• Company executives are judged — fairly or not — on how they acted and what moves they made before the pandemic.
• A company’s success is often tied to how steady its leaders are guiding it through the crisis.
• Leadership will be put to the test beyond COVID-19 as the labor shortage deepens.
COVID-19 caused an inflection point for wholesale distribution, and the companies that are emerging the strongest are likely guided by steady leadership. When MDM interviewed distribution executives for our 2022 Trends survey, we found that how CEOs, presidents, general managers and even sales VPs manage their teams is just as important as — if not more important than — how the company navigates supply chain congestion, shifting customer demands or state-mandated lockdowns.
One key: Leaning on fellow leaders to learn best practices for communicating with staff or implementing new HR rules. The industry is built on collaboration, even among competitors, and despite the dearth of in-person gatherings, such as association conferences, executives are finding ways to network and share both what is and isn’t working. No matter how they are getting it done, distributors are finding a way to guide their companies through what was (and still is) the most disruptive incident in our lifetimes. Here are some trends about leadership that distribution executives shared with us.
More than a few distributors use sports metaphors when describing how they “coached” their teams through COVID-19. For Mike Meier, president and CEO of Meier Supply Co. Inc., a Conklin, New York-based HVACR wholesaler, that sport is, naturally, hockey. “For me, it’s about not looking at where the puck is now but understanding where the puck is going,” Meier says. “We spend a lot of time networking with other distributors in our industry, sharing best practices. Over the last 18 months, leadership has been critical, especially when COVID-19 was starting, but even now because it’s hanging around. Once a month, we have an ‘all-hands’ meeting for our employees. Communication is so critical because you need to connect with people, and that’s especially important to us because we’re a people business. Our employees come first, and they need a calming voice telling them everything’s going to be OK.”
Mark Bray, president, ACR Supply, says leadership took on special meaning during COVID. Guiding a company was about much more than growing the top line.
“Flexibility and empathy have been some of the most important leadership characteristics needed over the past 18 months as we’ve navigated the pandemic,” he says. “Many people have been out of work for COVID diagnosis or related symptoms, direct exposure quarantining, child care challenges, general fear or anxiety, etc. We’ve had to figure out how to both care for our team and work differently at the same time. One of the biggest changes made was the institution of a new work-from-home policy for certain roles in our company. The world around us has proven that many administrative, sales and support roles can be done remotely. This has changed our mindset about the need to have everyone report to the office every day, so going forward, we’re letting people have the benefit of working remotely two days per week — or 100% remote in special circumstances. It will probably be a long time before we see the effects of the pandemic go away. Leaders will need to continue staying positive, being flexible, and showing empathy to their team.
How strong was pre-pandemic leadership?
To keep with the sports metaphors, it’s easy to play Monday morning quarterback when looking at how companies went into the pandemic — e.g., did they have e-commerce in place or was their sales model already updated? — but COVID-19 clearly separates the prepared from the unprepared.
The companies that, say, implemented e-commerce well before March 2020 were better suited to pivot to curbside pickup when quarantines and lockdowns first prevented in-person selling. Those that didn’t found themselves scrambling as five years of digital transformation took place in the last 18 months. “We were very lucky that we had an executive leadership team that looked into the future and saw digital transformation as something that was necessary,” says Michael Butera, director, digital marketing, Steiner Electric Co. “We started that well before the pandemic, which obviously nobody saw coming. From what I’m hearing, other distributors that are now trying to go through this are struggling. It’s not only a point of catching up, but it’s hard to find digital talent these days.”
Leadership amid a labor shortage
Butera’s point leads right into the next important issue that distributor CEOs are facing — the labor shortage that is putting executives across all industries to the test. The nationwide truck driver shortage is well-publicized, but companies are having trouble filling positions that range from the warehouse on up. That means getting creative, says Meier. “To combat that, we’re embarking on two things,” he says. “One, we’re lining up an internal talent development program, which is a three-year leadership and business acumen program to develop our people and develop more leaders. We’re setting up career paths for them because the younger generation wants to see a path.
“Two, we’re spending more resources on recruitment. We just hired a video production company to come up with an awesome recruitment video. The idea is to get anyone looking at our website to say, ‘Wow, I want to work for that company.’ We’re doing these things because the labor issue isn’t going away.”
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