Things I Learned At The Institute of Distribution Management
At the 2002 PHCP Institute of Distribution Management presented by the ASA Education Foundation, many ideas were set on the table from nine speakers in 11 different courses. About 70 people made the trip to Indy to hear what they had to say. Here are some of the most interesting points I took away from the classes:
Playing The Game.As individuals, people look for self-gratification not only in life but also in the workplace. In teamwork, players look for the betterment of the team. Finding common ground for individuals can be a game in and of itself.
Be a coach and call a team meeting. Break your workers up into groups and make them find the five most creative things they have in common. Set a time limit and be sure to clarify that the answers must be rated PG, and pick someone to judge. Most important, offer a prize (preferably cash) to the winning team, showing that working together will lead to a reward for everyone.
It is important that everyone knows the object of the game, the rules, the reason to want to play and win and what the score is - just like in your business atmosphere.
While my team didn't win, I did learn that we all like brunettes, we all had at least one speeding ticket and that none of us had made our first million ... yet. But we were more open with each other, and worked better together through the rest of the exercises.
Open The Playbook.According to John Carroll, president of the consulting firm Unlimited Performance, "Business literacy reduces and eliminates ignorance in your business." For me, the more I know about my company the better off I feel and the more I get accomplished. Opening your financial books to your players is a good idea. It'll get people to see the business through the eyes of an owner and understand more of why you do what you do.
This idea sounded crazy at first, but other observers seemed to warm up to the idea as the class moved forward, especially after the "open book" was clarified. You can get people to think like owners by giving them some, not all, of the information you see regularly. For example, Johnny could get mad when he sees how much Bill gets paid per week, so leaving out payroll isn't such a bad idea. But the main focus is to let your employees see what their hard work (or lack thereof) is accomplishing and how much net profit you actually make on each dollar sold, which isn't more than just a few pennies. When teams understand the business and see a constantly updated score, they generally want to improve.
Show Me The Money.Everyone needs a reason to win, and there is no better reason than money. For each game you play in business, you should set up clear rewards by way of bonuses and incentives. Make sure the prize fits the game, so bigger prizes are for games that show bigger results.
Play For Pay.Another option is to incorporate performance-based pay plans for your employees. Joel Becker, CEO of Torrington Supply Co. in Waterbury, Conn., suggested paying employees strictly on commission. Give each person a salary of the least amount of work you expect him or her to produce. At the end of the year, pay commission above that mark. Base your salespeople's commission on sales. Base your pickers' commission on number of picks. Base your drivers' pay on delivery time, accuracy and safety record. Anyone who doesn't reach the goals you set might not be right for your company and should be let go. A move like this could motivate your employees to work harder since the more work they do, the more money they bring in for the company, the more money they make.
A move like this could net big dividends for your supply house, but be careful with this plan and monitor your salespeople carefully. The aggressiveness of getting the sale might hurt team unity. Everyone should earn his or her keep, but not at the expense of teammates.
Give Everyone A Voice.Employees like to know they are being heard, and an easy way to involve them is to have them help you determine the incentive portion of the game. Get their input as to what is fair, and if you disagree be sure to be clear why, but don't completely rule anything out. Getting your players involved in the process lets them know that you want what's best for everyone. The more they are heard, the more productive they will feel.
Team Motto.Every company needs some kind of "Vision Statement" or a motto to act as the foundation of the company. It can be long, it can be short, or even in-between, but most important it must be clear and to the point.
"Make money and have fun doing it," said Jim Porter of Porter Pipe & Supply in Addison, IL, a suburb of Chicago. That motto is simple, concise and to the point, and each of his employees knows it. In my opinion, that sounds like a smart way to run your business.
Another motto suggested by Becker was also clear and to the point: "It is the vision of our company to become our customers' supplier of choice, our venders' distributor of choice, and employees' employer of choice." That says it all. You make money selling to customers; the more you distribute the more you have to sell; and keeping the best employees gives you a great shot at making the sales.
Gaining A Fan Base.Customers come and go, but it's your job to get them to stay. Some of the wholesalers believe in discounting because it gains new accounts and secures long-term commitments. Others think discounting is a sham because it lowers profits and starts bidding wars. But they all agree that you need something to help you sell.
According to Jeff Blackman, president of Blackman & Associates, using a "Unique Selling Proposition" works better than any price reduction. A "Unique Selling Proposition" is a proposition you make to your customers specifying the unique benefits he or she gets when buying your product or service. The proposition must be strong enough to bring you new customers - and impress the ones you already have.
Guaranteeing Victory.Domino's Pizza once offered a guarantee: "If we don't get the pizza to you in 30 minutes or less, it's free." They were confident enough in their service to make a promise to the customer. Confidence in your business seems to be a good way to attract new customers, according to Blackman, and confidence also keeps current customers happy.
Make a guarantee to your customers about your service. One wholesaler suggested offering a free lunch if the product isn't delivered by a certain time. That might not be a bad deal. You will have a guarantee on your service, which will keep your team working hard to achieve it. And if you can't deliver in the given time, taking a client out to eat isn't such a bad thing - most take clients out to eat from time to time anyway. That lunch can even give you a chance to talk about new business. A guarantee like that could potentially be a winner for both sides.
Extra Innings.Going the extra mile is important, but staying cost-efficient is equally as vital to your company. A cheap and easy way to keep close with customers (and potential customers) is through e-mail. But I learned there are some important things to remember before sending your letter through cyberspace.
Typically, it's best to use a conversational tone. People read e-mail quickly, so writing like you talk makes sense. Use short sentences and write in paragraphs. Include your contact information (known in the computer world as your "signature") at the bottom of every e-mail and, above everything else, check for typos and grammatical mistakes. Sometimes people won't deal with someone who won't take the time to double check for errors. And that's the last reason you should lose a deal.