By: Jim Roddy, President & CEO at the RSPA
My first job promotion to a leadership position at a retail IT channel organization was accompanied by a two-line job description from my boss: “There’s a gap between how the business should be run and how it’s actually being run. Your job is to minimize that gap.”
My top takeaway from Inspire 2024, the RSPA’s annual leadership conference held Jan. 28-31 at the Wyndham Grand Rio Mar Resort in Puerto Rico, is that several channel companies were astounded to learn here that their “gap” is far larger than they believed when they first arrived on the island. That’s bad news on the surface but good news long-term because now they can go to work shining light on their blind spots.
Let me set the scene for you: During the first full day of Inspire (Monday, Jan. 29), RSPA hosted a workshop on trends and topics most affecting VARs and ISVs. The record 235+ attendees, a mix of senior channel executives and aspiring channel leaders, huddled in small groups to discuss what was top of mind for them and then collaborated on actions VARs and ISVs should take as a result. A spokesperson for each group shared findings during an open microphone session.
The results were eye opening and mind expanding. Here’s some of what they said that jumped out to me (topic followed by a summary of their insights):
- Payments-backed/VC-backed vendors buying the whole POS stack and moving up market: We have to continue to focus on how we do something different. We can’t just provide hardware and some light service. Each solution provider has to determine what makes themselves different, and then they have to become great at that point of differentiation. Pick up the phone and make proactive calls to merchants because the big guys won’t.
- Bigger companies making it harder for smaller companies to make money: You have to come in as a small guy with something sticky that the big guys are ignoring. Start with specialization; when you’re the subject matter expert you’re the go-to person. Learn the big guys’ technologies better than their support staff. Merchants won’t bother calling the 800 number if you’re way better. Then let them know if they used your product their results would be even 10x better. Educate them about what it means if they get into bed with one provider and what that means for them in the future. Remind them of where they can find themselves in two, three, or five years. They will lose sight of that if all they’re doing is looking at spreadsheets.
- AI: Talk about AI amplifying your workforce, not replacing them. Your marketing team might come in hung over from an RSPA event; AI never gets hung over. It can give your marketing team a jumpstart to get them going. Implement an AI policy in your handbook so it’s clear what the guiderails are for using AI. Pay a bonus to employees who use AI to find new efficiencies. Understand there are many AI tools beyond ChatGPT.
- Continued decline of hardware margins; where will partners make their money?: This is a solution-selling association now. VARs have to sell services and solutions beyond the traditional POS in order to make margin.
- Providing solutions that don’t result in merchants raising their prices: We provide self-checkout where the cashier doesn’t handle payments, but they assist with bagging the groceries which provides a better customer experience. We showed our merchants how to train AI – because we have trained ourselves on AI. We use AI in our business for customer support. If the caller doesn’t like it, they press 0 and get a human right away.
- The quality of required customer support continues to rise: Support customers on their terms; they don’t necessarily want to call on the phone because they’re in a busy retail or restaurant environment. Create a text system where AI responds quickly and then a human tech follows up with a detailed answer.
Because RSPA events are open to all distributors, vendors, VARs, ISVs, ISOs, MSPs, and other solution providers, they’re the only place where a true cross-section of the retail IT channel can douse you with a firehose of perspectives. And because we opened up the mic to any attendee willing to share their perspective, everyone in the room received unfiltered, unrehearsed, no-BS insights.
An executive from an ISV with a robust channel told me he learned more from that workshop than he’s learned going to events the past three years combined. When I asked why that was the case, he told me, “If you attend a trade show, everybody talks about the products and technology in the booths. At our partner conference, everybody is asking questions about our software. Here there are no booths. There are no software demos. There are just the people, so we talk about the business challenges and opportunities facing our industry. You don’t get that anywhere else.”
A hardware executive told me the group discussion about cash discounting and surcharging was foggy for him, but his takeaway was crystal clear: “It’s complicated, so I need to be easy for the reseller to work with.” Another executive told me his team’s priority list changed completely after the Day 1 session. “The list of topics we felt were important to the channel – none of them were mentioned here. Not one. That’s a fail on our part.”
Now that those attendees are aware of their knowledge gaps, they can do something about it. The three executives I referenced told me some of the initial steps they will take when they return to the mainland. But other attendees expressed concern their executive team back home won’t change course because they didn’t share the unique Inspire experience of hearing firsthand from droves of solution providers.
Their fears made me think of a Pearl Harbor documentary my family watched recently. Signs of the impending attack were clear before 7:48 AM on Dec. 7, 1941 when the first bombs dropped. A telegram was sent to all outposts to prepare for war, but U.S. military leadership at Pearl Harbor did nothing upon receiving that missive. A Japanese mini-submarine was sunk near Pearl Harbor an hour before the attack, but leadership did nothing. A squadron of planes was spotted on radar, but leadership explained it away based on what they thought was their reality.
Despite numerous specific reports from the front lines, leadership dismissed all concerns and left themselves open to attack.
Of course there’s no comparison between the tragedies of war and the consequences of business errors, but there are lessons that can be learned when any leader buries his or her head in the sand – and keeps it there despite teammates offering to shovel them out.
Your job as a leader isn’t to explain why you’re certain you’re right. Your job is to listen, learn, and then close that gosh darn gap between your perception and reality.
