside that customer journey with the technologies we have inside the store. We talked a little bit about online and how we're using data that comes from those experiences to really figure out how the journey should be and respond to a store shopping online or via mobile. But also in the stores, how are we measuring radios off Wi-Fi, how are we seeing pass-through traffic when they're walking by the store, and how do we bring that traffic in? How do we respond to them differently? If they're in front of the video wall and they've been hanging out by the Xboxes for 30 minutes looking at all these games, but when they walk over to the TV, we can change all the screens in the stores to start talking about Xboxes and bring those advertisements in. Also, personalization at the point of sale, how we're using computer vision and all that data to really personalize that experience at the POS. These things are highly experimental at this point. I do not want to paint a picture that this is what we're doing inside of our stores yet, but they're really powerful.

Absolutely. And it's really important to think about that you're getting a lot of that from metadata. You're not necessarily fully identifying a customer or taking pictures of customers. With computer vision methodologies, you're using the metadata of that image to really identify that customer, so it's a bit anonymous in some regard, and you're still getting the great benefit when they come to the register. It's really interesting.

One question, Andy. Thank you. I'm going to have to thank him for that question later. It's a great question. When I think about what we do here, it's a lot of things. One of the things I'm very proud of is the culture of inclusion we have across the floor. It's not about everything that you've done, it's everything that we've done. We work so closely together, there's no silos. That's true throughout the entire Rent-A-Center headquarters and in the stores. We're all in this together. There's a desire to have that. Folks that have left here have said, 'Wow, I didn't know how good I had it,' or 'I didn't know anywhere else was going to be different than what I saw at Rent-A-Center.' Frankly, that's why I signed on in 2017. I was able to get a view into this before I signed on, and I was so excited about the way this place operates that I had to be a part of it. There's also empowerment. I'm a firm believer that if you give folks the tools and the opportunity to do their job and do it well, and allow them to drive it themselves, you're going to get great rewards from that. They're going to be excited about being here, excited about what they've accomplished, and they know they're going to get another opportunity to do something great again. When I think about all the exciting things that have happened just from folks wanting to do it and me giving them the opportunity, we've got some pretty amazing experiences out there internally and externally. That's how we're doing it. We also work with different programs from a talent perspective, from a mentorship perspective, internships. We go through that once a year more towards the school season. The mentorship piece is a bit unofficial inside IT. We do a lot of mentorship inside here, but we also try to partner with universities where we can to pull talent there as well. That's an area that I think we need to invest more in in 2020. Earlier in my career at Rent-A-Center, we had a stronger focus on that, and I'd love to get back to it because it's such an important market to tap into. You need folks coming out of college who are so excited to show what they've learned and make their mark. I love seeing that.

Yeah, what I meant by that when we were talking about before, it's not agile in the traditional sense of course, but it's the ability to move quickly and to stand up technologies or integrate technology fairly quickly and be able to tear it down. That goes back to where we talked about modernizing and simplifying our architecture so we can do that. One of the other things we're trying to do a lot more of is automation. I mentioned the very mature DevOps shop that we have. I would never say automate ourselves out of mundane tasks, but that's kind of what we're doing. All the things that you would normally do as part of a standard IT shop, we're automating so we can focus more on value-add items. There are very quick wins from an agile methodology perspective on the delivery side. There's also a topic that I'd love to dig more into, and I'm not an expert yet, but this concept of AIOps. It's incredible. You take AI and machine learning and couple that into a platform, and you're automating all your AI-driven operations on the backend. You're freeing up time, getting to the value-add, delivering a better service to your consumers, building self-healing infrastructures. That's an incredible place to be. Could you imagine not getting the call in the middle of the night? That's a fantastic thing for myself and my team. I'm committed to driving that direction in 2020. We serve franchisees, we want to deliver good service to customers standing in front of our counters in our corporate stores, and we have good folks online transacting. They should not see a blip in service. We should have a fully automated service no matter what time of day or night it is, and be able to self-heal those environments as they see trouble. It's impossible to have a bright, shiny, rosy system that never has any issues. Things happen. So we're doing everything we can to prevent those things through automation.