What you know for sure that just ain’t so
Mark Twain nailed it.
It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.
Brexit offers a fascinating and way overanalyzed case study. None of the political elite really took seriously that the UK would vote to leave. From their perspective it was nuts. Everything that they held dear; had worked toward for years; indeed everything that they “knew” led to one inescapable conclusion. Brexit was an annoyance but wouldn’t actually happen.
Except it did.
We’re no different than the political elite
We each have things that we know for sure that just ain’t so — and those upon which you build your manufacturing business strategy may be the most problematic.
This can work both ways. The settled science of “Peak Oil” has turned out to be not so settled after all, with enormous implications for energy intensive manufacturing. In contrast there are a number of technologies and social trends that will likely impact industrial manufacturing, but which the boomer leadership of the SMB manufacturers “knows” to not be applicable to their businesses.
Some examples (hardly an exhaustive list) may illustrate the point.
Preparedness for a downturn
In a recent article on Forbes Bill Conerly noted that the management experience of those at the helm of today’s companies was accumulated during a period of Great Moderation.
They simply don’t have the experience to intuit what’s happening should things become unpredictably and more extremely cyclical.
The risk is that they will “know” what levers to pull; what outcomes to expect; what duration and magnitude they’re likely to endure, etc. — with deleterious outcomes.
3D printing
I’m amazed at the number of manufacturing company CEOs who are wholly dismissive of the rise of additive manufacturing.
3D printing is almost itself an obsolete term as machines now operate with five axes.
Human organs, apartment houses and even hamburgers are being “printed.” It’s crazy to think that your widgets or entire assemblies can’t be.
But beyond the printing itself, what would that mean to supply chains? Transportation and logistics companies? Warehouses? And of course factories? (and the jobs they represent?) After all, for industrial manufacturers that supply other manufacturing operations, if their manufacturing is impacted, yours will be too.
It’s likely to be an existential crisis the next generation of ownership will face.
Sharing economy
Uber and Airbnb have their predecessors in the B2B world. Fractional CFOs have been common among the lower tier of SMBs for some time. Contract manufacturers and copackers have been offering B2B sharing models for years, and UPS is nothing more than a sharing model for space on planes and in trucks and warehouses.
But B2B industrial manufacturers, particularly in the capital equipment space, know differently.
“Uber was easy. Our business is different.” They “know” that it can’t possibly work in their circumstance.
Except it seems the folks at Floow2 didn’t “know” that. And they’ve created a sharing market place for forktrucks and other capital equipment.
Internet of Things (IoT)
Manufacturing will soon be about the data. Devices will merely be sensors with function performing appendages. Companies that recognize they need to be in the manufacturing data game will have a chance to participate. Those who think the IoT is only for “big players” will abruptly (in 5–10 years) find themselves commoditized providers of bent metal — a long way from the positions of industry expertise and respect which they are accustomed to occupying.
NIRP (Negative Interest Rates)
When you, your banker and your customers’ CFOs all have embedded expectations on cost of funds, future value and investment criteria because of certain realities that you “know” well….there’s a recipe for unpredictable outcomes.
Things most industrial manufacturing CEOs know for sure
Unlike high tech where product life cycles are measured in months, most industrial manufacturers are built on a staid, conservative culture that evolves slowly and incrementally.
That’s the world the CEOs know. It’s the way it’s been, and the way it will be.
Except of course, it won’t. Because many of the things they know for sure simply won’t be so.
They’ll wear the bemused look that we saw on the faces of Bremain campaigners as Friday, 24 June 2016 dawned. And their companies, employees, investors, shareholders and communities will bear the burden of avoidable outcomes.
