'Rules Of Engagement' Should Be Called 'Rules Of Displacement'

HP, Compaq, IBM and just about anyone else that matters has or will soon announce similar criteria as to when, where and how its sales force will compete against the channel.

Obviously, some of these vendors do a better job than others with these so-called rules. But regardless of who does a good or bad job, in no case are these truly rules of engagement. That terminology is just marketing spin. When a vendor gives you a set of criteria that spells out when it is going to take business away from you, that is called displacement, in my book.

In fact, given that this is a new world we live in, let's go to Webster's New World Dictionary to see what it has to say:

Engagement: a) an engaging or being engaged; a promise; pledge; b) a promise of marriage; betrothal.

I don't know about you, but the last time I checked with my wife, the "rules of engagement" I signed up for were all about helping each other. And aren't engagement and marriage supposed to be about giving more than you receive?

So let's go back to the dictionary:

Displacement: displacing or being displaced.

To me, the definition of displacement sounds more like what happens when a guy or a gal tells the other to get lost.

You might argue that the word "displacement" isn't exactly the right word either, because it seems these rules set the stage for the vendor to cheat on the channel, but with the channel's knowledge. Perhaps we should look up the definition of "swinger." Then again, this is kind of a family newspaper and I'm not sure we want to go there.

The real issue here is why do we need these "rules of displacement"? The reason is most vendors don't structure themselves in such a way to foster communication, cooperation and objectives with their indirect sales channel.

They structure themselves to ensure there will be conflict internally. Politics internal to the organization inherently carry over into the market and the indirect channel.

None of these vendors thinks about channel issues at product concept. Most don't measure their product-marketing executives by the executives' awareness of the company's product in the channel. There are dozens of other reasons, not the least of which is how people are compensated.

What happens is when executives understand the channel and how to leverage it, they are well-placed politically. The vendor generally brings strong channel programs to market, sales increase through indirect channels, SGA goes down, and life is good.

However, people come and people go. So when a well-versed, well-regarded channel executive departs and is replaced by someone with little knowledge in this space, or little political capital inside the company, the mood and direction change.

Before long, channel programs and relationships decline, direct sales become a larger focus because everyone understands it, and problems begin to mount.

The larger an organization, the less channel expertise it generally has. Because sales profitability and indirect channels are not taken into account through compensation structures, conflict arises inside and outside of these companies, and the next thing you know "rules of displacement" are being drawn up.

So, the next time a vendor tells you they want to talk about rules of engagement, ask if they are a swinger. When that stops them dead in their tracks, tell them you are not buying the spin.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at rfaletra @cmp.com.