Grover: Treat Employees as Assets, Not Expenses - Modern Distribution Management

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Grover: Treat Employees as Assets, Not Expenses

The way leaders view their employees has strategic implications for the business.

Companies have different approaches toward leading and managing people. Brent Grover, the author of The Little Black Book of Strategic Planning for Distributors, says he has his own views regarding things like how much information to share with employees or how best to hold them accountable, "but I don’t have the data to support an opinion about these choices being strategic success factors. " A lot depends on company traditions and leaders' personalities.

"There is, however, one leadership decision that does seem to have strategic implications," he said: the way leaders view their employees. Some view employees as highly valuable assets worthy of continued investment, while some behave as though employees are "an operating cost that must be kept at a minimum," said Brent Grover, author of The Little Black Book of Strategic Planning for Distributors.

Employees do, of course, cost money. In The Little Black Book of Strategic Planning for Distributors, Grover estimates the cost of getting a new distributor salesperson to the point of being a profit generator at more than $150,000. But, he said, "if distributors capitalized these costs as one would a piece of production equipment – instead of writing if off as a current expense – that would be an asset on the balance sheet of at least $150,000 per salesperson."

Trained sales reps are valuable, and Grover recommends distributors treat them that way. "Our findings over many years of working with distributors, and examining the data from all sources, indicates that distributors with a smaller number of more highly compensated people do much better than firms with a larger number of lower-paid staff," he said. As a benefit of lower turnover, distributors who treat employees well have more experienced staff who make fewer errors. These distributors also enjoy lower training costs and greater customer satisfaction.

Distributor strategic planning often delves into sales force attraction, development and retention, so Grover provides a framework for determining the cost of recruiting and developing new sales reps in his recent book.

Visit the website for the book at or order your copy from MDM's online store.

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