Q&A: Retired NAW CEO Dirk Van Dongen – How Distributors Build Resiliency and Manage Change

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Dirk Van Dongen, who recently retired from a 54-year tenure at the National Association of Wholesaler-Distributors (NAW), joined Proton's Board of Advisors to lend his deep experience to our team as we develop AI solutions that empower distributor sales teams.

It was a pleasure to get his insight on the biggest challenges facing distributors, how distributors can manage change in their organizations and what distributors should do to evaluate technology solutions to better respond to today’s changing sales environment.

Interviewed by Benj Cohen

Proton: Why did you join Proton’s Board of Advisors?

Van Dongen: At NAW, I interacted with many who provided solutions that help distributors compete in today’s environment. I met Benj Cohen, the founder of Proton, through his family’s dental distribution company, which is an active NAW member. Because of his background, he really understands distribution and was focused on creating a solution that would help distributors in a meaningful way. Benj attended many NAW events and the more I learned about Proton, the more I realized it’s almost a no-brainer for distributors. The returns for distributors aren’t fuzzy; they’re real. And interacting with the Proton team is really invigorating.

Proton: What do you think is the biggest challenge facing distributors today?

Van Dongen: Arguably, we’re in a unique situation right now. From time to time, something comes along of significance that disrupts or forces you to look at how you’ve done business traditionally. Usually, those forces are singular. What’s different about the current climate is that distribution is being challenged and tested in a multiplicity of ways at the same time. That makes the management of change much more complex.

Proton: How should distributors manage this change?

Van Dongen: “Distributors, you’ve got to innovate, you’ve got to change.” Conventional wisdom, right? Often, however, there’s no real definition of what the goal of that exercise is. It’s a daunting strategic challenge to create an innovative plan that has clear goals and measurable results. It’s important to do so just to be able to stay in the game. Best practices today are table stakes. They don’t get you where you need to be in this changing world. You do need to innovate, but you need to figure out what that means in real terms.

Proton: From your experience, what do you think makes the distribution industry prepared for these challenges?

Van Dongen: Fortunately, this industry has tremendous resilience. It has a lot of brainpower. It has deep customer relationships and a wealth of product knowledge. It has an awful lot of strengths. There’s an urgency involved so that the value of those things doesn’t evaporate, because others are coming along with different ways to perform the historical functions of this industry. It’s a really challenging time, and it’s a little bit of a scary time. But it’s also a fascinatingly interesting time. This industry always seems to get back on its feet. But that’s not something that’s God-given. That’s not something legislatively given. It’s up for grabs; you must earn it every day. I think the challenge of earning it today again is more daunting than perhaps any time in my experience.

Proton: Why do people do business with distributors? What is distribution’s value proposition?

Van Dongen: They do business with distributors because they believe it’s in their economic self-interest to do so. Otherwise, they’d do it some other way. The customer is king. Today’s customer is different than the customer of 10 years ago. A lot of that is driven by younger people who have always lived in the age of the internet and ecommerce and iPhones and so on. But there are an awful lot of folks that aren’t young, that also have adapted their way of obtaining goods and services to this new way, because they also have found that it’s a better way to do this.

One of the things you’re doing at Proton is arming inside and outside sales personnel with tools that provide a better customer experience. It’s good business, because it’s good for the customer.

Proton: Which brings up the potential changes to the industry brought about as younger generations take over the reins and leadership of companies. Thoughts?

Van Dongen: I think the generational shift is healthy. Of course, whether it is or isn’t, it’s still going to happen because that’s the way of life. And how you and I do things as individual consumers is going to bleed over and blend into how we do things as business professionals. For example, you look at the growth of ecommerce that was occurring pre-pandemic. You look at the growth of Amazon Business, as an example. All the pandemic has done is just taken something that folks were predicting would take two, three or four years to occur, and accelerated it so it occurred in six months.

Proton: The only constant is change, right?

Van Dongen: Your place in the supply chain is not guaranteed. If you think that tomorrow is going to be exactly like today, and that’s how you plan and run your business, you’re at risk. In a perfect world, once you become successful, you want tomorrow to look exactly like today, right? But that’s not how the world works. Certainly not today. And so, you must be resilient. You have to be consistent. You must be thoughtful. But you also need to be flexible. And you’ve got to innovate. But you better understand why you’re innovating and what you’re trying to accomplish with that innovation. If you create all kinds of value-add innovations that are impressive, but only to you, and the customer isn’t willing to pay for them, they’re not worth your investment of time or money.

Proton: How does a customer decide to do business with Distributor A versus Distributor B?

Van Dongen: I think there are a lot of factors involved, but if you have to sum them up into one thing, it’s an intense understanding of the customer, the customers’ needs and how to make the customer more successful. If you’ve got those things going for you, you’re going to get five-star results, more often than not. If you don’t, then you’re at risk. If your customer is changing, you’ve got to be willing to understand that and hopefully understand it. Like Wayne Gretzky said, “I skate to where the puck is going to be, not to where it is.”

Proton: What are some key things distributors should consider when evaluating solutions that can help them succeed in today’s changing sales environment?

Van Dongen: Today, distributors are challenged by all the new ways customers can procure. They need to provide real-time assistance to customers while at the same time increase the average ticket in those transactions. Technology can be applied in a very focused and pragmatic way to help distributors do this. Solutions should be relatively easy to implement – you don’t want to completely turn your company upside down before reaping the benefits. Solution providers who understand the DNA of distribution companies as well as the cultural environment of the industry and who can share with you the results other distributors have experienced after implementing their solution should be on the top of the list of providers you evaluate.

The solution Proton provides doesn’t require distributors to change their entire company. But it produces tangible results because it’s customer-facing, customer-friendly and customer-enabling. Again, it’s not just beneficial to the distributor, it’s beneficial to the customer.

One of the great assets distributors have, obviously, is their data. The ability to harness that data is so potentially powerful that we’ve yet to see how significant it is for this industry.

Proton: And we’re just beginning to apply AI in distribution to empower customer relationships.

Van Dongen: Yes, there’s more to come. When companies start integrating AI solutions to empower customer relationships, they put themselves in a position of having an advantage going forward as you develop ways to employ AI for the benefit of the distributor beyond what is offered today. Not only will you be ahead in technology, but even more importantly, you’ll be ahead from a cultural point of view. The biggest barrier you have in distribution to implementing change is culture. Being an early adapter is a win-win.

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