Since October 2000 the wood products industry has lost over 100,000 jobs across the United States. Imported furniture now accounts for more than one-third of retail sales. Prices for many wood products are falling. Many companies are trapped in a no-profit zone, and many more are heading there.

To escape or avoid the no-profit zone, you must change the way you are doing business or exit the industry. Remember one definition of insanity - doing the same thing again and again hoping that the outcome will be different. That's the mentality of many industry players today.

The problem is a lack of leadership. Most companies are simply overmanaged and underled.

Management and leadership are different yet complementary, and both are vital to business success. A company must balance and connect the two carefully or be in danger of becoming obsolete.
Leaders innovate, managers execute. One without the other is of no value. In most cases, strong leadership combined with weak management is worse than the opposite. It does no good to innovate without the ability to execute.

What then makes a good leader? 

Traits of a good leader

  • Remember this - leaders are made, not born. Yes, there are leaders who are naturally charismatic and inspirational. But most leaders are normal people who have or can develop a leadership persona. That mind-set is evidenced by many traits.
  • Leaders have vision. A great leader thinks with imagination, beyond the here and now, past the edge of the radar scope. We're not talking about being a wild-eyed visionary. In truth many sound visions are based on well-known ideas. The ability to see old things in new ways or create new processes from old ones will better serve a company than pipe dreams. A vision that cannot be translated into a profitable business model is of no value. 
  • Leaders tolerate chaos. They understand that order and control are not as important as getting it almost right. Disorder is caused by speed, and speed is often key. Being just one step ahead of your competitors may be of immense value.
  • Leaders take risks. To them the dilemma of choosing between a perilous opportunity and the status quo is easy. The former may bring failure, but the latter might lead to obsolescence. Remember, in the no-profit zone you either change or exit the business. There are no other alternatives.
  • Leaders accept failure. Innovation and change end in failure more often than success. For companies like 3M, Intel and Merck, failure is a way of life. Success is won only by exploring lots of ideas. At Intel they say, "If we're not failing 10 times more than we're succeeding, we're not taking enough risks." And being willing to fail means a readiness to pull the plug on an idea that's not working.
    Leaders are consistent. And to them the truth matters. Employees want to see their company do what it says and be honest. You won't build a dedicated team by being dishonest or by saying one thing and doing another.
  • Leaders cultivate more leaders. The best-led companies have leaders embedded throughout their organizations. The leader at the top needs help in communicating, teaching and
    learning.
  • Leaders replace vision-resistant employees. Leaders do not hesitate to fire those who don't get their view of the future. Jack Welch, recently retired chairman of General Electric, said, "Change does not come from a slogan. It happens because you put the right people in place to make it happen."
  • Leaders dispense with tradition. To them doing things "the way it's always been done" equals inertia. The problems of today may not fall to the solutions of yesterday. Even doing something 10 percent better is no sure path to success. 
  • Leaders, in the end, force change. The marketplace is unmerciful to companies that underperform. A leader knows that his organization must change faster than the industry it operates in or die.

The bottom line

Leadership matters, and it matters most when times are toughest. Business today is simply more competitive and more volatile than ever. By sticking with tradition in these times, many companies are risking extinction. To survive and succeed, change should be your motto.

The market will continue to demand wood products such as furniture, cabinets and the like. But your customers' needs are most likely begging for new solutions.

Are there any leaders out there up to this challenge? Stay tuned.

Have something to say? Share your thoughts with us in the comments below.