Deep Dive: Getting to the heart of B2B innovation

Can we work together to shed old ideas and outdated notions of progress toward a more forward-thinking future for distribution?

I am delivering several keynotes and workshops over the next few months at company and association events. This edition offers a preview. My central idea is that B2B innovators are mainly working on their own, with very little support or guidance about the future of distribution and how to innovate for high-impact change. And so, in my keynotes and workshops, I explore the fundamental requirements for innovating B2B and the future of distribution around three critical areas—a new mindset, priorities, and enablers for making progress. I close with essential questions for leading your customers, markets, and company to the future. By pointing B2B companies in the right direction and giving them a nudge, I hope to jumpstart progress, build momentum, and create a thoughtful community of next-generation leaders for innovating B2B and the future of distribution.

Mindset: Out with the old, in with the new

Traditional distribution mindsets are based on highly restrictive assumptions, held consciously and subconsciously. The established story goes something like this: As intermediaries, distributor business models are constrained by manufacturers’ and customers’ strategies, policies, and practices. Distribution’s role is to add value to products, which ties business models to following through with manufacturers’ intent. Customers are deemed conservative and risk-averse, engaging the value chain as a source for products first and services second. Thus shackled, distributors struggle to reinvent their business models.

Breaking free from past mindsets requires a reset and new thinking, starting with traditional methods for improving business results. Best practices are not implementable, proven solutions. Instead, best practices are about always catching up with what others are doing. Similarly, continuous improvement is about getting really, really good at what you already do. Combined, best practices and continual improvement do more to lock existing business models in place than to help innovators leap forward with game-changing innovations.

Priorities: Doing business as humans for humans

In business, there is product. Everything else is distribution. Digital technologies enable all of us to do more of our work (and live more of our lives) in the virtual world. But humans are not virtual creatures. We are people that live and work in the real world. As B2B innovators embrace digital technologies for the exponential gains they create, we must intentionally give our time and energy to simultaneously innovate in the real world, which boils down to how we can better do business as humans for humans. I explore three urgent priorities essential for the future of distribution: look for inspiration, follow your North Star, and invest in enablers.

Look for inspiration

Recently, I’ve been looking for new science about the human condition as a source for ideas. This may work as your source of ideas, or you may look to literature, art, historical figures, sports teams, everyday heroes, charitable organizations, or more. As a science example, consider the perspective of Emily Anthes, author of The Great Indoors: The Surprising Science of How Buildings Share Our Behavior, Health, and Happiness. Whether your business constructs buildings or provides them with heating and air conditioning, safety and security, food services, lighting, or facilitates solutions, or if you just work side-by-side with your customers in buildings, Anthes’ science-driven insights may be a source of inspiration:

Modern humans are an indoor species. We spend 90 percent of our time inside, shuttling between homes and offices, schools and stores, restaurants and gyms. And yet, for all the time we spend inside buildings, we rarely stop to consider: How do these spaces affect our mental and physical well-being? Our thoughts, feelings, and behaviors? Our productivity, performance, and relationships? In this wide-ranging book, science journalist Emily Anthes takes us on an adventure into the buildings in which we spend our days, exploring the profound and sometimes unexpected ways they shape our lives.

Follow your North Star

The original North Star, Polaris, is a navigational aid. From Polaris, one can chart a course in any direction. In business, a North Star is a constant objective for setting a course and guiding innovations. In the digital age, it is easy to confuse technology with intended outcomes. Digital technologies are a means for following your North Star, not your North Star itself. Here are a few ideas relevant for innovating distribution:

• Pursue proximity. Robert Wolcott of TWIN Global defines proximity as the use of technology to drive the production and provision of services and products closer to the moment of demand. On Instagram, for consumers, proximity might be about noticing what an influencer wears, clicking to buy it, and getting it the next day. Buying processes are more complex in the business world, and purchase decisions may be settled before the actual purchase is made. Proximity is a digital-age metric that, as a North Star, may give the direction needed to relentlessly overhaul traditional business models and usher in the future of distribution.

• Get physical. Warby Parker, Amazon, and other digital denizens are opening physical stores to serve retail customers. B2B does not follow B2C, but this retail trend raises an important question: Can business-focused physical stores become an asset for real-world companies, a place where customers are educated and relationships are strengthened? I explored possibilities in a previous newsletter. As the pandemic work-at-home trend evolves into hybrid work, distribution companies may reposition their stores and other facilities as a new kind of third space, a place where customers may do some of their work, too. “Getting physical” is a North Star for designing a physical space where you and your customers can work collaboratively.

• Uplift workers. Manufacturers identify customers as “users” to invent products they will use to do their jobs. Distributors target “users” to sell them manufacturers’ products. The lexicon for innovating B2B does not have a word for naming customers for the value distribution creates. This is a monumental gap. I suggest “worker” for several reasons. The current supply chain crisis is driven by a shortage of truckers, a kind of worker. Among the trades, there is a shortage of welders, technicians, mechanics, and other blue-collar workers. Distribution’s innovations should focus on helping workers improve their vocation, jobs, and livelihoods, rather than simply selling them products. Doing so can create a new and powerful priority.

Invest in enablers

In my research and writing, I have learned an invaluable lesson for B2B innovators—the forces of change that are reshaping how we live our lives and do our work are not threats, they are enablers. A few examples follow; I dig for more in workshops:

• Platforms. As it turns out, platform business models are not about technology, they are about lending a helping hand. Designing a platform starts with identifying people (or organizations) that need knowledge, advice, connections, services, or products with others that have what they need. Platform experts are coming around to the realization that technology is an enabler for creating an exchange of value between humans, which has long been the primary mission of distribution. Read here and here for leading-edge arguments and advice.

• Personal brands. Personal branding is not just for next-generation influencers and social media mavens. In business, social media combines telling an individual’s story with the story of their work and innovations. As explained in Forbes, “A personal brand is the unique combination of skills and experiences that make you who you are … Effective personal branding will differentiate you from the competition and allow you to build trust …” Personal branding is a powerful tool for leaders, managers, team members, and workers to let customers (and partners) know about innovations in a way that creates awareness and builds trust. Personal branding is for companies, not just employees.

• Storytelling. Innovators cannot innovate without foresight. Foresight is not about having answers, a known and certain vision for the future. Instead, foresight is a compelling story about the future, one that engages your customers, suppliers, and fellow workers and draws them to the cause. Storytelling is an essential tool for developing foresight. There are many sources for learning how to implement storytelling, but I recommend this book and this service to get started. If you find better help, please let me know.

Join our innovation community (by asking questions)

In my keynotes and workshops, I close with questions. My aim is to create a conversation about my ideas and how B2B innovators may apply them to lead their customers, markets, and companies to create the future of distribution. Here, I offer three:

• What do you want technology to do for business, not to business? Much of the discussion about artificial intelligence, online marketplaces, edge computing, and more is about how these technologies will force established businesses to change. B2B innovators must put forth their foresight for the future of distribution and how business will be done, starting with customers. We must ask technology overlords to serve our cause. Doing so is putting the horse before the cart, where it belongs.

• Do you serve communities with a purpose? Communities come in many sizes and shapes and may include the city where your people live and work, a professional or trade association important for your customers, forums for leaders or innovators, and more. By embracing a mission to better a community, a defining purpose will emerge—one that is rooted in service, not self-interest. For more on communities and purpose, read this earlier newsletter edition.

• Can you measure customer relationships with human metrics? When asked, most of the business leaders I know explain that they measure the strength of customer relationships by the benefits created in their business, not the customer’s. For example, customer loyalty is often measured as repeat purchases or a willingness to pay a slightly elevated price. There is something naïve, uninformed, or cynical about this approach. Customer relationships should measure what your business does for customers as much or more than what customers do for you. Mutual value creation is the linchpin of enduring customer relationships.

Working with hosts, attendees at my keynotes and workshops will receive free all-access subscriptions to this newsletter, Mark Dancer on Innovating B2B. I invite you to join our conversation. For all my readers, don’t be a stranger. Please put forward your ideas, experiences, and questions in the comment section below, or reach out to me directly at mark.dancer@n4bi.com.