| comment (1) in Forest Operations, Forest Strategy

Reinvention and Competition: Wood Pallets and the Forest Industry, Part III

In the 1991 movie City Slickers, the crusty trail boss Curly, played by Jack Palance, gives life advice to Mitch, played by Billy Crystal:

Curly: Do you know what the secret of life is?

Mitch: No, what?

Curly: [holds up one finger] This.

Mitch: Your finger?

Curly: One thing. Just one thing. You stick to that and everything else don’t mean s###.

Mitch: That’s great, but… what’s the “one thing”?

Curly: That’s what you’ve got to figure out.

[Click here to relive the scene.]

In the forest industry, the one thing might be “survival.” Or we could call it “remaining sustainably profitable.” And within that work, operational priorities and market realities change over time. Today, the topic of people consistently percolates up in our research as a priority. Recently, this includes work on log hauling, logging employment, and business strategy.

In our past two posts, we introduced the wood pallet industry, and highlighted forest industry economics and the ability-to-pay for wood. In this post, we return to our study of PalletOne and the strategically important lesson of thinking hard about your people.

Have a People Strategy

Within and beyond the forest products industry, hiring, developing and retaining talent is a differentiator. The competitive and economic pressures in the forest products sector, however, make plain the recruiting and development “return on investment” of treating people with respect, providing opportunity and reinforcing accountability. Any team with high turnover highlights organizational tensions that emanate from the top. This, in part, is what made my findings at PalletOne so illuminating.

PalletOne facilities know well the challenge of hiring and retaining employees. Each mill I visited – from Hazlehurst in Georgia to Livermore Falls in Maine to Shipshewana in Indiana to Siler City in North Carolina and others – could have each put 5 to 10 more people to work full-time.

In early 2018, I spoke with PalletOne CEO Howe Wallace, Jr., about this and their ability to get the job done while continually short-handed. Unique among forest industry C-level executives, Howe did not work his way up through finance or operations. He served in staff, managerial and executive human resource (HR) roles at Ridge Pallets, PalEx and IFCO Systems. So, while PalletOne struggles to fill slots, they figured some things out with their core teams and supervisors. Howe said:

“That’s a benefit of having an HR guy as CEO, right?  We hug our guys a little bit, we value them. We don’t treat them like a ‘thing.’ And we tell them this. Some guys aren’t into that soft stuff, but over time, once guys have worked a few places, they buy into some. Look, we do care, and we’ve got to get the job done.”

Easier said than done? Indeed. This approach comprises a daily practice that gets reflected and communicated in a recognition of how the world works. Folks are not sitting around looking for handouts, but they are looking for opportunities to contribute, for situations that treat and compensate them fairly, for the training required to be successful, and for respect, given and earned. At the end of the day, there is a job to do.

In working with a range of firms over the years, I observe differences between situations with high turnover and those challenged to hire and fill roles in the first place. While we as individuals have unique perspectives, I generally see people leave jobs more due to unhappiness or dissatisfaction with a manager or work environment then for a shiny new bauble. My research at PalletOne reinforced this view.

PalletOne has a people strategy out of necessity and as an executive priority. While the hardest roles to fill have been the entry-level, manual jobs that currently challenge firms across industries, PalletOne’s leadership and core operating teams at each plant have been in place for years. This has supported the firm’s growth and created development opportunities for individuals across the business.

Comments (1)

  1. pm / Reply

    Very true. Those attributes are usually what separates firms that excel compared to their peers in most, if not all, economic environments and challenges encountered and build enterprise value over the longterm.

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