Do you know which stock is the top performer of the past 25 years? Guess again. (You said Apple, didn’t you?) After you’ve exhausted your list of high-tech guesses, I will point you in the opposite direction. Think nuts and bolts. Fastenal, a hardware supplier founded in 1967, is up a staggering 38,565 percent since the market crash of 1987. Lagging far behind at 9,906% and 5,542% respectively, are Microsoft and Apple.
So why, in The Digital Nirvana, am I talking about a hardware company? Like the printing companies and mailers of all sizes striving to become “marketing services providers”, Fastenal’s products are not in the least bit exciting, but are necessary, just as printing and mailing are still important components of marketing communications strategies. Unlike many of those printers and mailers, Fastenal, with its low-tech products, is consistently growing revenue and is consistently, respectably, profitable – the stock market does not respond with such enthusiasm to “just okay” companies.
For printers and mailers challenged to transition to being marketing services providers, presumably requiring less big hardware, (and square footage), and more robust software technology and new skills, here is a very successful company to examine and compare to.
If you are unfamiliar with Fastenal, as I was, much of what we believe we know about successful businesses today would compel us to make some assumptions. Surely it is internet-based with strategically placed warehouses and sophisticated inventory and distribution management software and systems, right? The reality is the opposite, at least the “internet-based” part; we’re talking serious brick and mortar – stores in all 50 states and internationally, and several manufacturing sites around the country. The company focuses on the customer, and being close to them. Its innovations, quality, and process improvement efforts are customer-centric. It has enjoyed consistent revenue and profit growth and is as efficient as it’s ever been. The robust continuous improvement culture even includes providing process mapping and process improvement support to customers, as well as being a key part of internal operations.
So, do printers and mailers have to completely abandon their roots in favor of new marketing communication channels in order to be relevant in this age of declining paper-based communications? It would seem not – nuts and bolts are not sexy. But this example would suggest that there must be a continuous commitment to understanding what the customer needs, a vision of solutions to meet those needs, investment in appropriate technology, and a structured ongoing process improvement effort to achieve the necessary efficiencies to be cost competitive and profitable over the long haul.
There are certainly no big surprises here, but it’s good to be reminded that there is no silver bullet, and a successful company is the sum of many parts. Being a process person myself, I was very happy to see how important and integral process improvement appears to be for this company. Process improvement drives efficiency, eliminates waste, streamlines operations, and supports effective integration of new systems and technology, resulting in lower costs. It can be an integral component of greater success for the companies that embrace and commit to it.