Sometimes they’re referring to insecurity regarding which direction to take. Other times, they’re talking about insecurity regarding who to hire, vendor-partner alignment, business models, future investments, new markets, or growth strategies. This feeling now seems to be the norm rather than the exception. And I think I understand what’s causing it: rapid change.
Based on regular conversations with members, we put together an oversimplified list of the leading issues that bring on feelings of insecurity. Now you know that you’re not alone!
1. You are selling to highly educated end-users
This can be a problem if you haven’t kept your people one step ahead of end-users in terms of knowledge and experience. Take comfort in knowing that uneducated end-users aren’t likely to actually buy anything. Their bosses and leadership are forcing better, more educated buying decisions. Stay relevant by elevating your game.
2. Your distributors offer labor, content, programming, etc.
You worry because this enables smaller shops to compete at a higher level. Distributors may do this as a value-add for all. In Europe, we see it all the time: Distributors will even assemble and wire racks if you buy everything from them. I haven’t spoken to a single distributor that intends to go beyond helping you do more with less.
3. The current unemployment rates
(Or full employment, as the statistics would suggest.) This creates all sorts of issues with turnover and higher wages. Talent is our biggest challenge and limitation to growth. It is shaking everyone’s confidence; finding qualified people to perform our work is very difficult.
4. Manufacturers are building brand awareness with your clients
I’m not as concerned about this as you might be. Our manufacturer members truly respect the role of the integrator, and are working with end-users to create demand for their products and solutions that will benefit you. Stay close to them and their rep. Allow their reps to come see you; value their insight.
5. Mergers and acquisitions are happening all around you
I believe that the M&A activity is a result of stagnant organic growth combined with a lack of talent. In many cases, growth through acquisition is the only choice. It makes those not looking to buy another integration firm feel like they might be forced out by mega-integration players.
6. You have difficulty with project scale, size, and scope
Everyone knows their “sweet spot” for projects, but we often find ourselves chasing bid work outside of that sweet spot. It’s been the start of the death spiral for many. Some members do great on huge projects, but lose money on small projects because their processes don’t scale. Other members bite off jobs that are way too big, and have major cash flow problems as a result.
7. Your labor costs are outpacing labor rates
Especially the benefits! This is why we must be so careful on our utilization percentages. Make sure your percentages are at industry standard or better. You have to make sure your production people are billing the vast majority of their time to revenue-generating activities. It seems simple enough, but is much harder than you might think.
8. If you bid the project at the desired GP, you won’t get the work
I hear all the time about situations where the competition bid a job at your cost. That might be true, but they may be betting on substitutions, working off backend rebates, implementing an RMR plan, buying differently, using financing, etc. Other companies may have efficiencies that you may not be aware of.
9. You love the technology offered by a certain vendor, but can’t trust them as a partner
This is a recurring theme: “I trust these folks, but their products are bad.” I’m not pointing fingers, but we have more pressure on us to hit revenue goals and grow in every direction. That has created multiple “swim lanes” in our industry for channel management. Channel conflict came along right behind the diversification strategy. Erosion of trust soon followed.
10. Your key employees can sense fear in your words and actions
Yes, they can – and do – sense a lack of strategy. Even more so, they can sense when you lack confidence in them to execute the strategies you develop. If you find yourself stuck in this situation, it needs to get straightened out quickly.
If any of these things are keeping you up at night, don’t feel alone. Every day, we talk to an entire network of your peers that have the same worries. The good news: NSCA can help you figure it all out. We have tools and resources to help, and can suggest ideas and strategies that have worked for other firms. Just reach out! –Chuck Wilson, NSCA Executive Director
Image by: Sira Anamwong