Monday, February 23, 2015

Distributor – Supplier Etiquette

Lately I have been thinking about Distributor-Supplier Etiquette; or should I say the lack there of.

As our industry accelerates through technology and demographic changes, we find ourselves with many new players on both sides of the distributor/supplier relationship. Training for supplier/manufacturer employees is directed toward products, customer types and factory programs instead of building a better channel.  In addition, the demographics in our industry are forcing generational interaction; so we find baby-boomers and millennials seated at the same table trying to communicate.

The chasm between partners widens; often based on simple lack of professional courtesies.  Miscommunications and friction between distributors and their upstream partners are building.  And, for some strange reason, nobody seems to be talking about it.

I want to bring this front and center.  To prime the pump, allow me to share a bit of the bad.

A Good Example of a Bad Example
Just a few weeks ago, I was invited to sit in on a distributor/manufacturer planning meeting.  The distributor had a long relationship with the manufacturer, and even though the distributor was producing strong sales results overall, a couple of key product lines were lagging.  Earlier in the year, the distributor and their supply partner had laid out an improvement plan.  For all intents and purposes, the plan had been a success; measurable results pointed to a significant turnaround.  I anticipated a positive working meeting to continue the efforts.

As we gathered in the conference, I couldn’t help but notice an air of nervous energy amongst the manufacturer’s people. The supplier’s local team members positioned themselves together on one side of the conference table, the distributor team members on the other (which is a topic unto itself.)  After a few social niceties, the supplier’s regional manager turned to the other group and bluntly stated, “We are here to understand what you are going to do for us in 2015.” After the distributor outlined 10 or so programs in place and plans to add more resources in the coming year, the regional manager said, “Good, put them on paper, and I will let you know if that’s enough.”

I couldn’t help myself, this was an expensive meeting with more than nine people in the room.   I held back as long as I could but had to ask, “Isn’t this about joint planning? Shouldn’t we discuss how we can make things work as a team?”  It was at that point the regional manager dropped the neutron bomb of distributor/supplier dysfunctional relationships.

“We are the ones who make the decision as to whether you are doing the right things.  Don’t forget who’s in charge here.  We are the manufacturer, you are the distributor.  We’ll tell you if you’ve got it right.”

While the words may not be dead-on accurate, they are mighty close.  The implication, tone and style conveyed the same meaning.  I could have suggested a hundred (maybe a thousand) alternatives.  The point is the comment was certainly not productive.  And, definitely not demonstrative of good etiquette.

I am interested in gathering your thoughts on distributor/supplier etiquette.   And, I am not being one sided. We are a team.   Distributors sometimes lack etiquette as well.  Respond with your favorite social faux pas.  We will reward the best one with a $25 Amazon Gift Card.

Wednesday, February 11, 2015

6 Key Components to Effective Leadership

Much has been written about developing and practicing effective leadership skills. Books by Jim Collins, Stephen Covey, Dale Carnegie, Jack Welch and Lee Iacocca, to name just a few, have addressed this topic from several perspectives. Thousands of articles have also delved into this subject. What this blog suggests is that there are a few skills/traits that are common in the most effective leaders of any organization.

#1 Honesty and Integrity
Great leaders create an organizational culture built on these two core values and hold all employees accountable to them. Without honesty and integrity as fundamental cornerstones of an organization, they will rarely succeed long term. And creating such a culture starts at the top of the organization. Everyone watches the leader and takes their cues as to what is acceptable behavior.

Effective leaders must also be trustworthy. They are recognized for always telling the truth and for practicing the highest standards of ethical conduct. Subordinates believe them and do not feel that their leader has hidden agendas. Good leaders readily admit their mistakes. Although difficult to do, this shows they are honest and can be trusted.

Great leaders show they have the best interests of the company in mind rather than their own personal gain, by making good on their commitments. They hold themselves accountable for their actions and decisions, and encourage their employees to do likewise.

Transparency is also important, even when there is bad news to share. Employees know when things are not going well. Trying to put a positive spin without acknowledging the organization’s difficulties will cost the leader his or her credibility. Sharing both the bad and the good creates deeper trust and respect.

#2 Outstanding Self Awareness
A leader must understand their own strengths and weaknesses. All of us have faults and instinctive behaviors that produce unintended results and/or consequences. It is critical for a leader to really know themselves, admit their shortcomings and ask for their help in addressing them. This demonstrates humility and humanizes the leader. No one is perfect and if a leader acts like they are, they will lose credibility and trust. In the worst case they will be seen as arrogant and intimidating.

Great leaders seek and welcome feedback and dissenting opinions. They encourage different perspectives and challenge conventional thinking. They create healthy discussions and debates, but also know when to move the conversations forward. And they are able to maintain their composure in difficult/stressful situations.

Effective leaders practice servant style leadership, trusting subordinates to do their jobs and providing them the necessary resources and guidance that allows them to do their jobs successfully and efficiently. Obviously different situations may require different management styles. An authoritative style may be necessary in some situations, especially during a crisis. But more often, a servant leadership style that demonstrates that leaders are there to help rather than simply telling others what to do, produces far better results.

Great leaders demonstrate empathy, show humility and genuinely care about others. Taking time to listen to associates and their ideas, learning something personal about subordinates and their families and asking for their opinions are wonderful examples of how to do this well.

Finally, getting 360 degree feedback from your team about your leadership strengths and weaknesses is essential to creating good self awareness.

#3 Vision
Outstanding leaders see the whole picture and do not get too focused on specific tasks or initiatives. They have deep knowledge of related industries/organizations and are seen as strategic thinkers. They often have strong networks and consistently identify important trends early in their life cycle. They are very good at communicating a vision of the future and getting organizational buy-in.

Strong leaders know their target customers, understand the organization's value proposition and also, its competitive weaknesses. They focus on enhancing core competencies of the organization and developing the skills and capabilities that will enhance their value proposition.

They are excellent at establishing clear goals and objectives for the organization, and for their direct subordinates. Importantly, they are also able to provide clear and convincing rationale that supports their vision of the future.

#4 Courage
To have courage requires confidence. The best leaders are very confident in themselves and their ideas, which allows them to be decisive. But, they must be able to exude that confidence without conveying arrogance or intimidation!

Great leaders have the ability to make tough decisions and are willing to take risks, even when conventional wisdom would dictate otherwise. They must be willing to stand alone if they believe in their convictions. This is directly related to their visionary skills, strategic thinking and their self confidence.

They are also able to recognize when they need the expertise or knowledge of others and are not afraid to admit it.

#5 Communication Skills
Great leaders do not have to be great orators or exceptional writers. What is required is that they are inspirational and persuasive. They can speak and write to the audience’s level, focusing on the WIFM (“What’s in it for me”). They communicate in a way that generates buy-in and willing followers. Because if you can’t succeed in doing those two things, you cannot effectively lead.

Good leaders must always be truthful, even delivering the bad news when appropriate. But, they generally exude a positive attitude and are seen as optimistic, even in the most troubling of times.

Even if they do not have a professional background or training in sales, leaders often exhibit elements of effective selling skills. They have the ability to advance their ideas in a logical and understandable way to all levels of the organization.

#6 Team Builder
Great leaders must have outstanding team building skills. This requires first and foremost the ability to attract and retain top talent.

Every great leader knows they cannot do it alone and that having the best talent enhances the opportunity for success. They know they need to build a team with complementary skill sets and experiences and constantly look to bring in people that know more than they do (this is because they are confident).

Importantly, they also understand that a team performs best when its members have differing personalities and styles, to expand perspectives when problem solving and avoid getting caught up in “group think.”

A good leader is often more of a facilitator of the team, able to generate healthy discussions and generate consensus. Great leaders know that if the team believes in, and is committed to a strategy or plan, the chance of success goes up immensely. The team becomes passionate about doing what they said they would do. Conversely, when a team feels that the leader will force them to do what he or she thinks is best, innovation is lost and there is little passion.

The best leaders are highly organized and trust the team members to do their respective jobs. The leader becomes a delegator, setting clear expectations and providing on-going feedback.

Finally, effective leaders regularly and publicly recognize others. They are quick to accept blame for failures, even when they may have not been directly responsible. And are just as quick to give others credit for successes rather than themselves.

In Summary
These six fundamental skill sets are found in virtually every individual who has been recognized as being an outstanding leader. But it is equally important to understand that few were good at all of these when they started their careers.

Knowing and admitting one’s own strengths and weaknesses is the first step in developing the requisite skill set to become a more effective leader. Next, committing and working hard to improve areas of weakness furthers leadership development. Then finally, asking others for help and feedback is essential to acquiring all the necessary skills and traits required to become an effective leader.

About the author:

Steve Earley is the CEO of Cross Company, a 100% employee-owned ESOP headquartered in Greensboro, NC. Founded in 1954, Cross has sales exceeding $100 million and over 200 employees. Their mission is “applying technologies to improve machine and manufacturing process performance.” Since 1974, Cross has acquired 18 companies and successfully integrated them into their unique ESOP culture. For more information explore their website. You can contact Steve directly by e-mail.

Other related blogs that may be of interest are: Creating a Culture of Employee Engagement, 5 Best Practices for Integrating Small-Medium Size Businesses.

Steve Earley is the CEO for Cross Company - a company comprised of 4 technology groups ranging from Hydraulics, Instrumentation and Automation to Integrated Solutions. Cross Company applies technologies to improve machine and manufacturing process performance. Cross Company is 100% Employee-Owned.

Friday, February 6, 2015

Believer, Skeptic or Psychoplanner, Part 3

Part III: Key Topics to get the Planning Juices Flowing

Joint Planning with Key Supply Partners
Not all vendors are created equally. Some have the power to cause our business to accelerate; others don’t. We have proof that companies who plan with their supply partners grow faster than their competition. Lots of companies go through the motions of planning with their partners. If you would like to hear of our proof, give me a call.

Major Marketing Activities
These can be marketing activities, plans for customer presentations, open houses, trade shows and other such events. Often we observe distributors rushing into events they have known about for a very long time – just because they lacked planning.

Major Technology Initiatives
What major initiatives can fundamentally change the way you do business? Here we are referring to things like CRM System implementation, implementing pricing tools, rolling out a new software system or warehouse bar-coding projects.

Product Launches
Far too many times, distributors in our industry launch new products and nothing happens. Based on observations and reports from the field, very little planning is applied to the process. Before you launch a new product ask yourself a few questions about the plan. Do we have the stock on hand to support the initiative? Is literature in place? How many times have you allowed a supply partner to do the training only to realize the support materials were lacking?

Targets – accounts, products and line expansions
Research indicates companies who establish formal targeting processes are 47% more effective in reaching their sales and financial goals than organizations who leave targeting to their sales team (without a process). Do your targets have timelines, individual responsibilities, opportunities for review and measures of success?

Inventory Management
Seasonal shifts in demand, changes in technologies and
obsolescence of existing products sometimes requires more than just a single person’s input. Without a plan in place, less than ideal consequences arise. A process for measuring and monitoring the ever changing conditions around the Industrial Distribution must be incorporated into the inventory management to achieve maximum results.

Now a final word for our psychoplanner friends
You have read through this article. Little voices are going off in the back of your mind. One voice says, “I’m a planner. This is a bunch of hot air. Plans don’t need all these things to work.” But you feel a little discomfort because you remember times things didn’t work out like you imagined they could. The other voice is saying, “If I would have had reviews, I could have avoided a costly mistake.” Or they're saying, “The inside sales group just didn’t execute on the plan. Maybe I should have assigned Deborah to make sure things got done.”

No plan is a perfect plan. 
Following the best practices of other Industrial Distributors tips the scale in favor of accomplishing top notch results. What would happen if you started looking back to the best practice list on a regular basis? My guess is you would soon find yourself enjoying at least one of my old distributor friend’s plans. And you too could plan for a nice summer vacation.

If you are planning to improve your own planning process, shoot me an email. I have a list of other areas where planning can impact your business.  

Of course, you're also still welcome to check out my planning book on Amazon.