Championing the channel: David Henderson

Championing the channel: David Henderson

If 3M and Toshiba had helped teach Henderson the importance of cultivating a healthy channel, it was his next role that gave him the greatest insight into how the model worked. He joined Tech Pacific, Australia’s largest IT distributor of the day, as one of a small management group led by David Cullen. It was a broad role responsible for vendor relationships and buying as well as marketing and communications – in effect, everything but the sales organisation. As with Ingram Micro today, Tech Pac was almost a vendor directory in itself and Henderson was in a position to see the business plans of more than 120 suppliers including just about all of the tier-ones. He developed a skill of looking at business plans and knowing if they would fly or not and remembers Tech Pac as the pulse of the industry. With sales checks carried out twice a day, it was essentially a barometer of strategies what were working and those that weren’t. This stint in distribution also taught Henderson the importance of credit and the vital role distribution plays in managing reseller relationships with vendors.

“Success has crippled so many partners and I have seen some go bankrupt with a full order book because they simply can’t bankroll it and cash flow gets them,” he said. “There has to be somebody responsible for supporting growth and vendors or distributors used to help companies trade through difficult times.

“You were essentially the bank and financial advisor that helped them continue growth but insolvency laws are now so tough that we are all scared to do that. As soon as a business goes cash negative you shut it down or the directors go to jail.”

Henderson’s days at Tech Pac also saw early successes in managing a profitable retail business, although the different pricing and rebate strategies employed were no more popular with traditional resellers than they are today. It was this army of small business owners that he developed the greatest empathy for.

“We all talk about the likes of Commander, Leading Solutions and Data#3 but there are 5000 small business guys out there just paying the mortgage and looking after the kids,” he said. “They are genuine, hard-working individuals and that’s why I get frustrated by people questioning the value of the channel and talking about fulfilment. It’s a derogatory term.”

Five years ago, Henderson joined EMC as channel and alliances manager. For a man with such a solid channel heritage, this would be a completely different experience and in many ways has been the toughest assignment of his career. With a customer base that consisted largely of global 500 companies in the late 1990s, EMC had a very singular direct route to market with no need or desire for a channel. As its product strategy broadened, and the company tried to grow its way down out of the enterprise, the powers that be realised the need to embrace channel.

Henderson was brought in to lead a transformation of its internal mindset over a period of time but that journey started with a major slap in the face that served as an indicator of the task that lay ahead. EMC had brought in Express Data to help it build a channel but Henderson had not been there long when he took a phone call from the distributor’s managing director, Ross Cochrane, to tell him it was all over.

“I remember thinking ‘hang on a minute, aren’t I supposed to be the one that does this kind of thing to you?’ It was terrible but at the time we had a very direct organisation when it came to manufacturing so quite rightly Ross made a financial decision to let the agency go. I respect him for that and it taught us a great lesson that it was going to take a lot of internal reengineering as well as investment if we were going to be successful through distribution.

“We sat down with Wendy [O’Keeffe] and the LAN Systems team with a completely different mindset. We told them we had a really bad back office and asked for their help to make it better. Distributors know supply chain and efficient sales operations better than anybody. That was a value-add they brought to us and we invested in talented people within LAN Systems.

“It has been spectacularly successful – a real case study in a vendor and distributor coming together to build a business quickly.”

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