By Susan Bloom
With many economic, political, and social policies up in the air under the current government administration, experts and distributors weigh in on the decision-making process during uncertain times.
Two weeks ago, the Senate failed to pass the 'skinny' repeal of Obamacare by a 49-51 vote, which NAED experts confirm may end the Senate's consideration of Obamacare repeal this year. Around the same time, in a joint statement on the administration's progress towards tax reform, Speaker of the House Paul Ryan and others shared that "our expectation is for [our proposed new] legislation to move through the committees this fall, under regular order, followed by consideration on the House and Senate floors"—an update which leaves the status of tax reform also somewhat unclear.
With so many economic, political, and social policies—from healthcare and tax reform to infrastructure, foreign matters, environmental policies, and more—up in the air under the current government administration, how is a business to plan and make certain strategic long- and short-term decisions? Following, industry experts and distributors offer insights on managing a future that appears difficult to read.
Addressing the Unknown
When it comes to making sense of the status of many policies today, "I see our constituents experiencing frustration," shared Ed Orlet, NAED's Senior Vice President of Membership and Marketing. "Businesspeople sense that there's a huge opportunity for a more business-friendly tax code and healthcare benefits landscape and they're frustrated that the powers that be can't seem to get out of their own way. There's a lot of folks shaking their heads at the missed opportunities," he said.
According to distributors, healthcare policies and their associated rising costs remain among the most difficult issues to get their arms around.
"In terms of political matters, there are a number of big unknowns which affect not only our industry as a whole but also our individual companies and, ultimately, our families," said Pam Erickson, Executive Vice President of Marketing & Business Development at NSi Industries LLC in Huntersville, North Carolina. Among those, "healthcare issues are always at the forefront of concern for our employees and the burden of the rising cost of healthcare is shared and absorbed by both our company as well as our employees."
"Being an organization of just over 100 people, our health insurance rates have been rising by approximately 20% per year and represent one of our biggest issues," agreed David Rosenstein, President/CEO of Buffalo Grove, IL-based ConneXion. "We strive to provide our associates with the most benefit at the lowest cost and have struggled to consistently achieve that goal as costs, out-of-pockets, and deductibles are all rising while benefits are shrinking."
"As healthcare costs continue to rise, our company pays more each year, as do our employees," concurred Jim Schaedler, CEO of PA-based Schaedler Yesco Distribution. He noted that another immediate issue has involved continual wage inflation for warehouse personnel and drivers and the difficulty in finding people to fill those positions.
According to Erickson, the current administration's approach to infrastructure and 'Rebuild America' plans—whether it be the potential privatization of the U.S. air traffic control system or upgrades to roads and bridges—stand as other potentially significant unknowns. "While these initiatives take time and their turnaround can be slow, this type of increased government spending can certainly have a positive impact on our industry," she said of activity—and subsequent industry planning and response—which still remain pending.
When it comes to making decisions in an age of uncertainty, "many businesses we've been in contact with are following a more short-term approach, but that doesn't mean they're not thinking about the future," confirmed Virendra Chhikara, Director of Louisiana's Small Business Development Center (a partner to the federal Small Business Administration) at the University of Louisiana.
On the issue of healthcare, for example, distributors report that they're relying on prudent fact-finding efforts and mindful management to move forward. "We communicate the choices we provide to help mitigate the cost increases," said Schaedler.
"We're trying to stay close to the situation and are using our providers to educate us on the trends so that we can make informed decisions," Rosenstein agreed. "We haven't been able to make long-term decisions because the healthcare situation is in such flux, but we're diligently working on the things we can control, such as pre-emptive wellness programs."
At NSi Industries, "we're managing the future by working to bring new products to market, finding better ways to support our customers, and further instilling our partnership value as well as exploring additional channels and vertices to help diversify our business," Erickson said. "We're very focused on our company's future and the things we can control, which are (high quality) product, (competitive) pricing, and (electrical distribution) placement; the relationships we've developed over the past 40 years are stronger than ever and we continue to grow both our customer base and market share. We're also gearing up for exponential growth over the next 2-4 years through new product development and complementary acquisitions," she added. "With the unemployment rate currently at a 16-year low and dropping, finding and retaining talent is a critical component of our future success."
For the Schaedler Yesco management team, "any current political or economic issues that we face as a country don't impact our decision-making process—we have no control over them other than to vote and we encourage all employees to vote during each election cycle," Schaedler said. Like Erickson, he agreed that in an age of uncertainty, the best defense is a strong offense. "Our primary emphasis is on the customers and industries we serve, what stock we need to best serve them, what services we need to offer that will benefit our customers and vendors, and what education we need to provide to our employees to keep them current with today's products and tomorrow's technologies," he said. "It's about education in new technologies, operational process improvements, and sales training that focuses not just on products and technology, but also on emotional intelligence and empathy. The education can never end."
"It seems to me that the best companies in our industry are focusing on being better service providers," Orlet concurred. "They're investing in consultative sellers who are creative problem solvers. Another great concept I've heard is that strategic planning should be directional and flexible rather than trying to predict a specific future state—if you can make your organization more flexible and quicker to identify and seize new opportunities, you're going to win more often."
Chhikara agreed that staying ahead of the curve is key—in certain or uncertain times. "Today is a time when we're seeing technology change and shift for a better future," Chhikara said. "Business owners should familiarize themselves with new technology and how it can be applied to meet their end users' demands because the new generation of customers is more informed and used to having information readily available at any given time. For any business, it's about changing with the market demand and maintaining a competitive edge over competitors."
"The future's always been uncertain," Orlet concluded. "The difference is that now it's okay to admit that we don't always know what's coming next—as long as we're prepared to respond quickly and intelligently."
Bloom is a 25-year veteran of the lighting and electrical products industry. Reach her at email@example.com.