Berkonomics

Here’s a simple corporate directive:     

Consider these three letters as something to teach your management team and internalize yourself.  Here they are:

  • A.  Accumulate or acquire (product line, breadth of services)
  • M. Marketing or merchandising (expert and diligent use of resources)
  • D. Distribution  (adding channels and reinforcing relationships)

First, let me credit one of “my” CEOs of a company where I was chairman, Erik Hovanec for this one, whether he originated it or recast it from his past.  As his chairman, I have watched him masterfully focus his employees all toward a common theme aligned with the company’s goals.  The genius of this insight is that no employee is exempt, even those in accounting or human resources.  Everyone supports the contribution to AMD in some way, or, according to Erik’s challenge, should not be here breathing the air, taking valuable space and consuming scarce resources.

“A” stands for innovation, quality improvement or product expansion

People in R&D, business development, purchasing or production all fit in to the “A” of the equation.  Without constantly improving or increasing products to offer, a company today is quickly overtaken by its competition.  Stagnant companies usually can trace their inability to gain market share upon the “A” area first, and management should pay particular attention to putting resources into this important focus of the company.

“M” stands for marketing or merchandising

[Email readers, continue here…] Without the “M”, effective marketing and or merchandising, sales people and distribution channels quickly dry of leads and must fight for attention beside better branded competitors.  Marketing is the area least understood, often least funded, and perhaps one of the most important within any company.  Even with the best products or services, companies fail for the want of good marketing.

“D” means distribution channels

For many industries including those with Internet-based sales entities, you cannot have enough channels of distribution, the “D” in this insight.  Some management will argue that channel conflict is one of the worst ways to lose the loyalty of distributor and direct sales resources.  I’d counter that a cohesive distribution strategy calls for a coordination between inside and outside distribution resources by management, not a competition for customers using inside resources to compete with outside distribution.  There are many ways to allocate or split a product or service in the marketplace: by size of customer, geographic location, market segment, or even agreed-upon rules to protect open competition between the distribution groups. 

Sometimes, a company must create a unique brand to self-distribute in competition with other distribution resources.  Many manufacturers have successfully created “OEM” labels for branded retailers wanting to distribute under the retailer brand, without disturbing other distribution channels.  And many wholesalers have successfully created a new self-managed retail brand for direct distribution in competition with current retail distribution channels.

Focus everyone on these three

Focusing your entire staff on a simple, understandable set of functions in support of the goal is a masterful way to increase productivity, create urgency and measure contribution of individuals to the common good.  Remember: A-M-D.

Images created using DALL-E3 with the prompt: “A young, casually dressed female CEO at a conference table, surrounded by five seated individuals, all listening to her as she points to three raised letters “A M D” laying on the conference table. Realistic images.”

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