On the 45th episode of Enterprise Software Innovators, hosts Evan Reiser (Abnormal Security) and Saam Motamedi (Greylock Partners) talk with Jonny LeRoy, CTO of Grainger. Grainger is a Fortune 500 industrial supply company, ensuring seamless operations for a broad range of customers, from hospitals to manufacturing plants and everything in between. With over $16 billion of annual revenue and 26,000 employees, the company provides over 30 million products to support its four and a half million customers. In this conversation, Jonny shares his thoughts on how AI transforms operations at Grainger, quick wins for AI applications in the enterprise, and realistic expectations around today's AI capabilities.

Companies are under immense pressure to modernize and stay ahead of the curve in today's rapidly evolving industrial landscape. One such company making significant strides in this space is Grainger, a leader in the industrial supply sector with a longstanding reputation for operational excellence. As digital transformation becomes increasingly critical for sustaining growth, Grainger has embraced innovation and new technologies to maintain its competitive edge. This shift has been spearheaded by leaders like Jonny, who have been pivotal in integrating cutting-edge solutions to modernize the company's operations. Jonny has helped to shape Grainger's digital transformation, explaining how a significant portion of the company's revenue now flows through digital channels. This feat was achieved through continuous improvement and the adoption of new technologies, including AI. AI is playing an increasingly vital role at Grainger, helping to streamline processes and improve operational efficiency. Jonny introduced an insightful analogy, likening today's AI capabilities to having a team of enthusiastic interns. "There's a spectrum from the breathless stuff you'll hear on Twitter, or X, about these God-like deity AIs, to the other end where you've got access to a bunch of interns. We're a couple of clicks beyond the intern stage." While AI might not yet operate at the level of an omnipotent deity, it has proven to be a powerful tool when applied to specific tasks. 

AI is also enhancing Grainger's customer interactions. Jonny discussed how the company is using it to assist customer service agents, helping them ask better questions and provide more tailored solutions to customers. "We started realizing that the right thing was to slow down and work out the right next questions to ask. Instead of giving a direct product suggestion, the AI recommends better questions for our customer service agents to guide the customer to the best solution." This integration of human expertise and AI's ability to parse vast datasets ensures that Grainger's clients receive exceptional service, even when dealing with highly technical or specialized products. Another notable use case involves improving the accuracy of product matches when managing customer supply rooms. By expanding product descriptions using AI, they were able to significantly enhance the accuracy of matching products to customer needs, which had previously been a time-consuming and error-prone process. According to Jonny, these minor, incremental improvements offer quick wins that deliver significant efficiency gains when scaled across Grainger's large operations. These kinds of targeted, practical AI applications, rather than aiming for transformative changes all at once, are where Grainger sees immediate value.

While the potential of AI is immense, Jonny is candid about its limitations and the importance of managing expectations. He shared that while many enterprise leaders may be tempted to wait for a fully matured AI solution, Grainger has taken a more pragmatic approach by starting with smaller, tractable use cases. "You've got to dive in and get started. We're trying to do a lot of incremental small releases—it's the 'walk and chew gum' strategy," he said. One notable example is Grainger's customer service improvement project, where they applied AI to a small, manageable task within their customer service operations. Instead of overhauling the entire system or waiting for a fully mature AI solution, they started by focusing on their text channel for customer interactions. Jonny explains: "We took the text channel where customers can text with our customer service agents, which is our smallest channel. We took a thin slice of people looking for product information from that small channel and started peeling those requests off to see if we can provide better information to our customer service agents." By tackling more tangible use cases, Grainger is steadily integrating AI into their operations while learning and improving along the way.

Grainger's approach to AI serves as a model for practical, results-oriented innovation. Rather than waiting for a fully mature AI solution, Jonny and his team have embraced an incremental improvement strategy, addressing specific, well-defined problems one step at a time. By focusing on tangible use cases, like improving customer service through AI-assisted interactions, they're proving that even small advancements can have a significant impact. This approach allows Grainger to adopt AI and refine it based on real-world feedback, ensuring it enhances their operations in meaningful ways. Their experience underscores that AI's power lies not in grand, sweeping transformations but in its ability to solve everyday challenges, making it a valuable tool for businesses aiming to stay competitive in an evolving landscape.

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Listen to Jonny's episode here and read the transcript here.