When I saw the news about Smurfit a few weeks ago, I knew it was going to be ugly, painful and in the long run, maybe a good thing.
Give me some time on the good part. There really is potential for a shiny side to all of this. Just not tomorrow or next week.
As for the bad, it isn’t just because of the 470+ employees in Missoula – though that’s certainly terrible news for those families, much less every business where they spend their money.
What worried me even more is closer to home – the ripples.
As I left for a Christmas trip to do the rounds at the parents’ and in-laws’, the ripples from the Smurfit closing are what concerned me most.
Ripples like how long it’ll be before Plum Creek, Stoltze and others can replace the revenue from Smurfit with something else.
Or ripples like the impact on the trucking firms, drivers (and their families) and truck stops that benefit from transporting materials to Missoula. And so on…
Income like that from selling chips (etc) to Smurfit is likely gravy to some. In other words, it fills a baseline need to make your “nut” for the week (nut = minimum income to survive), while your core business continues to grow.
Knowing that your payroll is under control thanks to that baseline income might seem like a luxury, but it’s critical to your core business – especially if the latter is a developing aspect of your plan.
This week on NPR, folks from an industry group and the legislature talked about how they would be studying biomass next spring so that they could find a way to deal with the losses in the resource industry.
Studying the problem next spring doesn’t do much for those who just found out they’re about to lose a job or a revenue stream. Presumably those folks and those businesses have been putting thought into that possibility long before now.
What concerns me is the lack of news stories about the business that thought ahead and found another use for these materials, created a market and dodged the Smurfit bullet. Or is that just a dream that I had?
Why in the world do we think it’s OK wait on industry groups, the Governor and the Legislature to solve this for us?
Any solution that goes through the state and industry groups will also likely go through DC. Hello politics, which often has a sand-like effect on the gears in the machine of business. While government actually does some good now and again, their work doesn’t typically get produced on a small business owner’s schedule.
Meanwhile, businesses are sitting around wondering what to do with all that slash, bark, chips, etc. One expert noted that “we’ll just end up burning it again”.
Great.
Not only have we (broadly speaking) not had the vision and gumption to work beyond our current situation and develop new business models well in advance, but now we’re going to *waste* one of the advantages (biomass assets) we *do* have?
Next thing you know, they’ll be putting a clause into farm subsidy legislation to pay us not to grow trees. Or to grow trees that don’t produce heat (hey, we do it for food, why not trees).
We’ve fiddled while slash (Rome) burns.
Are we so comfortable in the land of complacency that we’re willing to wait until Brian and the Legislature come to us with a solution that everyone’s willing to sign but no one really likes?
Is that the kind of solution that we’ll find durable in today’s hyper-competitive global market?
Is that the kind of solution that will encourage your kids to educate themselves and return to the valley to make a living (and some grandkids) ?
What’s the most dangerous number in business? The Smurfit-Stone situation reminds us once again. It’s ONE.
ONE little event can change everything.
If your business is dominated by one income stream, gets all its raw materials from one supplier, depends on one cheap raw material, or “falls apart” when one person is on vacation, you have one big potential problem.
Solve it while you still can. Start with two.
Want to learn more about Mark or ask him to write about a business, operations or marketing problem? See Mark’s site or contact him via email at mriffey at flatheadbeacon.com.