21st Century Professional Manufacturers Representatives

1
21st Century Professional Manufacturers
Representatives

• Building the Foundation
• CPMR 101

2
Objectives

• Build the foundation for 21st Century PMR
• Provide an overview of the concept of corporate
  culture
• Discuss the major trends reshaping the
  competitive landscape as well as ways to thrive
  in this hyper-competitve environment
• Provide a model and a profile of a 21st century
  Professional Manufacturers Representative.
• Introduce a handful of steps for getting started
  including a self-audit tool you can use to see
  where you stand.

3
Desired Outcomes

• We can declare victory if YOU
• Have a better understanding of the big picture
  trends that are transforming the world of
  business.
• Complete the Professional Manufacturers
  Representative Profile for your firm.
• Get a couple of ideas you can take home and
  implement.
• Leave challenged and energized to take your
  game to the next level.

4
Starting Agreements

• Change is needed change is inevitable!
• But who needs to change?
• Preaching to the choir
• Good to great.
• Be open.
• Turn off your auto-reject response.
• Provide a smorgasbord of ideas, examples and
  challenges.
• Invite you to try them on. If something fits,
  keep it. If it doesnt, leave it.
• Dont hate the messenger.

5
Exercise

• How would you describe your firm?
• If someone walked into your firm, what would they
  see?
• What is the dress code in your firm?
• Does your firm use special jargon or acronyms?
• What does all of this say about your firm?

6
Corporate Culture What is It?

• Textbook definition
• Corporate culture is the shared values and
  behavior that tie an organization together. It
  is the rules of the game the unseen meaning
  between the lines in the rule book. Culture is a
  way of doing things that is taken for granted.
  All organizations have a culture of their own.
• Eliot Jacques definition
• The customary or traditional ways of thinking and
  doing things, which are shared to a greater or
  lesser degree by all members of the organization
  and which new members must learn and accept in
  order to be accepted into the service of the
  firm.
• Street definition
• The way we do things around here.

7
Corproate Culture Where Does it Come From?

• Nature of the business you are in
• Industry you represent
• Geography
• Climate
• Population density and ethnic diversity
• Local economy
• Organizations history
• Company founders
• Senior management

8
Corporate Culture Key Dimensions

• Pervasiveness
• Degree to which the culture is widespread.
• Strength
• Amount of pressure the culture exerts on people.
• Direction
• Course the culture causes the organization to
  follow for example, positive or negative,
  adaptive or unadaptive.

9
Corporate Culture Attributes

• Universal
• Shared
• Learned
• Sub-cultures
• Official and unofficial
• Formal and informal
• Iceberg

10
Corporate Culture

• Visible Organization
• Business processes
• Management systems
• Policies and procedures
• Metrics -- which results you track
• Incentives -- what gets rewarded and who gets
  ahead
• Organizational structure and jobs/tasks

• Invisible Organization
• Norms, values, and beliefs
• Unwritten rules
• Political system
• Relationships and networks
• Informal leaders
• Informal reinforcement
• Mental models and shared meanings

11
Corporate Culture

• Competitive environment
• Vision, mission, and strategy
• Leadership actions
• Performance measures
• People practices
• Structure

• Climate
• Norms
• Beliefs
• Unwritten rules
• Values
• Symbols

• Behaviors
• Decisions
• Actions

Performance
12
Exercise

• How will your industry change over the next five
  years?
• What is the prognosis for you and your firm if
  you adopt a business-as-usual approach for the
  next five years?
• How will your firm have to change over the next
  five years?
• What are you doing about it?

13
Unprecedented Change

• Staggering rate of accelerating, unpredictable,
  and discontinuous changes.
• Trends historically took longer in coming than
  expected, but not any more!
• Less and less float time to get ready.

14
Whats Turning the World Upside Down
Flat World Effect
Innovate or else
Wal-Mart Effect
China Effect
15
The Wal-Mart Juggernaut

• Largest company in the history of the world
• Larger than Home Depot, Kroger, Target, Costco,
  Sears, and Kmart combined
• 1.6 million associates worldwide
• 3811 stores in the USA
• Largest retailer in USA, Mexico, Canada second
  largest in Britain
• 7.2 billion visitors per year

16
Wal-Mart Effect
17
Wal-Mart Effect

• Always low prices
• Looking for every penny of cost savings from
  packaging, design, materials, labor,
  transportation, stocking stores
• Re-shaping consumers shopping habits
• Suburbanization of shopping
• Consolidation of consumer products companies
• Jobs for Wal-Mart suppliers that offer low wages,
  miserly benefits, boring work, no respect, and no
  future

18
Wal-Mart Effect

• They had the lure of Wal-Mart volume. Once you
  get hooked on the volume, its like getting
  hooked on cocaine. Youve created a monster for
  yourself.
• Jim Wier, Former CEO, Snapper, Inc.

19
ChinaEffect
20
China Effect
21
China Effect

• Worlds fastest growing economy it may be the
  worlds largest as early as 2030.
• Low wage structure has made it the Factory to
  the World and a nation of commodity enterprises.
• But they dont really want to race us to the
  bottom
• Past ten years of the China Effect may NOT be a
  very good predictor of the next ten years

22
China Effect 2015

• Incredible entrepreneurial spirit driven by Why
  Not Us?
• Rapid-fire approach to RD will make it fertile
  ground for original products and services
• Chinas brain drain is becoming a brain gain
• High-quality management and transparent
  governance starting to count more
• Chinas overseas ambition especially as a
  catalyst for economic growth in emerging markets
  in the developing world

23
Flat World Effect

• The global playing field for business has been
  flattened.
• China, India, Russia, Eastern bloc countries and
  many more now have the same access to business
  opportunities as European and North American
  enterprises
• Due to ten forces that have re-shaped the world
  of business

24
Forces Flattening the World

• Fall of the Berlin Wall, victory of market
  capitalism and democracy.
• Emergence of Netscape and open access to the
  internet.
• Work flow software that allowed people to work
  together online.
• Open-sourcing, collaborative innovation of many
  people working in gifted communities.
• Y2K and outsourcing of software programming.
• Offshoring production.
• Supply chain management.
• Insourcing services.
• In-forming via online web search engines.
• Digital, mobile, virtual and personal
  accessibility

25
So Whats Next

• Theres good news and bad news.
• Past 25 years has only been the warm-up.
• Now we are going into the main event and by the
  main event I mean an era in which technology will
  literally transform every aspect of business,
  every aspect of life and every aspect of society.
  
• Carly Fiorina

26
The Squeeze is On!

• Era of customer power
• Commoditization of products and services
• Cost containment, spend reduction, and supply
  chain management

27
Implications for Reps

• These trends and the staggering rate of change
  will dramatically alter how Reps conduct business
  and how they add value.
• Dont believe that it will be the death of
  Manufacturers Representatives.
• Reps are survivors, but not all are going to
  survive.
• Success ? (E)

28
Whats the Antidote?

• Customer focus in all that you do
• Expand your range of possibilities.
• Anticipate and innovate.
• Connect and collaborate.
• Be professional.

29
Focus on the Customer and Add Value

• Always start with Whos the customer and what
  do they want?
• Make certain you contribute more than you cost.
• Make a real and perceived difference to your
  customer quantify your EVA -- economic value
  added.
• Profit-takers will be extinct.

30
Sales Driven or Customer Driven

• Sales Driven
• Inside-out thinking
• Doing something to the customer
• Quota driven
• Trying to be all things to all customers

• Customer Driven
• Outside-in thinking
• Doing something for the customer
• Needs driven
• Focusing on where you can add most value

31
Expand Your Range of Possibilities

• Business you are in
• Professional outsourced sales and marketing
  services.
• Your firms products and services
• Sales and marketing services.
• Extensive working knowledge of local markets.
• Deep understanding of customer needs in those
  markets.
• Established relationships with customers in those
  markets.
• How you add value
• Optimizing the supply chains in the industries in
  which you operate.

32
Video Case

• Louisville Redbirds
• What business are they really in?
• What is their primary market?
• Who are their main competitors?
• What are their Customers requirements?
• What do they need to be really good at to satisfy
  their Customers requirements?
• How might you have answered these questions if
  you had chosen the more traditional definition of
  what business they are in?

33
Anticipate and Innovate

• Requires profound understanding of your
  customers current and future needs.
• Either come up with the new, new thing,
  orchestrate the supply chain or commit to
  unrelenting innovation in everything you do so
  that you are constantly adding additional value
  in everything you do.
• Strengthen your relationship with your core
  Customers.

34
Connect and Collaborate

• Shift from vertical (command and control)
  relationships to much more horizontal (connect
  and collaborate)
• Examples abound Supply chain management
• One of the core competencies for success in
  business today is partnering
• Across town, across the country, across the globe
• You dont have to do it all yourself!

35
Be Professional

• Pervasive commitment to operational excellence
  (and continuous innovation) in all areas
• Competitive edge today survival strategy for
  the 21st century Manufacturers Representative.

36
Manufacturers PMR Profile
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Actual
Ideal
37
Manufacturers PMR Data
According to one respondent the scores should
all be 100!
38
Disciplined Customer Focus
50 Actual 88 Ideal
39
Inside-out Thinking

• Customer focus starts with thinking and working
  from the outside-in.
• Subtle but powerful shift in mind-set that looks
  at what you do from the customers point of view.
• Most sales people look at their customers from
  the inside out.
• View of the sales process begins with themselves,
  their own needs, their products, their
• Focus is on doing something to the customer
  persuading them, selling them something.

40
Adding Value in an Acquisition Process

• Its ALL about adding value!
• Two distinct ways to create value in the
  acquisition/sales process
• Create additional benefits within the process.
• Reduce the cost of the benefits you already
  provide.
• If you can not add value by increasing benefits,
  then reducing the cost of the acquisition/sales
  process is the only way to create added value.
• This inevitably means finding cheaper ways to
  reach the market and to sell -- catalogs,
  telemarketing, outsourcing, e-commerce.

41
Choose Your Customers

• Your most precious resource is your time.
• Suggestions for how to segment your customer base
  and prioritize how you spend your time.
• Conduct a customer profitability analysis.
• Assess your customers value orientation.
• Use the 80-20 Pareto principle to segment your
  customers based on their value orientation
• Vital few
• Important many

42
Develop Key Account Plans

• Develop written account plans for all of your key
  customers
• Buyers -- current and potential
• Principals -- current and potential
• Other players in your supply chain who could be
  potential customers.

43
Positive Principal Relationships
15 Actual 88 Ideal
44
Positive Principal Relationships

• Relationship between manufacturers and
  representatives has to be seamless.
• Stop bickering!!!
• You absolutely need to be partners!!!
• Partnering is the wave of the present because it
  leverages the core competencies of complementary
  firms.
• Its all about teamwork across your
  organizational boundaries.

45
Successful Partnerships

• Genuine respect for each other.
• Mutually beneficial relationship with shared risk
  and shared resources.
• Shared commitment to common mission, vision, and
  goals.
• Joint planning.
• Mutual accountability for success.
• Clear roles, responsibilities, and expectations.
• Close linkages at many levels.
• Regular multi-channel communication.

46
Clear Strategic Direction
38 Actual 85 Ideal
47
Value Proposition

• Promise you make to your customers
• What you provide to your customers
• How you deliver your products/services
• What you are known for
• How you differentiate yourself in the eyes of
  your customers -- both manufacturers and buyers
• Creates delighted customers and fosters loyalty

48
Defining Your Value Proposition

• No formula and no cookbook.
• Requires deep and profound knowledge of your key
  customers and their needs/problems as well as
  your product/services and solutions.
• Some starting questions
• What can you be the best at?
• What are you deeply passionate about? What
  deeper sense of purpose would motivate you to
  continue working for your your firm even if you
  were independently wealthy?
• Why does your firm exist? How do you add value?
  Why is that important? Repeat this question 3-4
  times.

49
Aligned Systems
40 Actual 85 Ideal
50
Aligned Systems

• Everything you do, every decision you make, every
  system you implement, every policy and procedure
  you establish, every person you hire, every
  business partner you work with needs to be
  focused on
• Adding value for your key customers
• Meeting and exceeding your key customers
  expectations
• Optimizing your core processes solution
  development and relationship management
• Key is the consistency, reinforcement,
  integration, and optimization of all effort.

51

• Leadership
• Ability to set direction, align resources, and
  motivate an organization.
• Providing clear and consistent direction.
• Management modeling the values, desired beliefs,
  vision and desired practices and reinforcing
  appropriate behaviors.
• Leadership style and competencies -- knowledge
  and skills.

• People
• Knowledge, skills and abilities
• Staffing levels
• Recruiting retention
• Assessment selection
• Development systems succession planning
• Performance management
• Compensation administration

• Process
• Flow of work describing how products and services
  are produced and value is created.
• Capability -- effectiveness and efficiency --of
  processes
• Work methods and standard operating procedures
• Utilization of technology/equipment

• Management Process
• Processes required to align resources and
  reinforce, monitor, and produce desired outcomes.
• Planning, resource allocation, and priority
  setting
• Budgeting and financial control
• Measurement, performance feedback, and
  monitoring systems
• Information/communication systems
• Decision making style and use of data
• Reward and recognition system

• Structure
• How people are brought together to do the work
• Reporting relationships and linking mechanisms
• Roles and responsibilities
• Critical interdependencies and tensions in
  structure
• Departmentation -- Functional, geographic,
  customer, process, matrix
• Nature of coordination -- hierarchical vs
  team-based
• Degree of centralization

• Culture
• Unwritten rules and unspoken values, beliefs,
  assumptions, and attitudes that specify how
  things really get done in an organization.
• Values, beliefs, assumptions, and behaviors
  exhibited by people in the organization.

52
Southwest Airlines Example

• Disciplined service mission
• Thirty years. One mission. Low fares.
• Focused and aligned value creation system
• Short haul, point-to-point routes between midsize
  cities into secondary airports
• 15-minute gate turnarounds
• No seat assignments, no meals, no connections
  with other airlines or baggage transfers
• High aircraft utilization
• Standardized fleet of 737 aircraft
• Lean, highly productive ground and gate crews

53
Aligned SystemsLining up the Arrows

Clear strategic direction
Loyal, Satisfied Customers
54
Another View
Unclear strategic direction

• Unaligned systems

Disgruntled Customers
55
Engaged People
57 Actual 89 Ideal
56
Imagine

• Everyone in your firm is working toward the same
  simple, compelling goals.
• Everyone is committed to adding value and
  satisfying your customers and your principals.
• Unnecessary work and unproductive time have been
  virtually eliminated.
• People genuinely respect and trust each other to
  do their jobs.
• People are open to change. They constantly
  suggest and implement great ideas to strengthen
  the firm.
• People take initiative and have a can-do
  attitude.
• A spirit of teamwork pervades the firm.
• People are really excited and enthusiastic about
  their jobs and positive about the business.

57
Would Performance Increase

• Less than 25?
• 25 to 50?
• More than 50?

58
Fostering High Engagement
You can buy a person's time. You can buy his
physical presence at a given place you can even
buy a measured number of his skilled muscular
motions per hour. But you can not buy
enthusiasmyou can not buy the devotion of
hearts, minds, or souls. You must earn these.

• Can not be forced.
• Time consuming.
• Either do it or prepare for the consequences.

Source Unknown
59
Service-Profit Link

• If you take of your employees
• Your employees will take of your customers and
• Your customers will take care of your bottom line.

60
Leadership
59 Actual 92 Ideal
61
Starts with Positive Intentions

• Leadership, in its most powerful and compelling
  form, will not work without positive intentions.
  A positive intent, a focus on others instead of
  self, is the foundation of leadership. Without
  that foundation, all the skills, techniques and
  trappings of leadership will ring hollow people
  will always sense the contradictions, and they
  will never give 100 percent support they will
  always have a back door But when the positive
  intent is there, all the skills of leadership
  will naturally follow.
• Larry Wilson

62
Core Values and Integrity
59 Actual 92 Ideal
63
Core Values
Activities, decisions, work processes
Reputation Character of the firm Core values
64
Core Values

• Small set of deeply held timeless guiding
  principles that reflect what really matters to
  you.
• Foundation and reflection of the character of
  your firm as well as your reputation and your
  brand.
• Your firms core values must be
• Authentic
• Reflect genuine commitment to service and
  customer satisfaction
• Clearly, consistently and constantly articulated
  to everyone
• Understood by all and important to them
• Reinforced through visible role models and
  visible accountability -- clear expectations and
  consequences

65
Commitment to Service
47 Actual 87 Ideal
66
Service is Job 1

• Critical to create a pervasive service ethic.
• Simple, but not easy, to do  what YOU say and
  what YOU do is what really counts.
• Every interaction with the customer
  (face-to-face, by telephone, in writing, your
  principals products in use, etc.) is a service
  moment of truth for you company.
• Only hire people who want to be of service.

67
Taking it Back Home

• Dont jump the gun let it all soak in.
• Find the time make it a priority.
• Start small build momentum.
• Assess where you are develop a plan.

68
Develop a Plan

• Review your PMR profile.
• What insights did you gain from your PMR profile?
  What are your highest scores. What are your
  lowest scores?
• Choose 1-2 areas you want to improve? How much
  do you want to increase your score in the next 12
  months?
• For each area, what 1-2 specific things do you
  need to change? Why?
• What challenges will you face in making these
  changes?
• Put together a realistic plan based on no more
  than 2 SMART goals (Specific, Measurable,
  Achievable, Results-oriented, and Time-bounded)
  to work on this next year.
• Identify specific next steps for each of your
  SMART goals to help you get started.

69
High Payoff References

• Collins, Jim. From Good to Great. New York
  Harper and Row, 2001.
• Friedman, Thomas. The World is Flat. New York
  Farrar, Straus, and Giroux, 2005.
• Rackham, Neil and De Vincentis, John. Rethinking
  the Sales Force Redefining Selling to Create and
  Capture Customer Value. New York, NY
  McGraw-Hill, 1999.
• Wilson, Larry. Changing the Game The New Way to
  Sell. New York, NY Simon Schuster, 1987.
• Womack, James and Jones, Daniel. Lean Solutions
  How Companies and Customers Can Create Value and
  Wealth Together. New York, NY Free Press, 2005.

70
Getting in Touch

• www.tpaconsulting.com
• daustrom_at_tpaconsulting.com
• 317-439-0906 (cell)

71
Study Guide for 101

• Combine
• A healthy dose of common sense,
• The lessons from the Louisville Redbirds video,
  and
• A little extra attention to SLIDES