For at least fifty years, large segments of the wood products industry have been in the standardization phase of their organizational history, with many of their products trapped in the mature or declining phase of their product life cycles. During that time these companies have excelled at minimizing costs, increasing efficiencies, and eliminating waste. However, competition from developing countries with “cents-on-the-dollar” wages, access to low cost fiber and access to capital for new machinery and equipment is throwing the concept of incremental improvement out the window. Many segments of the wood products industry are at a crisis point in their history; in some cases organizational survival is at stake. A new paradigm is needed.
However, the glass is clearly half full. This is the chance for industry to re-tool and rethink itself, and to seize the opportunity to move away from the low-margin, equipment-centric commodity approach of the past fifty years to a more flexible, higher margin, people-centric vision of the future. The opportunity is in redefining success in terms of profits earned and job satisfaction. For many, this situation gives leaders permission to re-create their businesses in ways they’ve always desired, but couldn’t because they weren’t able to find their way off the commodity treadmill.
This article discusses those key activities that can affect the ability of wood products companies to compete in the future. Foremost among these is recognition that the most critical change must occur in the boardrooms and executive offices, not in the factories and warehouses. Research suggests that there are three primary ingredients to successfully addressing this change. First, a clear, motivating vision is essential; and that vision may need to be significantly different than the one of the past. Second, organizations need to seek out, welcome, nurture, and institutionalize a higher level of creativity in all that they do. Third, deeper and broader relationships with customers, vendors, and employees are critical to identifying and implementing positive change. Ultimately, wood products businesses must begin to excel at: not making more, but making different; not eliminating costs, but adding value; and not increasing efficiency, but instead increasing intimacy.