By Kevin Meyer
The last couple weeks have brought the story of yet another icon of business, Kodak, collapsing and filing for bankruptcy. Yes, failure a key component of capitalism, and when you try to skew things so they feel better you get some crazy outcomes… like $250,000 Chevy Volts.
But failure doesn't have to happen. And that's the story we also read about last week – the story of a successful textile company, no less – and in the United States. Milliken.
Milliken & Co. of Spartanburg, S.C., arguably should have been crushed by global competition, just like Kodak. Its roots are in the textile industry, a labor-intensive business that long ago decamped for lower wages abroad, leaving abandoned mills throughout the Southeast.
And yet a visit to Milliken's vast campus finds the company thriving. "All of Milliken's traditional textile competitors are gone," says John Fly, a top executive who just wrapped up 45 years at the company. "They're out of business. And Milliken is having the best economic performance it's ever had. It's clear we did something different."
So what did they do? Well at first they joined the folks that whine and complain about how all the external forces… regulations, taxes, and the like… are crushing them.
What Milliken did was first try to hold back the flood of cheap imports—a strategy that chewed up management time and ultimately failed.
But then, unlike many of their brethren and unfortunately most manufacturers for that matter, they took a good hard look at their business.
Milliken diversified rapidly out of traditional textiles and moved deeper into niche products that built off its knowledge of textiles and specialty chemicals. And it bore down on scientific research and manufacturing innovation.
Today, Milliken makes the fabric that reinforces duct tape, the additives that make refrigerator food containers clear and children's art markers washable, the products that make mattresses fire resistant, countertops antimicrobial, windmills lighter, and combat gear protective.
Along the way it has amassed thousands of patents, focusing on specialty fabrics and chemicals, floor coverings and performance products. Milliken boasts that we come in contact with its many products almost 50 times a day.
"They were different because of their willingness to change," says Bill Fischer, co-author of "The Idea Hunter" and an expert on innovation. "And they moved fast."
Not too shabby. And that last statement by Mr. Fischer is critical. A willingness to change. Not ask for handouts, not ask for bailouts, not spend millions lobbying for less regulation and the like. And then they did it fast.
While Milliken doesn't disclose its financial data, Mr. Fly says revenue and profit have been rising steadily. Mr. Salley says the company is also debt free, has double-digit returns on invested capital, and has increased in value more than 30% since 2007 alone.
Yes, a textile company. In the United States. So tell me again why your business is in trouble? And in which direction are you pointing the finger?