 For me, looking back, as I did in last month's issue, is not as much fun as looking forward, an exercise that brings out my natural optimism. However, performing an autopsy on past decisions can lead to corrective action, a stronger operating foundation and a more sustainable future. In the process of reviewing 2008, I have identified several areas where my decisions were somewhat deficient. The one I'm going to discuss here is SPENDING TIME ON QUESTIONABLE OPPORTUNITIES.
In its early days, TRP struggled to bring in enough revenue to merely pay the rent. In addition to building materials, we handled reusable baby clothes, furniture, toys, and other items, but soon realized that the hodgepodge confused our customers—heck, it even confused us. Writing a mission statement quickly put us on track.
Over the past 15 years, TRP has grown from a small, open yard near the Mexican border, collecting and selling used building materials, to an organization with two large warehouses, two warehouse partnerships, foreign and domestic distribution channels, two deconstruction crews, a cadre of talented TRP-certified deconstruction contractors in six states, and a training, consulting and project-management arm. All are focused on the common mission of keeping reusable building materials out of landfills.
Since it's a worthwhile goal, and it's working, why not simply continue doing the same thing?
To paraphrase the late business guru Peter Drucker, "It doesn't so much matter where you stand, as in what direction you are moving." In a free-market society, all organizations, including nonprofits, must continue to grow and adapt to meet the needs of their customers and the challenges of the market.
Unlike many industries and businesses—automobile manufacturing, transportation, electronics, and even many recyclers—TRP is not constrained by legacy systems and huge investments in heavy equipment. The reuse business is truly in its infancy and is not as encumbered with existing practices as are many older businesses. While we lack the available capital that other industries easily attract, not much constrains our exploitation of new opportunities. Some of them are:
Geographic expansion. This is the familiar replication of services in multiple locations, domestic and international, following the fast-food model of the 1960s.
Horizontal expansion. We could take advantage of other reuse opportunities, including a move from predominantly residential clients to commercial/industrial ones—or the reverse. Giant leaps might include adding recycling opportunities and salvaging products other than building materials (but hopefully not baby clothes). We could increase our training efforts, focusing on green jobs, retraining for the unemployed, or re-entry skills for ex-offenders.
Vertical expansion. Reuse organizations could qualify and license local contractors to install the used materials they sell, as Home Depot and Sears do. Or perhaps Habitat for Humanity could build homes with used, instead of new, materials. Finally, why not build and operate low-income rental units, or produce small panelized, wood-frame structures that could easily be stored and shipped to assist with disaster relief.
None of these ideas is unreasonable or unachievable. In fact, the opportunities are almost limitless—a virtual playground for optimists.
Ok. You folks with both feet solidly planted on Planet Earth want to know the constraints. Most would probably guess lack of capital. I disagree. Years ago, helping young technology companies obtain the venture capital they needed to grow and expand, I discovered an interesting phenomenon. If money were the only constraint to a company's success, the company would have it. Let me explain this paradox. If a technology client had a defensible product or system, a solid management team with a proven leader at the top, a defined customer base that could absorb $200 million of the client's product annually, and a qualified board of directors, then the venture capitalists would search them out and our services would not be needed, except possibly to help structure the deal.
So if funding is not the obstacle, what is? Acceptance? This year the TRP management team decided to restrict expansion to markets that invited us, thus lessening the burden of acceptance. We were invited to four cities, made serious junkets to all four, and guess what? Only one of those has panned out. Oops, back to the drawing boards.
What else, besides money and acceptance, tends to inhibit success? I've identified five factors:
- The persons offering the invitation lack strong leadership roles within the city.
- Folks believe that local organizations are already providing, or about to provide, TRP-like services.
- Since no local organization is providing TRP-like services, the services are judged impractical or impossible.
- The host city fails to achieve a clear understanding of TRP's business model and goals.
- TRP fails to find the right person (usually a regional manager) to carry out its mission.
These are obstacles peculiar to pioneering efforts. If TRP were a traditional manufacturer, distributor or service provider, local sponsors would not be necessary since everyone would know what kind of business we were in and how it fit within the current mix. Also, existing industries would generate a pool of talent from which we could draw.
Where does that leave TRP and other deconstruction, salvage and reuse organizations who want to expand? In a word—EDUCATE.
TRP has typically applied two sets of criteria when evaluating potential expansion areas. The first looks at size, age and income of the population, quantity of old housing stock, landfill fees, competition, attitudes of the local leaders, existing legislation, and the network of support organizations and associations.
The second set of criteria assesses the services we can provide and TRP's fit within the environment revealed by the first evaluation—such benefits as increased employment in the construction trades, potential partnerships, estimated tonnage of landfill diversion, economic development through training and employment opportunities, and improvement to blighted neighborhoods.
In 2009, a third criterion will be added: increased education coupled with impact assessment. TRP plans to intensify its educational efforts by increasing the number of presentations that focus on the basics of reuse and deconstruction, and by demonstrating the benefits through actual case studies, charts and statistics. Further, we plan to ensure that our presentations are given to the right audiences and distributed to potential partners. If the impact is sufficiently positive, maybe we can overcome some of the obstacles that have tripped us up in the past.
As TRP and other industry organizations push for better and more efficient ways of conducting business, let's not forget that the bulk of the population still doesn't know the difference between reuse and recycling. Pioneers must be educators, otherwise we will end up on the margins of progress. |
