I was born into the industrial landscape quite literally with my father founding an industrial distributor in 1982 a few years before my birth. I grew up watching our business landscape changing slowly, then along came the internet… the changes were accelerated. Sales geographies disappeared. Communication preferences changed. Technical information was just a Google search away. And distributors who refused to change started getting acquired at an alarming rate.
Where is your organization in this shifting landscape? Has it adapted over time with these changes? Did it embrace the opportunity offered by the Internet? Or did your organization refuse to see these changes for what they were? If it turned a blind eye to this new normal, then COVID has been quite the slap in the face. If your organization has just woken up in a COVID induced panic do not despair. It is not it is not too late. How can I say that? Because technology today has never been more approachable, more affordable, and more capable of helping us as distributors adapt. So where do we start or how do we expedite our current innovation strategies to thrive and not just survive? We start with a baseball analogy of course. We win the game by getting on base, rounding seconding, sprinting to third, and sliding across home plate. We should take an incremental, base-by-base, approach to our innovation journey. I call this approach the Moneyball approach to business innovation.
To play the Moneyball game you start by establishing your large business transformation goal, something like “We want to grow our revenue by 50%, our profit margin by 5%, all while keeping our overhead locked (0% growth)”. Then to achieve these goals, win the game, you take an entrepreneurial approach rounding the bases with speed through a series of incremental, small innovations. These innovations always start internally inside your four walls. Internal innovations that drive process automation from the front door to the back dock and include creating a series of automated analytical tools to assess the success or failure of these early innovation efforts. How long will this journey take? Not as long as you might think with smaller organizations having the advantage here. Small distributors (less than 10M in revenue) could see this journey of digital transformation take less than 3 years. Larger organizations, depending on their starting point, could face a 5 year journey. Ultimately if you successfully complete the digital transformation, putting your organization in a position to thrive, not just survive, you will of course achieve your goals of overall business performance but you will also be setup for long-term success with these key digital distributor attributes.
Key Attributes of a Digital Distributor
Has this blog post over simplified this journey? Of course. This can be a brutal process, a journey fraught with numerous setbacks and pitfalls. Want to know more about how the Moneyball approach limits your risks, establishes confidence, and creates a culture of innovation? Then I will see you at UID 2021 for session 36 – “The Modern Distributor: It's About Digital Transformation”.