While a lot of attention has been on Washington D.C. in recent months, politics wasn't the top point of discussion at the Power Transmission Distributors Association's 2011 Industry Summit in Washington. Instead, with an uncertain economy and continued consolidation, most of the attention was paid to change: where is the industry at and where is it going – and how do distributors and manufacturers best "Capitolize on Change"?

"Let's face it, there's been nothing but change over the last few years," said David Mayer, PTDA president and vice president of marketing for Kaman Industrial Technologies Corp., Windsor, CT. "And as strong as we are, there are threats that we need to face."

Mayer highlighted some key industry shifts that impact companies within the channel and the association's role in the channel, starting with consolidation. Merger and acquisition activity continues to change where companies do business and with whom, he said. And it's a trend that will likely continue.

Other concerns: increased diversity of competition and the economic and market environment. "It's all changed very dramatically," he said.

The secret to success: Don't let uncertainty keep you from acting. Alison Levine, a veteran mountain climber & businesswoman, emphasized this message during her keynote address. "Fear is OK; it's complacency that will kill you," she said. "Fear keeps you on your toes and aware of everything around you …

"Once you stop paying attention to your environment, you can't react to shifting conditions."

In Levine's address, "Ascending from Summit to Summit", she focused on lessons she learned from climbing Mt. Everest that could be applied to the business world.  From choosing the best team – "It doesn't do you any good to be high up on Everest or any mountain in the world with the best climbers if they don't care about the team." – to learning from failures, Levine tackled important elements of business – and mountain climbing – planning and execution.

M&A Trends

One of the biggest shifts occurring within the industry right now is consolidation, said Jay Greyson, principal at Supply Chain Equity Partners and co-founder of Vetus Partners. "No matter who you are, there's a lot of M&A going on," he said during the panel discussion on the effect of mergers and acquisitions on the distribution channel. "It's happening with you, or it's happening around you."

The panel, which included distributors and manufacturers, focused on the impact of m&a on the channel, as opposed to individual deals, highlighting lessons the panel members learned from their own experience.

Several questions come to mind when an acquisition or merger is announced, said Chris Bursack, director of marketing at Industrial Supply Co., Plymouth, MN. "The first thing I want to know is what kind of disruptions will occur," he said. "And that's followed by what's the channel going to look like?"

Any time a company is bought, it has the potential to change the relationship between other distributors and their suppliers, Bursack said, because it can impact who carries what product and who receives what kind of support from the manufacturers.

As a result, it's important to keep your eye on the relationships you already have, said Ed Ralston, executive vice president at Baldor Electric Company, Fort Smith, AK.

But it's also important to not "stake your entire career on a single relationship," cautioned Steve Smidler, president, Kaman Industrial Technologies. "With any acquisition, there will always be people-related changes."

Finding that balance between fostering existing relationships and maintaining a healthy diversity is key to success in the ever changing channel.

That balance is also necessary when discussing brands in the marketplace, said George Rizza, president, Rossi Gear Motor Division, Habasit America, Suwanee, GA. You may want to create a "common family brand," he says, but you may lose acceptance if you phase out a popular brand to do so.

Everyone is impacted by mergers and acquisitions in their channel, Greyson says. But it's important to understand what's happening and why in order to adapt to the changing marketplace.

Economic Outlook

Another hot topic at the 2011 conference was the economy and the outlook for 2012. The U.S. will continue to be in "recovery mode" through mid-2013, said Alan Beaulieu, of the Institute for Trend Research, though it may be at a slower pace that what is currently being seen.

"But it's important to keep this in mind: a slow-down is not a recession," he said.

Beaulieu emphasized that the persistent fear throughout the country is in many ways unfounded. "Total industry is at its best point in 35 months," he said. "Where is the fear coming from?"

Part of the problem is that people are looking at the wrong indicators, he said. The stock market is a notoriously poor indicator of economic trends – "It's about as good as flipping a coin," he said – but people still place a lot of importance on it when trying to plan.

As for fears of a double-dip recession? It's not likely to happen, Beaulieu says. "There will be another recession at some point," he said. "The economy is cyclical, but it's not going to be for a few years."