> We’ve got this!

EXECUTIVE COMMENTARY

By Walter Tobin, ERA CEO

Walter Tobin

Vacations are over and summer is winding down – at least for us in the northern half of North America. Business travel is picking up and customers are beginning to open back up, albeit slowly, as many still prefer video conferencing. We find ourselves getting back into a bit of cadence, yet still balancing work-from-home challenges. We are returning to the office a few days a week. (Where did I put my favorite coffee cup?) Is this the new normal or the new abnormal that everyone has been talking about for the past three-plus years?

Actually, I think we have already been living our new business lives for the past 12 months or so; we just did not know it, nor did our customers, channel partners, manufacturers or reps.

So, what now?

For many of us, we have already “skated to where the puck is now” and have become more comfortable with this new cadence: balancing video calls, which as we all know by now are face-to-face, with in-person visits; trying to accommodate visits from our manufacturers into the territory to get some sort of audience with customers and channel partners; and trying to schedule multiperson sales calls with some of the attendees not in-person but on video. Is it easier to schedule calls or meetings now than pre-you-know-what?

I promised myself and you to never again say or type the word: “COVID-19” or “pandemic” again. That is the last time you will see or hear these dreaded words from me again. Yet, has this gone away? Have we gotten used to it? (No politics here at all.) Have we just decided to get boosted and live our lives? I think so. Very few masks are being seen – perhaps we have all turned the page…

We have survived, and perhaps even thrived, through allocation and now into inflation…perhaps heading into a recession? Gosh, what else can get thrown at us? I say, bring it on!

What is that saying? “What does not kill you only makes you stronger.”

My sense is that all of us are ending 2022 stronger; our organizations are stronger, the relationships that we have with our employees are stronger, the relationships with our customers are stronger, the rep model has not only survived but thrived. We have all learned who we can rely on to help us manage our companies, our “book of business,” and our business and personal relationships.

Who would have thought that we would ever allow employees to work from home two to five days per week? When did we ever think that our customers key engineering and procurement contacts would no longer work at the company headquarters, but move out of the territory? How do I now continue to support their needs? How can I call on them? Today, we have most of this figured out.

Did I ever think of the day when I found the perfect employee for an opening, but he/she worked so far away from our office that I could/would never be able to hire, onboard or evaluate them? Today, we all can find the best people for our openings, perhaps regardless of where they live. Is this progress? I think so!

Our business world has changed forever. There is no turning back. Embrace the changes! Sure, it may be new and tough. Some of our old paradigms (“If a person is not in the office, they are not working”) are falling by the wayside and many of us are being challenged in so many ways. But look back: we have seen perhaps 10 years of change in the past 18 months.

Time to “put our trays in the upright and locked position” as the plane is landing because a new world is waiting for us and has been there hiding in plain sight for many months.

I am excited for all of us in 2023! What other industry offers the kind of growth opportunity that electronic components offers? None. Growth comes with challenges and issues, but we’ve got this!

> QBR vs. SPM

FROM THE TOP

by John O’Brien

John O’Brien, CPMR
Coakley, Boyd and Abbett
ERA President
jobrien@cbane.com

I’ve always believed you can never know where you’re going until you understand where you’ve been. Today, this is still true, but I also believe in Einstein’s theory: “The definition of insanity is doing the same thing over and over again and expecting different results.” Which brings me to the structure of today’s quarterly business review (QBR.) We spend so much time looking back each quarter and spend so little time looking forward. There is little we can do to affect the past but, the future – that’s where we can make a difference.

Quarterly business review

Don’t get me wrong – it’s important to understand what was accomplished in previous quarters. As salespeople and as manufacturers’ reps, we are all compensated on accomplishments. It’s critical to our business and our principals’ business that we understand our performance. We review sales numbers to see if we’ve hit our metrics and if the numbers are growing. We review opportunities to see if they did in fact close in the last quarter. We look back to see what new designs have been started and to see where we are in the overall plan for the year. These things are important to understand. As salespeople our key performance indicators (KPIs) are based on hitting these metrics that were developed. But, many of these KPIs are determined many quarters before we review them. In many cases we’re developing plans for January during the previous August/ September time frame. Our principals use these forecasts and projections to plan resources during the forecasting period, so it is important to have open communication with management on the tactics we plan to use. In effectively communicating these tactics, everyone buys into the strategy and everyone is working towards the same goals and product development. They implement R&D schedules and launch new production introductions based on forecasted revenue. As salespeople and rep firms, we develop various strategies to hit certain goals:

• Strategies to meet sales goals and grow our numbers
• Strategies to maintain and grow our current customers
• Strategies on how to engage with new customers
• Strategies to design in principals’ new product introductions (NPIs)
• Strategies to gain market share

Strategic planning meeting

The strategic planning meeting (SPM) utilizes the results of the previous quarters but focuses on reviewing the strategies we employed to meet these goals. An effective SPM recognizes the strategies implemented and reviews the list of tactics – the actions we take on a regular basis to advance the strategies and ultimately meet our goals. We all try different day-to-day tactics. Some work and some do not. What’s important in this meeting is to openly discuss those tactics. If a tactic is working, how do you do more of it? If it isn’t, what needs to change to drive the desired results? In a group setting, these discussions spark new ideas. If something is working for someone else, how do we implement those tactics elsewhere? We highlight those that are working and do a deep dive in to why they’re working. If the tactics aren’t working, it’s just as important to figure out why, to avoid repeating them. Many times, it can be a simple tweak and a tactic that was previously driving no results can become successful.

It’s also important to understand what is happening in the markets. The global market and the North American markets both have an effect on our local markets. Then, each local market has its own drivers that affect their performance. This was evident over the past two years in an unprecedented time where the intricacies of each market were magnified by a number of issues. These meetings are critical in gaining an understanding of what’s happening in each of the markets, but the focus needs to be on adapting our tactics to meet these new market drivers. Again, in a group setting, everyone is communicating and the expectations are set with common knowledge.

By looking forward, everyone is engaged in the process. Everyone is learning from one another and everyone is focused on the end results.

> If I knew then what I know now…

VIEWPOINTS

by Chuck Tanzola, CPMR

 

Chuck Tanzola, CPMR
The Fusion Sourcing Group Inc.
ERA Chairman of the Board
ctanzola@fusionsourcing.com

Hindsight, people say, is 20/20. Two aspects of that statement stick out to me – hindsight (looking back) and 2020 – a year defined of course by the once in a lifetime pandemic that seemingly wouldn’t go away (sort of like my to-do and action item lists…they also never seem to go away, but I digress).

“If I knew then what I know now…” Perhaps you’ve also heard people say this. I know that I have. The statement is usually completed with some wistful expression of actions that maybe would have been taken if only our hindsight had been foresight instead.

As I have been thinking about our industry lately and talking to people, I hear them asking, “If we knew in early 2020 what we know now, what would we have changed?” Some of the most common answers I’ve heard are: We would have adopted video communications technology earlier. U.S.-based semiconductor fabs would be turning out more fine geometry chips in Austin, Columbus, Albany and Phoenix in 2022 instead of 2024, 2025 and 2026. We would have hired more people, sooner. We would have found time to see family and friends more.

Of course, we cannot change the past, so maybe some other questions are more important. For example, what do we know now that we didn’t know then? What have we learned? Here are some of my thoughts for your consideration:

We need people/family/social interaction. Now that we’ve largely spent the last two years in isolation, a day doesn’t go by where the importance of seeing people in-person isn’t extolled in the results of some survey or study.

Personal customer relationships are supremely important. Almost universally, my industry colleagues confirmed a significant increase to the normal difference in their ability to contact customers based on the depth of their personal relationships.

Necessity is truly the mother of invention (and innovation). During the pandemic, this was particularly (but not exclusively) evident in the healthcare industry. Consider how many new and different designs for ventilators were developed in a relatively short time, for example.

If necessity is the mother of invention, disruption is the accelerator of adoption. Video communication technologies existed prior to travel shutting down but are now fairly ubiquitous; the rise in electronic banking is widely reported; and home delivery apps have doubled their earnings in the last year.

Habits once formed, are hard to change. Consider that working from home was disruptive at first, and now is more comfortable and increasingly desired by employees. During the pandemic, restaurants accelerated their take-out offerings and services, and today reports are that more than 1/3 of people use more take-out dining than they did a year ago.

Our industry is simultaneously resilient and vulnerable. The growth of sales and corresponding supply chain challenges have been widely reported, so I won’t dwell on them here, but I will note that it at least seems that every distinct event has had a more dramatic effect on the supply chain than ever before.

Keep the first things first. Engineering activity shifted to get existing product out the door as customers focused on economic survival as opposed to future development. Correspondingly, the “golden screw” has been getting as much or more attention than the “next big thing.”

Flexibility and the ability to pivot is key. In Ithaca, we routinely (and rightly) talk about the frequency and suddenness of change in the weather. Frankly, it pales in comparison in both frequency and abruptness to what we’ve seen in changing situations on our industry.

I’m sure this is not an exhaustive list and I welcome any input you have that would add to it. However, as I developed this list, another question occurred to me. Is there anything on this list that we really didn’t know before? Are the lessons from the pandemic new, or have the last few years simply served as a not so gentle reminder of things we already knew? My sense is that while there is widespread emphasis on finding the holy grail – the industry and life-altering breakthrough that came out of the pandemic – the latter is more applicable.

If that is the case, then the real question of the pandemic is not, “What do we know now that we didn’t know then?” but rather, “Given what we already know, what will we do about it?”

A final confession. As I put this column together, I struggled with it a bit. I never quite know exactly where I’m going when I start writing but have a general idea or direction. In this case the final product took a number of twists and turns as I gathered a variety of input on the subject. I believe this is the result of uniquely personal experiences over the last few years. I suspect that the answer to my final questions are similarly unique to each of our circumstances and situation, but as always, I can be reached at ctanzola@fusionsourcing.com and welcome your comments.

This is my viewpoint – what’s yours?

> Communication is key

FROM THE TOP

John O’Brien, CPMR
Coakley, Boyd and Abbett
ERA President
jobrien@cbane.com

by John O’Brien, CPMR

As I was sitting in a colleague’s office, I read a small plaque on his windowsill for the thousandth time. It reads, “Poor performance doesn’t lose lines, lack of communication does.” I left his office and went on about my day, but something in the back of my mind kept bringing this thought forward. Later that day I got in the car to take an hour-long ride to visit a customer. I find that alone time in the car is when I get some of my best thinking done and then it hit me. In today’s world, how do we really define communication?

We are bombarded with communication from so many sources every hour of every day, including emails that we send and receive. It’s strange, but I’ve had to actually start using my out-of-office message more regularly. When we were all work-ing remotely at our desks all day, we were able to get answers to people quickly. Now, with customers opening up to see visitors more, those responses are delayed and people are not used to that delay. So, to help set the expectations for my responses, I will say in my outgoing message: “I am on the road visiting customers today, so my responses will be delayed.” While I may not be communicating an answer, at least I am communicating the expectation of when I can provide one. Then there are all of the other communications, text messages, LinkedIn posts, social media, as well as this article. The key to good communication is to be both efficient and effective.

Just as no two people like the same top-pings on their pizza, no two people have the same communications method. I find it fascinating to learn how each individual prefers to communicate. Sure, many of us follow the same routine: send an email, send a follow-up email, then send a third request. And let’s face it – we’ve all fallen into the email trap of “Well, I sent an email, but I haven’t heard back.” But the true art of communicating is going beyond what you’re comfortable with and seeking results with different methods. Maybe you can follow up the email with a phone call. Maybe you send a text to see if someone is available, prior to a phone call. Maybe you send an InMessage through LinkedIn to schedule a time to make the phone call. Or, maybe you word your email as a call to action by explaining why it’s important to them to get back to you. When I am work-ing with new colleagues, I like to challenge them to get out of their communication comfort zone and try something different. You’d be amazed at the response you get when you try different things.

We are all facing the same challenges in our industry today. Long lead times, supply chain constraints, rising raw material costs and product allocation are just a few. How many of us sit on calls with our partners (reps, manufacturers and distributors) and our customers, talk-ing about these issues and hearing how they are negatively affecting the customers? As salespeople, it is in our nature to want to help, if for no other reason than it’s our job to sell them products and we all want to be good at our jobs. Another colleague of mine is fond of saying, “In these tough times, we need to over-communicate. We need to keep reminding customers of the lead time issues. We need to communicate when parts get recommitted or when shipments don’t happen as scheduled. The more we can communicate with our customers, the better chance of them continuing to be our customers.” Her statement couldn’t be more true. Communicating bad news is the hardest thing to do, but if we deliver it quickly and effectively, customers appreciate it. They may not like the news, but at least they can make the necessary plans based on it.

To be a good communicator, you need to be a good listener. Ask people around me – one of my favorite sayings is, “God gave you two ears and one mouth for a reason, you should listen twice as much as you speak.” For us salespeople, that’s very difficult. We’re trained weekly on webinars where we learn all about our manufacturer’s latest parts. Then we want to go out and expound that knowledge on our customer base. We load up with data sheets, PowerPoints and samples to head out to find that next big opportunity. In our minds, we know why we think this particular part would be perfect for our customers. I propose that before you start presenting the latest and greatest, ask some questions. Ask the customer if they are having a problem. Ask the customer if they’ve found a solution. Ask them if they would be willing to consider an alternate solution. Anything you have to do to get them talking – then listen. Listen to their responses so you can tailor your discussion to their individual needs.

Finally, we need to make sure we are communicating well with all of our partners. Manufacturers’ reps, our principals and our distribution partners are all stakeholders in the success of our customers. The lines of communication need to be open and clear amongst all of us so that we’re all working towards the combined goal of closing opportunities and growing revenue.

> Can you teach a new dog old tricks?

VIEWPOINTS

Chuck Tanzola, CPMR
The Fusion Sourcing Group Inc.
ERA Chairman of the Board
ctanzola@fusionsourcing.com

by Chuck Tanzola, CPMR

Since my last column, I can report that I have successfully traveled to and returned from the EDS Summit in Las Vegas without the burden of any further “lost my wedding ring” incidents; and am able to reflect unencumbered on the energizing experience of having been “Back to the Summit.” I’ve indeed come full circle!

We live in a world of trade-offs that exist in tension – for each side of the equation, there is a corresponding other side pulling in the opposite direction. Some examples include: leisure or work; guns or butter (for all my economist colleagues); heads or tails – the game could depend on it (that’s for you Buffalo Bills fans); old “tried and true” methods or new ways; work smarter or work harder – the choosing of one seemingly precluding the other.

In the months leading to EDS, and in fact, for seemingly much of the last two years, there has been major emphasis on the specter of a new “normal” in our industry, and the associated tensions that implies. How will we deal with work from home versus work in the office – internally and externally? How will we reconcile just in time with just in case? How do we marry advanced analytics, AI and digital marketing techniques and technologies with analog baby boomers? With reportedly low unemployment rates, record job openings and the Great Resignation, how will we find new people to replace an aging demographic? What is the best platform for customer interaction – Teams, Zoom or visitor logs? (No, that’s not the name of a new software platform as far as I know).

It has been said, “You can’t teach an old dog new tricks.” So, as I traveled west for EDS, I found myself earnestly hoping two things: 1) That this “old dog” would come away from the summit with a new bag of tricks – new strategies and tactics for the challenges I described above to thrive in a changing, post-pandemic world; and 2) That my plane would land without incident in the 40-50 mile per hour winds reported by the pilot on our way to Las Vegas. Much to the pleasure of the 150 or so people on the plane, our pilot did well in exceeding my expectations on the second objective; but a funny thing happened during my time at EDS on the search for new strategies.

Expecting to experience a concentration on “new” things, I was surprised by the strength of the pull-back to the familiar I felt during the week. I found myself asking the question, “If you can’t teach an old dog new tricks, can you teach a new dog old tricks?” Shortly before EDS, I was privileged to be a part of a panel speaking with the members of ERA’s NEXGEN special interest group – comprised of young members of ERA. During our conversations, I was impressed by their questions and am confident they will move forward to impact our industry with many new ideas, methods and approaches. However, based on my experiences at EDS, I would remind them (and all of us) that while they look ahead, they should also remember that “Those who ignore history are doomed to repeat it.” On the plane, I was reading “Free, Perfect, and Now,” Rob Rodin’s story of Marshall Industries’ digital transformation in the face of turbulent and unpredictable times. While the book was written a number of years ago, besides finding the history interesting (perhaps more so because I remember much of it), I also found many parallels – albeit under different circumstances – with what is happening today, reinforcing the value of learning from history.

Over the years, the focus on relationships, person-to-person contact (belly-to-belly as contrasted with business-to-business) and local presence has been consistently acknowledged. As we move forward, the tension to juggle that with the efficiency of virtual communications methodologies will continue; and there is value in both. For me though, the importance of one-on-one, in-person, face-to-face business was reinforced and is the prime takeaway of EDS. (Speaking of juggling, did you catch the juggling act at the Digi-Key breakfast? I thoroughly enjoyed that!) Finally, with an emphasis on relationships, I close this article with a special, personal tribute to one of the “old dogs” of this industry. Congratulations on your approaching retirement Dick Neumann of Grayhill – I’m honored to have been among the many young pups you’ve influenced along the way! As always, I can be reached at ctanzola@fusionsourcing.com and welcome your comments. How was your EDS experience?

> So, what’s next coach?

EXECUTIVE COMMENTARY

Walter Tobin

by Walter E. Tobin, ERA CEO

So here we are, in the middle of summer, back from the excitement of EDS. Our business cards filed, action items done and followed up on, perhaps more than once. We reconnected with old friends on follow up emails and we’re sorting out our plans for the second half of 2022.

So, what’s next, coach?

Are you experiencing a bit of EDS withdrawal? Now that both the ERA Conference and the EDS Summit are over, it is back to the reality of our business – where expedites are still coming, product is still tight and COVID-19 is still here.

But what is different? Lots! We made it through 2020 and 2021 and now that 1H 2022 is in our rearview mirrors, we find ourselves as better salespeople and better managers. We are more organized and we’re getting really good at video conferencing. We got this!

So, is this it? Are we now in our “new normal,” “new abnormal” or whatever you want to call it? Like that old song said: “Is that all there is?”

We have been so focused on getting ready for the new times, pivoting, skating where the puck is going, learning new ways of doing things, etc. – is it now time to just do our jobs and do what we are good at? Which is, opening new accounts, visiting our customers and distributor branch offices, getting on airplanes and getting back to normal times, even if they are still a bit unsettled.

We are all back together and looking forward to summer vacations, even if airfares are up, the cost of gas is up, hotel rates are up. It’s time to just get back to our normal cadence: work, sleep, vacation and repeat as needed. Is all right with our world? Not yet, but we are getting close. We all need to try and focus on the things that are right and capitalize on them and try to deal with the remaining issues as “one-offs” as best we can. We will have some setbacks for sure – folks will still get COVID-19 or some latest version, but hopefully vaccines and treatments will prevent death. We will quarantine for the appropriate period of time, and then get back out there carefully and take good care of ourselves and others – but get back out there nonetheless.

How we handle ourselves and our “book of business” will determine the results for 2H 2022 and 2023. There will be lots of eyes on you as you set the tone for yourself and your company. Your team members will be looking to you for guidance and leadership. Your customers will also be challenging you for support in new design help and supply chain guidance. They, too, will be trying to get back to some normalcy and will be seeing who they can rely on to deliver the levels of support that they were used to prior to COVID…or perhaps even more now! By being totally transparent and supportive, you may be able to gain ground on your competition who may be taking a more cautious approach.

Your manufacturers seem to be getting many of the supply chain challenges behind them. They are now looking to you to gain new sockets and manage the open backlog; to execute and deliver regardless of any issues.

Let’s all focus on looking out the wind-shield of our industry versus the rear-view mirror. What is past is past – we have learned a lot in the past two years.

Let’s not focus any more energy on trying to get good at virtual selling, Zoom calls or hiring, onboarding and managing remote/work-from-home employees. Those who have not gotten all of this down pat by now probably never will. If these folks are your competition, make hay while the sun shines.

Let’s not focus on our past woes and issues. What other industry would you rather be in? There is no other industry that offers more excitement and opportunity along with its many challenges. This is why you are here – manage the challenges!

The demand for electronic components is exploding! Dust off your business costumes, fill up your car with $6-per-gallon gas, drive to your customer, fly to meetings and get at it! It is time to look ahead – fearlessly, but with good judgement!

This is what your coach is telling you: Tighten your belts and continue to march.