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We Need Outsiders
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Within days of each other, the industry recently received interesting news concerning two individuals. One was the announcement of the resignation of Juanita D. Duggan as president and CEO of the American Forest and Paper Association (AF&PA) after a stay of only a few months. The other was a similar announcement concerning the now former North American head of SAPPI, Ronee Hagen, president and CEO, after a stay of only a couple of years.

Official spokespersons at Sappi North America (SFPNA) responded as follows to inquiries from PaperMoney®:

PM: Sappi Fine Paper North America recently announced the resignation of Ronee Hagen, president and CEO, after a relatively short tenure. She is being replaced with an acting CEO, Mark Gardner. Can you tell us any more about these moves?

SFPNA: Mark Gardner has been with Sappi for over 25 years and has held leadership positions in manufacturing, engineering and supply chain. Due to his vast experience in the industry and with Sappi, he was the ideal candidate to take over as interim-president and CEO after Ms. Hagen announced her resignation. The Sappi Limited Board in conjunction with the new Sappi Limited CEO will finalize this matter.

Ms. Hagen decided to leave after receiving a compelling offer by another company which she felt that she should accept.

PM: Ms. Hagen came from outside the industry. Will management be looking for another permanent candidate from outside the industry? Why or why not?

SFPNA: As a global company, Sappi's policy is to do internal and external searches for all senior management positions and to not limit such searches to any specific industry.

PM: The U.S. pulp and paper industry has been in transition for a number of years. What qualities will a successful president and CEO have as this process continues? Or does Sappi Fine Paper North America believe this process to be essentially over?

SFPNA: Any business or industry requires leaders who can ensure profitability.
Sappi places strong value in leaders who can create teams, provide clear vision, deliver growth, profit, and value to all stakeholders and ensure the long-term sustainability of the business.

PaperMoney's specific inquiry to AF&PA seeking further enlightenment on their announcement went unanswered. Perhaps this is just as well, for when one tries to fit a square peg into a round hole, one faults neither the peg nor the hole for the misfit. We do hope and trust Ms. Duggan did not leave for personal health reasons.

I remember listening to Ms. Hagen at an AF&PA meeting shortly after she came to SAPPI. I found her words encouraging and fresh for an industry desperately needing new ideas. We still need her ilk.

I have watched for more than a decade as Bobby Cox, manager of our beloved Atlanta Braves baseball team here in Georgia, has melded players, rookies, and old timers, into a winning team. Watching his work is like watching a company's decisions in fast forward, for each season is just a few months long and determinations of ability must be made rather rapidly in order to establish a track record and develop a contending team come September.

Mr. Cox's genius is that he seems to know just how long to give a new player, rookie, or seasoned elsewhere, in order to discern whether they have what it takes to achieve his goals. Most of the time, I have to admit, he keeps some of them longer than I would, but apparently he reads their attitudes well enough to determine that some players need a little more time to adjust than others and hence he lets them have it. Of course, all the time he has to balance this necessary adjustment period to the short term damage these players may do to his team's record. He is excellent at this.

In our industry, we too need to determine how long we give an outsider to adjust, and how much we encourage an outsider who has perhaps made a decision to leave voluntarily to stay a little longer. In the two specific cases cited at the top of the column, we have official answers in only one case as to which occurred -- being pushed out or running for the door -- but both seem to this editor to be a bit short in the timeline of establishing comfort before assessing skills and abilities.

This is not to say that I do not believe in the old saw, "After a year, you own it." This is often said in regards to a new manager's area of responsibility -- after a year what goes on in your area reflects on you. However, in the case of outsiders, we may need to modify this a bit, especially when the outsider is placed over a large organization in a field of nearly complete unfamiliarity. It just may take longer than a year to determine contribution.

However, moving from these specific examples to the general case, one can state the following with certainty. There are two ways we can respond to the economic forces that will surely shape the future of the pulp and paper industry. The first is to take matters into our own hands, seeking out new people, new ideas. The second is to let the private equity investors continue to gobble up our companies and impose their ideas by fiat. Competition and the markets will set the pace; we have only to determine the course of action or inaction.

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