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OLD-TIME INDUSTRIES: RE-INVENTING THEMSELVES, THEY LEAP AHEAD By Brad Hosmer The following article was first published in the "Boston Business Journal." A second version appeared in "India New England News." When we think of old-time, "stodgy" industries, certain instant images come to mind, of metal, chrome, fabric, wood. These raise a dusty picture of industries that have had their day and that, while still producing needed goods, can never compete with more glamorous industries (software development, for example) nor with foreign competition. Driven by a sheer desperation to survive, however, urges that up until recently most such old-line industries have never known, many of the more "stodgy" ones have begun to re-invent themselves in quite advantageous ways that companies with lesser desperation would be hard-pressed to emulate. In this, such formerly old-fashioned, newly revitalized companies may offer instructive examples to us all. Look at textiles, for example, an industry under steady siege for many years. Textile manufacturers by and large have exhibited little growth in the past few decades, losing market routinely to lower cost, off-shore producers. Who would invest in such an industry, or want to spend one's career there? Yet one Massachusetts textile company, in response, a one-time producer of commodity fabrics, recently developed an air-tight coated nylon fabric for use in aircraft life vests, helium balloons, and camping mattresses. This new high-tech material has revolutionized "barrier applications," that is, impermeable fabrics that prevent the penetration of gasses, germs, e.g., medical drop-cloths and aprons during surgery. This innovative development has turned the company into a world-leader, fueling a 25% annual growth rate and restoring high profits. Another example from textiles, one old-line industrial maker of scrim and base fabrics for industrial and military applications, looked about one day to realize that its once-mighty sales volumes had disappeared. Market research indicated, however, that a demand for air bag fabric had lately begun to emerge. Shifting its capabilities to this very different application would not be so easy, however, as the entire company would have to adopt and master new methods way outside its long-time area of expertise. Essentially it would need to acquire and incorporate completely new engineering, manufacturing, and marketing skills. To do so, the company embarked on a multi-year effort, including the marshaling of all its textile know-how, bringing in polymer chemistry experts, establishing a state of the art development lab, and working closely with key customers to develop material that had precisely the needed properties. The campaign demanded new vision and company-wide commitment but once accomplished catapulted this longtime "archaic" manufacturer to the forefront of a brand-new market, giving rise to, concomitantly, record revenues. Beyond the benefit of enhancing the bottom line, such transformations also typically accelerate company growth. The application of new technology and competencies can be directed toward creating new products that satisfy the needs of a whole range of new customers. Our airbag company, for example, had spun off from its newfound expertise development of high performance, high value protective and decorative fabrics for many other medical, commercial, and residential applications. Today this company is soaring, happily dreaming up even more new ideas for the near-future. And how about a more modern manufacturing commodity, the ink jet printer? Rather mundane, lifeless commodity, when you think about it, and a low margin one at that. When you've seen one such printer, you've seen them all, many folks would say. However, one northern New England company has done broken from the printer "pack" by fabricating a highly specialized printer capable of producing images five meters wide. Who would want such a monstrous printout? Well, anyone looking to produce huge murals, giant signs, billboards, and other large-scale graphic imagery. In fact, this company's new technology has so taken the market by storm that it is now, in only a few short, recent years, captured world leadership in its field. What makes some companies wake up while others continue to move slow, slumber, die? The secret is this: Each accurately identified and responded to opportunities lurking in the corners of an otherwise unexciting marketplace. In taking off blinders and seeking out new markets, by choosing to stop "force-fitting" inadequate, mediocre products onto their customer base, they went on to evolve wholly new products, from idea state to commercial success. In so doing, they opened up their internal climates to fresh ideas and profitable change. And one other key factor was common: energized commitments from each company's CEO to pursue uncertain directions, frequently despite the advice of vocal company insiders content with the status quo and afraid of change. This courageousness from on high, in all cases, proved invaluable. So have you been feeling as though your company has gotten stuck within a stodgy or archaic industry? If so, there's no reason why your company must remain this way. Begin seeking out clues to new product avenues, advancing bravely toward uncharted strategic directions. In general, let go the fear of trying something different. Many formerly staid enterprises have traveled the same route and today their customers, employees and stockholders are delighted that they did. Bradley E. Hosmer, CMC, heads The Beta Consulting Group in Concord, NH, specializing in improved sales, marketing and new business development for generating profitable growth. For further information please contact Mr. Hosmer at Beta Consulting. |
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