One of our little consulting business’ best features is the opportunity, over more than 12 years, to interact with the remarkable and diverse collection of colleagues, clients, and friends who share our interests. Forest land management – where our roots run deep – is still an engaging and fascinating discipline. But the business of wood product certification is far, far more diverse. When we reflect on all connections that we have made, while helping folks with their certification challenges, we can’t help but feel lucky. It’s been a wonderful time.
Then everything changed. Quite quickly, in fact. Our long-standing travel patterns came to an abrupt halt. It seems that it was only yesterday, flying to a new city, meeting new people, and applying our craft in a new environment nearly every month. Now we sit at our desks, regularly on the phone, adapting to new communication channels as we struggle to keep things in motion and wonder what the next few weeks will bring—a strange time for most.
For those who are interested, we are happy to share that MixedWood LLC is stable and secure. Like many US businesses, we were able to access some government support to avoid the retrenchment decisions that so many have faced. 2020 won’t be a good year, but we are very sure that we’ll still be here in 2021, and for the moment, that seems like enough.
Our unique position in the middle of our network of business contacts means that we’ve been talking to many people lately. We’re forming some impressions about the rapidly evolving condition of our business, and some ideas about what the next year may bring. Please take these observations in context. We have almost no expertise in global finance, and even less in the frightening progression of this pandemic. We want to share what we are seeing and hope that some of you may find it helpful.
Some Things We Are Watching
Programs Adapted Quickly
All three of our Forest Product Certification programs (FSC, SFI, PEFC) adapted quickly when the COVID19 epidemic shook the world late this winter. The ground rules for certification have all been adapted, and new protocols seem to be working out reasonably well in the short term. SFI and PEFC quickly provided very flexible authorization to both postpone and modify scheduled audits. FSC took a slightly longer path but arrived in the same place. At this point, certifiers have a great deal of latitude to manage their business in the short term.
Business Impacts are Very Uneven
Many in our network tell us stories about struggling to adapt and reinvent their businesses on the fly and working long hours, scrambling to adjust to over-the-top demand while trying to keep their workplace and their staff safe. If you are this group, count your blessings because other folks face virtual shutdowns of their supply chain, the collapse of customer demand, and agonizing decisions about the future. We’ve been talking to folks in both of these situations and others, too. It’s a confusing time, and the folks who think they know how it will end are probably fooling themselves.
Chain of Custody has Gone Virtual
Beginning in March, and continuing as we write, the entire Chain of Custody auditing business, across North Amerca, shifted abruptly from mostly on-site, face-to-face audit visits to mostly off-site, desk audits. The community deserves much credit for pulling this off. It could have gone a lot worse. Three months in, we think we can take credit for managing the transition surprisingly well, but there is more work to do.
MixedWood has been close to this process and taken part – in various capacities – in a number of these new, remote audits. Many have gone quite well. Most have been effective. A few have been pretty awful. We have little concerns about the short-term consequences of this. It’s just Chain of Custody, after all. The long term prospects, though, leave us feeling a bit uncomfortable. We’ve been hearing folks suggesting that we’re reached “a new normal” and that once we get used to doing CoC audits online, we’ll never go back. This would – we think – be a mistake. We feel strongly that certification auditing is an art based on human interactions. CoC audits should never be just checking invoices. This is a good time to remember the underlying principles of objective verification that support our programs’ credibility. Adapting to extraordinary times is a good thing. Let’s not take it too far.
Forest Management (FM) Auditing Isn’t So Easy
Some FM auditing has been transitioned to fully remote techniques like CoC, but the transition has not been particularly smooth or consistent. For obvious reasons, FM audits are much more challenging to adapt. We’ve spoken to folks who tried to conduct traditional forestry audits using online video conferencing techniques. Results were predictably bad, forcing people to re-think assumptions and look for another way. Traditional, field-based audits are proceeding in some places. Auditors and company staff are doing their best to minimize physical contact by traveling separately and conducting physically distanced site visits, followed by a remote review of results. At best, it is an exhausting process that everyone hopes won’t last too long.
Certification Bodies (CBs) are in Trouble
The big certification companies are all struggling. Ironically, they seem to have good retention of forest product business. But third-party certification business as a whole appears to have contracted significantly. This shouldn’t surprise us, of course. The core ISO programs that all the CB’s rely on have been showing signs of maturation and stagnation for years. A shock like COVID19 is bound to be challenging. What will this mean in the near term? We don’t know. But we won’t be surprised to see mergers and outright failures in the coming year.
In the meantime, many CB’s are taking actions common to most companies when times get tough. They are trying to reduce costs and protect cashflow. For a service business like certification auditing, this can be awkward. We are seeing this play out in the CoC business right now. Auditors and clients are being asked to reinvent how they do business while – at the same time – the CB support staff are being furloughed stretched thinner and thinner. Frustrating.
Taking a Long View
The last three months have felt a bit like digging a ditch. When a ditch needs to be dug, especially in a hurry, it’s usually best to keep your head down and dig. But if you need reminding about what the ditch is for, it might be a good idea to pause briefly, lean on your shovel, and take a look at the horizon.
We’ve been using 3rd party certification to promote sustainable forest management and the commodity marketplace that relies on it for more than 20 years. It works. And our whole industry is better for it. Does this complicated and challenging system still make sense in the middle of a global pandemic? That’s a hard question. We think so, but we might not be the best judge.
Let’s ask a different question. Do we think that FSC, SFI, and PEFC will still be relevant to our industry when the crisis we are living in is finally over? Will the marketplace still attach value to the assurances they provide? Will sustainable and responsible commodity wood and paper products always bring value to our customers? If the answer is yes – and we think it probably is – then maybe it’s time to get back to our digging.
A Time for Sharing
Do you have stories to share about our challenging times? Ideas that might help us all get through this? Please drop us a line. We will do our best to share.