Strategy, Team, Execution...and Results.

Is The Customer Always Right?

2012-01-25T23:24:00.000-08:00

No. But you want them to feel that way.

Some people that are part of great organizations sometimes act like the customer is on one side of the wall and the employees are on the other.

"Us against them"
"They're not paying attention to the rules"
"Watch out or they'll take advantage of us"

As a good friend and former colleague said so plainly one day, "Customers Make Payday Possible." Organizations exist to find, create, and keep customers with products and services that meet or exceed their needs.

Why do we lose sight of that at times? Do we really understand what our customers need? What they want? If they find it easy and beneficial to do business with us, or is a competitor looking more attractive? I have discovered that by far the best way to learn how your customers perceive your company is to visit them, see them in action, and look back at your own business through your customer's eyes.

Short of that, caring for a customer is not a "nice to do" its a "must do." There are the same number of reasons to do so as there are competitors from which your customer has to choose.

Be simplistically easy to do business with. Anticipate needs. Strive to "delight" and surprise your customers. Say please and thank you.

This is not to say you break down procedures and give the store away. You've got to be profitable and run a good organization.

The customer is not always right. But you want them to feel that way.

Give...What You Expect (or Need)

2011-12-12T20:05:00.000-08:00

I call it the mirror effect. It's the principal that states:

1. What you aren't getting and want...is what you need to give.

2. And what you get and don't want...is likely what you're giving.

3. And what you want most over anything else...is exactly what you need to give.

This has implications for personal relationships. And the same principal of "the mirror effect" is just as applicable to business relationships.

1. If you're not getting loyalty and commitment from customers...your company probably isn't bathing your customers in the same.

2. And if you get employees who are putting in 70%--it is likely because you're not giving 100% of your best to them--personally, professionally, and treating them as your most valuable resource.

3. And if you don't receive the absolute best products and prices (treatment) from your suppliers....it's probably because you make extreme demands and don't pay on time (again--the word is treatment).

There's a simpler way to act. Follow the Golden Rule.

"No." One Of The Most Powerful Words Ever.

2011-11-18T06:36:00.001-08:00

This recent post by Seth Godin should remind us all that its okay to say "no." In fact, saying no may be the best decision you ever make.

From Seth:

No.

No, we don't take clients like that.

No, that's not part of what we offer.

No, that market is too hard for us to service properly.

No, I won't bend on this principle.

No, I'm sorry, I won't be able to have lunch with you.

No, that's not good enough. Will you please do it again?

No, I'm not willing to lose my focus, and no, I'm not willing to compromise.

Seth's Blog

Sage Advice From Drucker

2011-10-12T22:15:00.000-07:00

I try to keep up with reading my copy of "The Daily Drucker" which is a compilation of Peter Drucker's work arranged by topic with an idea provided for each day of the year. I share here a particularly insightful essay based on Drucker's work "The Effective Executive."

Five points:

1. Know where your time goes.
2. Focus on outward contributions.
3. Build on strengths.
4. Concentrate on superior performance.
5. Make effective decisions.

From "The Daily Drucker"

Five practices have to be acquired to be effective. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control. Effective executives focus on outward contributions. Effective executives build on strengths--theirs and others. They do not build on weaknesses. Effective executives concentrate on superior performance where superior performance will produce outstanding results. They force themselves to stay within priorities. Effective executives make effective decisions. They know that this is a system--the right steps in the right sequence. They know that to make decisions fast is to make the wrong decisions. Whenever I have found a person who--no matter how great in intelligence, industry, imagination, or knowledge--fails to observe these practices, I have also found an executive deficient in effectiveness. Peter F. Drucker

Hard to argue...

Survival Tips for Wholesalers (Shelter Magazine Interview)

2011-09-01T19:39:00.000-07:00

I thought I'd re-share the thoughts and ideas below--hoping they'll resonate with wholesalers seeking ways to increase the value they offer their customers--and their manufacturers.

Survival Tips
Former General Manager Gives Tips on How to Stay Successful
by Samantha Carpenter, editor of Shelter magazine.

(Originally published in Shelter Magazine, March 2008)

Distribution need not sell around its customers, but rather provide a tier of services at a cost—and as a helpful function—to satisfy end-user needs together with its customers,” says Jeff Wedge, a veteran of the building products distribution climate. An innovative idea like this one is what Wedge believes he and others in the distribution industry need to adopt in order to survive the changing distribution business, and offers “out-of-the-box” concepts from one of the industry’s most innovative thinkers.

Special Delivery

As an example, Wedge says that a wholesale distributor could offer jobsite delivery. “A wholesale distributor could, in fact, develop jobsite delivery services that would not replace the retailer or dealer’s services, but be a service for the retailer or dealer,” Wedge says. “An example of that is a truckload of windows. Instead of delivering them to the lumberyard, I could deliver them to the jobsite for a nominal fee charged to the lumberyard. The [lumberyard] would, in turn, not have to pay for [its] employee, [its] fuel, or [its] truck and tie [it] up from servicing another customer. [The lumberyard] could pay me to do that. And, due to my scale and logistics expertise, I could probably handle those windows and deliver them in better condition than a lot of lumberyards or retailers could anyhow.” The distributor is providing a service so the retailer doesn’t have to, he says.

“I could go a step further now that I’ve got them [the materials] at the jobsite. I could stock the project; I could put all my doors near each opening they are assigned to; and I could stage all the windows next to the openings,” Wedge says. He says that his former company, Hampton Distribution in Sacramento, Calif., had this type of vision of jobsite service. Hampton wanted to develop an installation program with its own installers who would (for a fee) offer installation for the lumberyard or pro-dealer or the non-technically install-oriented dealer who doesn’t have the infrastructure, the insurance or the team to do that, so the distributor, in turn, could represent their products as installed to the end users and to the consumer. “I believe that the distributor can help reach through and down to the end user—not to threaten [the dealer or retailer] but help them to do more,” Wedge says.

Another idea Wedge has includes a fit-and-finish program (or sometimes referred to as a lock-and-slide program). “I’m talking specifically about the door business and window business,” Wedge explains. “When the windows have been installed and construction is continuing, there is an opportunity for the distributor to go to the jobsite and walk through and check and adjust all the windows, maybe even install all the hardware, clean the tracks and do troubleshooting. You are doing two things: saving a lot of money for that jobsite call down the road … and while on the jobsite, looking for the opportunity for additional business.”

And another idea for distributors is the adjustment, replacement and repair after a job is complete. Wedge says that while many manufacturers, distributors and retailers have taken this role, “I think distributors have a chance to go in and assert themselves. There is a strong value for providing that service for the whole marketplace, proactively, not reactively.”

Fear Factor

Wedge says there are many reasons why distributors are afraid to face the problems within their industry. First is the perceived threat that, if they offer services like jobsite delivery, they are going to threaten their customers. “They might think my ultimate goal is to cut them out and do it myself. And that’s a very, very fine line to walk,” Wedge admits. “If I do, quite frankly, develop the ability to deliver to the jobsite and to install the windows, and I know who all the architects, builders and remodelers are in a given area—then many keen retailers and pro-dealers would possibly believe that is the next step [to take over their business].”

Wedge says that distributors would need to make it very clear to their customers that this is not the case. “The enormous scale of the points of transaction, the credit, and the sheer logistics is not something they would want to take on in an entire marketplace and sell direct to end users, but collaborating with [the retailer and dealer] is.” Starting an installation program from scratch would be difficult, according to Wedge. “[At our company], we knew we would have to purchase an organization that already had installers and that [it] might sell more products than we handled, such as cabinets, doors and windows,” Wedge says. “But to get that expertise, we would have to buy a company that was already doing it, that had a line of insurance and expertise to scale.”

Wedge says then the two companies could be blended. “And that’s a formidable task. That’s not what distribution has done in the past; it’s vastly different,” he says. “So that crosses into the third reason [why distributors are afraid to change]: these ideas are foreign to what distribution has always been.”

But what will happen if distributors and their dealers stay in their traditional roles? Wedge says both companies could lose market share. “Many pro-dealers and retailers don’t do these same things for fear of losing customers. For instance, a major lumberyard owner may choose not to offer installed product initiative because he thinks, ‘If I install, well that’s what my contractors do. I’ll take their business; I can’t do that,’” Wedge explains. “That’s not how to look at it. A lot of these builders would love to have a back-up installation leg on which to stand.” Wedge says this is a possible scenario: a contractor may be running thin with people, he may get backed up, he may ask a lumberyard with an installation program to help install a job and “it may be the greatest savior the contractor could ever imagine.” Wedge suggests that the contractor might say, “Hey, I’m really glad you were there for me. Hey, that worked pretty well. I might try that again next time.” If distributors don’t start looking at new services to offer their customers, what does Wedge believe will happen?

“[Distributors] will wait and watch product lines, one at a time, go direct,” he says.

Wedge believes there are a number of reasons that manufacturers want to exert control over the supply chain by going direct. “They want to ensure that their product[s] [are] sold first and in the best light and sales are seen through to the end,” Wedge says. “In many situations, a distributor handles competitive lines, but the fact of the matter is: the manufacturer has to have absolute confidence that all of the sales department’s promotional efforts and advertising dollars and all of the field sales, training and sales calls done result in a sale of [its] product. When [it is] in control of all those aspects … [it has] a field sales force that is totally committed to selling [its] product and nothing else, and that’s a very attractive component.”

Sit at the Table

One way to ensure that distributors and suppliers have the same goals in mind is to sit down and discuss them. It doesn’t sound hard, but Wedge believes there aren’t many companies actually doing this. Andersen Windows, according to Wedge, coined the phrase for their work with distributorships—a joint business plan. “And we used that with a lot of our dealings with our suppliers [at Hampton]. We would sit down at the beginning of the year (and preferably four times a year total) to talk about our products purchased versus the plan we had mutually developed, promotional elements, services offered, target customers, promotional publications, offers and so forth. [We talked about] the actions that we both needed to commit to as a manufacturer and a supplier in order to grow share,” he explains. Wedge has spent the last eight months communicating to the distribution industry ways in which he believes it needs to change (through his website www.thewedgeedge.com and industry blogs, such as Adam J. Fein’s Distribution Trends blog).

Wedge’s distributorship closed May 2, 2007, when Andersen Windows made the decision to distribute its products itself rather than through distributorships in the western market. “It was just going to be a matter of time for Andersen to extend its logistics model to all areas of the West. It made sense. We understood it, but we didn’t like it,” Wedge says. “Andersen was extremely fair in the way it helped us and treated us upon our exit. Andersen’s decision to finally take the territory over with company-owned distribution was the final straw for us. It didn’t make it feasible for us to remain in business. Andersen was 80 percent of our volume.”

Wedge says that a lot of people have asked him, “How in the world did you ever let Andersen become 80 percent of your business?” “When my boss and I came to the company, it wasn’t,” Wedge says. “We had four separate divisions and multiple products, and we were not focused and weren’t executing well. We decided we didn’t want to be a company that was ‘everything to everyone’ and we decided to ask ourselves, ‘If you are going to be in this business, what are you best at, what do you have passion for and what can you make money at?’ … We decided we were great at Andersen and we were really good at doors.” So the company sold off all its other divisions and put themselves in that position intentionally.

“Because of it, we ended up winning the exclusive agreement and distribution in the West for Andersen,” Wedge says. “That was a great win, but as Andersen’s Pacific Northwest and Southern California expansions occurred, it left Sacramento as this little island by itself, and over time, it was just too attractive for Andersen to sow up [its] entire model. It made sense.” “There are never any hard feelings,” Wedge says. His company is now closed.

Wedge will need to put into action many of his ideas, if he wants his next distribution industry venture to be a success. Other professionals will need to institute innovative ideas to survive the changing distribution business as well.

Call to Attention

If you attended the Association of Millwork Distributors’ (AMD) Convention in Denver in October 2007 you’ll remember Don Houghton, AMD’s immediate past president, reading Wedge’s letter of resignation from the Board of Directors (see the November/December 2007 issue of Shelter, page 20); Wedge resigned from the board because his company closed.

In the letter, Wedge wrote, “I encourage the leadership in this industry to build on the ideas and momentum that have recently sprung forth, and change the heading we are on—and forever increase the benefits and vitality to our customers, our suppliers and ourselves. And to do so this year … My greatest disappointment would be if these outstanding initial steps and beliefs failed to find enough voices and actions to help propel the industry in a bold new direction and prove the critics wrong.”

The association took Wedge’s advice and made some dramatic changes to its bylaws. For instance, the AMD membership passed a bylaw that allows for associate members to serve in a board of director position and as an officer on the executive committee.

The Inventory Pitfall

Jeff Wedge, former general manager of Hampton Distribution, which closed its doors in May of 2007, says that distributors need to become solution and logistics providers, not inventory managers. “Taking orders, the inventory, the transactional element and delivery is not the entire game any longer,” Wedge says.
“Distribution needs to reach down into the channel and provide services that can be of greater value, not only to the retailer, but to the end-user. When I satisfy those two audiences, I’ll do a better job satisfying the manufacturer.”
Wedge says distributors have three masters that they need to satisfy: the customer, the end-user, and the supplier. “Distributors need to, of course, take care of their customers. Distributors need to take care of their customers’ customers and help them be better, and they need to, of course, make sure that their suppliers could not imagine the sale of their products into a given marketplace through any other means.”

Feedback Wanted

If you would like to discuss some of Jeff Wedge’s ideas in this article or other ideas he has, please e-mail him at jeffwedge@sbcglobal.net or visit his website at www.thewedgeedge.com.
Shelter

© Copyright 2008 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.

What If The Coach Didn't Show Up?

2011-08-23T16:30:00.000-07:00

It's game day. The football teams have arrived and have finished warming up. The fans have filled the stadium. The players are ready. They've practiced all of their careers for this game. There's a coin toss, the teams take the field, and it's "game on." The Blue Team against the Red Team.

But the Blue Team's coach hasn't shown up. The game begins.

In the first plays of the game, the Blue Team is flawless. Everyone knows their role and is doing their job. All of their training and practice has prepared them for this day. They are veterans and have run these plays a thousand times before.

But an overload of maneuvers and opposing efforts from the Red Team begin to distract the coach-less players. They begin focusing on one thing--and their opponents do another. They let down their guard and are overcome by moves they didn't see. In the huddle, everyone expresses their own idea on how to make the next play. Without a coach's view, perspective, and coaching from the sidelines, the players are constrained by their own individual agendas and blinded to the distractions which are thwarting their efforts. They are not playing their best game. They are not playing as a team. They are not being led.

If he'd have been there, the coach wouldn't have played the game. He'd have helped them play better.

One of the leader's main jobs is to help others get their work done, to grow, and become better. The leader doesn't do the work. In an orchestra, the conductor does not play an instrument. In football, the coach does not kick the field goals.

Good leaders LEAD, DIRECT, and TAKE ACCOUNTABILITY for the results. They don't assume their star players will perform music or win the game on their own, without intense coordination, guidance, and direction.

Be there for your team.

What Are You Talking About?

2011-07-21T22:19:00.000-07:00

What's the conversation at your board or conference room table?

A) Are you first talking about what's working before what's not? Are you talking about customers, their needs, finding them, satisfying them, and holding onto them? Are you talking about how to beat your competitors and what products your current and future customers need that you can make?

Or

B) Are you talking about widgets and manufacturing? Product design initiatives and laborious process issues?

News is, both are equally important. But make sure you spend equal time on both. Our tendency is to fall in love with our products, plants, and processes. But make sure you give your customers attention, as well as paying attention to your markets, the needs, the competitors, and all the stakeholders involved.

Seth Godin said it this way in a recent blog:

What (people) want

What do customers, friends, the socially networked, users, neighbors, classmates, servers, administrators, employees... maybe even brands... want?

notice me
like me
touch me
do what I say
miss me if I'm gone

Pay attention to what matters.

When Is A Leadership Team---"Not?"

2011-05-26T21:14:00.000-07:00

A leadership team "isn't a team" when it's members don't trust one another. It won't operate at its best if the members even mistrust a single person on the team.

A leadership team doesn't operate when it's members work in their own silos--placing their personal or department agendas ahead of the team's.

A leadership team doesn't point fingers at one another--because they know that four of those fingers are often pointing back at themselves.

A leadership team doesn't withold helpful, constructive criticism or debate around key ideas in order to "make nice" with the others.

A leadership team doesn't let take their collective or individual "eyes off the goal" and allow critical progress toward results to go unaddressed. And a leadership team doesn't continuously take on new projects before they execute and complete the current.

So where does teamwork start?

In Patrick Lencioni's book The Five Dysfunctions of a Team, the author places "trust" at the foundation of building effective leadership and management teams. If you've not read the book--I place it at the top 5 most useful business books I've read. Like Lencioni, I also place trust at the core of an effective team.

Earning and building trust is a two-way street--and it happens on and off the court. When team members trust one another--each knows that he or she can count on the other members to work together for the good of the team. Personal agendas are checked at the door. Attempts at control and power-grabbing are absent. The agreed upon objectives of the team become "goal #1" for all--with no exceptions.

Leadership teams can attempt to master all the other qualities of a high performing team--but if trust is missing--or even in question, the collective results will suffer.

Do you have a team? If the answer is no, where do you need to start?

What Gets Measured Gets Attention....

2011-04-26T07:29:00.000-07:00

....and what gets attention gets results. There's truth in this concept that "what gets measured gets attention--and what gets attention gets results."

It is difficult to deny that the goal of every organization must include “results.” To go through the actions of business, transactions, product development, program initiatives, and tactical execution WITHOUT the attainment of results is in itself disappointing, but is totally unacceptable if the “results” were never the focus, not measured, not spoken about, unclear, and were not at the heart of the leader and his or her team’s focus and conversations.

How do you do this? One way to start is to ask yourself “how visual is my workplace?” If for instance, safety, on-time shipments, customer satisfaction, or profit margins are important--how do you keep track of those? Better yet--how does your team and how do your employees keep track of those?

A visual workplace is one where the company metrics aren't a secret, where they're not shared only among the management team.

A visual workplace is one where the "vital signs" are posted, they are shared, and they are used in daily decision-making. A visual workplace uses "dashboards" or charts or bulletin boards to post the progress against the stated goals and objectives.

And while you're considering sharing vital information--why not post your entire strategic plan? Whether you post it for all employees or in your office for you and your team to review frequently--Verne Harnish has created some outstanding tools for business planning. Review and download his templates and planning forms at http://www.gazelles.com/.

One of the Gazelle's primary principles is to create measurements and themes and post them for all to see--and to track the progress throughout the year.

Three keys to creating a visual workspace are:

1. Select a small number of metrics to measure that reveal the progress of the company and departments towards the top objectives.

2. Use dashboards and easy-to-read graphs or charts to convey the "green light/red light" status toward the goals.

3. Keep them updated.

And finally, engage your team and employees in conversations regularly around the progress you're making. Bring attention to the measurements--and you'll bring attention to the results.

Is Your Focus Inward or Outward?

2010-11-17T07:04:00.000-08:00

I recently read a blog by Dirk Beveridge with a reference to the "fox hole" and how we get comfortable at times in it. "It" can be a love for our product and innovation above our love for identifying and meeting customer needs through dedicating the resources (time and money) to do it.

We may talk a good line--and even place the customer at the center or top of our org charts--but at the end of the day--where does the passion flow in a business?

Where does the money flow? Does it flow to product development and manufacturing improvements? If those are the critical needs--so be it.

But does everyone in the organization know and care as much about the business from the customer's point of view as they do their own manufacturing, engineering, or administrative fox hole?

What's Your Company Culture?

2010-11-01T23:34:00.000-07:00

Innovative? Risk averse? Customer centric? Entrepreneurial?

There's a culture within your company. Your people reflect it--and the leader at the top sets it. Are you WHO you want your customers to experience? Why or why not?

If the answer to your question isn't what you think is right--ask your customers. They'll tell you. But deep inside--you really know, don't you?

Most great companies are really clear about this--and at the end of the day--their customers are (1) at the top of the org charts, (2) in the center of everyone's efforts and focus, and (3) why the company exists.

Are you there? Is your customer?

Forgetting To Put The "Sell" In Selling

2010-10-16T13:18:00.000-07:00

If you're selling a product with highly technical attributes--well, yes--you'd better know them well and how to sell them. And how they benefit the buyer. But of course--the technical and performance attributes aren't the only reason that buyers buy.

This blog is about getting caught in a trap. The trap of a singular focus. The trap of forgetting why people buy.

Are you selling the practical benefits? And stopping there? Or are you reaching out to customers with a story about "why?"

Some auto experts claim the Honda CR-Z is the best value in automobiles in America today based on fuel efficiency, performance, and the low $20,000 base price. But of course--not everyone buys a car based only on value--or the "logical" reasons for the purchase. We buy for prestige, comfort, safety, resale--and a host of other "emotional" reasons.

Consumers can buy a $800 set of Cutco knives when a $300 set from Macy's might do. Consumers can buy a $800 replacement window when they're commonly sold for $300. And consumers can choose a BMW 128i Coupe for $32,000 when the Honda CR-Z at less than 2/3 the price is judged a better investment.

Long story short--buyers buy on more than just reason, payback, and tangible attributes. The more expensive products listed above might all in fact be much better. And that's where the "sell" in selling comes in.

Paint a picture. Ask questions. Find out what buyers truly value. And then create a compelling "why" that helps them satisfy their emotional as well as logical needs.

Park yourself for 18 minutes and watch this video of Simon Sinek giving a talk about the "why" in buying decisions--and not just "what" and "how." My good friend Rick VanDermyden shared this with me after a conversation we had about the need for companies to have a "customer and market" focus--as opposed to only a "product and services" focus.

The "traps" are:

1. Forgetting why companies make stuff.
2. Forgetting how we sell stuff.
3. And overlooking "why" people buy stuff.

Enjoy the video--and here’s to good selling!

The Three Essences of Confident Direction

2010-08-22T22:56:00.000-07:00

This economy, political environment, the employment situation, and--the outlook for the future--both that of our companies and of ourselves--cause some fairly radical self-questions to emerge.

And so I propose three filters be used for a "thin slice" response to where you stand.

#1 Follow Your Gut. There is no mistaking that "your gut" telegraphs the right decisions to you. Don't know what to do on an issue? Follow your gut. It's that tingling, sometimes raw-gut feeling that beckons to you. Follow it. Your gut instinct is almost always right.

#2 Take Care of Number One. That means so many things to so many different audiences: the company; the family; the individual; the self. The most seasoned veterans of our economy today were to first to cut employees, downsize and eliminate branch locations, and adjust their businesses to the new economic reality. So whether you are wresting with laying off 20 or 200 employees to keep "#1 afloat," or if you are contemplating closing your company so that you can walk away as unscathed as possible--take heed of this advice: Take care of number one. I do not take away anything from the noble ethic and desire of the most devoted of you. I simply shine a light of reality your way to make sure your emotion or pride is not driving your thinking to extreme.

#3 Change the Rules Until You Win. This I can't underscore enough. Take "out of the box" to a whole new level. Do not let yesterday's realities be today's realities. Think out of the box and do something you would have never thought of doing before. Change customer bases, change who you work for, change the way you "show up and suit up," or change the way success is measured. Change your services. Deliver a new value that never existed. Change the rules until you can win.

Follow your gut. Take care of number one. And change the rules until you win.

What's The Value of Your Values?

2010-02-10T20:45:00.000-08:00

When you establish values for your company--what's the real value?

I've been fortunate enough to have happend upon Jim Collins' methods for establishing values within a company--and have had the chance to do it twice within two different organizations.

In short, Collins suggests that instead of the executive team sitting down and picking out the 4-5 values THEY believe are important--that instead--they study the best employees in the company, identify the values those employees demonstrate, and where those values overlap--make them the company's own.

What you end up with is a set of values that defines the very best people within your organization. You may then use these values to emphasize behaviors, evaluate performance, and also use them to recruit and bring aboard new employees into the company.

You now have a set of values that really mean something. They not only describe your company--but they ARE your company.

And that's where the real "value of the values" comes into play.

When facing decisions, these values serve an imporant purpose. These values become the filter through which your evaluate choices and they help chart your course very cearly and plainly.

These values--that have been developed from a set of the best characteristics displayed by your very best employees--now have real meaning. This, as opposed to the meaning derived from a set of 5 "classic" values that the management team thought were important and had printed on posters around the office.

Not that you shouldn't print and post them--but wouldn't it be better if they resonated with your employees?

Follow Collins' process and you'll wind up with the best set of values possible--which will help guide you in every way you can imagine.

Permanent Whitewater

2009-08-07T06:49:00.000-07:00

Throughout my career, it seems I've been engaged in continuous change. Whether it was developing a new channel model; helping market partners understand new ways of selling; or participating in the pioneering of a new product and industry.

I like to say that "the smooth waters are behind us and there's nothing ahead but permanent whitewater." We all have to create change, adapt to change, and "live" change.

I reached into the archives this morning and found one of my favorite pieces that addresses man's (and woman's) reaction to change--and in some cases--their resistance to it.

From Machiavelli’s “The Prince”, Written in 1513

And one should bear in mind that there is nothing more difficult to execute, nor more dubious of success, nor more dangerous to administer than to introduce a new order of things.....for he who introduces it has all those who profit from the old order as his enemies, and he has only lukewarm allies in all those who might profit from the new.

This lukewarmness partly stems from fear of their adversaries, who have the law on their side, and partly from the skepticism of men, who do not truly believe in new things unless they have actually had personal experience of them.

A Letter to President Obama

2009-07-14T23:29:00.000-07:00

Dear President Obama,

No longer can I stand by at the edge of a current of raging red waters that flow by us all in a torrent of overspending, a lack of focus on fiscal responsibility, and a destructive path of erosion that threatens the foundations of our freedom, future, and motivations.

Our local, state, and federal governments must curb their overspending and serve the people with decisions and actions to help secure a worthwhile future for our young. We also must find ways to balance budgets without over-taxing the achievers and contributors in society with disproportionate shares of the revenue burden—thereby penalizing success achieved by these business owners, corporations, entrepreneurs, and hard-working citizens.

In my household, I must align spending with income.

In the company for which I work, I must align spending with income.

And in the country in which I live, our GOVERNMENT MUST ALIGN SPENDING WITH INCOME.

Please take a step back, and cast an eye forward—on what must be done to ensure our continued success in this, the greatest country on Earth.

Sincerely,

Jeff Wedge

Why Do Manufacturers Use Distribution? Really.

2008-10-14T21:53:00.000-07:00

As you may have heard me say before, manufacturers choose to use distribution for 4 primary reasons:

1) The distributor's knowledge of the market.

2) The execution of market and channel plans to get product to market thoroughly and efficiently.

3) Access to customers known by the distributor--where relationships flourish and penetration is deep.

4) The volume of business a distributor can deliver to a manufacturer.

But let’s add some of the more tactical issues to that list, shall we?

5) Distributors provide customer service and order fulfillment.

6) Distributors maintain inventories in the desired geographies next to the end-use customers.

7) Distributors provide logistics into the market.

8) Distributors absorb the credit fluctuations and the AR role throughout their markets.

Hold on—what’s wrong with this picture? How about this? Number 1-8 above can ultimately all be figured out and executed by manufacturer themselves. But before the customers of distributors get too excited about the possibility of “cutting out the middleman” and buying direct from manufacturers, we need to keep in mind that there are costs associated with all of these—at some level. So—the price is the price is the price. What an end-user pays for products will likely be the same whether they buy from distribution or from manufacturers direct—because there is a cost to all of these services.

Now, let’s look at the last two services distribution can provide.

9) Sales & Marketing, through excellent value-added sales representation and sales promotion into the market, and…

10) An unbeatable value proposition for customers. Distribution must create such a compelling reason for its customers to buy from them—that the customers could not even imagine carrying those particular products if it were not for the unbeatable value proposition the distributor provides.

These last two are the most challenging for distributors to figure out, design, pay for, and execute. But they are the key to a lasting dominance in the channel. And together, all of the areas above are a 10-point plan for sustainability and long-term success.

Decision-Based Agendas

2008-07-26T09:31:00.000-07:00

Has this happened to you?

You're participating in a group meeting. You come upon an important topic on the very full meeting agenda labeled "Widget Sales Program." The meeting leader initiates the conversation with an somewhat impressive introduction and overview. He or she then asks for input.

As the input comes from all directions from all the participants--the course of the meeting shifts left--then right, then backwards, then totally off topic--then back to the middle.

Many excellent ideas come out. Some are even written down on the flip chart. After 35 minutes of discussion, sharing of ideas, and even bold proposals for "change," the meeting organizer realizes she'd only allowed 30 minutes for the discussion and time is running out, and so she's going to have to move on.

She sums up what she thinks she heard and then moves on to the next topic.

So what was wrong with this? Perhaps nothing--if the group and leader arrived at an important decision or action point based on the discussion.

But more often than not--a meeting agenda prompts a lot of great discussion where many great ideas are shared--but no "goal" was set for the agenda item in the first place. It felt good to the meeting organizer and participants to have the agenda item on the list--but they leave the topic not really feeling as if they did something substantial about it.

How do we make this process better? The answer is through decision-based agendas. The trouble can be--is that these don't come naturally to us. A decision-based agenda item looks odd on the page, and even if we don't phrase it properly, the meeting leader must exhibit the discipline to remember to crystallize the goal for the topic in everyone’s mind so that a decision is reached.

One way to enable this process--is to just rewrite the agenda topic. Instead of "Widget Sales Program," the meeting leader might have listed it as "Widget Sales Program: What Are The #1 and #2 Enhancements Needed to Achieve Our Goals?"

This tells everyone at the outset that their mission for the discussion--is to identify just two components to improve the Widget Sales Program. It's easy for the meeting leader to come back around in the middle of the discussion and remind the group of the goal. And more importantly, it sets the right tone at the very beginning for the participants, so that they know what is expected during this section.

Other agenda topic examples:

Before: "Customer Service"
After: "Customer Service: Determine Priority and Responsibility List Based on Last Month's Survey"

Before: "Warranty"
After: "Establish New Warranty Labor Provision: 1 Year or 2 Years"

Before: "Widget Inventory"
After: "Decide What Stock Items Can Be Reduced to Achieve 10% Inventory Reduction"

Obviously, not every topic on an agenda can be expressed as a question. Often, there are important updates and sharing of information that just need to be expressed as such--without any question attached.

But using a Decision-Based Agenda strategy will help ensure more of our meeting topics produce something useful to take away from the discussion, rather than that empty feeling when we're 30 minutes behind schedule and we just have to "move on because we're out of time."

Execute...or be Ex-e-cu-ted

2008-05-04T15:47:00.000-07:00

There is no doubt that one of the top five lessons I have learned in business is that of execution. And in fact at times it might be number one.

Having worked for a company in the first half of this decade that was fairly good at execution—I have learned how to spot execution when it exists, and more importantly—when it doesn’t. The CEO of our parent company felt execution was so paramount to successful business that he developed The Execution Award for managers who demonstrated effective focus, clarity of management, and clear speed in getting things done. Unfortunately, he would tell you that he could count on one hand the number of times he gave the award away across the various business that were part of the organization. My company was able to secure the award once. And we thought we were good at it.

Yes, execution is elusive.

When it exists, people explain things simply to one another, they reach clear agreements, and they hold one another accountable for results. You can observe it in those who are successful in gaining clear commitments from others, those who write down steps and dates and ensure everyone knows what they are, and then follows up to see to it what was promised truly gets done.

You can also see when execution is lacking—such as in these examples:

A president asks his team at a meeting when something will be completed, and the answer from one of the vice-presidents is “a couple of weeks.” The president then says, “Good—as long as it’s not going to be six weeks.” No one writes anything down and the conversation moves on.

(The problem here is that the president accepted a vague answer, did not write down a precise commitment date, and let the conversation move on without coming to a clear agreement on who, what, and when)

Or two, a manager sends an email to three recipients and addresses remarks to no one in particular—saying she needs some certain result by sometime next week.

(Here again, the lack of specifics cause each of the three recipients to think “Hmmm, certainly one of the other two will respond to this—since it wasn’t directed at me personally” and so it goes. Each of three recipients all go on thinking ‘someone else’ will handle it—and almost certainly no one will)

Or three, the supervisor of a work group needs to know that a brand new process has been used in 100% of the week’s production schedule to meet a quality guarantee. The ideal question would be something like “Was this new process used from the start of Shift ‘A’ this week—and continuously in every shift since right up through today?” Instead, the supervisor who isn’t practicing a solid discipline of execution attempts to ask the question—but expresses it instead as a statement: “And, the new process has been used from the start of Shift ‘A’ this week? His trailing tone leaves it hanging there as a confusing combination between a weak question and an even weaker statement. Its easy for the employees to silently nod their head, but the real answer is never flushed out.

Execution simply means getting things done. And as you can see, it has a very clear connection with a person’s ability to communicate clearly and with intention. You must use direct language. You must look people in the eye when you ask them questions—and get clear agreement. Assumptions cannot be made. Dates and promises are to be written down. Follow-up is to be consistent. And rewards afforded to those who execute—and withheld with those that do not.

Once you begin understanding and recognizing when good execution is present—and when it is not—you will be more purposeful in your dealings with people, with your communication, with your follow up, and with your attention to results.

It is, after all, what separates those who do—from those who do not.

Privileges and Responsibilities of Leadership

2008-04-27T12:43:00.000-07:00

If you ever want to be reminded of the significance, responsibility, and opportunity possessed by those of you in leadership roles—consider for a moment the lives lead by our Founding Fathers—in their formerly “normal” positions and then being thrust toward the path of creating true greatness—for those around them, their towns and cities, and later for the country. My wife and I recently took an East Coast vacation including four days in Washington D.C. and a trip to Jamestown, VA--the birthplace of America. I have to tell you--the monuments, examples, and "living history" exhibits we observed were an awesome reminder to me of the responsibility each of us has to uphold, protect, build upon, and carry forward the beliefs and principles of our Founding Fathers. Specifically, how starting with the leadership of a few good men (and women)—amazing events can occur.

When standing in front of the likenesses of Abraham Lincoln, Thomas Jefferson, and Benjamin Franklin and reviewing some of their founding beliefs expressed through their many writings captured forever in granite--one feels humbled by the enormity of their thinking and foresight. It's at a time like this when one’s appreciation and understanding of the great risks and sacrifice these men made for the rest of us is brought clearly into focus.

It also shines a bright light on the responsibility that we now have.

All Americans have the opportunity, and yes--the responsibility, to continue to live and perpetuate these phenomenal beliefs. But perhaps it rests more squarely on the shoulders of those of us who are community and business leaders to help reaffirm these incredible ideas and principles and ensure they find their way into the daily aspects of living for all around us.

This is the greatest country on Earth. Our Founding Fathers envisioned and created a constitution and government that outlived them and will outlive us all. We can help ensure that the freedoms, rights, and privileges outlined by our predecessors are enjoyed and put to benefit in our communities for many years to come. And as leaders, it begins with acknowledging and sharing with others the greatness of America, leading by example, and using our voices to be the inspiration for those in our community.

How will you lead today?

Take A Chance...What Do You Have To Lose?

2008-03-24T23:37:00.000-07:00

I recently shared some thoughts with Shelter Magazine that were published in a March article about the tactics I believe a wholesale building products' distributor could take to solidify the value they provide to their customers, to their suppliers, and to the market in general. Editor Samantha Carpenter focuses in on the variations from "the norm" that can become a focused set of initiatives within a distributor's operating plan.

Response to the ideas I shared has been positive, for the most part--with only one former retailer expressing that the ideas are too far stretched and that they may collide with current retailer initiatives.

However, the majority of the feedback has been very supportive--from distributors and retailers alike. The supply chain CAN be improved, redundancies eliminated, and a new tier of service can be created to benefit the end-user.

If you're a wholesaler, I invite you to read and decide for yourself whether adopting a greater interest in services and programs can and will be the initiative that drives you forward--onto new and better results.

The article can be found at:

http://www.usglassmag.com/Shelter/Backissues/2008/March08/survivaltips.html

Forget Commodities. I’m a “Specialty Supplier” Right?

2008-02-22T05:58:00.001-08:00

When it comes to margins and serving customers who remain loyal to us due to the high-end products we provide—everyone knows the value of being a specialty products’ provider, right? And in addition, its our least loyal, price-shopping customers that make us often consider cutting out commodity products altogether.

So what would be wrong with increasing our focus on specialty products—and backing away from commodities? Well, not so fast. There is that issue of having a “full shopping cart” from which to sell—and if you compare this to a grocer—you’ve got to have both milk, eggs, and butter on the shelf—and your own bakery, fresh fish, and maybe even organic produce.

But perhaps a more convincing reason to think carefully before giving up the “everyday stuff” and focusing on the high-end only is the threat the competitive low cost commodity provider poses of moving up the chain and competing with us nose-to-nose for the most profitable business too.

Consider the examples from the steel industry described in Clayton Christiansen and Michael Raynor’s book The Innovator’s Solution. They describe a steel industry in the 1960’s that was dominated by the big “integrated” mills who watched as smaller “minimills” started up and, due to their low manufacturing capabilities, could only produce rebar—a low grade form of steel.

When the minimills entered with rebar—which accounts for only 4% of total steel use—and offered it at drastically lower prices—the large mills were almost happy to stop offering it as it only produced margins of 7%. They then began to focus their resources on higher margin products and customers.

When the minimills improved manufacturing and began to offer angle iron and other components—once again, the large mills were almost relieved to walk away from this low profit business—as the margins had always been low in this category as well. Once again they aligned resources and product offerings on more discrete customers segments—allowing the minimills to capture the low margin commodity business.

This happened again with structural beams, which the minimills perfected after great effort. Once more, they exerted heavy competitive pressure on the large mills and, once more—they took away more share.

Finally, the minimills perfected the ability to produce sheet steel—and the end of the story is, that today the minimills have grown larger than the former traditional mills—such as Bethlehem Steel—and the industry now is forever changed.

There is a point at which a company needs to assess, “Do I walk away from low margin commodity business and just focus on the profitable high-end? Or, do I invest in a broad spectrum of product and services offerings, compete on the lowest margin business, and keep my share of market?”

This will be a different decision for every company, in every market, and against every different form of competitor.

However, before you retreat “upstream” to Specialty-Land too quickly—you may wish to consider what door you leave open—for your competitor to enter.

Death by (Slow) Improvement

2008-02-11T14:44:00.000-08:00

Beware "incrementalism.” Wikipedia describes the concept as “a method of working by adding to a project using many small (often unplanned) changes instead of a few (extensively planned) large jumps.” A similar example would be making subtle improvements to a service, program, or company—while the world goes on changing around us—or by us.

In Good To Great, the first chapter of Jim Collins’ unequaled business book is titled “Good Is The Enemy of Great.” Why fiddle with it if it’s not broke—right?

Wrong! “Incrementalism” can be the death of innovation, and at the very least—slow down innovation to the point of insignificance. And when businesses take a string of very small, for the most part insignificant steps unto themselves—and slowly marches along—the business itself can be left vulnerable to a competitor, supplier, or and entire industry “leap-frogging” over the top of them and leaving them behind.

For instance, in the building products wholesale distribution industry, I often suggest that "rule changing" behavior is needed that leaps ahead in huge bounds. Instead of an exclusive focus on slight improvements—such as order fill rates, accuracy, and customer services—distributors should be evaluating “reinventing” what they offer and what it is they do.

They might instead consider offering private labeling, job site delivery, job site installation and repair, and special warranty considerations that guarantee replacement value no matter what.

Now THOSE are the type of offerings that just might be considered leap-frogging.

And keep a company out of the pot of boiling water.

Breaching The Threshold of Change

2008-01-22T10:54:00.000-08:00

Key Ideas:

Building products distribution can continue to evolve and prosper--if it will find its new role in the channel.
Distribution must be ready to extend itself either up or down the supply chain (offer more services to dealers and end-users, or source/manufacture products themselves).
Distribution need not sell around their customers, but rather provide a tier of "fee" services as a helpful function to satisfy end-user needs together with distribution's customers.
Distribution cannot stand still.

*********************************************************

Everyone seems to talk or write about the need for change in the wholesale building products distribution industry. Including me. However, too few of us ARE the change we need to see.

As a nearly 20-year veteran of this industry and former member of the board of directors for the Association of Millwork Distributors (AMD), I’ve been reminded many times of the famous Hans Christian Anderson fable The Emperor’s New Suit. You recall the one, in which the little boy, upon seeing the Emperor with nothing on at all—cried out “Why—the Emperor has on no clothes!”

Well, the problems facing the distribution industry (see Adam Fein's article at "Distribution Trends) are as clear as an elephant sitting in the middle of the room--or an Emperor wearing no clothes. But not enough people stand up to do anything about it.

As manufacturers develop their capabilities to perform the functions of distribution and dealers consolidate and become larger—and command closer relationships with the manufacturers—it leaves the “middleman” in a precarious position.

How does distribution go about expanding their role in the supply chain, without alienating customers by going around them, and at the same time strengthen the value and necessity for their services to exist?

The answer’s going to vary for different products, geographies, participants, and customer needs. But as a start, company strategic plans must include an examination of and implementation plan for:

1) Services down line (see "The Future of Distribution")—such as assembly, jobsite delivery, installation, and field service (not in place of the retailer or pro-supplier, but as a service for the retailer or pro-supplier).

2) Unique sourcing relationships or programs, such as directly importing products or entering into the manufacturing businesses themselves.

3) A high emphasis on taking costs out of the channel while improving accuracy, dependability, fill rates, inventory management programs, and overall benefit for customers and end-users.

4) An intense discussion with the distributor’s manufactures to create a mutual plan that achieves the goals for both.

5) Laser-focus on securing product purchase choices from the decision-maker (no—not the buyer behind the lumberyard desk, but the architect, contractor, or builder in the field). And then execute a plan to help the lumberyard secure the sale.

6) An unwavering focus on continuously improving the customer experience. Starbucks doesn’t sell coffee—they sell a unique personal experience (Starbucks' mission statement).

I am encouraged at the recent wisdom, strength, and conviction displayed by the AMD and several companies in our industry. Perhaps we are “getting it” and willing to tackle the next wave of opportunity before us.

It’s often unpopular to be first to do something new. However, everything of significance that ever happens does so when a few people—or even a single person—charts out the new direction and takes the first steps.

If anyone ever doubts the importance that one decision can make, look no further than the decision made in 1863 during the Battle of Gettysburg. Major General Joshua L. Chamberlain—who was leading his Union Army troops at Little Round Top—had repeatedly defended attack after attack by the Confederates during one critical battle. Exhausted and nearly out of ammunition, many other men would have given up. But Chamberlain made the determined decision to CHARGE—with a fraction of his men and with only bayonets—and to persevere. The result was that the Union Army drove back the Confederates and won the battle.

Historians recount that this is the one decisive battle victory that allowed the Union to win the war, bring the conflict to an end, and change the course of history.

One decision that any of us makes can have a tremendous outcome.

I encourage the leadership in this industry to build on the ideas and momentum that have recently sprung forth, and change the heading we were on—and forever increase the benefits and vitality to our customers, our suppliers, and ourselves. And to do so this year.

My greatest disappointment would be if these outstanding initial steps and beliefs failed to find enough voices and actions to help propel the industry in a bold new direction.

And prove the critics wrong.

The Future of Distribution

2008-01-17T16:52:00.000-08:00

I want to relate some thoughts around two-step distribution and market performance within the wholesale building products and millwork industry. In my 10 years with Andersen Windows and 6 years at Hampton Distribution Companies (a window and door distributor in California)—I have always known that distribution had to add value to remain viable.

Whether a distributor, a dealer, a one-stepper, or a supplier—ALL have to individually make a difference. And with manufacturers continuing to evolve the sales, service, order fulfillment, and logistics they offer--the redundancies in the channel continue to grow.

Manufacturers choose to use distribution for 4 primary reasons:

1) The distributor's knowledge of the market

2) The execution of market and channel plans to get product to market thoroughly and efficiently

3) Access to customers known by the distributor--where relationships flourish and penetration is deep

4) The volume of business a distributor can deliver to a manufacturer

There must be an overwhelming and compelling reason why each entity should have a place in the channel of distribution. Where value is not added, where market share gains are not realized, and where customer satisfaction does not increase—a successful and prosperous relationship between distributor and manufacturer will not endure.

At Hampton, we knew we had to add value to move forward. We saw the day where we could provide specialized functions as a service for our independently-owned customers—in order to provide more well-rounded solutions for them to offer to their customers.

Our written long-term vision statement, created in late 2005, was:

Home installation and service for windows and doors in every major metro market in the West--defined as:

1) Value-added services that help our customers, and
2) HDC's foothold on continued market strength.

Strategies like this would have given Andersen and our door suppliers more ammunition in which to combat the competition—making our products easier to handle, sell, and provide to homeowners everywhere. We never ended up testing our theory due to running out of time. In 2007, external events caused us to close the company.

But the vision bore great promise in an escalating world that demands more “do it for me” service all the time.

A Case For Focus

2008-01-14T13:21:00.000-08:00

For six years from 2001 and 2007—I was privileged to have been a part of the management team at Hampton Distribution Companies (HDC) in Sacramento, CA—a wholesale building products distributor. I was hired by Chris Walton, one of the brightest talents I’ve met in my career—and under his leadership—we succeeded in re-designing the sales organization, restructuring or eliminating non-performing business segments, winning an exclusive distributorship that doubled our business overnight, and reaching all-time highs in ROI. As I took over as general manager in 2004—we continued finding new ways to “reinvent” our company and the distribution function.

We took the company from 4 divisions and multiple product lines down to just 2 divisions and 2 products lines (Andersen Windows, comprising nearly 80% of our volume, and a complete line of residential door products—comprising the other 20%).

During that time, some people asked “Jeff—how could you allow Andersen Windows to become 80% of your business and put all your eggs in one basket?” To them I answered “In 2002, Chris Walton and I decided that if we were going to be an Andersen distributor—then that’s what we should do—with focus, execution, and commitment. We took the opposite approach of many of our competitors—who seemed to be adding more and more products each day.”

We followed Jim Collins’ advice in Good to Great and made Andersen our hedgehog. A hedgehog is:

1. What you are passionate about.
2. What you are best at.
3. What you can make money at.

So, continuing along our determined path, we narrowed our product portfolio and increased our focus—to the point where we sold and supported just two product categories: windows and doors. Of course, we knew this put us at some risk--but the financial performance HDC achieved seemed to suggest we'd made the right decisions.

Yes, we were successful in many ways. HDC was an outstanding company made up of exceptional people. Externally, we excelled in the areas of business development through end-users, customer training and development, sales programs and promotion, value-added services, and attention to detail and execution to be the best we could be. Internally, we practiced continuous improvement, developed and empowered our people, measured constantly, promoted and rewarded desired behaviors and results, and shared information with employees to help everyone feel a part of the challenges, efforts, and success.

With this focus—we continued to hit all-time highs in profitability, improved customer satisfaction, and along the way—earned became a working model of continuous improvement.

Our sales force did a better job—not having to wear multiple hats, but rather—specializing in just one segment. Door sales people sold doors, and window sales people sold windows. We also learned from some minor mistakes along the way. Individual sales rep territory ownership and accountability is paramount in field sales. We dissolved the teams we’d established years earlier—and gave distinct and separate territories to our sales people—who then became accountable—and satisfied—managing all the functions in their market. They could now focus on a smaller geography and group of customers—providing greater involvement and impact.

This focus also allowed us rationalize our customer base—and aim at doing more business through fewer, yet more committed customers. As we reduced the number of low-volume customers we serviced, our overall volume actually increased, our costs of business decreased, and our customers received better service because we weren’t stretched so thin.

Is This Approach For Everyone?

Obviously not. Many, many organizations have proven that you can branch out, expand products and services, and grow successfully. I’m just providing one case for an organization who achieved quantifiable financial success by going the opposite direction—and focusing on those very few things we could do best. It’s up to you to decide which is right for you.

Is Building Materials Distribution Alive and Well--Or Ailing?

2008-01-11T08:26:00.000-08:00

Adam Fein, the President of Pembroke Consulting, recently said, "distribution as a whole is still a stable and pretty substantial part of the U.S. economy." To that I ask, "Then why was I and 124 other former colleagues at a wholesale distributor displaced when our major vendor set up their own distribution?" (I have no grief over the fact that this happened--as it was a natural evolution of our supplier's progress. But nevertheless, could we have avoided it?)

The answer to the question of what contributed to this happening is that the tipping point was reached. My company was unable to offer a SIGNIFICANTLY greater amount of value faster and more completely than the manufacturer was able to do on their own. As they developed their own capabilities, it became too attractive for them to expand and better utilize their growing distribution function. Things reached the tipping point. And we were gone.

So it's a precarious statement to say that distribution is alive and well. It is if it evolves and constantly adds value that far surpasses that which key vendors would be able to do themselves. In fact, distribution needs to provide service at such a high level, and with low cost--that vendors and customers alike could not IMAGINE using the product unless that particular distributor was the company providing it.

For the majority of distribution functions, such as inside customer support, field sales, light assembly and manufacturing, delivery, credit, etc. --the manufacturer in many instances is quite capable of performing those very same functions. And while there is a cost associated with whomever provides the services--many manufactures enjoy exerting their own control over the entire supply chain and selling function--to ensure the customer experience is pure delight. It may or may not be more profitable, but it allows them to exert control.

So to prevent reaching this tipping point, if I were to run a wholesale distributor organization, I would ensure I had these strategies in place:

1. A value proposition for the end-user that is built a) on the customers' greatest needs that (they will pay for), and b) those that my vendors and I agree are best-of-class and give us a sustainable advantage to obtain, protect, and grow market share.

2. Strategies to move either up or down the supply chain. For example, to move up the supply chain, I would manufacture and/or source materials for myself to limit my reliance on my suppliers. Or to move down the supply chain--I would develop services that are performed at lower levels in the channel (closer to the end user). This last step can be considered as encroaching or competing with services that my customers or down line providers do themselves for the ultimate end user. However, which would I prefer? To have more involvement in the supply chain and have a sustainable function and reason for existence, or less involvement and play a smaller and smaller role in the supply chain with each coming year? (This is one sure way to make yourself obsolete)

3. A “source and process” mentality, as opposed to a “product” mentality. We’re not in the product business. We’re in the solutions business, and we do it with being a complete source for our customers with processes that ensure mutual success.

Taking orders, warehousing products, and making deliveries is NOT the game we’re playing. Ask yourself, “Could my major supplier perform the functions on their own that I do as their distributor?” If the answer is yes, your leadership had better go away for a long offsite meeting and reinvent your company—before you get “tipped over.”