By Matt Pillar, Business Solutions magazine.
A Midwest integrator doubled its head count and drove strong sales after its new owner implemented a disciplined sales and service structure.
When Chip Emery bought Supply Chain Services in February 2010, he didn’t know much about the channel. He didn’t have much experience with automatic identification and data collection (AIDC) technologies. He didn’t even know much about the slow-growth but profitable business he had just purchased.
What Emery, now 65, did know was that retirement wasn’t a fit for him, which is to say it wasn’t a fit for his wife, either. After a tenured career that included a decade as CEO of MTS Systems, a $500M test engineering company and 13 years running international businesses for Honeywell, Emery wasn’t home long before his wife warned that he’d better find something to keep himself busy. He was soon CEO and sole owner of Supply Chain Services (SCS), a then 14-person integrator of AIDC solutions for warehouse, distribution, and logistics environments. What follows is Emery’s account of the tactical and strategic moves he made to reenergize the business.
Step One: Define Your Core Competency
SCS had been looking for a buyer long enough to create anxiety among its employees. The company’s founder was looking for a new opportunity, leaving the rest of the company to wonder what was to come. While 12-year-old SCS remained profitable, it wasn’t growing. The poor economy only added to employee angst as sales fell by 5% in 2009. Then, along came Emery, a skilled and seasoned business manager with little in the way of channel experience.
Emery’s first plan of action was to quickly learn everything he could about the company, which began with a series of one-on-one meetings with each of his new employees. “My basic understanding of the company came from these meetings,” says Emery. “From the administrative staff to the COO, I asked simple questions like, ‘If you were in my shoes, what would you do and why? What do you like about doing what you do?’ I learned much from these conversations, and the answers to these simple questions drove the vision for our future.”
What was particularly satisfying to Emery was the fact that the employees’ suggestions mirrored much of what the two executives in charge of day-to-day operations were saying.
Of course, some of what he heard in these meetings created concern. Conversations with his sales team painted the picture of a company that had lost its focus. Where its original charter was to serve the AIDC needs of warehouse- and distribution center-intensive businesses, the sales team was spreading the company’s resources thin as it chased business in other areas, from POS to healthcare to banking. “My first — and only real — directive was to stop chasing business outside of our core warehouse and distribution competency,” explains Emery. “This created a little pushback, as some of our sales representatives were reaching for low-hanging opportunities that didn’t fit our model.” Emery and his management team consistently communicated a philosophy that the business would be most successful if it funded, nurtured, and expanded its core. “We made everyone aware of the several hundred million dollar size of AIDC solutions in our core warehouse and distribution markets, convinced them of the opportunity it presented for growth, and drove that hard until it was the established mentality,” he says.
In his one-on-one meetings with sales associates, he heard a common plea for more and better tech support. Since the company only employed one technician at the time, the SCS management team set out looking for talented engineers. Today the technical staff numbers five employees dedicated to pre- and postsales technical and engineering support. The investment continues in the form of a renewed commitment to OEM technical training from SCS vendor partners.
Step Two: Invest In What You Do Best
Next came an evaluation of the company’s core skills. It didn’t take long to ascertain that selling is SCS’ true internal competency. That said, when Emery took over there was little in the way of consistency in the company’s sales approach. It became clear that investments in sales training were necessary. The goal was not only to strengthen selling skills, but also to create consistency in processes and language across the sales organization. SCS implemented a sales training program from Action Selling, an organization he had success with in previous management roles. Every employee in the company is now engaged in the program in some capacity.
“Because there hadn’t previously been a significant investment in sales training initiatives, we had an advantage over some established companies that have put their sales staffs through ‘flavor-of-the-day’ sales programming,” he says. The program has been embraced by the entire company from the start, and it’s been in place consistently for more than 18 months at SCS. Often, pushback on new sales policies and procedures leads to turnover when seasoned sales reps refuse to wrap their arms around a new way of doing things. At SCS, retention has been 100% since Emery took over. “Our sales reps know this works, and their paychecks are seeing the benefit,” he says. “Investing in the sales staff is the best thing we can do to help them grow, which in turn helps the business grow.” SCS implements new modules of Action Selling regularly, and its senior management staff meets weekly in one-on-one sessions with each sales rep. This way the Action Selling approach is applied to real-world sales opportunities and actual customer interactions.
Of course, high-tech channel sales are tricky business. Sales skill is paramount, but so is industry knowledge. The bulk of head count growth at SCS has come in the form of new sales associates, who go through a rigorous two-week technical training program. There, they learn the basics of mobile computing and channel relationships prior to six months of intensive sales training. In that training, they’re put on the phones and expected to make 80 to 100 calls per day under direct supervision. “When one of those calls turns into an opportunity, sales management pairs the trainee with an experienced representative to work on it together. If it becomes a sale, they share the commission,” explains Emery.
SCS finds that it takes close to a year for the average sales trainee to fully understand the marketplace and the products and solutions it sells. “At that point, they’re paired with a senior sales associate who acts as a mentor,” says Emery. “It’s a mutually beneficial relationship; the senior rep’s strong book of business and customer service demands prohibit him from expanding his base, so the junior salesperson steps in to handle day-to-day customer maintenance needs — orders for new batteries, cables, and so on — while still making outbound sales calls.” Working together, the junior rep is taught how to get things done and how to solve customer problems while freeing the senior associate to delve more deeply into existing opportunities.
Step Three: Develop A Transparent Strategic Plan
Last fall, Emery took his management team and a few trusted outsiders on a two-day, off-site retreat to map out the company’s five-year plan. What emerged was a concise document outlining five initiatives to pursue, each with a two- to threepoint supporting plan. Each senior manager is accountable for one or more initiatives, and the plan has been shared with the entire company. Each quarter, management gathers the company to review progress. “The whole company knows where we’re going, when we’ll get there, and if we’re failing at something, they know why. They’re all part of the plan in one way or another,” says Emery. As a case in point, one of SCS’ five current initiatives is to explore ways to expand its service business. “As margins in this area are traditionally better than those on new hardware sales, we wanted to explore ways to grow this too,” explains Emery. In recent months, the company has talked with several potential partners. In each of those cases, a sales associate brought forward the potential partner, sharing his “boots on the ground” intelligence because of his awareness of the company’s strategy. “If it’s important to the company, we put it right up front so that everyone is working toward the same objective,” he says.
Emery says his first two objectives — identifying the company’s core market and investing in its primary skill set — created a lucrative step-change in selling competence at SCS. “I haven’t talked about anything really unique here — anyone can do the same,” he admits, “but consistency doing the basic ‘blocking and tackling’ works. Can I prove it? Even our most experienced folks have embraced it. We speak the same language. We reinforce each other. We’ve doubled our staff. And revenue was up 40% last year.”