Derek Smith & Associates LLC
Consultants in Paper and the Environment
“Leadership in Paper & the Environment”
dereksmith@paperleadership.com www.paperleadership.com
PO Box 246 Glenwood MD 21738 * T:(301)327-7233 * F:(410)510-1421
The recession WILL end -will you be ready?
The recession has engulfed all of us one way or the other, and dominated business thinking for many months. During that time we've seen many good firms in the printing and the graphic arts industries close their doors and it is highly likely that more will follow before our recovery is complete.
The fact is though that the recession WILL end and we WILL recover. The tragedy will be for those companies who have weathered the storm so far but are unable to make the final lap before the finish line is reached.
Most companies did not see the recession coming. This clearly applied to some of the most powerful names in our corporate society and this lack of foresight rippled through big business to small business. In many cases it was catastrophic and highlighted the critical need to spend time and money trying to forecast the short and long-term business future with some degree of accuracy. Living for exclusively for today was surely one of the fundamental reasons that we faced the recession.
That truth must also apply to understanding the upturn when it comes. It is not just a question of getting the timing right but also understanding how business might be changed by the recession, where new markets are to be found for profitable growth and whether those new markets and indeed the economic recovery itself are actually sustainable.
It appears clear that one of the key issues emanating from the recovery and recession and of course the politics that surround it will be the growth of alternative energy. The evidence that at federal, state and city level the drive to find answers to our energy and sustainability problems is available for all of us to see. Equally clear are the trends. Five years ago issues like wind power, solar heating and hybrid vehicles would barely make the headlines if they made the news at all. Today those issues are driving new markets and are registering on the forefront of our thinking in terms of economic recovery. It is, consequently, at least a fair business bet that this trend is will become entrenched and that allied and associated markets will be impacted both in the short term and in the long-term.
A cursory look at the websites or annual reports of some of our biggest corporations will confirm this view, many of them cloaked under the general heading of sustainability. Corporations like Wal-Mart, Verizon, Ford and GM, Sprint and Dell, JCPenney and FedEx, GE and Staples are amongst the thousands of major companies committed to changes in their corporate behavior to produce more sustainable performances.
They cannot do this in isolation from their suppliers, and it is logic to suggest that greater sustainability demands will therefore be made on suppliers of those businesses in the coming months and years. This change in corporate behavior multiplied by state, city and University
and school sustainability programs is likely to be irresistible. What is fascinating, by the way, is that in almost every case these programs have grown during the recession rather than receded.
The business imperative of seeing market trends and applying strategies and tactics designed to fit those trends is available to us all whether we are small, medium or large companies and Paper, packaging, print and graphic design have a major impact on sustainability, perhaps putting those industries in the same category as energy.
Paper and the graphic arts industries however tend to be far less obvious contributors to sustainability than other forms of energy and many companies (particularly on the supply side of the business) do not understand the positive or negative power that printers, graphic designers and paper suppliers can have on corporate and other end-user sustainability programs. It is this knowledge that provides some of the great opportunities for graphic arts as the recession gives way to recovery. For printers the wave of certification, before the recession, has left major questions about the value of sustainability. The fact is however that many printers have acquired certification, typically SFI or FSC, in the expectation that business will automatically follow.
This was as unlikely as this supposition that the advantage gained by certification would last for long as more and more printers were required to become certified, thereby lessening the impact and value in marketing terms of the very certification they acquired. It is what printers actually do AFTER certification that counts.
Again for many, the costs of certification are simply too high to sustain under normal circumstances. Those problems have been multiplied significantly by the devastating effects of the recession. and understandably many printers have turned against these issues as they struggled to survive. The solution to this problem lies mostly in the hands of the certifiers, SFI and FSC and I am aware of the work that SFI is doing in this regard with the SPGG and others. The print market is huge and the cost of disenchantment to SFI and FSC and their certifiers is of real consequence. Print needs to work hard to change this dynamic.
Every day I am told that the only issue for buyers of paper and print is price. Price will always be a key factor in any purchasing decision but to suggest that it is the only factor is economically dangerous and quite simply untrue. Dangerous in the sense that the more that buyers and vendors are encouraged to believe that price is the only factor, the more the price WILL be the only factor, and this cannot be good for vendors or even ultimately for buyers as the number of alternatives they have begin to dwindle, setting up inevitable price increases in the long-term. Untrue because if it were true we would all be using photocopied newsprint for paper and print requirements. We still sell thousands of tons of coated and uncoated stock, high end text and covers and similar products. Not as much of course but we are not all reduced to newsprint just yet
The more that the customer debate center on price, the more differential has to be part of strategic and tactical thinking. An example of differential can perhaps be found by aligning print, design and paper with the growth of the sustainability market. The question is made more important by the real challenges paper and print face from electronic competition, but here lies the rub. If the market we pursue is sustainability then how do paper and print stack up environmentally?
The suggestion that paper is somehow ‘bad’ because the industry ‘kills trees’ is highly debatable especially in North America and to suggest that electronic messaging is less harmful, may be absurd in some respects.
The papermaking and printing Industries in North America have much to be proud of in sustainable development but a large part of the general public seems unaware of much that has been achieved or about the environmental truth of these competing industries.
So the question remains: Are you ready for the upturn and;
How do I become sustainable?
How do I access the sustainability market?
How do I get value from certification?
How do I counteract the electronic surge?
How much does it all cost?
What are the benefits?
How do I market the value I will add?
A final thought. Sustainability is not ‘IN PLACE’ of anything; it is ‘IN ADDITION’ to all the other qualities that make your company different.
You won’t fail because you are a sustainable printer.
Derek Smith August 2009
Derek Smith has a lifetime of experience in the printing and paper industries. He was formerly CEO of one of the largest paper merchant in group in the southern hemisphere and the executive director of a major printing and packaging organization. He is now a consultant on sustainability and the graphic arts industries and has consulted for corporate end-users, printers, designers and packaging companies throughout the United States.