Be thankful for the past.  Be proactive in the present.  Be mindful of the future.

Recognize that what worked then may not work now.  Adapt quickly.

What is Your Egypt? What is Your Promised Land?

I was flipping through my Bible the other day, and I found an intriguing story that seems to parallel where our industry is right now.

There was a famine in North Africa. An Egyptian ruler named Joseph had wisely saved his resources, and so he invited his family to move to Egypt and stay with him.  This family eventually grew into a large people group known as the Israelites.  Egypt became comfortable for them; it became home.  Howver, the Egyptians soon began t0 despise the Israelites and evenutally enslaved them.   There home is no longer a welcoming place for the Israelites.  So God sends Moses to lead them out of Egypt to a new land where they will flourish – the Promised Land.

The Israelites braved all forms of danger on their journey and finally reached their destination. A group of spies went into the land to check it out, and they returned will tales of the beauty of their new home.   However, there was a problem.  The inhabitants of the land were really, really big, and were pretty mean too.  Rather than continue their journey, Israel began to tremble and begged Moses to RETURN them to their slavery in Egypt.

Looking back instead of advancing forward became Israel’s downfall. Because they decided that the familiarity of slavery was better than the uncertainty of a free future, the adult population ends up wandering around the desert for 40 years.  Eventually, their children  returned to the Promised Land to defeat the giants and settle down.

In summary:

• Egypt was a great home at one time for the people of Israel.
• Times changed; people changed. Egypt was no longer suitable for the Israelites.
• The people made a bold move and left their home in search for a better place.
• When the Israelites encountered an obstacle, they immediately began experiencing selective memory and wished to could go home to Egypt.

So, what does this mean for us as we operate our window treatment businesses?

• The way we used to operate was good.

The world of the late 90’s and early 21st century had its own unique needs.  For example, if homeowners wanted to buy plantation shutters they almost certainly had to buy from a U.S. source.  American manufacturers were the dominate providers of the product back then!  Furthermore, consumers were more inclined to trust the opinion of an interior designer or home furnishings retailer (instead of trying to find a credible manufacturer who wouldn’t steal their deposit!).

Plantation shutter manufacturers responded by building healthy wholesale relationships with retailers and design firms and thrived from the business they were brought.

• The world has changed.

The introduction of foreign made plantation shutters into the U.S. market began redefining the window treatment landscape.  Cheap labor, low government regulation, and high production volume allowed Chinese factories to sell shutters at a fraction of what U.S. factories sold for.  Window treatment retailers took advantage of lower prices (and potential higher margins) by switching to foreign made products.  There were trade-offs: limited finish color selection, longer delivery time, etc. with Chinese product, so interior designers, etc. still always kept a local manufaturer in their roledex to handle truly custom projects.

• The way we used to operate enslaved us.

Many U.S. manufacturers refused to accept the changing environment.  Owners and managers denounced the  foreign product and fervently argued that the Chinese pricing strategy wasn’t sustainable.  ”They’re bluffing!” was the industry mantra.  ”There is no way an American company can compete with those prices!” was the war cry.  ”If we keep doing what we’ve always been doing, eventually we’ll drive these low-priced companies out!” was the business model.

• We began the search for a new home.

As it became obvious that foreign competition was here to stay, some companies responded by altering their strategy.  Some pursued specific niche markets with luxury woods (like Kirtz Shutters in Stillwater, Oklahoma).  Some developed superior synthetic shutters with features unmatched by foreign competitors (like Danmer Custom Shutters with multiple locations in California).  Others pursued e-commerce solutions.  Some sought to meet Chinese competitors head on by producing a line of shutters with limited options in such high volume that a profitable low price was achievable.

Some manufacturers moved away from selling wholesale and began selling direct to the public, passing along the savings that came from cutting out retailers or designers.

• As challenges arose, many companies returned to what was comfortable.

As companies experimented with new ways of doing business, some of their efforts were successful and some were not.  Change requires tackling challenges in logistics, pricing, marketing – everything.  Because of the difficulty faced, many companies decided “it just can’t be done,” and returned to their old business model – a model that had become an endangered species.  It was only a mtter of time.

As the sun of economic recession rose, it began to burn away all unhealthy companies.  Those with antiquited business models have perished. Some companies are barely surviving.  And some are adapting and joining the ranks of the manufacturing elite.

The Lessons:

Be thankful for the past.  Be proactive in the present.  Be mindful of the future.

Recognize that what worked then may not work now.  Adapt quickly.

The Sun is Rising.