Learning from 2020

Twas the night after Christmas and all was a hush. Dinner clean-up was easier and there wasn’t a rush. While Corona entered 2020 with a rush, its everlasting impact cannot be crushed with a Mexican flush of the same name as we all seek to give it the heave ho thrust.

Okay, so much for my poetry or rhyming but you get the message. Christmas was different this year for many but perhaps as meaningful with more time for family.

As the year comes to a close, we’ll all be reminded by the media of the “year” we’ve had (although trying to remember what pre-March 16th was like is a real challenge!) By the end of the week, we’ll be tired of the phraseology of “interesting times”, “challenging times” and similar.

While the year has been unfortunately tragic for many, from a business viewpoint it could have been much worse (remember 2008 / 2009 … “The Great Recession”?)

What We Learned

A distributor asks

One industry executive reached out with his industry observations since March 16:

1. “Many salespeople are not engaging, or don’t know how they can engage.
2. Many companies, particularly public ones, are much more hamstrung with HR, Finance, and Legal rules now than ever.
3. Many companies spend far too much time internally when they should be spending more time externally. How beneficial can 2-3 meetings per week be when the discussions are about the same subjects?
4. I wonder if some of the supply chain issues we are having are more because companies reduced their forecasts 20%+ in April, rather than waiting a month or so. You could argue the $$ cost of having too much inventory far offset the $$ cost of lost sales from having too little inventory.

Interesting that if you use $100 B as the size of the overall electrical distribution market, at the worst case scenario, this is still a $90+ B business in 2020.  We have certainly had worse years than how this one appears to be ending.

Just saying…………….”

A manufacturer wonders

And a mid-sized manufacturer shared that they lost a regional manager (the regional manager decided to pursue a local opportunity due to a young family) and decided to not refill the role for the time being. When asked why, senior management shared “it wasn’t a cost issue, we wanted to gain greater insight into our reps and their needs.” What they found is that

1. Many of the rep inquiries where customer service-oriented, not sales or strategy related.
   • Which begs the question of, could advanced customer service and rep empowerment, within parameters, coupled with increased access to information via a rep portal / and data sharing, answer some of these questions?
2. Conversion opportunities were limited in 2020. Distributors have not had the time (or perhaps the energy) to consider line conversions unless it was something that the distributor sought due to another supplier’s inability to perform.

Essentially, they were conducting field research on what is the future role / need for regional managers. They know they need some, they wonder what the description of the role should be.

As distributors have adapted, manufacturer sales organizations have been learning on the fly. The role of a rep may have taken on greater significance. The role of regional managers may change. Perhaps more territory managers for local involvement and a quasi “sales engineer”-type role?

A resilient industry

Aside from business interruption from mid-March through May, the business has come back for many. While all feared the worst, business has rebounded. Some are even reporting growth this year (market specific); many only down about 10% (not bad considering April and May.)

Some companies, either through necessity or opportunity, realigned their resources. Many, if not all, showed remarkable resilience, flexibility and adaptability and responded with deployment of technology to support not only work from home but, perhaps more importantly, customer service from home. Curbside pick-up became a “delivery option”. The role of outside sales and regional sales management is being redefined. Technologies we already had access to are now integral to long-term strategies. Digital has transformed business – it is no longer an option. Many management teams are more tolerant. Marketing is now about demand generation and no longer solely communications / collateral, premiums, and events. Customers, be they distributors or contractors / end-users are more loyal than ever to performance / results (donut runs are down, familiarity and performance counts.)

Looking Forward

There is light at the end of the tunnel, but it will take some time. We can look at the challenges that COVID has brought and get down or we can look at the challenges and say “we’ve survived” (and yes, many are innovating and some are thriving.)

Companies that are good operators (quality management, good systems, strong financials, team cultures, forward thinking) see opportunities and are investing to take share and emerge stronger. The traditional recession playbook, but this time mixed with utilizing technology as a differentiator and productivity driver, provides a guide for 2021 planning.

Being a leader in your market is an intentional mindset that requires continuous planning and adaptation.

To quote Ben Franklin, “out of adversity comes opportunity.”

2020 left much adversity but for some, creativity and resilience generate opportunity. 2021 will help those with vision for their business opportunities to take share and accelerate achievement towards their goals.

As 2020 closes, congratulations on your success. Remember, stay positive, it’s contagious!

And next week we’ll share some thoughts on possible opportunities. Enjoy celebrating the new year with family and close friends.