Despite some distributors reporting strong or record-breaking business to wrap up 2022, the threat of a potential economic slowdown promises to make 2023 a volatile year for many industries. Just as they learned to do during the height of the COVID-19 pandemic, industrial distributors and manufacturers may need to hone in on a few particular areas if they want to compete and grow over the rest of the year.
During the latest MDM QuickTake podcast, CEO Tom Gale and Indian River Consulting Group’s Founding Partner Mike Marks discussed what life could be like for distributors as they traverse 2023, with a specific focus on continued transformation. And for companies that have already started their digital evolutions, the gap between them and those that are still talking about it will likely become even larger in 2023.
“Anytime there’s a recession, nobody’s going to start to do any kind of major innovation — they’re hunkering down,” Marks said on the 12-minute podcast. “And so, that gap between the innovators and the laggards is going to get bigger and bigger. When the market comes back, it’s going to be even more painful for the laggards.”
Gale and Marks pointed to three key areas that companies may want to emphasize as they navigate 2023: talent inertia, artificial intelligence and culture.
Talent acquisition and retention continues to be a battleground for distributors. With low unemployment and myriad job openings across industries, 2023 could yield an even more competitive industrial labor market than companies saw in 2022. And that means the onus is on distributors to make their workplaces desirable, Mark said.
“The companies that are doing really well have pretty much thrown out their employee handbooks, and and they’re treating people as people,” he said. “So, you can say, ‘I don’t like millennials, I don’t like Gen Z, and they don’t want to work.’ But you can talk about all you want. You get the talent to actually capture, retain the customer. So, get rid of the plateaued execs, start to figure out what you’re going to do so that you can actually be a good place to work. And if you’re the CEO, and you’re the owner … nobody’s ever going to tell you what they really think about the company. So, there’s all kinds of things people can do to get better, but they have to decide to do the work.”
On the subject of artificial intelligence, advancements that have sprung up over the past month — from Google, Microsoft and the instantly infamous ChatGPT — could produce long-term or permanent changes to how businesses operate, Mark said. It’s another sign that industrial companies need to be proactive in how they evolve digitally.
“I think people need to be looking at this digital transition,” Marks said. “And if you haven’t started, boy, you’re going to be really hard-pressed if you lose a year. Because you have a tough market trying to get back. It’s like, you’ll recognize it, but if you’re so far behind, how can you catch up?”
Listen to the full podcast episode via the audio player above, and check out our full library of MDM Podcasts here.