Joyce is the President of a $35 Mil multi-location distribution company. They utilize dashboard management so they know that their inventory turns, picking accuracy, order fill rates, average order size and other industry metrics are within acceptable ranges. The company participates in an industry buying group. They even get money from manufacturers to help fund their marketing. Joyce has been pleased that they have been gradually recovering from the downsizing that was forced on them in 2008/2009.
What do you think? Is the company positioned for growth or a plateau?
Although a vignette can never convey the whole story, there is enough information here to prompt some questions.
$35 Mil can become a comfortable size for a distribution company. The branches can usually be served by a single hub. By the time a distributor reaches that size, decisions have been made about order entry systems, EDI, bar coding, etc. The blend of commercial & residential, projects & products, and outside & inside sales has become well established.
So what would prompt Joyce and other executives in this business to consider taking this business to the next level? The second top cause of The Plateau Pattern™ is “no felt pain.” Ironically, these are the business leaders who get blind-sided because they can’t see that they are getting “behinder” and “behinder” with each passing day.
What are other companies doing with e-commerce that threatens the very existence of distribution companies like Joyce’s? Which Baby Boomer owned competitors are being sold, participating in roll ups, or becoming part of a larger industry consolidation? At what point will the bright, young, ambitious managers in Joyce’s company realize that she isn’t investing in growth, become bored, and start to look elsewhere? Which value-added services are other progressive distribution companies quietly developing and offering to Joyce’s customers?
Joyce may be comfortable and feel no pain now, but it is probably short lived.
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.