6 Benchmarks Of Future Relevance For Distributors
With the pace of change and disruptive forces impacting distribution today, distributors need to work harder than ever before in defining relevance. Relevance not just for today, but for a changing world with disruptive competitors, digital savvy customers, and employees who are seeking more than the typical 9 to 5.
Here are six benchmarks that you can use to determine if you are working to position your distribution business for future relevance.
Risk Adverse versus Obsessed With Growth
Those businesses whose relevance is in question avoid change at all costs rationalizing for example that “This is the way we have always done it.” Unable or unwilling to take risk for fear of disrupting shareholder lifestyle these managers avoid asking the hard questions. Businesses focused on future relevance on the other hand, operate with the belief that the business is either growing or dying. Growth is a guiding principle. Deployment of resources is laser focused on generating growth, and new capabilities throughout the organization.
No Reinvestment versus Foreverness
Those businesses whose relevance is in question are marginally profitable. Due to complacency, no future thinking, and risk aversion, the thinking of “What isn’t broken, doesn’t need to be fixed” prevails. As a result there is little reinvestment into the business, and when there is it is typically a defensive investment. Businesses focused on future relevance on the other hand, lead with a foreverness mindset where leadership is focused on continuing the business forever. As such they are not simply focused on the next 12 months or even three years, but are continually setting the conditions for the next generation’s success.
Complacent and Content versus Strategic Possibilities
The leaders of those businesses whose relevance is in question are satisfied with the business in its current state. The distribution business is stagnant, and because there is a reluctance to change, the business creates no differentiating value to the marketplace. In businesses focused on future relevance on the other hand, you’ll find leadership is energized, dynamic, and positive with a possibility mindset. They develop, articulate, and align the organization around clear strategic goals and objectives that build for the future.
Traditional and Transactional Relationships versus Partnerships
The leaders of those businesses whose relevance is in question perpetuate the business with traditional – old school thinking. Their relationships with customers and suppliers are based primarily on personal friendships and function transactionally with each. These businesses are typically trapped in a “me too” business model. Those focused on long-term sustainability however focus on strategic collaboration with suppliers and customers as being central to their business strategy. Beyond transactional relationships, deep collaboration, definition of new value, and recognition of the interconnectedness of the supply chain drives the creation of solutions the market rewards.
Family Culture versus Team of Leaders
The culture of those businesses whose relevance is in question is focused on the needs of current ownership and there is little to no succession planning. Long-term employees have found it a good, stable, and safe place to work. The business of distribution may have become secondary to other assets such as real estate in the family’s wealth creation strategies. On the other hand are the distribution businesses where leadership recognizes the value of quality people and has established a succession plan with individuals who are going to challenge the status quo. There is an insistence of talent development to build a team of leaders for the future.
No Future Thinking versus Constructive Paranoia
The leaders of those businesses whose relevance is in question is stuck in the past, not driven to build for the future and has no point-of-view of what is to come. As a result there is no vision for the future and the company leaders get lost in a fog of uncertainty. Businesses focused on future relevance on the other hand, have a leadership team that is constantly facing forward to the future identifying the next opportunities with a healthy awareness of threats. There is constant questioning if the business is prepared for what the market will demand next. They are often pleased with progress, but never satisfied.
What About Your Future?
During your next leadership meeting, examine each of these six benchmarks and then allow for open and honest dialog around these six questions.
- Are we committed to growth?
- Do we have a mindset of foreverness?
- Have we aligned the team around strategic objectives with an eye on the future?
- Are we working collaboratively to create new value in the market?
- Are we investing in the leaders of tomorrow?
- Do we approach the business with a healthy dose of constructive paranoia?
If these six benchmarks resonate with you (and if you have gotten this far I am sure they do), you’ll want to join us each fall for our UnleashWD Innovation Summit – The only innovation summit for distributors. Over two days we help you look at your business strategically through a set of new lens so that you can rethink your future relevance.
Founder | UnleashWD
The Premier Gathering For Innovative Distribution Leaders
Join us as we host the most driven leaders throughout distribution – from almost every imaginable line of trade – with the purpose of providing the inspiration, education, and connections needed to transform their business in this age of disruption. Your participation will leave you excited, charged, and prepared to return to your work with the vision and energy needed to lead your business to a profitable, sustainable, and relevant future.