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We hope you will forgive a short tribute: About 20 years ago Rich started writing this column with his father, Joe. Joe had been writing for The Wholesaler for several years and as a part of his mentoring process, graciously allowed Rich to join him in writing the column. Two months ago, you may have noticed Jen joined Rich in writing the column as a part of his role as a mentor. This month marks 10 years since Rich started writing the column by himself through Joe’s passing. With this in mind, we wanted to republish an edited version of one of our favorite columns. It was written by Joe in 1993, as Rich was just coming on board, entitled: MBWA, circa 1993 - Management By Walking Around is How High-Performance Wholesalers Keep an Eye on Business by Joseph R. Schmitt, Management Consultant.
MBWA circa 1500 B. C. - During the reign of King Ashur-ubullit in the land of Aram (about 1500 B.C.), a wealthy, farmer was killed in the uprising of the Kassites. His holdings were then passed to his son, a scholar in the libraries of the king.
Unlearned in the art of farming and animal husbandry, the son became aware, as time passed, that his fields of wheat, barley and emmer were deteriorating and were being subject to disease and distress due to poor care. His cattle, sheep, goats and pigs were also faring poorly and many were lost to thievery. His profits were dwindling and his coffers emptying.
The son went to the temple of the god Asher to seek a holy man he knew to ask how to remedy the situation. After he heard the story, the holy man pondered and eventually brought the son a small rosewood cask. Inside, the son was told, was magic sand. He was instructed to take the cask to each of the boundaries of his estate and to drop a pinch of sand at each corner every day. He was told that as long as he followed this course, his lands would prosper.
The son went out dutifully each day to the extent of his lands. He saw his peasants and his overseers every day and soon began to know them all and he came to know their names.
He saw, as time passed, that the sand was indeed magic. His pigs and cattle and goats became healthy and wholesome; his fields grew abundant wheat, emmer and barley. As long as he followed the holy man's strictures, his riches increased and his coffers filled to overflowing.
BUT, there is no magic sand you say. This is just a fable.
And I tell you, you're wrong; there is magic sand. To be effective, that magic sand must be sprinkled by executives from the highest level of your corporation.
This magic sand is self-replenishing, weightless and invisible. Successful managers are blessed with a never-ending supply of this sand.
A wholesaler sandman
So this is your assignment: To be outstandingly successful you must place a pinch of magic sand on a regular basis on every profit-generating or profit-consuming segment of your business.
To be effective, MBWA must be a random-sample process. Your intent is to see the operation as it exists and functions when you are not present. These trips through your facilities are quick and accurate audits that reflect the daily reality of your business.
Pre-announced visits are neither cost-effective nor informative. Too much energy is expended in "dressing up for the show." Let me relate to you some examples accumulated from many years working with wholesalers.
The president of one company was uncomfortable with the numbers from one of the branch operations. So, one morning, instead of going to his office, he drove the considerable distance to that branch. He left early enough so it appeared at headquarters that he was merely late for work that morning. In fact, he walked into the branch unannounced at 10:00 a.m.
The president knew before he had even reached the branch manager's office that something was radically wrong there. He could read it in the stunned and uncomfortable expressions of the employees as he walked through the building.
He found the branch manager busily working in his office dressed in nothing but pajamas, bathrobe and slippers. It was a toss-up as to who was more surprised at the other's appearance.
There was a feeble attempt at explaining away a sleepless night, and going into the office to get some work cleared away and then losing track of the time. Clearly, the branch (and its manager) had a serious problem.
Corners of your estate
Each department or operation within your wholesale firm is, in effect, one of the corners of your estate that needs visiting.
For example, MBWA practitioners make it a point to arrive at the shipping dock at the same time the trucks are pulling out to make their deliveries. The timing is important. The intent is to arrive just as the truck is loaded and ready to leave.
There is much to be gained by this unannounced arrival to ride “shotgun" with one of the driver's on his assigned route. First, drivers are an important information source. The truck drivers may know the customers better than anyone else in the company except the salespersons who call on them. He is also, perhaps, more candid and more objective in his observations about the customers.
As the ride proceeds, the truck driver is casually interviewed about his route and about customers who are being delivered to on this trip, as well as about potential and former customers in the territory. Larger companies may spend thousands of dollars accessing the information that is available simply by riding shotgun. (In fact, this one MBWA activity can become so addictive as to exclude other corporate "magic sand" visits).
When the truck stops to make a delivery, MBWA includes a brief opportunity to talk with the customer and view his place of business or job site. Much can be learned quickly about a customer and his buying habits that will never appear in a call report. For example, is your company getting an appropriate amount of business from this customer? What else is he buying from whom else?
This is also a perfect occasion to thank the customer for his business. Tell him that you would like to do whatever it takes to deserve more of his business and that you would appreciate his help in defining how that could be done. As a consultant, too often I hear that a company has never even asked their steady customers for more business. Sprinkling a little magic sand here can increase sales penetration.
Inside your estate
So far, we have described how visits to the far boundaries of "your estate" will produce eye-opening revelations. Yet, there are opportunities for sand-sprinkling right under your own nose.
For example, while you are still riding shotgun on that delivery truck, note how long it actually takes to make all the deliveries. When you ride with the driver, does he still need overtime to complete the route?
At the end of the day, having completed all the deliveries, is there still material on the truck? Sometimes excess product is loaded onto a truck, and this product then "finds a home" at bargain prices. Stray merchandise left on the truck after you ride shotgun could be a tip-off to internal theft. Or perhaps the driver has an independent business that is using your equipment for its deliveries. If so, you will sense this long before the day is over.
The magic sand you sprinkle can cut thefts of time and product.
You should make it a point to unexpectedly walk through all of your warehouses at different times of the day during incoming deliveries, outgoing shipments, the lunch hour. Who really moves and who doesn't? Who isn’t there who should be? Who is there who shouldn't be?
Some warehouse workers move at a slow pace and aren't really providing the quick service to customers that you promised and honestly thought you were delivering. In other warehouses, the workers literally jog around, following the lead of a supervisor who does likewise.
It is equally important to look though the warehouse during slow periods or after closing. What are the workers doing during lulls? Are they in hiding? Or are they hiding something?
After a recent warehouse walk-through, I pointed out to the president where an employee had stacked boxes so that they became an "easy chair," complete with "end table," ashtray and reading light. It is not uncommon to find what I term "hollow-stacked' bedrooms. Whenever you find a hiding place in your warehouse, leave your business card there as acknowledgment of your magic sand visit.
No substitutes for your own eyes
Sometimes it is possible to train other people to observe, investigate and distribute sand for you, but it does not always work as planned.
In an attempt to expand the number of sand-sprinklers, a wholesaler established a new auditor function and assigned a long-term employee to the task. On the last day of his first audit at a branch location, the employees there held a small party for him and, during the festivities, removed all the audit work papers from his briefcase.
The loss was not discovered until he returned to headquarters. He then engaged in an excruciating negotiation with branch employees, who demanded a substantial audit rewrite which they would author.
Field auditing is, at best, a lonely business. The auditor is away from headquarters much of time and is always cast in the role of an adversary. It is usually better to delegate field audit tasks to current employees as a portion of their normal workload, rather than assign audits as a full-time job.
The magic sand can dramatically reduce the need for formal internal audits. A walk through the city counter area and the loading dock area during times of peak activity is an opportunity to observe people who seem to become uncomfortable by your presence. In a properly functioning company, where no monkey business is being conducted, your presence will not cause discomfort.
However, if the employees are involved in thievery, bookmaking or drug sales, then the atmosphere will become strained in your presence. You will learn to sense this and need to find out why. But even when you do not sense something is awry, your magic sand is still working.
Taking the time
Management by walking around, obviously, takes a lot of your time. And where will you find this time?
The answer is that you ruthlessly tear it from time now spent doing “comfortable” things of lesser importance. Nothing is more important than watching your business. Watching your business is your most important business.
Sometimes wholesalers will argue with me that visiting customers is difficult and unpleasant for them. Customers tend to be such awful bitchers. If your customers are complaining, you've got problems. If you are a high- performance wholesaler, then you will make corrections and adjustments in your service before your customers have anything about which to complain. People - even your customers - would rather say complimentary things to you. Some customers, who intensely dislike any confrontation, will merely quit using your services rather than complain. If pressed, they may avoid discomfort by telling you your prices are too high.
Occasionally you may find a customer who is just downright mean-spirited and appreciates none of your quality efforts. The smartest thing I know to do with your worst customer is to give him to your worst competitor. That rule stands for all time.
The magic sand you sprinkle, around the boundaries of your company, over your customers and under the noses of your employees will make your business stand out from all of its competitors. And that, quite succinctly, is what high-performance wholesaling is all about.
MBWA, circa 2015. We think you will agree that the insights still apply to our industry today. In fact, the recommendations may apply even more today as executives attempt to operate their businesses from their isolated bunkers using e-mails, video chats, texts, tweets and their cell phone. In the old days they called it the ivory tower to highlight its posh isolation. The danger of 2015 is the mistaken perception that a gigabit internet connection and technology are somehow a substitute for MBWA. For all the technology at our fingertips, we are often losing the subtle nuances that are provided in the tone of person’s voice, the body language provided by a face-to-face communication or the 360 degree view we get by walking into a branch location. Looking at your warehouse through the 4X zoom lens of your security camera is not the same as walking through the warehouse looking at all the spaces that are outside the view of the camera. Texting a customer a 30 character message is not the same as even a 2 minute conversation with that customer. E-mailing a proposal to a customer is not the same as presenting it in person or, when that is not possible, describing it over the phone or using a video conference.
To be sure, technology is and will be a huge part of our future but the real high performers will understand how to balance technology, phone, video and personal contact with their team and their customers. Last month we discussed how one wholesaler had created a nice blend of services using their webstore as the foundation for their multifaceted sales attack that included bricks-and-mortar, phone sales, online chat and the webstore. We continue to believe that even the best tech-savvy wholesalers will devote time and energy to sprinkling some sand throughout their operation.
Quick plug: As we work to develop the next generation, who have grown up in the age of impersonal technology, programs like HARDI’s Emerging Leaders and ASA’s Young Executives are great ways to demonstrate the importance of personal interaction and help to develop better interpersonal skills.