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Week of 18 November 2019: Strategy Pitfalls

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There is the old children's story of the blind men describing an elephant. As the story goes each one of them walks around the elephant and feels different parts of it. As they do so, each has a different impression of what an elephant might be, based on the parts they touch.

Some companies operate as the blind men did when it comes to setting a future course--their strategy. They are so lost in their myopic view of the world they miss the big picture.

This is often why some companies go out of business and others thrive. Then, of course, there is the case of those that are just lucky, but we'll save that for another day.

It has been instructive in the last twenty-five years to watch the white paper and newsprint industries stumble through the sea change of disruption caused by the internet. Failures to read the trends no know bounds. A famous Scandinavian company, for instance, overpaid by billions of dollars for a US fine paper company with a record of marvelous results--in the past. A newsprint manufacturer that should have been the last one standing in North America makes newsprint no longer because they misread the market trends on both the raw material side as well as the product side. The list goes on and on.

Often the new entrants in any business suceed because they don't have blinders on--they are not hindered by what happened in the past. Paperitalo Publications is an excellent example of this. We chose our direction by looking at where the exchange of information is going, not where it had been. We have taken our share of ribbings following what some thought was the foolish idea of reporting on the paper industry online, not in a print magazine. So far, we have been right--our implementation of this idea goes back fifteen years and we are still here. Meanwhile our noble competitors' printed magazines become thinner and less frequent every year.

*** has hundreds of registrants! [12.12.19]


I actually saw a new paper machine project stopped once because of a change in the published price of linerboard in one week (it went down, of course). If you are so weak-kneed that you are going to base your faith in your strategy on weekly variants in the price of a product, throw away your strategy hat. You are not talking about strategy.

Strategy exercises should be far ranging in both time and space. They should involve listening to lots of people who may be in the know (not necessarily all of whom would be called experts) and should involve what may appear to be extraneous subjects (at one time the environment was an extraneous subject). But strategy should never touch day-to-day operations until your strategic plan is "fully cooked."

Good strategy example: a major company completely tore down and removed a multimachine fine paper mill that was forty years old. They had done their homework and decided this asset no longer fit their strategic plan and they did not want it to fall into the hands of a competitor.

Bad strategy example: staying with any newsprint mill too long, hoping the market will come back. It hasn't and it won't.

Example of lucky strategy: keeping a liquid packaging board mill running in the hopes that liquid packaging would come back. These folks just happened to survive long enough for the world to develop a distaste for plastic.

At its best, strategic plans are fraught with danger. Do everything you can to mitigate that danger by looking far and wide, reading everything you can find and interviewing people from all walks of life. If you want some help, give me a call.

For safety this week, let's think about the trends in accident prevention. Safer means of human/machine interface are developed each year. Are your implementing them?

Be safe and we will talk next week.

___________________ has taken off like a rocket! Over fifty jobs are posted, in many interesting categories. These jobs are in at least 15 different US states. [12.12.19]


Employers are on board with There are nearly forty employers located in fifteen different US states and six other countries. [12.12.19]


Other interesting stories:

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