How to Find and Use Your Vision to Drive Innovation
Marsh Electronics has changed shapes several times over the years.
The electronics distributor has undergone a number of major structural changes in its 80-plus-year-history. It’s leaders changed. Then it merged with another company. Then that company was absorbed into a much larger conglomerate, until Marsh’s leaders decided in 1998 they wanted out and carved Marsh back out from this parent company. At the end of the day, the final result was an independent $20M midsize firm.
In 2019, Jim Banovich, the current CEO of Marsh, took over from partner John Casper. Jim’s father, who had been in the business since 1956 and had been at the helm since the 1980s, used the final spinoff to exit the day-to-day business, and turned it over to Jim, his brother Steve, and partner John Casper.
As a newly independent company again, and facing the rapidly changing landscape of distribution that’s hitting every distributor, Marsh Electronics needed to find a unique value proposition to differentiate it from its competitors and solidify its position.
In short: Jim needed to find the company a vision. “As my brother and I took over, we needed a vision for our employees. They were looking for an answer to the question, “Where are you taking us as a company?’”
Vision is a business leader’s quest, where you want to head next, and innovation is the way you arrive. Too often leaders are dismissive of the power of forces like vision; they simply don’t know where to start or they don’t believe they have time to start. Many are distracted from the long view by the tyranny of the urgent, the short-term, day-to-day problems that keep them up at night.
Vision is not thinking about solving the problems that keep you up, it’s thinking about the things that get you out of bed in the morning.
This is an important distinction and it’s something Jim really embraced when he began to consider what kind of company he wanted to run. In a bid to discover his vision, he joined us at the 2018 Unleash Innovation Summit, which generated so many ideas for him that he carried the program book with all his notes around with him for a year as he reworked his business. He was particularly inspired to think bigger by leaders like Nick Porter of Porter Pipe and Andrew Berlin of Berlin Packaging.
“These guys talked a lot about their guiding principles, their core values and the culture they tried to develop. Those things really sunk in,” he says. “Marsh employees were looking at my brother and I asking, where are you going to take the company? How are we going to get there? The speakers and agenda just aligned with what I needed to focus on as I prepared to take over as CEO and be the next leader at Marsh.”
Jim's Unleash Manifesto Poster
Jim didn’t want to just develop a profitable business. He wanted to develop a quality workplace that treated its people right. He wanted a sustainable business model that would build the company his dad worked his whole life to grow. He wanted a lasting company that was fanatical about its customers. It was time for Jim to take a stand and be the next-generation leader the company needed to create a new Marsh Electronics.
This kind of desire is the starting point. It’s what Mike Medart meant when he told me distributors need to “learn how to dream the dream again.”
So, with the help of everything he learned at the Summit and some smart consultative advice, he peered into the future. What’s exciting to me isn’t just what Jim saw in Marsh’s future; it’s about what he didn’t see. He knew as much about where he didn’t want to go as what he did and it’s that kind of decisive strength in the clarity of his vision that is carrying Marsh forward and aligning his employees toward an innovative future.
Here’s what Jim and his brother are doing to build Marsh around continuous transformation, change and a bright future.
1. Knowing he didn’t want to compete in commodities, Jim is structuring the company to compete on solutions and services.
“We’re not big enough to compete against the commodity-type products so we’re not focused on them,” Jim says. Instead of forcing his company through that door, he focused on specialized components and adding value by zeroing in on the company’s MarVac Assemblies division. This division was filling a gap in the market.
“Within that division, we do some light manufacturing, sub-assemblies and box builds and it fits well with us…It’s kind of fun because it supports the suppliers we’re partnered with and the big guys in the industry don’t like to sell those kinds of products, and they definitely don’t like to assemble or inventory them.”
But Marsh does. They help companies streamline production assemblies so their production line is more efficient. It’s highly customized work, but Marsh is good at it. Plus, customers can’t find this kind of service at other, larger, commodities-focused distributors.
So this division became the focal point of Marsh’s vision, and the company is throwing resources behind it to drive the company forward.
2. Zero in on the right customers and win with them.
Jim also discovered that large, tier-one commodity-based customers were not going to produce the right results for Marsh.
“These guys are so big they just think they can do it all on their own or they have the ability to drive pricing,” Marsh says. “They tend to see distributors more as the middle-man.”
So Marsh focused on second- or third-tier customers where the fit is better and the solutions-based components, value-added and assembly work Marsh does makes an impact.
“We fit better with them and our larger competitors typically won’t put a program together for these customers because they don’t fit their business profile,” Marsh says. “However, we offer some logistics, flexibility and design help and those customers are willing to pay a little bit more for that.”
3. Consumers and customers need help solving problems. What problem are you solving?
“Our vision includes being a solutions distributor. We design products, offer a unique product selection or help customers engineer a solution,” Jim says.
One of Marsh’s solutions is vendor reduction. Jim noticed that many of his customers needed component parts or products from a variety of vendors for their unique applications. So, Marsh offers to evaluate customers to see where consolidation can create efficiencies, so they can reduce inventory, consolidate invoicing and order procurement, and reduce transactions.
It’s these kinds of services that are born from really getting to know your successful, high-impact customers ( I offer some tips in my new eBook on how to frame these conversations). They reduce pain for your customers and create value.
Jim and the Marsh Electronics team are using these and other strategies to great success. They’ve grown their business from that $20M spinoff to $61M-$62M in just a few short years, and it all started with a clear vision.
Jim knew as much where he wanted to go as he did where he didn’t want to go. That winnowing process allows Marsh to focus on where they and their customers can win and win big. As you navigate through the disruption of distribution, think of this duality: Where do we want to go? And where don’t we fit anymore?
Know your company, your customers, and yourself. That will make the vision much clearer.
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.