Role reversal for buyers and sellers
Doug Ramsdale discusses how to turn a business model into a model business in the post-superstore era
Like a lot of young people, I had no real idea what I wanted to do when I started out in life; or rather, I did know what I wanted, I just did not know how to get it!
I had curiosity I needed to satisfy; the world was a fascinating place – I wanted to see it; I wanted to make an impact, leave my mark; and oh, yes, flying around and staying in fancy hotels sounded great.
Not being blessed with a grandfather in the diplomatic service, or a doctorate in tropical medicine, and needing to put bread on my own meagre table, I got a job in ‘business’. I discovered that I had been entrusted with the responsibility to persuade and I soon realised that my efforts impacted the business in more ways than I ever imagined. I was the spark that lit thousands of investment, supply chain, and job creation fires.
Most of the decisions pivoted around the major variable, the non-quantifiable, the unpredictable; in other words the consumer, the ultimate customer. As the person closest, I played bigger and bigger parts in those decisions, and ultimately became trusted with the final say myself.
Evolution of the business model
Today, the industry is a stew of multi-syllabics – globalisation, consolidation, disintermediation and rationalisation. These describe processes; they depict consequences; they reflect the actions of people, and it’s those actions that I find truly revealing because of how much they have evolved over the last 20 years.
Under pressure to accomplish the most difficult of goals – growth without risk – businesses have recoiled from the unpredictable consumer and looked for ways to control the outcome of events. It boils down to two strategies – replication as the first, and if that doesn’t work, we’ll buy something and replicate that!
And were they successful? Absolutely, no doubt about it. Icons like McDonalds have taken the inexpensive ‘burger and fries’ onto the world stage. There’s a Home Depot in every strip mall, a Starbucks on every corner, a Staples truck in every parking space!
The mantra has become the "business model". And over 20 years or so, its success has been stunning, and made a lot of people very rich. It has spawned ideas that mesh seamlessly with the concept, and a new dictionary of business speak. It is all about management, the application of control, and the use of tools that give the appearance of control. Relationships are managed, traffic patterns are controlled, access is denied.
While this has been happening, I’ve witnessed a change that I find both puzzling and frighteningly symptomatic – salespeople are staying home and the buyers have hit the road!
This is not absolutely true of course, but if you study the budgets of major companies, distributors and manufacturers alike, you’ll see what I mean.
I’m certainly in favour of face-to-face communication and building personal relationships. But it seems absurd that while requiring suppliers to establish bases near the retailers’ corporate offices in Bentonville or Delray Beach, they are putting thousands of people in China, Thailand, Paris and Milan.
The point I’m making here is a simple one: The ‘business model’ that has been so successfully replicated started out as an idea. The idea embodied risk, and success demanded persuasive, even compelling selling. A great idea can be developed and milked for years. But eventually, it will run out of steam.
Tom Watson built IBM, but it was the orders that Ross Perot brought in that made it possible. Irwin Helford was surrounded by brilliant people, but it was his talent for persuading a prospect to pick up the ‘phone that spun the miracle that was Viking. The top sales award at Fellowes is named after Harry Fellowes, one of the founders who is legendary for turning family vacations into selling trips, stopping at every office supply store on the way.
If we are to flourish in the post-Superstore era, we need to embrace the ideas of risk, unpredictability and become drivers of change.
Here are a couple of thoughts:
• Look at your organisation and identify the "change makers", the people who mistrust the status quo and see something better.
• Give them license to thrill.
• Invest truly in new business! Plough more fields, sow more seeds!
• Don’t just manage customer relationships, juice ’em up.
• Speak to existing customers not just when you’ve got something to say, but when you have something they want to hear.
• Reward your stars. Remunerate your supporting cast.