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Lately, I have been wrestling with finding the right expression for an idea that would help us all better understand the increasing competitive paralysis of domestic woodworking companies. The greater the competitive pressure, the greater the paralysis. The continuing overall decline of growth and profitability of wood products manufacturers in the U.S. , particularly furniture, is symptomatic of a deeper cause. Moreover, it would seem that, for at least the last decade, the cause has remained unknown, misdiagnosed, misunderstood or miss-treated.

In a moment of unrestrained curiosity, I consulted the dictionary. According to Merriam Webster's, a ‘commodity' is a mass-produced unspecialized product . To be sure, many domestic manufacturers find themselves producing products that differ little from those of their competitors. More importantly, their customers see little difference as well: not in design, materials, function, quality, delivery times, warranties or service.

When customers cannot clearly perceive a difference in products, service, and now more importantly experience, manufacturers are left to compete on price - which is exactly where the industry has found itself. Indeed, even manufacturers of custom products are experiencing price pressures driven by product sameness and the erosion of price points at the commodity end of the market.

So, for the woodworking industry, let's add to our definition of commodity, the word undifferentiated . And let's include in that list of undifferentiated attributes the words ‘business model' . For the sake of clarity, we will define business model as how we fulfill customer demand for products and services.

Geoffrey Moore contends there are fundamentally only two types of business models: ‘Volume Operations and Complex Systems'. 1 In other words, mass-production and mass-customization. The first constrains product and service variability while the latter facilitates extreme variability by using complex systems and fixed solution space as control and boundaries. 2

The wood industry, both here and abroad, has become standardized on a volume operations model. As defined by mass production, this model serves customers in essentially the same way: ‘Build it and they will come' . Therefore, the way in which we serve our customers also lacks differentiation.

This business model has become obsolete because it is based on the manufacturer's perception of their world – product, process, and cost control - and not on the real needs and expectations of end-users. To be sure, many manufacturers never actually have direct contact with their end-users, delegating this responsibility to dealers and other intermediaries. This view of the world is the pervasive industry mindset resulting from a business model based on mass-production principles that have been perfected over four generations.