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> Tighten your belt and continue to march


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!

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