A big part of Wholesale businesses are midsize and small family businesses with a long and deep tradition running over decades of years. Most of them can be characterized by a conservative hierarchical management philosophy.
So it was a bit surprising to me that the owner of a very successful midsize wholesale distributor asked to organize a professional Brainstorming and Design Thinking Session for a group of about 15 young talents, representing less than 5 % of his company’s workforce. The objective has been to better understand what might be the Wholesale business of the future as he recognized that the traditional business – “deliver the right goods at the right time with the right price, quality and volume” - is changing. The digital era is requesting something completely different. Many strong competitors like Amazon Business, Alibaba and Alphabet are threatening the proof business model of Wholesale Distribution.
While other industries like Retail, Consumer Products, or Utilities are constantly explored by many national and international academics and research institutes, wholesale industries are often ignored. Wholesale business still seems to be a black box for the majority of students of business administration but also – believe it or not - for business people. So the challenge is to create visions and innovative business models on their own.
Be relevant for the Young Generation!
If you want people to get engaged, then you need to be relevant to them.
In this case the owner of the Wholesale business wanted the young employees to deeply understand today’s industry challenges, identify specific company challenges and discuss about future options for the business.
In a creative innovative environment, facilitated by Design Thinking experts the whole process has been kicked off. The young people came from all functional areas of the company to ensure the holistic view on the e2e-value chain. The outcome was amazing.
Before starting to work in specific groups all of them shared their thoughts about how does Wholesale business look like in the future. Many of them have been worried that Wholesale business might disappear completely, what explains that they were highly motivated and interested to really create relevant and serious results.
Identify and understand the “critical areas”!
Based on the critical questions from the professional facilitator the young talents reflected not only the market but also the situation of their company and identified main pain points to discuss about improvements taking wholesale industry trends in consideration and leveraging new technologies.
Taking the point of view of the selected job roles, e.g. strategic sourcing, strategic marketing, the teams did some internal and external research and had the chance to clarify upcoming questions.
Leverage new technologies!
All industries are facing the need for digitalization and the new technology trends like Virtual and Augmented Reality, Blockchain, Artificial Intelligence, Internet of Things, Drones, Autonomous Machines & Robots, 3D Printing are opening new business opportunities.
A traditional wholesaler would likely focus on 3D Printing and robots, having in mind the typical logistic processes. However the young people were bold to think in the patterns of using social media and other new technologies they are familiar with from their daily private life. The design thinking session ended with the creation of 4 prototypes.
Back at their workplaces the teams encouraged a number of colleagues and external stakeholders to evaluate the prototypes with a view on todays and future circumstances before the reworked prototypes were presented to the management.
Utilize Canvas and Business Model Innovation Methodology!
Excited by the constructive unexpected ideas, the owner decided to follow up and take the next iteration of Design Thinking using some elements of the methodology of Canvas and Business Model Development and Innovation.
Several reviews among the various teams and the integration of a machine learning expert brought up additional critical questions and dispersed uncertainties. Information Technology expertise and entrepreneurial thinking in each team helped to specify ideas to innovative digital applications.
What is hindering you to leverage the brain and ideas of your young talents to identify innovative business models to continue business success in the digital era?
christine.arend-fuchs@sap.com
