I'm a strategy consultant to
distributors. At least I used to be before I became a distributor. So now I'm back with a book after
getting some great action on the front lines.
OK, so I took a hiatus to work for a real live distributor after
being a consultant. Yup, I had to make this stuff work for real.
It was great fun. Like a giant test lab for me. Good thing most of the
tests worked! You can ask Sam McCamy about that.
Worked on pricing, new product intro processes, taking 3D marketing to
the next level, leaning up inventory, setting up a sales review
discipline, organization planning, planning a couple of acquisitions,
getting SPA processes and product data ship shape, getting people to
work on teams, reallocating accounts to sales forces, integrations,
Growth Planning and more. I loved it.
Wished it could have lasted, but we sold it for a nice price to a great
company.
Then I helped a non-profit family business organization develop a new
value strategy for it's members.
Still doing that... but got the itch to get back in "the channel".
Back to consulting.. but refreshed!
In three years, you'd be amazed how fast they forget about you.
I
did, however consult to quite a few distributors, a group of 18
distributors called the Vanguard Distribution Group, wrote for some
magazines and gave a few presentations at conferences. Helped a couple
of distributor associations plan their futures. Wrote over 100
articles.
OK, you don't remember. See what I mean?
Consulted to some big Manufacturers, too. The Industry Data Exchange
Association. eBusiness companies. You STILL don't care? Ok, back to the
distributor stuff.
So I sat back and consolidated the stuff I learned that creates a
scalable, profitable growth Business for distributors, and honed
it into the Profit Triad and The Eight Steps. Just for you guys.
Strategy for
Wholesale Distribution
Has this past recession affected
you like none that ever came before it?
Are your sales down more precipitously than ever before?
Or, have you enjoyed good growth in the past and now you're
bewildered with figuring out where the growth is going to be and
when?
Watch this video
for a great idea on where you can get some growth for your
company... you'll be surprised!
I must
admit, it's easy to get discouraged in this prolonged recession.
It's over 24 months now, right? So when will it end?
Though it might already have ended, that doesn't mean we'll be
able to dig out quickly and "get on the good foot" like last
time. (a little James Brown there.. can't get it out of my head
because my band kicked butt on "I Got You" the other night)
It's going to be slow going. You need to look in different
places, do different things for customers. Embrace Adjacencies.
Say what? Adjacencies? We'll talk about those later. For now,
let's examine why this recession is tougher and the effects will
stay around longer.
There's too much debt that the last bubble heaped on the
economy, and little capacity to take on more. Paying it down
will take years. It's NOT coming back fast like 2003-2008. That
was all bubble demand.
Plus, another financial shock is coming with commercial real
estate that won't clear out till after 2012. Something like $2
trillion dollars of deals in 2005-2007 that are coming up for
refinancing in 2010-2012 but are underwater on their notes. More
credit squeeze from more toxic assets on bank balance sheets.
More drag on available capital for growth.
So what
do you do?
Treat Your Distribution
Company Like It Needs a Turnaround
Strategy!
I know. Sounds crazy. You're not a turnaround
candidate, you say. It's insulting, demoralizing to even
think you need one. But it just might be what you're looking
for. A shot in the arm. Something completely different.
Besides, what if there wasn't a recession and
you suddenly found yourself with these kinds of uncertain (I
love that word.. everybody substitutes it for "Bad")
prospects and 30% down from last year?
Would that call for a turnaround?
Stay with me for a bit.
The Turnaround Man
I recently had a conversation with a very
bright fellow named Bob Webbhttp://robertlwebb.com/
who does turnarounds for manufacturing companies. By the way, if
you are a manufacturer needing a turnaround strategy, or know of
one, call this guy. He knows what he is doing. I sensed that, so
I asked him how he approached a turnaround and he obliged. If
somebody can tell you that off the cuff and it makes sense it's
a pretty good sign they know their stuff. Here's what he said:
First you work on the usual presenting
problem: cash. It's not the core problem but you have to
take care of it before they die. They're out of money and
getting farther behind every day. Orders slowed down and the
sins of neglect committed when things were rolling are now
roosting in the plant and warehouse. When orders slow down, the
extra stuff you bought when you were lax is now staring you in
the face. Medium moving inventory becomes slow. Slow moving
inventory becomes dead in either raw materials or finished
goods. The company got sloppy collecting receivables. You fix
these things to generate cash to pay vendors and repair
relationships with them so they'll start shipping again and you
can satisfy YOUR customers. You're not done yet by a long shot.
Simultaneously, you send another part of the SWAT
team to make process improvements in the plant and back room
accounting operations. Rearrange things to squeeze out labor
hours and waste. Automate processes. Go from serial style
manufacturing to more lean style manufacturing where you can do
things in parallel and ramp up productivity 400% or more. You
get yourself in ship shape to make delivery times for customers
and gain their confidence back, earning your way back to a
number 1 supplier position from a number 2 or 3 position at a
customer.
Bob sends a SWAT team of experts in
engineering, manufacturing, logistics, finance and organization
design to the company and literally lives with them for 3
months. He says you can't fix it if the relationships have gone
over the edge, though. You need customers and vendors to still
be hanging on to you for some reason. If the relationships have
rotted off the vine, you're done.
After a turnaround in cash flow and productivity,
the company needs somebody to help explore growth opportunities.
That's where we connected. We might be doing some things
together. Peanut Butter meets Chocolate and makes Reese's peanut
Butter Cups.
A while
after that it dawned on me...
The turnaround approach is really very similar to
what I do with the Profit Triad and The Eight Steps to
Breakthrough Growth for distributors. I just don't have to do it
in such imperative circumstances and so fast with a SWAT
team approach. But maybe that's just what's needed to shake
things up.
The Profit Triad approach is inherent in my 8
Steps to Breakthrough Growth. First you get operations ship
shape in the ability to generate cash and meet customer
requirements productively. Automate your business so it's
scalable, so costs don't go up at the same rate your GP Dollars
do when you grow. Substitute technology for labor. Automate the
front room and back room.
Then move on to growing the company with a
disciplined approach that grows your business with a foundation
of successive layers culminating in....
Adjacencies!
Which, when chosen correctly to leverage your
core business, are the most powerfully profitable growth
strategies known to business.
Nope, this it not about sales management and
promotion strategies. We can recommend those later, and you
an do those right now. You have
more fundamental and strategic issues to deal with that will
yield more than promotional and sales tactics. You need to work on the MEAT, not
just the sizzle to get the big
results.
So what's an adjacency?
Invest a little time and explore it...
Either call me or click here.... where you can
get the first two chapters of my book Free.
