THE RTMA
MANAGING CHANNEL CHANGE
You are about to unveil new contracts, slash your distributors, let in the big retailers. But your new strategy stands little or no chance of success - unless you can help your partners handle the change. Rosemary Wyatt, a consultant with VIA, looks at the classic mistakes and how to avoid them....

Managing Channel Change (44.235Kb) - DOWNLOAD

1. Have you got a clear, consistent vision?

Many companies start talking before they have really worked out what they want to say. And, often, different groups are given different messages. You will create confusion if you tell Wall Street that you plan to grow direct sales to 40 percent within two years, and yet inform your intermediaries that direct will never be more than a trial!

You can't be clear and consistent until you have got real internal agreement first. Often, big changes are sabotaged by local managers, who don't believe the company is really going to move from a to b. Ultimately, you risk unveiling the state of civil war inside your company to the outside world.

Clarity is also vital. The architects of a new strategy, those who have lived and breathed it on a daily basis, have a horrible tendency to assume that what they have developed is as clear as crystal. It may be as clear as mud to those who need to implement it.

2. Put the right rewards in place - internally and externally...

Almost invariably, I find that companies which want to change behaviour don't make the necessary changes to rewards.

So you want your account managers to spend more time building relationships with key partners? Are you rewarding them for doing that, or are they still paid on sales?

Maybe you want your intermediaries to order online. Again, unless they are truly convinced that this will save them time and money, they won't budge.

3. Have you worked out who is really going to be affected?

All too often, companies focus on those for whom any change will be unalloyed good news. You need to sit down and systematically go through all the stakeholders - how they will be affected and to what degree. This sort of impact analysis will almost invariably uncover new groups you need to address.

Try charting the degree of impact on their business on one axis and whether the news is good or bad for them on the other. Those for whom the change will be high impact, bad news need a lot more time than those for whom it is low impact, good news .

This is also the time to decide who should communicate what and how. It is all too easy to send an indian, when you should be sending a chief!

Your mantra should be to get the right message to the right partners at the right time through the right medium.

4. Are you communicating - or just broadcasting?

A big PR campaign, brochures, a conference - companies can invest millions in telling partners of changes. If they don't allow for two-way communications, then they will still get it horribly wrong.

Partners have to be allowed to come back, to ask questions, to challenge you. Build this into everything you do. Commit to responding to emails on a particular subject within two hours. Build break out workshops into your conferences.

This means budgeting for the heavy expenditure of that most valuable commodity - time!


5. Are you prepared for resistance?

You have to have the humility to expect resistance. And you have to be ready to help partners to deal with change.

The initial reaction may be one of denial: "You can't do that." This will then change to resistance: "I am not going along with this." It is only at this stage that partners or employees can start to explore what the change really means, and how they will live with it. You have to help them along each step in this process to reach the fourth stage - commitment.

6. Are you trusted?

If your partners don't fundamentally trust you, then change may well prove to be impossible. Lou Stern (see interview) defines trust as a combination of competence, honesty and benevolence. The last is important. Partners need to believe that, at some level, you have their best interests at heart.

Look at your past history. Is this your fourth big initiative in four years? And did the others just fizzle away to nothing? If you always hit them for big orders at the end of the quarter, are they really going to believe you when you talk about moving to a sell-through model?

Gauging how people will react can be hard. It is always worth asking how partners feel about the status quo today. Paradoxically, if they are happy with the present, then it may be particularly hard to move them with you. But if they are dissatisfied with the way you work today, then they may welcome change.

Change is easier for companies which invest long-term in building relationships with partners. Forums where partners can meet and discuss the market, how they work with you and explore ways of improving things, are not a fancy luxury.

Remember that channels is a people business. A company whose managers have formed real friendships with partners is much more likely to succeed than one which hasn't. Ideally, you want to reach a situation where you really are working with them in a consultative way very early on in the change process.

7. Don't overestimate your power....

Managers who work for large suppliers assume that their tens of billions of dollars of sales equates to power. Most of the time, it doesn't. Unless they are in a monopoly position, suppliers often have very little real power over their resellers. History is littered with failed initiatives. Making changes to routes to market is several times harder than making changes with employees.

Unlike employees, partners can simply switch from one supplier to another. Most distributors and resellers don't have much time, and what time they do have, they want to invest in maximising profits. If your changes won't net them any extra profits, they are unlikely to bother participating.


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