Don’t Let Turbulence Go to Waste in 2020 - Modern Distribution Management

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Don’t Let Turbulence Go to Waste in 2020

Theres a quote about not letting a good crisis go to waste; it can provide an opportunity to leverage whatever disruption is in play to address other issues in addition to the main event. Thats a great mindset to think about 2020.
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There’s a quote about not letting a good crisis go to waste; it can provide an opportunity to leverage whatever disruption is in play to address other issues in addition to the main event. That’s a great mindset to think about 2020. Too many salespeople and executives use the excuse of a market downturn to justify lack of performance. It happens in every business cycle.

My personal view is that the likelihood of a recession in 2020 is slim based on the latest wholesale market data we track (through August), despite what much of the media is likely to amplify around industrial production, especially heading into an historically contentious presidential election year. There is no question that a probable trough is forming up for the first part of the coming year, as the manufacturing sector has weakened in the last half of this year in response to tariffs, trade wars and a more developed global downturn. But the data today indicate a slowdown that is not a surprise. Beware the noise that interferes with sound business planning and use it to gain competitive advantage in 2020.

Market share is gained on the shoulders of the business cycle. There are many actions and strategies distributors and suppliers can take to position most effectively in 2020.

I’ll touch on a few here, but you can get a more in-depth discussion in the free (and free-wheeling) webcast that Mike Marks of Indian River Consulting Group and I are holding Thursday, Nov. 14.

Our core theme is that 2020, for the reasons above, will offer plenty of noise and clutter that typically send many businesses into lockdown mode until the dust clears. But companies are innovating to gain advantage over competitors that are trying to avoid risk and incrementally refine their models. As in any downturn, those who proactively manage their cash conversion cycles can invest in defined-risk moves with high potential impacts. Mike and I outline what innovation looks like for 2020 and beyond. The moving target today is how digital and a rapidly changing workforce are reshaping the core business, sales and channel models in distribution that are under attack from all directions.

We’re quickly moving to a more complex channel network where Amazon Business becomes less of a monolithic threat, as alternate digital platforms and marketplaces emerge for distributors and suppliers to reconfigure their unique market power. I’m not discounting the fundamental competitive threat Amazon continues to present, but I believe distributors in 2020 have more tools and opportunities to respond, defend and create deeper value.

There’s opportunity in 2020 for those already disrupting their company’s comfort zones to redefine the value proposition. Leaders are getting traction from digital, analytics and how they manage talent more effectively than their competitors. Embrace the discomfort that 2020 presents to innovate your model… before your competitors do it first. Please consider using the Nov. 14 webcast discussion and slides with your leadership team to review your current playbook for 2020.

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