Camp Irrelevence

Don’t Go to “Camp Irrelevance”

What do you do to find new ways to create and add value to your customers, suppliers, and hopefully both–every day, week, and month of the year?

What do you do that is unique and can’t be provided by any other distributor or dealer?

And then what are you doing to build on top of that?

 

If you don’t have solid answers to those three questions, then welcome to Camp IrrelevanceCamp Irrelevance where apathetic middlemen go to die.  And even if you’ve got good answers, there still isn’t a guarantee things won’t change on you “just because that’s the way things work today.”  I know.  Me and 130 of my colleagues were personally put out of jobs 15 years ago by a manufacturer who, guess what—made the widgets and then put in place warehouses, trucks, sales reps, customer service, and AR–all things we did in our distribution business–none of which were unique. Sometimes things change no matter how good you are but you have a better chance if you make changes now.

 

Distributor Middlemen2

Imagine if there are 15 steps between where products are manufactured and where they are installed or used.  Distributors and dealers should get paid according to how many of these 15 steps they perform and the liability they absorb.

Now make a list of those 15 steps.  Then ask if they’re unique and that you can perform them materially better than a manufacturer or third party.

  1. Receive products at a warehouse.  Nope.
  2. Have the warehouse in the first place.  Nope.
  3. Stack products on racks or bins in a warehouse.  Nope.
  4. Do light assembly in the shop in the warehouse.  Nope.
  5. Hire a sales team to go call on the customer.  Nope.
  6. Have inside customer service people answer phones and take orders.  Nope.
  7. Get an employee to pull an order and load a truck.  Nope.
  8. Have trucks and deliver products to the right location.  Nope.
  9. Invoice the customer.  Nope.

…..and so on.  You get the point.

Unless you want to take on manufacturing, you’re probably going to want to to add more steps, more knowledge, more expertise, and more value closer to where the products are used.  Services galore.  And, you’re going to need to find a way to take costs out, increase efficiency, and compete with others that aren’t adding the value.  Those are the rules to play anymore.

And in these powerful, valued added services lays your competitive edge.  And your “lock” on being an invaluable part of the supply chain which gets the customer to say “I can’t imagine being in this business without you because of everything you do to help me, my business, my bottom line, and my success.”

ConAgra

ConAgra’s CEO on the Topics of Change and Innovation

Sean Connolly is the CEO of the company my wife works for…ConAgra. In this 3 minute interview with Fortune, he addresses the questions:

1. “Regarding change, how do you get everyone to stick with you as you’re trying new stuff?” Answer: “We let employees know we’re trying to build something that’s special, and everybody’s invited to participate in that. And when you feel like you’re part of something special, it can be incredibly exciting.”

ConAgra

2. On creating a culture of innovation: “The first thing we did was make external focus one of our company values…meaning we don’t want to spend our time on inter-office politics, PowerPoint presentations, and meetings–we want all of our team focused on the customer, emerging trends on what entrepreneurial companies are doing to delight customers better than the giants, etc.

Stages of Company Growth and Customer Focus

 

Connolly goes on, “But it starts with everyone from top to bottom, from side to side–have an external focus on our consumers, our customers, our competitors, and our communities. And that external focus goes a long ways toward jump starting innovation.”

Bravo!

1 2 3 9