It feels like a fog of stagnation has socked in the U.S. economy for the past few years. No one is ready to say we have slipped into a recession, and economists are already seeing signs that things should start to improve in the second half of this year or next year. But business is shuffling along at a frustratingly slow pace. What makes folks particularly uneasy in this era of stagnation is that they have to wrestle with these less-than-spectacular economic conditions while at the same time trying to figure out which of the industry-changing technological, demographic and digital mega-trends lurking just below the surface may change their businesses forever.
At one of the educational sessions during the recent NAED South-Central Conference in Las Vegas, distribution industry consultant Dirk Beveridge, president, Unleash WD, dug into some of these trends in a thought-provoking presentation. He said distributors, manufacturers, reps, electrical contractors and end users must deal with a bigger challenge right now than just managing their businesses through the ups and downs of general business cycles. Beveridge said the global economy is being restructured by disruptive forces in technology, digital shopping and generational change in the workforce.
One of the source documents in his presentation offered some additional insight into these disruptive forces. A 2013 Forbes magazine article by Steve Denning, “Leadership in the Three Speed Economy,” offered some fascinating insight into these changes. Wrote Denning, “Is the economy in a recovery? The question today is almost meaningless. That’s because the economy is an aggregate of three very different economies, each going at its own speed, each with its own dynamic and each with its own very different trajectory.”
“Each of the three economies faces a different set of leadership challenges. The Traditional Economy — still the largest — is in steep and fundamental decline: It needs more honesty, vision and courage from its leaders. The seemingly prosperous economy of Financial Capitalism continues to run on bubbles and needs to be reconnected to the real economy. Meanwhile, the Creative Economy is the genuinely flourishing economy of the future: Its leadership needs to institutionalize gains already made.”
The Forbes article hits home. Much of the electrical market is by necessity squarely positioned in the Traditional Economy, manufacturing the necessary products to power the world, but doing it with the same business philosophies they have used for decades.
Denning says the most future growth opportunities are in the Creative Economy, led by companies willing to rethink markets and introduce radically new products or services. Denning says leaders in the Creative Economy “exploit an inter-connected constellation of technological innovations and bring to the marketplace dramatic reductions in cost, size, time and convenience, new systems of infrastructure, new ways of socializing, new meaning as to how time is spent, and new ways of living these possibilities.” Some of companies he mentions include Apple, Amazon, Salesforce, Whole Foods and Costco.
This month’s issue offers several articles that can help you size up the disruptive changes that will be the future foundation for the “New Normal” in the electrical business. Executive Editor Doug Chandler kicks things off with his article on page 14 with the mind-bending possibilities of distributed generation — producing electrical power locally outside the traditional electrical grid.
In part 2 of our coverage on the Rep of the Future Study recently published by the National Electrical Manufacturers Representatives Association (NEMRA) and Farmington Consulting Group (FCG) (p. 21), Tom and TJ O’Connor of FCG explore what top-shelf reps will have to do to remain competitive in the future. I wrote the “10 Trends that Will Shake the Industry” feature on page 18 and David Gordon and Allen Ray made some intriguing selections in their Speaking Out column entitled “16 Distribution Industry Trends for 2016” (p. 32).
Electrical Wholesaling’s editors think this package of articles will provide plenty of food for thought for your management and fellow employees. Enjoy!
