Wanted: great branch managers

With competition for good employees heating up, how can distributors find good managers to run their ever-expanding companies?

By -- Industrial Distribution, 5/1/2000

These days, it's hard enough to find good employees, let alone good branch managers. While growing these individuals up through the firm's ranks is the desired approach, some distributors grow rapidly and wind up depleting their internal candidate pool. Once that resource dries up, companies are forced to look to the outside labor market-which is currently at 96 percent capacity-for help.

In doing so, distributors find it increasingly difficult to head up their new branches with experienced, qualified managers willing to learn the ropes at a new company.

At Syracuse, N.Y.-based K.J. Electric, Inc., for example, company president Ken Jacobs says he'd much rather promote branch managers from within. However, after experiencing rapid growth, his five-location distributorship of motors, electronic drives and controls found itself tapped out of available candidates.

"It's impossible to promote as fast as you grow," says Jacobs, noting that the downside of hiring from the outside is that everyone brings along their own concept about how they want to do things. "They bring concepts in with them from other companies, and they always want to show me how to do things their way."

Hiring the right employee is always a hit or miss situation. However, distributors who know what they're looking for before they start their search will increase their odds of finding the right branch managers. According to Mark Dierolf, president of Innovative Distribution Solutions, Inc., in Gilbertsville, Pa., distributors should be seeking "intrapreneurs" and not entrepreneurs. Entrepreneurs will want to take control, but won't necessarily want to follow the rules of the company. On the other hand, intrapreneurs will take charge, while also acting as team players with the rest of the firm.

"Look for someone who can create thoughts, ideas and processes around your company's own internal core," Dierolf advises. "You need someone to make quick decisions-someone who is a leader, and not a manager." He adds that basic accounting, marketing, sales and computer skills are vital, as are integrity and the ability to act quickly in response to customers' changing demands. And leadership skills are vital, Dierolf adds, because branch managers are actually leaders, not just managers. "If someone is really serious about a branch management position, then they should have six to13 weeks of training, including training on corporate initiatives," he adds.

At Hubbard Supply Co., a distributor of industrial and electronic supplies in Flint, Mich., Bob Fuller acknowledges the fine line between entrepreneurial spirit and the need to stick to a company's core values. When seeking branch managers, he looks for two major traits: smarts and leadership skills. "We need someone who can operate not only as an entrepreneur in their own world, but who can perform to standards that the organization requires," Fuller explains. "It's a tough job."

Don Rice, professor emeritus of industrial distribution at Texas A & M University, says his basic rule for ferreting out good branch managers is simple: "There are two places you can't have mediocre people: as airline pilots, and as branch managers." He advises distributors to hire more college-trained individuals-those with management skills and asset management experience. "The branch manager should be adept at maintaining assets," he says. "So give your branch manager a set amount [of money] and see how much they can make with what you gave them."

At K.J. Electric, Jacobs has a simple formula: find individuals who have played team sports. He reasons that they're competitive by nature, and that they'll work well with others. "In most cases, they also hate to lose," he says. "And, they know that they have to work well in order to succeed."

From sales to management

Many times, distributors look first to their sales force for possible branch management candidates. According to Dierolf, this is a mistake. "Great and good salespeople generally make poor branch managers because they have a hard time delegating effectively," he says. "They're good at [performing] in front of the customer, and they have a lot of good traits, but they generally make poor leaders."

Jacobs, once a salesperson himself, disagrees. In fact, he sends branch managers out with his salespeople on a monthly basis, mainly to increase the face-to-face contact with customers. "The branch managers don't always get to see the customers," he says. "These meetings are helpful because they let the managers come in contact with the customers and give them feedback that they wouldn't normally get-such as a shipping/receiving clerk who doesn't like the way a particular product is packaged.

"To give your customers good service, you must be cognizant of these types of issues."

According to Fuller, whether or not a salesperson is suited for the branch management position really depends on the size of the branch and its function. If, for example, a branch is a sales office rather than an operational facility, then it requires a different skill set than a stocking location would. "The demands of the job are high for a salesperson who is in the position of having to deal with operational issues, and who doesn't have experience in those areas," says Fuller.

Tackling the issues

Most industrial distributors have the majority of their assets tied up in inventory. For this reason, trusting control of a branch's assets to one individual is a big step, especially if it's a stocking location. "A branch manager must have a general knowledge of your company's inventory policies," says Dierolf. "And, they must know how to manage inventory, and how to control the inventory in a way that meets the needs of their region."

With that, Dierolf says, internal communication becomes a real issue. He advises communicating weekly, monthly and quarterly to ensure that the main location doesn't lose touch with any particular branch. "The various locations should communicate on a regular basis by telephone, and should also develop a monthly written report and have some type of physical meeting at least quarterly," he says. "During those meetings, review a basic report on a weekly basis, then expand on that every month.

"Also, on a quarterly basis, you must physically sit down together and have a serious chat about strategies and goals."

According to Fuller, branch managers tend to be "pulled in several different directions" at once. On one side are the local customers, on another are the local salespeople, and on yet another is the distributor's corporate headquarters. "Sometimes, there is a conflicting agenda," says Fuller, adding that his firm's incentive system, which is built on the success of the company as a whole, helps solve that problem at his distributorship. "We don't break out branch performance as far as incentives are concerned. Instead, we're one cohesive unit."

Whether you choose to promote from within or hire from the outside, the challenges to finding good branch managers who can take control of the reigns while still following the rules of the road are many. Those who do look outside their doors for quality individuals would be wise to heed the following words of wisdom from Rice: "To get one exceptionally good branch manager, you'll need to interview at least 25 people. However, with the labor market as it is, they're just not available." The best solution? Grow your own.