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Wanted: Successful Branch Manager

Branches Come in all Shapes and Sizes, but the People Who Manage Them Have Some Very Specific and Necessary Characteristics

By Kimberly Griffiths, Associate Editor -- Industrial Distribution, 7/1/2006

There's no shortage of branches in this industry. Take a look at most of Industrial Distribution's Big 50 participants, and they've got a number of them under their corporate wings. Of course, a distributor doesn't need to be pulling in the larger millions in sales to have a branch, and the type of person needed to run a branch for any distributorship is basically the same.

Branch manager needed: must be excellent communicator and people person; knowledge in product a plus, but not always necessary; management experience is required; should be able to make own decisions for the good of the branch, and for the company. Hours and pay are negotiable.

"At BDI, the branch manager is the most important position in the company," says Carl James, president of BDI, a bearings and general-line distributor headquartered in Cleveland that also hosts 139 branches, in an e-mail. "This person leads the branch team, which is the focal point of our operations because it is the unit that is closest to the customer."

Communication to spare

As most distributors know, sales in this industry are made and broken on communication: communication with salespeople, their managers and their companies. Making that communication as smooth as possible is better for the entire selling process.

"The branch manager must be personable, and have good communication with their staff and customer base," says Larry Wolfe, president of Production Tool Supply, a master distributor and industrial tool distributorship headquartered in Warren, Mich. The company boasts 19 branches. "That, in addition to great sales abilities and product knowledge, is very important to the business."

Craig Cole, president of New Hampshire Tool Outlet, a full-service tool and equipment distributor based in Salem, N.H., recently opened his company's first branch in Pembroke, N.H. Finding someone to head the branch was a daunting task, he says, until a peer who was closing down some branches suggested one of his own managers for the job.

"This guy had the experience in managing a store, which was very important, even if he didn't have the knowledge in tools," says Cole. "He has a good work ethic. I hired him to work in our original store for six or seven months, before the branch opened, for some product experience. He was instrumental in setting up the new store, and has hit the ground running."

Steve Chmelar, vice president of commercial sales for Carroll Distributing and Construction Supply, a distributor of concrete forming systems and construction equipment headquartered in Ottumwa, Iowa, agrees that it takes a certain sensibility for a branch manager to be successful. Carroll Distributing has 14 branches in the Midwest.

"...They are key to any organization," he affirms. "These people must be trustworthy and unselfish, and be able to listen to the corporate leadership, interpret the directions, and then put them into action."

Finding someone with the proper sensibility is important, as the wrong person could poison a team's motivation and have detrimental effects on the company.

In a conversation Chmelar had with one of his branch managers who was recently promoted from salesman, Chmelar quoted the manager as saying, "As a salesman, I heard negativity from my manager so often that I bought into his reasoning. Rather than rallying the team to do more, he complained about the reasons that we couldn't or wouldn't. Since you moved me into this position, and gave me the authority to lead our team in the same direction, it is amazing what we have accomplished."

Separate, but still a part

Independence on the part of the manager also is important to the success of a branch. Being able to answer questions definitively and make decisions quickly is key to the sales success of every salesperson; but in the case of the manager, it may be precedent setting. That's why having a firm grasp on the parent company's strategy and philosophy is integral to the job.

"The managers must be able to deal with all matters of the branch in public," says Production Tool Supply's Wolfe. "They are a representative of the branch, the company itself, and the products we sell. In that, the role of the manager has changed from gatekeeper to more about operational efficiencies and loyalty to customers. They used to be at their desks all the time, but now they're out on the road about 40 percent of the time. They need to work hard to represent the company in the best light."

Jerry Rosin, CEO of S.L. Fusco, Inc., a distributor of industrial abrasives in Rancho Dominguez, Calif., also believes that independence is key to branch manager success. (SLF has branches in National City, Calif., and Tempe, Ariz.) According to Rosin, an SLF manager gets what the company believes is the proper balance of corporate support combined with managerial independence.

"We give them some independence, but at the same time, you don't want them thinking that they're out there all alone either," he says.

At BDI, the branch managers are considered leaders of their branch teams. (They typically are outside sales representatives, as well.)

"As a result [of their leadership responsibilities], they also are mentors and coaches for the branch teams, and set the business growth strategy for the branch," BDI's James explains. "That builds into a regional and then company performance [strategy]. BDI is in the talent business—the business of building talented men and women into teams that exceed our customer expectations and provide applications solutions."

Chmelar also believes that choosing someone to lead—and who is able to toe the company line—is necessary to a successful branch.

"By selecting a branch manager with a desire to grow the business, while continuing to meet the needs of the existing customer base, we have all enjoyed success," he says. "By presenting the branch manager with a challenge to meet realistic goals, and by providing him the freedom to make strategic decisions toward accomplishing those goals, we have become stronger and more successful [as a whole]."

A manager may have all of those great characteristics, but when it comes down to the success of a branch, the life and death of it rides on the sales numbers it generates. When asked how he judges how well a branch manager is performing, SLF's Rosin says he knows to look there first.

"If you have the sales, then the branch is successful," he says.

Having opened about eight months ago, N.H. Tool Outlet's new branch is doing fine, says Cole.

"We opened in a slow time, which really was good, because it gave us the opportunity to get all the kinks out when they wouldn't be too busy," he explains.

At Production Tool Supply, Wolfe also agrees that sales are where a branch's success shows. The company has been strategic in where it's located its branches, and has given the managers the flexibility to operate autonomously, he says. That allows them to react faster to a customer's needs—and when the branch is stocked appropriately and there's no wait for product, that translates into sales.

 

Branch manager compensation 101

"Hopefully, the responsibility of caring for the performance of a branch will be rewarded with appropriate compensation and appreciation," says Steve Chmelar, vice president of commercial sales for Carroll Distributing and Construction Supply in Ottumwa, Iowa.

So are branch managers being fairly compensated? In an effort to bring you the answers to all your burning questions, we at ID decided to have the information given by branch managers in our Annual Compensation Survey broken out into its own results category.

  • Branch managers make an average of $80,000 per year, including bonuses and commissions.
  • In the past year, 40 percent of the branch manager respondents had a 2 percent to 4 percent increase in pay, while 20 percent boasted a 5 percent to 7 percent raise, 10 percent added 8 percent to 10 percent to their wallets, and 7 percent counted an 11 percent to 20 percent raise. Sixty percent of the respondents said that their normal annual review was the occasion for the raise.
  • Thirty-one percent said that 1 percent to 10 percent of their salary is based on certain performance measures. Fourteen percent said that none of their salary, and 14 percent said that 11 percent to 20 percent of their salary, is variable on performance.
  • An overwhelming 87 percent of the respondents said that their job functions have increased over the last two or three years. Only one respondent could say that their responsibilities have lessened.
  • Eighty-seven percent of those who replied said they are satisfied with their jobs. But if they were to leave their jobs for any one reason, 37 percent said more money, and 10 percent said moving into a different industry.
  • What do they like most about their jobs? Thirty-seven percent said the work itself, and 33 percent said the challenges the job presents. And what do they like least? Thirty-three percent cited a lack of management support, and 23 percent counted the additional workload as a detriment.
  • Thirty percent of the respondents are most concerned about management support, a recurring theme, and 17 percent cited both job security and keeping current on technology. Thirteen percent mentioned both company merger or acquisition and sufficient operating budget.
  • And last but not least: the average branch manager, by the numbers: he is 46 years old; has a college degree; has worked for three companies; boasts 20 years of experience in industrial distribution; has been at his present job for five years; works about 50 hours per week; and would recommend a career in industrial distribution to someone graduating college or considering a career change.
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