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Kicking Your Electrical Distributorship Out of “Stagnancy” Mode, Part I

Kicking Your Electrical Distributorship Out of “Stagnancy” Mode, Part I

How to recognize stagnancy and make the fundamental changes needed to compete effectively in today’s business world.


When Dave Karr surveys the current state of the electrical distribution industry, he picks up on several common challenges that all firms are dealing with right now. From changing customer and employee demographics and a growing skilled labor deficit; to serious competitive threats like Amazon, outdated or dying sales and marketing strategies, and rapidly shifting purchasing preferences, the hurdles are many and varied.

“A storm is brewing. Many distributors have been unable or unwilling to recognize the symptoms, because all of us – to varying degrees and outside times of true economic recession – have enjoyed success for many years,” Karr, director of marketing at Mayer Electric points out in tED’s Better Together: How to Drive Radical Change. “At some point in time, every organization comes to a stark and unnerving realization: it’s time to make a fundamental change.”

Of course, substantive change is never easy to initiate or follow through on—the precise reason why companies across many industries have fallen into a state of stagnancy. Credit the brisk economy for contributing to this mindset (how quickly we forget the “lean” days of the most recent recession), but whatever the culprit the message is clear: This is not the time to rest on your company’s laurels and hope that the favorable economic conditions go on forever.

“History is full of organizations that get sucked into believing that the good times—the economic fortunes—will continue down the path that they are on right now,” says Dirk Beveridge, founder of Chicago-based UnleashWD and author of INNOVATE! How Successful Distributors Lead Change in Disruptive Times. “Heck, it’s human nature.”

The problem is that, in many cases, those good times are camouflaging poor performance, says Beveridge, and pushing companies to deal with the here-and-now instead of paying attention to what’s coming around the next corner. Then, when economic downturns rear their ugly heads, a major customer closes up shop, or some other disruptive event hurts the distributorship’s bottom line, organizational leaders are shocked and surprised (instead of prepared).

The question is, how can a distributor reap the rewards that the “good times” are putting in front of it while also making sure that it doesn’t get complacent? Beveridge says it takes a fine balance, and the realization that tunnel vision on maximizing current opportunities isn’t the best approach. Instead, companies should be “peering into the future” to understand the disruptive trends that they will be facing, says Beveridge, and continually posing questions like:

  • Are we using a disciplined strategic planning process?
  • Do we know what trends are changing the way business is done now, and what threats and opportunities these trends will present?
  • Are we committed to developing tomorrow’s leaders?
  • Are we investing in the technology that our customers want in the short-term and the long-term?
  • Are we taking part in “constructive paranoia,” knowing that our business positions must be solid not just for today, but also for tomorrow?

Distributors should also look at the arenas that they want to “play” in, says Beveridge, and examine the value of focusing on specific market segments—including those they may not have focused on in the past. The same goes for new suppliers, new products, new technologies, and new customer segments. “Look carefully at the opportunities that you want in invest in going forward,” he advises, “and at what innovation and/or changes will be required to be able to meet unfulfilled needs in the marketplace.”

By taking this forward-thinking approach to business, distributors can begin to crowbar themselves out of “stagnant thinking” mode and into a mindset that’s centered on future growth (despite what the economic or competitive conditions may look like right now). “From there,” says Beveridge, “consider the financial implications and the sequence of moves that you’ll need to make to prepare yourselves for an eventual downturn.”


Read the SIDEBAR to this article: 6 Ways to Overcome “Virtual” Stagnancy


In Part II of this article series, we’ll give you even more strategies that distributors can use today to start shoring up their business models for the eventual downturn.


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Bridget McCrea  is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at bridgetmc@earthlink.net or visit her website at www.expertghostwriter.net.

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