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Fresh Perspective

May 1, 2003
Problems that seem unsolvable may only need a new angle of approach.Do you ever grumble about "the way things work?" With most of life's annoying little

Problems that seem unsolvable may only need a new angle of approach.

Do you ever grumble about "the way things work?" With most of life's annoying little insoluble problems, you wish it could be different. You then proceed as usual, working around or with the difficulty, because there isn't another choice.

Sometimes, though, a bit of "what if" thinking can change the irritating "what is" to a new and improved whatever, ripe with opportunity. Such imagination came to light last month with news of a fresh approach to customer service by WESCO Distribution, Inc., Pittsburgh, Pa.

WESCO's president, Roy Haley, developed an innovative service by using a proven business strategy: listening to customers, and turning their problems into his company's opportunities. When meeting with customers, he always asks how WESCO can help them meet their own internal objectives. He discovered a common desire to source from a dependable minority-owned business.

"Many customers, if not most of them, have told us that some way to provide a highly professional way to source from a full-fledged, legitimate, minority-owned business would be a very important capability that they would significantly benefit from," he says. "This is coming from contractors, utilities and industrial firms," he says.

Here's WESCO's startling solution for its customers' problem: WESCO hopes to sell a controlling share in Fife Electric, Novi, Mich., to a minority-owned distributor, thus making it a minority-owned business in its own right. With talks still underway, the name of the acquirer has been kept under wraps. WESCO bought Fife Electric, which now has sales in the $40 million to $45 million range, in August 1995. It was the first of a growing list of acquisitions made by the Haley-led WESCO over the past few years.

The deal will not be finalized for a number of weeks. Negotiations and preparations have taken a long time, says Haley, because WESCO wants to make sure Fife Electric will not be viewed as a "pass-through" company or an artificial front to direct minority contracts to WESCO. The deal will undergo review by the nonprofit Michigan Minority Business Development Council, which promotes minority enterprises, to ensure the legitimacy of the ownership change.

If the plan works, small distributors that depend on minority set-asides for their wellspring of business (especially those in Michigan) will face tougher competition. Some people may think this setup is unfair, because they believe it subverts the intention of minority set-asides. But that's a knee-jerk reaction. If you think about the customer issue that Haley outlines, and read between the lines based on your own experiences, you will see that a minority-owned Fife Electric would be a drop in the bucket toward a solution. It also becomes apparent that this problem creates tremendous opportunities for those who attack it creatively.

In fact, the pending Fife Electric sale marks only one of WESCO's innovations in this arena. The distributorship has in recent years made concerted efforts to promote minority business nationwide, including expanding its own supplier base to include more minority- and women-owned businesses. For instance, last year it launched a two-pronged campaign called the Extra Effort Initiative: WESCO now offers various services like engineering, project management, energy conservation and industrial automation via minority business enterprises with which it has strong partnerships. The firm also distributes a special catalog highlighting minority businesses that offer a wide range of electrical and industrial products. In addition, it runs a mentoring program focused on minority issues and maintains a minority supplier database. WESCO has been formally recognized by Texaco for its programs to promote minority business.

If the changed face of competition here concerns you, ask yourself if this change makes all parties involved more efficient and more profitable. With the planned Fife Electric sale, WESCO offers one creative approach, one which might or might not pan out. The underlying problem still exists nationwide, and affects millions of dollars of business. Try to develop your own winning solution and turn a customer's problem into a sales opportunity for your company.

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