Tire Business Interview: Tire industry needs to ask ‘What does success look like?’

There is a question I believe tire distributors should ask more often when evaluating a new supplier.

It isn’t, “What is your price?”
It isn’t, “What is my container program?”
The question is much more simple: “What does success look like to you?”

I asked that question last year during a meeting at the SEMA Show with the CEO of a large Asian tire manufacturer. This was a substantial company that had recently opened an impressive new manufacturing facility. Members from both of our teams sat around the table, working through all the expected subjects: Products, programs, pricing, volumes and opportunities.

At some point, I stopped the conversation because I wanted to understand something more fundamental about the company sitting across the table from us.

I looked directly at the CEO and asked him a simple question.

“What does success look like to you?”

There was silence.

He thought about it for what felt like a minute or two before finally answering.

“Just buy more tires.”

I remember sitting there thinking about his response.

If someone asked me that question about my own business, I could tell them in considerable detail what success looks like. I could tell them where we want to go, how we intend to get there, what we need to invest along the way, and how our customers, suppliers and team members fit into that plan.

His answer gave me a much clearer understanding of our relationship than before I asked the question.

It was refreshingly simple, but it also exposed a fundamental disconnect that I believe exists throughout parts of our industry.

For many tire manufacturers, particularly those competing in the more price sensitive tiers of our industry, the strategy is primarily focused on convincing the distributor to buy the tire. Tremendous amounts of capital are invested in factories, equipment, molds, capacity and increasingly broad product portfolios. Sales teams travel the world looking for importers and distributors. Manufacturers attend trade shows, build impressive booths, create catalogs, offer container programs and develop incentives designed to generate more purchase orders.

Then the tire arrives at the distributor’s warehouse, and the responsibility for creating demand largely changes hands.