Real Issues. Real Answers: Battling the status quo

Real Issues. Real Answers
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What would you do as the manager of an LBM company who wants to embrace new business opportunities, but the owners of your company are more comfortable keeping things the way they are? That’s the question we received from a Midwestern LBM pro, and it’s at the heart of this month’s Real Issues survey. As we do each month, our Real Issues. Real Answers feature aims to help a fellow lumber dealer gauge the temperature on an industry issue. More than 150 readers responded to a brief, three-question survey this month to help out an LBM Journal reader who, as a manager of his location, doesn’t feel he’s getting the support he needs from ownership to make changes that will maintain the company’s status as a market leader.

First, we asked readers to share where they feel their company stands on change. Just over half of respondents said their company’s attitude toward change is, “Moderately cautious. Don’t be last to change, but don’t be first either.”

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Next, we asked readers who have opted in to receive our surveys via email to respond directly to the question we received from the Midwestern dealer who asked…“As a store manager, I am always looking for ways to not just keep our business strong, but also to grow it. Unfortunately, the owners are fine with how things are or have always been. Since they don’t like change, our business is missing out. I don’t want to just sit on my hands, so to speak, because in the business world if you’re not growing, you’re dying. I’d love to hear how others would navigate this.”

Responses from lumberyards, building material dealers, specialty dealers, and distributors

“First, do your homework and provide not good, but great data as you are going to have to sell the change to the owners and you need buy-in. Know all the steps, the investments (time and money) required and the estimated benefits and outcomes. Make it hard for them to say ‘no’ and if they do, ask for explanation to better understand their position to maximize your management role. Be prepared with smaller steps or stages of the change and ask if those can be performed and, if successful, then the next steps and so on. If still receiving push-back, ask where the owners would like to see growth and/or improvements to the company and then develop a plan with changes necessary to achieve their visions. Accomplish that, and then use this achievement as the stepping stone for more changes in the future.”

“Baby steps. Whether it’s upgrading your showroom, adding new inventory items, new signage, adding a salesperson, go slow. One item at a time. You must do all the legwork on your own time. You must present them proof of positive results of your suggestion. If they are not going to listen to you, or any other employee, attempt to get a product rep in front of them. Good luck!”

“We need to constantly look at ‘tomorrow’ for our business and know the path to get there. We need to clearly communicate the reasoning, return, and cost to the owner (both written and verbally). We should also try to communicate the ramifications of not making certain changes. All of this must be done in the best interest of the company (integrity, humility, and selfless).”

“Start with some small changes. Make a business case for them. If the owners can see additional sales and profits, they are more likely to agree.”

“It’s hard to improve things from the bottom up. I face the same challenge as a department manager. What I have been doing is working hard to earn the owner’s trust and then making small changes within agreed parameters. When the changes pay off, I leverage that to get approval to make more improvements. It’s a slow process but I feel like continuing to strive for improvement will give me additional opportunities in the future.”

“You have to change with the times. If not, you are going to be left behind.”

“Change for the sake of change is not always productive; but change for the sake of innovation, efficiency, and growth are necessary to remain in business. I would not lose sight of this and continue to push. If your owners are not receptive to this, I would brush up your résumé.”

“I would be considering other options for employment. Move on before things get worse. Nothing stays the same anywhere!”

“Small changes over time turn into bigger changes in the long run. Baby steps may be the best solution.”

“The most likely thing to convince the owners would be to present them with numbers showing how change can improve their bottom line.”

“Outline the changes you would like to see and map out the ROI to your owners. Money talks! If they aren’t interested, it may be time to look for a new company.”

“Sometimes the reality of ‘whose money is making the decisions’ applies. After surviving a recession, caution may be our handicap.”

“If the owners will not change, look for a job with a competitor who shares your views.”

“As a company, we are embracing change. At this time, we are in the process of moving to a new computer system to upgrade to the world of e-commerce.”

“Qualify the needs for change by ranking them and then reasoning why your ideas would improve the current culture or business model.”

“Everyone likes to be in the comfort zone. I agree you have to continue to grow, sometimes by just doing a better job of what you do every day. I struggle with owners who don’t keep up on the rolling stock in a company and forklifts and then complain about repair costs. Most bigger yards are really trucking companies that deliver lumber.”

“Try to instill to the owners that change is inevitable and to keep up or move ahead you must change and adapt with the times.”

“I would say do as much as you’re comfortable with. You can make real changes without the support of the owners. If they start to shut down your changes, maybe it’s time to take your ideas to a place that would appreciate your innovativeness. If you’re successful in your changes, maybe they’ll come around eventually.”

“Talk to owner and try to get him to see where you’re coming from and the vision you have for his company.”

“Show them, don’t ask them, on some of the smaller things, then get into discussions about support for larger change. If they still are not interested, there are plenty of other owners who would like your energy.”

“At the store manager level, we should hire, train, and promote. Create an environment that inspires our team. The external customer will feel like their team is always looking to get better for them.”

“Really tough call. It depends on the type or level of change you want to make. As wrong as it sounds, if you really believe in a particular change that needs to happen on a level where you can make the decision, it may be easier to ask for forgiveness than permission.”

“Do the research to be able to present quantitative forecasts.”

“I would try to explain how the change would benefit the company and make them more money. If you can show more profits for the owners, they might be more receptive.”

“It’s moving a boulder—and that depends on how heavy it is to move forward, without it rolling backwards on you.”

“I agree with the premise that you’re either growing or dying. Your job as a manager is to advise your owners of the best path that you see. In the end, it’s their business. But, your career is your business. If the two business plans don’t align, then you’re going to have to make some tough decisions as to whether to further your career there or move down the road.”

“Find a new place to work that shares your ideas.”

“I would have been looking at a new product and checking the need for it in my area and check the profitability to the company.”

“Offer to become a partner financially. Otherwise, if you’re unhappy, get your résumé together.”

“If that’s their stance, change employment.”

“If you have interest in the business long term and have spoken to the owners in the past about new growth and they have not shown interest, then maybe it is time to work on a plan for you to help the company grow by working on a business plan that asks to share in the profits of the new business over an agreed value. If not, it may be a great time to look for another opportunity.”

“A store manager’s job is to manage and maximize the profits under the guidelines laid out by the owners. The way an owner looks at the business is often different than the managers. They have the investment and risk which managers do not have. I would respect my owner’s position and work to achieve their goals.”

“Bring in a new line, add to your contractor base, bring up the bottom line, and tell the owners you would like to expand to another location and grow the business. Results will be your best story. They will not want to lose you to another company that appreciates your drive and ability. Force their hand.”

“Buy the company and run it however you like.”

“I’d suggest small changes with measurable results and low risk—or at least measurable risk. Unknown can be challenging for some owners. Having a clear plan, with gauges for success vs. failure may open up their thoughts. Additionally, discussing and understanding their reluctance for change would be helpful. Have they tried things in the past that didn’t work? What happened then? What’s different now? Also, understanding long term goals or at least starting to set long term goals may be helpful in getting them to think 3-5 years down the road. The status quo will change eventually. In today’s fast paced world, we’re seeing it change multiple times.”

“If you are the manager and they have awarded you that position then you need to manage your way just make sure you’re making them money.”

“With change in the air, owners must be open. Ideas are 10 cents a tub full. You must come with both sides of the equation. Risk for your company and the rewards and most of all downfall cost to the bottom line if it doesn’t work out. Good people are hard to find.”

“Gather data. Show the owners the opportunities that they are missing and let them know you will own them.”

“Look first at yourself and ask if you are making a strong case for change. Have you spent the time and energy to adequately research the opportunities, then laid out a business plan for accomplishing them? If you are simply suggesting ‘ideas’ off the cuff without substantiating them, the owners have little incentive to change, perhaps with good reason. If, on the other hand, you are doing your due diligence and they are simply running out the clock, you need to find a more progressive employer or accept that you will have to live with the status quo.”

“Try to demonstrate market potential of new ideas, plus the value of being known as market leaders and innovators.”

“Either stay the course and accept your fate, try to convince the owners to make some change, or look for another company that thinks like you do.”

“Advance areas you do not need permission to change and show metrics showing improvement. If ownership will not let you proceed with successes either continue without permission or relocate to a business more open to success.”

“I think you need to clearly state your case with the ownership, perhaps with small steps at first. If there is still no interest, you may be working at the wrong yard.”

“I would continue to have those discussions with ownership. Gather information and data around what you are looking to do to be able to present your case.”

“Be proactive within the parameters you have and show the owners the results. Once you have buy-in from them, they should be willing to see more.”

“Do your research. Prepare forecasts and actual data as to how the change will benefit the company and its future. Present it in a way that shows all angles of benefit—culture, financial, future growth, etc. Prepare possible solutions for the obvious challenges that would need to be overcome. It may be that you uncover something that you haven’t thought about yet or perhaps you discover that the change doesn’t align with your company’s goals, or the risk doesn’t meet the reward. Be understanding of the burden that owners carry in their business investment and seek to understand why they are averse to this particular change (not change in general). Also, have an open mind and continue presenting your ideas, ‘no might not always be ‘no.’ They may warm up to the idea later.”

Responses from wholesale distributors, manufacturers, and service providers

“Within your level of authority, make some changes and validate the reasons and the results. As you can, get customer feedback that supports the changes you would like to make. Share with owners what your competition is doing (with success) that you are not and ask to make a trial change to better compete. The trial change is just that…if it does not work, make changes, or discontinue.”

“If the company does not want to grow, I would leave. I feel either you set the pace or have the world set it for you.”

“It’s hard to make changes in a business without the green light from ownership. Create a solid presentation, practice prior to presenting, and do your best. The rest is up to them. You may be pleasantly surprised at their support.”

“Whatever idea you have to grow the business, you need to show how your plan will affect the bottom line. Show the numbers.”

“I totally agree that you need to focus on growth, because if things dry up in what you are doing now, you need to be able to compensate elsewhere. Honestly, if you want to be with a business that grows, there are so many opportunities to do that. But, if it is because they are just overwhelmed with all that is going on, I would be patient. Many fear growing because they do not have the capital or personnel to support anything additional.”

“Sometimes a mock P&L will help open ‘old’ eyes as to the possibilities and how it would benefit the owner family.”

“Change with existing product lines or new additions with related products. More product enhancements from existing vendors won’t make the disruptions paramount.”

“Unfortunately, what you will figure out at some point is that you are the problem and not them. The reality is that it is their business and sometimes a business exists to support a family, or the owners are fine with the status quo. This can feel like ‘fighting the ocean’ sometimes. Do yourself and them a favor and find a new place to work that is more aligned with your values. You’ll be happy you did.”

“Keep pushing and do what’s best for your customers, employees, and company. If resistance persists, then it may be time to look elsewhere.”

“Start with the data. What is occurring in the markets/products that you are already in? Are they stable, growing, receding? Present the opportunities and forecasted direction and recommend a small change or addition, identifying how risk will be managed. If you get approval, and the projections are not in line with your commitments, then you have to be willing to cut ties fast. Growing versus dying can be frustrating trap. Growth needs to be the right growth. Growing top line without a corresponding growth in EBITDA is a loss. Many companies have saved themselves and become more profitably by divesting. Good Luck!”

“It is extremely difficult when trying to change old minds that have been profitable for eons (or so they think). Instead of making mass changes, hone in on one or two areas that will show them that you have the ability to back up your statement of growth. It’s slow process, but Rome was not built in a day! Good luck. It is frustrating to say the least.”

It is inevitable that some of the customers you have today won’t be your customer in the future. This doesn’t mean you have driven those customers away; they are no longer buying from you because they went out of business, they sold, or the many other reasons, but this will happen. When do you begin to replace the inevitable lost customers? This needs to be an everyday focus. This can be obtaining new customers, new products, new channels—always be looking for new ways to add business. That is how you survive and thrive.”

“I suggest doing some test marketing for your idea.”

“Ask them for a budget allocation to take on new products.”

“Make sure your best and truest customers agree with you. If they do, perhaps it’s about time to have them speak up and ask growth questions at opportune times. If they don’t, perhaps you should consider joining a different team that embraces your eagerness to grow. Either way you go, be truthful to all parties.”

“Quite the conundrum this issue presents to one like yourself. From past experiences my advice is to initially try a few small things that can be done without drawing attention. If these are successful, present this information to the owners and ask for their thoughts. If they are pleased, proceed to a larger idea. As you continue to take small steps, they should trust you in your position. If they are not pleased and you are reprimanded for these actions, even though they improved your bottom line, then you need to understand that you are not the store manager for them. Immediately begin your search for other opportunities where your talents and business perspective align with ownership. If you continue to work in this environment, it will drag you down and years of your career will pass you by. Given the current industry conditions, finding a good fit for your talents and enthusiasm should not take too long.”

“Keep pushing with innovative ways to approach change.”

“You’ve got to do what you have to do to keep things rolling.”

“At the end of the day, you have to realize that they are the business owners. They make the decisions. They are the ones taking the risks. All that being said, it’s important that you communicate opportunities to expand in a way that helps them see the benefits and that it is sometimes more risky to avoid risk and change.”

“I would strongly suggest that you speak up.”

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