Distribution Is Very Much AliveOver the past few years, more than a few industry pundits have talked about the demise of the middle man. They predicted a limited future for distribution itself. A few even referred to the value added by wholesale distributors as “slop in the channel.” However, while these pundits prattled on, most of us were keeping our noses to the grindstone, modernizing our businesses and improving our returns.
Sometimes I think we are the “Rodney Dangerfield” industry - getting no respect. My personal observation is that many of our businesses have been so busy that we are much more like Paul McCartney who, upon hearing rumors of his death said, “If I were dead, I'd be the last to know.”
I think you'll agree that any reasonable scan of the last few years' results proves that we are all very much alive indeed.
I think you'll also agree it will take a lot more for us to achieve and sustain a vibrant future. We will need to work harder, certainly smarter, and continuously improve our operations.
I believe that our vibrant future is achievable. But it is not guaranteed.
So while we celebrate our history and reap the gains of the last few years, we need to prepare ourselves to meet the challenges of constant and rapid change.
It's a virtual certainty that if we always do what we always did we will get a little bit less every year until we are neither profitable nor salable.
So let's consider what preparing for a vibrant future might look like and how ASA will be a key player in that future.
When I think of a company with a vibrant future, I think of a company with sustainable profits, a strong balance sheet, growing market share, excellent customer service, and solid partnerships with its vendors and a respected place in the local community.
Driven By Our PeopleIn just about every business book or journal article that you read, a clear theme resonates - it is that all of those things that define our vibrant future will be driven by our people.
Many of us have expressed the feeling that “our people are our most precious resource.” Sometimes this is said without a lot of thought as to exactly what that means. Even worse, it is often said by those who don't even dedicate a line item for training in the company's annual budget!
We are entering a world-class war against other industries as well as other distributors in filling our human resource needs - needs that extend from the warehouse floor to the corner office.
Going forward, we're going to have to develop a deeply ingrained culture of caring for our people, until we are perceived as an employer of choice in the minds of our employees and potential employees.
Who Will We Hire?Think about this for just a moment. Over the next 10 to 15 years, 70 million Baby Boomers will retire. Only 40 million new workers will enter the workforce. We are going to have to be exceptionally creative and committed to becoming the employer of choice to get our share of that incredibly diverse, highly-limited force of 40 million workers. Given these figures, developing ourselves into employers of choice is not an option.
The teams that we put together will have to be well-trained, well-paid, profit-oriented professionals - teams that are capable of making us the supplier and distributor of choice for our customers and with our vendors.
The good news is that as members of ASA we have a world-class resource. ASA and its Education Foundation are our first choice to help us build a framework of exemplary human resource practices and strengthen our team with comprehensive world-class training.
Your Human Resources ResourceEven before we hire anyone, we need to get everyone on the same page about what an employee is supposed to do and accomplish. We need to know what knowledge, skills and aptitudes are required to do the job. We then need to recruit the right people, orient them for success, evaluate their performance regularly and pay them competitively.
With these practices in place we need to train new employees to get them started, train to help them advance, train them as the business changes and train them as new product is introduced. We need to train, train, then train some more until we build an entire company of “bionic learners” that embrace change and learn better, faster and more thoroughly than our competition.
When we look to ASA for help with the basic HR practices we will find an Employee Performance Improvement Tool Kit with 21 distribution job descriptions that we can customize to what we need them to do and accomplish in our own businesses. The Tool Kit also provides a performance evaluation system and guidelines for developing an orientation program.
ASA helps us to stay competitive by offering an Employee Compensation Report that lets us see how our companies' compensation packages stack up against others in our distribution industry as well as other industries.
Core Product TrainingWhen I think of the training challenges in our industry I mostly think of product training, business training, job training and supervisor/management training.
ASA's product knowledge training provides the biggest and fastest bang for your training dollar. In this regard, the ASA Foundation already excels. Under its ProductPro® brand the Foundation offers 10 product knowledge certificate courses.
By year's end, new editions of 8 of the 10 courses will be available in course book/ certificate format and in the Foundation's Online Training center.
These excellent courses provide a solid basis for serving customers better, getting the employee up to speed faster and reducing costly product errors. They prepare the employee for the advanced training from vendors and other association-provided programs.
The Essentials Brand Of CoursesProviding our team members with excellent product knowledge training is a relatively straightforward process. However, turning our employees into astute distribution business professionals is somewhat more daunting. Our companies can't have that vibrant future we seek unless our team members are solid business professionals.
For years distributors have been complaining about their employees confusing margin with markup, giving unwarranted price discounts, blowing off mistakes as trivial and neglecting to make the sale rather than just taking the order. These are symptoms of poor or non-existent business training.
Then a few years ago, the Foundation broke new distribution business training ground when it introduced the Essentials of Profitable Distribution. This program teaches key concepts like the difference between margin and markup, the cost of mistakes, the impact of price cuts on profits, the impact of 1% improvements on profits, and the importance of profit in a healthy company and secure, long-term employment. I sent my people to the Essentials pilot seminars and was so impressed with the results that I committed our entire staff to completing this program. Several distributors now make Essentials the core of their business training, and over 2,000 industry employees have completed the program to date.
We will shortly be introducing the second in our Essentials brand of distribution business training products, Essentials of Profitable Inside Sales in Distribution. This course focuses on the emerging Distribution Sales Specialist - a true sales professional capable of accepting new responsibilities from outside sales and raising the level of profits within the company. This new, world-class inside sales professional is thoroughly versed in the requirements for a profitable sale, eagerly adds line items to an order, confidently crushes price objections and exploits the different levels of price sensitivity. Since the inside sales position is at the very core of our profitability, we should enthusiastically welcome this new program.
New Guide For New ManagersFinally, ASA supports the training of your supervisors and managers. We have just introduced our newest book, The Art of Supervising and Motivating People by Ed Felten. Many of you remember Ed as a former president of ASA and last year's recipient of the Fred V. Keenan Lifetime Achievement Award. In his Supervision book Ed distills four decades of his distribution wisdom. What a wonderful tool to share with your supervisors.
For more advanced training of your management team, the Education Foundation co-sponsors the University of Industrial Distribution every year. Not only does your ASA membership entitle you to a discount, but the Endowment Fund provides a $200 stipend for every employee you send. This program sells out early every year.
You Ain't Seen Nothin YetI hope these examples demonstrate how ASA and Foundation programs will contribute to a vibrant future for all of us. Completion of the Karl E. Neupert Endowment Campaign enables us to pick up the pace - developing more programs, supporting more educational activity and offering more tools and more training in more delivery formats.
As we wrap up an aggressive development program this year and move into next year, we will be helping members implement the new inside sales Essentials program by holding pilot seminars nationwide.
We have plans on the table to expand the Essentials brand with new programs in outside sales, showroom sales and branch management.
Those plans also include expanding ProductPro® with a revised Industrial Valves Course, offering more courses online and a new program that ties commercial and industrial schematics to selling skills.
We will accelerate using our Web site to partner with other organizations like the National Association of Manufacturers to offer hundreds of other business, personal skill development and technical courses and distribution operations programs to ASA members.
We have begun developing job requirements for common distribution jobs to be added to the next printing of the Employee Performance Improvement Tool Kit.
And, of course, the Foundation will continue to support special interest training, regional training and convention training programs.
In distribution we like to position ourselves as one-stop shopping. At the Education Foundation, our vision goes beyond being your trainer of choice to becoming your one-stop source for developing your world-class workforce.
I hope this gives you some idea of the significant help you get from your ASA membership. There is only one caveat: You've Got To Play To Win!