E-letter: Looking for a breakout?

For just a moment, I want to talk about both Canadians and Americans at the same time, since there is no reason we, Canadians and Americans, should see our manufacturing, installation and design industries fail in competition against the rest of the world.

The reasons are mostly quite obvious. We have all the natural resources we need, all the human resources we need, all the capital resources, all the intellectual resources and so on. In fact, the only way I can see that we are being pressured it through the self-imposed handicaps of politics. We let wage and benefit arguments, cost-of-compliance with local, regional and federal regulations and the demands of international trade negotiations push, pull, stretch and poke North American productivity until it needs to be put on life support. At that time, the pundits and the competitors shake their heads, whisper “tut, tut… and they had everything going for them,” and prepare to close the lid.

Kerry Knudsen
Kerry Knudsen

The only thing is, our manufacturing, design and installation industries are not dead. In fact, I was heartened to see a recent news announcement from Weeke North America’s vice-president of operations, Matthäus Schmidt, who said a larger factory is needed in Grand Rapids, Mich., because “manufacturing is coming back to the U.S.” And I’m certain he would have included Canada, had he been asked. In fact, I extend an invitation to Weeke North America to work with W.I. Media Inc. on a concrete, directed, professional plan to achieve exactly that purpose, since that is precisely the direction W.I. Media is headed.

If we ask ourselves what is missing from our resource list, above, that can separate us from international competitors, the first answer that comes up is customer service. We will be looking at customer service in depth during the coming months, but, for now, let’s just point out that customer service means catching and holding the loyalty of the customer, and that happens with communication, and no other way. Even a simple concept like “quality,” taken to its finest meaning, simply means letting the customer know his purchase illustrates a partnership with the supplier in which the customer endorses the value of the supplier’s expertise and mastery. The supplier has succeeded in communicating a value message to the prospect, and the prospect has become a customer.

On the other hand, imagine if the supplier communicates to the customer a quality message, such as marble countertops, but supplies marble-pattern melamine, instead. That is communication, as well, but it achieves exactly the opposite of the desired result. In this case, the customer finds out too late the value message was false and fraudulent and immediately seeks a remedy. However, and you can see this one coming, in the current environment of internet sales, fly-by-night suppliers and international networks, a remedy is not always readily available.

Let’s take this out of the realm of home, business or office furnishings and go, instead, into publishing, since the analogy can be free of minor exceptions for individual readers, but remain true to facts we have all seen, at least, at a distance.

Not all publishers are honest. In fact, we have a long history of skullduggery, misrepresentation, falsification and pandering. As with international exporters, not all are crooks, but enough have been to attract the attention of the law, professional associations, academics and the public. If you are interested, you can read of recent arrests for circulation fraud arrests, firings at the Wall Street Journal and plea deals in New York. More immediately, TD Bank has launched its own investigation into Canadian marketing fraud, and just yesterday Marketing magazine released a story on accountability and marketing fraud in Canada.

What’s the big deal in lying a bit about circulation? That’s a bit tricky. Most people, including uneducated publishers, see advertising as a product. To them, in print, an ad is a piece of paper with ink on it; in broadcast, it is a multi-second spot conveying a visual and audio message.

However, this is not the real answer. An ad, whether in print, broadcast, digital or chalk on a sidewalk, is “access to a specific audience for a specific period of time.” So, you see, the sale of an ad is not so much the sale of a product, but of a service. Publishers provide the service of relaying a message to an audience.

Or they should. Long ago, publishers faced with competition began to fudge their numbers. This led to loss of trust, loss of value, lawsuits, and, finally, the creation of third-person auditing boards charged with the duty of providing an objective report on where the ads were hitting the markets, and at what focus.

Unfortunately, just as international trade laws were to end the proliferation of counterfeit and under-spec goods and did not, so the rules governing advertising remained under pressure. The reasons are not difficult to understand. Mainly, the model of a magazine or show being created by an expert and distributed as a service quickly falls when large corporations buy up profitable titles, staff them with amateurs and try to squeeze a profit from an idea they cannot grasp. Then, the monkey-see-monkey-do school pops in, with results such as in the current crop of so-called reality shows. There is nothing real about them, except in the way the amateurs that stole the “concept,” mug for the camera and quote themselves.

In many ways, this is analogous to our industries in North America, as foreign wanna-bes come along with no other idea than to make money on the backs of the reputations established over long decades by small-shop experts that may or may not have expanded to multi-million-dollar enterprises, only to sell when the temptation is too great. This is typically followed by a lowering of quality, a break in customer communication and a retreat into the anonymous, protected, corporate identity chosen by the buyer.

Like designing, manufacturing and installing in the “occupied space” sector in North America, publishing has fallen on hard times, largely as a function of its own success and its own willingness to sacrifice its standards and its customers on the altar of quarterly P&L statements.

Irrespective of our knowing the causes of our current situations, it will take work and authority to reverse them. It is not sufficient to say this country or that makes junk or steals jobs or uses prohibited materials. We have done that, and it has not worked.

Our alternative is to energize and direct our own associations to conduct investigations, make reports, involve our legislators and the public and help people understand there is a cost to low cost. We have long known that you cannot sell an oak tree from Pennsylvania to China for $1,000, process the tree into furniture for $4,000 and turn around and sell that same furniture back to Pennsylvania for $3,000 and tell everybody you are making up the loss in volume. At some point, opinion becomes irrelevant and the issue becomes fraud.

North Americans are heartily sick of being defrauded. Unfortunately, the mega-corporations laugh on down the path, mocking consumers and manufacturers, alike. Their excuse? “We’re bigger than you are.” And, unfortunately, white-collar criminals are often given a political green light. Birds of a feather flock together. We discuss this frequently in these e-letters and in our regular magazine. And, contrary to the thinking of those that are happy to profit from fraud committed by others, letting somebody else bear your costs is no absolution. While these people see themselves as smart, they are weak. If they were not, they could compete based on value. Further, those that have the resources to abuse the good will of nations provide a model for those that don’t, much the same as any 2:00 a.m. barroom karaoke jockey is convinced he can sing like Mick Jagger.

This is the reason North American industry is languishing. Companies that are both strong and competent can compete successfully, but not when they are undercut and sandbagged by politics. In all sincerity, honesty may be a virtue in speeches and churches, but in the real world of bare-knuckle competition, it is a definable, identifiable, successful business plan that is desired and sought by consumers.

North America’s suppliers of designs, installations and products for the occupied-space sector, one day or another, will have to unify, demand action from their suppliers, associations, legislators and enforcement agencies and straighten things out. Wood Industry has been working along those lines, and is hopeful the statement from Weeke can help generate some talking points and direction.

Associate Publisher Stephen King and I will both be at the AWFS show in Las Vegas next week, and are looking forward to meeting with any and all parties that think a solution is possible. We don’t think it; we know it.


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