Helping Manufacturers And Distributors
Improve Sales Performance And Profitability
Published by the Industrial
Performance Group, Inc.
800-867-2778
Issue
No. 22

Turning Knowledge Into Action.

Both manufacturers and distributors agree that strong working relationships are more important today than in the past.
Better working relationships have been an issue of concern for manufacturers and distributors for the past twenty years. Yet our research indicates that only three percent of manufacturers and distributors actually do anything to improve their relationships.

Why does the time and money expended on improving manufacturer/distributor working relationships produce so few results?

As is often the case, there is no simple answer, only more questions such as:

1) Is the manufacturer/distributor working relationship a big issue, or is it just a popular topic of conversation?

2) If it truly is a big issue, do manufacturers and distributors know the benefits of changing the nature of their working relationships?

3) If they know the benefits of changing, why don't more of them do something?

During the past five years we have gotten input from over 2,500 manufacturers and distributors throughout the US and Canada. With their help and support, we discovered that both manufacturers and distributors agree that strong working relationships are more important today than in the past. This is due to the fact that in most industries, competition is fierce, margins are low, and customers are demanding more and more from their suppliers.

Based on these findings it's apparent that the lack of action is not due to a lack of knowledge.
We also discovered that the majority of manufacturers and distributors understand the benefits of changing their working relationships. In fact, eighty seven percent of manufacturers and distributors indicate that problems in their working relationships are having a negative impact on their bottom lines. In a recently completed e-survey, we discovered that the cost of these problems is much greater that most people realize. Executive Summary #1

Based on these findings it's apparent that the lack of action is not due to a lack of knowledge. Quite the contrary, manufacturers and distributors understand the importance of better working relationships. They also understand how they would both benefit if changes were made, and for the most part, they understand what needs to be done. However, for some reason(s) they just don't seem to get the job done.

As a result of our research and client work, we've identified two common barriers that keep manufacturers and distributors from turning knowledge into action that produces results.

#1 Fear. When a person fears for their job, their future, or their self esteem, chances are good that they are not going to do anything that challenges the status quo, even if the status quo is to blame for their problems. Our research indicates that most people know exactly what needs to be done to improve manufacturer/distributor working relationships and the benefits of doing so. However, fear is such a compelling force that most people continue to do things that they know are the wrong things to do.

Fear is such a compelling force that most people continue to do things that they know are the wrong things to do.
One of the problems we face today is that management through fear was a popular fad during the 80s. In the era of "Mean Business," management was led to believe that unless people are under pressure and fearful for their futures, they won't work as hard as someone who works diligently simply because they want their organizations to perform well. Despite the fact that this technique has been discredited, fear is still pervasive in many manufacturing and distribution organizations.

Fear hinders turning knowledge into action in two ways. First, fear ca
uses people to focus on short-term results with little regard for the long-term consequences. In fact, many of the problems manufacturers and distributors face today are the direct result of actions taken by both parties in the past.

Secondly, fear forces manufacturers and distributors to focus on self preservation rather than on working toward a mutually beneficial outcome. At a time when collaboration would yield improved sales performance, increased profitability, and happier customers, manufacturers and distributors gripped by fear continue to pursue their individual goals which are often achieved at the expense of the other party.

The only way to overcome this barrier is to drive fear out of your organization. You need to create a culture that believes that there is no learning without error. And that the only true failure is the failure to act on your knowledge. However, during periods of uncertainty and tough economic conditions, this is a very hard thing for an organization to do, despite the fact that those who do reap huge rewards.

#2 Substituting Talking For Action. People love to talk about manufacturer/distributor working relationships. Pick up any industry related publication or attend a trade association meeting and you are bound to find something on this topic. Talking is an important part of acquiring and sharing knowledge. However, talking is not a substitute for taking action.

Talking is not the culprit. Rather, it is the kind of talk manufacturers and distributors engage in. Caught in the flurry of technological advances and current management fads, manufacturers and distributors have lost sight of the fact that open and honest dialogue, rather than a continuous monologue of complaints, forms the basis of a productive working relationship.

Do your meetings produce a great deal of talk which usually leads to even more talk, but very little action?
Talking is so valued in some organizations that people have come to believe that just because they have discussed manufacturer/distributor working relationships, that action will occur as a result.

To determine if this is happening in your organization, think about the amount of time you spend preparing for meetings, attending those meetings, and then preparing follow-up reports on what did, or did not, happened during these meetings. Now ask yourself, what action was taken to improve manufacturer/distributor working relationships as a result? If you are like the majority of manufacturers and distributors, your meetings produce a great deal of talk which usually leads to even more talk, but very little action.

You can avoid this common problem by focusing your attention on one particular aspect of the manufacturer/distributor working relationship, goals, plans, compensation, etc. Try to avoid unnecessary complexity -- keep it simple, clear, and direct. Use action oriented language that leads to a decision rather than more talk. Once you have made a decision, assign accountability to assure that the decision is implemented, and follow-up to make sure that action is being taken.

By reading this newsletter you have increased your knowledge. You are now aware of the common barriers that prevent manufacturers and distributors from turning knowledge into action that products results. Now its up to you. Before what you know can produce results, you have to do something.

TO LEARN HOW WE CAN HELP YOU TURN
YOUR KNOWLEDGE INTO ACTION.

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