Be a Student of Your Industry
By John Monroe
My first job out of college was with Shaw Industries, a company that would eventually become the world’s largest floor covering manufacturer. Founder Bob Shaw was a student of the industry and of running a business. In the 1970s, when the carpet industry was in its prime, there were over 400 carpet manufacturers. Shaw navigated the company through the inflationary period of the late 70s, the recessionary period of the 80s, and by the late 90s, Shaw became one of the top three floor covering manufacturers in an industry with less than 100 mills remaining.
During most of my 25 years with Shaw Industries, I called on Tom, the owner of a floor covering store in Ohio who was just like Bob Shaw—a student of business, the carpet industry, and retail floor coverings. I relished the opportunity to visit with Tom to find out what was going on in the local markets as well as the floor covering industry as a whole. Tom had his finger on the pulse of the industry better than most of the industry CEOs! Tom had opened a single retail store in a major Ohio city in the early 80s. By 2010 he had four locations and was one of the top three floor covering retailers in his market. Eventually, he made it into the top 100 floor covering retailers in the country, when ranked by revenue.
A tale of two market segments in the same industry
In his novel A Tale of Two Cities, Charles Dickens wrote, “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…” Bob and Tom were in the same industry, but one was a manufacturer and the other a retailer. They navigated the best of times and the worst of times, and both ended up at the top of their respective markets. Much of their success was because of the wisdom they gained by observing other industries and by listening to what was happening around them in their industry. Neither was foolish enough to rely on just their own intuition.
Michael Porter’s Five Forces model
Every morning I start the day with a couple cups of coffee while I spend an hour catching up on world events and business activities across all industries. I read newspapers and magazines such as The Wall Street Journal and Forbes. I review emails from leading consulting firms like McKinsey and Bain. I review social media sites like LinkedIn where I peruse headings from thought leaders and industry influencers. I then read through emails from industry suppliers and trade associations.
While I’m reading and researching information, I keep Michael Porter’s Five Forces model top of mind. Porter said there are five competitive forces that shape the direction of any industry or market segment.
- Competition in the industry
- Threat of new entrants into the industry
- Power of suppliers
- Power of customers/buyer
- Threat of substitute products
Understanding the impact these five forces can have on the industry helps me identify the direction a business needs to take. With this information, I can help you develop a business strategy for your company to sustain long-term profitable growth.
Be a student of the industry
Most successful business leaders like Bob and Tom develop a passion for learning because they understand that lifelong education is their responsibility. Being a student of your business is the best investment you can make in your business. The way of conducting business has rapidly changed this past year. This doesn’t mean that you shouldn’t learn from the past, because it’s said that history repeats itself. It’s also a given that technology is going to continue to change the way business is done at an ever-faster pace.
Here are some suggestions for what to focus on and how to make learning a part of your workday.
- Understand the history of the industry
Research the history of your industry using the internet and be sure to always read information from multiple sources. Talk to current suppliers and buyers that have been in the industry from the early beginnings. Gain insights from multiple sources about the past players in your market segment and the industry. Find out the reasons for why suppliers, buyers, and competitors have grown or gone out of business. Realize that you must know where the industry has been before you can see where it is going.
- Understand the current changes in the industry
Keep yourself abreast of changes in technology that could improve efficiency in operations, sales/marketing, and administrative functions. Attend industry trade shows and talk with existing suppliers and potential new suppliers about new products. Do research by using the internet and by reading industry magazines and newspapers. Join industry associations to stay in touch with new regulations. Stay up to date on potential new entrants (competitors) in the industry and the market.
Use your suppliers and customers to keep informed about what your competitors are doing. You will be enlightened by what you can learn if you ask them and then really listen to their responses. Tom talked to his suppliers regularly to stay on top of what they knew about changes coming to the industry, and he was always asking them about what other companies were doing. Bob studied other industries and talked to executives who weren’t even associated with floor coverings.
- Understand where the industry is headed
As the saying goes, “Keep your friends close; keep your enemies closer.” Recognize that all five forces can impact your business and put you OUT of business. Tom and Bob both knew the inherent risk the five forces played, but they stayed focused on their short-term strategies as well as their long-term goals. Do your research and stay on top of changes in the industry. To not implement new strategies on information you gather, choosing instead to continue to do business the way you have always done, is a waste of knowledge.
Be a student of the industry and your business by reading, researching, listening, and then acting on the information you have gained. Every day, wake up and make it your goal to become wiser about your business skills and your industry. Surround yourself with people who are always looking for opportunities to build a thriving business.
According to Adam Grant, “If knowledge is power, knowing what we don’t know is wisdom.” Be curious and never stop learning!
John Monroe is a Business Development Advisor for Violand Management Associates (VMA), a highly-respected consulting company in the restoration and cleaning industries. Monroe is a leading expert in marketing, sales and sales management for the restoration and cleaning industries with over 30 years of experience in those fields. Through Violand, Monroe works with companies to develop their people and their profits. To reach him, visit Violand.com or call 800-360-3513.
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February 21, 2023