During the three-day meeting, attendees listened to four panel sessions—three that focused on “what the very best distributors do” in regards to customer focus, operational efficiencies, and leadership culture and a wrap-up featuring remarks from NAW's Institute for Distribution Excellence fellows.

Attendees also heard various accounts of what lies ahead in terms of the economy. Alan Beaulieu of the Institute for Trend Research, for example, assured members that we are not yet in a recession.

“The housing sector [downturn] alone is not enough to tip us into a recession,” he said.

Beaulieu predicted “tepid” growth this year and said a recession will occur in 2009 and 2010, with the economy rebounding in 2011 and 2012.

He said distributors can ride out the recession by working smarter and closely monitoring their cash position; more accurately determining the necessity of new hires; developing a layoff plan; and taking advantage of changing demographic markets.

“Go back to what you did [in 1999 and 1989] before previous recessions,” Beaulieu said.

He went on to say that the United States is still the number one exporting nation in the world, though the media is focusing more on the soaring economic growth of China—a story Beaulieu says is overblown.

“Their economy is not as strong as most people believe,” he said.

Whether the recession is here now or is coming next year, from a financial standpoint, the United States has grown more in the past quarter century than at any other similar time in history, according to keynote speaker Stephen Moore, an editorial page writer for The Wall Street Journal.

“We've had more financial growth in the past 25 years than in the previous 200,” he says.

Moore praised the idea of making the Bush tax cuts permanent and said that if Congress were to do that tomorrow “the stock market would gain 500 points in a single day.”

He also noted that 22 nations have flat tax systems in place and two more, Poland and Bulgaria, are to implement such plans shortly. (Read more on Beaulieu's and Moore's comments in Keough's Korner blog at our Web site, www.inddist.com).

A panel discussion facilitated by Michael Marks, a principal with Indian River Consulting Group, focused on the importance of developing a leadership culture.

Panelist Chip Hornsby, a group executive with Wolseley plc, the largest industrial distributor in the world, pointed to the commitment his company made to grooming professional talent.

“We have a phenomenal training program,” he said, pointing to a management training program that requires employees to start in the warehouse and work their way up the corporate ladder. Wolseley hires more than 1,000 college graduates a year for the U.S. program, and a similar program is being implemented in its European operations.

Hornsby traced Wolseley's growth from its founding as a sheep-shearing firm to a company that at various times included a tractor distribution company, a plastics extrusion firm and several others before changing its focus and concentrating solely on the industrial and construction sectors.

The move seems to have paid off. Today, Wolseley is a $32 billion international conglomerate that does business in more than 28 countries. Half of that business is in the United States, primarily through its Ferguson Enterprises and Stock Building Supply divisions.

Hornsby pointed to the challenges affecting that part of the business, particularly Stock Building Supply, a $5 billion company with 45 percent of its sales tied to lumber-related industries—sectors that are under tremendous financial strain. Hornsby drove that point home by mentioning housing starts.

“There were 2.2 million housing starts a year ago,” he said. “There are 700,000 today.”

He also said the drop-off in construction led to the “very difficult decision” to significantly reduce the number of employees in Stock's workforce, as well as at Ferguson, which has some $11 billion in sales. Wolseley has cut 3,000 jobs in North America since last August. Hornsby said the company reluctantly made those decisions so it could “restructure our workforce for the years ahead.”

Another panelist, Hisco Corp. CEO Bob Dill, pointed to the advantages of being part of an employee-owned company. Houston-based Hisco has been managed by an Employee Stock Ownership Plan since 1974.

“We have 265 [employee] owners and no one owns more than 3 percent of the company,” Dill said.

He added that Hisco managers are empowered to make decisions and all employees provide input into the company's overall strategy.

Dick Gochnauer of United Stationers stressed the seven values that lead to success at this company: accountability, teamwork, a customer-first philosophy, respect/dignity, honesty/integrity, people giving back, and continuous quality improvement.

“[The values] are meaningless unless they're lived up to,” he said.

Three distributors participated in another panel discussion, “What the Very Best Distributors Do: Customer Focus.” The panelists were Dave Griffith of the Modern Group, Mark Kramer of Laird Plastics and Steve Nelson of POOLCORP.

Griffith pointed to his company's success in listening to customers when problems arise. Modern Group researches problems, identifies and fixes them and notifies customers of the results—and then follows up with a thank you note. Communicating with customers and deepening their relationship is at the core of Modern's success, Griffith said. Managers, for example, make sure customers have their name, e-mail address, and contact information so they can be notified when a problem occurs.

Adam Fein of Philadelphia-based Pembroke Consulting moderated the customer focus panel discussion. He was also a panelist with three other NAW fellows for a wrap-up session on distributor best practices facilitated by Tom Gale of Modern Distribution Management. Fein said that despite the recessionary signs in the economy, distribution “is not only growing, but thriving.”

He pointed to the growth of exports in materials handling and pharmaceuticals as an example.

“As much as we talk about a recession, there are opportunities in areas such as exporting,” he said.

Wolseley's Chip Hornsby is the new chairman of NAW. He succeeds Raymon York of Ewing Irrigation Products.