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« Cash Cows and Beer Distributors | Main | Even More Random Thoughts From Vegas »

Random Thoughts From Las Vegas

First the important stuff… I simply don’t have the eloquence to state my feelings toward beer wholesalers, their execs and staff.  Your collective outpouring of love - I know that’s not my usual macho self ;-) but that’s the only word which comes close to describing it – this outpouring of love for my wife Barb and her fight against leukemia is overwhelming.

I only wish my attempts to sell my services would generate such a response ;-).  The number of people who stopped me to inquire about Barb astonished me… the vast majority being people who have never met me or Barb… and they all assured me their prayers and well wishes continue every minute.  When I got home I told Barb she was a minor celebrity with beer distributors and their employees… that generated quite a flood of happy tears.

Perhaps the most wonderful (and most difficult) were the many, many folks who told me their stories… stories of wives and husbands, brothers and sisters, parents, children, friends and their battles with cancers and other serious diseases.  Many of these stories had happy endings… far too many did not.  It is a funny position to be talking to someone you’ve never met about the most intimate aspects of your life and those around you… as both parties try not to breakout bawling… sometimes out of joy… sometimes out of sadness.  Trust me, it throws that macho-image right in the trash can.  But it really drives home what is ultimately important.

I state the following as the highest compliment… a compliment that has nothing to do with gender but a great deal to do with character… wholesalers and their employees are some of the greatest people you will ever have the pleasure to meet… you are magnificent bastards and I am honored to know you.  My buddy and associate Steve Cook edited out the word, I put it back… as I note in the first sentence, I state this as the highest compliment… and I profoundly mean it.

And on the Barb front, today is day 219, 219 days since the bone marrow transplant.  As long as the leukemia doesn’t come back, we are almost out of that dark tunnel and we look forward to putting this behind us as a minor bump in the road… at this point in time it is a 15% chance it comes back… this might sound bad if you hadn’t walked the path Barb has walked… when we started it was 100% mortality if nothing was done, 80% mortality with treatment… trust me, from that perspective that 15% looks pretty dang good!  If not for the immunosuppressants depressing her immune system, Barb is healthy as can be.  A few more months of that and then hopefully the end of this episode.  And since I can’t help but get on my soap box… please don’t let government destroy the finest medical system the world has ever seen.  Very real people and very real lives are at stake.  I know this intimately.

Now on to some random thoughts from Las Vegas…

  • Management lessons from the Distributor Only Meeting – I asked many distributors about this meeting - to save Craig some headaches I don’t sneak in anymore… you owe me Craig ;-) and the general feeling was… “more of the same”… “nothing new”… and the real kicker repeated to me many times, “a waste of my time”.  One distributor who was in the “waste of my time” category talked about how he and many other distributors had to travel much earlier to attend this meeting, which in the end turned out to be a waste of time.  As he talked I had a flashback of MANY conversations I have had over the years with drivers and sales reps who complain about most meetings being a waste of their time.  As I told this distributor, let this experience be a lesson… for it is one thing to waste other people’s time and a far different thing when it is your time being wasted.  Honestly look in the mirror… do you force your drivers or sales reps to come in an hour or two early for a weekly meeting only to waste their time?  Guess what… your employees don’t like it any more than you do.  Perhaps the advice you’d give NBWA… don’t waste our time unless you have valuable, content rich information should also be applied to your own company.  Trust me, every employee you have will thank you for having this epiphany – if you have nothing new to say, don’t have the dang meeting… treat other people’s times as you would wish your own to be treated.
  • Operations - The Next Big Area Of Improvement? 

Do you have a vision for the potential of your company’s operations area? Some estimate the number at over $2 billion for the entire industry.  Many wholesalers will need reorientation and reprioritization if they want to have a top flight operations department and capitalize on the potential cost opportunities.

A forward thinking wholesaler talked to Steve Cook and me about how he thought the next big area of improvement for beverage distributors is in operations – delivery and warehousing and support.  He made an incredibly insightful statement that the sales area is generally measured on a grade scale… you know, display execution is a B+, distribution a C-, margin control an A-, etc.  But operations are generally graded on more of a pass/fail grading.  I think he’s got that generally right. 

We have developed many metrics to measure sales performance (and in all honesty it is sometimes easier to make these measurements) but have not necessarily spent as much effort in the operations area.  Now I FIRMLY believe distributorships MUST be sales organizations but that is the key word, organizations.  Integrated, cohesive, with aligned systems and all parts must work at a high level if the entire system is to work at a high level. 

A common theme I encounter in a re-organization is “which position is more important”… in answer to this I emphasize that in an integrated system the question has no meaning.  In an integrated system all parts are equally important in the functioning of the whole organization… what is more “important” in your car?  The spark plugs?  Transmission?  Tires?  Steering wheel?  The question makes no sense… the car doesn’t function without any of them.  As an analogy I use the Challenger space shuttle… that’s the one which exploded soon after takeoff, killing all on board.  The shuttle was an integrated system which cost over $1.5 BILLION dollars… guess what, the failure of a $5 DOLLAR part (an O-ring) caused the system failure and subsequent explosion.  If you could talk to those dead astronauts, which part of the integrated system do you think they would identify as the most important part?  Keep this in mind as you pull back and examine your operations area… nothing is unimportant in a system.  Perhaps implement a new grading scale for operations with is a little more refined than the simple pass/fail.  And perhaps quit using the operations area as a “dumping” ground for those employees who cease to provide value in their present positions. Better yet, do some investment spending and improve your company’s operations area now.

  • 75th Anniversary of NBWA

While at the convention I discovered that next year is the 75th anniversary of the NBWA.  I am a STRONG supporter of the NBWA and every state association.  This industry needs a strong voice at both the federal and state levels.  I certainly don’t agree with every move NBWA makes – although I haven’t thrown any bombs recently at Craig – but that’s the nature of business organizations… few are ever going to support 100% of your desires.  But they are incredibly important and only a short-sighted beer distributor would not support them.   Perhaps even those states which split their associations along supplier lines could rethink their choice… these splits were not implemented for the benefit of beer distributors… you all know this to be true. 

Tom Long gave a pretty good speech emphasizing the importance of the partnership between brewers and distributors.  He is absolutely correct; your suppliers are your partners… but remember, partnerships only work as long as things work for both parties.  Once this is not the case for any partner, the thing generally falls apart or changes considerably.   I’m all for partners with our suppliers but I’m more for brothers among wholesalers!… And guess what?  Your fellow distributors (yes, even your direct competitor) are your brothers (or sisters if you prefer)… they are your brothers whether you like them or not.  They are your brothers regardless of what happens… since it is certain to impact you both.  Brothers are bonded in blood.  Brothers are different from partners… you forget that at your own peril.

 And lastly for these random thoughts…

*     It was nice to meet with several trusted clients who engaged Steve Cook and me to provide value-added consulting support for their mergers and acquisition activities based on our reputation and expertise.

*    Owners saying “NO, I won’t sell,” shouldn’t be considered the final statement.   Instead let Steve and me create an opportunity.  Let us leverage our professional expertise by creating and establishing a potential transaction process.  Still might not get them to yes but I’m certain it will get them closer.

*    Just a thought since I’m frequently asked the question.  If you’re buying or selling or simply looking for a valuation, give us a call.  It doesn’t have to cost an arm and a leg to sell your business to some adjacent wholesaler.  We provide the best value in this business.

 Next post – more random thoughts from Vegas.  And lastly, Barb sends her heartfelt (and tearful) thanks.

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