Rick Schwartz was inducted as 2016 chairman of the National Association of Wholesaler-Distributors at its Executive Summit in January. The former Winsupply CEO, who now serves as chairman of the board, spoke with MDM Associate Editor Eric Smith earlier this month at the company’s annual meeting and vendor showcase about issues facing distributors and NAW’s goals for the year.
MDM: First, how is the soft economy affecting distribution and what should companies be doing to cope with it?
Rick Schwartz: Expense control and asset management are so fundamental to wholesaling but are so much more important in uncertain economic times. However, more challenging than ever is the need to simultaneously balance the costs and investments in future systems and technology to meet our customer’s needs. Critical to managing in a soft economy is having a good insight into short-term and long-term economic forecasts.
MDM: Why is talent acquisition and retention so challenging and what are some ways NAW is helping distributors develop initiatives to address this issue?
Schwartz: Recruiting and managing talent is one of the biggest challenges we face at Winsupply. Both due to changing culture and scarcity. Today’s young people entering the workforce don’t necessarily think of distribution as a viable career path. As an industry we can do more to show the benefits and opportunities that exist within distribution.
Also, the need to manage more technical team members effectively is challenging. The support NAW provides through their publications as well as new programs like the leadership training for aspiring distribution personnel provided in alliance with the Apollo Education Group and Western International University.
In addition, at the Executive Summit, Ben Casnocha, author of The Alliance: Managing Talent in the Networked Age, presented some very valuable new ideas on unique ways to structure work “tours” and make our jobs more exciting and challenging to the younger generation. Hearing his presentation alone was worth the time to attend.
NAW is helping distributors via presentations like the one by Casnocha; surveys on talent issues by the NAW Institute for Distribution Excellence; talent management articles in NAW SmartBrief; an alliance with Apollo Education Group/Western International University to provide leadership training for aspiring distribution company personnel; and Facing the Forces of Change, the NAW Institute’s landmark trends report, the latest edition of which will be published in November and will include talent management.
MDM: With today’s evolving customer demands, how critical is it for a distributor to develop an effective omnichannel strategy, and where should they begin?
Schwartz: I recently saw a quote from a CEO of a large company who said, “The only thing moving faster than technology is customer expectations.”
Winsupply is focused on making it easier for our customers to do business with us the way they want to do business with us. That means a seamless experience whether we’re serving a customer at one of our locations, over the phone or online. This is a big opportunity for distributors as our customer base begins to shift with an increasing number of millennials and the expectations that have been created in the retail space and through online providers like Amazon. We used to see a very clear demarcation between retail and wholesale, and today that line is blurring primarily because of the customer experience.
We have always said that our business is based on relationships, and it’s important for us to understand that the definition of a good customer relationship is evolving along with the expectations of the customer.
MDM: What are some hallmarks of a strong distribution leader and how does NAW make better leaders?
Schwartz: NAW makes distribution leaders better through a combination of networking opportunities and education – meetings, publications, webcasts, etc. NAW is in a unique position, since NAW represents the entire $5.4 trillion industry, to offer an entire array of networking opportunities where the best companies in one line of trade can network and share
ideas with the best of breed from other lines of trade.
MDM: What is NAW pushing for with its lobbying efforts to improve the political landscape for businesses? And what are some other issues distributors are facing in 2016 and how can NAW help?
Schwartz: NAW believes the most important role of government is to get out of the way so businesses can do what they do best – create jobs and grow the economy. Government doesn’t create jobs, the private sector does, and NAW fights for government policies that create the environment in which businesses can thrive.
We need comprehensive tax reform that treats all businesses equally. Reform which levels the playing field so that we no longer have some companies/industries paying effective tax rates in the single digits while industries like ours faces effective rates close to the statutory 35 percent rate.
We also fight hard to stop the regulatory assault. Analyses show that the cost to the economy of the regulatory burden in 2014 was more than $181 billion – that’s money that could have been put to much better use investing in our free enterprise system and our workers.
Candidly, no one expects a lot of big, bold legislative missions to be accomplished in a federal election year – they never are! – but NAW is on point making sure that bad legislation is relegated to the back burner and that we are primed to hit the ground running in January.
In the interim, NAW’s PAC seeks out and supports candidates for federal office who understand and support business-friendly policies and who can be counted on if elected to support free markets and the capitalist system.
MDM: What are NAW’s goals for 2016? Specifically, what does it hope to accomplish for member companies and the industry as a whole?
Schwartz: NAW’s highest goal is to maintain a pro-business majority in Congress.
MDM: And what are your goals in this role? What do you hope to accomplish and what do you hope to get out of the 2016 chairmanship both personally and professionally?
Schwartz: I am taking a leadership role in speaking out and helping NAW and our industry achieve a pro-business majority. I’m someone who has spent over 40 years in distribution and I’m extremely passionate about the promotion of free enterprise capitalism and encouraging earned success. Distribution provides that earned success for capable, hard-working individuals and I hope to further expand that conversation across the association and industry. At this point in my career, this is job No. 1. Winsupply has been successful for 60 years living this philosophy, and I look forward to discussing and debating it with other distributors in the hope that our entire industry continues to improve and prosper.
MDM: Why should a distribution executive consider joining NAW? What are the benefits that you’ve enjoyed as a NAW member?
Schwartz: NAW is a very special place where the best of the best from across the industry come together to share. For example, NAW gives Winsupply a great return on its investment because of the issues it addresses in Washington on behalf of the $5.4 trillion wholesale distribution industry. We as distributors should make sure that we have a strong voice in Washington, and NAW does that for us.
In addition, NAW provides Winsupply’s senior staff the opportunity to network and benchmark with other distributors with whom we do not compete. NAW attracts the best of the best for membership in NAW. We learn from the leaders in the distribution industry. At NAW distributors can meet with our peers that have similar responsibilities and experiences and share ideas with other non-competing large wholesaler-distributors. By going to the NAW events, Winsupply’s senior staff can hear about issues and opportunities that have already come to fruition in other industries that are going to hit our industry soon. So by attending we get to “look around the corner” and have an idea of issues that are coming and how to address them before they arrive in our industry. This saves the Winsupply team a great deal of time and money by being able to “peek around the corner.”
If we have a question or issue we are trying to solve we can get in touch with NAW and they will find a distributor that has already solved the problem or they can survey the industry for us to find out what others are doing about a specific issue. To know Winsupply has this resource available is invaluable.
In short, NAW is an organization with a high rate of return. NAW brings together the best of the best to solve issues and move our companies forward.