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Management Side
Week of 13 July 2015: The Board is coming--an introduction
Sponsored by Genesis Energy, LP--your exclusive source for NAHS--1-800-422-6274

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I am adding another title to the long list of books I intend to write: "Preparing for the Board of Directors' Visit." This column will serve as the introduction to that book. We'll let you know in the Paperitalo Store when it is complete, but don't hold your breath; I have several manuscripts I am working on at any one time.

So, you have been informed that the board of directors, or other high ranking officials from headquarters, are coming to see your facility. The range of emotions at your site will range from snickers and sighs to people who are actually looking forward to this. May I suggest a neutral viewpoint be adopted? This is an occasion as important as any event in the life of any facility. It is somewhat akin to making paper--it is simply part of your duties, an important part.

Let me begin by saying there is seldom an upside to a board of directors' visit. In fact, I'll say that another way--it is highly unlikely anything good will come out of a board of directors' visit. Your best hope is to break even, that they don't go away with any worse view of your facility than they had before they came.

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You will no doubt do a lot of cleanup and painting to get ready for a board visit. You will spend a lot of money--money that doesn't get spent on fixing things that need fixed or improving things that need improved. Get over agonizing over this right now. It is necessary to spruce up for THE VISIT.

Boards of directors of large companies will visit a particular facility very infrequently, likely no more than once every ten years. If you wonder why, look at the list of major facilities your company owns. If they make a field trip once per year, they are going to see ten sites in ten years. Now, that does not mean that individual directors may not cruise through once in a while (more on them in a minute), but there simply isn't time for the entire board to visit very often.

And this is why it is important. They are going to form impressions of your facility that may last beyond the tenure of the youngest person on the board. For they will, in their routine meetings, comment on various facilities. Thus, in a few years, with some board turnover, the impression of your facility in board meetings will be second hand comments from board members who came to your facility five years ago. Those second hand impressions will make a difference when it comes to decisions as to how much capital you receive and whether your mill even lives or dies. Doubt me? Just ask the former mill employees in the vicinity of Courtland, Alabama.

Your prep needs to go further than skin deep, too. Some board members are known to veer from the official tour path. What are you going to do? Tell them they cannot go behind that closed door? I think not.

You may have some things you don't want to leave out and about--unsightly but necessary things. First off, I would challenge you three or four times if you really do need them. However, if you convinced me, then I would rent some intermodal containers and, placing them neatly somewhere on my site where they don't look out of place, I would lock the junk up in them.

An aside for a humorous story...one place I was working as a junior person at the time, not involved in these decisions, had the capability of placing 44 rail cars inside the shipping warehouse. Someone got the brilliant idea of stuffing their junk in three of these cars. Only problem was--you guessed it--those cars left. It took months to track them down.

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Obsolete mills need to be obsolesced ... Check out the latest edition of Strategic & Financial Arguments.

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Two cautions before we close. When you think you have your facility shipshape, think again. The board never saw it when it was unkempt, so they are not comparing your facility to those times. They are comparing your facility to other facilities they have seen on other board tours. If they are outside directors, heaven help you if one of their other board assignments is a food plant. It is extremely difficult to make a pulp or paper mill compete favorably with a food preparation plant.

The other caution is the individual board member who wants to stop by, say, next Tuesday. Your team prepares for their visit next Tuesday. Well, I have known some of these clever individuals not to show up next Tuesday as advertised, but the Saturday night before at about 11 pm. They will start with noting how good your security is at that point in time and it will go downhill from there.

What are your board of director visit experiences? You may share them in our quiz this week.

For safety this week, when the board visits, you may have some important people not used to the heat, noise and rigorous stair climbing that may be required. Prepare for this.

Be safe and we will talk next week.

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