What are the challenges of moving to a solutions-based channel model?

October 11, 2011

3 Min Read
Challenges of Transformation

By Khali Henderson

In this fourth installment of our ongoing report on the channels movement away from transactional models, we will take a closer look at the challenges of transformation.

Transformation in any business can be trying, but it is especially so for small and medium businesses like those making up the channel. Change management professionals observe that SMB owners find it difficult to think beyond day-to-day operational issues and develop strategy. To make matters worse, they often are lacking in management process, long-term vision and leadership skills, so they are unprepared to take on a transformation project even if they have identified the need. Professional advice can be a way to help shore up these gaps and develop a road map for growth.

One such professional, Robert H. Miles, president of Corporate Transformation Resources LLC, has identified six inhibitors to business transformation in general. These are detailed at length in his article, Accelerating Corporate Transformations,” in the January 2010 edition of the Harvard Business Review. They include:

  1. Cautious Management Culture to have credibility the owner and, if applicable, executive team must have an active role in the transformation.

  2. Business as Usual Management Process to accelerate transformation, businesses need a dedicated overlay process that is targeted and not mired in meetings.

  3. Initiative Gridlock to move forward, transformation goals must be cohesive companywide and not a series of unrelated departmental improvements.

  4. Recalcitrant Executives to smooth the transition, deal with naysayers on the management team and, if applicable, your own anxiety over transformational change.

  5. Disengaged Employees – to ensure transformation is successful, engage all levels of employees at the outset and establish accountability for transformation initiatives from top to bottom.

  6. Loss of Focus During Execution to complete the transformation, you must follow through with regular progress reports and avoid going on autopilot.”

For entrepreneurs in the channel, these inhibitors highlight the need for commitment to transformation at all levels of the organization, but particularly at the leadership level. Even if you are a one-man show, being committed to a plan is necessary for success. Its very easy to put off plans to change when running your business gets in the way. The reality, however, is that both tasks must be done simultaneously. As Tommy Wald, CEO of White Glove Technologies, noted about his companys move away from a transactional business model, It was like trying to change a tire while the car is still moving.”

In a workshop on Transformation at the Fall 2012 Channel Partners Conference & Expo in Chicago, channel partners discussed some of the challenges they are experiencing in moving away from transactional to consultative models. Here are a few of the overarching issues:

  • Changing the Customer Conversation how to move buyers from a reactionary and price-focused position to a proactive, value-focused position.

  • Retraining the Sales Force how to find effective sales people and teach/incent them to focus on customer needs, not customer savings.

  • Managing Vendor Expectations how to communicate to vendors that you are not their transaction guy” anymore and how to manage the change in the relationship.

  • Aligning with expert partners how to create collaborative partnerships with complementary solutions providers.

A conclusion of the workshop was that perhaps the biggest obstacle was simply understanding the next steps away from a transactional model. While there are many lessons learned in the experiences of others, the paths for each companys transformation can be quite individual.

Through the end of the year, and with the help of experts, including analysts, suppliers and partners, Channel Partners will be exploring some of the important questions about how partners can transition their businesses away from transactional models, including possible new models and how to get there. We will feature regular installments on the Transformation Blog examining five partners that have successfully made changes to their business models. We will also be publishing a Transformation Issue in December.

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