Coca-Cola has a secret soft drink formula worth preserving. Various companies have R&D projects underway that are good to hide from the prying eyes of competitors. Market research departments often uncover hard-won data they want to keep proprietary - until they figure out a price tag and peddle it to everyone they can.
I’m running out
of examples of truly valuable business secrets. The ratio of business
information deserving of confidentiality is about the same as the percentage of
spam worth saving.
So why do so
many distributors try to hide in plain sight when it comes to business
Don’t get me
wrong, I love you folks, but I’m going to come right out and say that
wholesalers as a group are the industry’s most secretive bunch by far.
Manufacturers, reps and contractors are far more forthcoming in discussing
their sales figures and operations than wholesalers, for reasons I’ve never
been able to figure out.
are reluctant to reveal even something as innocuous as their sales volume,
though anyone with a feel for this industry can come within 10% or so via
educated guessing. Even more to the point, does it really matter? What possible
advantage can a competitor gain by finding out how much you sell in aggregate?
In fact, competitors are in the best position to come close with an estimate.
Maybe some wholesalers are trying to hide the information from creditors, the
IRS, or divorce attorneys. This would be understandable, but I refuse to
believe that so many of our industry citizens have so much to hide.
90% of their
secrets are anything but. Information comes out from customers, vendors, reps,
disgruntled employees, competitors and even the Internet. I suspect many
wholesalers guard their privacy more to prevent embarrassing information getting
out than to protect anything of value.
has little to do with proprietary information. The American business community
is renowned for innovation, but except for patented technology, it’s virtually
impossible to keep innovations from spreading rapidly throughout an industry - and
even patents expire eventually. Public companies - including some our
industry’s largest wholesalers - are obligated to reveal their business strategies
and fairly detailed financial information to all interested parties. Does that
handicap them in any significant way? McDonald’s, Burger King and Wendy’s know
everything worth knowing about one another, yet they still run distinctive
operations, and that’s the way it goes in all large industries.
What makes a
business succeed or fail can be summed up by one word - execution. It’s not
what your employees do, but how well they do it that counts.
Am I missing
something? Are there good reasons to closely guard innocuous information such
as sales volume? Let’s hear your take on this.
Why Are Distributors So Secretive?
October 28, 2008