December 2004

'We're Lost, but We're Making Good Time!'

For those wood product manufacturers that have lost their way,
here is some advice for getting back on track

By Tom Dossenbach

It has become apparent to me over this past year that many smaller furniture manufacturers and some suppliers to the woodworking industry are struggling to cope with the rapid succession of change that is taking place. Many of these companies have lost their direction and have not made any meaningful corrections to their plans and objectives for the future.

A few weeks ago, I picked up "The Yogi Book" by Yogi Berra. In addition to the former Yankee great's famous sayings, Yogi writes about the time when he got lost while driving to the Hall of Fame in Cooperstown, NY. In response to the ribbing he took from the family members with him in the car, Yogi replied: "We're lost, but we're making good time!"

I could not help but chuckle and afterwords suddenly realized that within these words lay great and tragic truth for our industry.

Many managers in the wood products and furniture industries are lost in the maze of change, not knowing where they are headed or how they are going to get there. Instead, they put the pedal to the metal and go full-speed ahead down that same old road to "somewhere."

Let us take a closer look at how a company might lose its direction, and even more importantly, how it can get back on the right road.

Ignoring the Signs

There are many recurring situations that inhibit our ability to concentrate on the critical road signs. We all know from experience that if we do not stay focused while driving, it is easy to miss an exit. I recall driving down I-95 a few years ago to visit a client. In deep thought about something and in auto- pilot mode, I was not aware of what I was doing; I just kept the car in the right lane and cruised south doing 70.

Suddenly, I realized that I did not know where I was. I did not recognize any landmarks and a momentary panic set in before I realized I must have missed my exit. How far back was it? How much time had I wasted? How was I going to get back on the right road? Should I backtrack? Should I find an alternative route? All I knew was that I had to get off the interstate, stop, and find the best way out of this situation.

Too often, this is the way it is in our industry. Consider this anecdote.

There once was an office furniture manufacturer that had been around for almost 100 years. The office desks and chairs it produced were of high quality and the company experienced steady growth, especially during the '70s and '80s. Sometime during the early '90s, however, the company lost its vision and entrepreneurial spirit. It assumed its products would always be acceptable in the marketplace and that its loyal customers of the past half-century would provide a continual supply of orders, even though its competitors were introducing products geared toward the modern office setting. At the same time, the company's management stopped investing in new production equipment and fresh talent.

This company kept cruising along and missed all the signs along the way, pointing out the need to change. One day, as John, the president of the company, was trying to figure out how to make the payroll that week, he was gripped by the realization that things had gone terribly wrong. The light went on when John realized that he did not know where the company was going and that he and his management team had been on autopilot far too long. John did not recognize any landmarks that would tell him where the company was heading. Even worse, the company did not have a roadmap to guide it - an up-to-date strategic plan or written goals and objectives.

Panic set in as John realized he must have missed some important signs along the way. Where and how far back was the most critical one? How much time had he wasted? How was he going to get back on the right road? Could he backtrack? Could he find another route? Was it too late?

I got lost and John's company went bankrupt because neither of us watched for the signs along the way that told us it was time to change direction in order to meet our goals. Unfortunately, many in our industry simply continue to make good time while being lost and ignoring the signs of the times.

Making Wrong Decisions

Another way woodworking companies can get lost is by getting on the wrong road without knowing it. As Yogi would say, "When you come to a fork in the road, take it!" Unfortunately, our industry and too many companies within it have subscribed to this philosophy. They ended up on the wrong road because they simply did not take the time to thoroughly analyze their situation so that they could make good decisions.

One of the industry's most critical mistakes was made about 30 years ago when furniture manufacturing companies did not invest in new plants and automated woodworking equipment. If money had been invested then, we would have been traveling down a completely different road and would not have lost our competitiveness in the process. In addition, our country would be a leader today in innovative wood processing.

More recently, companies ignored the impending surge of imports and how that would affect their customer base - their future. Now, short of outsourcing manufacturing to their Asian counterparts, they are trying to determine what to do to survive.

Finding Your Way Again

Whether your company has ignored road signs along the way or has indiscriminately made decisions on the direction your company should take, the pressing issue is to get back on the right road to success and to do it as soon as possible.

A good starting point, and one that is extremely revealing, is to conduct a SWOT analysis - simply an exercise of analyzing the Strengths and Weaknesses of your company, the Opportunities before you, and the Threats your company faces. This should be done with input from managers, staff and employees, not just by one or two officers.

First, identify your company's strengths, which are determined by your superior skills and resources. Utilized or exploited, these give your firm the ability to outperform your competitors. It is critical to remember the word 'exploited' because you must decide how to leverage these strengths later when you set your strategies. An honest inventory of company strengths is an excellent foundation on which to build a future.

Next, take a frank look at your company's weaknesses - the deficiencies or constraints that limit the company's ability to match or exceed the competition. Most managers would rather not go through this exercise because it can be painful. However, this must be done if you are going to make an honest assessment of what corrections have to be made to prepare for a more successful future. It is often advisable to get input on this SWOT element from an outside perspective such as from customers, suppliers and others that will look at your company and products without bias or preconceived notions.

Obviously, the weaknesses that are identified will become a priority for elimination as a part of a rapid continuous improvement program.

I have always thought the "T" in the acronym - SWOT - was out of order; therefore I recommend that the next step should be to analyze the threats to the future of your company. These may be imminent or may be looming as part of a long-term trend. The idea is to identify all of the internal and external threats to your company's long-term success. For example, imports used to be viewed as just a trend, but today many woodworking companies find this an imminent threat. A heavy debt load may be an internal threat.

During this exercise, it is important to consider a wide spectrum of potential threats to monitor, some less obvious than others. If you can identify a future challenge quicker than your competition, you will have actually gained a competitive advantage.

The final step is to analyze the opportunities that exist for your company. This can be both fun and satisfying to the participants. Climb out of your box with crayons in hand and color outside the lines. Use every ounce of creativity you can muster from your employees to define those opportunities that can lead to new goals and objectives.

The first three steps point to some of the most important and positive opportunities available to the company. Eliminating weaknesses, building on strengths and finding ways to negate threats should be incorporated into new plans and objectives. In fact, the worse things seem for a company is often an indication of greater opportunities for success as the company redefines where it is going and structures a strategic road map to most efficiently reach that destination.

The companies that succeed in this task have the right to say, "We're NOT lost, and we're making good time!"

 

 

                                                                                                                                                                                           

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