9 in 10 Distributors Say Their Business Strategy Won’t Hold Up. Why Futures Thinking is the Answer - Modern Distribution Management

9 in 10 Distributors Say Their Business Strategy Won’t Hold Up. Why Futures Thinking is the Answer

In the first of a four-part series previewing new MDM research to be unveiled in a June 25 webcast, we introduce futures thinking and our rationale for pursuing this topic now.
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Editor’s Note: This is Part 1 of a 4-part series in which we’ll preview new research conducted by MDM, ultimately leading to the publication of 4 future scenarios and strategic implications for distributors to consider over the next 3 to 5 years. In Part 1, we introduce futures thinking and our rationale for pursuing this topic now. This research is generously sponsored by Infor. For deeper insights, join our free webcast discussion on June 25.

In one of the most famously ill-timed moments in military history, Union General John Sedgwick looked calmly across a Civil War battlefield and said, “They couldn’t hit an elephant at that distan…”Those were his last words.

It’s a darkly comic but very real reminder of how dangerous a misguided view about the future can be, especially in fast-changing environments. The same applies to leadership in wholesale distribution today. When markets are being restructured, technologies are reshaping customer expectations, and volatility is becoming the new normal, it’s the assumptions distributors don’t question – the futures you don’t see – that can become most disruptive.

And yet, many distributors are still relying on strategies – and strategic planning methods – built for a more predictable past.

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The Strategy Confidence Gap in Distribution

In our recent research on business model innovation, highlighted at MDM’s 2024 SHIFT Conference, we identified a striking pattern: distributors that had a dedicated process for thinking about the future were four times more likely to be high-performing new-revenue-generators (defined as revenue derived from new innovations launched in the previous 36 months).

While it might seem obvious in hindsight, the finding made explicit something we have talked about at MDM for many years: the highest-performing distributors aren’t just operationally excellent, they are proactively future-focused. They’ve made strategic foresight part of how they operate.

And yet, that kind of forward-looking discipline is still the exception.

In our most recent research — a follow-up to our business model innovation work — we find that 87% of distributors believe their current strategic plan isn’t as prepared as it ought to be to keep pace with changes expected over the next 3 to 5 years. Even fewer report using any form of structured scenario planning.

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We also asked distributors to describe how they approach long-term planning in the face of so much uncertainty. One comment that captured the research findings especially well was, “Past performance has traditionally been a good indicator of future success, but ‘unprecedented’ actions and events make it more difficult to predict with confidence.”

In other words, what got us here won’t get us there. But what will get us there? And what’s stopping distributors from pursuing better futures thinking if the correlation to performance is so strong?

Some leaders admitted they simply don’t have a formal planning process, partially because doing futures work well takes considerable time and effort. Others felt that trying to ‘predict’ the future wasn’t worth the effort. And many distributors described their futures thinking efforts as ad-hoc at best.

Overall, what we heard is that distributors want to plan better and become more sophisticated navigators of uncertainty. But inconsistent tools, unclear ownership, imprecise language, and competing short-term pressures get in the way.

This struggle is exactly what our new research is meant to address.

Why Strategic Foresight? Why Now?

The world distributors operate in today is defined by converging disruptions:

  • AI and automation are transforming how value is created and delivered.
  • Talent shortages, generational change, and succession risks are reshaping labour markets and firm leadership.
  • Climate impacts, trade policy shifts, and supply chain volatility are increasing operational risk.
  • Competitors are no longer just traditional distributors, but manufacturers, upstarts, and new entrants from other sectors.

In this kind of environment, it’s no longer enough to fine-tune last year’s plan. Strategy needs to be more dynamic. That’s where strategic foresight comes in.

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Foresight isn’t about predicting the future. It’s a way to explore multiple plausible futures, map the forces driving them, and stress-test today’s strategies against what might happen next. It’s about being ready for what’s plausible – not placing bets on what’s most likely or predictable.

Our forthcoming research seeks to do futures thinking and release the results as a report for distributors to use – not just read – in their planning efforts. Our work included robust and rigorous methods from the field of strategic foresight:

  1. Conducting a horizon scan of the most significant social, technological, economic, and environmental shifts reshaping the sector.
  2. Identifying two of the most critical uncertainties that surfaced:
    • Will investment in innovation accelerate or slow?
    • Will the global economy remain integrated or fragment into regional segments?
  1. Using these uncertainties to construct four plausible scenarios for the year 2035.

Each scenario represents a different future operating environment for distributors that is distinct, detailed, and grounded in current signals from our research. Our goal wasn’t to favor one future, but to help leadership teams prepare for a range of plausible futures.

We chose 2035 – a ten-year horizon – because it requires imagination and provocation. And in a moment where many distribution leaders feel boxed in by near-term constraints, today’s headlines, and this quarter’s budget, imagination is a strategic asset.

What the Rest of this Series Will Cover

This is the first in a four-part series that brings our strategic foresight research to life:

If you’re a distribution leader who wants to regain strategic confidence in today’s environment – or ensure your next move doesn’t end like General Sedgwick’s – you’re in the right place.

Next Up: The Forces Reshaping Distribution to 2035

In the next installment of this series, we break down the shifts already underway and what they signal for the road ahead. See Part 2 here.

Want the full report when it’s ready? Sign up here to get notified of our upcoming June 25 webcast and research release.

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