Change in culture, focus is central theme at ASA

BY MARY JO MARTIN
Editorial director

Network 2011 — the American Supply Association’s Annual Convention — is set to take place September 13-16 at the Bellagio Hotel in Las Vegas. Appropriately themed “All In,” the event is generating advance registrations and sponsorships that exceed original goals.

We thought it would be an ideal time to talk with ASA’s executive vice president Mike Adelizzi about the association’s new energy and vision — and some things on the near-term horizon. Adelizzi graciously sat down with me recently to share his insights. The following are excerpts from that interview.

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MJM: You’ve been executive VP at ASA now for almost five years. Looking back, Mike, what was it about ASA that intrigued you to accept this challenge?

Adelizzi: Well, actually its three years and 10 months, but who’s counting?! Seriously, this position appealed to me because I saw a relatively large group of Board and Executive Committee members who cared deeply about the industry and returning ASA to an effective trade association. I felt that I could help foster a change in the culture of decision making to focus the organization to think big and broad, and achieve goals they previously didn’t think were attainable.

MJM: Undoubtedly, the last few years have been difficult for everyone because of the struggling U.S. economy. But specifically looking at ASA, what have been some of the biggest hurdles you’ve had to face since taking on this role?

Adelizzi: The image of ASA not being relevant is probably the biggest. We have come a very long way changing the hearts and minds of industry leaders to understand the good things we are doing for them. Refocusing our resources away from non-traditional association roles and back to what is important to our core programming, while streamlining our operating budgets and replacing the dependency on a trade show like ISH are a few hurdles we’ve had to deal with.

MJM: And on the flip side, what are some of the key initiatives that you have been most proud to be involved with at ASA, such as new programs/benefits, legislative efforts etc?

Adelizzi: At our winter board meetings, we bring in a facilitator and gather all our committees, councils and Board members to work on ASA’s long-range strategic plan, review the direction we want to take the industry in, evaluate our assumptions about the future and revise our plan accordingly. This has been instrumental in keeping nearly 70 volunteers all focused and working together on the same vision.
From an organizational structure standpoint, I am most proud of the development and implementation of our strategic governance structure.

Other major initiatives have been:

• To solidify our revenue streams primarily by replacing ISH with a dedicated ASA Convention that is returning more revenues to ASA than in the ISH heyday.

• To restructure staff, cutting some non-essential employees while giving some previously overlooked staff members the chance to help lead ASA.

• To restore ASA’s image to one of leadership is something everyone involved is very proud of.

• To rapidly expand the offerings of our Education Foundation.

MJM: Last year when you appealed for a financial commitment from members to bring on board a full-time legislative advocate in Washington, they responded quickly and generously. Why was that so important for ASA, and how has it changed the way you are able to lobby and get your voice heard on Capitol Hill?

Adelizzi: I heard Nick Giuffre from Bradford White say something during a speech at the PSDA conference that sums it all up: “If you are in business, you are in politics.” ASA needed to think beyond the very limited role of hiring a lobby firm at a rate of $350 per hour that really did not allow our industry to become an effective voice. Think about it for a second — if ASA engaged a lobby firm at that rate to work full time, it would have cost over $600,000 a year. So we needed to think big and outside the box. Thankfully, a few key members and chapters stepped up and paid additional voluntary dues for the next three years to hire someone full time to represent us in Washington.

One of the issues that really challenged us to do this is LIFO. Half of the industry is on LIFO, with each firm carrying large reserves. If Washington eliminated LIFO, those firms would have to pay the IRS half of their reserve — that would be the tax bite. It would cost many of our members millions of dollars. If ASA looked the other way and didn’t challenge ourselves to dig in and join the fight, how could we really call ourselves the voice of the industry? These are the type of issues that can take hundreds or even thousands of hours per year to fight, so hiring a full-time person just makes sense.

MJM: Besides LIFO, what are some of the other key items on the legislative agenda that ASA is most involved with right now?

Adelizzi: Passing the WATER bill, which would provide a very strong marketing benefit to many in the industry. We are part of roughly 13 coalitions from Copper Theft to LIFO Repeal to Card Check. The deluge of regulatory issues coming our way that can deeply impact our industry. The administration has found it difficult to pass their priorities through Congress, so you are starting to see an uptick in federal regulations instead. We have seen this with DOE’s elimination of the manufacturing of multi-shower head units, lead in plumbing products, and many employer mandates that have cost our members thousands of dollars to comply with.

MJM: And bring us up to speed on the Education Foundation, some of its more recently released programs, and what is to come in the near future?

Adelizzi: The ASAEF is probably one of the more exciting areas of the association. The ASA Board, ASAEF Trustees and staff led by Amy Black have established a very aggressive goal of striving to make the employees of ASA members the best trained in the industry.

And it takes more than just publishing books to accomplish that. It takes some bold down-range thinking about the direction education is moving in this industry and how we can deliver it to better meet members’ needs. We have converted all of our publications online — making it very easy for wholesalers to deliver training right to their employees’ computers. Through our Learning Man­agement System, an owner can monitor employees’ progress in completing courses and how well they have retained that knowledge.

The most exciting development is being unveiled this month during NetrworkASA. Our new ASA University, with five colleges currently being developed, will revolutionize the delivery and educational learning in our industry. Wholesalers will be able to put key employees in a college that outlines a complete curriculum to follow — much the same as going to a college or university. We are even moving in the direction of helping members develop customized and personalized training profiles for their employees. It’s all really exciting stuff!

MJM: Do you have any current stats on the participation of members in the Education Foundation programs?

Adelizzi: At the halfway point this year, we had already reached our full-year sales budget. We are also exceeding every metric we have to measure new students enrolled, new wholesale firms engaged in training and the total number of students participating. While we are still only scratching the surface, with the excitement from the soon-to-be-introduced ASA University, the sky’s the limit.

MJM: Has your opinion of ASA’s role in the industry as a whole changed since you became involved?

Adelizzi: In some ways yes, and in some ways no. I was correct in my opinion that ASA has a core of real dedicated leaders who are working to restore the association as the industry leader in education, advocacy and providing industry data through benchmarking programs. What I didn’t realize is the depth of volunteers waiting to step up and help. All that was needed was to provide a big vision to inspire them into action.

Very few associations can pull off bringing over 70 opinionated individuals into a planning session and having them walk away united in purpose and thought. We not only have pulled that off but it’s what’s driving ASA today.

MJM: What is it that you think is keeping some wholesalers from becoming members and keeping others from fully participating in regional and national conventions? Is there any way to turn the tide?

Adelizzi: A lack of knowing what ASA is all about. I can’t tell you how many owners are out there who have a very old and outdated opinion about ASA that is based on decades-old experiences. Some owners would just rather sit back and let others carry the load for them; heck, they will benefit from the success ASA achieves without paying in and supporting those who are working to build a better future.

As far as turning the tide, it’s already beginning to turn. Many wholesale firms that are leaders in their local markets are beginning to join — and not only are they joining but they are getting involved.

MJM: There has been a significant amount of acquisitions over the last 10 to 15 years, which has obviously made a big difference in the number of wholesaling companies in the marketplace. How does an organization like ASA deal with that reality?

Adelizzi: That’s a great question and one that we have tried to deal with, but not very successfully. Prior to me coming on board, we thought the solution was to raise the cap on dues so that as the national distributors continued to acquire our independent wholesale members, they would increase their dues to offset what we lost. That was good in principle, but when the markets began to crash, companies started going through tough times, and guess what — we lost.

I am happy that we now have all the national wholesalers back in as fully participating members, but we still have to deal with the long-term effect of acquisitions because its not going away. To me there are several ways to deal long term with this issue:

• ASA needs to reach more of the smaller wholesalers and bring them into membership — but that would mean we would have to represent closer to 75% of the wholesalers instead of the 30% to 40% we currently share.

• Raise dues across the board .

• Build greater non-dues revenue sources.

• Seek to merge with another trade association.

To me, a combination of all four could really strengthen ASA’s position and be a long-term solution.

MJM: You made a concerted effort to attract these national firms to rejoin ASA and get involved. Why was that important, and what does that signal to the industry?

Adelizzi: First of all, I’d like to point out that not all the national wholesalers left the association and we are grateful for that. We are even more grateful that the rest have come back — and in a big way. And it’s extremely important in many of the things we do. They probably represent half of the warehouse locations throughout the U.S. If we are going to be effective in accomplishing what’s in our long-range goals, we need everyone in the boat. It’s certainly more impactful, for example, that when our Director of Government Affairs Dan Hilton goes into someone like Sen. Harry Reid’s office from Nevada, he can tick off all the branch locations and manufacturing plants that we represent throughout the state. Having these national firms on that list gives us much more leverage.

MJM: I really appreciated [ASA president] Bill Kenny’s speech at the PSDA Convention. He was very candid in talking about how he believed ASA had really changed as an organization, and how the volunteer leaders were so dedicated to improving its offerings and benefits to members. Can you outline some of those changes as you see them?

Adelizzi: Sure, I’d be glad to:

• A dramatically expanded educational offering at more affordable prices delivered right to an employee’s desk or even home is of great value.

• A radically expanded representation in Washington can protect members’ livelihoods even if they don’t see the long-term threat to their businesses. I look at it this way — every business buys insurance even if they hope to never have a disaster, so why wouldn’t they want to help ensure that Washington doesn’t put them out of business?

• During the economic downturn, we added a monthly sales benchmarking report at no cost to the membership.

• When money was tight, ASA expanded our operations and services.

• We’ve added monthly safety articles and monthly safety tool talks that members can implement in their operations — all at no cost.

That’s a pretty good start, don’t you think?

MJM: Bill also noted that things like membership, benchmarking participation and sponsorships are all up. That must be very pleasing to everyone who has worked so hard. To what do you attribute those gains?

Adelizzi: Probably a more focused approach by staff and committees to deliver services. A greatly improved marketing effort by the association — not just running ads but communicating through industry publications and weekly e-newsletters.

But most importantly, since I believe that this is a word-of-mouth industry, we make sure to be at almost every industry event including reaching out to all the buying groups. I think the latter is one of the biggest changes. In the past we may have viewed the buying groups as the enemy, but I think that they are a vital cog in ASA achieving our strategic goals — just as important as our regional groups and the national wholesalers.

MJM: You’ve actually formalized relationships with these industry buying/marketing groups. Describe how you’re working together and how these partnerships will benefit all involved?

Adelizzi: Being a political animal, you learn quickly that in any campaign it’s about building a coalition of organizations that can rally around your cause and bring energy to your campaign. You build a large enough coalition and a winning outcome is almost always sure to follow. When I first came onboard, I saw an “us versus them” attitude toward the buying groups that I knew had to change if ASA was to accomplish some of the mega goals we were seeking to achieve. How were we going to fight an over-aggressive Washington, D.C., provide the industry with quality benchmarking data and ensure our industry had the best-trained labor force if we didn’t have all of the wholesalers in lock step behind us? We needed the buying groups to do that.

Today, we’ve established formal agreements with every major buying group except one. That has given ASA access to virtually every independent wholesale firm — ASA member or not — in the country. Through their formal meetings, ASA is given the opportunity to meet their members and talk about where ASA is heading. What I am excited about the most is that ASA members now stand up at their buying group meetings and talk positively about what we are trying to do on behalf of the industry. The leadership and members of the buying groups get it — and now they are helping us accomplish these goals. There is an excitement building about the direction ASA is taking and that becomes infectious.

MJM: Talk about the sponsorship program that you’ve developed and the response you’re getting? How is that funding used within ASA?

Adelizzi: The sponsorships are actually going great. In fact, we have significantly exceeded our budget for sponsorships during the past two years. It’s called our Supplier Partner Program, and it’s geared toward promoting manufacturers that support ASA all year long. There’s real benefit to them and that’s why it’s growing. The benefit to ASA is that it provides us with a steady stream of non-dues revenue, which is highly important. Membership dues only cover about 35% of our budget. So you can see how important that sponsorship revenue is to us and our ability to provide some great services to the industry.

MJM: How do you feel about the future of ASA?

Adelizzi: Not only am I excited about the future of ASA, I feel that the industry as a whole is beginning to feel the same way. The rumor mill and back talk that once undercut what ASA was doing is being replaced by positive chatter. Bringing all the national members back in, adding some of the larger regional wholesalers, and getting more support and buy-in from the manufacturers have all helped our revenue side of the ledger.

But to get healthy, you need to attack the expense side as well. In each of the four years I have been at ASA, we have cut our operating expenses and staff while at the same time expanding our offerings. That’s not an easy thing to do. Next year, transitioning our headquarters from downtown Chicago to the suburbs will further cut our expenses and improve our ability to expand our programming to the membership without dues increases. So needless to say, I am happy with the direction we are going.

MJM: What are your thoughts regarding advance registration for this year’s convention?

Adelizzi: Huge turnout and record attendance — everyone is ALL-IN. We have very modest goals of bringing 80 wholesale firms to Las Vegas, but I have every expectation that we will far exceed that number with several people attending from each firm. The last two Networks have scored very high marks based on the feedback from attendees. We are seeing more first-timers coming this year and as a result we expect attendance to continue to build in 2012 and 2013.

MJM: And what are some of the highlights that members can most look forward to in Las Vegas?

Adelizzi: I’d say the strongest benefits to members lie in these key areas:

• A strong line-up of speakers

• A powerful panel of leading customers in three market segments to give our members insight into what our customers are thinking about the future

• The conference appointment session between the wholesalers and manufacturers

• Our networking councils.

It’s shaping up to be our third successful convention in a row, and we’re excited to kick it off. n

 

For additional information, visit www.asa.net.