Optimizing Human Capital Development

Achieving Distribution Competitive Advantage through People:
Best Practices in Acquiring, Developing, Managing and Retaining Talent

Overview

The NAW Institute for Distribution Excellence and Texas A&M University’s Industrial Distribution Program maintain an alliance dedicated to further the understanding and application of best practices in wholesale distribution. This alliance operates through the Council for Research on Distributor Best Practices (CRDBP). The mission of the CRDBP is to create a competitive advantage for wholesaler-distributors through the development of research, tools, and education.

The Council for Research on Distributor Best Practices conducted its 2014 consortium on Optimizing Human Capital Development. Following the very successful Optimizing Channel Compensation and Optimizing Growth and Market Share consortia, this initiative conducted research to develop practical methodologies and tools to optimize recruiting, training and retaining human capital. A two-day educational session was developed based on the resulting knowledge, methodology and tools.

The speed at which most distribution firms can grow (profitably) doesn’t solely depend on the distributor’s geographic reach, physical assets, product selection, access to capital or innovative services. It depends on its human resources. Human resources are the most significant factor in distributor success. Not on the balance sheet and only listed on the profit and loss statement as an expense, the value of human resources within a company is often underestimated. Distributors have expended tremendous energy in optimizing operations with information technology, facility development, inventory control, transportation management, and so forth. Human resources are often left behind due to a lack of resources for training, a poor understanding of the return-on-investment (ROI) for human resources development, and the perception that people are more expendable than other assets within the business.

Wholesaler-Distributors often struggle with recruiting, developing and retaining sales talent. They also experience challenges with developing a leadership pipeline for growth and succession. Successful distributors understand the importance of acquiring, developing, motivating and retaining talented employees, but often struggle to develop and implement successful programs.

Texas A&M University has developed a consortium in alliance with the NAW Institute for Distribution Excellence that investigated how distributors can optimize their human resources.

Why Join a Research Consortium?

Many times companies cannot afford to invest in some research and development due to the high cost and/or lack of knowledge resources required to conduct the research. Research Consortia are an economical path to low-cost, high-quality research and development that is essential to the growth of companies. Consortia also allow for the sharing of best practices and strategies among the cutting-edge organizations that invest in such efforts.

Who Joined this Research Consortium?

This Research Consortium proved to be very beneficial to:

• WholesalerDistributors, Manufacturers who go to market through Wholesaler-Distributors
• Technology Providers who serve WholesalerDistributors and Manufacturers.

What Are the Benefits?

Consortium members:

• Had the opportunity to actively participate in groundbreaking research in one of the most crucial and timely challenges facing the industry and receive results, methodology and tools.
• Were able to direct the scope of the research so that the results are actionable and sustainable.
• Had a month’s head start on competitors in understanding and implementing the new best practices developed in this consortium as well as a far deeper understanding of the best practices from workshops conducted directly with their organizations by the research team.
• Had the opportunity to send up two people from their organizations to one of the two educational programs delivered at Texas A&M University for no cost other than travel expenses during the 2015 sessions. The educational programs were scheduled following the conclusion of the research.

Value to Members

• Distributors and manufacturers gained a competitive advantage by implementing the scientific Optimizing Human Capital Development methods and using the tools developed to maximize value propositions.
• Technology companies gained the knowledge base, methods, and tools that can be implemented in their systems.

Deliverables

In addition to the body of knowledge resulting from this research, consortium members received the following tangible outcomes:

• An implementation strategy, tools, and methodologies for member firms to optimize their human capital development, specific to each company, based on workshops conducted with their teams
• A one-day workshop at Texas A&M
• A two-day educational seminar aimed at providing firms with knowledge about how they can apply the concepts, tools, and techniques identified in the research
• Free seats in the educational program that follows.

Consortium Deliverables

Consortium members participated directly in the research to gain a better understanding of the findings. The full report was issued to each consortium member with all analysis performed on the firm itself with the firm’s own data. Direct recommendations were made for individual participating firms on:

• • Developing and using distributor organization development methods and tools
  • Creating a human capital development plan, processes, and metrics
  • Implementing and measuring human capital development interventions, programs, and activities
  • All tools created to complete the study and analysis for the study.
    All consortium member company results and data shared with researchers are kept confidential. Only general findings and best practices are shared with other consortium members. Distributors will benefit from the research findings and from sharing best practices with other cutting-edge firms in the consortium. Manufacturers will benefit from a shared strategy development study with the distribution community.

Consortium Structure and Fees

The membership fee was $25,000 per company in this consortium. The fee covered attendance in consortium meetings hosted by the Global Supply Chain Laboratory at Texas A&M University and workshops with member firms to design the research solutions personalized to their needs.

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