> A riddle, wrapped in a mystery, inside an enigma

FROM THE TOP

by Chuck Tanzola, CPMR

“It’s a riddle wrapped in a mystery inside an enigma…” In an October 1939 radio speech, Winston Churchill used this phrase to describe a situation that was difficult to comprehend. (At the time, he was analyzing the early events of the second war to end all wars.)

That same phrase could describe our industry today — at least as far as I can tell and hear. Conflicting signs and rapidly changing events make it difficult to comprehend what is really happening. Read one report and you’ll hear about the slowing orders, increasing schedule push out requests and cancellations by customers. Read another report and you’ll be overwhelmed by the growth forecast of specific industries or ongoing product and supply chain shortages due to record demand.

Are we entering (or already in) a recession-induced major slowdown? Or are we in a strong economy? The answer is yes — depending upon who you ask. Is what we are seeing the normal, cyclical variations of our market; or is it uniquely attributable to one or more systemic changes in the industry? The answer is again, yes, depending upon who you ask. All this uncertainty leaves us with a conundrum. What do we do? Is this a time to pull back and conserve cash; or is it a time to invest aggressively? Once again, depending upon who you ask… well, you get the idea.

Of course, answering yes to both apparently alternative options is a bit tongue in cheek, but the dilemma of determining what is happening and what to do about it is real. How do we deal with that? It is in these times of ambiguity that we need to rely on principles that have proven true time and again. For this reason, I appreciated the “Things to Remember” presentation by the TTI Family of Specialists at their recent EDS Executive Briefing breakfast. Paraphrasing from my notes, they spoke about the need to be there for their partners; to win and grow together while maintaining a spirit of appreciation, gratitude and humility. These solid, core guiding principles have built a strong foundation and served them well. Their message at EDS was that even in times of uncertainty (maybe especially in times of uncertainty) they will not deviate from them.

Speaking of EDS, universally, the feedback from attendees has been overwhelmingly positive. EDS 2023 was outstanding in many ways. The Rat Pack was back (as was the industry!) And, I didn’t hear people comment on the elevators once during the week (except for when the power went out in the Mirage, of course.) Yet while I applaud the EDS Show Corporation for the way the Summit was managed, I realistically believe that it was not specifically the traffic management around the elevators nor even the Connections Café lunch options that were the primary causes of the positive reports. From everything I hear (or see posted on LinkedIn), EDS affirmed that it is the associations we have that make a difference.

The lesson of EDS confirmed for me something I have always believed to be true — proximity determines impact. The closer we are to people (or they are to us), the greater the influence we can have. This is true all the time — whether the market is stable or rapidly changing. What to do in times like these? Make sure you are staying in touch — social and digital media is fine, but nothing replaces proximity!

As always, I can be reached at ctanzola@ fusionsourcing.com and welcome your comments and feedback. How was your EDS experience? If you attended, I would love to hear your thoughts.

> Recovery or reset?

VIEWPOINTS

by John O’Brien, CPMR

Looking back on my experiences at the 2023 EDS show in Las Vegas, I can’t help but wonder if we are in a time of recovery or a reset. Will we recover and reach sales levels we saw for 2020-2022? Were those years anomalies and the demand by customers will reset to levels closer to 2019? If I knew for sure, I probably would have won more at the tables in Las Vegas. However, I remain extremely optimistic about the future of our industry.

One of the big reasons I am so optimistic is the shared responsibility I saw in many of the meetings I attended at EDS. Reps, manufacturers and distributors alike are all facing the same issues in 2023. Negative book-to-bill, cancellations, pushouts, customer credit issues and continued allocation on some products. These issues have us all working together to find creative ways to win customers and continue sales growth. We were all in agreement that the best way to work ourselves out of this is to work together. Many discussions I encountered were more strategic and tactical. There was no finger pointing; rather, there were discussions on how best to work together.

A lot of the discussions revolved around those markets that continue to be strong and show long-term growth, and which products and services best address these growing markets. Electrification and EV seem to be leading the way, followed closely by IoT, medical and some applications within the industrial market.

Another reason for my optimism is the influx of youth I am starting to see in our industry. Whether it is industry events like the ERA Conference or EDS, or even a recent New England ERA Chapter event, we are starting to see more young folks enter this industry than any time I can remember. This is exciting as these newcomers bring ideas and an enthusiasm that help drive innovation.

Some industry experts say these cycles last for three quarters, so depending on when you believe we went into this downturn, recovery could come as quickly as Q4 2023. But whether it’s Q4 2023 or Q1 2024, the future of our industry is very strong going forward.

> Tighten your belt and continue to march

EXECUTIVE COMMENTARY

by Walter E. Tobin, ERA CEO

So, how was your EDS? I bet it seems like a lifetime ago…yet it was only in May! We all got home with a folder full of notes and new business cards or QR code-generated contacts. What did we talk about again? Was I going to reach out to them or were they going to contact me? Do I wait a little bit longer or take the initiative to reach out to them? How long is it when it becomes too long to follow up? My vote is NEVER! It is sort of like sending a thank you note or email; there is no expiration on either.

What message did you hear at EDS from your reps, channel partners or manufacturers? Was it consistent? Positive, flat or doom and gloom? All of the above? How do you take all of these inputs, put them in a pot, let them marinate a bit and then decide what barometers you will use to plan for 2H 2023? Do you listen to these so-called experts or to your gut? My chips are all on your gut…it is almost never wrong!

There is a lot of “FUD” (fear/uncertainty/ doubt) out there for sure — order cancellations, book-to-bill ratios less than 1:1, requests for returns with the promise of “Help me now and I will never forget you!” or “If you do not help me, you will never do another dime here!” Perhaps the truth is somewhere in the middle. People are nervous and want help, without giving up too much. How do we sort through all of this?

I think it’s pretty simple: Be open and honest. Over-communicate in a true spirit of partnership. Talk about your past service performance and all that you did to help them navigate through the past two years of supplychain issues and golden screw issues. You kept their supply chain functioning and now they want help in undoing all that you did together. This never feels good but unfortunately, sometimes it is the reality.

But this is when you find out your true sense of partnerships versus opportunity-based relationships. Partners are there through thick and thin for each other and help one another when the other one needs help.

Opportunity-based relationships are just that: you hear from them when they have a need or when the market turns from a buyer’s market to a seller’s market or vice versa. These are not partnerships, so take them for what they are, no more and no less. It is easy to be a “partner” in good times, but partnerships are tested when times get tough. Get ready to be surprised or disappointed.

We all know right now which of our relationships are in which camp. Be honest with yourself and perhaps even with them.

We heard some tough news at EDS but were any of us really surprised? We have book-to- bill ratios off the charts. Some of us had 2-3 years of backlog on the books — did we really think it was real? Didn’t we know deep down that the crash was coming? That more normal times of adjustment were on the horizon?

Well, here we are, and normalcy is here. We are now “paying the price” for huge sales and margins for the past two-plus years and now the chickens are coming home to roost. So, what now? Pretty simple: Tighten your belts and continue to march.

The worst is perhaps behind us. A recession may happen soon but let’s get it over with and put the “FUD” behind us. Let’s get through the balance of 2023 and better times should be on the horizon in late Q1 2024.

Hang on to your people! Do not fall into the trap of trying to cut headcount to maintain past bottom-line metrics. When you start to see the market turn back up, it will already be too late for you to find, interfere, train and onboard new folks and you will miss the upturned market.

Keep your people, perhaps watch new expenses, keep a keen eye on travel and talk to each other.

True partners will help each other. Hold them close. You got this!

> Implementing big goals and ideas

VIEWPOINTS

by John O’Brien

John O’Brien, CPMR
Coakley, Boyd and Abbett
ERA Chairman of the Board
jobrien@cbane.com

Fresh off a record setting 2023 ERA Conference, I find myself wondering how I’m going to implement everything I learned and thought of at this year’s Conference. If you’re anything like me, I have more action items than I could ever accomplish before the 2024 ERA Conference. So here are some of my thoughts on how to prioritize what I learned:

1. Sometimes I believe less is more. If I can accomplish 2-3 of the big goals I envisioned at the Conference, that will have the greatest impact on my organization and those are the ones on which I need to focus.

2. Don’t go it alone. Find people in your organization that you can bring into the discussions and can provide valuable insight into implementation. The mark of a good leader is someone who can take inputs from the team and coordinate it all to fit within the company’s vision.

3. Define what changes are driving you and your organization and work with your team to decide how these changes will affect your organization.

a. Our principals are always changing either through mergers and acquisitions, leadership restructuring, new product introductions and industry trends.

b. Our markets are constantly changing. Whether it’s robotics/AI, electrification or 5G evolution, our customers are looking to us to help navigate these changes.

4. Realize that a good decision made today may not be a good decision three months from now. I’ve stressed the need for flexibility and adaptability in previous articles. These changes will continue and they will accelerate.

5. Embrace new technologies. I had only heard of ChatGPT immediately prior to the 2023 Conference. Now I find myself referencing it for any number of things that come up in my day to day. I’ve been reluctant to utilize video, if for no other reason than I don’t like the way I look or sound in it. I’ve gotten over that and am working on my first video shoot as we speak. The ERA Conference really provides an opportunity to not necessarily work in your business, but work on your business, so use those ideas to make an impact on your company. Embrace the changes and use them as opportunities to grow.

> A view from the top

EXECUTIVE COMMENTARY

By Walter Tobin, ERA CEO

Walter Tobin, ERA CEO

We are back from the 2023 ERA Conference in Austin. It was a great three days. Here are some of my thoughts as I look back on all that went on.

Economy

The economy is strong and there is little, if any, chance of a recession. Yet, the economic world continues to be upside down. Adding jobs is bad for the economy. (Huh?) Rising interest rates slowed inflation but caused a few banks to fail. Will interest rates keep rising to slow inflation but possibly weaken more banks? A strong U.S. dollar may be bad. (Huh, what?) Common sense may be out the window! The war in Ukraine is bad for everyone worldwide. There is no upside to this and no winners at all – this will only fuel global uncertainty. Yet, there is cautious optimism. Folks want to have a strong year but headwinds are blowing. How is your windmill coming along?

New tools and technology

There are many new and exciting software tools available now – get great at using them and do not fear them! (e.g. ERA SearchLink.ai) ChatGPT has been here for six months. It will only get stronger and perhaps a bit scarier; look into this and manage it; do not let it manage you and do not fear it. Times are both scary and exciting. Allow yourself to be scared but use this fear as fuel to change. New markets and new worlds are before us – e.g., EV vehicles. These new markets present huge new opportunities for the electronics industry. Change and adapt, or become irrelevant. Embrace reps doing marketing and market research. Do not rely on anyone else to find new customers or opportunities for you — you must do it!

Our industry

The rep model is getting stronger and is here to stay in a big way. In-person selling is back but virtual selling is here to stay. Do not revert to the old ways prior to the pandemic. Selling is still a full-contact sport, we are just changing the tools we need to use. Do not become irrelevant or a fossil! Business travel is back. Pick your spots and make sure the reason for your trip could not be done on a Zoom call. Do not waste your silver bullet with your supplier or customer. Social media: What is your social media image? Do you have one? Get great at social media! Do not mix your personal footprint with your business footprint.

ERA Conference

I’m proud that there were so many smart and confident female general session and breakout session panelists at the 2023 ERA Conference. This is long overdue! There were also many more young folks in Austin. We must empower them, nurture them and mentor them. Do not fear them – they are the future of your company. Our industry has never been more exciting – what other industry would you want to be a part of?

Final thoughts

Our customers and manufacturers want more out of their rep network and their channel partners. We need to clearly understand their wants before they have to tell us what they are. Then we must work hard to meet/exceed their expectations or we will be replaced by someone else who is embracing the future, using new tools and providing new services before we are asked to by our customers. Trust and honesty never go out of fashion. Keep your eye on both of these attributes every day. Who will be at the ERA Conference in 2028? Will you be there? Do you and your company have a clearly defined succession plan? Who will represent your company’s leadership in five years? Sharpen your skates and get your game face on! See you in 2028!

Author’s note: This article was written by me and not by ChatGPT or another “bot.” So, blame me if you do not like it!