Defining a new product distribution strategy
Transforming a company from a periodical to a wholesale distributor.
Synopsis
A mid-sized firm providing distribution of well-known periodicals to retailers was losing significant profit. They needed to launch a new strategy and refine their organizational chart and business relations to transform into a full-service product distributor.
Problem Statement
In the late 2000s and early 2010s, smart phones and the internet began to emerge as the primary way in which individuals received information and news coverage. This caused periodical distributors, who delivered magazines and newspapers to major retailers, to suffer financially. Due to the evolving media market and general economic climate at the time, the organization was facing declining revenues from periodical sales and supporting businesses. Chief Officers sought to innovate their existing periodical business while expanding their portfolio of products and services. This encompassed identifying their product inventory, the technologies and processes required to transform their business model, and driving enterprise-wide alignment and adoption of the new strategy.
The company was further challenged by their existing processes, organizational structure, company focus, and infrastructure. The organization had established several workarounds to process orders, bill, ship, and receive non-magazine products as a wholesale distributor. There were additional concerns about the company’s speed and capability to scale the organization and infrastructure to manage in the new model once the business began to increase and grow.
In order to successfully implement a new strategy to become a full-service product distributor and supply a wide-range of consumer packaged goods to the current customer base and expand the model to supply new customers; significant industry research and expertise, as well as consistent communications and robust change management, would be required.
Approach
Work was divided into three workstreams, including enterprise strategy and alignment, business architecture and development, and organizational design and transformation. Day-long workshops were conducted with a group of ~50 Chief Officers, Vice Presidents, Directors, and Subject Matter Experts over the course of 6 weeks.
The first week of workshops was to prepare for an enterprise-wide summit where the new plan would be introduced. Executives participated in half day workshops to articulate their objectives, goals, reasoning, and anticipated benefits of implementing the new strategy. A presentation was prepared, and the Executives unveiled the plan and shared key remarks regarding their enthusiasm to help build and ignite excitement surrounding the anticipated change and work ahead.
The second week of workshops focused on defining and aligning key leaders to the new strategy. Well-known tools and assessments such as a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis, were completed. In addition, CPG (Consumer Product Goods) industry-specific data and insights to help define and give input into trends was purchased and compiled by industry experts. Activities were completed to define a new mission and vision statement, as well as a break-down of objectives into short and long term goals. A sub-group was also formed to create and refine a proposed product inventory list defining which products would be in scope based on the new strategy and capabilities defined. This information was used as the foundation and framework for the process and organization structure workshops.
The next two weeks of workshops focused on the development of a business process framework to enable a wholesale distribution operating model and create specific business process architecture to direct the design of the organization and its ability to manage the business. Industry professionals were re-engaged to advise on standard product distribution processes and Directors and Subject Matter Experts broke out in small groups to define and map out 5 core processes for the business, each with multiple smaller processes rolling-up into their respective categories.
The final two weeks of workshops was focused on the design of the organization. Functional roles emerged based on the process framework that was established, and Directors and Subject Matter Experts were again broken out into smaller groups to identify high-level role descriptions and performance criteria per process group. A new structure was also crafted, and dependencies mapped out based on the new organizational functions, roles, and processes. Finally, Key Performance Indicators (KPIs) and scorecards were drafted to accompany the new role and functional design.
A roadmap capturing the strategy, processes, and design was created to disseminate details easily and quickly to the rest of the organization. The journey to visualizing, documenting, and agreeing to each piece of the roadmap was captured via pictures of people and activities, as well as printing final deliverables. These were hung up across a conference room in chronological order and employees were invited to complete a self-guided tour to learn what their leadership had completed over the past couple of months.
Results
A buzz of excitement infiltrated the organization and leadership was motivated and aligned because they had participated and given input into every detail along the way. This saved time, effort, and confusion during implementation.
A new strategy, processes, product portfolio, roles, technology, and organizational design were identified within two months, a timeline that is about one-third the average, and resulted in saved dollars.
The Chief Executive Officer was thrilled with the results and recognized his team and their hard work, which further motivated the group to succeed.
Long-lasting relationships were set in place and employees’ commitment to the organization was renewed through the anticipation and alignment to doing something big and great for the company.