Workers in distribution don’t want to be viewed as “assets.” They want to be seen as humans, with dreams, goals and potential.
Studies have shown that customer engagement rises as employee satisfaction improves. Happier, more fulfilled employees are more productive and effective. In short, more fulfilled employees = greater profits.
In this interview, Dirk Beveridge, Executive Producer of the We Supply America tour (season two launched this week), shares why distributors must adopt new ways of leading their companies to build a sustainable business. He believes distributors have a unique opportunity to bring deeper meaning and purpose to their organizations to create relevancy in the face of disruption.
Distribution Strategy Group: In your opinion, there is a need for innovation in distribution. Are perceptions among distributors beginning to shift towards this realization as well?
Dirk Beveridge: Without question. When we did our research project with NAW, the data showed that roughly 85% of distribution leaders believed that the pace of change in their business was too slow, and 70% believed they were using outdated business models. So the need for transformation and innovation has been heightened.
I think the pandemic proved that we can and do change when necessary. The way distributors pivoted during the pandemic was truly heroic. First, we focused on our people and ensured that their health was taken care of mentally and physically. Then, after that, we took care of our business. We were able to do that because the way we had to pivot and solve problems on the spot is what we do every day.
DSG: Can you tell us about your “We Supply America” tour and how it informed your perceptions of leadership?
Beveridge: I was really influenced by what I did last summer. We are part of a $7 trillion economic engine, the third-largest on the planet. The 30,000 distributors in this country have created six million jobs. I find that to be very noble. Distribution, in my mind, is the backbone of this country.
I think back to when we were first told we had “two weeks to flatten the curve.” As we entered the second year (of COVID), I had to get out of the office. So, I bought an RV, and we wrapped it with the theme, “We Supply America.” I went across the country to champion the noble calling of distribution.
Over those 97 days, 35 states and 34 different distributors, I got to meet, talk to, learn from and listen to hundreds of professionals throughout distribution, from warehouse associates to C-suite executives and everyone in between. It blessed me with a unique perspective that cannot be had through online surveys and research. It gave me the opportunity to see firsthand where the work is being done and how things are changing.
There are a lot of lessons we will continue to share, but there are two overall premises that I would love to explore today.
No. 1 is that the very nature of leadership is changing more rapidly than most of us realize.
The second is that the human element is going to be prioritized in the future.
DSG: How is the nature of leadership changing?
Beveridge: We’re in the midst of a research project to either prove or disprove that premise. So far, we’ve discovered that 77% of distributors believe that leadership is changing.
The futurist Alvin Toffler said that the illiterate of the 21st Century will not be those who don’t know how to read and write. Rather, the illiterate of the 21st Century will be those who don’t know how to learn, unlearn and relearn. I think about that quote in the context of leadership on the other side of the pandemic. At its surface, the illiterate leaders will be those who don’t know how to unlearn and relearn.
One of the questions we asked in our survey is, “Do you believe there are some leadership qualities we relied on in the past that got us to where we are today?” and “Do you believe there are some leadership qualities we need to unlearn for a post-pandemic world?” Sixty-five percent of us believe there are qualities that got us to where we are today as leaders that we need to let go of and relearn going forward.
DSG: What are some of those qualities leaders should unlearn and relearn?
Beveridge: In our research, people have called out autocratic leadership, fear, control and micromanaging. Another issue is top-down unilateral decision-making without getting buy-in from the organization.
There are four stages of leadership in this post-pandemic world: controlling, managing, leading and what I call “the noble calling of leadership.” There is a need for vision, strategy and greater purpose. One disruptive force that we’re going to have to focus on as leaders is this multi-generational change that’s happening. Values are evolving as a result of those changes.
What is coming out loud and clear from this research is the realization that Baby Boomers are retiring early due to the pandemic. This shift is happening faster than most of us had planned for. We have to understand what that means, not only from the number of employees we need to fill jobs but also from a cultural perspective. As these new generations are coming in, their expectations, demands and values are different from those leaving.
Leaders in distribution today believe that 49% of distributors are leading in the “managing” phase, 41% are leading in the “leading” phase, and only 6% are in the “noble calling” phase. When we asked distributors what they expect leadership will be five years from now, there was a 41 percentage-point shift in that “noble calling” phase. It went from 6% to 47%. What is expected of leaders is shifting rapidly.
DSG: More and more employees are transitioning to remote work. How do you cultivate culture in a remote environment?
Beveridge: Three things come to mind: vision, purpose and communication. Those aren’t the answer, but they are part of the conversation we need to have in this remote environment. We’re going to need to be aligned around a common cause that holds us together. I think vision is important to that purpose. There’s got to be real meaning in the work that people do. We’re also going to have to completely rethink what strategic communication means to leadership in this world.
DSG: What are the top concerns keeping distributors up at night?
Beveridge: Well, obviously, there are supply chain issues, inflation and the Great Resignation. Those are the headline things keeping everybody up at night. But, another thing I’m finding in my research is the issue of culture and how we can create an aligned team in this new world. I think culture is owned by leadership, but the rubber really meets the road at that middle management level. That’s where it’s executed every day.
DSG: Take us through your thoughts on the human element. How did your “We Supply America” tour affect your opinion on this?
Beveridge: I believe there’s an opportunity to change our mindsets around this topic. Stop and think about the term “human resources.” We need to shift our perspective and obliterate that term.
“Our people are our greatest assets.” We’ve all accepted that as a truism, but what are we saying there? The definition of an asset is a commodity that can be transferred at will and has a depreciation schedule. Our people shouldn’t depreciate – they should appreciate.
Our people are not our greatest assets. Our people, in my opinion, are human beings with dreams, goals and God-given potential. I believe leadership today is focused on developing the potential of their people, not as an asset but as a person.
There is an opportunity here for us to change that mindset throughout distribution.
We asked distributors about the human element in our research and found that 93% believe that the human element will play a more important role in the future. Great leaders believe in people more than they believe in themselves.
When I walked through those warehouses on the “We Supply America” tour, I stopped seeing products and shelving. I stopped seeing the buildings. Instead, what I saw in those distribution businesses, the backbone of this country, were platforms for our people’s personal and professional growth.
People want to fulfill their potential and to be given that opportunity. They don’t want a job; they want to grow and develop. So that’s our opportunity as we move forward.
DSG: There is something called the “loyalty effect,” which states that there is a virtuous relationship between employee and customer retention. As you start to improve one, the other moves, as well and results in higher net profit. What are your thoughts on that?
Beveridge: I have a premise. I don’t have quantitative data for this yet but think about what we just said: building dynamic, durable growth engines, and helping people fulfill their potential are platforms for our people’s professional and personal growth.
If we’re honest with each other, we, the collective, have done very well at growing and developing 20% of our workforce. So, for example, those in sales, in leadership, those who attend our association meetings and innovation summits, etc., we constantly train them and are very good at helping them develop. But, we’re not as good with the other 80% – the drivers, warehouse associates, and other people who get the job done.
This is where I believe there is a great opportunity to change our frame of reference to this platform for growing and developing people. When we do that, we focus not on growing 20% of our organization but on growing 100% of it.
We want to work to ensure distributors are the channel of choice; but for them to be the channel of choice, the business needs to thrive in every branch. For every branch to thrive, all six million distribution professionals need to thrive. We need to focus on leadership and the human element to thrive, and the “loyalty effect” tells us that the business results will follow when we do.