Like many of you, I had the opportunity to attend a few distribution conferences last year, including MDM’s process-oriented SHIFT event. We heard many challenges (that we don’t control), including economic uncertainty, tariff impacts, elevated inflation, high interest rates and the burden of regulations. We also heard best practices, opportunities and advancements in distribution growth strategies, operational excellence and the promise of technology (including AI). Some of these are not new ideas and rather ones we have talked about it for a while like improving margins through better pricing. However, many distributors struggle to execute on these ideas and realize the benefits. Distributors have an “Execution Gap”.

Strategy-Execution Gap (Knowing-Doing Gap)

Everybody has ideas. Ideas are cheap. Ideas are a commodity. Ideas are overrated. You can’t talk about strategies, you can’t read about it, it will not get you results. You got to do it. Execution is the differentiation. Execution creates competitive advantage. Zig Zigler said “Execution is the bridge between goals and accomplishment.” MDM’s retrospective analysis of articles in its year-end MDM Wrapped 2025 piece identified closing execution gap and getting better at execution consistency were key to operating in the slow-growth environment.

Distributors make money in three ways: (1) increasing sales, (2) decreasing costs and (3) decreasing assets. All processes, people and technology drive one or more of the above. Increasing sales is achieved through growing sales, expanding margins or expanding services. Growing sales is achieved through selling more to existing customers (and often) and finding new customers. As you can see, each of these processes can be expanded to several sub-processes that has the opportunity to impact the bottom line. There are over a hundred ways to boost profitability. The key challenge facing distributors is which process to improve, has the most potential, spend their time on and maximize ROI. Sometimes, this leads to analysis paralysis. We think we need more information, when all we really need is more action.

5 Reasons Why Execution Stalls Between C-Suite and the Frontline

1. Too many Priorities: Most distributors are running too many projects and initiatives – expanding locations, new sales programs, implementing technology, supplier-driven ventures and more. The attention, focus, resources and time are split.
2. Ignoring Middle Managers: In many organizations, strategy goes to the frontline to die. Branch and functional managers are execution engines. Train and empower them to execute. Remove blockers and provide resources to execute.
3. Lacking Process Discipline: Well-defined processes need to be executed consistently at the branch level. Consistency beats intensity. Aristotle said “We are what we repeatedly do. Excellence then is not an act, but a habit.”
4. Tech-first instead of Process-first: Falling in love with the technology is a common challenge. Defining processes first is critical. Then, digitize and automate the process. Having clean data is crucial.
5. Misaligned Metrics: Not focusing on KPIs that reflect project goals or business value. Focus on leading indicators when designing and executing projects. (example: quote-to-order cycle time, on-time promise, price override rate).

5 Ways to Bridge the Execution Gap 

1. Prioritize What Matters. Select three to five projects per year to prioritize and focus on. Start with outcome-based goals, break down the projects into tasks, define the end state for each, and the steps to get there. Co-create plans and playbooks with frontline employees. Keep strategy simple, execute relentlessly. Example: Reduce quote turnaround time from 12 hours to 4 hours for 80% of quotes in the next 90 days.
2. Invest in Frontline Capability: Plans don’t translate to frontline behaviors automatically. Communicate and empower frontline managers with ownership and decision-making power. Local managers know their customer needs better.
3. Create Consistency: Short-term results come from intensity. Long-term results come from consistency. Ninety percent of success can be boiled down to consistently doing the obvious thing for an uncommonly long period of time like on-time delivery.
4. Align incentives: Right incentives drive behaviors. Align policies across sales, operations, and finance. Keep metrics simple and visible. Share reward from the improvements. Follow-up regularly and make changes as needed.
5. Pilot-Learn-Scale: Test at few branches, improve, perfect, standardize before full-scale rollout. Involve the users in the testing and perfection stage.

The Upshot

The rapid changes in distribution business, market conditions, entrepreneurial mindset, broken processes at the branch level, outdated technology and talent shortages have all contributed to execution gap for distributors. The distribution business has become complex. Competition is stiff and margin compression is eroding profitability. Customers expect more from distributors. It’s an opportunity.  Let us make 2026 the year to close the execution gap, instill discipline, drive innovation and realize growth!