Valin Corporation CEO Joe Nettemeyer on Change and Consistency

Submitted by Daniel Seeger || Industrial Distribution Magazine
Fresh out of college, Joe Nettemeyer started learning how to solve problems. In 1973, he began work as an assistant project manager with an electrical contractor, garnering direct experience with supply chain logistics and managing suppliers. That led to a long and varied tenure with Emerson Electric, where he expanded his range of expertise in topics such as channel strategy and adoption of technical solutions. He was recruited by the founders of the San Jose, California-based industrial distributor Valin, where he’s served as the company’s president and CEO since 2001. In his long and productive career, Nettemeyer has had a front row seat to a significant amount of change, and he’s learned how to help others embrace transition. Nettemeyer spoke to Industrial Distribution about guiding everyone—even the skeptics—through major business shifts.

Industrial Distribution: What are some key changes you’ve seen over the course of your years at Valin?

Joe Nettemeyer: In 2001, we were still in the early stages of integrating the digital tool capability for deep analytics necessary to make informed decisions. Most of our analysis was reporting, and that meant primarily focusing on what happened the previous month. Gathering the information
to get a real-time view of the business wasn’t there, which meant we also weren’t looking ahead.

We’re forecasting now, and we’re picking up more quickly on when a market sector is shifting, what’s going on with critical customers, where we are at on margins, and so on. The data’s there. We’re dealing with real-time information now to make decisions.

Also in the last 10 years, there’s been a broader change in technological factors, such as utilization of ERP and other systems to monitor activity and communicate with customers. There has also been a big shift in e-commerce platforms. Too many people always ask me, “What are you selling on?” I say the question should be, “What are we communicating on?” Whether we like it or not, the generation that’s entering the workforce digests information from the internet, off of our sites. And, if you don’t have relevant information there, you can’t make a connection. Customers are no longer waiting for a salesperson to come out and talk about products.

ID: How are those changes in the structure of the business reflected in workforce development?

JN: We have to focus on the experience, and our workforce is going to have to evolve. The traditional distributor org chart might slot new hires into customer service, then they get into a bigger insider sales job, and then migrate to outside sales. That’s not the path to success any more, and our organizations are going to have to look different because of that change. That’s what we’re working on. What type of organization do we need to be to meet the expectations of the generation we’ll be serving in five years?

ID: What are some of the biggest misconceptions about technological change?

JN: When I talk about software, far too many executives ask me what software to use. I turn that back and ask, “What do you want to accomplish?”

I always felt that we got less than half of the capability out of the software we bought over the years because we didn’t understand it. Most people think you get a software package and it solves all of your problems. You can’t solve your problems until you map your processes. You need to understand what you want to accomplish and then decide what software can facilitate it. It’s also very important to determine how to get employees comfortable using the new tools and not feel threatened by them. They worry that if they adopt the new technology, they will eventually lose their jobs to the technology. And that is a big, big part of the management challenge, communicating that the real goal is to take away low-value tasks from personnel and replace them with high-value tasks.

ID: What strategies do you employ to win over skeptics?

JN: The first thing you have to do is get people grounded in a process. We’ve made a strong investment in young individuals in our company. When we’re recruiting, we tell incoming staff we’ll help them develop career skills. If you just want a paycheck, you can go anywhere. For those individuals with high potential, we offer support for them to attend the Texas A&M industrial distribution program. We’ve had other employees who had more specific interests and we also provided them support.

For those who aren’t going to get the full master’s degree, we’ve sent them to seminars. There are several week-long certification programs on supply chain and other related topics. They go through one of those programs, equipping them with a common language. Then they can communicate effectively with the people who have gotten the master’s degree. I’m looking for that common language.

When I was at Emerson Electric, it was considered one of the 10 best-managed companies in the U.S. The reason for that was we all embraced the same management process. We all measured out businesses on the same metrics. I could go from one division to the next division—and I got sent to five different divisions during my tenure there—and I could immediately look at the data and know where the business was at. The products might be different, the end markets may be different, but we’re here to create value, so the measurements aren’t different.

ID: Looking ahead, what do you see coming up in the field of industrial distribution?

JN: I think the big change is identifying the skill sets that are critical to sustain relevance over the next decade. Those skill sets are not about building the traditional sales team. We still have to sell, but we have to sell differently using different tools. And how we do it is not going to be static because technology keeps making breakthroughs.

We have a person in our marketing department who spends half of her time working on website content, and the other half of her time on social media. Her part-time effort on our behalf generated 800,000 impressions on Valin’s social channels last year. I couldn’t hire enough salespeople to get that kind of reach.

In our business, we sell assurance. We sell devices that people have to install, so we have to assure them that we can give them the proper instructions on installations because if you don’t properly install them, bad things happen. And how are we going to craft our messages and how are we going to deliver our information to do that?
A lesson for me is that I need to involve you earlier in the program.

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