Growth through Distribution Innovation: The Key Theme from the TUG CONNECTS 2023 Conference

July 5, 2023
Thomas F. Fitzgerald, CPA 

Authors: Thomas Fitzgerald and Tim Plotner

The TUG CONNECTS 2023 Conference brought hundreds of distribution professionals together for a week of interactive networking and education. The educational sessions covered many topics, but the central theme of the conference came down to the need for distributors to focus on synergy and innovation.

Innovation can propel companies toward profitable growth, while ignoring opportunities to innovate can doom a company to mediocrity and stunt their ability to thrive.

Thoughts on Innovation

One of the keynote speakers, Jeff Havens, discussed key issues that distributors need to bear in mind when thinking about how to promote innovation.

Too often organizations hear the mantra that if you don’t innovate, you’ll be out of business in five years. Some experts promoting innovation use this fear-based message. But, innovation can’t be forced, and fear actually stifles your ability to think freely!

Havens emphasized that innovating is actually simple and freeing. He pointed out that all innovation can be reduced to these three steps:

  • Ask questions. Everyone can ask questions.  Not “Can we reduce costs” but “How can we reduce costs?” Identify questions that will help you solve an ongoing problem or issue.
  • Propose solutions. Don’t focus on trying to change the world – some ideas will and some won’t, and you rarely know the difference from the beginning. Instead, identify possible solutions that could answer the questions you need to address.
  • Experiment. Try the proposed solutions and be prepared for them to evolve as you learn more about how they can be implemented.

He pointed out that most innovations start when someone recognizes a problem and asks a question. For example, consider the invention of the rolling suitcase. Someone got tired of carrying luggage through an airport. Their question would have been something like, “How can I get my luggage through the airport without straining my back?” 

Inventors experimented with a number of solutions. Remember the ‘dog leash’ rolling suitcases with four wheels and a strap that would whip around and not stop when you stopped? Then they put a collapsible handle on the top of the luggage and two rollers on the bottom.  Now practically every traveler has that type of luggage – it changed the world!

Synergy and Innovation Require Advanced Networking Technology

Distributors need to think about bringing together all the data used to make better and quicker business decisions. That data can’t be isolated in data silos. Distributors must integrate their systems to create a 360-degree view of operations and identify opportunities for improvement.

Distribution Innovation is Aided by an Advanced Approach to Decision Making

Once data is available from all critical systems, it must be turned into useful information. Data is raw and doesn’t provide contextual insights. Without technology, it’s very difficult to determine how data from different areas relate and interact to affect overall operations.

Information is created when the data is presented in terms of relationships and how the data from different activities come together to affect the whole operation. With this type of information, a distributor can perform analyses using a PIO approach to decision-making.

  • P = Performance Measurement. It sounds obvious, but you must start with measuring performance. Many distributors simply don’t measure their business’s performance.
  • I = Improvement Tracking. Secondly, to see whether your actions are making a difference, you must see results over time. It’s not enough just to see where you are today without seeing how your results are changing.
  • O = Opportunities. Finally, your technology must point you to the areas of opportunity that will make a difference in your results. With limited time, you can’t afford to wander around hoping you stumble on the changes that will maximize your results – your technology should point the way.

A top-tier business performance management tool can provide information that drives growth and profitability. This type of tool doesn’t just display the information, it focuses your attention on the best opportunities.

Synergy and distribution innovation can be achieved by asking questions and using technology to help provide potential answers. It isn’t difficult to change the world, or just your own business!

Thomas F. Fitzgerald, CPA
Thomas possesses over 40 years of experience driving proven results in corporate financial management, spanning the scope of strategic planning, merger & acquisition, market/product targeting, sales plan integration, operations control & review, cash flow management, capital acquisition, income tax planning & compliance, wealth preservation planning, and enterprise resource planning design...
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