Is Bigger Better?

December 6, 2010 - 17:45

In the past few weeks we have once again seen our industry consolidate and contract — Hines Nurseries filing for reorganization for the second time in two years, Weeks and J&P Roses filing bankruptcy, Iseli Nurseries filing for bankruptcy, and the list goes on and on. It makes me stop and consider what it is going to take to really be successful (profitable) as our industry continues to mature. It also makes me consider this question: Is bigger really better when it comes to doing business with big box retailers?

In light of all that has happened the last two years, I think we all have to agree being big is not the answer to the profit question. Over the last several years we have seen big box retailers continue to consolidate their businesses with the “big boy” nurseries for a variety of reasons. Those reasons include consistency of products and services for a large number of stores, fewer vendors to manage, and the ability to standardize cost and retail. But at the end of the day I’m not sure it’s worth the risk whether you are looking from either the retailers or growers perspective.

We had a client ask us the other day what it takes to be successful working with big box retailers today. I summed it up in these words — effective, fast, flexible and focused.

Being effective as a business person is doing the right things extremely well. Being more effective requires us to be more self-aware and to truly watch what is going on in our business and with our customers. Being effective provides us the opportunity to observe with detachment, to notice things that are happening and then choose different actions.

Sometimes we have a tendency to hold on to the way we have always “done it” and are unwilling to step back and try a new way of looking at our businesses and the obstacles that are in front of us.

Being a medium-sized business gives you some great opportunity to capitalize on some distinct advantages in the market place:

  • Greater flexibility to respond to market changes
  • Reduced decision channels to make approvals and changes
  • Closer relations with employees and customers
  • Greater speed to make internal and external business changes

But it all starts with you being willing to make the needed changes. It also means that you have to be the company leader.

Let me ask you a question: Are you focusing on the basics of your business? As companies become big they seem to forget all the basics that it takes to be successful in the big box retail world.

Retailers need you as much as you need them. But they need companies who are bringing them value. What is your company’s value? In the world of commodity producers and products, it is very difficult to create a different value that describes just your company. But the answer falls in developing core values that sets your business apart from the big guys. In simple terms, core values are set conceptions that you and your management team decide to follow in running your business. Core values are crucial aspects of any successful business as they contribute to the growth and profit of the company. When I look at the well-run companies in our industry I see examples of sound core values in the following areas:

  • Customer service and satisfaction
  • Quality of services
  • Integrity
  • Commitment to employee career growth
  • Excellence
  • Creativity
  • Adherence to deadlines and deliverables

Do you and your team really understand your customer’s expectations? Training your organization to set and meet your customer’s expectations is critical to the success of your company. There is nothing more frustrating to a big box retailer than a failed commitment. Remember the basics — this is where the big guys fail:

  • Have respect for the customer at all levels
  • Be a great listener
  • Develop a partnership and agreement on the key points about your products, services and future commitments
  • Document all conversations and agreements
  • Have a plan for follow up

Lastly, do not forget that quality will always sell. Big box retailers are always going to buy quality when all other factors are the same. As the mega growers get larger, quality control seems to get left some where in the organization. You have a real opportunity to separate your business simply by always shipping “products that would make your grandmother proud.”

Stay focused on the business fundamentals. Be fast and ready to take advantage of market opportunities. Be effective in your leadership to your staff and use your time and talents to guide your staff. Be flexible to change and the size of your company will be your advantage in the future.

 

Dave Edenfield is part of Visions Group LLC, a solutions group providing marketing, management and production assistance to the green industry. He can be reached at dave@visionsgroupllc.com.

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