“Your competitors are afraid to change,” Dirk Beveridge told the National Fastener Distributors Association. “If you are focusing on your competition you are waiting for the competition to do something rather than pioneering yourself.”
In this “Age of Disruption” distributors need to innovate and “experiment without fear,” the consultant emphasized in a presentation on innovation.
“Develop a level of furry with the status quo,” Beveridge advised. Don’t be “trapped in a world of sameness.”
Beveridge cited WD-40 – a product in most U.S. households today. The Rocket Chemical Company started with a staff of three in 1953 to develop rust-prevention solvents for aerospace. It took the company 40 tries to develop a working water displacing formula and the result was accordingly named WD-40.
“Does your company have the culture to fail 39 times?” Beveridge asked.
You need to “experiment without fear,” he added.
One employee at Lely – a farm equipment company – thought dairy farming could be better than one of the worst-rated jobs. Consequently, Lely technology today does everything from robots feeding cows to milking with lasers separating according to fat content.
Thanks to that Lely employee starting changes, today dairy farmers can go enjoy a football game instead of staying behind milking cows, Beveridge observed.
“Companies don’t innovate, their people do,” Beveridge declared. That puts an importance on hiring.
Employees who consider themselves “entitled” don’t innovate. Entitled employees feel they are owed vs. they need to earn, they are static rather than growing and seek to preserve vs. transform, Beveridge explained.
“You want employees with an experimental mindset,” he advised.
And you want to foster a “value culture” instead of an “entitled culture.”
- To innovate, start by asking, “What makes us special?” Innovation is “leading your customer to a better future for which they are willing and able to reward you,” Beveridge explained.
- Think of the product and price being 40% of the purchase and a 60% majority being the distributor’s “value added.”
- Distributors especially need to innovate because power has been transferred to customers and end users. Your traditional customers have “alternative channels with more ways of sourcing.” Twenty-percent of customers don’t even want to see a salesperson.
- Beveridge noted there are compressed margins throughout distribution due to Amazon, direct buying and other sources.
“Distribution as we know it is dead,” Beveridge declared.
You need to be thinking about what is “relevant, sustainable and profitable.”
- Only 30% of companies survive into a second generation and 12% into a third.
The annual Apple conference has invited from 10-year-olds to 82-year-olds, with ages 13-17 dominating.
“People who don’t know what a bolt is are rethinking fastener distribution,” Beveridge said of the Apple types. Eighteen-year-old kids are disrupting industries.
It is part of a “generational shift” toward “disruptive technology,” Beveridge said.
“We cannot be pulled back into yesterday,” Beveridge declared. “Think about what is next.” Web: nfda-fastener.org or dirkbeveridge.com
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