Many experts are forecasting that strength in the remodeling sector will partially offset the decline in housing starts. As housing starts continue to decline in 2007, fewer families will enter the housing market and instead will opt to improve their current homes.

Kitchen + Bath Business is estimating that spending on kitchen remodeling jobs will rise by 6.9 percent in 2007 to nearly $79 billion. While the number of projects will rise only 1.2 percent, most of these kitchen jobs will fall in the mid- to high-priced category.

Anecdotal evidence from kitchen dealers around the U.S. is confirming continued strength in kitchen remodeling. Some of this resilience is undoubtedly coming from older Americans who want to remain in their existing homes. A recent study by The Home Depot found that life events common to the 50 and older demographic, such as retirement and the birth of grandchildren, are triggers for home improvement projects.

Sixty percent of this age group expects to live in their current residences for five or more years and 65 percent plan to remodel. Importantly for cabinetmakers, 73 percent say the kitchen is the most important room in their homes.

Keep your eye on this important segment of the cabinet business over the next few months.

Customization Critical To Upscale and Younger Furniture Shoppers

Younger furniture buyers and those able to afford the exact furniture they want are an important, yet oft, overlooked consumer segment. Of late, industry experts claim a sharp rise in the number of shoppers willing to pay a premium for custom-configured upholstery as well as dining sets and other wood furniture.

In upholstery, the segment of shoppers who prefer a custom look has remained relatively constant at 30 percent. This group is the prime target for U.S. upholstery makers at a time when imported sofas and chairs have about 22 percent of the market. Customization in the form of fabric and frame selectivity combined with fast order delivery provides a powerful weapon in defending market share from importers.

Most upholstery makers have converted to plywood frames that can quickly be produced on large format CNC routers. This technology, along with computerized pattern making and fabric cutting, enable a domestic producer to fill a custom order in hours if the correct fabric is in stock.

Selling custom-configured products requires a knowledgeable retail floor sales staff and time. For that reason, many upholstery producers now enable their resellers with point-of-sale technology that allows a consumer to "build and see" a sofa before buying it. Some even offer this visualization software via the Internet.

While the market share of imported upholstery has tripled in the last decade, domestic wood furniture makers have lost over half of their market share. Customization has long been available in casual dining sets where consumers want to contrast or match their semi-custom kitchen cabinetry. However bedroom, entertainment, home office, and other wood product categories offer few custom configuration opportunities. Domestic wood furniture producers are missing this opportunity. In fact, this gap is rapidly being filled by sharp cabinetmakers who now offer products for other rooms in furniture-grade finishes.

No doubt wood furniture can be "cabinetized," i.e. converted to a more modular, customizable product. This opportunity requires smart product engineering combined with quick set-up equipment for woodworking and finishing. A network of specialty component suppliers is also useful to supply carvings, turnings, and other special parts that add style to a casegood. The enablers for customized wood furniture - machinery, software and suppliers - exist. The missing ingredient is a willingness among furniture executives and entrepreneurs to implement an innovative business model.

Economic Factoid

For years "protectors," e.g. politicians and industry executives, of the U.S. manufacturing base screamed for the Chinese to float their currency. For the decade prior to July 21, 2005, the Chinese renminbi was pegged at a rate of 8.28 renminbi to the US dollar. The dollar now buys only 7.77 Chinese renminbi, a decline of 6 percent. This decline means that Chinese manufacturers now pay less for raw materials like hardwood lumber that are purchased in U.S. dollars while their labor costs remain low.

Sector Report

Kitchen Cabinets

Last November cabinet sales broke a 127-month run of positive monthly growth by declining 4.8 percent versus the same month in 2005. In December that weakness continued as the KCMA's Trend of Business Survey showed a decline of 11.7 percent for the month. Sales for 2006 were up 7.8 percent versus 39.2 percent in 2005. Drilling into the numbers, December custom cabinet sales fell by 0.1 percent; semi-custom cabinet sales, by 6.4 percent; and stock cabinet sales, by 18 percent.

At the cabinetmakers...

Masco, the largest cabinetmaker in the U.S., has reported the layoff of several hundred workers at four of its cabinet plants in Ohio and Pennsylvania. The company blamed the decline in housing starts.

Home Furniture

Retail furniture sales are weakening in step with slower sales of new and existing homes. Analysts indicated that furniture sales lag trends in housing by six to twelve months. Given the continuing weakness in housing, a meaningful improvement in furniture at retail will not occur in the first half of 2007.

However, for those U.S. producers who brought anti-dumping charges against Chinese wood furniture makers, cash is coming in from duties collected since June 2004. The U.S. government has distributed $21.9 million with $5.4 million to Stanley Furniture, $3.9 million going to La-Z-Boy, $3.8 million to Vaughan-Bassett Furniture, $1.55 million to Bassett Furniture and smaller payments to 17 other U.S producers. Some of the recipients plan to invest these windfall gains in upgrading their manufacturing processes.

On an operating level, company news continues gloomy...

Ethan Allen reported a 6.7 percent decline in its 2Q2007 sales, as continued retail weakness impacted performance. Gross margin, however, rose to 52 percent while operating profit fell from 16 to 14.2 percent. Interestingly, as the company continues to close manufacturing plants, Ethan Allen has increased the number of company-owned stores to 149, nearly half of its total retail presence.

While full year sales were up 1.3 percent, Furniture Brands announced that its 4Q2006 ended down 1.2 percent. Management indicated that this weakness will continue into its 1Q2007, as retail conditions remain "abominable". Full 2006 earnings were down 10.4 percent versus the prior year.

Bassett Furniture reported a 13.7 percent decline in its 4Q2006 sales. Earnings dropped nearly 83 percent. For the full year, revenues declined 2.1 percent while earnings fell nearly 45 percent versus FY2005. Bassett, who supplies 134 branded retail stores, saw its retail sales rise by 19.8 percent while wholesale shipments dropped by 5.5 percent. About 72 percent of wholesale shipments were to its branded stores.

Stanley Furniture reported its 4Q2006 sales down 13.3 percent versus the same period last year. Gross margin declined to 17.7 percent versus 24.7 percent last year while operating profit dropped to 4 percent from 11.4 percent. Previously, the company announced the lay-off of 200 workers at its Robbinsville, NC, plant because of slowing sales.

Hooker Furniture is closing its last remaining domestic wood furniture plant. The 700,000 square foot facility, located in Martinsville, VA, adjacent to company headquarters, employed 280 workers. Warehouse operations for imports will continue at the location. Management attributed the closure to declining demand for its U.S.-made wood products. Two longtime Southern furniture makers, Hooker and Broyhill, are now sourcing 100 percent of their wood furniture from offshore. Hooker operates four upholstery plants in North Carolina in its Bradington-Young subsidiary.

Schnadig is shifting production of its upholstery line offshore. As a result, production lines in Belmont, MS, and Corona, CA, will be shuttered. These facilities will continue as warehouses for both imported wood and upholstered products. Limited custom options will be available.

Casegoods producer Oakwood Furniture, Tazewell, TN, has closed its 82,000 square foot factory that employed 56 workers. Management blamed competition from imports in its product categories, bedroom and entertainment furniture.

RTA producer Bush Industries will eliminate one-third of the workforce at its 1.1 million square-foot Erie, PA, plant as operations are consolidated at its Jamestown, NY, factory. The company's increase in importing will result in the loss of 90 jobs.

Vaughan-Bassett Furniture is seeking a buyer for its Atkins, VA, lumber processing/parts production facility. The plant presently employs 55 and produces parts for the company's Galax, VA, and Elkin, NC, furniture plants.

Sun Capital Partners announced the purchase of upholstered furniture producer Rowe Furniture. Rowe had been operating under bankruptcy protection. Sun also owns wood furniture importers Lexington Home Brands and Powell.

Canadian upholsterer Sklar Peppler has purchased Alan White, longtime producer of mid-priced upholstery with plants in Shannon, MS, and Stamps, AR.

Office Furniture

BIFMA's monthly report shows continuing signs of moderating growth in the business and institutional sector. December orders grew by 2 percent year-on-year, but declined 3 percent from November. This performance marked the fourth consecutive month of reduced order growth. December shipments grew 5 percent versus last year, but the 7.4 percent growth in 12-month shipments was the lowest growth performance since January 2005. More importantly, the unfilled order backlog declined in December by 9 percent from November. Industry growth seems to be slowing to the 7 percent rate experienced in the 80s and 90s. Analysts continue to believe the longer term will see the growth rate slowing further to 3-6 percent, in line with the U.S. GDP.

At the company level...

Steelcase, the world's largest producer of business furniture, reported a 6.8 percent increase it its 3Q2007 revenues over the same period a year ago. Gross margin improved to 31.5 percent benefiting from gains in international sales. Operating income grew to 5.8 percent, up from 5.3 percent a year ago. Overall performance was negatively impacted by poor results from the company's North American wood furniture operation, which lost about $6 million in the quarter. Management forecasts that profitability will not be achieved in that segment until early FY2008.

Herman Miller reported 2Q2007 sales of $499 million, up 13.9 percent from a year ago. Operating margin jumped to 11.8 percent, up from 10.1 percent last year. With incoming orders during the quarter up 22 percent, the company's backlog also improved.

Wood Flooring

December 2006 shipments of strip flooring declined to 33.174 million square feet, down 20 percent compared with the same month in 2005. For 2006 the industry shipped 527.241 million square feet, a 8 percent decrease compared with 2005.

At the company level...

Analysts have trimmed estimates for Mohawk Industries, the largest producer/ distributor of flooring in the U.S. The company produces laminate flooring under the Unilin brand. Forecasts of laminate flooring sales for 2006 have been pared from 10 percent to 6 percent while growth assumptions for 2007 are now set at 4 percent. Additionally price deflation, estimated at 2.5 percent annually, continues to impact industry revenues. Chinese-made laminates are also impacting sales of domestic manufacturers.

Softwood Lumber

Industry expert International Wood Markets Group is forecasting an 11 percent decline in 2007 housing starts to 1.6 million units, down from a peak of 2.07 million in 2005. As a result, "lumber producers need to realize that we are only half way through this housing market cycle correction, and a second wave of lower lumber demand is still to come. Another significant round of capacity curtailments will need to occur in 2007."

Lumber consumption in North America probably decreased from 75.8 billion Bf in 2005 to 72.8 billion Bf in 2006. A further fall of 3.3 billion Bf is predicted for 2007. About half of this decline will come from reduced imports, primarily from Europe. Wood Markets also forecasts a fall in Canadian lumber production.

The price for the benchmark 2x4 No. 2 random-length lumber will fall from an average $353 per MBf to $275 in 2007.

Interestingly, the National Association of Home Builders (NAHB) is working with Swedish officials to increase softwood lumber exports to the U.S. According to the NAHB, the U.S. softwood industry has insufficient capacity to meet its demands. The association has also met with Russian government and industry officials to discuss increasing imports of Russian lumber. NAHB's interest in additional import sources is reportedly driven by "serious uncertainties for U.S. builders over the availability and price of Canadian lumber". Canadian supplies may be impacted the complicated system of taxes and quotas mandated by the recently-completed lumber trade agreement between the U.S. and Canada.

Non-Residential Construction

Spending on non-residential construction expanded at a 16 percent annual rate during the twelve months ending in September 2006. Building Design + Construction predicts that total sector growth will slow somewhat in 2007. Its experts estimate that spending on retail and warehouse construction will rise by 9.7 percent this year. Office construction is expected to jump by nearly 16 percent this year as rents and vacancies have improved. Spending on manufacturing plant construction is projected to expand by nearly 9 percent in 2007. Sharply higher room and occupancy rates drove hotel construction up 52 percent in 2006, and this segment is set to increase another 22 percent in 2007. School construction increased 6.5 percent in 2006 and will grow by 10 percent in 2007 primarily for middle and high schools as well as university facilities. Increasing employment that translates into higher insurance premium income plus higher Medicare/Medicaid budgets will drive spending on new healthcare facilities up nearly 18 percent in 2007. This sector of the economy is an underappreciated contributor to sales of numerous wood products ranging from doors, millwork, cabinetry, and fixtures.

In the State Of The Union Address, President Bush announced his "Twenty In Ten" plan to reduce U.S. gasoline usage by 20 percent in the next 10 years. The President called on Congress and all Americans to join him in pursuing the goal of reducing U.S. gasoline usage, which will help increase our Nation's energy security by reducing our dependence on oil. Specifically, the President's "Twenty In Ten Goal" calls for:

• Increasing the supply of renewable and alternative fuels by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017-nearly five times the 2012 target now in law. In 2017, this will displace 15 percent of projected annual gasoline use.

  The President's fiscal year 2008 budget will request $2.7 billion for the advanced energy initiative-an increase of 26 percent above the 2007 request and 53 percent above 2006. The President has called for increased federal investment in hydrogen fuel technology research. He has also called for increased investment in advanced batteries for hybrids and plug-in hybrids, bio-diesel fuels and new methods of producing ethanol and other biofuels.

  Under the new farm bill proposal, Agriculture Secretary Mike Johanns will announce significant efforts at the Department of Agriculture to advance alternative and renewable fuels research. The administration's farm bill proposal will include more than $1.6 billion of new funding over 10 years for energy innovation, including bio-energy research, energy efficiency grants and $2 billion in loans for cellulosic ethanol plants.

• Reforming and modernizing corporate average fuel economy (CAFE) standards for cars and extending the current light truck rule. In 2017, this will reduce projected annual gasoline use by up to 8.5 billion gallons, a further 5 percent reduction that, in combination with increasing the supply of renewable and alternative fuels, will bring the total reduction in projected annual gasoline use to 20 percent.

  To help meet the President's "twenty in ten" goal, the federal government will contribute to the national effort to reduce oil use and improve environmental and energy performance. The executive order the President signed directs the federal government to:

  Reduce oil consumption in fleet vehicles. The President has set the goal of reducing petroleum consumption in fleet vehicles by 2 percent annually through 2015. In addition, the President has directed federal agencies to purchase plug-in hybrid vehicles when commercially available.

  Increase use of renewable and alternative fuels. The President has directed federal agencies to increase their alternative fuel consumption by at least 10 percent annually.

  Use more new renewable power. The executive order stipulates that at least 50 percent of agencies' current renewable energy purchase requirement must come from new renewable sources, such as wind, solar, biomass, landfill gas, or geothermal.

  Reduce greenhouse gas emissions. The President has directed federal agencies to improve energy efficiency and reduce greenhouse gas emissions by cutting back on energy intensity-the amount of energy used per square foot of building space-by 3 percent annually or 30 percent by 2015. This new goal seeks to achieve in 10 years the same level of improvement federal agencies achieved in the last 20 years and is 50 percent stronger than the goal called for in the energy policy act of 2005.

  Acquire environmentally sound products. The executive order requires increases in the purchase of environmentally sound products, including biobased and more efficient electronic products, and the development of high-performance buildings that are healthier and consume less energy.

  The President believes requiring the federal government to invest in new sources of energy will help diversify America's energy supply. The federal government is the largest purchaser and user of energy in the world. According to the President, the requirements of the executive order will help protect our environment and confront the serious challenge of global climate change.

  The President's plan to strengthen America's energy security also includes stepping up domestic oil production in environmentally-sensitive ways and doubling the current capacity of the strategic petroleum reserve (SPR) to 1.5 billion barrels by 2027. Doubling the SPR alone will provide approximately 97 days of net oil import protection, enhancing America's ability to respond to potential oil disruptions.

  At the same time, the President is setting out this challenge, the House has passed legislation that raps the knuckles of the oil industry and directs new efforts towards renewable fuels and energy conservation. It has passed legislation that eliminates a variety of tax incentives for oil exploration and production. The bill would use the revenues to fund a Strategic Renewable Energy Reserve to invest in clean, renewable energy resources, promoting new emerging technologies, developing greater efficiency, and improving energy conservation.

  The Senate has not given any indication yet of what it will do. We are not sure where the new energy policy lines will be drawn, but it does seem certain new lines will be drawn!

The following is a summary of major trends of US exports and imports for the January - December 2006 period. Statistics are reported for all woodworking equipment and its three component parts: machines, cutting tools and, accessories and parts.

(WMMA members: to view detailed tables on US imports and exports of machinery, cutting tools and parts and accessories, by country, click here and scroll down to the spreadsheets listed under the heading "US Imports and Exports of Woodworking Machinery, Cutting Tools and Accessories". You will need your user name and password. If you don't have one or forgot it, contact WMMA Headquarters at 215-564-3484 or email info@wmma.org.)

Harold Zassenhaus is available to provide more detailed US export and import data by product as well as by country. For more information, contact him at (301) 652 0693 or email hzassenhaus@fernley.com.

Total Woodworking Equipment Market
Exports of woodworking equipment (machinery, cutting tools and parts and accessories), grew at a faster pace than imports. US export shipments recorded an impressive 11% increase through the calendar year, growing to $361 million. However, the increase is largely due to a dramatic 64% increase in exports of parts and accessories. Exports of machines actually decreased by 9% and those of cutting tools rose by 20%.

Canada purchased 38% of our exports, a decrease from the 41% share it held in 2005 as exports to other countries increased. Mexico, Australia, Germany, Poland, Japan, China, the UK, Ireland and the Netherlands rounded out the top 10 export markets for the year.

Imports slowed during the 4th quarter and for the year increased just 3%, reaching $1.8 billion. Imports from Taiwan and China accounted for 39% of the tota,l with imports from China continuing to grow (up 7%) and those from Taiwan continuing to decrease (-23%). Taiwan's decrease was at the hands of not only China, but Germany as well. Imports from Germany rose 26% through December to $323 million and the European nation is now our 2nd largest supplier.

In excess of 90% of Chinese imports continue to be small stationary commercial and hobby products like mitre saws, scroll saws, band saws, sanders, etc. each valued at under $1,000. However, the Chinese are increasingly producing and exporting more sophisticated and industrial grade machinery.

Machinery Trade
As mentioned above, machinery exports decreased by 9% to $157 million, due to a combination of decreased sales to a number of countries including Mexico, Australia, Germany, the UK and China. Sales to Canada, however, remained unchanged at $54 million. The drop in exports to some of our most important European clients is bothering, since the dollar has continued to weaken against the Euro over the past year, a trend which is expected to continue through 2007. Our top 10 markets, in order are: Canada, Mexico, Australia, Poland, Germany, the UK, Japan, China, Chile and Sweden.

Imports of machinery totaled $1.047 billion through December, a 6% increase over calendar year 2005. China and Taiwan continued to be our largest machinery suppliers accounting for 48% of the import market. Shipments from China increased to $256 million (up 12%) and imports for Taiwan decreased 24% to $242 million. Imports from Germany increased by 44%, but largely due to significant and abnormal purchases ($70 million worth) of German particleboard press machines, as reported in the last trade review. Nonetheless, Germany continued to significantly increase shipments of secondary wood processing machinery including machining centers, CNC routers and CNC point to point boring machines.

Our top 10 suppliers in 2006 were (in rank order with percent changes noted parenthetically): China (12%), Taiwan (-22%), Germany (44%), Italy (8%), Canada (14%), Mexico (14%), Austria (20%), Japan (23%), France (15%) and Spain (32%).

Cutting Tools
Cutting tool exports increased for the period by 20% to $120 million. Reflecting the larger trend, exports to Canada dropped in importance, accounting for 50% of shipments or $49 million. Sales to Mexico jumped over 95% to $25 million, perhaps and hopefully reflecting a growing need for higher tolerance tooling and a growing woodworking sector. Rounding out the top 10 markets were: Germany ($4.5 million), the Netherlands ($4.2 million), China ($3.1 million), Switzerland ($2.6 million), the UK ($2.3 million), Japan ($1.9 million) and Australia ($1.7 million).

Cutting tools imports slowed in the 4th quarter and for the year amounted to $513 million, a modest 3% increase over 2005. China continued to capture market share (now 24%) with shipments valued at $121 million, over twice as much as its nearest competitor. The remaining 10 largest suppliers were: Germany ($59 million, down 5%), Japan ($51 million), Italy ($41 million), South Korea ($39 million), Canada ($33 million), New Zealand ($21 million), the UK ($20 million), Sweden ($20 million) and Taiwan ($19 million).

Parts & Accessories
Exports dramatically increased by 64%, reaching $83 million, much of the increase due to shipments to Mexico that shot up 244% to $23 million and Ireland, where shipments went up to $5 million (normally less than a $1 million market).

Imports dropped by 7%, a sharp turnaround from years' past double digit growth. Surprisingly, imports from China dropped (14%) as did those from Taiwan (down 30%) and Japan (down 31%).

In 2005, U.S. Customs and Border Protection (CBP) seized $93 million in counterfeit and pirated goods, almost 75% of which came from China. As we all know, this is only the tip of the iceberg as counterfeit and pirated products seem to be everywhere compromising WMMA member ability to sell their products in the US and overseas.

The US government, with the assistance of the Chamber of Commerce and private business is now providing assistance to combat the growing problem:

• A hotline (866-999-HALT) staffed by specialized attorneys to counsel businesses in how to protect their intellectual property rights (IPR) and best resolve IPR problems. Where the company has properly registered its rights, a referral is made to a trade compliance team which will monitor the case and determine the next steps.
• www.stopfakes.gov, an excellent website managed by the US Department of Commerce that provides:
1. Information and guidance on how to register and protect IPR in the markets around the world;
2. "IP toolkits" to guide businesses through securing and enforcing their rights in key markets including China, Russia, India, Mexico, Korea, and Taiwan.
3. News and notifications on IPR events including a series of webinars on IPR in China;
4. FAQ's on patent, trademark and copyright laws and concerns and;
• The Intellectual Property Rights (IPR) Advisory Program that offers small and medium-sized U.S. businesses free IPR consultation with an attorney. This program is provided in conjunction with the American Bar Association, NAM and the American Chamber of Commerce.

Finally, the US Chamber of Commerce and the Coalition Against Counterfeiting and Piracy (CACP), a coalition of more than 240 businesses and associations, have joined forces in developing a guide of proven strategies that companies, both small and large, can and should use to protect their supply chains from counterfeiters and modern-day pirates. The No Trade in Fakes Supply Chain Toolkit, available here or through www.stopfakes.gov, also includes case studies and brand protection strategies for purchasing, manufacturing, transportation, sourcing, packaging, distribution and more.

Businesses must do their part to prevent the production and sale of counterfeit products. Lax security creates opportunities for counterfeit and stolen goods to make their way into legitimate production, wholesale, and retail channels. Globalization, the Internet, and advanced technology have made it easier for counterfeiters to infiltrate fake products into the supply chain and increase the availability of these products in markets around the world.

Are you getting what you need from your Website? If your Website is not helping to improve your bottom-line, then it's time to take action to enhance its value. Here are five ways to increase the effectiveness of your Website.

1. Make Sure Its Goal-Oriented

   Have you seriously considered the strategic role of your Website? Those that have feel their Website is their most powerful marketing tool. An effective Website can help you achieve a number of business goals, such as generating leads, building a marketing database, enhancing customer service and selling online. You can produce results online. But to do so, you must make sure you align your Website objectives with your overall marketing and business objectives to ensure you are on the path to success.

2. Design for Your Customers, Not Your CEO

   This may sound like a ridiculous statement, but all too often, manufacturers do not design their Website for their customers and prospects. Rather, they take an egocentric approach to Web design, more interested in talking about themselves and their products instead of solving their customers' problems. If your Website does not serve your prospects and customers, then it is not serving you either. Make your Website customer-focused by offering content and interactive features that speak to the needs of your customers and provide a solution to their problems. If your customers and prospects do not find your Website relevant, trustworthy and satisfying, they will leave. Remember, your competitor's Website is only one click away.

3. Make an Offer They Can't Refuse

   Lead generation consistently ranks as a top priority for manufacturers. However, most companies handicap themselves by relying on their Website's 'Contact Us' page as the sole method for prospects to take action. To turn your Website into a lead generation machine, pepper your Website with a variety of relevant offers tailored to the needs of your target audience, such as:

   • Request a quote or purchase online
   • "Call me now" or online chat to reach out to salespeople
   • Order free samples
   • Register for seminars, webinars or events
   • Request access to "premium content" - whitepapers, knowledgebase, articles, etc.
   • Subscribe to your e-mail newsletter
   • Also, don't forget to prominently display your toll-free phone number on every page. More than half of Web visitors prefer to call rather than complete an online form.
4. Become a Search Engine Magnet

   Is your Website invisible to Google? If you want to succeed online, it better not be. Search engines are the most powerful way to drive targeted traffic to your Website. But to be successful, you must make sure your site is optimized for search engines. To turn your Website into a search engine magnet, first, fill your Website with rich content focusing on the keyword phrases your customers use most often. Second, code your Website so it is "crawlable" by Google and other engines, including keywords in the page tags. Pay close attention to elements such as title tags, meta description tags, directory and page names, internal links, navigation and the site map. Third, build a network of quality inbound links to your Website from reputable and industry relevant external Websites.

5. Define success...Then Measure it!

   How will you know if your Website is a success? Don't rely on subjective measures, gut feel or esoteric statistics like "hits." Define your success measures based on the goals you want the Website to achieve. Then identify specific, measurable performance criteria you can easily track to measure success. For example, if your Website's goal is lead generation, track online form inquiries and in-bound phone calls (use a unique toll-free number for your Website). If your site has a variety of offers, track leads generated by offer. These are just a few examples. By tying your success measures directly to your business goals, you will be able to measure the effectiveness of your Website. And, you will be able to leverage this knowledge to improve your results in the future.

Do you need help planning an effective Website? Then visit the WMMA Online Marketing Resource Center to download your free copy of the Website Planning Guide.

Bob DeStefano is President of SVM E-Business Solutions, a leading online marketing agency focused on delivering measurable business results for manufacturers. SVM is the preferred online marketing provider for WMMA Members. SVM can be reached on the Web at www.svmsolutions.com or by calling 1-877-SVM-EBIZ.

"Innovate or die" is not news. But, innovation requires companies to change, and unfortunately, most can not do much more than fine tune their past. At companies where too many top-down change initiatives have fizzled, employees can even become cynical about new change efforts and ignore them. If our company is struggling to escape its past ways in a changing world, what then is our credible, going-forward, "growth story" (vision) that we need to attract and keep better than average employees who will, in turn, help make those changes happen?

How do we change how we have been trying to change? Here's a theory: besides top-down vision and will to change, what if we have to also have a "corporate culture" that "enables" change to happen? Will our corporate culture allow the management team, for example, to even think about how we think about change? How could we test this corporate culture hypothesis quickly and cheaply?

The "fail forward faster" guideline suggests that we should try some necessarily imperfect experiments to learn as much as we can in the shortest time for the lowest total cost. Because thought experiments are especially fast and cheap, what if we: 1) wrote down a lot of questions that we 2) deliberately choose to live with instead of offering instant, action-oriented answers or universal stops like "we tried that already"; or, "we are already doing that". These two steps would be true experiments for most companies!

Below are some questions to seed the effort, perhaps they will trigger more related questions which together will create a "question map" about this tweak-our-culture theory.

• What are the specific, corporate antibodies that have killed past change initiatives?
• What if we could: name those specific, anti-change rules and behaviors; explore the unspoken, dysfunctional assumptions (and motives) behind them; and then, re-engineer them to create a climate that enables innovation and change?
• When was the last time we did a quick, informal "corporate culture audit" that surveyed a cross-section of employees with a promise of anonymity to find out how things really "get done or not done around here"?

To expand on the last point above, why, when, and how might we take a next step and use an hour or two of an outsider's help (remember don't spend a lot; test cheaply) just in case we might have some management, groupthink, blind spots or dated clutter. Most gardens need to be weeded, and most plants in the garden need to be pruned to grow better. Why should all of the ideas that make up our corporate culture be any different?

With a promise of anonymous cover, an outsider should also be able to coax some extra information out of the bottom 80% of the payroll concerning what really happens in the minds and hearts of the front-liners when change edicts are handed down. And, best of all, if the outsider should deliver honest feedback that is critical about how top management is a big part of the problem, we can fire them at a small investment loss and choose to accept only the amount of reality we can handle. (Question: Do ego needs, denial and even moderate delusions come in all degrees from the individual level to the collective team level? True or false?)

For more food for thought on the topic of "corporate culture audit", check out these sources on the net:

• Go to www.wikipedia.org and read the entries on "corporate culture" and "memes" (rhymes with genes).
• Google "how to do a corporate culture audit" and do some cheap, fast reading.
• Check out this URL for ideas on "innovation memes": www.merrifield.com/articles/SixCultureOfInnovationMemes.pdf.
• Do some quick survey work of employees without an outside expert (even cheaper and faster). Brainstorm about what would be some good questions to put on surveys for managers, sales reps, operation people, etc?

If these questions about corporate culture are unsettling, don't worry. Less than 4% of all mature companies are able to continuously innovate. Most companies have over-invested in being too:

• Efficient instead of effective;
• Short-term #s oriented instead of steady, long-term investors in continuous innovation;
• Highly consistent and stable in how they operate (which is efficient) without trying enough new stuff that is inherently disruptive, messy at first, and could involve extra expense and stress.
• Tightly run in a hierarchal manner that actually suits most people who would rather not be individually responsible for continuously learning and failing forward at either home or on the job. Ambitious, innovative, self-starting individuals don't work (for long), however, at stable, growing-nowhere companies.

On the other hand, most, non-starter-type people are not happy being crank-turners in a slowly dying company. Most would prefer a creative balance of stability with something new that has upside for them and all stakeholders, but they both need and appreciate some social and institutional support to help them be the person they want to be. How do we re-engineer some of our corporate culture memes to reduce the memes that hinder learning, change and growth and add ones that will enable all of the things that go into "change capacity"?

"WMMA's Leadership Development Committee is preparing the slate of Directors for the Board term expiring in 2010. Peter Perez, Chairman of the Leadership Development Committee, is open to your suggestions on who the committee should consider for these openings. Your suggestions should include members who have been active in the Association and its activities.

These individuals should be known for their character, strength and integrity. They must also embrace change, while maintaining the strengths of the existing organization and identifying the key challenges facing the Association and industry. Nominations should be sent immediately to Mr. Perez, c/o Carter Products, Inc., 2871 Northridge Drive NW, Grand Rapids, MI 49544 or via fax (602) 470-1916 or email at perez@carterproducts.com.

"The WMMA® Baldwin Award is named for Ralph B. Baldwin, long-time member and Past President of the WMMA®. During his career with Oliver Machinery Company and his involvement with the WMMA®, Ralph exemplified the kind of commitment that really makes an Association function at, or near, its peak potential. It is in the spirit of Ralph Baldwin's vitality and dedication to the woodworking industry that this award was created-to recognize those who have contributed similar levels of involvement and to encourage others to do the same. The award's significance can be quickly determined by the prestigious list of recipients.

Nominate the individual you believe is deserving of this prestigious industry recognition. The award seeks to honor individuals who have made outstanding contributions to the industry, regardless of their affiliation with WMMA. Some activities that warrant consideration are: leadership in WMMA or the IWF Board, active committee involvement, innovations introduced to the industry, and participation in programs that benefit the industry. Please submit your nomination to WMMA by March 9th.

Download Baldwin Award Competition Rules

Download Baldwin Award Nomination Form

The woodworking industry and your business face new challenges every day. WIC offers thought-provoking discussions, workshops and other educational forums to better prepare you for today's ever-changing business environment.

The 16th Annual Woodworking Industry Conference will be held April 25-28, 2007 and is the premier forum for education and networking. Attending the WIC '07 at the Renaissance Vinoy Hotel in St. Petersburg, FL, is the right choice for your business.

To read about this year's exciting program, visit wmma.org/events/wic.cfm.