You already know what the most important job is (if you don't, I will be reminding you before this month is out, for sure).
Today, however, I want to talk about the Second Most Important Task. The Second Most Important Task (SMIT) is to create new products, or fresh modifications of your existing products. 3M is likely the most famous company for executing this strategy. Continuously, something like 60% of 3M's products did not exist five years ago. Yet, 3M has only one basic technology--applying adhesive to a substrate. This highly successful business is on one hand very, very simple.
There are two ways to create products and one way to not create products.
The first way to create products is to watch and listen to your existing customers. What are they buying now from you or your competitors? What do they tell you they wish for in the existing product lines or are there products they want that are not available on the market? It could be the reason certain items are not available is because they won't pay a price that makes a profit for the sellers.
We have had experiences like this. People ask us if we know who makes (fill in the blank). Today, we send them to the Paperitalo Supplier Directory (www.suppliers.ipulpmedia.com). At one point in time, we thought: here is a product idea! We'll create a concierge service to help mills find things they need. We quickly learned they were willing to spend a day of their time looking for something than spend money with us to help them find things. They were willing to ask us for help as long as we gave them help for free. Fortunately, we did not have much invested in that product. First rule of product creation--you have to create a product people will buy.
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A second subset of this area is to create an enhanced version of a product you already make. The chemical, starch and clay companies are very good at this. A little tweak here, a little tweak there and you have created a new premium version of what you already sell. Machine clothing companies are good at this, too. It is a bit more difficult in equipment, but it can be done.
Don't be afraid of cannibalizing your existing products. If you can think of a way to do it, someone else can, too. Better you cannibalize your own products than let someone else cannibalize them. There was once a company that had a large portion of the business for porcelain insulators for high voltage electrical lines. They were smart enough to hire some plastics engineers and set them up in a state-of-the-art laboratory for the express purpose of developing an injection molded insulator that could withstand the high voltage. After a couple of years, these folks succeeded and obsolesced the entire porcelain operation--basically replaced it with a few injection molding lines. It was a multifold drop in employment at the company and a huge shrinkage in the factory footprint. But the company had figured out what was important and survived, they did not let a competitor do this to them, they did it to themselves and could hence control the transition.
The second way to create products is to see a need and develop a product or service for it. In this case, the prospects don't know they need the new idea, but once they are attuned to it, they jump. Soft, strong and absorbent toilet tissue fits in this category. Up until the late 1960's, all toilet tissue was the same--pretty poor performing stuff. P & G put their marketing and research folks on the problem and enjoyed close to twenty patent protected years of fantastic markets. Now, the patents have run out and toilet tissue breaks into two commodities--premium and economy. Perhaps one of these days someone will invent a better mousetrap and light a fire in the tissue markets again.
The nice thing about being first in a market is that, at lease for a while, you can earn fantastic margins, for the product or service is sold on prices the market will bear, not prices it cost to produce the product and make a slim profit margin. Think iPhones. Like all products, though, they have run their cycle and now Apple and its competitors are struggling to make the next great personal communications device.
For safety this week, I am sure all things safety wise have not yet been invented. Perhaps your workbench in your garage is just the place to invent the next great lifesaver.
Be safe and we will talk next week.