The Perks of Investing in Culture First - Modern Distribution Management

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The Perks of Investing in Culture First

On MDM’s most recent webcast, Stellar Industrial Supply President and CEO John Wiborg outlined the importance of investing in a strong culture before exploring new technologies.

Investment is in the DNA of Tacoma, Washington-based industrial distributor Stellar Industrial Supply. The company has continually invested in new technologies ever since its founding in 1988 — but especially in the last few years, according to President and CEO John Wiborg.

“About five or six years ago, we started looking at the types of investments that we were going to have to make to be relevant to the kinds of customers we want to attract,” Wiborg said on the latest MDM Webcast, (re)Building the Future Distribution Model. “These investments were going to be pretty significant and take a level of sophistication and capital that would change the shape of the market in terms of cost of entry to be an effective player.”

As Stellar looked to implement new technologies in its business, it also sought to “effectively leverage technologies we’d already invested in that we were underutilizing,” Wiborg said.

On the webcast, which was hosted by MDM CEO Tom Gale and sponsored by Epicor — whose Prophet 21 ERP software Stellar uses — Wiborg outlined the technologies the company has deployed or upgraded in recent years.

These include a new pricing model, analytics engines, market data (“so we can understand where and how to deploy our people,” Wiborg said) and even cloud technology, which came in particularly useful when COVID-19 struck earlier this year.

“I heard some horror stories about rather large distributors in our space that had to go to a virtual environment, and they couldn’t even handle their accounts payable function because people couldn’t get in the office to pay the bills,” Wiborg said. “We’re lucky we weren’t one of those. We had most of our CSR team on a cloud version of Epicor Prophet 21 already. Epicor has a number of smaller distributors on their cloud version, but we’ve been on the bleeding edge as far as some of the larger companies working with them.”

For all the investments Stellar has made in technology over the years, it’s a longer-term investment — culture — that Wiborg credits for the company’s successes. Without it, these newfangled tools that help automate a business wouldn’t be nearly as effective.

“Some companies that are trying to just invest in technologies, if they don’t take a hard look at their culture and their willingness to change and adapt and learn and grow, I think they’re going to spend a lot of money and have a hard time getting ROI,” Wiborg said. “They need to get their people oriented around redeploying their talents, embracing the reality and the need of the technologies, and understanding the strategic positioning the companies are trying to do. When you get that part right, then making the investments is much easier and much less risky.”

Ways to Invest in Culture

But how does a company take a hard look at its culture or invest in its culture before investing in technology and analytics?

One, the leadership team needs to make sure every member of the organization embraces the company’s mission. Stellar has embraced 26 “fundamentals” that showcase the company’s values, and not only are those fundamentals displayed on the website, but employees include them in their email signatures.

Stellar employees learn early in their tenure about those fundamentals. Wiborg said that during the onboarding of a new hire, “we spend a lot of time on culture and how it relates to our mission, our vision and our business strategy.”

That approach is especially critical for Stellar — as it should be for any distributor — because the company’s mission is to be a service provider to its customers and help them grow.

“In a service business especially, you’ve got to have people that are engaged, that are looking to solve problems for customers, that are not trying to foist something on a customer just to make a sale,” Wiborg said. “We’re here to help customers thrive. Our team feels good about the work that we do to help customers be more profitable so they can invest in their business. The more we do that, the more we can invest in our business.”

Culture is also about collaboration. Companies whose employees work in silos aren’t likely to be touted for their great cultures. But businesses whose employees work together can accomplish anything.

“Our best success comes when we bring ourselves to the customer as a team working in conjunction with one another,” Wiborg said. “Sometimes we miss the mark, but mostly, when we collaborate with one another the way that we can, when we work as a team, we can do some tremendous things for customers.”

The bottom line, Wiborg said, is that the latest and greatest technology without a strong culture behind it will eventually become another unused tool on the shelf and a wasted investment.

“You can invest an awful lot of money in an awful lot of new shiny technology, and it either sits on the shelf or it gets marginally deployed and everybody ends up back to the tyranny of the status quo,” Wiborg said. “They just go back to the way they did their work before. Maybe they enter a few things in your CRM system, but they don’t mean it. If they’re not embracing it, if they don’t understand the why, then you’re not going to get the return. If you don’t get the return, you won’t be able to stay relevant to customers. Because of that, culture is core to everything we do.”

Click here to watch the webcast and learn much more about the role culture plays, plus other ways that distributors are rebuilding their models.

And join us for our next MDM Webcast, Why Order Management Automation is the Right Move Now, on October 8 at 1 p.m. EDT.

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