Over the last 36 months had the opportunity to lead strategic planning workshops for associations, buying groups, independent distributors, and one manufacturer.  While each engagement has its uniquenesses, I have discovered 9 lessons that ran as a common thread through all the sessions.

Use these lessons to frame up the important work of strategic planning in your organization.

I. The Process Of Strategic Planning

#1: Messy, Challenging, and Invigorating
The process of strategic planning which leads to deeper understanding, redefinition, and transformation:

• Is organic never knowing where your new discovery will lead next
• Is difficult because at times you’re not sure what questions you should be asking or what path we should be exploring
• Is a fascinating, energizing and valuable process of examination, collaboration, and deep thinking, with the vision of building a stronger and more relevant organization.

Framing question: Do you value the process of strategic planning as much as the outcome?

#2: Strategic Planning Is Continual
The days of strategic business plans – hard coded for 3-  5 years or longer seems to be over.  As one international manufacturer’s leadership team says – “Strategic planning is done in pencil.”  The pace of change today requires a constant rhythm of analysis, assessment, and strategizing.  As a result view your initial strategic planning work as the start of an ongoing strategic planning process.

Framing question: have you hard coded a rhythm of continual review that insures your strategic plan does not gather dust on a shelf?

II. The Trends

#3: How Business Is Done Is Changing
There are significant trends that cannot be ignored that are changing how business is and will be done.

• From changing demographics to evolved customer buying habits and expectations
• From new and non-traditional competition to evolving hybrid business models
• From the role of data and analytics to technology infused products

All of these and many more will change how our distributors, their suppliers, and their customers conduct business.

Framing question: Have you identified the significant trends that you “bet on” changing how business will be done in the future?”

#4: Unprecedented Change
The pace of change and the confluence of change makes these truly unique times that have significant leadership, business model, value proposition, and even cultural ramifications.

• Technology is driving the pace of change – Moore’s Law continues to dramatically increase computing power with decreasing costs leading to ubiquitous connection, complete transparency, non traditional competition and more.  New technologies such as mobile, artificial intelligence, virtual reality, autonomous vehicles, Internet of Things, renewable energy sources, 3D printing, and more will be changing the business landscape as well.
• The confluence of change –  technology, demographic shifts, apathy for the trades, rise of social media and social movements, M&A activity, wide political swings, globalization, sustainability, polarization in Washington, policy whiplash, and more … all happening at once are placing unprecedented pressures on every businesses today.

Framing question: Is your leadership team embracing the inevitable change, or being pulled towards the past because of legacy thinking, needed investments, mindsets, or other obstacles?

#5: Some Things Won’t Change
Despite the winds of change, as the saying goes – “For as much as things change, some things remain the same.”  Jeff Bezos has said “I frequently get the question, ‘ What’s going to change in the next 10 years.  And that is a very interesting question, it’s a very common one.  I almost never get the questions, ‘What’s not going to change in the next 10 years? And I submit to you that the second question is actually more important than the first because you can build a business strategy around the things that are stable over time.”

There are foundational norms that strategies can be built around.  For example:

• The need for the products you distribute is not going to disappear and customers will still need to source these products.
• Talented and skilled employees will continue to win the day.

Framing question: Have you identified those things that won’t change to build your strategy around what is known?

III. Distributor’s Businesses

#6: The Traditional Distributor Business Model Is Under Pressure
With these macro trends impacting and filtering into our markets, the traditional business model of distributors is under pressure.  While Deloitte reports 8.3% points decline in wholesale distribution’s return on capital, and Forrester reports 22% of outside sales people (primarily from wholesale distribution) will lose their jobs to e-commerce – cases can and have been made that the traditional distributor business model is under pressure.  For example:

Framing question: Have you acknowledged that the traditional distributor business model is under pressure?

#7: There Is A Cross Section Of Distributors
Beyond size, geography, markets served, and suppliers aligned with, there is a cross section of distributors based on organizational mindset, leadership, and value delivered to the marketplace.  Each of the four categories of distributors as outlined below, have different strategic planning needs.

Framing question: Have honestly discussed where your business fits along this spectrum?

#8: Distributors Will Evolve And Transform Their Businesses
As the macro trends impact and filter into our markets, progressive distributors will work to evolve and transform their business.  For example they will:

• Change How The Customer Buys From Them – Business outcomes, engineered solutions, installed costs, total cost of ownership will be key drivers through a technology infused, data driven, and user friendly platform.
• Solutions & Services Become Primary – Beyond selling the right product at the right place at the right time, distributors will provide integrated technology, logistics, education, and financial services as an eco-system of solutions.
• Technology Strategies – Those organizations that have the most relevant digital strategy, technology, and solutions will create sustainable and profitable businesses.  The most successful distributors will provide digital solutions, uniquely combining technology, expertise, and business acumen.
• Product Categories – The distributor of the future will be a hybrid business, expanding its offering beyond traditional products to offer adjacent products, software and services.
• Culture Becomes Imperative – The realization that it is a company’s culture that drives the business will become the mantra of leadership.  These cultures will embrace the human need to grow and make an impact – an impact for each other, customers, suppliers, and the social causes important to employees.

Framing question: Doe your strategic plan incorporate real transformation, or are you continually focused on the incremental changes?

#9: The Business Model Of The Strongest Distributors
The business model of the progressive distributors who are building relevance and sustainability into their enterprise will have the following characteristics:

• Growth Oriented – Rather than maintenance
• Invest In Their People & Assets – Rather than primarily taking money from the business
• Professional Look At Future – Rather than accepting the status quo and clinging to the past
• Technology Enabled – Rather than manual and analog
• Executors  – Rather than talkers
• Hybrid Business Model of Products & Services – Rather than traditional product seller
• Adapters To Changing Market – Rather than inflexibility
• Solid Culture of Innovation To Create New Value – Rather than being “Me Too”

Framing question: How does your organization compare to these eight characteristics?

Conclusions

72% of distributors believe the pace of change is too slow in their business.  Use the strategic planning process and these nine lessons to re-think your future and create the change and transformation required for tomorrow’s relevance.