No Planning Means No Accountability, or, “How to Hit a Home Run to Win the Game, and Still Lose”
April 1, 2006

Recently, I authored a "white paper" for the NPTA Alliance whose objective was to learn what suppliers valued about their distributors. The survey that we utilized asked suppliers in the NPTA Alliance wholesale distribution channel a number of questions around key categories and functions that distributors provide.

In particular, we asked the suppliers to isolate specific distributor functions that were most important to them, and further, how they perceived their distributors' performance in those functions. The functions that stood out, as you may guess, were those that suppliers valued, yet were graded poorly in terms of distributor performance.

I focus your attention on one of those categories, "Distributor Planning & Management." Here were two of the questions/statements the supplier respondents were asked to reflect upon that focused on functions that fit in this category:

• "Distributors should engage in an interactive, open planning and goal setting process with their key suppliers on a regular basis."

• "The distributor should be accountable for agreed upon performance objectives (i.e. promotion results, new product introductions, sales/margin/profit increases) that are established mutually with the supplier."

In both cases, the suppliers' responses indicated a high importance placed on both "open, interactive planning," and separately, "accountability." Conversely, uniformly "sub par" grades on their distributors' performance were given.

While it is important to review the complete survey to understand how these results fit within the whole, you can determine a strong message that may help in your work with your supplier or distributor channel partner.

Specifically, because distributors, as a whole, are not perceived to be engaged in collaborative goal setting with their suppliers, it is logical that suppliers will be continually let down when it comes to feeling their distributors are accountable.

My question is, "accountable to what?" If suppliers do not create the environment or provide the tools to conduct collaborative planning with their important distributors, than how can suppliers expect to have their distributors behave in an accountable manner?

Further, if distributors consider a collaborative effort with their suppliers to be an important ingredient to maximizing channel partner, and consumer satisfaction, then why don't distributors insist on having a clearly defined interactive, open planning and goal setting process with their suppliers?

It seems to me that both distributors and suppliers are forced into the "ready, fire, aim" mentality. While distributors are able to survive using this mentality, (they obviously have through the years), it is entirely possible that their result, including increased supplier sales and market penetration, may not be the results with which the suppliers will be satisfied.

In a sense, this sets the distributors up with having to make assumptions about what to market and sell, as well as the processes of doing so, thereby generating business and having their suppliers be dissatisfied. This is sort of like the child who comes home having hit the game winning home run, and having the parent unhappy because he should have been playing soccer.

My point: Suppliers want to have their distributors spend more time collaboratively planning and establishing goals and activities. Further, they want to feel that their distributors are more accountable for agreed upon performance objectives, including shared account penetration and sales goals, engagement in sales promotions, collaborative calling, education and training, lead generation and responsiveness, etc.

Planning and accountability would seem to benefit both suppliers and distributors. However, until both come to the table to craft and implement interactive and open goal setting and planning, to which both are accountable, there will be continued dissatisfaction. Distributors should be as insistent on a joint planning process as their suppliers, and should take the initiative to make this happen. Further, while we didn't survey distributors for this study, I would imagine that distributors would like to have their suppliers more accountable as well.

Ironically, the distributors, like the child in the baseball example, may be hitting home runs, and having their suppliers unhappy. And, vice versa.

Distributors and suppliers: Let's hit home runs, and win the game, together. Start planning together!

For information on supplier/distributor planning processes, please contact Jeff Grover at j.grover@grovergroupllc.com.

To access the NPTA Alliance Supplier Perception Study, you may visit www.gonpta.com.