Friday, August 2, 2013

The Death of a Distributor - The Wrong Kind of Culture

A typical Iowa summer storm-2013
Recently, I had an opportunity to visit with some old friends. We’ve known each other for a very long time and I felt as though I really knew their company. Back when I knew them, they were innovative, entrepreneurial and aggressively nimble in their approach to opportunities.

Lately, the supplier grapevine is rife with reports of their slow-down. Instead of the glowing stories of the past, comments like “can’t make a decision to save their soul” and “everything is a committee” flowed through the market. Even competitors had chimed in with tales of grabbing business opportunities away from their company. None of the stories seemed right or reasonable, based on my previous experiences. But things change…

My conversations with these old friends were telling. As we talked about business and all that was going on in their lives, I recognized something. Somewhere over time, this company had changed from an organization that learned from mistakes to a place where mistakes were to be avoided at all costs. The message was out; mistakes will be remembered and punished.

In the past, when an employee recognized a window of opportunity, they felt comfortable pulling out all the stops to capture the business. Mangers who noticed a new or innovative approach to solving a problem thought about it for a moment then put the full force of their authority behind fast and immediate action. Decisions were made, actions came immediately and the results often caught competitors napping. Were mistakes made? Absolutely, mistakes happen. Were the mistakes sometimes costly? The answer again is yes, but looking back costly mistakes occurred on just a few very rare occasions. On the other hand, the number of positive outcomes was huge.

Somehow the culture of the company had shifted.

Davenport, IA during the
Great Mississippi Flood of 1993
When presented with opportunities, the company’s managers create committees to discuss, rehash, and dissect the course of action. The committees, knowing full well mistakes are punished, avoid making bold moves. Very often, by the time a decision is made, it is diluted to the point of not providing a substantial competitive difference. In many instances, decisions are made after the opportunity has expired.

The net result has been slow growth and employee stagnation. Entrepreneurially spirited employees have moved on. The whole place moves forward like a bunch of bureaucrats positioning for the next election.

Deluded to the point of dumbness, this previously high flying distributor’s leadership team congratulates themselves on employee involvement. Committees, task forces, ad-hoc groups abound. Lots of talk, massive study and lots of smoke with very little fire replace action.

I went away from my meeting feeling spent and tired. What a shame to see something like this happen. I generally stay away from the whole “culture thing” but after seeing the negative impact, I had to vent. Here are five valuable thoughts framed by the words of great leaders from business, politics and big-time sports:

“A good plan violently executed today is better than a perfect plan executed sometime next week.” General George Patton
In distribution, timing can be everything. If involving others slows down your decision process, you lose some of the advantage. Innovative new product lines are scooped up by competitive distributors. Customers find new alternatives elsewhere. Highly qualified prospective employees get a job down the street. Carefully review your ability to pull the trigger quickly.

Quad Cities Ice Storm, Davenport, IA-2013
“If you see a snake just kill it… don’t appoint a committee on snakes…” Ross Perot
Decide early on who is qualified to make decisions. Committees are a useful tool, but somebody should hold the decision making power inside the committee. Beware of managers who take everything to committee and use the committee as their excuse for underperforming.

“If you're not making mistakes, then you're not doing anything. I'm positive that a doer makes mistakes.” John Wooden
Mistakes are valuable learning tools. I would never recommend ignoring mistakes. Quite the contrary, I recommend analyzing mistakes. By better understanding the circumstances, why the mistake happened and how your team could have responded differently, a distributor can train their people in a real world setting. It’s only when the similar mistakes are repeated over time that disciplinary actions should be considered.

“The more people you make responsible for something, the less chance there is for it to get done.” Jason Fried – 37Signals
Involve a committee if you must. But activities are completed when one person is responsible for making things happen. Group decisions along with shared responsibility set the wheels a spinning.

“The buck stops here…” President Harry Truman
If you occupy a leadership position in a distributorship, albeit Owner, President, VP, Sales Manage or something else, you are responsible for the decisions of the team. When things go wrong, absorb the heat. That’s your job.

A parting thought….
I find the quotations of those great leaders of the past inspiring. Across from my desk hangs a portrait of President Andrew Jackson. His men called him “Old Hickory” because he was tough and aggressive. He made some tough decisions and at least a couple of time, he made poor decisions. He played an instrumental role in pushing our young nation to greatness.

He also said, “I was born for the storm. The calm does not suit me.”

I say create your own storm.

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Levi Lewis said...

Thanks, this was insightful.

Anonymous said...

The problems described are pervasive.

The Alpha men and women of the world are swiftly being replaced by betas. The historical, hierarchical Alpha paradigm had a heralded, unprecedented run. The Beta's have replaced the Alpha's.
Entrepreneurial achievers that contributed to building the business are frowned upon.

Communicate and cooperate are the new senior management measurements for success in the organization.

Too many books by psychologists have pointed us in this make everyone happy direction: Matrix Management, influencing without authority (where are the people that manage with authority), management by committee, etc. We are in a downward spiral and management could not be happier.

John Nugent said...

My favorite: Teddy Roosevelt

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.