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Published in U.S. 1 Newspaper on July 7, 2000. All rights
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E-Distribution
How information is collected and formatted — that’s
one of the overlooked issues of today’s digital economy, says Quinn
Spitzer, former CEO of Kepner-Tregoe, the 40-year-old consulting
firm located off of Route 518. He and another Kepner-Tregoe alumnus,
Ron Evans, opened McHugh Consulting on Pennington Road this spring.
“There is so much information and how it is utilized is really
defining the economy,” he says.
“The distribution network is as important as how the information
is processed, and probably as important as what information goes
through
it,” says Spitzer. “E-commerce is really a distribution
network,
and what we are going through today is the third or fourth
distribution
revolution of the century.”
Distribution networks have come full circle, says Spitzer, noting
that at the start of the century retailing was very minimal, and
customers
dealt directly with the producer of the goods. Storefronts, such as
mom and pop groceries, opened in the 1920s. After World War II came
mass merchandising — self-service large stores containing
everything
— and these were the golden years for Sears Roebuck and Montgomery
Ward. In the ’70s came the mass distribution category killer stores.
“All of these were putting a distribution network, however
efficient,
between the consumer and the producer,” says Spitzer. “The
great irony is that E-commerce is taking us back to where we were,
where we are dealing with the person who produces something, one on
one.”
“You will see a split in E-commerce,” he predicts. “If
a firm’s E-commerce role is basically fulfillment, that will be less
successful than business to business (B to B) or business to consumer
(B to C).” He points to the retail book business as one that is
particularly encumbered by its distribution network. Amazon.com seems
to circumvent the overstock problems now but in the long run, he
claims,
even Amazon.com will have a struggle. “If I am an educated
customer,
I will go directly to Simon & Schuster to buy my book at a
discount.”
“If you are a strategist, ask what you want your company to look
like in five years, depending on what you think the environment and
the economy will be like.” No industry does not require this look
into the future. “Your product might not change that much, but
the market might change, and the capacity to be successful might
change.”
The question becomes, where will the change occur? “In technology
industries — telecommunications, computers, chemicals, and
pharmaceuticals
— changes are occurring quickly on all three fronts,” he says.
To cope with such rapid change consultants need to follow a Socratic
model. “Those industries do not lack information on markets and
marketplaces; they are the experts. Our job is to make sure they are
asking the right questions and if the conclusions they draw don’t
follow logically, to push back. Important are:
Getting the right factors.Using the information the right way.Asking the right questions.Making the right decisionsSpitzer’s father was a country doctor who paid his way through medicalschool and internship — and also supported five children —by working in the steel mills of Pittsburgh, but at the end of hiscareer he was the medical director at Squibb. Spitzer went to theUniversity of Virginia, Class of 1971, and has a master’s ingovernmentadministration from Georgia. He and his wife have two grown sons andthree younger children.By working in Atlanta for Jimmy Carter, then Georgia’s governor, hefirst learned about how large organizations run. “It is not somuch that I have seen everything, but I saw more than I would haveexpected to see when I was very young,” Spitzer says. “Iwatchedhow an environment, a big city in the Sun Belt, could change rapidly.I learned how change can appear on two different currents, sometimesvery visibly, other times very slowly, much more opaque.”After doing consulting from 1978 to 1982 for Kepner-Tregoe, he tooka career detour of one year to be chief deputy director of Arizona’sprison system. “An old friend said it was about time to run areal organization rather than be a consultant. Then Ben Tregoe askedme to come back.” From 1984 to 1987 he had various jobs: runningKepner-Tregoe’s western U.S. operations and doing staff work, andthen he ran the North American business until 1990, when he becamethe second CEO in the company’s history, reporting directly to thenew owners, USF&G.”It was prettyacrimonious, a fairly difficult period of time. They wanted me gone,though I felt there were some things that needed to be done,”he says. “Their position was right — I should have just left.But we will refer a lot of the training opportunities back toKepner-Tregoe,and I have many good friends there still.””Ron and I started toying with the idea of having our own companyover pints of Guinness in an Irish pub, McHugh’s,” says Spitzer.His first move was to hire his former K-T assistant, Linda Cuilla.He and Evans focus on strategy and organizational improvement andhad hoped to keep their firm small, to hire people that they genuinelyliked to have as friends, to avoid doing training, and to hire someoneelse to head the administration for the company.”But for a couple of reasons we will have to be bigger than weoriginally anticipated,” he says. McHugh has six consultants nowand by the end of summer there will be 10 — with 5 to 10 moreby the end of the year. He is hiring someone to do the administration,leaving himself free to consult. “There is no room forboredom.”Growth is inevitable, he thinks, because he likes to consult for largeFortune 50 and Fortune 500 companies such as Corning Inc., which haveinteresting, complex problems with an international scope. “Weget bored pretty easily,” says Spitzer. “That’s the fun ofthe whole thing,” says Spitzer.Consultants need foresight, a good intellect, an insatiable curiosity,and a lot of drive, he says. “And they had better have a healthydose of people skills because at the end of the day it is about sales.Everything is selling something.”Foresight runs the family, says Spitzer, when you count that hisgrandfather,who ran a hardware store, had that quality. He became a wealthy manbecause he obtained the first franchise for refrigeration in the cityof Pittsburgh. “I was fascinated that he had enough foresightand then the acumen to secure the franchise. It probably seemed asmuch of a gamble then as the IT stuff does to us today.”— Barbara FoxMcHugh Consulting, 2490 Pennington Road, Pennington08534. Ron Evans, chairman. Quinn Spitzer, president. 609-818-0003.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
