Certified Professional Manufacturers Representatives

1. Building the Foundation CPMR 101 Certified Professional Manufacturers Representatives

2. Objectives Build the foundation for 21st Century PMR • Provide an overview of the concept of corporate culture • Briefly discuss the major trends reshaping the competitive landscape as well as ways to thrive in this hyper-competitive 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 doesn’t, leave it. • Don’t hate the messenger.

5. Exercise • How have your industry and your firm changed over the past five years? • How will your industry change over the next five years? • What is the prognosis for 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?

6. 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.

7. The Squeeze is On! • Era of customer power • Commoditization of products and services • Cost containment, spend reduction, and supply chain management

8. What’s Going On? Flat World Effect Innovate or else… Wal-Mart Effect BRIC Effect

9. And Today …

10. What’s the Antidote? • Expand your frame. • Customer focus in everything you do. • Anticipate and innovate. • Connect and collaborate. • Be professional.

11. Expand Your Frame • Business you are in • Your firm’s products and services • How you add value

12. 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?

13. Expand Your Range • Business you are in • Professional outsourced sales and marketing services. • Your firm’s 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.

14. Focus on the Customer … and Add Value • Always start with … Who’s 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.

15. 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. • Keep strengthening your relationship with your core Customers.

16. Connect and Collaborate • You don’t have to do it all yourself! • Shift from vertical (command and control) relationships to much more horizontal (connect and collaborate) • One of the core competencies for success in business today is partnering … • Across town, across the country, across the globe

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

18. Professional Manufacturers Representative Profile x x x x x x x x x x x x x x Actual x Ideal x

19. Manufacturers’ PMR Data * According to one respondent the scores should all be 100!

20. Exercise • What are the 3-5 words or phrase that your customers would use to describe your firm? • What are the 3-5 words or phrase that your principals would use to describe your firm? • If someone walked into your office or sat in on a sales call, what would they see or hear? How would they describe your firm?

21. Corporate CultureWhat 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.

22. Corporate CultureA Street Definition The way we do things around here.

23. Corproate CultureWhere Does it Come From? • Nature of the business you are in • Type of industry you represent • Geography • Climate • Population density and ethnic diversity • Local economy • Organization’s history • Company founders • Senior management

24. Corporate CultureKey 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.

25. Universal Shared Learned Sub-cultures Official and unofficial Formal and informal Iceberg Corporate CultureAttributes

26. 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

27. 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

28. Culture Matters Research results consistently show that … • High performance firms have more people-oriented cultures. • Low performance firms more frequently have “toxic” cultures. Tim Baldwin, 2008

29. Professional Manufacturers Representative Profile x x x x x x x x x x x x x x Actual x Ideal x

30. Disciplined Customer Focus 50 Actual 88 Ideal

31. 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 customer’s 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.

32. Adding Value in an Acquisition Process • It’s 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.

33. 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

34. 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.

35. Positive Principal Relationships 15 Actual 88 Ideal

36. 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. • It’s all about teamwork across your organizational boundaries.

37. 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.

38. Clear Strategic Direction 38 Actual 85 Ideal

39. 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

40. 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. • Where and how can you receive a reasonable return on your efforts (i.e., profits) in all of this?

41. Aligned Systems 40 Actual 85 Ideal

42. 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.

43. Strategic Aspirations Organizational Architecture Model Leadership People Process Culture Management Processes Structure • 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.

44. 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

45. Aligned SystemsLining up the Arrows Clear strategic direction Loyal, Satisfied Customers

46. Another View Unclear strategic direction Unaligned systems Disgruntled Customers

47. Engaged People 57 Actual 89 Ideal

48. 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.

49. Would Performance Increase • Less than 25%? • 25% to 50%? • More than 50%?

50. 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 enthusiasm…you 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