Looking back at our blessings

Looking back at the nearly 200 articles posted to this blog, most were designed to provide insight,

suggestions and training for distributors and their supply partners. Our mission has been, and continues to be, creating a catalyst for better ideas within the distributor channel. But, for just a couple of minutes, allow me to take a look back in time.

We are celebrating out 10th Anniversary
River Heights Consulting was formed ten years ago on November 13, 2005. After many years of consideration and sleepless nights, I decided to take my gathered knowledge and skills to launch out on my own. It was my long-time dream to consult in the distribution world.

When I first launched, I had no clients, no prospects of clients and very little idea as to how to find new clients. For a couple of days, I felt like Jack from Jack and the Beanstalk, somewhere deep within my consciousness I heard voices say, “Jack, you traded the cow for these three magic beans? How stupid of you…” But I was blessed. A few days following my resignation, I received an unsolicited call from Phil Allen of Grace Engineered Products who wanted to be my very first client. I am happy to report Grace is still a client. Blessings continue to flow.

During the first couple of years, it was tough connecting with new clients. The good news was that it was fairly easy to find organizations where I could provide really strong value.  They wanted to hire me!  The trouble was, they wanted to hire me as an employee, not a consultant.

It seemed as though every baby-boomer with any level of success “put out a shingle” and called themselves a consultant. At least until somebody offered them a job. My wife encouraged me to stay the course. Again, I was blessed. At some of my most discouraging times, a new client would join the River Heights Consulting family. The family grew and now at the end of ten years, we are maintaining that momentum. With each new client, I have learned something.  I have learned about their business, how to be better at my own business, and how to help others overcome obstacles and prosper.

Over the past 10 years, River Heights Consulting has:
• Interviewed over 1,000 distributor executives (we quit counting at 800 about five years ago). Each one of these folks generously shared the issues facing their businesses. In many instances, they talked openly of their successes and the pitfalls they experienced along the way.

• Interacted with some of the top thinkers in the wholesale distribution. The folks who run distributor associations really do have a handle on the issues facing wholesalers. They shared, they bounced around ideas and they generously assisted with research.

• Written five and a half books. Why the half book? Well, there are a few that are near complete but need either some final editing or a bit more research required to move them from mildly interesting to worthy of the readers' time.

• Authored over 400 articles. This has put me in touch with some world-class editors. They helped me improve my writing skills. Don't forget, I am an engineer by trade, so writing was never a strength. These people were patient with me, offering amazing tutorials.  Plus, they taught me to not be afraid of putting some of my personality into the work.  "Frank speak" is a real thing around here.

Since many people want to know, here is a list of the work we have performed.
• Executive coaching. In spite of claims made by others, I don’t believe any one course can provide the background needed to be a top-level distribution executive. We work one-on-one with great people to help them be even better. We play devil’s advocate and challenge their decisions. We ask dumb questions and demand smart answers. We help them refine ideas.

• Sales training. We do training on target-based selling, Value-metric selling and solutions selling. We often ride along with salespeople to provide them with a bit of coaching as well.

• Speaking. We have been honored with the opportunity to speak to groups all over the world.

• Distributor Advisory Councils. This is one of my personal favorite tasks. River Heights Consulting has conducted dozens of these meetings and helped suppliers build a better relationship with the wholesale partners.

• Rep. Council Meetings. Sales Agencies, AKA Rep firms, are part of the landscape. They provide real value to the channel. One rep recently pointed out a notable fact. According to Forbes Magazine the average tenure of a rep in their market is 22 years versus just over two years for a salesperson working directly for the manufacturer.

• Strategic Planning. Without a plan, it’s hard to grow. We’ve had a lot of fun helping all kinds of organizations refine their vision for the future.

• Customer Focus Groups. The voice of the customer is powerful. Understanding why people buy from you is as important as any fancy sales strategy.

I could go on and on with this list. I know I have skipped over some important stuff. I suspect in another ten years the list will be even bigger and better. So allow me to close with the most important point.

We have been blessed with literally thousands of friends, people who have helped us succeed. We have been blessed with a modicum of success.

But it’s not about Frank Hurtte or the team here at River Heights Consulting.
Instead the real secret is all of you.

Thank you for your help and support since November 13th of 2005.  You have given me hope in the face of adversity and have kept me laughing with your distributor stories.  You have blessed me.

I hope to be a blessing to you and your company some day as well.  And with the next 10 years ahead, I thought I should share our new and improved logo:

As always, I would love to hear your thoughts!  Happy Thanksgiving!

Amazon: Best Friend or Worst Enemy?

Bad advice disguised as a how to compete against Amazon article

Vultures circle high overhead.  Stumbling,

struggling, maybe even crawling way down below, we see the cadaverous body of the wholesale distributor.  The experts are once again predicting the demise of distribution.  Unless we heed their costly advice, our lifeless corpse of an industry will be served up as carrion caviar.  And the folks at Amazon will dance a merry jig around our tombstone.

It’s not too hard to imagine the advice these guys are tossing out.  Spend money on building your own e-commerce site.  Hire them or their company to assist you in growing your very own mini-Amazon. 

For our kind of distributor operation, this is a terrible recommendation. 

What is our kind of distribution?

A few years ago I coined the term “Knowledge-based distribution” to describe our type of business.  In this knowledge-based world, we sell a bit of our expertise with every brown box headed out the door.  Depending on the products on your line card, this could be engineering support, start-up assistance, internal logistics assistance, parts kitting or integrated solutions with parts from several manufacturers tied together to solve the customer issue.  We work hand-in-hand with our customers to establish production, maintenance or other long term strategies.  This is a far cry from logistics based wholesalers who basically toss product over the wall to their shipping departments.

If we play the Amazon game we will lose.

Think about this for a moment.  Amazon is investing hundreds of millions into their internet-based platform.  For the purposes of this discussion, we did a quick review of spending for online capabilities.  Amazon didn’t break out their budget, but their biggest competitor in this business, Grainger, reported spending $40 million for online spending in 2012 alone and industry analysts indicate this number for annual spending is going up each year.   If you happen to be a distributor with this kind of budget for e-commerce, you might want to skip the rest of this post.

We’re not saying that fighting an online guerilla war with Amazon, Grainger and the like isn’t a valiant cause.  Instead, I wonder if investing time and energy is a good use of our troops and treasure.  Why not use the effort to up our game in our real area of expertise?  Let’s focus on playing our own game so well that we take business from the giants.

Upping the ante in a game we can win.

Instead of fretting and fumbling with how to improve our online catalog, why not work to develop additional tools for your own unique knowledge-based value proposition?  No doubt your organization provides dozens of value-added services to customers.  Certainly, you provide on-site expertise which will not be delivered via the web (at least in the foreseeable future and my lifetime.)  Let’s invest in the stuff that really attracts our customers.  The list could be massive but here are a few to ponder:

1. Develop a process for measuring the value you provide to customers. 

Don’t count on technical customers to properly monetize the value of your product/service solutions.  Most technical folks lack the basic skills required to turn your last late night service call into dollars produced for their employer.  Develop and aggressively sell this customer advantage.

2. Create connections with your customer’s top brass.

These folks may be writing big checks to your company every month.  Very few of them understand precisely what you do and why you warrant the dollars they send your way.  They don’t understand the technology of your products and most don’t want to learn it.  Why they do want to understand is how you help them make money.  Learn to speak their language; talk about financial impact (see my previous comment.)

3. Build a process around your sales effort.

Good salespeople are hard to find.  Many of your top sellers may be pushing toward retirement years.  A process will help capture their expertise and allow your company to quickly and efficiently on-board the next generation.  And, the future will most likely involve some kind of team sales approach.  Done well, team selling requires a playbook.  A sales process keeps the team running in the same direction.

4. Start charging for some of your services.

A lot of what we do is so valuable, so uniquely positioned and required for customer success that we deserve to be compensated.  The Gross Margin for service model is starting to break down.  Why, because products are getting functionally cheaper and the cost of our expertise is rapidly rising.  Something has to give.  This is where I put in a shameless plug for my book, The Distributor’s Fee-based Service Manifesto.  It’s on… holy smokes, you may have guessed-- Amazon.com.

5. Sell your value to your Supply Partners.

Here’s my take on a lot of this Amazon stuff.  Some of our Supply Partners are reading the same articles I have been subjected to.  A good many of them are starting to wonder if they should be jumping aboard the midnight train to Amazon-land.  We need to stop them at the platform and before they buy the ticket.  The folks who actively sell vendor’s products into new applications aren’t hunched at a computer.  The knowledge-based advice we provide is not buried 300 pages down on some internet site.  We actively sell their products.  We create new demand for their stuff.  All of this effort costs money.  We need a much deeper margin than an online store.

I am not saying we should abandon new customer facing ideas.

Before we get back to the business of distribution, I want to make one final point.  I do believe we should constantly update our ability to interface with customers.  A dynamic website is a must have these days.  Distributors need to be able to handle electronic orders and provide logistical information to customers via e-commerce.  I like electronic invoices.  Mobile apps will play an important role in our near-term future.  Not keeping up is never good.  But….

I believe our game is solving customer problems not selling brown boxes on the internet.

A Woman's Place is...

Women in Industry- the New Trailblazers

I squint my eyes and let my mind wander back to those days spent inside the ivy covered walls of the Illinois Engineering campus.  Drab colors, institutional sanitizer and well-worn army surplus furniture stood against the backdrop of overly caffeinated students hustling, bustling and shuffling off to the next class.  And, those students came from every continent, every culture; literally every walk of life.  Except one thing was missing: women. 

Actually, my own graduating class was small, around 50 students.  And, only two of them were female.  That’s a whopping 4 percent.  Now fast forward to interviews, job offers and graduation.  Based on my college experience, it didn’t shock me when I discovered zero female presence in the sales training program of my new employer.  Thinking about the whole thing in today’s terms is mind boggling.

A common misconception in the past of
women in male dominated fields.

Along the way, some of my contemporaries explained away the issue with, “Female students don’t want to waste their Engineering degree with a sales role.”  At least a couple of my bosses (great guys but from another generation) dismissed the whole idea of women in “our business” by saying, “Even if qualified women could be hired, our customers just aren’t ready for the women sellers, or managers or... anything else.”

A few years later, I was blessed with a wife who was breaking ground as a sales woman in a different male dominated industry.  I saw the issues she faced and admired the way she broke down barriers.  I noticed how her approach differed from my own.  I also couldn’t help but notice how she was forced to jump through higher hoops to meet her goals.  Yet she still managed to make it look easy.

Over the course of the past couple of decades, I have seen women break in to all levels of Distribution.  The best of these fine people demonstrated valuable traits like organization and ability to listen.  There also seemed to be bonus characteristics not shared by my male contemporaries: a gift for checking their egos at the door and working well with teams.

I am happy to say, I see breakthroughs across all areas of distribution (and supply-partners.)  Part of this could be tied to the ongoing difficulty companies in our industry face in finding qualified people of any kind.  Basically, it makes business sense to expand the field of candidates.  Secondly, a good many companies are seeing the results of women in adjoining fields of business.  Additionally, women are coming out of school with the technical backgrounds our organizations need.  For instance, Women graduating in science related fields has risen to nearly 50% in math and science areas, even stogie old Engineering degrees like mine now see women with about 20% of the jobs.

On an anecdotal note, I spoke at a distribution group where the ratio of males to females was about equal.  I couldn’t help but observe some of the new types of questions coming from the group.  Even though the topic under discussion was sales process, questions covering the interaction of sales, customer service and group interaction were deeper and more pronounced. 

One participant was keenly interested in how to best win over workers and managers who didn’t understand the importance of the process.  In most male dominated meetings, this topic is generally overlooked and an assumption made that change can be driven by sheer force of will at the leadership level.

The main point of all this is simple.  Women think and drive change differently than men.  Women do business differently than men.  And, women sell differently than men. 

Pulling from a recent opinion piece in Forbes Magazine: 

Credit: David Cutler

If you and the people around you see the world in exactly the same way, then the ideas you are going to come up with are going to be remarkably similar.

And that isn’t good.

What we need today is as many good DIFFERENT ideas as possible so we can pick the absolute best one. And that means coming up with different perspectives and different ways of approaching and solving market needs.

I believe it’s high time for our world to take advantage of a great source of diversity in approaching and solving market needs.  And with this in mind, I want to call attention to the work being done by the National Association of ElectricalDistributors and specifically the NAED Women in Industry Forum.

This group regularly honors a woman who has blazed the trail for others.  The award given is called the Industry Trailblazer Award.

This year’s honor went to Tammy Livers, Vice President of Sales with Eaton’s Residential and Wiring Device Division.  Tammy joins a host of women who are changing the face of our industry for the better.  Congratulations and our regards to Tammy.

For the rest of us, perhaps it’s time for some soul searching…