“It was the best of times, it was the worst of times.” The first sentence from Charles Dickens’ famous novel A Tale of Two Cities captures well the state of the hardwood lumber industry over the last five years. For most hardwood lumber producers, the last six months have been among the best times that they’ve ever experienced. And yet, the pain of much of the previous five years remains seared in our memories. So how do we handle these two radically different images at war in our minds? As I’ve thought about this, I’ve come up with some advice for myself. Maybe some of this will work for you.
- There’s an old stockbroker’s saying that goes something like this: “Don’t confuse brains with a bull market.” So, in our context, enjoy the good times while they last, but don’t let them convince you that you’re suddenly a lot smarter than you were a year or two ago. The current runaway market will end sooner or later, and it isn’t our smarts that has created it. We need to enjoy it while we can, but be ready for it to return to normal.
- Don’t let rising prices and increasing margins cover up sloppy operations and sales practices. It’s easy to be lulled to sleep by increasing sales and margins, and not look hard enough at what’s “underneath the covers.” We need to keep pushing just as hard for the half percent efficiency increase, or the 1% gross margin increase, as we did in the depths of the recession. It’s just as important now in good times as it was in poor times.
- Keep investing. When business is good, there’s a temptation to think that it’s not as important for us to keep investing in our business. I’m not just talking about equipment, but also about investments in IT and other areas that make our businesses more efficient and cost effective. Continuing to invest will give us a cost advantage when things turn back to normal.
- Work harder than ever at getting close to our customers. The temptation in times like these can be to think “we’re in the drivers’ seat.” At all cost, don’t give into this temptation. Suppliers and customers need each other and the pendulum swings back and forth. Don’t be afraid or embarrassed to raise prices, but travel and work hard to keep strong personal connections and relationships, and don’t present a “take it or leave it” attitude.
- Proactively look for talent that we can add to our team, whether it’s in production, operations, sales or support functions. Don’t wait until someone leaves to try to fill a spot. With our business growing again, we will need more and better talented people. Try to get ahead of the curve in hiring these people in advance, even if we don’t have a position open for them right now.
These are a few thoughts that I remind myself of these days. Hopefully one or two of them will help you.