Advice and knowledge are invaluable to less-experienced members of an industry. Following is the second in a series of excerpts from Profiles in Wholesale Distribution Leadership, a program sponsored by the Distribution Research and Education Foundation of the National Assn. of Wholesaler-Distributors. Michael Marks, a principal and managing partner with the Indian River Consulting Group in Melbourne, Fla., led some of the industry's smartest and most successful leaders in a conversation focusing on younger distributors coming into the industry, and their careers in wholesale distribution.

When asked what he would tell someone looking at a career in wholesale distribution, Woodhouse had this to say:

"I would tell them that although every so often people say it's such a simple business — that all you have to do is buy it, store it, sell it and collect for it — it's incredibly complex. At Sysco, we're dealing with 10,000 items that we're selling to 3,000 customers in the food area. The convention is, we take the order today, and we'd better deliver it tomorrow. If we can't get you 99 percent of everything, then the only thing we can do is sell it cheaper than every other idiot in town. And you can't make money if you're going to sell it cheaper than every other idiot in town.

Its complexity is, [as an example] when you and I walk into a restaurant, which is 60–65% of the food service industry, we're given a menu. The menu is an implied promise that everything on that menu is going to be available. When you order 'X' and you're told, 'I'm sorry we don't have it today,' you're basically angry. Most of us are ladies and gentleman — we don't throw water glasses or have a hissy fit, but as we walk out, we are disappointed. There are another 35 restaurants within 10 miles of that place, and the restaurateur knows it. They want to be able to support their menu, which means they have to rely on the distributor to get the product to them.

I'd really look to make sure that you have the financial controls; that you really know what is going on. There are a lot of distributors out there that don't have those financial controls, and you could be buying a distributorship that you thought did. The sales are probably right, but the profits may not be. That is not a financial business. That's a sales and marketing business.

I'd make sure that there was a really competent, above-average financial individual shoulder-to-shoulder to me as the boss. More failures take place there, I think, than anyplace else.

Also realize that this is not a 9-to-5 business; you've got to be prepared to sacrifice. You think you get to have the holiday but, believe it or not, that resort in Atlantic City wants to have food delivered on Saturday, even though it's the Fourth of July weekend — and you'd better be around to do it. If you can't take care of the service requirements, then we're back to where we were earlier [with the restaurateur]."

When asked if life at Sysco changed when it became a Fortune 500 company, Woodhouse said:

"I hope not. I just hope not. We still needed to be the same enterprise, basically being very careful to remember that our customer needs service, service, service, and service. Everything we do had better be supplying that, and making sure that we have the best people in the industry to provide that service. Whether we are a Fortune 500 or not has nothing to do with it. We just better remember what got us there, and keep going after the same thing."

In discussing what he would tell a distributor just getting ready to buy a business, Steiner said this:

"Someone getting ready to buy a business needs to understand that you start small, and the things that you do for whatever business you're in apply to every size business. The same things that we did when we ran a company that was $200 or $250 million also were true with a $1 million company.

Single line, little risk, keep it simple, and get the customer what he wants. All of those things, and you can list them out any way you want to list them, are things that are applied.

Take care of your customer. Understand who you are, and that you can't be all things to all people.

If you reinvest in the business, you have the opportunity to grow. You either grow internally, by opening additional locations where they are going to provide bottom-line revenue dollars and net income dollars to you, or you buy other companies.

You have to remember that when you're buying a company, you're buying people and geography. For the most part, the other things that you're buying are of no great significance. They're assets that can be liquidated. They're assets that have little meaning — you're going to change them over time. So it's the people, the customers, and the market that you're looking at. If you're buying something because it's good, then you have to make sure you don't destroy it. If you're paying a premium, ultimately for a company, there has to be a reason why you paid that premium. Understand that they got where they are because they were doing some things well, or they were a bad company and weren't doing things well. When you buy those companies, you have to find a way to preserve either the culture, or the way and the process of procedures that they were using, and find a way to amplify them over yours.

There are things that everybody can learn in a business operation. The biggest question is, when you acquire companies, particularly when you're going to merge multiple groups of companies, how do you preserve or create the new culture? You want everybody working together, not apart.

Obviously, the security factors are very important. [Employees are asking,] 'Am I going to keep my job? What's this going to mean to me? How is this going to work?' An open communication, open dialog, with the new president or CEO sitting in front of and dialoging with them, is the best way to do it. Being honest, straightforward, and forthright to those people is how you make things better, and that's what this is all about.

The bottom line is performance. In the end, focus on performance, and you'll get the results you're looking for."

To find out more about NAW's Profiles in Wholesale Distribution Leadership, visit www.naw.org.