Friday, November 25, 2005

Volume 14 - 'Consultative' selling within the Contract Door Hardware Distributor Market

During my last three years with the Amweld/WWH companies, I had the pleasure of taking on two very special challenges:

The first, was the creation of an Architectural Door Hardware Company within the framework of Amweld Building Products Inc. As you can see by reading my blog posts, I am now in the throws of repeating this very task as I, in conjunction with a few other Founding Members, who will be joining me, continue to create my own company, Independence2. The various topics related to start-up businesses and the Door Hardware Industry, form a great deal of my previous blog postings, so I invite you to go back and catch-up with past volumes that, hopefully, will help you in whatever venture you may be part of or you may be contemplating starting.

The second special assignment involves, what I call, 'consultative selling' which consists of a very special group of clients, and this is the main topic of this blog volume. The basis of this topic is the privilege I had in working very closely with six distinguished Contract Door Hardware Distributors, all being different in size, organizational structure, and business philosophy. I created a program called the 'Inner Circle'. The basic structure was simple, these selected customers permitted me a 'peak under their tent' of their respective companies, in return for a Business Process Report, consisting of an oral presentation accompanied with a detailed written report on what I witnessed, both the good and the bad. These Business Process Reports contained summaries of the data I witnessed personally, along with improvement suggestions. These Business Process Reports were drawn from various personal resources and my years of experience and provided in-depth analysis free of charge, of any kind, period. They saved thousands of dollars in Change Management, Sigma Six, and Quality Improvement Consulting fees. This is uniquely valuable for all Distributors, but even more so for the Distributors, where the business model consists of sole ownership structures, family businesses, or small and mid-size corporations, since in general these operations have limited finances available to invest in high-end outside consulting services and their related hundred thousand dollar fees. In case you read this and think, “okay, I just need to go higher a Consultant”, let me state this, there are few within the Door Hardware Industry that can boast extensive years of experience within this specific Door Hardware Market in conjunction with the rare relationships with Distributors that have taught me the personal insights into the Contract Door Hardware Distribution business I have witnessed.

In the final analysis, the experiment with my creation of the 'Inner Circle' concept had the following successful goal: Enhance relationships with a select tier group of Amweld Distributor Accounts by sharing proven techniques and management "Best Practices", in order to empower growth driven entrepreneur Distributors to seek and achieve a measurably higher growth and profitability rate. The overall Sales strategy was simply a supplement to Amweld's Sales and Marketing by offering to share existing accounts the proven “Best Practices” that I have successfully implemented over my years within the industry and which I have seen time and again provide results.

The actual Business Process Review started with an 'Assessment' and ended with a thorough 'Evaluation'. The broad stroke subject matter covered Sales & Marketing, Operations, Financial Management and Information Technology with specifics to the industry ranging from estimating, bidding , selling , vendor pricing, procurement, value engineering and change orders. In some cases, it carried over to in-depth discussions on merger and acquisitions, contract and job file administration, financial reporting & planning after-market expansion.

This successful experiment was an example of ‘consultative selling' using knowledge share of case study examples redefining a door, frame and hardware distributor in a manner geared toward sales growth and profitability, for that distributor, recognizing his uniqueness in a particular marketplace. It is not often that an entrepreneurial company can have the opportunity to affect the reshuffle of the elements of a major traditional industry on a geographical enhanced scaled openings industry but with the aid of techniques utilized with the 'Inner circle', in this experiment, our new company, Independence2, will use this a direct selling tool in the years to come. In an industry characterized by brand name and quality of product upgrading with generally poor service standards and little respect for distributors, Independence2 will, through a respect for and commitment to its distributors, effect a change that will affect practices for the new building and after-market end users, architects, contractors, facility managers commercial and industrial building owners.

Monday, November 07, 2005

Volume 13 - Importation of Goods - Trade Imbalance - Why and How?

There was a time, not long ago, within the early 60's that we as Americans noticed products, of various sorts, being made in Japan, Korea and other Asian countries reaching our shores and stores. 'Not impressed' would be an understatement as the 'bottom of the food chain' seemed to be their customer base with emphasis on the word 'cheap' both in price and quality. For example, the 1963 Honda was small, spartan, and certainly didn't fit into the realm of American muscle cars of this period. Although 'three swings for a dollar' with a baseball bat or sledgehammer onto this Japanese car, at more county fairs, with U.A.W. sponsorship protesting importation, raised more money for local charities than the Red Cross in that time period.

It didn't take very long however, about two decades or so, and this automobile manufacturer had captured 10% of the automobile market share and winning 'quality' awards on a yearly basis. And, today, we have more automobile manufacturers globally than we have candy companies with market share still progressing toward foreign manufacturers. Luckily for the U.S. economy 'they' are also spending billions of dollars building plants in this country. Examples abound of this importation phenomenon, in particular, with Asian manufacturing prowess involving every manufacturing type industry from clothing to cars to hardware to computers. The fastest growing economies in the world, so much so that their speed is effecting prices of steel, oil and essential natural resources.

Other than screaming about imports, decrying Washington DC's foreign policy and blaming others for the exodus of manufacturing, the implosion of imports, and decades late discussions concerning global economies, did you ever stop to ask why and how this phenomenon has occurred?

I have a theory. This theory states that there is presently an inverse relationship between the rapidly increasing importance of other world regions to the economic prosperity of the United States and how much our present primary and secondary educational system compares and competes with the world outside our borders. A sub-theory, directly related to present business, states that a steady decline in research and development within our small to medium size companies due to corporate focus on 'top-line' numbers has stagnated our manufacturing abilities and our poor showing in the market place. And, although I will argue the above statement concerning the downgrading of R & D to be absolutely correct, the real problem is actually more complex and more difficult to solve.

Our educational system pales in comparison to high achieving countries. Our educational system has stopped being competitive. Our educational system and its non-competitive mentality is root cause for our inability to be a manufacturing leader in today's global economy. Our primary and secondary schools are controlled by thousands of local 'boards of education' who are then overseen by State Boards and other governing bodies. Anyone, without any educational qualification, can be publicly elected to a school board. This entire system is full of non-productive and unaccountable bureaucracy. Our teachers, within primary and secondary education, are poorly paid and, unfortunately, most don't deserve anything more. Their standards are minimal; their teaching abilities are sedentary; their ill-prepared to help students close the international knowledge gap; and, they have no accountability other than to a school administration, a localized school board, and a union or association who simply have no understanding of what it takes to succeed in today's competitive world. Our high school football, basketball and baseball teams, both boys and girls, are world class; too bad our educational system isn't. Our higher educational institutions are still world class loaded with foreign students desiring the best education in the world in the areas of business, engineering and medicine while American students pursue non-business, non-science and non-engineering type curriculums.

In the past 10 years, 1994-2004 the population growth rate for youth ages 5-19 was higher in the United States than in Canada, France, Germany, Italy, Russia, the UK and Japan. Only 65% of U. S. children ages 3 to 5 were enrolled in center-based preprimary and primary education in 2001, a rate that was lower than the rates of all G8 countries with the exception of Canada. Yet in the same year almost 25% of U.S. 18 to 29 year olds were enrolled in higher education, the highest enrollment rate among those same countries. And of that number, only 7% in the general field of engineering, manufacturing and construction, according to the National Center for Education Statistics. Another example of this up-side-down system is the language instruction does not reflect today's realities. Over one million students in U.S. schools study French, a language spoken by 80 million people with fewer than 40,000 students that study Chinese, a language spoken by 1.3 billion people. The statistics available simply tell the tell.

It isn't a question of expenditures per student anymore than it is inner-city versus suburban curriculum or 'red states' versus 'blue states'. Its a fundamental organizational development problem that needs total revision starting with the local boards of education, the accountability of teachers, curriculums reflecting world importance, involvement of parents and implementation of standards without exception.

You can build walls around this country and tout protectionism, decry the global economy, and wish it was the decade of the 70's, but it isn't. It's the 21st century; it's the Global age; so, stop whining about the Global economy, deminishing manufacturing and resurgence of foreign countries and start implementing corrective action, acknowledging the real world, and, just possibly, we can regain world prominence, even on a higher level, through an educated workforce with a productive competitive outlook.