This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
The distribution industry has seen a surge in discussions about leadership and culture. With an uneven economy, new threats of disruption and the continuation of a massive generational shift in distribution, exhibiting strong leadership is critical for any company that wants to prosper.
But how does a company measure strong leadership beyond stability and profitability? It begins with the top executive acting more as a CMO – chief morale officer – according to Dan Tinker, who was recently promoted to president and CEO at SRS Distribution, McKinney, TX, where he believes his new duties extend beyond improving the top and bottom lines.
“My job is to make 3,000 people want to come to work every day,” he says. “If that’s true, that will be much more meaningful than any strategy I could ever deploy to make more money or grow the company.”
Leaders must also carry themselves consistently, even in challenging times – such as during the Great Recession or, more recently, the sluggish period many distributors endured in the past 18 months – according to Henry Looney, president, United Central Industrial Supply, Bristol, TN.
“If (employees) see leadership scared, if they see in your eyes you’re scared, then it’s not going to be very good for them, so you have to have faith and confidence in what you’re doing,” he says. “You have to know that there’s an end result and that there’s light at the end of the tunnel, and that we’re going to get there and we’re going to be better as we come out of it.”
Companies are mirror images of their leaders, no matter if it’s a successful or struggling business, according to James Teat, president, Axcess Technology Source LLC, Carrollton, TX. This is especially apparent at family-owned companies that handed down leadership over the generations without much thought for who is taking over and why.
“If they’re on board the ship, they need to know where it’s headed, and that’s the job of the leaders and everything to set the course and maintain it,” Teat says. “So many third-generation businesses fail because they lose sight of what made the company great to begin with, and a lot of times they take things for granted. They’ve become privileged; they don’t get out and have a strong working relationship with the people that are in the warehouse or driving the trucks or in the sales field.”
Leadership has grown more critical for a company’s success because of the generational change. The U.S. workforce now is composed of boomers, Gen Xers and millennials – but distribution can still count members of the silent generation among its ranks. Being able to lead such a wide range of ages requires a balancing act of holding onto company traditions while also embracing new ones.
“One of the greatest challenges of leadership is how to encourage every generation to come together and work better together, to think differently and move ahead,” says John Allenbach, president, sales, AgoNow, Tulsa, OK.
Leadership is responsible for driving those changes, according to Ted Stark, president, Dalco Enterprises, New Brighton, MN. “Whether you like it or not, that’s where (change is) going to come from,” he says. “It is important for us as leaders, or whoever the leaders are and whatever age-bracket we’re in – and there are still a lot of distributors out there that are run by the founders that are in their 70s and 80s – to be aware of the generational differences and try to adapt as best you can.”
Strong leadership leads to a strong company culture, which, in turn, leads to stronger profitability, according to Stewart Strauss, president & CEO, Strauss Paper Co. Inc., Port Chester, NY. “We’re all moving the same boxes around,” he says, “so culture is one of the most important things because that’s why people stay.”
And strong leaders should always look to maintain a strong culture or get it back on track by doing what’s best for the company, such as addressing any underlying business problems and instilling leadership duties throughout a company’s ranks, according to Katie Powell, vice president, Munro Cos., Grand Junction, CO.
“There is nothing that’s going to drive a culture back on track if leadership isn’t driving it,” she says. “You’ve got your senior leadership and then middle management; you can find emerging leaders in your workforce who can lead from within. Recognizing those folks and how they’re behaving and why makes things better for everyone else. If your leadership isn’t focused on it, it’s amazing how quickly it can flip.”