Did you miss the peak?

The recent peak in good fortunes in our industry may already be past by the time you read this column. If past behavior is any indicator of future performance, our industry's peaks are short-lived and the bottom troughs are long-lived, much like looking at a topographical map of the Earth--mountain tops are small and valleys are wide.

Since the peaks are short and the troughs are long, we spend most of our time wishing for the good old days of that quarter or half year when things were rosy all over. In other words, most of the time, we are collectively depressed, a characteristic of those in a mature industry.

Our collective business acumen worldwide is just beginning to learn how to deal with mature industries. It is a new frontier. If one looks back a century or two to the beginning of the industrial revolution, a couple of interesting points surface. It has been written elsewhere that at the turn of the century, 1801, the general population had little expectation of life changing dramatically in the century to come. After all, the horse and the mill dam still reigned supreme as the nonhuman sources of power and wood, stone and brick were the main structural components of all things built by humans. By 1901, however, things had changed dramatically and people's expectations had changed, too. Now all seemed possible, both imagined and undreamed, and people had great expectations that technology would create better lives for all. No industry had matured.

The first industry to mature was the oldest--farming. Following it was basic metals and heavy manufacturing. Farming involved the largest transformation of people, work, and culture in the history of the world. In a mere 60 or 70 years, developed countries' populations went from roughly 98% directly engaged in farming to roughly 2% directly engaged in farming--something akin to moisture removal from headbox to dry end of the paper machine and figuratively just as fast relative to all of recorded history. Surprisingly, all this was accomplished with relatively little chaos.

Basic metals were next. Although maturity has been under way in this sector since at least 1970, it has been rough, disruptive, and done in fits and starts. The transition is not yet over.

Our own turn in this new world began more than a decade ago, and we have done poorly in accepting our new-found maturity. For instance, many of us are still hoping for the "good old days" to return, much like the mature person who finds themselves in a pensioner's or nursing home. We are in denial, thinking that things will return to the days of old.

We are at a new frontier--one where we must learn to live with our industry's maturity. Like the pensioner, the first thing we must do is accept where we are--we will not be able to thrive and survive until we make that mental leap. However, acceptance does not mean we should be passive and expect the graveyard as our ultimate industrial destiny. Rather, it means we must accept and actively manage the following:

1. longer cycles

2. shorter peaks

3. smaller technological improvements

4. competitive advantage obtained through business creativity

Although we will never stop improving technologically, we can expect our improvements to move to highly scientific and detailed nuances. Leaps may still be possible, but they may be residing in electron microscopes, customer service, logistics, and so forth.

Should this be discouraging for technological and managerial organizations such as TAPPI and PIMA? Absolutely not--in fact, it is possible that their roles will become even more important. If farming is any guide, those surviving in that business have more technological savvy and business acumen than their predecessors a mere quarter century ago could have even dreamed about. From plant genetics to animal husbandry to the very equipment they drive across the field, the complexity and knowledge base has become formidable. The same is true in our industry. Someone once said, "With all thy getting, get understanding." Nothing could be more true or important as we stand on the threshold of a mature pulp and paper industry.

ABOUT THE AUTHOR

Jim Thompson's day job is managing TAII (www.taii.com). He is a member of the Solutions! Editorial Board and writes the weekly column "Nip Impressions" in TAPPI's "Over-the-Wire." He is also the Executive Editor of "PaperMoney" (www.globalpapermoney.org), which is published by TAPPI and TAII.

[ILLUSTRATION OMITTED]