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When my pulp and paper writing started to gain notoriety many years ago, I received correspondence on two different occasions from a fine old professor, long retired, from a famous institution of learning in the pulp and paper industry. Quite elderly at the time, this gentleman gave me a written thrashing along the lines of "how dare you write about the industry, you did not graduate from [fine institution]." This bothered me. In earlier times, I had had dinner with him on several occasions, but obviously now when I poked my head up out of my foxhole, it was not appreciated. In his eyes, I was not worthy.
I hear lots of discussions these days along the lines of "what is wrong with this industry is it is run by a bunch of MBAs that don't know anything about pulp and paper." I will agree that the industry is run by a bunch of MBAs that don't know anything about pulp and paper but I will not agree that that is what is wrong with this industry.
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The reality is all industries these days are run by a bunch of MBAs that don't know anything about [fill in the industry]. Why? Because these are the only people that know how to talk to the bankers and financiers on Wall Street. Even privately held large companies hire such MBAs as the go-betweens with their bankers.
Financial, tax and regulatory matters have become so complex that an entire breed of trained professional has been created to talk in these circles. Your pulp and paper company could simply not operate without this layer of individuals today. Your company could not participate in the correct credit and equity markets without having them on board. Business has become so complex that these specialists are necessary in order to keep the money and paperwork in order.
This is why you see top people move from CEO of a company in one industry to CEO of a company in an entirely different industry.
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Where the mistakes come is when these people, believing their own ego's thoughts, think they actually know something about the companies where they sit as head. This is usually a disaster. The smart ones make sure they have some very bright industry knowledgeable managers packed closely around themselves. And those managers are also bright enough to know what they are there to do--run the day to day business.
Long gone are the simple days when an engineer or pulp and paper scientist with little other training can rise from an entry level position to the CEO slot without a detour for further education or experiences. The last one I knew that did this was Bill Laidig, who started out as a green engineer at Great Northern and rose to the CEO position, a position he held until the company was sold to Georgia-Pacific back in the early 1990s.
If you closely examine the best run companies in the industry today, the top of the company is not dominated by one person, although necessarily one person holds the top job. Again, packed tightly around that person is a group of fine industry professionals, with everyone performing within the area of expertise.
What do you think? Tell us what you think of the individuals who run your company by taking our quiz this week.
For safety this week, safety has to be practiced from the top to the bottom. No excuses.
Be safe and we will talk next week.
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