Principles 7, 8, 9

Peter Drucker deemed effective leaders to be those who delegated much but retained authority over what was most strategic for the organization.  

Motivate the troops, Embrace the front lines and build leadership in others.  Peter Drucker, who studied managers in action over six decades, deemed effective leaders to be those who delegated much but retained authority over what was most strategic for the organization.

But effective leaders also had a habit of personally visiting the front lines, giving rise to the title of one of Drucker's publications on the subject,  "Not Enough Generals Were Killed," a slighting reference to World War I army commanders who remained far from the battle lines while ordering soldiers into pointless rounds of trench warfare.   Noel Tichy, a university professor who also directed General Electric's leadership program for several years said building troop strength is a matter of creating other leaders throughout the organization. 

ACTION POINT: Stay close to the front lines and build leadership in others.

Developing and Training Talent

Product knowledge will continue to be a potential point of true differentiation.

Employees also need to become comfortable with complexity and ambiguity--a sign of the times and a challenge for practically every industry.  Finally, as services become more embedded in wholesaler-distributors' businesses, employees must understand the elements and benefits of a more integrated, consultative sales approach rather than than strict price/discount/volume negotiation. 

Product knowledge will continue to be a potential point of true differentiation.  In addition to employees, suppliers should be fully engaged in sharing and conveying product details to deliver the necessary information and insights, and better serve customers and end users. 

ACTION POINT: Always promote a "consultative" sales approach.

Developing and Training Talent

It applies to educating suppliers and customers about using a distributor's new technologies, such as web portals for ordering, customer service, and orders status.

Effectively developing and training employees is an issue that crosses size and lines of trade.  Distributors must continue to invest their own time, money, and resources in developing and implementing training programs for their personnel.

One of the challenges with all of these efforts is finding the right balance between cultivating employees, customers, and suppliers, and getting too far ahead of their capabilities.  This is where change management comes into play.  As we discussed earlier, managing change is a real consideration when it comes to developing your people.  It applies to educating suppliers and customers about using a distributor's new technologies, such as web portals for ordering, customer service, and orders status

ACTION POINT: Consider customers and suppliers in your training and development plans for your employees. 

Managing and Enabling the Workforce

Perhaps a more relevant phrase for today's environment would be: "Knowing, showing, sharing, and growing will win the battle." 

"Showing up is half the battle." That phrase is often invoked by leaders looking to motivate individuals and to convey a sense of purpose.  However, in today's ultra-competitive and dynamic business landscape, showing up likely won't get you very far and, in many situations, may not even be necessary.

As wholesaler-distributors look to fully leverage their workforce and create competitive advantage, they must leverage technology to both manage the workforce (that is, ensure the optimal alignment between resources and responsibilities) and enable workers with information, insights, and tools. 

A combination of tools may allow for virtual meetings and online collaboration where, previously, face-to-face meetings were required.  Perhaps a more relevant phrase for today's environment would be: "Knowing, showing, sharing, and growing will win the battle." 

ACTION POINT:  Know what is important, show what is relevant, share what is differentiating, and grow together. 

Accommodating Generations

The field sales force must serve as the eyes and ears of the company.

Another strategic decision regarding human capital management is the degree of decentralization, autonomy, and accountability a company will foster.  If these factors are to be a point of differentiation for the business (for example, empowering branch managers with broad decision-making power about pricing, promotions, and assortment), then company recruitment, development, and retention plans must align with such expectations and strategies.

They must also align with the expectations of a new generation of employees, who increasingly expect high levels of autonomy, opportunities for rapid advancement, and training.  Another generational issue affecting the industry and many customers is that of retirement and succession planning.   As the baby boomer generation reaches retirement age, ensuring adequate succession planning also becomes a very real challenge.   As one CEO remarked: "The field sales force must serve as the eyes and ears of the company...knowing their territory and 'who is doing what," including what the likely succession plans are, assessing which dealers are up-and-comers, and which ones will shortly be 'turning out the lights."

ACTION POINT:  Recruit and develop talent for the next generation.

Mission Critical Principle 6- Communicate Persuasively

"I really want to listen.  I want to engage, but I have to shut up."

There is not shortage of leaders willing to reveal what has worked, or sometimes failed, in their own exercise of power.  Inevitable, some of these accounts are exercises in vanity, self-promotion, or self-justification, but the best of such self-reporting furnishes useful insights from the front lines of leadership.

CEO Dawn Lepore of online retailer Drugstore.com with revenue in 2010 of 450 million, offered that while she was "very comfortable with ambiguity," when "you're leading a large organization, people are not as comfortable with ambiguity, and they want you to be clearer about what's happening, where you're taking them.  So I had to get better at communicating what I was thinking."

Communicating must also be two-way, reported Carol Bartz, CEO of Internet provider Yahoo, who saw the act of hearing as essential, if not always natural: "I have a bad habit--you get half your question out and I think I know the whole question, so I want to answer it.  And so I actually had to be trained to take a breath.  I really want to listen.  I want to engage, but I have to shut up."

ACTION POINT: Communicate clearly and listen intently.

Sales Call Evolution II

Understanding the preferred communication style, goals, and objectives of ones counterpart in any face-to-face meeting is essential.

In addition, pre-call planning has assumed greater importance--both with customers and suppliers.  Understanding the preferred communication style, goals, and objectives of ones counterpart in any face-to-face meeting is essential.

Distributor personnel that interact with suppliers or customers should come prepared to discuss and resolve any outstanding service or product issues and the specifics of any new business opportunities.  Because a greater percentage of customers are increasingly comfortable using online tools for basic requirements--for example, receiving after sales technical support(32%), discussing customer service issues (26%), obtaining updated order information (37%), and reviewing purchasing history (37%). 

ACTION POINT: Distributors need to ensure that face-to-face encounters create more value for everyone. 

Sales Call Evolution

face-to-face interactions require thoughtful and comprehensive upfront planning; highly professional execution; and often a more informed, consultative approach.

Author Gary T. Moore highlights the evolution of face-to-face interactions in his book Taking Charge of Distribution Sales.  Moore notes that the purpose and structure of "sales calls" continue to rapidly evolve--including the increasing relevance of team sales--especially as transactions become more complex and multifaceted.

As services become a more integral part of distributor's value proposition, face-to-face interactions require thoughtful and comprehensive upfront planning; highly professional execution; and often a more informed, consultative approach.

ACTION POINT:  The changes require distributors to raise the bar on sales force education and training.

The Evolution of Face to Face Interactions

a fundamentally different type of interaction can occur. 

While their frequency is decreasing and their perceived importance is declining, face-to-face interactions actually play an increasingly important and differentiating role in the distribution industry.  Distributors that best leverage available technologies to free their personnel from low-value tasks and re purpose them for meaningful, value-creating activities and interactions with customers will be well positioned in the future. 

Indeed, while electronic ordering and e-mail are pervasive, the majority of distributors indicate  that face to face encounters will not go away.   By freeing workers--especially those in customer-facing roles--from non-value-added responsibilities, a fundamentally different type of interaction can occur. 

ACTION POINT: Recognize that their is a new direction for face to face interactions.

Focal Jobs II

these positions play a critical role in differentiating the organization with customers and suppliers

Focal jobs can be found anywhere within a distributor's business and may or may not include positions with direct management responsibilities.  Nonetheless, collectively these positions play a critical role in differentiating the organization with customers and suppliers, and achieving success in helping the business in the following areas:

• Managing risk
• Generating revenue
• Improving customer satisfaction
• Elevating overall performance by changing talent-management-practices.

Focal jobs often involve multiple people performing the same or similar kind of task.  Responsibilities can also be broken down into specific roles, skills, and competencies.

ACTION POINT: Identify the focal jobs within your organization.

Mission Critical Principles 4 and 5

effective leaders were most often defined by a driving determination to reach a goal, an ability to generate trust and communicate optimism, and a bias for action when ambiguity prevails.

The U.S. Marine Corps Officer Candidates School places great emphasis on taking charge and acting decisively.  To build an ability to make rapid decisions under stress with incomplete information, would-be Marine commanders learn to make do with a "70-percent" solution, not 100-percent consensus: explain unambiguous objectives and leave their subordinates to work out the details; tolerate mistakes if they point to stronger performance next time and are not repeated a second time; and view indecisiveness as a fatal flaw--worse than making a mediocre decision,  because a middling decision, swiftly executed, can at least be corrected.

In a similar vein, Warren Bennis, an academic observer and university administrator, concluded that effective leaders were most often defined by a driving determination to reach a goal, an ability to generate trust and communicate optimism, and a bias for action when ambiguity prevails.

ACTION POINT:  Act swiftly and decisively.

Focal Jobs

directing attention to a few select positions that truly influence the organization's standing.

Companies need to develop a talent pool that can help achieve differentiation and increase growth.  One way to do this is by directing attention to a few select positions that truly influence the organization's standing.  By pinpointing the people, practices, and performance criteria needed to support these responsibilities, distributors, like other companies, can target areas that require extra attention and more effectively allocate limited resources.   

Incorporating focal jobs into their workforce strategies can yield important new insights and benefits for distributors, allowing them to: 

• Directly link workforce management investments to business strategy and organizational performance
• Raise awareness and visibility of previously undervalued positions
• Employ a more disciplined fact-based approach to integrating human capital-related activities and investments
• Reinforce the need for better workforce analytics and insights
• Clarify the distinction between high value contributors and high-value positions
• Generate more revenue, better manage risk, and increase customer satisfaction.

ACTION POINT: Look for the focal jobs within your organization.

Human Capital Strategy II

positions that truly influence the organization's overall performance

Distributors must now turn their attention to recruiting, retaining, assessing, managing, and developing the individuals that collectively form a distributor's human capital.  In looking to craft a human capital strategy, distributors should focus on addressing seven human capital-related activities:

• Differentiating high (and low) performers.
• Making employee-related decision based on specific, measurable capabilities and shortcomings.
• Enabling leadership to guide individuals and the organization through change.
• Transferring critical knowledge and stimulating social networking.
• Identifying opportunities for enhancing the role of human resources and addressing gaps in learning.
• Offering more flexible work environments.
• Directing attention toward focal jobs--positions that truly influence the organization's overall performance--not just those that sit highest on the organizations chart.

ACTION POINT: Utilize the activities above in your human capital strategy.

Human Capital Strategy

The core skills required to operate in today's environment--continue to evolve.

The growing importance of human capital management is being driven by numerous internal an external factors:

• Business complexity. Most distributors are now selling a more complex value proposition--in many cases combining elements from a diverse portfolio of products, services, design capabilities, and analytics.
• Heightened competition. The highly competitive operating environment is compelling companies to extend their geographic, industry, product, and service coverage in the quest for top-line growth.
• Higher service expectations. Customers have ever-higher service expectations concerning product-related services (kitting, packaging, design, installation and maintenance, and so on) and transaction-and relationship-oriented services (order management and problem resolution for example).
• Evolving skills requirements. The core skills required to operate in today's environment--the ability to work with ambiguity and constant change, a comfort level with complexity, a willingness to embrace and leverage new technologies, and knowledge of both business and technical issues--continue to evolve.

ACTION POINT: Recognize the internal and external factors driving the importance of human capital management.

Sales Force Direction

customers want to know that whatever they are paying for is money well spent, and that the person they are talking with is knowledgeable and proactive.

Today, a distributor's sales force must move past negotiations based strictly on price, discount, and volume.  While cost is certainly a fundamental consideration, customers want to know that whatever they are paying for is money well spent, and that the person they are talking with is knowledgeable and proactive.

This capability depends on a integrated, informed sales approach that utilizes the most, current, most complete data, which in turn relies heavily on information technology and analytics to guide and enrich the sales process.  Companies that fail to address these issues and do not enhance their IT resources will e at a disadvantage when it comes to attracting and retaining highly skilled performers and keeping pace with the capabilities of their customers and suppliers.

ACTION POINT: Inform your sales force with the most current and complete data to deliver value to your customers.

Mission Critical Principles

...common leadership threads included an exceptional ability to define a compelling vision for change, devise a strategy for achieving it, and honor those followers who were being asked to achieve it.

Multiple sources affirm the importance of the 15 core principles, including studies of the qualities of leadership by academic investigators, reviews of leadership development programs among well-established organizations, consideration of what leaders report has served them well.   Here is a brief sampling of of sources for principles 1 (Articulate a Vision), 2 (Think and Act Strategically), and 3 (Honor the Room).

Two well-informed observers, educator Howard Gardner and researcher Emma Laskin, explored historical sources on twentieth-century luminaries ranging from Nelson Mandela and Mahatma Gandhi to Margaret Thatcher and George C. Marshall, and concluded that their common leadership threads included an exceptional ability to define a compelling vision for change, devise a strategy for achieving it, and honor those followers who were being asked to achieve it.

ACTION POINT: Define your vision and devise the strategy to achieve it and then honor those that embrace it.

Addressing Skill Shortages

It is predicted that talent shortages will return over the long term

An additional concern is the growing shortage of individuals with specific skills required in the distribution business.  It is predicted that talent shortages will return over the long term and some of the hardest jobs to fill include:

• Skilled trades
• Sales representatives
• Engineering, technical, operations, or maintenance technicians
• Truck drivers
• Engineers
• Customer service representatives

ACTION POINT: Competition for people with these and other desirable skills will be intense, with a wide range of companies looking to bolster their analytical capabilities, their IT-related skills, and their business acumen.

Shifting Workforce Demographics

A new generation of employees entering the workforce brings a very different set of expectations in terms of available technology, communication styles, compensations plans, available benefits, and advancement opportunities.  Striking a balance between new and existing employees will require agility and flexibility.

In addition to acquiring new skills and raising the overall profile of human capital, companies must deal with new opportunities and challenges brought about by the country's changing demographic makeup and trends within the distribution industry itself.  Some specific trends to consider are:

• The graying of the workforce.  As an increasing number of knowledgeable and seasoned employees near retirement age, distributors face the potential loss of valuable relationships, product knowledge, and market insights.
• Managing a new generation of employees. A new generation of employees entering the workforce brings a very different set of expectations in terms of available technology, communication styles, compensations plans, available benefits, and advancement opportunities.  Striking a balance between new and existing employees will require agility and flexibility.
• New kinds of workers.  A growing number of ex-service personnel (from the Army, Navy, Air Force, and so on) are entering or re-entering the workforce--bringing with them unique leadership, teamwork, and management skills as well as insights about critical areas such as logistics, communications, information technology and collaboration.
• Gender dynamics. More women are entering the distribution workforce--assuming leadership roles and bringing a new dynamic to what was traditionally a male dominated industry.
• Ownership and management succession at many distributors.  This is exacerbated by the limited interest of some second-and third- generation owners to assume the responsibility of running the family business (especially after an exceptionally challenging economic environment and an extended period of uncertainty ahead.)

ACTION POINT: Understand the challenges and embrace the opportunities you are facing with the workforce of today.

Human Capital

over the next five years, the skills needed to support these attributes will be very different from what they were even three years ago.

Going forward, there are numerous factors that distributors of all types must take into account when developing their human capital strength, including competing for individuals with high-value skills and capabilities.  Wholesaler-distributors should assess and prioritize each of these issues in the context of driving business performance.

Technologies such as e-commerce, e-mail, and electronic data interchange (EDI) play an increasingly important role in facilitating and automating communication and transactions.  Yet for the most part distribution remains a relationship driven industry.  Face-to-face transactions and interactions continue to play an important and differentiating role in this industry.  Employers, customers, and suppliers place a high value on trust, personal connections, and ongoing relationships.  However, over the next five years, the skills needed to support these attributes will be very different from what they were even three years ago.

ACTION POINT: The ability to think analytically, deal with more ambiguity and uncertainty, embrace complexity, and communicate value and service (in addition to price and product) will be essential for both customer-facing and internal personnel.

The Leaders Checklist

Friday's DD's for the near term future will be dedicated to the topic of leadership based on Michael Useem's recently published book, The Leaders Checklist.  

The Leaders Checklist is composed of 15 core principles applicable to most leaders, in most endeavors, in most circumstances.  A checklist is only as good as its underlying foundation, and the foundation is only as solid as the materials and engineering that go into it.

From development work with hundreds of managers and executives in leadership programs in Asia, Europe, North American and South America, from research interviews with many managers in the United States and abroad, and from witnessing managers  facing a range of critical moments, the Leaders Checklist points to a core of 15 mission-critical leadership principles that vary surprisingly little between companies or countries.

These principles constitute the vital foundation of universally applicable Leaders Checklist.

1. Articulate a Vision.  Formulate a clear and persuasive vision and communicate it to all members of the enterprise.
2. Think and Act Strategically.  Set forth a pragmatic strategy for achieving that vision both short and long-term, and ensure that it is widely understood; consider all the players, and anticipate reactions and resistance before they are manifest.
3. Honor the Room.  Frequently express your confidence and support for those who work with and for you.
4. Take Charge. Embrace a bias for action, or taking responsibility even if it is not formally delegated, particularly if you are well positioned to make a difference.
5. Act Decisively.  Make good and timely decision and ensure that they are executed.
6. Communicate Persuasively.  Communicate in ways that people will not forget; simplicity and clarity of expression help.
7. Motivate the Troops.  Appreciate the distinctive intentions that people bring, and then build on those diverse motives to draw the best from each.  
8. Embrace the Front Lines. Delegate authority except for strategic decisions, and stay close to those most directly engaged with the work of the enterprise. 
9. Build Leadership in Others.  Develop leadership throughout the organization.
10. Manage Relations.  Build enduring personal ties with those who look to you, and work to harness the feelings and passions of the workplace.
11. Identify Personal Implication.  Help everybody appreciate the impact that the vision and strategy are likely to have on their own work and future with the firm.
12. Convey Your Character.  Through gesture, commentary, and accounts, ensure that others appreciate that you are a person of integrity. 
13. Dampen Over-Optimism.  Counter the hubris of success, focus attention on latent threats and unresolved problems, and protect against the tendency for managers to engage in unwarranted risk.
14. Build a Diverse Top Team.  Leaders need to take final responsibility, but leadership is also a team sport best played with an able roster of those collectively capable of resolving all the key challenges. 
15. Place Common Interest First.  In setting strategy, communicate vision, and reaching decisions, common purpose comes first, personal self-interest last.

ACTION POINT:  Print the list and refer to it often.