BCBusiness | Seeing the forest for the trees

Tony Wanless | Image: Jupiter | Published: February 19, 2008

A tree takes dozens, if not hundreds, of years to grow, so you’d think those whose business is trees would think the same way.

But they don’t. And apparently that’s one of the biggest problems with the B.C. forestry industry that emerged from the recent annual Truck Loggers Association convention in Vancouver.

The industry has been slammed by such current difficulties as a high loonie, a worsening slump in their biggest market—the U.S. housing sector—and labour shortages that are contributing to shrinking profit margins.

The sector needs a 20-year plan, but the majority of the Association’s members are small businesses, with a typical member being a 20-person company with $3 million to $4 million in capital. So it’s a common affliction that members think too much in the short term, says Dave Lewis, the TLA’s executive director.

I have no doubt that Lewis’s lament will be echoed soon by leaders in many other sectors.

Take away the particular product or service and you could, or will soon be able to, write the same story for other small business sectors. Small and medium-sized business aren’t generally known for their long-term thinking, and certainly not for their propensity to plan—to look forward to the future and form strategies to deal with changing markets, financial risks and other events that affect their business operations.

Many SMBs fly by the seat of their pants most of the time, taking care of today and allowing the future to take care of itself. It’s a running joke among those who work with them that long-term for them usually means three months out. People who run these organizations often are too busy handling a variety of jobs to take time for big picture planning, innovative thinking or strategy formation.

Worse, many are more skilled in a particular job than in business operation, so they probably wouldn’t know how even if they recognized the need for it.

Unfortunately, it’s starting to look more and more like they’re going to have to learn. And fast, because the forestry sector quagmire is a harbinger for other problems.

The world’s financial system is an unholy mess, the extent of which is barely known so far. This causes many to talk about economic recession, if not an outright depression. I don’t know which is coming, but I do know that when big banks and other global financial enablers start taking write-downs in the billions of dollars,

the system contracts and a lot of people get hurt.

And you can bet that pain is going to cascade down until it lands squarely on the head of the small-businessperson. It always does.

Who knows how that’s going to play out? I know I’m preparing my business for rocky, or at least changing, times ahead. I advise every other small business to do the same thing.

Now’s the time to take a retreat and engage in some strategic planning.

The minute-to-minute work will always be there. But the opportunity to do big-picture thinking, engage in scenario planning, brainstorm diversification strategies, form directions for the future, and plan other defensive moves won’t be.