New insights for innovating the supply chain

Distribution lacks world-class professional development programs designed to identify, nurture, and support innovation from the inside. Will you help create them?

Milton Young has ideas and is working to make them happen. Young is a senior supply chain professional with experience in energy, automotive, and home appliance markets. And, Young is the President of the Yale Science and Engineering Association (YSEA), one of the nation’s oldest alumni shared-interest group. He also understands community-focused economic development, having served as Executive Director of the Asian Chamber of Commerce Houston (ACC). We talked about his work and passions, and found several intersections with innovating B2B, distribution, and the future of the supply chain—ideas that go to elevating distribution as a profession and the efficacy of experienced-based startups. If this edition rings true with your ideas and experiences, or runs afoul of them, please reach out!

Stepping up to today’s challenges

As a supply chain professional, Young is an unrelenting force for improving performance and accountability, pushing for operational and strategic outcomes, and advocating for purchasing as a consequential function with expanding responsibilities in the digital age. Young is of the science, technology, engineering, and math (STEM) community, holding undergraduate and advanced degrees in chemical engineering from Mississippi State and Yale Universities and an MBA from the Kellogg School of Management at Northwestern University. Young’s ideas offer a strong point of view for innovating distribution and building a supply chain that is up to the challenges of our times.

To help focus our conversation, I suggested an innovation hypothesis for distribution as a lynchpin for helping the supply chain leap forward to create unprecedented wealth and well-being:

Distributors are reinventing what it means to be local in the digital age, from providing a geographically proximate source of inventory to leaning in to help customers do their work better. Progress requires new intermediary business models that broker not only products but also knowledge, technology, services, and more—whatever is needed to help customers achieve their business goals and flourish.

Digging in, we explored two topics: 1) acting as a “super-connector” to build professional competencies and 2) the power of “experienced-based startups” for accelerating consequential innovations.

A super-connector for professional development

Young explained that YSEA’s mission is to connect alumni with students, the University, and each other to strengthen the Yale science and engineering community. Typically, alumni associations help members create a network of personal relationships, sponsor job fairs to meet potential employers, and offer a modicum of continuing education through speakers and travel. He is pushing for more by reimaging YSEA as an intentional super-connector:

We want to connect alums with people, ideas, and a variety of resources to provide expertise, funding, facilities, networks, and more. As a super-connector for STEM professionals, YSEA will help retool skills in anticipation of moving to a new company, taking on a stretch job assignment, or starting a business. We can help them develop social media and podcasting skills, help them better promote themselves, and reach new or targeted audiences. And we can also help them gain and apply new knowledge. For example, YSEA might organize a panel of alums to discuss a topic like additive manufacturing with expert practitioners from automotive, aerospace, or rocket manufacturing, and through discussions, advance the frontier of additive manufacturing. Or we might arrange trips to study new techniques or technologies—a kind of work away from work, maybe as an apprenticeship or mentoring relationship. We want to enable life-long learning that is more experiential, and less theoretical.

Young's ideas have critical implications. Distribution is not known as a profession, at least not with the visibility and reputation of STEM professionals from a prestigious university like Yale. Distribution professionals run an $8 trillion sector, a third of the economy. But distribution is not present or at the center of conversations about curing what ails us in the digital age. Distribution professionals are victims of low expectations—they are not seen as disruptors or change-makers, and so they are not.

I can imagine two solutions for strengthening the distribution profession. Sensing a platform opportunity, a startup business might emerge, offering education delivered through courses and coaching as well as programs for applying acquired knowledge to address real-world opportunities and challenges. Or distribution’s trade associations may innovate their business models and move in the direction Young is charting for YSEA.

However, distribution’s current associations may run into a barrier. As trade associations, membership is limited to a narrow set of business models or a particular industry, working against building the diversity of experiences and ideas necessary for the most robust innovations. A trade association building professional competencies for a changing society and economy may need to find collaboration partners to achieve the most significant impact.

Of course, there may be other solutions—and even the ones I suggest are not mutually exclusive. Collaboration with educational institutions might lead to different approaches. Or, members may call for change—especially those of the younger generations. Or the adoption of digital technologies across industries may create a common cause among industries, nudging associations to evolve organically toward greater diversity.

An incubator for experience-based startups

I asked Young if students pursuing STEM degrees were flocking to join technology companies, hoping to launch unicorns, amass personal wealth, and retire in their thirties. He responded,  “Funny you should ask!” and then argued for professional experience and business savvy as the most crucial drivers of success for a newly launched business. But it is not easy for working professionals to launch a startup, and Young wants to help:

Our community includes people with expertise in computer and life sciences, or mechanical, electrical, and biomedical engineering, and more. We have an opportunity to go beyond offering life-long learning to help them take an idea and pursue it, maybe turning it into a business. We can help them be intrapreneurs, launching startups where they work, or entrepreneurs, starting new companies, especially when their employer may not be interested in doing so. I’ve learned that most successful startups are launched by people in their forties or fifties—experienced people that have accomplishments and know how to get stuff done. They see what others don’t see because they have the knowledge and experience to understand what’s going on. When they see an opportunity, a breakthrough idea, they have the right stuff to turn it into a successful startup business.

Many incumbent leaders in the distribution sector are monitoring startups emerging from technology and venture communities, often threatened and worried about their impact. Proactive distributors are making technology investments, hoping to retain customers and fend off disruption. But many more are put off by the investment required, recognizing that their people, processes, and culture also need upgrades if they are to fully embrace technology as a competitive advantage. All distributors feel pressure; for most, technology is considered more of a force pressing from outside distribution than an enabler from within.

In past editions, I have commented on the lack of robust debate around ideas for the future of distribution and the supply chain. But I’ve come to realize that ideas are not enough. Ideas require people to embrace them, make them their own, and act on them—working through failures and relentlessly driving toward successful implementation. It’s not a chicken and egg thing, ideas vs. people. People come first. Distribution must work to identify its innovators, recognize and reward them, break down barriers, and give them the tools they need to create consequential and lasting innovations. People are the future of distribution.

Again, I see two opportunities. First, distribution needs an innovation competency profiler, akin to assessment tools used to hire new talent but expertly designed around essential and proven innovation skills. Such a tool would allow better hiring and point to training opportunities for current employees. A competency profile will innovation help teams work better, especially as they focus on collaborative projects with customers, suppliers, educators, and more. (For more, read this edition on workforce ecosystems.)

A widely adopted innovation profiler would help distribution step up as an industry, creating influence and profits as distribution helps guide the supply chain forward for the betterment of society and the economy. (I have found one such tool and will write about it soon.)

Second, distribution needs multifaceted programs for encouraging experienced-based startups. With an innovation profiler in place, companies could engage outside innovation assistance to train and develop innovators, identify and incubate opportunities, launch new products and services, and ultimately, transform business models. Pushing further, distribution’s innovators might take their startup ideas to venture-supported founder communities. Or, they might partner with tech founders through a mentorship program.

The combined goal of every idea in this edition is to develop a cadre of world-class innovators inside incumbent distribution (and supply chain) companies—a force for stepping up and leaning in, to work independently and collaboratively, building the supply chain of the future. This edition is about acting on ideas, as a profession, aiming to build a supply chain for our times. This is a worthy moonshot.

Foresight and footsteps

This edition marks a shift in the content I create and publish as a newsletter. Future editions will present the passions, experiences, and actions of people putting ideas into action—and then draw implications for innovating B2B, distribution, and the future of the supply chain. Not every edition will focus on such individuals, but many will—and I hope you find them useful.

Thinking about this edition, I offer three discussion topics for all readers to consider:

• What do you think of my innovation hypothesis for distribution? Do you have an innovation hypothesis for guiding your company’s investments? If not, why?

• Do you use an innovation competency profiler? Is it helpful in hiring and developing talent? For guiding their work? Do you engage outside assistance for your innovation journey? If not, why?

• Do you accept my premise that an industry-wide project for improving distribution’s competencies as a profession may accelerate innovation? And improve distribution’s reputation and influence? If not, why?

I need your help. I’m looking for stories to tell, so please introduce me to innovators implementing ideas that are making a difference. Please leave your comments below or reach out at mark.dancer@n4bi.com.