Delivering for Best-in-Class Wholesaler-Distributors
January 26, 2017  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-Making Sense of Digital Tools – Distributors in the Digital Era #2

Cutting Through the Fog by Recognizing That Success Begins at Home

My ongoing conversations with distributors reveals, over and over again, that leaders are inundated with a flood of urgent pronouncements about the need to make investments and build digital capabilities. Experts and vendors proclaim that distributors must go online to keep up with rapidly evolving customer preferences, and that disruptors—including incumbent distributors and online marketplaces (like Amazon)—are out in front and pulling ahead. Distributors must “go digital” if they are to prosper, or even survive. Action is required, but what are the right digital investments for your company? And, what can a leader do to drive his or her company forward?

Our work with distributors that are making digital progress identified seven essential drivers for getting results from digital investments:

  1. Align your leadership team
  2. Reimagine your business
  3. Watch out for transformations
  4. Develop capabilities
  5. Invest in digital knowledge
  6. Enable digital champions
  7. Articulate a vision.

Combined, these drivers are based on advice from successful companies and also include actions required to overcome mistakes and failures. They provide a checklist for leaders to help ensure that their companies are on the right path to leverage digital tools and achieve business objectives.

Of these drivers for getting results, three are helpful for cutting through the fog of advice offered by digital evangelists and vendors of digital solutions. In fact, these three drivers are particularly useful and effective because they emphasize that success starts within your company, not blindly following the recommendations of digital experts on the outside. These three drivers are discussed below.

Align Your Leadership Team

Digital tools cut across the organization by pulling data and information together from financial, marketing, sales, and operational systems. When leaders operate in silos, they use digital tools for their own purposes. Used in this way, digital tools worsen results and destroy morale. One leader shared an awakening of sorts, one that pointed out a critical requirement to shake up, challenge, and align the leadership team:

“I didn’t understand why we weren’t making much progress until I sat down and talked with my heads of marketing, sales, operations, and so on. I found out they had very different ideas and levels of commitment. They were working against each other, and some weren’t doing much of anything.”

And from another leader:

“I put my leadership team on a steep learning curve through reading, conferences, vendor meetings, and more. I sent them out in pairs, and I required them to share what they learned. I made them work together on projects, even if the goal is mostly aligned with one area. I needed to shake things up and get them to work together if we are to make progress.”

Develop Capabilities

Leaders can push digital progress by demanding investments in their company’s people and processes, in equal amounts to investments made in tools. It’s a three-legged stool scenario. Unequal attention to all three elements results in instability and a lack of performance. Our work identified priorities for disciplined and effective capability-development initiatives:

  • People development is about identifying the knowledge, skills, and aptitudes required to execute the use of digital tools in support of your business goals. It is multifaceted and includes recruiting, hiring, training, and coaching. Attention to both extrinsic rewards and intrinsic motivations is essential.
  • Process mapping is fast becoming a critical competency for becoming a digital company. Digital tools change the way people work, and documenting critical processes is always a necessary step toward changing habits.
  • Metrics are essential for guiding success and measuring progress. As one distributor put it when describing the benefits of CRM as a digital tool: “I want to manage my sales force as I have always managed my warehouse—with consistent processes measured by metrics that can lead to continual improvement.”

Articulate a Vision

Distributors that have a strong vision are moving forward, strengthening their business model, and developing new capabilities. Companies that do not have a strong vision are spinning their wheels, failing to learn from mistakes, and wasting their investments. Visions enable progress, not because they completely lift the fog, but because they point teams in the right direction and break log jams. Strategies follow, along with programs, policies, actions, and decisions.

By the term “vision,” we do not mean a blue sky, grandiloquent, or inspirational statement of meaning and purpose. Our feet are planted firmly on the ground. Instead, by vision, we mean a well-defined and actionable direction that is obvious to your people, customers, and suppliers because it resonates with your specific business opportunities and challenges. Often, visions begin with a single sentence or two. Four examples offered by distributor leaders include:

  • “We are using digital tools to relentlessly drive costs down and productivity up.”
  • “We are looking for digital tools to help us align with customer problems and compete with the big distributors that dominate our industry. We need to sell our expertise, not just our products.”
  • “We want to give our customers the ability to interact with us on their own terms, at any time, from any location.”
  • “Our salespeople and our entire business need to become all about value-selling. We are using digital tools to leverage data and implement our way of selling.”

Summary

In some ways, these three drivers for getting results for digital investments should comfort leaders that have not mastered the language and application of digital tools. Success starts in areas that are familiar for all leaders. Why not align and challenge your leaders, while at the same time, identify and build new people competencies and business processes in your organization? It is critical for leaders to articulate a digital vision, but outcomes achieved when leaders explain which tools will be used for what purposes in their own company is multiplied many times over when leadership teams, people, and processes are ready to run with the vision.

The new study by the NAW Institute for Distribution Excellence, Getting Results From Your Digital Investments helps you to build a vision that is the right one for your company and then to take all the needed action to execute your vision. It provides advice for helping you make investments, mobilize people, and ultimately, get results from your digital investments.

Have you downloaded the Pocket Guide about this important study yet?
Click on the image to receive some valuable excerpts from the full study.

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.

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