Monolithic, slow to change and under-performing are just some of
the descriptions he uses to describe the state of the industry.
This, he says, results in a focus on selling the things the
industry wants to make instead of beginning to make the things the
customer wants to buy. And if that is not enough, McNutt adds that
"Leadership seems largely to lack adequate vision, innovative
thinking and a good solid understanding about the character of
With an ever-growing world population signifying an ever-growing
readership which, in turn, creates a rich demand for paper
consumption, he sees no need for a stagnant growth pattern. He
blames the current corporate culture for many of the problems
facing the industry.
During a presentation made at Montreal's École
Polytechnique in September, Dr. McNutt gave a brief history of
several large corporations in other fields as examples, assessing
why some were able to develop and prosper, while others were
One characteristic the successful companies all showed was a
willingness to learn new techniques and to adapt their management
to it. Novel techniques ranged from time-motion studies, which
influence production lines, to a form of Keiretsu, which describes
the principle of interlocking operating relationships between
companies. But no matter what the innovation, the company had to
learn to adapt itself to changing times and changing customers.
Dr. McNutt also maintains that industries which did not flourish
in the past century "had their own unique technologies...[but] all
failed to pay attention to other industries' technologies." To
illustrate his idea, he gave the example of the inventions of the
transistor and the fax machine. Both of these innovations were not
recognized for their potential at first and rejected by companies
too blinkered by their established paths of business.
Needless to say, both products were ultimately accepted and went
on to create huge successes for other, more forward-thinking
The key here, McNutt explained, is to be open to linking of
different industries. "Technologies likely to impact....business
and industry the most are technologies outside [the] field."
In the second half of the last century, the paper industry has
experienced a massive wave of technological change that has
transformed its basic operating and process management and control
systems. But what is missing is the reinvention of the products
themselves, i.e. as the customers' needs change, so should the
Very important for success is a concept McNutt labelled as
What are BHAGs?
Big Hairy Audacious Goals: While a strange-sounding title,
pinpoints the drive for success. Over the past 100 years, companies
that have succeeded in their sector and maintained excellence have
been driven by a greatly ambitious goal. Examples of this are
"landing a man on the moon in this decade" (NASA), "crushing
Adidas" (Nike) and "become the company most known for changing the
world-wide perception of the poor quality of Japanese products"
There is no "one size fits all" approach. Each company or
industry had to reinvent itself to follow its new goals. However,
companies with these "BHAGs" have been 12 times more likely to have
lasting successes since 1925.
And this, McNutt added, is just as possible for the pulp and
paper industry by keeping in mind that excellence is a constantly
moving target and change is absolutely necessary for sustained
success. After all, with some adaptation in character and focus,
the pulp and paper industry has great potential and the rewards are
there for the winning.
Dr. McNutt , PhD, is the Executive Director of CPBIS, Center
for Paper Business and Industry Studies, a joint venture between
The Institute of Paper Science and Technology, the Georgia
Institute of Technology, the Alfred P. Sloan Foundation, and the
Pulp and Paper Industry.
1 McNutt, J.A., "Lessons from Past, Other Industries Provide
Impetus for Transformation," Pulp & Paper, March 2000, Vol. 74,
No. 3, p 50.
2002 Business Information Group. All rights reserved.