Features Business intelligence
That’s Rich: Hope is not a strategy

Pablo Picasso once said that our goals can only be reached through the vehicle of a plan. There is no other route to success. As part of my recent research into supply allocation, I got into a wide-ranging discussion with a veteran industry executive that touched on the more general issue of strategy in the glass industry. He didn’t want his name used, so let’s call him Bob. I want to share some of his thoughts here.

In a nutshell, Bob feels much of the glass industry lacks a strategy.  “About three years ago, I was with an HR manager and the provincial government had just announced that minimum wage was going to have a series of increases. I drew a line on the whiteboard and showed where the union contract and minimum wage intersect, which is our current present time. And we know what is happening at the moment with labour.” Bob knew even then recruiting was going to be a disaster because “minimum wage is for the least skilled and least experienced people. Not workers who you need to run a modern glass factory.” 

Bob says that when wages are the same or very close to minimum wage, people get paid the same for making fast food as they get for making high-performance sealed units. “Well, you can imagine the effect that has on recruiting and quality. The pandemic has made it worse. The game has to change. It has to be about productivity, not lowest labour cost.”

“When somebody buys an iPhone, they’re paying a significant premium over other products because Apple knows that you can make more on the premium side than you can on the cost containment side,” he says. “The glass industry is missing a strategy to deal with this massive shift. And it really has to focus on productivity and quality as opposed to output and cost.” 

If you’re a worker that can work at a glass plant, Bob says you can certainly work at Amazon. “You’ve proved that you can show up on time and that you’re comfortable in a warehouse or industrial environment, and you can work shift work. You’ve got all of the credentials that would qualify for Amazon.” 

Your employment strategy comes down to the employer package versus employee effort. “You have to be more appealing to the same worker.” 

Bob warns of short-term thinking. “If suppliers are at capacity, it is an easy thing to say, ‘Well, I don’t need to have a business strategy because I’m selling all that I can.’ The price of lumber went through the roof in the summer time. All-time-record highs. But then what happened? Projects got cancelled. Demand fell off. Prices tumbled. You don’t want to price your product out of the stratosphere so that maybe they put less glass in the buildings or go offshore. Or if enough components have price increases, maybe they cancel the project. Capitalizing on short-term price bonanzas can kill your golden goose.”

The glass industry is aging. “If you wanted to know who are the up-and-coming driving forces in the glass fabricator world that are under 40, I suggest that list is limited. Anybody who’s looking at selling or having a succession plan, they’re going to be dealing with a very limited number of options. If you’re planning on passing the baton in five years, you need to know who you are going to be passing it to.”

Bob says higher quality is another big strategic factor that the construction industry is concerned with. “Everybody knows that ASTM standards are the floor. They’re the minimum. Who has a plan to consistently deliver better quality than ASTM? And by how much? And do they stand behind it?” 

This is how strategy drives tactics. “Unfortunately, it’s what’s missing at many fabricators,” says Bob. “They could have happier customers, higher productivity, a better culture, and keep their costs down, if they adopted effective strategy.”

There are global shocks to the market that are in play now. And there are ones that will certainly come in the future. Do you have a strategy strong enough to win the long game? And if you don’t, that means you need a strategy tune up.

Rich Porayko is a professional writer and founding partner of Construction Creative, a marketing and communications company. richp@constructioncreativecom