3 Risks of Management Status Quo - Modern Distribution Management

Log In

3 Risks of Management Status Quo

Why you should update your management style as your business grows.

The behaviors that make the CEOs of small, entrepreneurial distributors effective – a focus on cash, strong risk aversion, a hands-on management style and, usually, a dislike of change – can become less effective as businesses grow.

If you want to maintain the current size of your business, there's nothing wrong with a "lifestyle" approach to management. But if you want your business to grow beyond your own contributions, you may want to transition to professional management.

Here are three things that can go wrong when you don’t transition your management style as your company grows:

  1. Decisions take longer to make and are no longer guided by reality if you micromanage your business. As your company grows, it will accumulate a team of increasingly specialized employees who will ultimately understand their areas of responsibility more intimately than you do. And by forcing subordinates to run everything by you, you drag out decision-making, leading to frustrated employees and causing you to miss the boat on opportunities that require swift action.
  2. Risk and investment are avoided, stifling growth. The strategies that help a new business get off the ground are different than those required for continued growth. If you maintain the same cash-obsessed, risk-averse, reactive mindset that helped you start your business, you probably won’t invest time and resources in endeavors that will yield a return down the road.
  3. Innovation becomes impossible when you approach decision-making with a "this is the way we've always done it" attitude. When you don’t allow your employees to experiment with new ideas, your business stagnates, making it harder to get ahead of the competition or to adapt to new market challenges.

To learn more about what it means to transition to a professionally managed business, and how it can help you increase your company's value, read Crossing the Chasm, my latest article in MDM Premium.

Mike Marks is managing partner of Indian River Consulting Group and specializes in helping distributors and manufacturers accurately diagnose problems and identify risk-bound alternatives, so they can take their next steps confidently. Call IRCG at 321-956-8617 or visit ircg.com.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.