Tech Leaders Expand Lead on Laggards - Q1 Results
Hardest part of tech innovation is not what you'd think
This past week, I spoke at the NAW’s Executive Roundtables about the State of Distribution Technology – there was a lot of interest in our tech leaders and laggards index, which we have an update on for this week’s newsletter.
The other area of resounding consensus was that the biggest challenge a distributor faces to adopt new technology is actually change management, NOT the technology itself.
Training People and Changing Process = Hardest Part of New Technology Adoption
For a presentation about technology innovation, it may seem counterintuitive that the hardest challenge is not the technology – instead, the biggest challenge is the people.
However, in both my sessions, with large and billion-dollar distributor c-suites, there was head nodding all around the room. There seemed a common consensus that change management departments were understaffed.
Common roles and activities discussed:
Creating new processes and making incremental improvements on existing processes
Trainers to do hands-on training with front-line staff in the roles of sales, finance, procurement, and operations/warehouse
In-person events held on a regional basis to present leaderboards and recognize champions for new initiatives
Budget for incentives and give-aways. Incentives for spiffs to front-line workers, or incremental bonuses for branch managers and P&L owners
There were a lot of great ideas shared.
One participant, an executive at a multi-billion dollar distributor, said she has over 30 people working on the above activities. And, with that level of support, they can move quickly and didn’t feel that the topic was too big of a challenge for them.
Question to our readers: do you think a material investment in change management resources would significantly increase your company’s ability to adopt new technology solutions?
Let’s carry on the conversation in the Substack chat.
Tech Leaders Maintain Lead over Laggards Despite Suboptimal Earnings
Despite Q1 earnings being substandard for many distributors, including both the leaders and laggards, the tech leaders maintained their lead. We measure and compare the following:
Gross Margin
Stock Price
EV/EBITDA
For more information on the composition of the index, read our original newsletter on the topic here.
EV/EBITDA Increases for Leaders
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