Monday, July 16, 2012
In honor of Stephen Covey - The Seven Habits of Highly Effective Distribution Executives
I thought I'd take the 7 Habits and see if I can't do justice to Stephen by applying them to Distribution Executives.
Habit 1: Be Proactive
Take initiative in the effective distribution of your products and services by realizing that your decisions are the primary determining factor for effectiveness in your distribution strategy. Be informed about your options and the impact of each choice.
Take responsibility for your choices and the subsequent consequences that follow. If you choose a particular channel (e.g. the travel agencies) and the most effective way to reach them is the GDS companies connections, then don't blame the GDS for the model.
Habit 2: Begin with the End in Mind
You must know what you are trying to accomplish before you can determine the best channels. Do your homework and understand not only the cost of each channel, but the average revenue that you can expect for sales through that channel. Do the math and ensure that you understand channel PROFITABILITY, not just channel COST.
Clarify what you value and what goal you are trying to reach. Envision the ideal characteristics for each of your various distribution partners and the outcome of the relationship.
Hint: Strife and lawsuits are not a great outcome.
Habit 3: Put First Things First
Prioritize, plan, and execute your tasks based on importance rather than urgency. If there is a new channel that you would like to explore, put together a project plan and prioritize according to the expected return on investment versus the size of the channel today.
Evaluate whether your efforts exemplify your desired values, propel you toward goals, and enrich the roles and relationships that were elaborated in Habit 2.
Habit 4: Think Win-Win
Genuinely strive for mutually beneficial solutions or agreements in your distribution partnerships and relationships. Value and respect people by understanding a "win" for all is ultimately a better long-term resolution than if only one person in the situation had gotten his way.
Did I mention that lawsuits and tearing each other down in the media are not generally a good way forward??
Habit 5: Seek First to Understand, Then to be Understood
Use empathic listening to be genuinely influenced by a person, which compels them to reciprocate the listening and take an open mind to being influenced by you. This creates an atmosphere of caring, respect, and positive problem solving.
In distribution you need to follow the money to truly understand the other person's perspective.
If you are a supplier, start from the consumer's perspective and realize that they don't always choose to buy from the supplier direct. If they are choosing other channels (e.g. OTA or travel agency or even a tour operator), then how can you best reach them and with what product offering (contrary to popular belief you don't have to sell the same product through every channel).
Then, think from the agency perspective. In the late 90s, airlines cut travel agency commissions and they had to shift their model to service fees and yes, the GDS productivity credits did become a bigger part of total compensation. The agencies are still a VERY effective channel, with professional travel agents selling travel all day every day and in most every category, yielding a higher average revenue for your product.
If you are an agency, then think about the supplier's perspective. They do need to make a profit to stay in business, but if they are trying to bypass you to be more profitable, then you need to demonstrate to them that indeed you do deliver a higher yield on average than they do in selling their product online.
If you seek to understand first, you will eventually be understood!
Habit 6: Synergize
Combine the strengths of people through positive teamwork, so as to achieve goals no one person could have done alone. Get the best performance out of a group of people through encouraging meaningful contribution, and modeling inspirational and supportive leadership.
This one doesn't really need any modification. Just do it.
Habit 7: Sharpen the Saw
Balance and renew your resources, energy, and health to create a sustainable, long-term, effective distribution strategy.
On a regular basis, you should look at your resources - people, tools, partners - and where you are putting all of your energy. In the company context, health = profitability and in order to be sustainable as a business, you need to be profitable. Make the right choices and your strategy will work long term and will be effective.
The other thing that you need to do is GIVE BACK. Make sure that you are thinking about ways to give back to society, to your community.
If you have a good story there, contact me and perhaps I'll feature your company in my UNCOMMON GIVING BLOG or interview you on my radio show, also known as Uncommon Giving.
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